CHICAGO, Feb. 25, 2021 /PRNewswire/ -- Cars.com Inc.
(NYSE: CARS) ("CARS" or the "Company"), a leading digital
marketplace and solutions provider for the automotive industry,
today released its financial results for the fourth quarter and
year ended December 31, 2020.
Q4 Financial and Key Metric Highlights
- Revenue of $153.0 million, up
$0.8 million, or 1%
year-over-year
- GAAP net income of $7.2 million,
or $0.10 per diluted share, compared
to GAAP net loss of $4.1 million, or
$0.06 per diluted share, in the prior
year
- Adjusted Net Income of $6.0
million, or $0.09 per diluted
share, compared to Adjusted Net Income of $42.2 million, or $0.63 per diluted share, in the prior year
- Adjusted EBITDA of $48.5 million,
or 32% of revenue, up $9.2 million
and 600 basis points as a percentage of revenue,
year-over-year
- Average Monthly Unique Visitors of 22.2 million, down 5%
year-over-year
- Traffic (visits) of 138.1 million, down 6% year-over-year
- Monthly Average Revenue Per Dealer ("ARPD") was $2,264, up 6% from $2,136 in the prior year period and up 4%
compared to the third quarter of 2020
- Dealer Customers of 18,372 as of December 31, 2020, up 242 compared to 18,130 as
of September 30, 2020, driven by both
strong retention and growth in new Dealer Customers
2020 Full Year Financial and Key Metric Highlights
- Revenue of $547.5 million, down
$59.2 million, or 10%
year-over-year
- GAAP net loss of $817.1 million,
or $12.15 per diluted share,
primarily due to non-cash goodwill and intangible asset impairment
pre-tax charge of $905.9 million
triggered by the COVID-19 pandemic and recorded in the first
quarter
- Adjusted Net Income of $70.3
million, or $1.02 per diluted
share, compared to Adjusted Net Income of $104.2 million, or $1.55 per diluted share, in the prior year
- Adjusted EBITDA of $155.9
million, or 28% of revenue, compared to $167.3 million, or 28% of revenue, in the prior
year
- Net cash provided by operating activities of $138.6 million, with Free Cash Flow of
$121.9 million, compared to
$101.5 million, and $80.2 million of Free Cash Flow, in the prior
year
- $67.7 million of cash and cash
equivalents with total liquidity of $297.7
million, including availability under our revolving credit
facility, as of December 31,
2020
- Average Monthly Unique Visitors of 23.8 million, up 5%
year-over-year
- Traffic (visits) of 599.8 million, up 8% year-over-year
Operational Highlights
- Growth in Dealer Customers in four out of the last five
quarters
- Growth in website customers continues, reaching approximately
4,400 at December 31, 2020
- Expanded digital advertising program; Dealer Inspire selected
as a preferred digital advertising provider for U.S.-based
FordDirect dealers
- Momentum with new FUEL product continues to build and
contribute to ARPD growth
- Voluntary debt payment of $30
million in January 2021
"We are entering 2021 in a position of operational and financial
strength. Our solutions allow dealers to meet consumers where they
want to buy cars, either online or in physical showrooms. While
2020 was a challenging year, the COVID-19 pandemic has accelerated
the importance of our digital solutions strategy and propelled our
organic strength as a technology enabler for both buyers and
sellers," said Alex Vetter,
President and Chief Executive Officer of CARS. "Our audience,
customers and average revenue per dealer are all trending
positively as we continue to invest in our dealer network and
expand our solutions and services."
Q4 Results
Revenue for the fourth quarter of 2020 was $153.0 million, up $0.8
million, or 1%, compared to the prior year period, due to
growth in ARPD driven by increased solutions sales.
Total operating expenses for the fourth quarter of 2020 were
$137.1 million, compared to
$147.5 million for the prior year
period. This decrease was driven by the cessation of our affiliate
revenue share expense in the second half of 2020.
