CARMEL, Ind., Aug. 4, 2020 /PRNewswire/ -- KAR Auction
Services, Inc. (NYSE: KAR), today reported its second quarter
financial results for the period ended June
30, 2020. For the second quarter of 2020, the company
reported revenue of $419.0 million as
compared with revenue of $719.1
million for the second quarter of 2019, a decrease of 42%.
For the second quarter of 2020, the company reported a net loss
from continuing operations of $32.3
million, or $0.27 per diluted
share, as compared with net income from continuing operations of
$27.4 million, or $0.20 per diluted share, in the second quarter of
2019. Adjusted EBITDA for the quarter ended June 30, 2020 decreased 41% to $80.0 million, as compared with Adjusted EBITDA
of $135.9 million for the quarter
ended June 30, 2019. Operating
adjusted net income from continuing operations per diluted share
decreased 73% to $0.08 for the
quarter ended June 30, 2020, as
compared with operating adjusted net income from continuing
operations per diluted share of $0.30
for the quarter ended June 30, 2019.
The company's operating results for the quarter ended June 30, 2020 were significantly impacted by the
COVID-19 pandemic, as further discussed below. In addition, the
company recorded a $29.8 million
charge for the impairment of goodwill and other intangible assets
in the second quarter of 2020.
For the six months ended June 30,
2020, the company reported revenue of $1,064.5 million as compared with revenue of
$1,408.7 million for the six months
ended June 30, 2019, a decrease of
24%. For the six months ended June 30,
2020, the company reported a net loss from continuing
operations of $29.5 million, or
$0.24 per diluted share, as compared
with net income from continuing operations of $42.7 million, or $0.32 per diluted share, in the first six months
of 2019. Adjusted EBITDA for the six months ended June 30, 2020 decreased 35% to $168.6 million, as compared with Adjusted EBITDA
of $258.8 million for the six months
ended June 30, 2019. Operating
adjusted net income from continuing operations per diluted share
decreased 60% to $0.20 for the six
months ended June 30, 2020, as
compared with operating adjusted net income from continuing
operations per diluted share of $0.50
for the six months ended June 30,
2019. The company's operating results for the six months
ended June 30, 2020 were
significantly impacted by the COVID-19 pandemic, as further
discussed below. In addition, the company recorded a $29.8 million charge for the impairment of
goodwill and other intangible assets in the second quarter of
2020.
Impact of COVID-19 on Company Operations
In response to the COVID-19 pandemic, on March 20, 2020 we temporarily suspended physical
sale operations, including Simulcast-only sales, across
North America. We began operating
Simulcast-only sales in select markets on April 6, 2020 and expanded the Simulcast-only
sales each week, where possible and as permitted by government
directives. We also held Simulcast+ auctions at select locations, a
fully digital auction operated remotely with an automated
auctioneer, sequential sales, audio and visual cues to simulate the
live auction experience and all buyers and sellers interacting
virtually through the Simulcast platform.
All ADESA auction locations in the U.S. and Canada are offering vehicles for sale via
ADESA Simulcast, DealerBlock and Simulcast+. Most auction locations
have resumed offering ancillary and related services, where
possible and as permitted by government directives. While ADESA has
experienced increasing volumes over the last few months, the
business has not fully returned to pre-COVID operations. Given the
evolving health, economic, social and governmental environments,
the potential impact that COVID-19 could have on our business
remains uncertain.
