CarLotz, Inc.

Good day, and thank you for standing by. Welcome to the CARLOTS fourth quarter and full year 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during this session, you will need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your host today, Susan Lewis, VP of Investor Relations. Please go ahead.

Thank you. Good afternoon, everyone. With me on the call is Luis Solorzano, our recently appointed Chairman of the Board, Michael Bohr, CarLots' co-founder and outgoing Chief Executive Officer, and Tom Stoltz, our Chief Financial Officer. For those of you who don't know Luis, before his role as chairman, he was our lead independent director and is also CEO of Acomar Partners. We are glad to welcome him to today's call. Before we get started, I would like to remind you of the company's safe harbor language, which I'm sure you're all familiar with. The statements contained in this conference call, which are not historical facts, may be deemed to constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual future results may differ materially from those suggested in such statements due to a number of risks and uncertainties, all of which are described in the company's filings with the SEC, which includes today's press releases. If any non-GAAP financial measure is used on this call, a presentation of the most directly comparable GAAP financial measure to this non-GAAP financial measure will be provided as supplemental financial information in our press release. Now, I would like to turn the call over to Luis.

Thank you, Susan. Good afternoon, everyone, and thank you for joining us to discuss our fourth quarter and full year 2021 financial results, our initial thoughts on 2022, and also importantly, the announcement of our new CEO. We started 2021 with tremendous growth plans. During the year, we made significant investments in all areas of the business, hub expansion, marketing, technology, and building the organization to execute our growth plan. We were, and today we still are, strongly committed to offering our unique and differentiated consignment business model, which we believe generates value for both sellers and buyers across the country in this highly fragmented used vehicle marketplace. As you know, the used car market has undergone unprecedented disruptions. With the price of used vehicles rising over 30%, new car production down dramatically, and used car inventory at levels not seen in recent memory. Much of this stems from the chip shortage. Our new hubs have not been growing unit sales as quickly as expected, and our inventory mix has been less desirable due to a higher penetration of lower-aged vehicles with higher average price points, and also a higher penetration of dealer-owned units acquired through auctions. These factors have created and continue to create significant challenges to our business. And despite our efforts, our financial results felt significantly below our expectations. As a result, the board of directors agreed that a new CEO will help to steer the company forward into the future. Consequently, we're extremely excited to announce that Lev Peeker, CEO of CarParts.com, is joining as CEO and member of the Board of Directors starting April 18th. We believe Lev has experience, track record, and passion to help grow this business. Lev has led a successful consumer-centric e-commerce strategy, doubling sales, and improving profitability during his three-year tenure at CarParts.com. We believe there are many parallels between CarParts.com and CarLots that, in our view, make Lev an ideal CEO for this business. For example, Both companies operate in industries that are very large and highly fragmented. And both businesses are consumer-facing, operationally complex, and technology-enabled. We believe Lab's experience with operations and marketing will offer significant benefits to the company that we expect will yield top and bottom-line results. During Lab's stewardship of CarParts.com, the stock significant growth as he focused the team on effectively executing a strategic vision that resulted in increased sales and improved profitability. We really look forward to Lev joining us and introducing Lev to you very soon. While we expect our new CEO to take time to fully evaluate the business and communicate his vision, in our view, our consignment model will continue to be a Carlott differentiator. As part of that, we emphasize our commitment to serving our corporate sourcing partners. We have maintained these relationships and have run many new pilots during these challenging times in this challenging sourcing environment. Finally, on behalf of the entire board, I'd also like to take a moment to say thank you to our outgoing CEO, Michael Bohr, for his significant contributions to the company. Mike will continue to consult with Carlos for the next 12 months, so that Lab and the company will have access to Mike's vast institutional and industry knowledge, with the goal of making this transition very smooth. Mike would like to say a few words before we discuss the financial results.