GAAP net income for the fourth quarter of 2020 was $7.2 million, or $0.10 per diluted share, compared to GAAP net
loss of $4.1 million, or $0.06 per diluted share, in the fourth quarter of
2019. The current period net income was driven by tax benefits
generated through an increase in the Company's ability to carryback
operating losses as a result of the CARES Act. Adjusted Net Income
for the fourth quarter of 2020 was $6.0
million compared to $42.2
million in the fourth quarter of 2019.
Adjusted EBITDA for the fourth quarter of 2020 was $48.5 million, or 32% of revenue, compared to
$39.3 million, or 26% of revenue, for
the prior year period. Looking forward to 2021, we expect to
increase our investment in the business, with a particular focus on
marketing to support opportunistic consumer traffic acquisition and
the CARS brand. Additionally, we expect to invest in resources to
accelerate product innovation. These investments will result in
lower sequential Adjusted EBITDA margins. We expect Adjusted EBITDA
for the first quarter to be up on a year over year basis with
margins between 27% and 30%.
While we delivered record Traffic and lead growth in 2020,
Average Monthly Unique Visitors in the fourth quarter declined 5%
year-over-year and total traffic declined 6% compared to the fourth
quarter of 2019. In the fourth quarter, we increased our brand
investments to support longer term consumer growth. While we are
always seeking to further optimize our marketing mix, our decision
in the fourth quarter to make long-term marketing investments was
based on our double-digit year over year lead growth. Organic
traffic was 73% of total traffic and grew 1% year-over-year, a
testament to the consistent, high-quality traffic that we deliver
to our Dealer Customers.
Fourth quarter 2020 ARPD was $2,264, up 6% year over year and up 4% compared
to the third quarter of 2020. The ARPD growth was driven by
continued growth in solutions products.
Dealer Customers were 18,372 at the end of 2020, 242 higher than
Dealer Customers of 18,130 at the end of the third quarter of 2020.
This increase came from growth in both marketplace and solutions
only Dealer Customers. Compared to December
31, 2019, Dealer Customers were down 462.
2020 Full Year Results
Revenue for 2020 was $547.5
million, compared to $606.7
million in 2019. This decrease was primarily due to invoice
credits that we provided to marketplace customers as COVID-19
relief in the second quarter, second quarter Dealer Customers
declines, and a decline in national advertising revenue, partially
offset by growth in solutions products.
Total operating expenses for 2020 were $1.4 billion, or $528.9
million excluding the 2020 goodwill and intangible asset
impairment charge, compared to $1.1
billion, or $591.3 million
excluding the 2019 goodwill and intangible asset impairment charge,
in the prior year. This decrease in expenses was due to the actions
taken to align expenses with revenue in an uncertain COVID-19
environment. These actions included lower marketing spend and
measures taken to reduce headcount related expenses, primarily
during the second quarter of 2020. In addition, affiliate revenue
share expenses ended in the second half of 2020.
GAAP net loss for 2020 was $817.1
million, or $12.15 per diluted
share, compared to GAAP net loss of $445.3
million, or $6.65 per diluted
share, in 2019. Adjusted Net Income for the year was $70.3 million, or $1.02 per diluted share, compared to $104.2 million, or $1.55 per diluted share in the prior year
period.
Adjusted EBITDA for 2020 was $155.9
million, or 28% of revenue, compared to $167.3 million, or 28% of revenue, in the prior
year period.
We delivered record Traffic and leads in 2020. Average Monthly
Unique Visitors grew 5% and Traffic grew 8%. Traffic and lead
growth were supported by our brand strength, heightened consumer
demand and consumer gravitation toward online marketplaces,
particularly in the second and third quarters, and a focus on
driving high quality organic traffic. Organic traffic was 73% of
total traffic and grew 10% year-over-year. Mobile traffic grew 12%
year-over-year and accounted for 75% of total traffic, compared to
72% in the prior year.
Cash Flow and Balance Sheet
Net cash provided by operating activities in 2020 was
$138.6 million, compared to
$101.5 million in the prior year.
Free Cash Flow in 2020 was $121.9
million, compared to $80.2
million in 2019.
