SANTA MONICA, Calif.,
Feb. 24, 2021 /PRNewswire/
-- TrueCar, Inc. (NASDAQ: TRUE) today announced its
financial results for the fourth quarter and fiscal year ended
December 31, 2020.
Fourth Quarter 2020 Financial Highlights
The following financial results reflect continuing operations
only:
- Fourth quarter total revenue of $64.0
million, down (25)% from $84.9
million in the fourth quarter of 2019.
- Fourth quarter loss from continuing operations of $(7.7) million, or $(0.07) per basic and diluted share, compared to
loss from continuing operations of $(9.7) million, or
$(0.09) per basic and diluted share,
in the fourth quarter of 2019.
- Fourth quarter Non-GAAP net loss(1) of $(1.1) million, or $(0.01) per basic and diluted share, compared to
Non-GAAP net loss of $(2.6) million,
or $(0.02) per basic and diluted
share, in the fourth quarter of 2019.
- Fourth quarter Adjusted EBITDA(2) of $6.1 million, representing an Adjusted EBITDA
margin(3) of 9.5%, compared to Adjusted EBITDA of
$1.7 million, representing an
Adjusted EBITDA margin of 2.0%, in the fourth quarter of 2019.
2020 Financial Highlights
The following financial results reflect continuing operations
only:
- Total revenue of $278.7 million,
down (16.8)% from $335.0 million in
FY 2019.
- Loss from continuing operations of $(19.8) million, or
$(0.19) per basic and diluted share,
compared to loss from continuing operations of $(58.3) million, or $(0.55) per basic and diluted share, in FY
2019.
- Non-GAAP net income of $20.2
million, or $0.19 per basic
and diluted share, compared to Non-GAAP net loss of $(8.7) million, or $(0.08) per basic and diluted share, in FY
2019.
- Adjusted EBITDA of $42.1 million,
representing an Adjusted EBITDA margin of 15.1%, compared to
Adjusted EBITDA of $8.2 million,
representing an Adjusted EBITDA margin of 2.4%, in FY 2019.
- Cash and cash equivalents of approximately $273 million at December
31, 2020.
(1)
|
Non-GAAP net income
(loss) is a Non-GAAP financial measure. Refer to its definition and
accompanying reconciliation to GAAP net income (loss)
below.
|
|
|
(2)
|
Adjusted EBITDA is a
Non-GAAP financial measure. Refer to its definition and
accompanying reconciliation to GAAP net income (loss)
below.
|
|
|
(3)
|
Adjusted EBITDA
margin is a Non-GAAP financial measure, calculated as Adjusted
EBITDA divided by total revenue.
|
Management Commentary
"Thanks to the many decisive actions we took throughout 2020, we
delivered a strong fourth quarter with financial performance well
above expectations," said Mike
Darrow, TrueCar's President and Chief Executive Officer.
"More importantly, we head into 2021 with a number of tailwinds
behind us, including our recently announced Navy Federal
partnership and the roll-out of our Deal Builder experience, yet
another significant step towards becoming the industry's leading
end-to-end online car buying solution."
Key Operating Metrics
- Average monthly unique visitors(4) increased 2%
to 7.9 million in the fourth quarter of 2020, up from approximately
7.7 million in the fourth quarter of 2019. In FY 2020, average
monthly unique visitors increased 12% to approximately 8.4 million,
up from 7.4 million in FY 2019.
- Units(5) were 166,474 in the fourth quarter of
2020, down from 248,037 in the fourth quarter of 2019. In FY 2020,
units were 766,413, down from 998,495 in FY 2019.
- Monetization(6) was $382 during the fourth quarter of 2020, compared
to $342 during the fourth quarter of
2019. Monetization was $352 during FY
2020, compared to $335 during FY
2019.
- Franchise dealer count(7) was 10,589 as of
December 31, 2020, a (1)% decrease from 10,745 as of
September 30, 2020.
- Independent dealer count(8) was 3,794 as of
December 31, 2020, a (2)% decrease from 3,858 as of
September 30, 2020.
