1847 Goedeker Inc. (NYSE American: GOED) ("Goedeker’s" or the "Company"), a one-stop e-commerce destination for appliances, furniture, home goods, and related products, announced today the entry into a definitive agreement for the acquisition of Appliances Connection, one of the leading retailers of household appliances in the U.S. In a deal valued at $210,000,000, the acquisition will be financed with a combination of cash and equity and is expected to close in the first quarter of 2021. The combined entities are expected to generate approximately $400M of revenue and $30M in EBITDA in 2021, making 1847 Goedeker one of the most attractive, large independent online appliance retailers. The principals from Appliances Connection, Albert, and Elie Fouerti, will continue in their current leadership roles and Albert Fouerti will join the board of directors of 1847 Goedeker.
Doug Moore, CEO of 1847 Goedeker stated: “I am thrilled that we have reached a Definitive Agreement to acquire Appliances Connection, a 20-year-old company with a sterling reputation and strong management. We are addressing a $21B US household appliance market growing at 13.7% CAGR (expected to reach $40B by 2025). Together with Appliances Connection, we will significantly increase our operational strengths and realize substantial synergies by combining marketing, logistics, delivery, and installation platform for continued strong top and bottom-line growth. As I have stated publicly, my vision is to become the most profitable online retailer of appliances in the U.S. This acquisition catapults us into becoming the fastest growing online appliance retailer in the U.S. today.”
CEO of Appliances Connection, Albert Fouerti, commented: “We have spent the last 20 years building an extremely successful business, which includes residential, commercial and government divisions driven by an industry leading e-commerce platform. Our highly efficient nationwide delivery and installation operation and our strong presence in the northeastern United States provides us with important competitive advantages. I look forward to working closely with the Goedeker’s team to continue to scale the business, increase profits and make Goedeker’s the most profitable online appliance retailer in the nation.”
Chairman of 1847 Goedeker, Ellery Roberts, stated: “This acquisition dramatically increases our scale and scope, provides a huge boost to revenue and profitability, while expanding and strengthening our management team. We will now have a warehouse in the Northeast and Midwest, a fleet of 29 delivery trucks, a greatly expanded product line, and a robust platform with tremendous scalability as we continue to execute on our growth strategy. This is a very exciting time for our shareholders!”
About Appliances Connection
Founded in 2000, Appliances Connection is one of the leading retailers of household appliances with a 200,000 square foot warehouse in Hamilton, NJ and a 23,000 square foot showroom in Brooklyn, New York. Appliances Connection carries many household name brands, including Bosch, GE, Frigidaire, Whirlpool, LG, and Samsung, and also carries many major luxury appliance brands such as Verona, Thermador, La Cornue, Dacor, Smeg, and Viking. Appliance Connection provides appliance installation services and old appliance removal services. In addition to selling appliances, it also sells furniture, fitness equipment, plumbing fixtures, televisions, outdoor appliances, and patio furniture, as well as commercial appliances for builder and business clients.
About 1847 Goedeker Inc.
The Company is an industry leading e-commerce destination for appliances, furniture, and home goods. Since its founding in 1951, the Company has transformed from a local brick and mortar operation serving the St. Louis metro area to a respected nationwide omnichannel retailer that offers one-stop shopping for national and global brands. While the Company maintains its St. Louis showroom, over 90% of sales are placed through its website (www.goedekers.com). The Company provides visitors an easy to navigate shopping experience and offers more than 185,000 items organized by category and product features. Specialization in the home category has enabled the Company to build a shopping experience and an advanced logistics infrastructure that is tailored to the unique characteristics of the market. Learn more at www.goedekers.com.
Non-GAAP Financial Measure
EBITDA is not a measure of financial performance under U.S. GAAP. EBITDA is defined as net income attributable to our business before interest expense, provision for income tax, and depreciation and amortization. We believe EBITDA provides additional information about (i) our operating performance, because it assists us in comparing the operating performance of our business on a consistent basis, as it removes the impact of non-cash depreciation and amortization expense as well as items not directly resulting from our core operations such as interest expense and income taxes and (ii) our performance and the effectiveness of our operational strategies. Additionally, EBITDA is used as a measure in our executive compensation plans. Furthermore, EBITDA is used by investors as a supplemental measure to evaluate the overall operating performance of companies in our industry.
Management believes that investors' understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations. Many investors are interested in understanding the performance of our business by comparing our results from ongoing operations period over period and would ordinarily add back non-cash expenses such as depreciation and amortization as well as items that are not part of normal day-to-day operations of our business such as interest expense and income taxes. By providing this non-GAAP financial measure, we believe we are enhancing investors' understanding of our business and our results of operations, as well as assisting investors in evaluating how well we are executing our strategic initiatives.
Our competitors may define EBITDA differently, and as a result, our measure of EBITDA may not be directly comparable to EBITDA of other companies. Items excluded from EBITDA are significant components in understanding and assessing financial performance. EBITDA is a supplemental measure of operating performance that does not represent and should not be considered in isolation or as an alternative to, or substitute for net income or other financial statement data presented in the consolidated financial statements of our company as indicators of financial performance. EBITDA has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP.
Some of the limitations are:
- EBITDA does not reflect our cash expenditures, or future requirements for capital expenditures or contractual commitments;
- EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
- EBITDA does not reflect the interest expense, or the cash requirements necessary to service interest or principal on any indebtedness we may have;
- EBITDA does not reflect our tax expense or the cash requirements to pay our taxes; and
- although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and EBITDA does not reflect any cash requirements for such replacements.
Due to these limitations, EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our U.S. GAAP results and using EBITDA only supplementally. We further believe that our presentation of these U.S. GAAP and non-GAAP financial measurements provide information that is useful to analysts and investors because they are important indicators of the strength of our operations and the performance of our business.
As the EBITDA data provided in this press release is a projection of future EBITDA and we have not disclosed or otherwise provided projected net income elsewhere, we will reconcile EBITDA to net income in a future report that we file with the SEC that contains the comparable GAAP measure of net income.
Forward Looking Statements
This press release contains "forward-looking statements" that are subject to substantial risks and uncertainties. All statements, other than statements of historical fact, contained in this press release are forward-looking statements. Forward-looking statements contained in this press release may be identified by the use of words such as "anticipate," "believe," "contemplate," "could," "estimate," "expect," "intend," "seek," "may," "might," "plan," "potential," "predict," "project," "target," "aim," "should," "will" "would," or the negative of these words or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on the Company’s current expectations and are subject to inherent uncertainties, risks and assumptions that are difficult to predict. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. These and other risks and uncertainties are described more fully in the section titled "Risk Factors" in the final prospectus related to the public offering filed with the Securities and Exchange Commission and other reports filed with the Securities and Exchange Commission thereafter. Forward-looking statements contained in this announcement are made as of this date, and the Company undertakes no duty to update such information except as required under applicable law.
Dave Gentry, CEO
RedChip Companies Inc.
Office: 1.800.RED.CHIP (733.2447)