Total liquidity was $297.7
million, including cash and cash equivalents of $67.7 million and $230
million of revolver capacity, as of December 31, 2020. The Company made $50.6 million in debt repayments during 2020, net
of borrowings, bringing total debt outstanding to $597.5 million as of December 31, 2020. Net leverage at December 31, 2020 was 3.4x and secured leverage
was 1.3x, compared to maximum allowable secured leverage of 3.5x,
in accordance with the Company's recently amended credit agreement.
In addition, the Company made a $30
million voluntary debt payment in January 2021.
During the fourth quarter the Company refinanced its debt
facilities on favorable terms extending the maturity date from 2022
to 2025 for the credit facility and establishing a 2028 maturity
date for the new senior unsecured notes. This new structure
improves the Company's flexibility to invest in and grow the
business.
"Our solutions driven model delivered in the second half of 2020
with strong top line trends, profitability and cash flow. We
maintained cost discipline, made focused investments in marketing
and continued to invest organically in our digital platform. Solid
performance and a strengthened financial position give us ample
flexibility to pay down debt, pursue opportunistic acquisitions and
invest in marketing and technology innovations setting us up for
growth in 2021," said Sonia Jain,
Chief Financial Officer of CARS.
Q4 Earnings Call
As previously announced, management will hold a conference call
and webcast today at 9:00 a.m. CST.
This webcast may be accessed at investor.cars.com. A replay of the
webcast will be available at this website following the conclusion
of the call until March 11, 2021.
About CARS
CARS is a leading digital marketplace and solutions provider for
the automotive industry that connects car shoppers with sellers.
Launched in 1998 with the flagship marketplace Cars.com and
headquartered in Chicago, the
Company empowers shoppers with the data, resources and digital
tools needed to make informed buying decisions and seamlessly
connect with automotive retailers. In a rapidly changing market,
CARS enables dealerships and OEMs with innovative technical
solutions and data-driven intelligence to better reach and
influence ready-to-buy shoppers, increase inventory turn and gain
market share.
In addition to Cars.com, CARS brands include Dealer Inspire, a
technology provider building solutions that future-proof
dealerships with more efficient operations and connected digital
experiences; FUEL, which gives dealers and OEMs the opportunity to
harness the untapped power of digital video by leveraging
Cars.com's pure audience of in-market car shoppers, and
DealerRater, a leading car dealer review and reputation management
platform.
The full suite of CARS properties
include Cars.com™, Dealer
Inspire®, DealerRater®, FUEL™, Auto.com™, PickupTrucks.com™
and NewCars.com®. For more information,
visit www.Cars.com.
Non-GAAP Financial Measures
This earnings release discusses Adjusted EBITDA, Adjusted EBITDA
margin, Adjusted Net Income, Adjusted Net Income per diluted share
and Free Cash Flow. These financial measures are not prepared in
accordance with generally accepted accounting principles in
the United States ("GAAP"). These
financial measures are presented as supplemental measures of
operating performance because we believe they provide meaningful
information regarding our performance and provide a basis to
compare operating results between periods. In addition, we use
Adjusted EBITDA as a measure for determining incentive compensation
targets. Adjusted EBITDA also is used as a performance measure
under our credit agreement and includes adjustments such as the
items defined below and other further adjustments, which are
defined in the credit agreement. These non-GAAP financial measures
are frequently used by our lenders, securities analysts, investors
and other interested parties to evaluate companies in our industry.
For a reconciliation of the non-GAAP measures presented in this
earnings release to their most directly comparable financial
measure prepared in accordance with GAAP, see "Non-GAAP
Reconciliations" below.
Other companies may define or calculate these measures
differently, limiting their usefulness as comparative measures.
Because of these limitations, these non-GAAP financial measures
should not be considered in isolation or as substitutes for
performance measures calculated in accordance with GAAP.
Definitions of these non-GAAP financial measures and
reconciliations to the most directly comparable GAAP financial
measures are presented in the tables below.