Business Outlook
For the first quarter ending March 31,
2021, we expect revenues to be in the range of $60 million to $62
million. We expect to grow revenues sequentially from there,
with a bit less sequential improvement from the third to the fourth
quarter as a result of typical seasonality. As it relates to
Adjusted EBITDA, it is management's view that accelerating unit
growth takes priority over near-term profitability in the first
quarter. However, we expect a healthy Adjusted EBITDA for the
remainder of the year.
(4)
|
We define a monthly
unique visitor as an individual who has visited our website, our
landing pages on our affinity group marketing partner sites or
our mobile applications within a calendar month. We calculate
average monthly unique visitors as the sum of the monthly unique
visitors divided by the number of months in the period.
|
|
|
(5)
|
We define units as
the number of automobiles purchased from TrueCar Certified Dealers
that are matched to users of TrueCar.com, our mobile applications
or the car-buying sites and mobile applications that we maintain
for our affinity group marketing partners.
|
|
|
(6)
|
We define
monetization as the average transaction revenue per unit, which we
calculate by dividing all of our transaction revenue (dealer
revenue and OEM incentives revenue) in a given period by the number
of units in that period.
|
|
|
(7)
|
We define franchise
dealer count as the number of franchise dealers in the network of
TrueCar Certified Dealers at the end of a given period. This number
is calculated by counting the number of brands of new cars sold at
each individual location, or rooftop, regardless of the size of the
dealership that owns the rooftop.
|
|
|
(8)
|
We define independent
dealer count as the number of dealers in the network of TrueCar
Certified Dealers at the end of a given period that exclusively
sell used vehicles and are not directly affiliated with a new car
manufacturer. This number is calculated by counting each location,
or rooftop, individually, regardless of the size of the dealership
that owns the rooftop.
|
Conference Call Information
Members of our management will host a conference call
today, February 24, 2021, to discuss our fourth quarter and
full year 2020 results at 4:30 p.m. Eastern Time. To
participate, domestic callers should dial 1-877-870-4263 and
international callers should dial 1-412-317-0790. A replay of the
call may be accessed the same day from 7:30
p.m. Eastern Time on Wednesday, February 24, 2021 until
11:59 p.m. Eastern Time on Wednesday,
March 3, 2021 by dialing 1-877-344-7529 (domestic) or
1-412-317-0088 (international) and entering replay PIN 10151984. An
archived version of the call will also be available upon completion
on the Investor Relations section of our website at
ir.truecar.com. We have used, and intend to continue to use,
our Investor Relations website (ir.truecar.com), Twitter (@TrueCar)
and Facebook (www.facebook.com/TrueCar) as means of disclosing
material non-public information and for complying with our
disclosure obligations under Regulation FD.
Forward-Looking Statements
This press release contains forward-looking statements. All
statements contained in this press release other than statements of
historical fact are forward-looking statements, including
statements regarding our future revenue growth potential and
opportunities and our outlook for the first quarter and full year
2021, including our expectations regarding future revenue and
Adjusted EBITDA. These forward-looking statements are subject to a
number of risks, uncertainties and assumptions that may prove
incorrect, any of which could cause our results to differ
materially from those expressed or implied by such forward-looking
statements, and include, among others, those risks and
uncertainties described under the heading "Risk Factors" in our
Annual Report on Form 10-K for the year ended
December 31, 2019, our Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2020,
June 30, 2020 and September 30, 2020 filed with the Securities and
Exchange Commission, or SEC, and our Annual Report on Form 10-K for
the year ended December 31, 2020 to
be filed with the SEC. Moreover, we operate in a very competitive
and rapidly-changing environment. New risks emerge from time to
time. It is not possible for our management to predict all risks,
nor can management assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in
any forward-looking statements we may make. All forward-looking
statements in this press release are based on information available
to our management as of the date of this press release and,
except as required by law, management assumes no obligation to
update those forward-looking statements, which speak only as of
their respective dates.
