LMP Provides Year-End Shareholder Update

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FORT LAUDERDALE, FL, December 28, 2021 (GLOBE NEWSWIRE) – LMP Automotive Holdings, Inc. (NASDAQ: LMPX), a U.S.-based e-commerce and facilities-based auto retailer, today released its update shareholders’ day at the end of the year.

Sam Tawfik, CEO of LMP, said: “Looking back on the year, it is remarkable to see how much we have accomplished given the current environment, not only in terms of financial performance but also in terms of unwavering focus, dedication and discipline. 2021 is shaping up to be a solid year for LMP, with the company generating record revenues and revenues, along with many other records in each of our lines of business, while maintaining credit discipline and strengthening our balance sheet on on a quarterly basis. We completed the acquisition of our White Plains subcontractor, New York Chrysler Dodge Jeep Ram at the start of the fourth quarter using approximately $ 5 million in cash from the company’s balance sheet, 55,000 common shares and $ 1.3 million. cash dollars from our existing credit facility. This acquisition will be immediately accretive to earnings in the fourth quarter of this year. As a result of this year’s acquisition activity, the company currently owns 15 new vehicle franchises, operates 4 thrift stores over 12 rooftops in 4 states that generate over $ 600 million in annualized revenue.

Macroeconomic and industry dynamics have created an unprecedented backdrop for consolidation in the highly fragmented automotive retail sector. The expected medium-term rebalancing of vehicle supply and demand offers substantial visibility into dealer profitability, both thanks to higher gross margins per vehicle and a rebound in unit volumes following a pent-up demand. Additionally, high-margin parts and service revenues are benefiting from growth in vehicle kilometers driven after a pandemic-related lull and strong economic growth.

Our strategy is to strengthen operational density in attractive markets by partnering with existing operators of profitable concessions. We use a prudent combination of cash, equity and acquisition consideration to align interests with our partner operators. We believe this approach to M&A is a low-risk, scalable platform model that offers vendors a unique value proposition and captures the upscaling at the operational levels of the company and region. Our acquisition pipeline continues to grow and we are now focused on acquiring larger
dealer groups, as larger transactions require a similar due diligence and closing effort as smaller transactions. However, we remain opportunistic in acquiring selected national and economic import brands in our targeted regions.

As part of our strategic realignment, we sold certain assets related to our secondary rental and subscription business during the year. We believe that deploying this capital in our dealerships will generate higher returns.

Our concessions generate substantial operating cash flow, which we will use to prudently manage our liquidity and leverage. We intend to repay our existing term debt of approximately $ 11 million in the fourth quarter of 2021, resulting in a balance of approximately $ 85 million, of which the company is allocating $ 53 million to its real estate holdings and $ 32 million at his Blue Sky concession to buy debt. Essentially at the current rate of cash generation, if we choose it, the business can pay off its current blue sky debt in less than a year.

During the year, our company signed purchase agreements with 8 targets that will bring the platform to 57 franchises and 6 thrift stores across 36 rooftops in 6 states, which will more than triple the number of business of the company. These acquisitions will add density to the footprint of our existing dealers and expand into new, very attractive geographic areas.

We engaged Bank of America to help us place debt to refinance our existing credit facilities. We believe that our new credit facilities, if and when closed, will provide the capital to fund the acquisitions for which we have signed purchase agreements, as well as the flexibility to deal with future growth.

As part of our acquisition strategy, we ask an accounting firm to audit each of our targets in accordance with the rules and regulations promulgated by the SEC and, from time to time, to provide audited interim financial statements for each of our targets. We file our target’s financial statements and LMP’s pro forma financial statements in accordance with SEC reporting requirements. The requirement for our targets to have audited financial statements may extend the time between signing a purchase contract and closing, but it is a critical part of our financial policy, especially with the pace of our growth.

Our goal is to become one of the leading automotive retailers in the United States, and we have full confidence in our plan to execute our growth strategy. Our goal in 2021 was to lay the foundation for a high performing concession platform and demonstrate a history of success. Our priorities for 2022 will be to complete contract acquisitions, integrate our acquisitions and selectively add to our portfolio of concessions to generate the highest possible risk-adjusted returns.

Ultimately, the basis of our success is our people. They are the ones who serve our customers and our communities, build the technology and make the strategic decisions. Whatever your view of the complexity of the world and the risks and opportunities to come, having a great team of people – with the necessary abilities who can navigate difficult circumstances while still dedicating themselves to professional excellence – is what guarantees our prosperity, now and in the future. Finally, I would like to thank all of our LMP shareholders, stakeholder partners, employees, external professionals, suppliers and creditors for their continued efforts and support.

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. These statements include, without limitation, all 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, followed or include the words “aim”, “anticipate”, “believe”, “estimate”, “expect”, “foresee”, “intend”, “probable”, ” perspective “,” “plan”, “potential”, “project”, “projection”, “research”, “may”, “could”, “could”, “should”, “should”, “would”, the aspects negatives of these and other words and terms with similar meanings. Forward-looking statements are based on management’s current expectations and are subject to risks and uncertainties that could adversely affect our business, results of operations, financial condition and the value of our shares. Factors that could cause actual results to differ materially from those currently expected include: our reliance on external sources to finance our operations; our ability to effectively execute our business plan; our ability to maintain and develop our reputation and to achieve and maintain 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 infringement of the intellectual property rights of others; our ability to maintain and develop relationships with existing customers and automotive suppliers; and our ability to compete and succeed in a highly competitive and constantly changing industry; as well as other risks described in our filings with the SEC. There can be 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 that date. We expressly disclaim any obligation or commitment to publicly release any update or revision to any forward-looking statement contained herein to reflect any change in our expectations or any change in the events, conditions or circumstances upon which such statement is based, unless required by law.

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