We define Adjusted EBITDA as net income (loss) before (1)
interest expense, net, (2) income tax (benefit) expense, (3)
depreciation, (4) amortization of intangible assets, (5)
stock-based compensation expense, (6) unrealized mark-to-market
adjustments related to derivative instruments, and (7) certain
other items, such as transaction-related costs, costs associated
with the stockholder activist campaign, severance, transformation
and other exit costs and write-off and impairments of goodwill,
intangible assets and other long-lived assets. Amortization of
unfavorable contracts liability is not adjusted out of Adjusted
EBITDA.
We define Adjusted Net Income as net income (loss) excluding the
after-tax impact of (1) amortization of intangible assets, (2)
stock-based compensation expense, (3) unrealized mark-to-market
adjustments related to derivative instruments, and (4) certain
other items, such as transaction-related costs, costs associated
with the stockholder activist campaign, severance, transformation
and other exit costs and write-off and impairments of goodwill,
intangible assets and other long-lived assets. Amortization of
unfavorable contracts liability is not adjusted out of Adjusted Net
Income.
Transaction-related costs are certain expense items resulting
from actual or potential transactions such as business
combinations, mergers, acquisitions, dispositions, spin-offs,
financing transactions, and other strategic transactions,
including, without limitation, (1) transaction-related bonuses and
(2) expenses for advisors and representatives such as investment
bankers, consultants, attorneys and accounting firms.
Transaction-related costs may also include, without limitation,
transition and integration costs such as retention bonuses and
acquisition-related milestone payments to acquired employees, in
addition to consulting, compensation and other incremental costs
associated with integration projects.
We define Free Cash Flow as net cash provided by operating
activities less capital expenditures, including purchases of
property and equipment and capitalization of internal-use software
and website development costs.
Key Metric Definitions
Traffic (Visits). Traffic is fundamental to
our business. Traffic to the CARS network of websites and mobile
apps provides value to our advertisers in terms of audience,
awareness, consideration and conversion. In addition to tracking
traffic volume and sources, we monitor activity on our properties,
allowing us to innovate and refine our consumer-facing offerings.
Traffic is defined as the number of visits to CARS desktop and
mobile properties (responsive sites and mobile apps), measured
using Adobe Analytics. Traffic does not include traffic to Dealer
Inspire websites. Traffic provides an indication of our consumer
reach. Although our consumer reach does not directly result in
revenue, we believe our ability to reach in-market car shoppers is
attractive to our Dealer Customers and national advertisers.
Average Monthly Unique Visitors
("UVs"). Growth in unique visitors and consumer
traffic to our network of websites and mobile apps increases the
number of impressions, clicks, leads and other events we can
monetize to generate revenue. We define UVs in a given month as the
number of distinct visitors that engage with our platform during
that month. Visitors are identified when a user first visits an
individual CARS property on an individual device/browser
combination or installs one of our mobile apps on an individual
device. If a visitor accesses more than one of our web properties
or apps or uses more than one device or browser, each of those
unique property/browser/app/device combinations counts toward the
number of UVs. UVs do not include Dealer Inspire UVs. We measure
UVs using Adobe Analytics.
Dealer Customers. Dealer Customers represent
dealerships using our products as of the end of each reporting
period. Each physical or virtual dealership location is counted
separately, whether it is a single-location proprietorship or part
of a large consolidated dealer group. Multi-franchise dealerships
at a single location are counted as one dealer.
Average Revenue Per Dealer ("ARPD"). We
believe that our ability to grow ARPD is an indicator of the value
proposition of our products. We define ARPD as Direct retail
revenue during the period divided by the monthly average number of
direct Dealer Customers during the same period.
Forward Looking Statements
This press release contains "forward-looking statements" within
the meaning of the federal securities laws. All statements other
than statements of historical facts are forward-looking statements.
