LMP Automotive Holdings, Inc. (NASDAQ:LMPX) (the "Company" or
“LMP”), an e-commerce and facilities-based platform for consumers
who desire to buy, sell, subscribe for or finance pre-owned and new
automobiles, today announced its entry into a definitive agreement
for the acquisition of a 70% Interest in New York’s largest
franchise dealership group, Atlantic Automotive Group, and New York
logistics and vehicle storage company, Atlantic Central Storage, in
a deal valued at $608,000,000.
Management will hold an Analyst and Investor
conference call Tuesday, October 13, 2020, at 4:30 p.m. ET to
review and discuss the Company's business. Details of the call are
included in this press release. Details of the call are included in
this press release.
Evan Bernstein, the
Company’s Chief
Financial Officer commented,
“This acquisition is expected to add an estimated $1.6 billion in
revenue, $38 million in net income, or $3.18 per share, on an
annualized basis in 2021, combined with our currently contracted
acquisitions which we expect to close beginning the end of next
month and the following months. We anticipate combined expected
revenues post-closing to exceed $2.2 billion, generating
approximately $55 million in net income, or$4.59 per share, based
on 12 million shares outstanding post financings.”
Mr. Bernstein
added, “We are seeing a robust acquisition market
as we continue to build our pipeline of prospective dealership
acquisitions and intend on accelerating our acquisition strategy
moving forward in our targeted regions, as well as recruiting
adding additional management and promoting within our portfolio
companies.”
Richard
Aldahan, the
Company’s Chief
Operating Officer
added, “This brings our total
contracted new vehicle franchise count to 33: 2 Lexus, 5 Toyota, 3
Honda, 1 Subaru, 6 Hyundai, 3 Genesis, 3 KIA, 4 Chevrolet, 2 GMC, 2
Cadillac, and 2 Buick dealerships. In meeting the Atlantic
management team, it became very clear why they are out-preforming
most in the industry. Each and every one of them are loyal,
passionate and proud of their company, and are the most talented
management team I have seen in this industry. They contribute 110%
at all times. I am looking forward to working with everyone in the
company and building on their historical success. We plan to
accelerate their growth and earnings by adding e-commerce and
flexible subscription-leasing options for their customers. We
believe this combined approach will produce continued revenue and
earnings growth for us and our shareholders.”
Sam Tawfik, the Company's Chairman and
Chief Executive Officer stated, “I want to thank the
Atlantic and LMP teams and everyone else involved for their
tireless efforts in making this historic transaction happen.
Looking forward, we are as optimistic as ever and focused on our
next generation of innovation and growth as we roll out e-commerce
home delivery, site-to-store, and ship-from-store delivery
strategies for our customers and demonstrate the value of our
e-commerce hybrid model at the growing list of auto dealerships we
intend to acquire. We believe LMP’s e-commerce sales and
subscription and technology overlayed at these dealerships will
continue to demonstrate the value of our hybrid model. Upon
closing, and combined with our currently contracted acquisitions,
in 2021 we expect to have over 9,000 vehicles exposed and available
nationwide on our online platform and app for our customers with a
cost-efficient transportation and delivery network that we will
begin to integrate and add to inventories shortly after close. This
is an important addition to our network given Atlantic’s dominant
and clustered presence in New York, one of the most important and
lucrative markets in the United States. Atlantic’s vehicle
fulfillment, reconditioning and service capacity will
cost-effectively expand our free delivery radius and cut out
multiple legs of costly transportation, logistics and
reconditioning costs. Our team is as excited as ever and looking
forward to working with our future teammates. As we have mentioned
previously, we are seeing a robust acquisition market and have a
pipeline of prospective acquisitions for which we are in active
negotiations. We intend to continue to build our pipeline of
prospective dealership acquisitions and accelerate our acquisition
strategy moving forward. LMP currently plans on adding an
additional 30 to 40 dealerships in 2021 that combined with the
existing acquisitions under contract have the potential to
represent $9.50 to $11.50 per share in annualized net income,
expand our e-commerce and fulfillment presence, provide
efficiencies and increase our inventory exposed in our
lmpmotors.com online store.”
E-COMMERCE AND TECHNOLOGY
UPDATE
Last month the Company launched its next
generation interactive e-commerce website with similar
functionality as it previously announced app. The Company expects
this to enhance its customer experience and onboarding, as well as
allow LMP to process customer orders quicker, resulting in a
cost-efficient increase in future sales.
The Company is currently developing software
logic and algorithms for the integration of finance and insurance,
service contracts, and automated document management that LMP
expects to significantly increase margins in addition to gross and
net profits per sale. Management anticipates releasing these
updates to its app and website in the fourth quarter of this year
and first quarter of 2021. LMP also intends to simultaneously
integrate the vehicle inventory of its contracted acquisitions. LMP
expects this combination will enhance its customer experience,
lower SG&A per transaction. as well as significantly expand its
lmpmotors.com online store.
