Envela Corporation · AMEX:ELA
Envela — Q3 2020 Earnings Presentation
28 slides from Envela's earnings presentation, November 2020
Slide 1: Recommerce: Extending the Life of Goods
RECOMMERCE EXTENDING THE LIFE OF GOODS Fall 2020 Investor Presentation
Slide 2: Cautionary statements
Cautionary statements This presentation contains “forward-looking statements,” that is, statements that address future, not past events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition. Forward- looking statemen
Slide 3: What is recommerce?
What is recommerce? Recommerce / rē kämǝrs / Recommercialization Refers to the process of reselling previously-owned or used products as whole goods and / or the recycling of of an item’s components or materials for re-use 2
Slide 4: Recycling is also recommerce
Recycling is also recommerce Known as “end-of-life” recycling, some waste management companies specialize in recycling while others are more specialized in the extraction, collection, and resale of high-value recyclables Examples where “end-of-life” recycling is needed: Jewelry styles change with ti
Slide 5: Recommerce is driving consumer and market trends
Recommerce is driving consumer and market trends… of 18-29 year-olds favor at which recommerce 74% sustainable, recycled, 4x merchants are growing or re-used products faster than retail 56M women purchased used handbags in 2018 $58B estimated size of e- waste market by 2021 of toxic, heavy metals co
Slide 6: Now a trillion-dollar marketplace with emerging leaders and goods
…and is now trillion-dollar marketplace with emerging leaders & goods Online Most common recommerced items Brick & Mortar Sold as whole goods • Cars • Jewelry • Clothing • Electronics • Gym equipment ► • Furniture • Musical instruments Recycled for component re-sale or refinement • Printer ink • Jew
Slide 7: Our approach
Our approach
Slide 8: ELA investment highlights
The recommerce sector is growing 4x faster than retail and expected to accelerate post the coronavirus pandemic Engaged in both recommerce operations (i.e., both reselling and recycling), Envela is positioned to win ELA Two separate divisions with dedicated operating companies focused on the highest
Slide 9: Evaluating potential recommerce inventory
Evaluating potential recommerce inventory Recommerce requires includes: assessing prospective 1• Determining the re-sale inventory for its ability value of an item as a whole good which may to re-sell items or require refurbishment or upgrading recycle their materials for re-use 2• Calculating the r
Slide 10: Envela's approach to recommerce is grounded in four key pillars
Envela’s approach to recommerce is grounded in four key pillars Our industry focus is currently concentrated in two of the highest value product segments Expert evaluators quickly assess the recommercialized value of individual items or a ‘lot’ of products Our B2B and B2C business models mitigate ri
Slide 11: Q1-Q3 2020 and Q3 2020 sales growth
Q1-Q3 2020 Q3 2020 $85M sales, up $39M sales, up 42% YoY 70% YoY We service business and consumers by recommercializing previously used products for re-sale as whole goods or recycling products for their component or material value 10
Slide 12: Our business
Our business 11
Slide 13: Our business operates in two primary divisions
Our business operates in two primary divisions Four operating subsidiaries in the recommerce of Three operating subsidiaries in the recommerce consumer electronics and IT equipment of luxury assets (i.e., jewelry, diamonds, watches, rare coins & currency) 12
Slide 14: ECHG division
Echo entities recommercializes consumer electronics and IT equipment and provides the highest value on resale as whole goods or the recycled value in components or refined materials Where we acquire recommerce inventory Businesses Education & Manufacturers ECHG division Individuals after software Or
Slide 15: Company profiles: Electronics recommerce