Forward-looking statements include information concerning the
impact of the COVID-19 pandemic on our industry, our Dealer
Customers and our results of operations, our business strategies,
strategic alternatives, plans and objectives, market potential,
outlook, trends, future financial performance, planned operational
and product improvements, potential strategic transactions,
liquidity, including draws from our revolving credit facility,
expense management and other matters and involve known and unknown
risks that are difficult to predict. As a result, our actual
financial results, performance, achievements, strategic actions or
prospects may differ materially from those expressed or implied by
these forward-looking statements. These statements often include
words such as "believe," "expect," "project," "anticipate,"
"outlook," "intend," "strategy," "plan," "estimate," "target,"
"seek," "will," "may," "would," "should," "could," "forecasts,"
"mission," "strive," "more," "goal" or similar expressions.
Forward-looking statements are based on our current expectations,
beliefs, strategies, estimates, projections and assumptions, based
on our experience in the industry as well as our perceptions of
historical trends, current conditions, expected future
developments, current developments regarding the COVID-19 pandemic
and other factors we think are appropriate. Such forward-looking
statements are necessarily based upon estimates and assumptions
that, while considered reasonable by the Company and its management
based on their knowledge and understanding of the business and
industry, are inherently uncertain. These statements are expressed
in good faith and we believe these judgments are reasonable.
However, you should understand that these statements are not
guarantees of strategic action, performance or results. Our actual
results and strategic actions could differ materially from those
expressed in the forward-looking statements. Given these
uncertainties, forward-looking statements should not be relied on
in making investment decisions. Comparisons of results between
current and prior periods are not intended to express any future
trends, or indications of future performance, unless expressed as
such, and should only be viewed as historical data. Whether or not
any such forward-looking statement is in fact achieved will depend
on future events, some of which are beyond our control.
Forward-looking statements are subject to a number of risks,
uncertainties and other important factors, many of which are beyond
our control, that could cause our actual results and strategic
actions to differ materially from those expressed in the
forward-looking statements contained in this press release. For a
detailed discussion of many of these and other risks and
uncertainties, see our Annual Report on Form 10-K, our Quarterly
Reports on Form 10-Q and our Current Reports on Form 8-K and our
other filings with the Securities and Exchange Commission,
available on our website at investor.cars.com or via EDGAR at
www.sec.gov. All forward-looking statements contained in this press
release are qualified by these cautionary statements. You should
evaluate all forward-looking statements made in this press release
in the context of these risks and uncertainties. The
forward-looking statements contained in this press release are
based only on information currently available to us and speak only
as of the date of this press release. We undertake no obligation,
other than as may be required by law, to update or revise any
forward-looking or cautionary statements to reflect changes in
assumptions, the occurrence of events, unanticipated or otherwise,
or changes in future operating results over time or otherwise.
The forward-looking statements in this report are intended to be
subject to the safe harbor protection provided by the federal
securities laws.
CARS Investor Relations Contact:
ir@cars.com
CARS Media Contact:
Marita
Thomas
mthomas@cars.com
