Newegg Commerce, Inc. · NASDAQ:NEGG
Newegg Commerce — Lianluo Smart — IPO Roadshow (May 2021)
23 slides from Newegg Commerce's IPO roadshow presentation, May 5, 2021
Slide 1: Newegg Presentation May 2021
Newegg Presentation May 2021
Slide 2: Disclaimer
Confidential | 2 Disclaimer This presentation of Newegg Commerce, Inc . (the “company,” “Newegg,” “we,” “us,” or “our”) includes "forward - looking statements" intended to qualify for the safe harbor from established by the Private Securities Litigation Reform Act of 1995 . These statements relate t
Slide 3: Transaction Summary: Offering
Confidential | 3 TRANSACTION SUMMARY OFFERING Newegg Commerce, Inc. will be the registrant post consummation of the reverse merger with Lianluo Smart Limited. ISSUER Lianluo Smart Limited/Newegg Commerce EXCHANGE/TICKER “LLIT” following completion of merger “NEGG”/ NASDAQ. OFFERING SIZE $ 34.5 M (In
Slide 4: Table of Contents
Confidential | 4 TABLE OF CONTENTS GROWTH STRATEGY KEY TAKEAWAYS FINANCIAL OVERVIEW COMPANY OVERVIEW TRANSACTION SUMMARY
Slide 5: Transaction Summary: Merger Overview
T R AN S ACTIO N SUMMA R Y M E RGER O V E RVI E W On October 23, 2020, Newegg Inc. (“Newegg”) entered into a definitive merger agreement with Lianluo Smart Limited and its merger sub, Lightning Delaware Sub, Inc. (collectively “LLIT”) (NASDAQ: LLIT). Upon consummation of merger: ▪ LLIT will sell all
Slide 6: Company Overview: Leadership
COMPANY OVERVIEW LEADERSHIP Anthony Chow 邹果庆 Chief Executive Officer EXPERIENCE: 27+ Years Mr. Chow rejoined Newegg in 2019. Mr. Chow was Vice President of Newegg’s North American business from 2006 - 2008 and then went on to lead Newegg China as President until 2011. Previously, he was the CEO of O
Slide 7: Company Overview: Why Newegg?
Confidential | 7 COMPANY OVERVIEW WHY NEWEGG? Newegg is where tech experts go to buy technology We are an entrenched and dominant player in a large vertical niche Laptops Desktops Consumer Electronics Components
Slide 8: Newegg at a Glance 2020
News w ee k ’ s 202 0 Best Online Sho p s , Consu m er Ele c t r on i cs #5 e C o m merce D B’s 202 0 T op Onl i ne S t ores , Ele c t r on i cs #7 $2.6 Billion+ 2 0 20 GM V 32.5% R epea t P u r c h asers $301 Ave r age O r de r V al u e 4.7 Million+ Uniq u e Acti v e Cus t omers 382.2 Million+ T ot
Slide 9: Company Overview: History
C OM P AN Y O V E RVIEW HISTORY For two decades, Newegg has been at the forefront of e - commerce. Founded in 2001, Newegg began selling PC components and helped popularize the PC - building movement, and in doing so, developed a niche following among PC and DIY enthusiasts. Since then, Newegg has b
Slide 10: Company Overview: Our Business Model
Confidential | 10 COMPANY OVERVIEW OUR BUSINESS MODEL QSPEP BUSINESS MODEL DIRECT Newegg controls inventories sourced from suppliers and directly sells goods to its customers and businesses on Newegg platforms Newegg allows third - party Sellers to sell products through the Newegg Marketplace, and r
Slide 11: Newegg Market Share: Components
NEWEGG MARKET SHARE: COMPONENTS GROWTH STRATEGY DIRECT SALES STABILITY Newegg increased GMV during the pandemic, as well as its market share. Newegg estimates its market share, in certain categories of components, as high as 40%. We deliver Value and we help the Vendors build their Brand, simultaneo
Slide 12: Growth Strategy: China Marketplace Growth
