8-K
ECD Automotive Design, Inc. (ECDA)
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 19, 2024
Date of Report (Date of earliest event reported)
ECD AUTOMOTIVE DESIGN, INC.
(Exact Name of Registrant as Specified in its Charter)
| Delaware | 001-41497 | 86-2559175 |
|---|---|---|
| (State or other jurisdiction | (Commission File Number) | (I.R.S. Employer |
| of incorporation) | Identification No.) | |
| 4390 Industrial Lane<br><br> <br>Kissimmee, Florida | 34758 | |
| --- | --- | |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s telephone number, including area code:
(407) 483-4825
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock | ECDA | The Nasdaq Stock Market LLC |
| Warrants | ECDAW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and FinancialCondition.
On August 19, 2024, ECD Automotive Design, Inc. (the “Company”) issued a press release announcing its financial and operational results for the quarterly period ended June 30, 2024. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.
As provided in General Instruction B.2 of Form 8-K, the information in this Item 2.02 and Exhibit 99.1 are “furnished” and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of such section nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
The following exhibits are filed as part of, or incorporated by reference into, this Report.
| No. | Description of Exhibit |
|---|---|
| 99.1** | Press Release dated August 19, 2024 |
| 104* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
| * | Filed herewith. |
| --- | --- |
| ** | Furnished herewith. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Dated: August 19, 2024 | ||
|---|---|---|
| ECD AUTOMOTIVE DESIGN, INC. | ||
| By: | /s/ Raymond Cole | |
| Name: | Raymond Cole | |
| Title: | Chief Financial Officer |
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Exhibit99.1
ECDAuto Design Reports Second Quarter 2024 Financial Results; Revenues Increase 129% to Record $8.9 Million
Q22024 Maintains Strong Gross Margins While Revenue More Than Doubles, Drives Adjusted EBITDA of $0.4 Million
Company’sReaffirms Full Year 2024 Revenue Guidance of $33.0 Million
KISSIMMEE,FL / Globe Newswire / August 19, 2024 - ECD Automotive Design, Inc. (Nasdaq: ECDA) (“ECD” or the “Company”), the world’s largest Land Rover and Jaguar restoration company known for its custom luxury builds, including bespoke Defenders, Range Rovers, Jaguar E-Types, Ford Mustangs and Toyota FJs, announced today its financial results for the second quarter ended June 30, 2024.
CompanyHighlights
| ● | Revenues<br>increased 129% to $8.9 million in the second quarter of 2024, compared to $3.9 million in the same year-ago quarter. Growth was driven<br>by increased volume, higher average selling price and increased used vehicle sales versus a year ago. |
|---|---|
| ● | Gross<br>profit increased significantly to $2.2 million in the second quarter of 2024, compared to $1.2 million in the same year-ago quarter |
| --- | --- |
| ● | Gross<br>margin was essentially flat at 31.8% in the second quarter of 2024, compared to 31.8% in the same year-ago quarter |
| --- | --- |
| ● | Net<br>loss was ($0.9) million in the second quarter of 2024, compared to net income of $36,000 in same year-ago quarter |
| --- | --- |
| ● | Adjusted<br>EBITDA (a non-GAAP financial measure) improved $0.4 million to $0.4 million in the second quarter of 2024, compared to Adjusted EBITDA<br>of $9,000 in the same year-ago quarter |
| --- | --- |
| ● | Subsequent<br>to quarter end, classic Toyota FJs were added to the Company’s product lineup through a licensing agreement with Black Dog Trading. |
| --- | --- |
ManagementCommentary
“ECD continues to see strong growth as we push through with our ambitious plans to be the preferred partner in the classic luxury automotive market. Progress along our growth plan was evidenced by our 129% increase in revenues to a record $8.9 million and strong gross margins of 31.8% during the second quarter, which is among industry leaders like Ferrari and other luxury auto brands,” stated Scott Wallace, CEO & Founder of ECD. Mr. Wallace continued “As we move ahead, we will continue scaling our existing footprint to maximize the business model, while also looking at growth opportunities in the larger classic car ecosystem. In 2024, we have expanded our classic car product line through the acquisition of assets of ‘Brand New Muscle Car’, adding classic Mustangs, and a licensing agreement with ‘Black Dog Trading’, which added classic Toyota FJs. We also continue to enhance our brand through strategic partnerships like our new collaboration with Turtleback Trailers. Not only are these opportunities important to our growth plans, but they provide us the ability to maximize our existing footprint and scale in a capital efficient manner.”
FullYear 2024 Guidance
The Company is reaffirming their guidance and expects 2024 revenue to be $33.0 million, representing an increase of approximately 108% when compared to revenue of $15.1 million in 2023.
FinancialResults
Revenue increased 129% to a record $8.9 million in the second quarter of 2024, compared to $3.9 million in the second quarter of 2023. The increase was primarily due increased volume, higher average selling price and increased used vehicle sales versus a year ago.