Use of Non-GAAP Financial Measures
This earnings release includes the following Non-GAAP financial
measures: Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP net
(loss) income and Non-GAAP net (loss) income per share. We
define Adjusted EBITDA as net loss adjusted to exclude interest
income, interest expense, depreciation and amortization,
stock-based compensation, income (loss) from equity method
investment, certain restructuring costs, certain executive
departure costs, certain transaction expenses, certain litigation
costs, changes in the fair value of contingent consideration,
goodwill impairment, other expense (income), impairment of lease
right-of-use assets, and income taxes. We define Non-GAAP net
(loss) income as net loss adjusted to exclude stock-based
compensation, income (loss) from equity method investment, certain
restructuring costs, certain executive departure costs, certain
transaction expenses, certain litigation costs, changes in the fair
value of contingent consideration, goodwill impairment, other
expense (income), impairment of lease right-of-use assets, and
related income tax impact of these adjustments. We have provided
below a reconciliation of each of Adjusted EBITDA and Non-GAAP net
(loss) income to net loss, the most directly comparable GAAP
financial measure. Neither Adjusted EBITDA nor Non-GAAP net (loss)
income should be considered as an alternative to net loss or any
other measure of financial performance calculated and presented in
accordance with GAAP.
We use Adjusted EBITDA and Non-GAAP net (loss) income as
operating performance measures because each is (i) an integral part
of our reporting and planning processes; (ii) used by our
management and board of directors to assess our operational
performance, and together with operational objectives, as a measure
in evaluating employee compensation and bonuses; and (iii) used by
our management to make financial and strategic planning decisions
regarding future operating investments. We believe that using
Adjusted EBITDA and Non-GAAP net (loss) income facilitates
operating performance comparisons on a period-to-period basis
because these measures exclude variations primarily caused by
changes in the excluded items noted above. In addition, we believe
that Adjusted EBITDA, Non-GAAP net (loss) income and similar
measures are widely used by investors, securities analysts, rating
agencies and other parties in evaluating companies as measures of
financial performance and debt service capabilities.
Our use of each of Adjusted EBITDA and Non-GAAP net (loss)
income has limitations as an analytical tool, and you should not
consider either in isolation or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:
- Adjusted EBITDA does not reflect the payment or receipt of
interest or the payment of income taxes;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
changes in, or cash requirements for, our working capital
needs;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditures or any other contractual commitments;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
severance charges associated with the departures of certain of our
former executives in the second quarter of 2019;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
charges associated with a restructuring plan initiated and
completed in the second quarter of 2020 and first quarter of 2019
to improve efficiency and reduce expenses;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
the legal, accounting, consulting and other third-party fees and
costs that we incurred in connection with the evaluation and
negotiation of potential merger and acquisition transactions;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
the costs to advance our claims in certain litigation or the costs
to defend ourselves in various complaints filed against us;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income
considers the potentially dilutive impact of shares issued or to be
issued in connection with stock-based compensation; and
- other companies, including companies in our own industry, may
calculate Adjusted EBITDA and Non-GAAP net (loss) income
differently than we do, limiting their usefulness as comparative
measures.
Because of these limitations, you should consider Adjusted
EBITDA and Non-GAAP net (loss) income alongside other financial
performance measures, including our net loss, our other GAAP
results and various cash flow metrics. In addition, in evaluating
Adjusted EBITDA and Non-GAAP net (loss) income, you should be aware
that in the future we will incur expenses such as those that are
the subject of adjustments in deriving Adjusted EBITDA and Non-GAAP
net (loss) income and you should not infer from our presentation of
Adjusted EBITDA and Non-GAAP net (loss) income that our future
results will not be affected by these expenses or any unusual or
non-recurring items.
About TrueCar
TrueCar is a leading automotive digital marketplace that enables
car buyers to connect to our nationwide network of Certified
Dealers. We are building the industry's most personalized and
efficient car buying experience as we seek to bring more of the
purchasing process online. Consumers who visit our marketplace will
find a suite of vehicle discovery tools, price ratings and market
context on new and used cars — all with a clear view of what's a
great deal. When they are ready, TrueCar will enable them to
connect with a local Certified Dealer who shares in our belief that
truth, transparency and fairness are the foundation of a great car
buying experience. As part of our marketplace, TrueCar powers
car-buying programs for over 250 leading brands, including AARP,
Sam's Club and American Express. Nearly half of all new-car buyers
engage with TrueCar powered sites, where they buy smarter and drive
happier. TrueCar is headquartered in Santa Monica, California, with offices in
Austin, Texas and Boston, Massachusetts.
