Polished.com Inc. (NYSE American: POL) ("Polished" or the "Company") today announced that it is filing all restated and/or delayed financial statements for Fiscal Year 2021 and Fiscal Year 2022 and is filing its results for the first quarter of Fiscal Year 2023. As a result, the Company will be current with its financial reporting obligations and is positioned to retain its listing status on the NYSE American. The Company's filings and supplemental information can be found on its investor relations website: https://investor.polished.com/financials/sec-filings.
The process of filing amended and delayed financial statements was extensive because it entailed onboarding a new audit firm and the auditing of the previously filed financial reports since the Company's merger and initial public offering ("IPO") in 2021. The audit resulted in a restatement of the Fiscal Year 2021 and first quarter of Fiscal Year 2022 results, as well as a reevaluation of the Company's goodwill associated with the IPO.
Rick Bunka, Chief Executive Officer, commented:
"Since new management joined in October 2022, we have been intensely focused on addressing the findings of the Audit Committee's 2022 investigation and putting Polished on stronger footing. We have achieved the first round of milestones that include becoming current on financial reporting obligations and positioning the Company's securities to preserve their listing status. This said, we acknowledge that the unwelcomed events of the past year were disruptive for our business, suppliers, partners, shareholders and warrant holders. Fortunately, reaching initial milestones and remediating past issues will allow the management team to continue its focus on attaining greater stability, producing profitable growth and resuming normalized communication with the market.
Importantly, while the restated performance of the business in Fiscal Year 2022 was extremely disappointing, our first quarter results demonstrate that while operating on reduced volume, the Company can deliver more normalized margins and earnings within the constraints of a difficult consumer spending environment. We intend to spend the rest of this fiscal year establishing a stronger infrastructure, identifying more efficiencies and making sure we remain a destination of choice for customers. By taking the right steps over the duration of 2023, which is a fix-and-rebuild year, we will be well positioned to pursue profitable growth and enhanced value in 2024 and beyond."
Polished also provided updates on its capital position, outlook and strategic review.
Top Metrics ? First Quarter 2023
Top Metrics ? FY 2022
Top Metrics ? Amended and Restated FY 2021 Results
Update on Capital Position, Outlook and Ongoing Review Process
Conference Call
The Company will host an investor conference call at 8:30 a.m. ET on Friday, August 4, 2023 to review its results. The phone number for the investor conference call is 1-844-881-0136 (toll-free) or 1-412-902-6507 (international); please ask to join the Polished Investor Conference Call. This call and all supplemental information can be accessed on the Company's investor relations site at https://investor.polished.com.
ABOUT POLISHED
Polished is raising the bar, delivering a world-class, white-glove shopping experience for home appliances. From the best product selections from top brands to exceptional customer service, we are simplifying the purchasing process and empowering consumers as we provide a polished experience, from inspiration to installation. A product expert helps customers get inspired and imagine the space they want, then shares fresh ideas, unbiased recommendations and excellent deals to suit the project's budget and style. The goal is peace of mind when it comes to new appliances. Polished perks include its "Love-It-Or-Return-It" 30-day policy, extended warranties, the ability to arrange for delivery and installation at your convenience and other special offers. Learn more at www.Polished.com.
FORWARD LOOKING STATEMENTS
This press release contains "forward-looking statements" that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "seek," "may," "might," "plan," "potential," "predict," "project," "target," "aim," "should," "will", "would," or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company's current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond the Company's control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those described more fully in the section titled "Risk Factors" of the Company's Annual Report on Form 10-K for the year ended December 31, 2021, and Quarterly Report on Form 10-Q for the quarter ended March 31, 2022, filed with the Securities and Exchange Commission. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.
NON-GAAP FINANCIAL MEASURES
The Company's audited consolidated financial statements and unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States ("GAAP"). The Company also provides financial information in this release that was not prepared in accordance with GAAP and should not be considered as an alternative to the information prepared in accordance with GAAP. The Company believes the non-GAAP financial measures presented in this press release will help investors understand the financial condition and operating results of the Company and assess the Company's future prospects. The Company believes these non-GAAP financial measures, each of which is discussed in greater detail below, are important supplemental measures because they exclude unusual or non-recurring items as well as non-cash items that are unrelated to or may not be indicative of our ongoing operating results. Further, when read in conjunction with GAAP results, these non-GAAP financial measures provide a baseline for analyzing trends in our underlying businesses and can be used by management as a tool to help make financial, operational and planning decisions. Finally, these measures are often used by analysts and other interested parties to evaluate companies in our industry by providing more comparable measures that are less affected by factors such as capital structure.
The Company recognizes that these non-GAAP financial measures have limitations, including that they may be calculated differently by other companies or may be used under different circumstances or for different purposes, thereby affecting their comparability from company to company. In order to compensate for these and the other limitations discussed below, management does not consider these measures in isolation from or as alternatives to the comparable financial measures determined in accordance with GAAP. Readers should review the reconciliations below and should not rely on any single financial measure to evaluate our business.
The non-GAAP financial measure used in this press release is adjusted EBITDA. The Company defines adjusted EBITDA as net income before income taxes, depreciation and amortization, financing costs, interest expense, sales tax accrual and one-time non-operational events. Adjusted EBITDA is not calculated in accordance with GAAP and should not be considered an alternative to any financial measure that was calculated under GAAP. Adjusted EBITDA is used to facilitate a comparison of the ordinary, ongoing and customary course of the operations of the combined company on a consistent basis from period to period and provide an additional understanding of factors and trends affecting the business of the Company. Adjusted EBITDA may not be comparable to similarly titled non-GAAP measures used by other companies as other companies may have calculated the measures differently.
The reconciliation of adjusted EBITDA to net income for the Company is provided below (in thousands):
Q1 2023:
Three Months Ended |
|||
March 31, 2023 |
|||
Net loss for three months ended March 31, 2023 |
$ |
(2,761 |
) |
Depreciation and amortization |
|
1,070 |
|
Interest expense |
|
1,882 |
|
Income tax expense |
|
104 |
|
EBITDA |
|
295 |
|
Adjustments |
|||
Loss on change in fair value of derivative contract |
|
1,325 |
|
Management fee |
|
63 |
|
Stock compensation expense |
|
188 |
|
ADJUSTED EBITDA |
$ |
1,871 |
|
FY 2022:
Year-Ended |
|||
December 31, 2022 |
|||
Net loss for year |
$ |
(125,965 |
) |
Depreciation and amortization |
|
11,456 |
|
Interest expense |
|
3,421 |
|
Income tax benefit |
|
(8,409 |
) |
EBITDA |
|
(119,497 |
) |
Adjustments |
|||
Impairment of goodwill and intangible assets |
|
109,140 |
|
Loss on settlement of debt |
|
3,240 |
|
Estimated penalty and interest for late filing sales tax |
|
2,123 |
|
Negotiated settlement of fees related to Appliances Connection Acquisition |
|
1,750 |
|
Specific inventory reserves |
|
1,100 |
|
Allowance for doubtful accounts |
|
900 |
|
Severance payments |
|
613 |
|
Sales tax audit findings |
|
400 |
|
Fee to re-audit 2021 |
|
465 |
|
Delaware 405 lawsuit |
|
475 |
|
Miscellaneous other items |
|
516 |
|
ADJUSTED EBITDA |
$ |
1,225 |
|
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