312.601.5692
Cars.com
Inc.
|
Consolidated
Statements of Income (Loss)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Revenue:
|
|
|
|
|
|
|
|
|
Direct
|
|
$
130,460
|
|
$
127,933
|
|
$
463,018
|
|
$
477,095
|
National
advertising
|
|
20,009
|
|
21,022
|
|
73,176
|
|
80,774
|
Other
|
|
2,539
|
|
3,227
|
|
11,309
|
|
14,442
|
Retail
|
|
153,008
|
|
152,182
|
|
547,503
|
|
572,311
|
Wholesale
|
|
—
|
|
5
|
|
—
|
|
34,371
|
Total
revenue
|
|
153,008
|
|
152,187
|
|
547,503
|
|
606,682
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenue and operations
|
|
27,160
|
|
24,562
|
|
101,536
|
|
99,549
|
Product and
technology
|
|
18,305
|
|
14,734
|
|
60,664
|
|
62,859
|
Marketing and
sales
|
|
50,714
|
|
52,560
|
|
183,448
|
|
217,432
|
General and
administrative
|
|
15,185
|
|
14,507
|
|
59,051
|
|
73,772
|
Affiliate
revenue share
|
|
—
|
|
11,002
|
|
10,970
|
|
20,790
|
Depreciation
and amortization
|
|
25,747
|
|
30,116
|
|
113,276
|
|
116,877
|
Goodwill and
intangible asset impairment
|
|
—
|
|
—
|
|
905,885
|
|
461,463
|
Total operating
expenses
|
|
137,111
|
|
147,481
|
|
1,434,830
|
|
1,052,742
|
Operating income (loss)
|
|
15,897
|
|
4,706
|
|
(887,327)
|
|
(446,060)
|
Nonoperating
expense:
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
(11,627)
|
|
(7,785)
|
|
(37,856)
|
|
(30,774)
|
Other
(expense) income, net
|
|
(4,239)
|
|
25
|
|
(11,226)
|
|
1,555
|
Total nonoperating expense,
net
|
|
(15,866)
|
|
(7,760)
|
|
(49,082)
|
|
(29,219)
|
Income (loss)
before income taxes
|
|
31
|
|
(3,054)
|
|
(936,409)
|
|
(475,279)
|
Income tax
(benefit) expense
|
|
(7,188)
|
|
1,056
|
|
(119,289)
|
|
(29,955)
|
Net income (loss)
|
|
$
7,219
|
|
$
(4,110)
|
|
$
(817,120)
|
|
$
(445,324)
|
Weighted-average common shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
67,477
|
|
66,850
|
|
67,241
|
|
66,995
|
Diluted
|
|
70,312
|
|
66,850
|
|
67,241
|
|
66,995
|
Earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.11
|
|
$
(0.06)
|
|
$
(12.15)
|
|
$
(6.65)
|
Diluted
|
|
0.10
|
|
(0.06)
|
|
(12.15)
|
|
(6.65)
|
Cars.com
Inc.
|
Consolidated
Balance Sheets
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
December
31,
|
|
|
2020
|
|
2019
|
Assets:
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
67,719
|
|
$
13,549
|
Accounts receivable,
net
|
|
93,649
|
|
101,762
|
Prepaid
expenses
|
|
6,491
|
|
6,526
|
Other current
assets
|
|
10,222
|
|
603
|
Total current
assets
|
|
178,081
|
|
122,440
|
Property and
equipment, net
|
|
41,323
|
|
43,696
|
Goodwill
|
|
—
|
|
505,885
|
Intangible assets,
net
|
|
835,166
|
|
1,329,499
|
Investments and other
assets
|
|
21,142
|
|
26,471
|
Total
assets
|
|
$
1,075,712
|
|
$
2,027,991
|
Liabilities and
stockholders' equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
16,512
|
|
$
12,431
|
Accrued
compensation
|
|
18,319
|
|
16,738
|
Current portion of
long-term debt
|
|
7,756
|
|
31,391
|
Other accrued
liabilities
|
|
47,781
|
|
38,246
|
Total current
liabilities
|
|
90,368
|
|
98,806
|
Noncurrent
liabilities:
|
|
|
|
|
Long-term
debt
|
|
576,143
|
|
611,277
|
Deferred tax
liability
|
|
30,800
|
|
132,996
|
Other noncurrent
liabilities
|
|
38,225
|
|
43,844
|
Total noncurrent
liabilities
|
|
645,168
|
|
788,117
|
Total
liabilities
|
|
735,536
|
|
886,923
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred Stock at
par, $0.01 par value; 5,000 shares authorized; no shares
issued and outstanding as of December 31, 2020 and
December 31, 2019,
respectively
|
|
—
|
|
—
|
Common Stock at par,
$0.01 par value; 300,000 shares authorized; 67,387 and
66,764 shares issued and outstanding as of December
31, 2020 and
December 31, 2019, respectively
|
|
674
|
|
668
|
Additional paid-in
capital
|
|
1,530,493
|
|
1,515,109
|
Accumulated
deficit
|
|
(1,184,187)
|
|
(367,067)
|
Accumulated other
comprehensive loss
|
|
(6,804)
|
|
(7,642)
|
Total stockholders'
equity
|
|
340,176
|
|
1,141,068
|
Total liabilities and
stockholders' equity
|
|
$
1,075,712
|
|
$
2,027,991
|
Cars.com
Inc.