For more information, please visit www.truecar.com, and follow
us on Facebook or Twitter. TrueCar media line: +1-844-469-8442 (US
toll-free) | Email: pr@truecar.com
Investor Relations Contact:
Danny Vivier
Vice President, Investor Relations and Strategic
Finance
424-258-8017
dvivier@truecar.com
Public Relations & Media Contact
Shadee
Malekafzali
Senior Director, Public Relations
424-258-8694
shadee@truecar.com
TRUECAR,
INC.
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Revenues
|
$
|
63,960
|
|
|
$
|
84,884
|
|
|
$
|
278,678
|
|
|
$
|
335,046
|
|
Costs and operating
expenses:
|
|
|
|
|
|
|
|
Cost of
revenue
|
5,146
|
|
|
6,270
|
|
|
21,549
|
|
|
27,828
|
|
Sales and
marketing
|
36,549
|
|
|
55,855
|
|
|
151,915
|
|
|
226,977
|
|
Technology and
development
|
10,069
|
|
|
12,215
|
|
|
44,930
|
|
|
56,114
|
|
General and
administrative
|
13,737
|
|
|
15,380
|
|
|
49,989
|
|
|
64,318
|
|
Depreciation and
amortization
|
5,226
|
|
|
5,042
|
|
|
20,547
|
|
|
20,665
|
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
8,264
|
|
|
—
|
|
Total costs and
operating expenses
|
70,727
|
|
|
94,762
|
|
|
297,194
|
|
|
395,902
|
|
Loss from
operations
|
(6,767)
|
|
|
(9,878)
|
|
|
(18,516)
|
|
|
(60,856)
|
|
Interest
income
|
10
|
|
|
477
|
|
|
462
|
|
|
2,480
|
|
Other (expense)
income
|
(252)
|
|
|
—
|
|
|
198
|
|
|
—
|
|
Loss from equity
method investment
|
(529)
|
|
|
(543)
|
|
|
(1,989)
|
|
|
(1,280)
|
|
Loss from continuing
operations before income taxes
|
(7,538)
|
|
|
(9,944)
|
|
|
(19,845)
|
|
|
(59,656)
|
|
Provision for
(benefit from) income taxes
|
126
|
|
|
(241)
|
|
|
(6)
|
|
|
(1,321)
|
|
Loss from continuing
operations
|
$
|
(7,664)
|
|
|
$
|
(9,703)
|
|
|
$
|
(19,839)
|
|
|
$
|
(58,335)
|
|
Income from
discontinued operations, net of taxes
|
95,680
|
|
|
890
|
|
|
97,533
|
|
|
3,445
|
|
Net income
(loss)
|
$
|
88,016
|
|
|
$
|
(8,813)
|
|
|
$
|
77,694
|
|
|
$
|
(54,890)
|
|
Income (loss) per
share, basic and diluted
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.07)
|
|
|
$
|
(0.09)
|
|
|
$
|
(0.19)
|
|
|
$
|
(0.55)
|
|
Discontinued
operations
|
$
|
0.93
|
|
|
$
|
0.01
|
|
|
$
|
0.92
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding, basic and diluted
|
103,029
|
|
|
106,681
|
|
|
106,315
|
|
|
105,805
|
|
TRUECAR,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
273,314
|
|
|
$
|
181,534
|
|
Accounts receivable,
net
|
|
32,923
|
|
|
38,239
|
|
Prepaid
expenses
|
|
5,800
|
|
|
7,158
|
|
Other current
assets
|
|
12,901
|
|
|
6,033
|
|
Current assets of
discontinued operations
|
|
—
|
|
|
6,777
|
|
Total current
assets
|
|
324,938
|
|
|
239,741
|
|
Property and
equipment, net
|
|
21,421
|
|
|
27,781
|
|
Operating lease
right-of-use assets
|
|
29,192
|
|
|
36,064
|
|
Goodwill
|
|
51,205
|
|
|
59,469
|
|
Intangible assets,
net
|
|
6,600
|
|
|
9,000
|
|
Equity method
investment
|
|
19,905
|
|
|
21,894
|
|
Other
assets
|
|
4,800
|
|
|
3,620