As a result, we proactively took significant steps to help
secure our business and preserve available cash during the second
quarter, including but not limited to the following measures:
- Reduced compensation expense by
-
- our CEO, CFO and President voluntarily electing to forgo 100%
of their respective base salaries and the remainder of our
executive officers voluntarily electing to reduce their base
salaries by 50% for the second quarter of 2020,
- reducing base salaries across many levels of the organization
for part of the second quarter of 2020,
- furloughing approximately 11,000 employees in April 2020 (approximately 5,000 have returned to
work),
- commencing a reduction in force in June
2020 (impacting approximately 3,000 of our employees),
and
- our board of directors voluntarily electing to forgo their cash
compensation for the second quarter of 2020;
- Prohibited non-essential business travel;
- Suspended non-essential services provided by certain third
parties at our locations;
- Delayed or canceled capital projects at our physical auction
locations;
- Negotiated the deferral of rent payments with certain
landlords;
- Suspended the ADESA Assurance program for part of the second
quarter;
- AFC reduced the unused portion of certain floorplan lines with
its customers; and
- Suspended the Company's quarterly dividend.
In addition, in June 2020 we
issued and sold an aggregate of 550,000 shares of newly issued
perpetual convertible preferred stock of the company for net
proceeds of approximately $528.2
million.
We have also taken advantage of legislation introduced to assist
companies during this time. In the second quarter of 2020, we
recorded approximately $7.9 million
of employee retention credits taken under the Coronavirus Aid,
Relief, and Economic Security Act ("CARES Act") and approximately
$9.7 million under the Canada Emergency Wage Subsidy. These credits
partially offset salaries and medical costs recorded in the U.S.
and Canada. We will continue to
monitor and assess the impact the CARES Act and similar legislation
in other countries may have on our business and financial
results.
While we have developed and implemented and continue to develop
and implement health and safety protocols, business continuity
plans and crisis management protocols in an effort to try to
mitigate the negative impact of COVID-19 to our employees,
customers and our business, the extent of the impact of the
pandemic on our business and financial results will depend on
numerous evolving factors that we are not able to accurately
predict.
The extent to which the COVID-19 outbreak impacts our business,
results of operations and financial condition will depend on future
developments, which are highly uncertain and cannot be predicted,
including, but not limited to, the duration and spread of the
outbreak, its severity, the actions to contain the virus or treat
its impact, and how quickly and to what extent normal economic and
operating conditions can resume. Even after the COVID-19 outbreak
has subsided, we may continue to experience materially adverse
impacts to our business as a result of its global economic impact,
including any economic downturn or recession that has occurred or
may occur in the future.
Business Trends Throughout the Second Quarter
New and used car retail activity was reduced to unprecedented
levels in early April. Auto retail operations were required to
temporarily close and supply and demand for used cars was
disrupted. By mid-April, we were experiencing improved retail
automobile sales and demand for used vehicle supply was beginning
to improve. Consolidated revenue for the month of April was 28% of
revenue for April 2019 and this
resulted in an operating loss for April
2020.
The company saw improved demand for used vehicles in
May. Total vehicles sold were approximately 65% of the volume
sold in May 2019 and consolidated
revenue for the month of May was 58% of revenue for May
2019. The company was able to reduce its cost structure and
generated operating profit in May
2020 that exceeded 70% of operating profit in May 2019.
Improved demand for used vehicles continued throughout June and
vehicles sold in June 2020 were 8%
above the volume sold in June 2019
and consolidated revenue for the month of June was 91% of revenue
for June 2019. The company's operating profit (exclusive of
goodwill and other intangibles impairment) in June 2020 exceeded operating profit in
June 2019.
Earnings Conference Call Information
KAR will be hosting an earnings conference call and webcast on
Wednesday, August 5, 2020 at
8:30 a.m. EDT. The call will be
hosted by KAR's Chief Executive Officer and Chairman of the Board,
Jim Hallett, and Executive Vice
President and Chief Financial Officer, Eric
Loughmiller. The conference call may be accessed by calling
1-844-778-4145 and entering participant passcode 1267834, while the
live web cast will be available at the investors section of
www.karglobal.com. Supplemental financial information for KAR's
second quarter 2020 results is available at the investors section
of www.karglobal.com.
A replay of the call will be available for two weeks via
telephone starting approximately 30 minutes after the completion of
the call. The replay may be accessed by calling
1-855-859-2056 and entering passcode 1267834. The archive of
the webcast will also be available following the call and will be
available at the investors section of www.karglobal.com for a
limited time.
