Polished.com Inc. (POL)·Q1 2022 Earnings Summary

Executive Summary

• Q1 2022 delivered sequential and year-over-year growth, with revenue of $152.8M (+7% vs Q4’21; +>10x vs Q1’21 on a reported basis) and gross margin of 23.5% (flat to 2021 pro forma), while adjusted EBITDA was $13.5M (9% margin) and GAAP EPS was $0.06 .
• Management reaffirmed FY2022 guidance: high teens to low-20s net sales growth vs 2021 pro forma; gross margin ~23.3% and adjusted EBITDA margin ~9% (flat y/y), despite supply chain and inflation headwinds .
• Liquidity improved with a new $140M Bank of America facility executed May 9, 2022 ($100M term loan + $40M revolver), supporting growth investments and capital structure flexibility .
• Key watch items for the stock: sustained freight and fuel cost pressures on margins, execution of the rebrand and B2B pipeline, progress on internal controls remediation, and resolution of the Delaware share validation petition; guidance reaffirmation and expanded credit capacity are potential positive catalysts .

What Went Well and What Went Wrong

• What Went Well
  • Revenue growth and profitability: Q1 revenue $152.8M; gross margin 23.5%; adjusted EBITDA $13.5M (9% margin); net income $5.9M (EPS $0.06) .
  • Strategic financing: Secured $140M credit agreement with Bank of America to support initiatives and capital structure optimization .
  • Strategic direction: CEO quote—“We established strong financial momentum… We reaffirm our… guidance… [and] continued to lay the building blocks of growth by finalizing our rebrand process, growing the B2B pipeline and improving our capital position due to our… credit agreement with Bank of America.” .
• What Went Wrong
  • Macro/supply chain pressures: Management highlighted sustained supply chain disruptions, significant inflation, and geopolitical uncertainty; freight and fuel costs are pressuring margins .
  • Cash from operations: Operating cash flow for Q1 was an outflow of $(3.7)M as inventory, vendor deposits and timing of order fulfillment weighed on working capital .
  • Controls and governance overhang: Disclosure controls and procedures were not effective (material weaknesses), and the company sought Delaware court validation of a share authorization amendment—both are non-operational overhangs .

Financial Results

Revenue, profitability, and margins (GAAP and non-GAAP)

Segment / product mix (Q1 2022 vs Q1 2021)

Cost structure and cash/KPIs (Q1 2022)

Non-GAAP reconciliation (Q1 2022)
Adjusted EBITDA: Net income $5.9M + interest $0.9M + D&A $2.7M + taxes $3.4M + severance $0.2M + management fees $0.1M + other one-time $0.3M = $13.5M .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• “We established strong financial momentum in the first quarter… We reaffirm our… guidance… [and] continued to lay the building blocks of growth by finalizing our rebrand process, growing the B2B pipeline and improving our capital position due to our… credit agreement with Bank of America.” — Albert Fouerti, CEO .
• Non-GAAP framing: Adjusted EBITDA excludes unusual/non-recurring and non-cash items to present underlying performance; reconciliation provided in filings .

Q&A Highlights

• The full Q1 2022 call transcript could not be retrieved from our document repository due to a source inconsistency. We will update Q&A specifics upon transcript ingestion. Reaffirmed guidance, supply chain/freight pressures, rebrand timing, B2B build-out, and use of the new credit facility were core discussion areas across filings and investor materials .

Estimates Context

• S&P Global consensus estimates for POL/GOED Q1 2022 were unavailable in our system at the time of review; therefore, we do not present a versus-consensus comparison. Where estimate data is required, we default to S&P Global; in this case, estimates were unavailable from S&P Global for this ticker.

Key Takeaways for Investors

• Revenue and profit momentum with margins roughly flat to pro forma 2021, consistent with reiterated FY guidance; execution against rebrand and B2B initiatives is the next leg to watch .
• Freight and fuel costs remain the key gross margin swing factors; any normalization could offer upside to the “flat margin” guide, while persistent inflation is the principal risk .
• The $140M BofA facility improves liquidity and provides flexibility for working capital, fulfillment expansion, and potential share repurchases or optimization over time .
• Working capital dynamics (inventory, vendor deposits, customer deposits) can drive quarterly cash flow volatility; Q1 used $(3.7)M in operating cash amid timing effects .
• Governance/controls remediation (material weaknesses) and the Delaware Section 205 petition are non-operational overhangs to resolve; progress here could de-risk the story .
• Near-term trading: catalysts include rebrand launch, any easing in freight/fuel costs, and visible B2B wins; risks include prolonged macro headwinds and continued logistics cost pressure .
• Medium term: scaling B2B, fulfillment/last-mile capabilities, and digital conversion improvements underpin the path to sustained growth and the long-term “$1B revenue” aspiration cited by management .

Citations:

• Q1 2022 8-K press release and non-GAAP reconciliation:
• Q1 2022 10-Q (financial statements, disaggregation, cost structure, liquidity, controls, legal):
• Q4 2021 8-K press release (prior quarter comps, prior guidance):
• Q3 2021 10-Q (trend context):
• New credit facility 8-K (May 9, 2022):