|
|
Noncurrent assets of
discontinued operations
|
|
—
|
|
|
24,118
|
|
Total
assets
|
|
$
|
458,061
|
|
|
$
|
421,687
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts
payable
|
|
$
|
13,198
|
|
|
$
|
21,319
|
|
Accrued employee
expenses
|
|
6,506
|
|
|
5,969
|
|
Operating lease
liabilities, current
|
|
4,771
|
|
|
5,875
|
|
Accrued expenses and
other current liabilities
|
|
17,252
|
|
|
20,252
|
|
Current liabilities of
discontinued operations
|
|
—
|
|
|
755
|
|
Total current
liabilities
|
|
41,727
|
|
|
54,170
|
|
Deferred tax
liabilities
|
|
40
|
|
|
783
|
|
Operating lease
liabilities, net of current portion
|
|
31,974
|
|
|
37,127
|
|
Other
liabilities
|
|
388
|
|
|
2,336
|
|
Total
liabilities
|
|
74,129
|
|
|
94,416
|
|
Stockholders'
Equity
|
|
|
|
|
Common
stock
|
|
10
|
|
|
11
|
|
Additional paid-in
capital
|
|
738,290
|
|
|
759,322
|
|
Accumulated
deficit
|
|
(354,368)
|
|
|
(432,062)
|
|
Total stockholders'
equity
|
|
383,932
|
|
|
327,271
|
|
Total liabilities and
stockholders' equity
|
|
$
|
458,061
|
|
|
$
|
421,687
|
|
TRUECAR,
INC.
|
RECONCILIATION OF
NET INCOME (LOSS) TO ADJUSTED EBITDA
|
(In
thousands)
|
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
88,016
|
|
|
$
|
(8,813)
|
|
|
$
|
77,694
|
|
|
$
|
(54,890)
|
|
Income from
discontinued operations, net of taxes
|
(95,680)
|
|
|
(890)
|
|
|
(97,533)
|
|
|
(3,445)
|
|
Loss from continuing
operations
|
(7,664)
|
|
|
(9,703)
|
|
|
(19,839)
|
|
|
(58,335)
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Interest
income
|
(10)
|
|
|
(477)
|
|
|
(462)
|
|
|
(2,480)
|
|
Depreciation and
amortization
|
5,226
|
|
|
5,042
|
|
|
20,547
|
|
|
20,665
|
|
Stock-based
compensation (1)
|
5,445
|
|
|
6,202
|
|
|
23,077
|
|
|
36,462
|
|
Share of net loss of
equity method investment
|
529
|
|
|
543
|
|
|
1,989
|
|
|
1,280
|
|
Certain litigation
costs (2)
|
—
|
|
|
139
|
|
|
(1,939)
|
|
|
1,575
|
|
Executive departure
costs (3)
|
—
|
|
|
138
|
|
|
—
|
|
|
5,089
|
|
Restructuring charges
(4)
|
—
|
|
|
—
|
|
|
8,346
|
|
|
3,015
|
|
Transaction costs
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,926
|
|
Change in fair value
of contingent consideration
|
31
|
|
|
75
|
|
|
182
|
|
|
300
|
|
Goodwill impairment
(6)
|
—
|
|
|
—
|
|
|
8,264
|
|
|
—
|
|
Other expense
(income)
|
252
|
|
|
—
|
|
|
(198)
|
|
|
—
|
|
Impairment of
right-of-use ("ROU") assets (7)
|
2,136
|
|
|
—
|
|
|
2,136
|
|
|
—
|
|
Provision for (benefit
from) income taxes
|
126
|
|
|
(241)
|
|
|
(6)
|
|
|
(1,321)
|
|
Adjusted
EBITDA
|
$
|
6,071
|
|
|
$
|
1,718
|
|
|
$
|
42,097
|
|
|
$
|
8,176
|
|
(1)
|
The excluded amount
includes stock-based compensation of $7.2 million incurred in the
second quarter of 2019 associated with the acceleration of certain
equity awards and the extension of the exercise period for certain
vested stock options related to the departures of certain
executives, including our former chief executive
officer.