About KAR
KAR Auction Services Inc. (NYSE: KAR), known as KAR Global,
provides sellers and buyers across the global wholesale used
vehicle industry with innovative, technology-driven remarketing
solutions. KAR Global's unique end-to-end platform supports whole
car, financing, logistics and other ancillary and related services,
including the sale of nearly 3.8 million units valued at
approximately $40 billion through our
auctions in 2019. Our integrated physical, online and mobile
marketplaces reduce risk, improve transparency and streamline
transactions for customers in more than 80 countries. Headquartered
in Carmel, Indiana, KAR Global has
employees across the United
States, Canada,
Mexico, U.K. and Europe. For more information, go to
www.karglobal.com. For the latest KAR Global news, follow us on
Twitter @KARSpeaks.
Forward-Looking Statements
Certain statements contained in this release include
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and which are subject to
certain risks, trends and uncertainties. In particular, statements
made that are not historical facts may be forward-looking
statements. Words such as "should," "may," "will," "anticipates,"
"expects," "intends," "plans," "believes," "seeks," "estimates,"
and similar expressions identify forward-looking statements. Such
statements are based on management's current expectations, are not
guarantees of future performance and are subject to risks and
uncertainties that could cause actual results to differ materially
from the results projected, expressed or implied by these
forward-looking statements. Factors that could cause or contribute
to such differences include those uncertainties regarding the
impact of the COVID-19 virus on our business and the economy
generally, and those other matters disclosed in the Company's
Securities and Exchange Commission filings. The Company does not
undertake any obligation to update any forward-looking
statements.
Analyst
Inquiries:
|
Media
Inquiries:
|
Mike
Eliason
|
Stephanie
Freeman
|
(317)
249-4559
|
(317)
343-5020
|
mike.eliason@karglobal.com
|
stephanie.freeman@karglobal.com
|
KAR Auction
Services, Inc.
|
Condensed
Consolidated Statements of Income
|
(In millions)
(Unaudited)
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended June 30,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
revenues
|
|
|
|
|
|
|
|
Auction fees and
services revenue
|
$
|
312.6
|
|
|
$
|
553.1
|
|
|
$
|
804.1
|
|
|
$
|
1,095.0
|
|
Purchased vehicle
sales
|
49.6
|
|
|
79.3
|
|
|
125.1
|
|
|
137.1
|
|
Finance-related
revenue
|
56.8
|
|
|
86.7
|
|
|
135.3
|
|
|
176.6
|
|
Total operating
revenues
|
419.0
|
|
|
719.1
|
|
|
1,064.5
|
|
|
1,408.7
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of services
(exclusive of depreciation and amortization)
|
235.1
|
|
|
417.4
|
|
|
629.7
|
|
|
811.3
|
|
Selling, general and
administrative
|
112.3
|
|
|
163.2
|
|
|
274.7
|
|
|
338.4
|
|
Depreciation and
amortization
|
46.5
|
|
|
47.9
|
|
|
94.2
|
|
|
92.2
|
|
Goodwill and other
intangibles impairment
|
29.8
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
Total operating
expenses
|
423.7
|
|
|
628.5
