Benzinga | Nov 29, 2021 06:08AM EST

Newegg Reaffirms FY21 Guidance; Opens Limited Trading Window For Restricted Shares

Newegg Commerce, Inc. (NASDAQ:NEGG), a leading tech-focused North American e-retailer, today reaffirmed its previously issued financial forecasts for the fiscal year ending December 31, 2021, as well as the launch of several operating initiatives to better serve its customers, the grant of restricted stock units to key employees, a new employment agreement for its Chief Executive Officer, and the opening of a limited trading window for its restricted shares.

Reaffirms Full-Year 2021 Financial Forecast

Newegg currently expects to have a favorable holiday season with strong financial performance for the fourth quarter of 2021. Newegg reaffirmed its previously announced full-year 2021 guidance, reflecting consistent expectations of demand and profitability relative to its previous guidance. For the full year 2021, Newegg expects to achieve net sales of approximately $2.4 billion (similar to its previously announced guidance of net sales of approximately $2.4 billion) and net income of between $36.3 million and $40.3 million (slightly higher than its previously announced guidance of net income of between $36.1 million and $40.1 million).

Newegg's CEO, Anthony Chow noted, "I am very pleased with Newegg's strong year-to-date performance, which is a testament to the successful execution of our strategy focusing on profitable growth. This performance is in line with our expectations, and we have laid the foundation for a strong fourth quarter."

Robert Chang, the Company's Chief Financial Officer, commented, "We expect to see continued strength in customer demand for technology products and anticipate a favorable holiday season. We are confident that, with our year-to-date financial performance combined with our positive outlook for the remainder of the year, we are on track to hit our previously announced financial and growth metrics for the year 2021."

Mr. Chow continued, "Since the beginning of the pandemic, similar to many businesses in our industry, we were and continue to be affected by global supply chain challenges. The disruption in the global supply chain has directly affected our vendors by putting pressure on their profit margins. We worked hard to optimize our relationships and create mutual trust with our vendors, as well as offer them logistical and marketing support to motivate them to put more of their products on the Newegg platform. On the other hand, disruption in global supply impacted consumer prices due to higher shipping costs, slower deliveries, and higher labor and raw material costs. Our team navigated through these challenges and, due to strong relationships we established with our vendors over the last two years, we continue to offer our customers a wide range of products at affordable prices."

Newegg has invested in new talent and technology to expand and improve its customer experience. The Company recently launched several programs to better serve its global clientele, including:

* Opened two new distribution centers in Atlanta, GA and Ontario, CA, with more than 200,000 and 240,000 square feet of capacity, respectively. These new facilities are important distribution points enabling Newegg to quickly and efficiently fulfill orders and meet growing demand from customers throughout the United States.

* Initiated a same-day delivery service to Southern California customers via Newegg's growing Newegg Express delivery service, with no membership or minimum order required.

* Piloted Newegg Live, its first app-based livestreaming platform that allows customers to interact with hosts while securing exclusive real-time deals available only on the app during the livestream, to hear expert opinions, to engage with those experts by asking questions, and to comment and react in real time using features built directly into the Newegg mobile app.

* Launched the Black Friday Price Protection program ahead of an early holiday shopping season, offering price protection on select Black Friday deals to reward shoppers by automatically refunding the price difference if purchased products drop in price.

Newegg also dedicated significant resources to improve, optimize and expand its vendor relationships. For example, Newegg signed an agreement with PromoteIQ, a leading retail media platform that enables vendor-direct sellers to promote products to in-market shoppers to increase sales in real time. The partnership with PromoteIQ provides Newegg's vendor-direct sellers with even greater control over how to promote their brands on Newegg.com.

Mr. Chow concluded, "We remain committed to delivering best-in-class services to our customers and providing our partners with innovative and cost-effective ways to increase their sales."

Restricted Stock Unit Grants and 2021 Equity Incentive Plan

Newegg approved the grant of 7.4 million restricted stock unit awards to its executive officers and key employees. These grants vest over four years, with 25% vesting on the one-year anniversary of grant, and the remainder vesting monthly over the following three years, such that they will be fully vested after four years. The grants total approximately 2% of the current outstanding share count for Newegg. One half of the grants, or 3,687,450 RSUs, were granted to the company's Chief Executive Officer, Anthony Chow. The remaining executives received grants as follows: 280,000 RSUs awarded to Newegg's Chief Operating Officer, Jamie Spannos, 150,000 RSUs to Chief Financial Officer, Robert Chang, 150,000 RSUs to Chief Technology Officer, Montaque Hou, and 100,000 RSUs to Chief Legal Officer, Brian Waters. The remaining 3,007,450 RSUs were granted or reserved for 252 other key employees or expected new hires.

All grants were made pursuant to a newly adopted 2021 Equity Incentive Plan, which has authorized shares under the plan of 7.4 million shares. After the RSU grant, there are no further shares available under the 2021 Equity Incentive Plan.