|
|
|
(2)
|
The excluded amounts
relate to legal costs incurred in connection with complaints filed
by non-TrueCar dealers against TrueCar and consumer class action
lawsuits. For the year ended December 31, 2020, the excluded amount
also includes a $2.0 million payment received from one of our
insurance carriers in settlement of a lawsuit we brought in the
fourth quarter of 2017 to recover insured legal fees. We believe
the exclusion of these costs and recovery is appropriate to
facilitate comparisons of our core operating performance on a
period-to-period basis. Based on the nature of the specific claims
underlying the excluded litigation matters, once these matters are
resolved, we do not believe our operations are likely to entail
defending against the types of claims raised by these
matters.
|
|
|
(3)
|
The excluded amounts
include $4.6 million in executive severance costs, as well as
related recruiting fees of $0.5 million, associated with the
separation of our former chief executive officer and the
termination of executive-level employees in connection with the
change in chief executive officer in the second quarter of 2019. We
believe excluding the impact of these terminations and the
associated chief executive officer recruiting fees is consistent
with our use of these non-GAAP measures as we do not believe they
are a useful indicator of our ongoing operating results.
|
|
|
(4)
|
The excluded amounts
represent charges associated with the restructuring plans
undertaken in the second quarter of 2020 and first quarter of 2019
to improve efficiency and reduce expenses. We believe excluding the
impact of these charges is consistent with our use of these
non-GAAP measures as we do not believe they are a useful indicator
of our ongoing operating results.
|
|
|
(5)
|
The excluded amounts
represent external legal, accounting, consulting and other
third-party fees and costs we incurred in connection with the
evaluation and negotiation of potential merger and acquisition
transactions. These expenses are included in general and
administrative expenses in our consolidated statements of
operations. We consider these fees and costs, which are
associated with potential merger and acquisition transactions
outside the normal course of our operations, to be unrelated to our
underlying results of operations and believe that their exclusion
provides investors with a more complete understanding of the
factors and trends affecting our business operations.
|
|
|
(6)
|
The excluded amount
represents a non-cash impairment charge we recognized on our
goodwill during the first quarter of 2020.
|
|
|
(7)
|
The excluded amount
represents an impairment charge on our ROU assets associated with
certain of our existing office locations. We consider these charges
to be unrelated to our underlying results of operations and believe
that their exclusion is appropriate to facilitate period-to-period
operating performance comparisons.
|
TRUECAR,
INC.
|
RECONCILIATION OF
NET INCOME (LOSS) TO NON-GAAP NET (LOSS) INCOME
|
(In
thousands, except per share amounts)
|
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
$
|
88,016
|
|
|
$
|
(8,813)
|
|
|
$
|
77,694
|
|
|
$
|
(54,890)
|
|
Income from
discontinued operations, net of taxes
|
(95,680)
|
|
|
(890)
|
|
|
(97,533)
|
|
|
(3,445)
|
|
Loss from continuing
operations
|
(7,664)
|
|
|
(9,703)
|
|
|
(19,839)
|
|
|
(58,335)
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Stock-based
compensation (1)
|
5,445
|
|
|
6,202
|
|
|
23,077
|
|
|
36,462
|
|
Loss from equity
method investment
|
529
|
|
|
543
|
|
|
1,989
|
|
|
1,280
|
|
Certain litigation
costs (2)
|
—
|
|
|
139
|
|
|
(1,939)
|
|
|
1,575
|
|
Executive departure
costs (3)
|
—
|
|
|
138
|
|
|
—
|
|
|
5,089
|
|
Restructuring charges
(4)
|
—
|
|
|
—
|
|
|
8,346
|
|
|
3,015
|
|
Transaction costs
(5)
|
—
|
|
|
—
|
|
|
—
|
|
|
1,926
|
|
Changes in the fair
value of contingent consideration
|
31
|
|
|
75
|
|
|
182
|
|
|
300
|
|
Goodwill impairment
(6)
|
—
|
|
|
—
|
|
|
8,264
|
|
|
—
|
|
Other expense
(income)
|
252
|
|
|
—
|
|
|
(198)
|
|
|
—
|
|
Impairment of
right-of-use ("ROU") assets (7)
|
2,136
|
|
|
—
|
|
|
2,136
|
|
|
—
|
|
Tax effect of above
adjustments
|
(1,845)
|
|
|
—
|