|
|
|
1,028.4
|
|
|
1,241.9
|
|
|
|
|
|
|
|
|
|
Operating profit
(loss)
|
(4.7)
|
|
|
90.6
|
|
|
36.1
|
|
|
166.8
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
30.9
|
|
|
55.6
|
|
|
68.9
|
|
|
112.1
|
|
Other expense
(income), net
|
1.3
|
|
|
(1.1)
|
|
|
(0.7)
|
|
|
(3.2)
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before income taxes
|
(36.9)
|
|
|
36.1
|
|
|
(32.1)
|
|
|
57.9
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
(4.6)
|
|
|
8.7
|
|
|
(2.6)
|
|
|
15.2
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
(32.3)
|
|
|
27.4
|
|
|
(29.5)
|
|
|
42.7
|
|
Income from
discontinued operations, net of income taxes
|
—
|
|
|
28.2
|
|
|
—
|
|
|
90.7
|
|
Net income
(loss)
|
$
|
(32.3)
|
|
|
$
|
55.6
|
|
|
$
|
(29.5)
|
|
|
$
|
133.4
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - basic
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
(0.27)
|
|
|
$
|
0.21
|
|
|
$
|
(0.24)
|
|
|
$
|
0.32
|
|
Income from
discontinued operations
|
—
|
|
|
0.21
|
|
|
—
|
|
|
0.68
|
|
Net income (loss) per
share - basic
|
$
|
(0.27)
|
|
|
$
|
0.42
|
|
|
$
|
(0.24)
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - diluted
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
(0.27)
|
|
|
$
|
0.20
|
|
|
$
|
(0.24)
|
|
|
$
|
0.32
|
|
Income from
discontinued operations
|
—
|
|
|
0.21
|
|
|
—
|
|
|
0.68
|
|
Net income (loss) per
share - diluted
|
$
|
(0.27)
|
|
|
$
|
0.41
|
|
|
$
|
(0.24)
|
|
|
$
|
1.00
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
—
|
|
|
$
|
0.35
|
|
|
$
|
0.19
|
|
|
$
|
0.70
|
|
KAR Auction
Services, Inc.
|
Condensed
Consolidated Balance Sheets
|
(In millions)
(Unaudited)
|
|
|
June 30,
2020
|
|
December
31, 2019
|
Cash and cash
equivalents
|
$
|
968.5
|
|
|
$
|
507.6
|
|
Restricted
cash
|
50.0
|
|
|
53.3
|
|
Trade receivables,
net of allowances
|
582.3
|
|
|
457.5
|
|
Finance receivables,
net of allowances
|
1,526.3
|
|
|
2,100.2
|
|
Other current
assets
|
124.0
|
|
|
125.9
|
|
Total current
assets
|
3,251.1
|
|
|
3,244.5
|
|
|
|
|
|
Goodwill
|
1,790.9
|
|
|
1,821.7
|
|
Customer
relationships, net of accumulated amortization
|
179.3
|
|
|
207.9
|
|
Operating lease
right-of-use assets
|
353.1
|
|
|
364.1
|
|
Property and
equipment, net of accumulated depreciation
|
583.7
|
|
|
609.0
|
|
Intangible and other
assets
|
335.9
|
|
|
334.0
|
|
Total
assets
|
$
|
6,494.0
|
|
|
$
|
6,581.2
|
|
|
|
|
|
Current liabilities,
excluding obligations collateralized by
finance receivables and
current maturities of debt
|
$
|
1,246.5
|
|
|
$
|
1,027.7
|
|
Obligations
collateralized by finance receivables
|
735.9
|
|
|
1,461.2
|
|
Current maturities of
debt
|
26.9
|
|
|
28.8
|
|
Total current
liabilities
|
2,009.3
|
|
|
2,517.7
|
|
|
|
|
|
Long-term
debt
|
1,856.9
|
|
|
1,861.3
|
|
Operating lease
liabilities
|
347.3
|
|
|
358.3
|
|
Other non-current
liabilities
|
197.8
|
|
|
193.7
|
|
Temporary
equity
|
528.2
|
|
|
—
|
|
Stockholders'
equity
|
1,554.5
|
|
|
1,650.2
|
|
Total liabilities,
temporary equity and stockholders' equity
|
$
|
6,494.0
|
|
|
$
|
6,581.2
|
|
KAR Auction
Services, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(In millions)
(Unaudited)
|
|
