8-KRegulation FDOther EventsExhibits & Filings

CARVANA CO. 8-K Report, Regulation FD Disclosure (Sep 10, 2018)

Filed September 10, 2018For Securities:CVNA

Summary

Carvana Co. (CVNA) filed an 8-K on September 10, 2018, primarily to disclose its intention to raise up to $300.0 million through a private offering of senior unsecured notes. These notes will be guaranteed by the company's domestic subsidiaries. The proceeds are intended for general corporate purposes, including working capital, capital expenditures, operating expenses, and strategic growth opportunities such as acquisitions or investments. The filing also indicates that Carvana management will be conducting roadshow presentations to potential investors, sharing certain slides that contain non-GAAP financial measures like Market Contribution and EBITDA. Investors should note that these measures are provided for analytical purposes and should be considered alongside GAAP financial information, with reconciliations included in the provided exhibits.

Key Highlights

  • 1Carvana Co. is pursuing a private offering of up to $300.0 million in senior unsecured notes.
  • 2The notes will be fully and unconditionally guaranteed by Carvana's existing domestic subsidiaries.
  • 3Proceeds are earmarked for general corporate purposes, including working capital, capital expenditures, and operating expenses.
  • 4Strategic growth initiatives, such as acquisitions or investments, are also potential uses for the funds.
  • 5Management will be conducting roadshows, presenting non-GAAP financial measures such as Market Contribution and EBITDA.
  • 6Reconciliations for non-GAAP financial measures to GAAP are included in the filing's exhibits.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Carvana Co.'s intention to offer up to $300.0 million in senior unsecured notes through a private placement, and to provide information related to the associated roadshow presentations for potential investors.

Carvana intends to use the net proceeds for general corporate purposes. This includes funding working capital, capital expenditures, operating expenses, and pursuing business development opportunities, such as acquisitions or investments in other businesses, products, or technologies.

The key non-GAAP financial measures mentioned are Market Contribution and EBITDA. Market Contribution is defined as market gross profit less market advertising and last-mile payroll, transaction, logistics, and occupancy expenses. EBITDA is defined as net loss before interest expense, income tax expense, and depreciation and amortization expense.

The filing states that Market Contribution and EBITDA have limitations as analytical tools and should not be considered in isolation or as a substitute for GAAP financial analysis. Investors should review the reconciliations provided in Exhibit 99.1 and consider these measures alongside GAAP figures.