GROWTH STRATEGY CHINA MARKETPLACE GROWTH 17.9%+ 84.7%+ China Seller base increased its GMV by 100%+ in 2020 and is on pace for faster growth this year! CHINA SELLER GMV 115.3%+ increase, $39.6M in 2019 to $84.3 in 2020 2.5% - 115.3%+ $190M $170M $150M $130M $110M $90M $70M $50M $30M $10M $0 2019 202
Slide 13: Growth Strategy: China Logistics
G R OWT H ST R A TEGY CHINA L ess T h an Full C o n ta i n er Shipping Chin a Sel l e r Newegg Logistics Service Support China Sellers with comprehensive Logistics to end Customers in North America N orth A me r i ca n P i c k & Pac k Tr a n sporta t ion & Wa re h o u ses La s t Mile Deli v e ry US
Slide 14: Growth Strategy: Newegg Partner Services Ecosystem
NEWEGG WEBSITE SERVICES GROWTH STRATEGY NEWEGG PARTNER SERVICES ECOSYSTEM B2C/B2B Platform Seller/Vendor SOCIAL EMAIL AFFILIATE DYNAMIC SEM SEO NEWEGG STUDIO SPA MARKETING SERVICE NEWEGG OPERATIONS NEWEGG LOGISTICS SHIPPED BY NEWEGG NEWEGG EXPRESS NEWEGG SERVICES WEBSITE DEVELOPMENT DATA INTEGRATION
Slide 15: Financial Overview: Business Model
Confidential | 15 FINANCIA L O V E RVIEW BUSINESS MO D EL • Newegg recorded Service Revenue of $13.0M in 2018, $11.2M in 2019, surging to $81.8M in 2020! • Our Strategy is to shift towards Marketplace and Newegg Partner Service businesses. Marketplace YoY GMV Growth Marketplace has grown by a CAGR o
Slide 16: Financial Overview: Growth
FINANCIAL OVERVIEW Growth Gross profit has increased 65.9% YoY as a result of restructuring in Q4 2019. Gross Profit 2020 Adjusted EBITDA at $ 39.3M profit up from ($ 49.2M ) loss. An increase of $ 88.5M. EBITDA $2,500 $2,000 $1,500 $1,000 $500 $100 $ - $(500) GMV vs. Gross Profit Vs. Adjusted EBITD
Slide 17: Financial Overview: Key Statistics
Confidential | 17 FINANCIAL OVERVIEW KEY STATISTICS 2019 2020 10.7% 12.9% 2019 2020 14.9% 11.8% 2019 2020 - 18.4% 23.8% 2019 2020 $84.5M - $10.1M GROSS PROFIT AS A PERCENT OF NET SALES 219 Basis Point Improvement SG&A AS A PERCENT OF NET SALES 311 Basis Point Improvement CASH FROM OPERATIONS $94.6M
Slide 18: Key Takeaways: Use of Proceeds
Confidential | 18 10% 25% 30% 35% Enhancing Technology Marketplace & Partner Services General Strategic Growth Initiatives To support the expansion of o ur B usiness O perations : • 35% Enhancing Technology: Building capabilities including Technology I nfrastructure. • 30% Marketplace and Partner Se
Slide 19: Key Takeaways
Our s o li d r elati o n s h i p s wi th t h e t o p I T / CE b r a n d s all o w u s t o s t o ck in d ema n d S K U s at c o m p etit i ve p ric e s t h r o u g h o u t m a r k e t cycle s . Wi d e r a n ge o f T ec h - f o c u s e d P r o d u ct s f r o m o ver 400 S u pp li e r s G l o b ally –
Slide 20: Key Takeaways: Contact
Confidential | 20 KEY TAKEAWAYS CONTACT Lisa A. Potok Vice President of Finance & Investor Relations 626.271.9700 Ext. 22180 Lisa.A.Potok@newegg.com Newegg Inc., 17560 Rowland Street City of Industry, CA 91745
Slide 21: Thank You!
Thank You! Confidential | 21
Slide 22: Company Overview: Transformation
• Eliminated unprofitable business and streamlined internal processes. • Initiated group focus structure to leverage business relationships holistically. • Initiated Domain based P&L mechanism to incentivize Domain leaders. COMPANY OVERVIEW TRANSFORMATION Business Optimization • Shift Share Strategy
Slide 23: GMV Reconciliation
G M V RE C ONC I LI A TI O N The following table reflects the reconciliation of net sales to GMV for each of the periods indicated: (In Million) For the Year Ended December 31, 2020 2019 Net Sales $ 2,114.9 $ 1,533.9 Adjustments: GMV - Marketplace 663.7 495.2 Marketplace Commission (58.1) (46.0) Def