|
Six Months
Ended June
30,
|
|
2020
|
|
2019
|
Operating
activities
|
|
|
|
Net income
(loss)
|
$
|
(29.5)
|
|
|
$
|
133.4
|
|
Net income from
discontinued operations
|
—
|
|
|
(90.7)
|
|
Adjustments to reconcile
net income (loss) to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
94.2
|
|
|
92.2
|
|
Provision for credit
losses
|
41.6
|
|
|
18.2
|
|
Deferred income
taxes
|
(13.1)
|
|
|
3.6
|
|
Amortization of debt
issuance costs
|
5.6
|
|
|
7.1
|
|
Stock-based
compensation
|
7.6
|
|
|
10.3
|
|
Loss on disposal of fixed
assets
|
—
|
|
|
0.1
|
|
Goodwill and other
intangibles impairment
|
29.8
|
|
|
—
|
|
Other non-cash,
net
|
4.9
|
|
|
5.8
|
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
Trade receivables and other
assets
|
(137.5)
|
|
|
(145.7)
|
|
Accounts payable and accrued
expenses
|
265.3
|
|
|
127.4
|
|
Net cash provided
by operating activities - continuing operations
|
268.9
|
|
|
161.7
|
|
Net cash provided
by operating activities - discontinued operations
|
—
|
|
|
155.8
|
|
Investing
activities
|
|
|
|
Net decrease (increase) in
finance receivables held for investment
|
532.6
|
|
|
(69.8)
|
|
Acquisition of businesses
(net of cash acquired)
|
—
|
|
|
(120.7)
|
|
Purchases of property,
equipment and computer software
|
(46.7)
|
|
|
(78.4)
|
|
Net cash provided
by (used by) investing activities - continuing
operations
|
485.9
|
|
|
(268.9)
|
|
Net cash used by
investing activities - discontinued operations
|
—
|
|
|
(37.4)
|
|
Financing
activities
|
|
|
|
Net increase in book
overdrafts
|
5.0
|
|
|
44.1
|
|
Net (decrease) increase in
borrowings from lines of credit
|
(1.9)
|
|
|
93.5
|
|
Net decrease in obligations
collateralized by finance receivables
|
(720.5)
|
|
|
(31.0)
|
|
Proceeds from issuance of
Series A Preferred Stock
|
550.1
|
|
|
—
|
|
Payments for issuance costs
of Series A Preferred Stock
|
(21.9)
|
|
|
—
|
|
Payments for debt issuance
costs/amendments
|
(3.9)
|
|
|
—
|
|
Payments on long-term
debt
|
(4.7)
|
|
|
(1,291.1)
|
|
Payments on finance
leases
|
(7.8)
|
|
|
(6.9)
|
|
Payments of contingent
consideration and deferred acquisition costs
|
(22.3)
|
|
|
(0.5)
|
|
Issuance of common stock
under stock plans
|
0.7
|
|
|
5.4
|
|
Tax withholding payments for
vested RSUs
|
(3.7)
|
|
|
(10.4)
|
|
Dividends paid to
stockholders
|
(49.0)
|
|
|
(139.8)
|
|
Cash transferred to
IAA
|
—
|
|
|
(50.9)
|
|
Net cash used by
financing activities - continuing operations
|
(279.9)
|
|
|
(1,387.6)
|
|
Net cash provided
by financing activities - discontinued operations
|
—
|
|
|
1,317.6
|
|
Effect of exchange
rate changes on cash
|
(17.3)
|
|
|
10.8
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
457.6
|
|
|
(48.0)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
560.9
|
|
|
304.7
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
1,018.5
|
|
|
$
|
256.7
|
|
Cash paid for
interest, net of proceeds from interest rate derivatives
|
$
|
63.9
|
|
|
$
|
98.2
|
|
Cash paid for taxes,
net of refunds - continuing operations
|
$
|
3.6
|
|
|
$
|
20.5
|
|
Cash paid for taxes,
net of refunds - discontinued operations
|
$
|
—
|
|
|
$
|
40.1
|
|
KAR Auction Services, Inc.