Company profiles ELECTRONICS RECOMMERCE: Transportation, product tracking, and comprehensive end-of-life recycling to its individual commodity components 14
Slide 16: Company profiles: IT asset disposition
Company profiles IT ASSET DISPOSITION: Secure collection, transportation, refurbishment, repair, and data destruction for companies looking to replace and remarket their IT equipment 15
Slide 17: Company profiles: System upgrades
Company profiles SYSTEM UPGRADES: Provides customers a diverse portfolio of the latest technology products and services for their specific business and technology needs. Helping customers recover value from their existing datacenter when moving to the cloud 16
Slide 18: Company profiles: Electronics recommerce
Company profiles ELECTRONICS RECOMMERCE: Trade in services in the U.S. retail sector, and an expert in reverse logistics, repair services, asset-recovery management and retail-sales representation cloud 17
Slide 19: DGSE division
DGSE recommercializes hard assets (i.e., jewelry, diamonds, fine watches, rare coins & currency, precious-metal bullion, collectibles, and other valuables) as refurbished whole goods or recycles them for their component re-use and refined metals Where we acquire recommerce inventory DGSE division In
Slide 20: Company profiles: Retail exchange stores
Company profiles RETAIL EXCHANGE STORES: A leading marketplace for authenticated luxury consignment. Our retail stores offer a marketplace for the public and dealers to buy, sell & trade fine jewelry, watches, fine art and luxury items. An in-house staff of experts including horologists, gemologists
Slide 21: Company profiles: Online precious metal sales
Company profiles ONLINE PRECIOUS METAL SALES: Precious metals recycled and collected at our retail locations are sold through Bullion Express, one of the region’s largest precious metals dealers. Through this channel, we offer a wide selection of gold, silver, platinum, and palladium coins, bars, bu
Slide 22: Comparable companies
Comparable companies Sales EPS EV / P/E Company Ticker EV TTM TTM Sales TTM Sector Product focus Distribution Luxury clothing for men and THE REALREAL REAL $1.1B $307M $(1.68) 3.5x - Recommerce Online and Retail women $360M Consignment luxury clothing Online and Retail THREDUP - - - - - Recommerce (
Slide 23: How we grow
1 Leverage our sector-specific recommerce expertise in electronics, IT, and luxury hard assets to prospective companies 2 Develop synergies between our divisions that reduce the marketing costs of whole goods or the recycling of goods 3 Evaluate and enter a new recommerce sector of products who manu
Slide 24: Financials
Financials For the full years ended December 31, 2018 and 2019 And for the 3 months ended March 31, 2019 and 2020 23
Slide 25: ELA income statement
ELA income statement For the YEARS Ended December 31 For the THREE MONTHS Ended September 30 FY 2018 FY 2019 3Q 2019 3Q 2020 TOTAL SALES $ 54,056,343 $ 82,024,497 $ 22,861,201 $ 38,810,884 Cost of Sales 44,376,620 65,768,655 17,674,747 31,647,487 Gross Margin $ 9,679,723 $ 16,255,842 $ 5,186,454 $ 7
Slide 26: Division sales performance
Division sales performance 3Q 2019 Margin 3Q 2020 Margin 3Q 2019 Margin 3Q 2020 Margin Resale of Whole Goods $ 14,105,015 11.8% $ 27,101,477 11.6% $ 5,133,181 46.9% $ 7,812,553 30.4% Resale of Recycled Components / Materials $ 2,547,912 14.1% $ 1,035,697 28.3% $ 1,075,093 70.6% $ 2,861,157 47.3% TOT
Slide 27: Balance sheet
Balance sheet 3Q 2020 YE 2019 Current Assets Cash and Cash Equivalents $ 7,269,258 $ 4,510,660 Trade Receivables, Net of Allowances 4,659,074 2,997,743 Inventories 10,617,516 9,509,454 Current Right of Use Assets from Operating Leases 1,173,733 1,160,658 Prepaid Expenses 328,354 172,834 TOTAL CURREN
Slide 28: Contact us
Contact us COMPANY INVESTOR RELATIONS David Vadala Head of Investor Relations Envela Corporation 13022 Preston Rd, Dallas, TX 75240 Phone: (972) 587-4030 Email: [email protected]