|
|
(1,845)
|
|
|
—
|
|
Non-GAAP net (loss)
income (8)
|
$
|
(1,116)
|
|
|
$
|
(2,606)
|
|
|
$
|
20,173
|
|
|
$
|
(8,688)
|
|
|
|
|
|
|
|
|
|
Non-GAAP (loss)
income per share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.01)
|
|
|
$
|
(0.02)
|
|
|
$
|
0.19
|
|
|
$
|
(0.08)
|
|
Diluted
|
$
|
(0.01)
|
|
|
$
|
(0.02)
|
|
|
$
|
0.19
|
|
|
$
|
(0.08)
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
103,029
|
|
|
106,681
|
|
|
106,315
|
|
|
105,805
|
|
Diluted
|
103,029
|
|
|
106,681
|
|
|
107,581
|
|
|
105,805
|
|
(1)
|
The excluded amount
includes stock-based compensation of $7.2 million incurred in the
second quarter of 2019 associated with the acceleration of certain
equity awards and the extension of the exercise period for certain
vested stock options related to the departures of certain
executives, including our former chief executive
officer.
|
|
|
(2)
|
The excluded amounts
relate to legal costs incurred in connection with complaints filed
by non-TrueCar dealers against TrueCar and consumer class action
lawsuits. For the year ended December 31, 2020, the excluded amount
also includes a $2.0 million payment received from one of our
insurance carriers in settlement of a lawsuit we brought in the
fourth quarter of 2017 to recover insured legal fees. We believe
the exclusion of these costs and recovery is appropriate to
facilitate comparisons of our core operating performance on a
period-to-period basis. Based on the nature of the specific claims
underlying the excluded litigation matters, once these matters are
resolved, we do not believe our operations are likely to entail
defending against the types of claims raised by these
matters.
|
|
|
(3)
|
The excluded amounts
include $4.6 million in executive severance costs, as well as
related recruiting fees of $0.5 million, associated with the
separation of our former chief executive officer and the
termination of executive-level employees in connection with the
change in chief executive officer in the second quarter of 2019. We
believe excluding the impact of these terminations and the
associated chief executive officer recruiting fees is consistent
with our use of these non-GAAP measures as we do not believe they
are a useful indicator of our ongoing operating results.
|
|
|
(4)
|
The excluded amounts
represent charges associated with the restructuring plans
undertaken in the second quarter of 2020 and first quarter of 2019
to improve efficiency and reduce expenses. We believe excluding the
impact of these charges is consistent with our use of these
non-GAAP measures as we do not believe they are a useful indicator
of our ongoing operating results.
|
|
|
(5)
|
The excluded amounts
represent external legal, accounting, consulting and other
third-party fees and costs we incurred in connection with the
evaluation and negotiation of potential merger and acquisition
transactions. These expenses are included in general and
administrative expenses in our consolidated statements of
operations. We consider these fees and costs, which are
associated with potential merger and acquisition transactions
outside the normal course of our operations, to be unrelated to our
underlying results of operations and believe that their exclusion
provides investors with a more complete understanding of the
factors and trends affecting our business operations.
|
|
|
(6)
|
The excluded amount
represents a non-cash impairment charge we recognized on our
goodwill during the first quarter of 2020.
|
|
|
(7)
|
The excluded amount
represents an impairment charge on our ROU assets associated with
certain of our existing office locations. We consider these charges
to be unrelated to our underlying results of operations and believe
that their exclusion is appropriate to facilitate period-to-period
operating performance comparisons.
|
|
|
(8)
|
For the three months
and year ended December 31, 2019, there was no income tax impact
related to the adjustments made to calculate Non-GAAP net (loss)
income because of our available net operating loss carryforwards
and the full valuation allowance recorded against our net deferred
tax assets for all periods shown.
|
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SOURCE TrueCar, Inc.