Reconciliation of Non-GAAP Financial Measures
EBITDA, Adjusted EBITDA, operating adjusted net income from
continuing operations and operating adjusted net income from
continuing operations per share as presented herein are
supplemental measures of our performance that are not required by,
or presented in accordance with, generally accepted accounting
principles in the United States
("GAAP"). They are not measurements of our financial performance
under GAAP and should not be considered as substitutes for net
income (loss) or any other performance measures derived in
accordance with GAAP. Management believes that these measures
provide investors additional meaningful methods to evaluate certain
aspects of the company's results period over period and for the
other reasons set forth below.
EBITDA is defined as net income (loss), plus interest expense
net of interest income, income tax provision (benefit),
depreciation and amortization. Adjusted EBITDA is EBITDA adjusted
for the items of income and expense and expected incremental
revenue and cost savings as described in our senior secured credit
agreement covenant calculations. Management believes that the
inclusion of supplementary adjustments to EBITDA applied in
presenting Adjusted EBITDA is appropriate to provide additional
information to investors about one of the principal measures of
performance used by our creditors. In addition, management uses
EBITDA and Adjusted EBITDA to evaluate our performance.
Depreciation expense for property and equipment and amortization
expense of capitalized internally developed software costs relate
to ongoing capital expenditures; however, amortization expense
associated with acquired intangible assets, such as customer
relationships, software, tradenames and noncompete agreements are
not representative of ongoing capital expenditures, but have a
continuing effect on our reported results. Non-GAAP financial
measures of operating adjusted net income from continuing
operations and operating adjusted net income from continuing
operations per share, in the opinion of the company, provide
comparability of the company's performance to other companies that
may not have incurred these types of non-cash expenses or that
report a similar measure. In addition, operating adjusted net
income from continuing operations and operating adjusted net income
from continuing operations per share may include adjustments for
certain other charges.
EBITDA, Adjusted EBITDA, operating adjusted net income from
continuing operations and operating adjusted net income from
continuing operations per share have limitations as analytical
tools, and should not be considered in isolation or as a substitute
for analysis of the results as reported under GAAP. These measures
may not be comparable to similarly titled measures reported by
other companies.
The following table reconciles EBITDA and Adjusted EBITDA to net
income for the periods presented:
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
(in
millions), (unaudited)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(32.3)
|
|
|
$
|
55.6
|
|
|
$
|
(29.5)
|
|
|
$
|
133.4
|
|
Less: Income from
discontinued operations
|
—
|
|
|
(28.2)
|
|
|
—
|
|
|
(90.7)
|
|
Net income (loss)
from continuing operations
|
(32.3)
|
|
|
27.4
|
|
|
(29.5)
|
|
|
42.7
|
|
Add back:
|
|
|
|
|
|
|
|
Income
taxes
|
(4.6)
|
|
|
8.7
|
|
|
(2.6)
|
|
|
15.2
|
|
Interest expense, net
of interest income
|
30.6
|
|
|
55.0
|
|
|
67.8
|
|
|
110.9
|
|
Depreciation and
amortization
|
46.5
|
|
|
47.9
|
|
|
94.2
|
|
|
92.2
|
|
EBITDA
|
40.2
|
|
|
139.0
