Q4 2022 EzFill Holdings Inc Earnings Call

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Greetings welcome to easy sell holdings fourth quarter 2022 earnings conference call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad. Please.

Note. This conference is being recorded I will now turn the conference over to your host John Mcnamara, Sir you may begin.

Thanks.

Welcome and thank you for joining us today for the easy fill 2022 fourth quarter and full year financial results Conference call.

With us today from management are Mike Macdonald, Chief Executive Officer, and Harp Levine Chief Financial Officer.

Before we begin as usual, we would remind everyone that certain matters discussed on today's call or answers that may be provides questions.

Constitute forward looking statements as defined under federal Securities laws.

Words, such as May should projects expects intends plans believes.

Anticipates hopes estimates and variations of such words and similar expressions are intended to identify forward looking statements.

These statements are subject to numerous conditions, many of which are beyond the control of the company, including those set forth in the risk factors section of the company's annual report on Form 10-K filed with the SEC copies of these documents are available on the SEC's website as well as on the company's website.

I would now what that actual results may differ materially from those expressed or implied by such forward looking statements. The company undertakes no obligation to update these statements for revisions or changes after the date of this call except as required by law.

I'd like to turn the call over to Mike Macdonald CEO go ahead, Mike.

Yeah.

Thanks, John .

Good afternoon, everyone. Thank you for joining us today G U R 22 quarter and full year financial result.

As we noted in our press release, which we issued a short while ago 2022 with easy feels first full calendar year as a public company.

At the end of 2021, one full operating quarter under our belt, we had about a dozen trucks that we service out of one location in Miami and we had about 15 fleet customers that we were generating approximately $3 5 million in annual revenue more than half of which came from one customer today.

Today, we're very pleased to report that after our first full year of operating results as a public company. We can point to significant growth in most of the key metrics investors look for in small growing companies.

We increased our revenue by 108% from $7 2 million to $15 million.

Net revenue was spread much more widely across more than 100 fleet accounts.

The customers that we service with 40 trucks operating out of five locations across Florida.

Previously announced in January and February we added 19, new fleet accounts.

Our customer base as diverse as you would expect in a large state like Florida, ranging from small moving companies and pet grooming companies to one of the nation's largest retail grocers. Most recently, we also announced the three year extension of our agreement with the organizers of the Miami Formula One Grand Prix.

We expect to see the <unk> count number continue to grow as the easy built brand becomes more widely known and respected.

We're focused on improving margins through a combination of higher average pricing predicting and new customers and improve driver in fuel purchasing cost efficiency.

We're also looking into the sale of other types of fuels that have higher margin.

We will continue to look for opportunities to add innovative solutions.

We leverage our technology to generate additional sources of revenue.

From other than fuel arising out of the trend.

The on demand services and supported with careful and focused investments in marketing this will likely involve strategic partnerships with other companies that have complementary products.

There is no doubt that we operate in a competitive environment, but with a $20 billion in growing drilling market in Florida.

We believe there is plenty of room to grow in our home state in short term, we will continue and evaluate opportunities to expand out of the state later in 2023.

With that I'll, let Arthur walk you through the financial results go ahead Sir.

Thank you Mike.

As Mike noted revenues for the full year.

8 million from $7 2 million in 2021, and 108% increase.

On a quarterly basis fourth quarter revenue increased to $4 9 million up from $2 2 million in the prior year fourth quarter.

The increase in both periods was driven by an increase in total gallons delivered as well as an increase in the average fuel margin per gallon.

For the year 2022, the total gallons delivered.

With $3 6 million compared to $2 3 million in 2021, 56% increase and.

And our margin per gallon in 2022 rose to 45.

<unk> 37 in 2021, a 22% increase.

As Mike mentioned.

We've been adding new customers.

Okay per gallon and where possible. We are also increasing fuel margin and fees for existing customers.

Operating expenses in 2022 were $12 7 million compared to $8 1 million in 2021, a 56% increase the increases were mainly in payroll sales and marketing insurance technology and public company expenses.

As we grew our infrastructure during the first three quarters in order to accommodate our growth and our expansion throughout Florida.