LMP BELIEVES
ITS COMPELLING
HYBRID
E-COMMERCE
AND ACQUISITION
MODEL IS
SUPERIOR TO ITS
PEERS FOR THE FOLLOWING
REASONS:
Speed to
Market – Faster
Year-over-Year
Sales Growth – Significantly Higher
Margins
– Higher, e-commerce sales, subscriptions and
leasing, clustered presence for logistical cost savings and
continued expansion of its owned vehicle transport network for
procurement of inventory, intra-store network transport, wholesale
disposition, consumer trade-ins and purchases, subscription swaps
and lease returns, as well as online consumer order
fulfillment.
Vehicle Storage and
Transport – Lower, Atlantic
Central Storage has off-site storage capacity in close proximity of
its dealer network for approximately 7,000 vehicles and a late
model multi-car carrier fleet that can cost effectively transport
about 5,800 vehicles monthly. We intend to expand this capacity in
New York and other regions.
Reconditioning
Cost – Lower, In-place
reconditioning, parts and service at wholesale OEM dealer cost
prices at most facilities.
Fulfillment
Cost – Significantly Lower
Customer Acquisition
Costs - Significantly Lower,
acquired dealerships have already established strong geographic
brand recognition and distribution, which translates to lower
marketing cost per unit. We believe that integrating all acquired
dealerships inventory to our lmpmotors.com online superstore and
mobile apps should result in an increase in organic visits and a
higher conversion of consumer leads based on internal test markets.
We intend to integrate inventory shortly after the close of
acquisitions.
BOTTOM LINE
We expect our hybrid and acquisition
model to lead to the following in relation to our
peers:
EBITDA Growth
– Significantly Higher
EBITDA Profits
– Positive and Significantly Higher
Net Income
Growth – Significantly Higher
Net Income
- Positive and Significantly Higher
The Company believes
it is
uniquely
positioned to
outperform its
industry
peers
CONFERENCE CALL
Management will host an investor conference call
at 4:30 p.m. ET on Tuesday, October 13, 2020 to discuss the
Company’s recently announced acquisition and conclude with Q&A
from participants. All interested parties can join the call by
dialing (877) 407-3982 or (201) 493-6780. A webcast of the call may
be accessed
at: http://public.viavid.com/index.php?id=141979.
An archived webcast of the conference call will
be accessible from the Investor Relations section of the company's
website, https://investors.lmpah.com/.
A telephonic replay of the conference call will be available
through Tuesday, October 27, 2020 by dialing (844) 512-2921 or
(412) 317-6671 and entering passcode 13711965.
ABOUT LMP AUTOMOTIVE HOLDINGS, INC. –
“BUY, SUBSCRIBE, SELL AND REPEAT.”LMP
Automotive Holdings, Inc. (NASDAQ: LMPX) describes its business
model as “Buy, Subscribe, Sell and Repeat.” This means that we
“Buy” pre-owned automobiles primarily through auctions or directly
from other automobile dealers, and new automobiles from
manufacturers and manufacturer distributors at fleet rates. We
“Subscribe” the automobiles to our customers by allowing them to
enter into our subscription plan for automobiles in which customers
have use of an automobile for a minimum of thirty (30) days. LMP’s
all-inclusive vehicle subscription membership includes monthly
swaps and covers insurance, maintenance and upkeep. It offers the
flexibility to upgrade your vehicle to a more premium model or
downgrade for a lesser cost model when you like. We “Sell” our
inventory, including automobiles previously included in our
subscription programs, to customers as well, and then we “Repeat”
the whole process.
Investor Relations:LMP
Automotive Holdings, Inc.500 East Broward Boulevard, Suite 1900Fort
Lauderdale, FL 33394investors@lmpah.com
For more information visit: lmpmotors.com
FORWARD-LOOKING STATEMENTS:This press release
may contain “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934, each as amended. Such statements
include, but are not limited to, any statements relating to our
expectations, beliefs, projections, future plans and strategies,
anticipated events or trends and similar matters that are not
historical facts. These statements may be preceded by, followed by
or include the words “aim,” “anticipate,” “believe,” “estimate,”
“expect,” “forecast,” “intend,” “likely,” “outlook,” “plan,”
“potential,” “project,” “projection,” “seek,” “can,” “could,”
“may,” “should,” “would,” will,” the negatives thereof and other
words and terms of similar meanings. Forward-looking statements are
based on management’s current expectations and are subject to risks
and uncertainties that could negatively affect our business,
operating results, financial condition and stock value. Factors
that could cause actual results to differ materially from those
currently anticipated include: our dependence upon external sources
for the financing of our operations; our ability to effectively
executive our business plan; our ability to maintain and grow our
reputation and to achieve and maintain the market acceptance of our
services and platform; our ability to manage the growth of our
operations over time; our ability to maintain adequate protection
of our intellectual property and to avoid violation of the
intellectual property rights of others; our ability to maintain
relationships with existing customers and automobile suppliers, and
develop relationships; and our ability to compete and succeed in a
highly competitive and evolving industry; as well as other risks
described in our SEC filings. There is no assurance that any
forward-looking statements will materialize. You are cautioned not
to place undue reliance on forward-looking statements, which
reflect expectations only as of this date. We expressly disclaim
any obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in our expectations or any changes in events,
conditions or circumstances on which any such statement is based,
except as required by law.
SOURCE: LMP Automotive Holdings,
Inc.
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