Second quarter 2024 gross profit increased significantly to $2.8 million, or 31.8% of revenue, compared to $1.2 million, or 31.8% or revenue in the second quarter of 2023.
Operating expenses were $2.7 million in the second quarter 2024, compared to $1.2 million in the second quarter 2023. The increase in operating expenses was primarily due to higher general and administrative expenses related to the ongoing costs of being a public company.
Operating Income improved to $0.1 million, compared to an operating loss of ($19,000) in the second quarter of 2023. The improvement was primarily due to a higher average selling price per vehicle and efficiencies in the build process.
Net loss for the second quarter 2024 was ($0.9 million), or $(0.03) per diluted share, compared to net income of $36,000, or $(0.00) per diluted share in the second quarter of 2023. The change in net loss was primarily the result of interest expense affiliated with a convertible note.
Adjusted EBITDA improved $0.4 million to $0.4 million in the second quarter 2024, compared to Adjusted EBITDA of $0.0 million in the second quarter of 2023.
Cash and equivalents on June 30, 2024 were $5.6 million, as compared to $8.1 million on December 31, 2023.
EarningsCall and Webcast
Management will host the conference call, followed by a question and answer session.
Date: Monday, August 19, 2024
Time: 4:30 PM Eastern Time (1:30 PM Pacific Time)
U.S. dial-in number: 877-270-2148
International number: 412-902-6510
Webcast: 2Q24 Webcast Link
The Company will also provide a link at https://ecdautodesign.com/ecd-investors/ for those who wish to stream the call via webcast. Please call the conference telephone number 5-10 minutes prior to the start time.
A telephonic replay of the conference call will also be available through August 21, 2024.
Toll-free replay number: 877-344-7529
International replay number: 412-317-0088
Replay passcode: 4333997
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AboutECD Auto Design
ECD, a public company trading under ECDA on the Nasdaq, is a creator of restored luxury vehicles that combines classic English beauty with modern performance. Currently, ECD restores Land Rovers Defenders, Land Rover Series IIA, the Range Rover Classic, the Jaguar E-Type and we have recently added Ford Mustang and Toyota FJ. Historically, each vehicle produced by ECD was fully bespoke, a one-off that is designed by the client through an immersive luxury design experience and hand-built from the ground up in 2,200 hours by master-certified Automotive Service Excellence ("ASE") craftsmen. The company was founded in 2013 by three British "gear heads' whose passion for classic vehicles is the driving force behind exceptionally high standards for quality, custom luxury vehicles. ECD's global headquarters, known as the "Rover Dome," is a 100,000-square-foot facility located in Kissimmee, Florida that is home to 90 talented craftsmen and technicians, who hold a combined 61 ASE and five master level certifications. ECD has an affiliated logistics center in the U.K. where its seven employees work to source and transport 25-year-old work vehicles back to the U.S. for restoration. For more information, visit www.ecdautodesign.com.
AboutNon-GAAP Financial Measures
The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used to evaluate companies on the basis of operating performance and leverage.
EBITDA is not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). In accordance with SEC Regulation G, the non-GAAP measurements in this press release have been reconciled to the nearest GAAP measurement, which can be viewed under the heading “Reconciliation of Net Income (loss) from Operations to EBITDA” in the financial tables included in this press release.
CautionaryNote Regarding Forward-Looking Statements
This press release includes express or implied statements that are not historical facts and are considered forward-looking within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance and may contain projections of our future results of operations or of our financial information or state other forward-looking information. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing,” “attempting,” or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.
InvestorRelations
Brian M. Prenoveau, CFA
MZ Group – MZ North America
ECDA@mzgroup.us
561 489 5315
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ECDAUTOMOTIVE DESIGN, INC.