Our fourth quarter operating expenses were approximately 600000 lower.

Year over year, primarily due to lower stock compensation lowered lowered D&O insurance premiums and efficiencies realized in other operating expenses or opex was significant sequentially lower than in the third quarter by a similar amount.

Depreciation and amortization for the full year was $1 8 million up from <unk> 9 million in 2021 with the increase mainly due to purchases of delivery vehicles.

Interest expense was 104000 in 2022 compared to 776000 in 2021.

The decrease primarily from the early payment of pre IPO debt.

On a GAAP basis, we reported a net loss in 2020 to $17 5 million compared to $9 3 million in the prior period.

In the fourth quarter, our loss of $6 2 million included a tube.

Impairment charge, primarily related to goodwill and intangibles the.

The majority of this impairment related to a license for technology that the company is not using and does not factor into our future plans.

Adjusted EBITDA loss for 2022 was $11 4 million compared to adjusted EBITDA loss of $5 8 million in 2021.

Increasingly adjusted EBIT loss reserve reflects significant spending on infrastructure during 2022 to grow the business, our adjusted EBIT for the fourth quarter improved slightly year over year and sequentially compared to.

Mainly as a result of a tighter focus on our marketing technology and other spending without limiting our ability to continue to grow the top line.

We will continue.

We are focused in our spending as we continue to grow the business as Mike mentioned, we now have 40 trucks in our fleet and there is still much room for our utilization to increase with the existing fleet.

We will review our needs as the year progresses, and if necessary, we'll order additional trucks.

We used approximately $2 6 million in cash in operations during the fourth quarter and $11 6 million for the full year.

Our cash position at December 31 was $4 2 million compared to $16 9 million at year end 2021.

Outstanding borrowings.

$100 million.

We're evaluating a number of options to increase our cash position.

There is limited detail that we can provide on those efforts at the moment we.

We will look to update the investment community on any new developments as soon as we have them.

With that we'll be happy to take any questions.

At this time, we will be conducting a question and answer session.

You would like to ask a question. Please press star one on your telephone keypad.

Confirmation tone will indicate your line is in the question queue.

You May press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.

One moment, please while we pull for questions.

Okay.

Our first question comes from Tate Sullivan from Maxim Group.

Okay.

Hi, It's all 100 and you want to take Sullivan.

Thank you for taking my question.

Okay.

Can you guys hear me okay.

Yeah, Hi, Kate how are you.

Hi, its alejandro.

Oh.

<unk> okay.

Based on recent.

Our recent announcement of the Miami Grand P. I was kind of wondering have you started to earn revenue related to the preparation for the night that yet or will you start earning revenue.

Prior to that a little prior to the event.

Yes, we started earning revenue in January .

100.

Construction getting the site ready doing all the work there, it's probably going to be six months.

Ramp up period, but we've been been engaged in everyday is getting more and more volume as the activity has continued to grow to get ready for the event.

Yes, I'll add to that.

We expect that the largest amount of the revenue from the from that event will be in Q2.

Yes, that's just the way the the event happens during Q2 and theirs.

The biggest concentration of our our work is.

Darren.

Thank you Matt.

Understood and if I could have one follow up as well.

Was wondering are the fleet contracts competitively bid or are mostly a result of your sales efforts.

I would say the majority of them are through the sales team and the sales efforts.

Okay.

Great. Thank you so much I appreciate it.

Hey.

Okay.

One reminder, that if you would like to ask a question at this time. So please press star one on your phone.

Sir there appear to be no further questions in the queue and we have reached the end of the question and answer session. I will now I will turn the call over to John Mcnamara for closing remarks.

Okay.

Hello, everyone was closing remarks.

This is Mike Macdonald John Me maybe.

On mute I would just say.

Thanks for joining the call.

Obviously very pleased with our progress in Q1, so far this year.

And we're looking forward to.

Extremely prosperous 2023, so I appreciate everybody joining the call. Thank you.

Okay. This does conclude today's conference call and you may disconnect. Your lines at this time. Thank you for your participation.

Yeah.