|
|
|
129.9
|
|
|
261.0
|
|
Non-cash stock-based
compensation
|
2.9
|
|
|
4.0
|
|
|
8.2
|
|
|
10.6
|
|
Acquisition related
costs
|
0.9
|
|
|
3.7
|
|
|
2.3
|
|
|
7.6
|
|
Securitization
interest
|
(6.0)
|
|
|
(13.8)
|
|
|
(17.4)
|
|
|
(28.6)
|
|
Loss on asset
sales
|
0.5
|
|
|
0.4
|
|
|
1.0
|
|
|
0.9
|
|
Severance
|
6.5
|
|
|
1.1
|
|
|
8.3
|
|
|
4.8
|
|
Foreign currency
(gains)/losses
|
2.7
|
|
|
—
|
|
|
3.1
|
|
|
(0.6)
|
|
Goodwill and other
intangibles impairment
|
29.8
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
IAA allocated
costs
|
—
|
|
|
0.9
|
|
|
—
|
|
|
2.3
|
|
Other
|
2.5
|
|
|
0.6
|
|
|
3.4
|
|
|
0.8
|
|
Total
addbacks
|
39.8
|
|
|
(3.1)
|
|
|
38.7
|
|
|
(2.2)
|
|
Adjusted
EBITDA
|
$
|
80.0
|
|
|
$
|
135.9
|
|
|
$
|
168.6
|
|
|
$
|
258.8
|
|
The following table reconciles operating adjusted net income
from continuing operations and operating adjusted net income from
continuing operations per diluted share to net income (loss) and
net income (loss) from continuing operations per diluted share for
the periods presented:
|
Three Months
Ended June 30,
|
|
Six Months
Ended June 30,
|
(in millions,
except per share amounts), (unaudited)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
(32.3)
|
|
|
$
|
55.6
|
|
|
$
|
(29.5)
|
|
|
$
|
133.4
|
|
Less: income from
discontinued operations
|
—
|
|
|
(28.2)
|
|
|
—
|
|
|
(90.7)
|
|
Net income (loss)
from continuing operations (1)
|
(32.3)
|
|
|
27.4
|
|
|
(29.5)
|
|
|
42.7
|
|
Acquired
amortization expense
|
14.1
|
|
|
14.8
|
|
|
28.4
|
|
|
29.4
|
|
IAA allocated
costs
|
—
|
|
|
0.9
|
|
|
—
|
|
|
2.3
|
|
Acceleration of debt issuance costs
|
—
|
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
Goodwill
and other intangibles impairment
|
29.8
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
Income
taxes (2)
|
(1.8)
|
|
|
(4.2)
|
|
|
(2.3)
|
|
|
(8.8)
|
|
Operating adjusted
net income from continuing operations
|
$
|
9.8
|
|
|
$
|
40.7
|
|
|
$
|
26.4
|
|
|
$
|
67.4
|
|
|
|
|
|
|
|
|
|
Net income (loss)
from continuing operations per share - diluted
|
$
|
(0.25)
|
|
|
$
|
0.20
|
|
|
$
|
(0.23)
|
|
|
$
|
0.32
|
|
Acquired
amortization expense
|
0.11
|
|
|
0.11
|
|
|
0.22
|
|
|
0.22
|
|
IAA allocated
costs
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.02
|
|
Acceleration of debt issuance costs
|
—
|
|
|
0.01
|
|
|
—
|
|
|
0.01
|
|
Goodwill
and other intangibles impairment
|
0.23
|
|
|
—
|
|
|
0.23
|
|
|
—
|
|
Income
taxes
|
(0.01)
|
|
|
(0.03)
|
|
|
(0.02)
|
|
|
(0.07)
|
|
Operating adjusted
net income from continuing operations per share -
diluted
|
$
|
0.08
|
|
|
$
|
0.30
|
|
|
$
|
0.20
|
|
|
$
|
0.50
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares (1)
|
129.3
|
|
|
134.1
|
|
|
129.2
|
|
|
133.9
|
|
|
|
(1)
|
The Series A
Preferred Stock dividends have not been included in the calculation
of operating adjusted net income from continuing operations and
operating adjusted net income from continuing operations per
diluted share for the three and six months ended June 30, 2020.
Likewise, the weighted average diluted share counts do not include
the effect of assumed conversion of the Series A Preferred Stock
for the three and six months ended June 30, 2020.
|
(2)
|
The effective tax
rate at the end of each period presented was used to determine the
amount of income tax on the adjustments to net income. There was no
income tax benefit related to the goodwill and other intangibles
impairment because these items were not deductible for income tax
purposes.
|
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SOURCE KAR Auction Services, Inc.