CONSOLIDATEDSTATEMENTS OF OPERATIONS
| Three Months Ended <br> June 30, | Six Months Ended <br> June 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Revenue | $ | 8,872,003 | $ | 3,867,903 | $ | 17,180,042 | $ | 6,575,229 | ||||
| Cost of goods sold (exclusive of depreciation expense shown below) | 6,054,705 | 2,639,201 | 11,885,805 | 5,042,435 | ||||||||
| Gross profit | 2,817,298 | 1,228,702 | 5,294,237 | 1,532,794 | ||||||||
| Operating expenses | ||||||||||||
| Advertising and marketing expenses | 271,063 | 101,568 | 614,472 | 206,788 | ||||||||
| General and administrative expenses | 2,284,998 | 1,118,060 | 4,461,943 | 2,434,567 | ||||||||
| Depreciation and amortization expenses | 143,728 | 27,685 | 191,382 | 54,993 | ||||||||
| Total operating expenses | 2,699,789 | 1,247,313 | 5,267,797 | 2,696,348 | ||||||||
| Income (loss) from operations | 117,509 | (18,611 | ) | 26,440 | (1,163,554 | ) | ||||||
| Other income (expense) | ||||||||||||
| Interest expense | (1,151,548 | ) | - | (2,122,325 | ) | - | ||||||
| Foreign exchange loss | (5,607 | ) | - | (10,311 | ) | - | ||||||
| Other income (expense), net | 103,865 | 54,773 | 152,391 | 77,150 | ||||||||
| Total other (expense) income, net | (1,053,290 | ) | 54,773 | (1,980,245 | ) | 77,150 | ||||||
| Loss before income taxes | (935,781 | ) | 36,162 | (1,953,805 | ) | (1,086,404 | ) | |||||
| Income tax expense | 9,712 | (522,568 | ) | - | ||||||||
| Net income (loss) | $ | (926,069 | ) | $ | 36,162 | $ | (2,476,373 | ) | $ | (1,086,404 | ) | |
| Net income (loss) per common share, basic and diluted | $ | (0.03 | ) | $ | 0.00 | $ | (0.08 | ) | $ | (0.05 | ) | |
| Weighted average number of common shares outstanding, basic and diluted | 31,976,585 | 24,000,000 | 31,898,151 | 24,000,000 |
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ECDAUTOMOTIVE DESIGN, INC.
CONSOLIDATEDBALANCE SHEETS
| December 31, | |||||
|---|---|---|---|---|---|
| 2023 | |||||
| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | 5,660,684 | $ | 8,134,211 | ||
| Accounts receivable, net | 105,132 | - | |||
| Inventories | 10,119,487 | 11,799,304 | |||
| Prepaid and other current assets | 405,468 | 34,006 | |||
| Total current assets | 16,290,771 | 19,967,521 | |||
| Property and equipment, net | 607,603 | 968,677 | |||
| Deferred tax asset | - | 515,444 | |||
| Right-of-use assets | 3,586,612 | 3,763,294 | |||
| Brand name, net | 1,200,006 | 0 | |||
| Deposit | 60,200 | 77,686 | |||
| TOTAL ASSETS | 21,745,192 | $ | 25,292,622 | ||
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | |||||
| Current liabilities: | |||||
| Accounts payable | 1,104,896 | $ | 768,808 | ||
| Accrued expenses | 1,411,058 | 687,000 | |||
| Deferred revenue | 11,467,622 | 17,596,512 | |||
| Deferred taxes liability | 7,124 | - | |||
| Lease liability, current | 334,231 | 314,903 | |||
| Floor plan payable | 1,321,000 | - | |||
| Income tax payable | 1,115,559 | 1,115,559 | |||
| Share issuance liability | 1,325,000 | 250,000 | |||
| Other payable | 641,621 | 168,256 | |||
| Total current liabilities | 18,728,111 | 20,901,038 | |||
| Lease liability, non-current | 3,554,078 | 3,727,182 | |||
| Convertible note, net of debt discount | 11,551,467 | 10,683,452 | |||
| Total liabilities | 33,833,656 | 35,311,672 | |||
| Commitments and contingencies (Note 16) | - | - | |||
| Redeemable preferred stock, 0.0001 par value, 20,000,000 authorized shares; 25,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023 | 3 | 3 | |||
| Stockholders’ deficit: | |||||
| Common stock, 0.0001 par value, 1,000,000,000 authorized shares; 32,099,662 shares and 31,874,662 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively | 3,210 | 3,187 | |||
| Additional paid-in capital | 431,936 | - | |||
| Accumulated deficit | (12,523,613 | ) | (10,022,240 | ) | |
| Total Stockholders’ Deficit | (12,088,467 | ) | (10,019,053 | ) | |
| TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT | 21,745,192 | $ | 25,292,622 |
All values are in US Dollars.
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ECDAUTOMOTIVE DESIGN, INC.
Non-GAAPReconciliation - Reconciliation of Net Income (loss) to Adjusted EBITDA
| For the three months ended | For the six months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| June 30, | June 30, | |||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||
| Net loss | $ | (926,069 | ) | $ | 36,162 | $ | (2,476,373 | ) | $ | (1,086,404 | ) | |
| Excluding: | ||||||||||||
| Interest expense | 1,151,548 | - | 2,122,325 | - | ||||||||
| Income tax (benefit) expense | (9,712 | ) | - | 522,568 | - | |||||||
| Non-recurring professional fees | - | - | 408,936 | 210,099 | ||||||||
| Equity compensation expense | 139,459 | - | 256,959 | - | ||||||||
| Other (income) expense, net | (103,865 | ) | (54,773 | ) | (152,391 | ) | (77,150 | ) | ||||
| Foreign exchange loss | 5,607 | - | 10,311 | - | ||||||||
| Depreciation | 143,728 | 27,685 | 191,382 | 54,993 | ||||||||
| Adjusted EBITDA | 400,696 | 9,074 | 883,717 | (898,462 | ) |
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