|
Consolidated
Statements of Cash Flows
|
(In
thousands)
|
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
|
$
(817,120)
|
|
$
(445,324)
|
Adjustments to
reconcile Net loss to Net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
18,943
|
|
18,266
|
Amortization of
intangible assets
|
|
94,333
|
|
98,611
|
Amortization of
unfavorable contracts liability
|
|
—
|
|
(18,885)
|
Goodwill and
intangible asset impairment
|
|
905,885
|
|
461,463
|
Impairment of
non-marketable security
|
|
9,447
|
|
—
|
Amortization of
accumulated other comprehensive loss on interest rate
swap
|
|
8,623
|
|
—
|
Stock-based
compensation
|
|
15,155
|
|
7,588
|
Deferred income
taxes
|
|
(103,582)
|
|
(44,920)
|
Provision for
doubtful accounts
|
|
4,380
|
|
4,897
|
Amortization of debt
issuance costs
|
|
5,108
|
|
1,573
|
Other
|
|
181
|
|
496
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
3,733
|
|
2,262
|
Prepaid
expenses
|
|
35
|
|
2,738
|
Other current
assets
|
|
(9,592)
|
|
9,835
|
Other
assets
|
|
43
|
|
(16,201)
|
Accounts
payable
|
|
3,993
|
|
874
|
Accrued
compensation
|
|
1,581
|
|
(83)
|
Other accrued
liabilities
|
|
7,614
|
|
(1,378)
|
Other noncurrent
liabilities
|
|
(10,144)
|
|
19,672
|
Net cash provided by
operating activities
|
|
138,616
|
|
101,484
|
Cash flows from
investing activities:
|
|
|
|
|
Purchase of property and
equipment
|
|
(16,712)
|
|
(21,257)
|
Other
|
|
—
|
|
(599)
|
Net cash used in
investing activities
|
|
(16,712)
|
|
(21,856)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from revolving loan
borrowings and issuance of long-term debt
|
|
565,000
|
|
10,000
|
Payments of debt issuance
costs and other fees
|
|
(17,344)
|
|
(2,940)
|
Payments of long-term
debt
|
|
(615,625)
|
|
(58,125)
|
Stock-based compensation
plans, net
|
|
235
|
|
(286)
|
Repurchases of common
stock
|
|
—
|
|
(40,000)
|
Other
|
|
—
|
|
(191)
|
Net cash used in
financing activities
|
|
(67,734)
|
|
(91,542)
|
Net increase
(decrease) in cash and cash equivalents
|
|
54,170
|
|
(11,914)
|
Cash and cash
equivalents at beginning of period
|
|
13,549
|
|
25,463
|
Cash and cash
equivalents at end of period
|
|
$
67,719
|
|
$
13,549
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for income
taxes, net of refunds
|
|
$
805
|
|
$
1,740
|
Cash paid for
interest and swap
|
|
26,433
|
|
29,654
|
Cars.com
Inc.
|
Non-GAAP
Reconciliations
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Reconciliation of
Net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
7,219
|
|
$
(4,110)
|
|
$
(817,120)
|
|
$
(445,324)
|
Interest expense,
net
|
|
11,627
|
|
7,785
|
|
37,856
|
|
30,774
|
Income tax (benefit)
expense
|
|
(7,188)
|
|
1,056
|
|
(119,289)
|
|
(29,955)
|
Depreciation and
amortization
|
|
25,747
|
|
30,116
|
|
113,276
|
|
116,877
|
Goodwill and
intangible asset impairment
|
|
—
|
|
—
|
|
905,885
|
|
461,463
|
Stock-based
compensation
|
|
4,974
|
|
2,332
|
|
15,450
|
|
7,736
|
Write-off of
long-lived assets and other
|
|
2,602
|
|
177
|
|
9,700
|
|
706
|
Severance,
transformation and other exit costs
|
|
1,462
|
|
963
|
|
7,919
|
|
10,588
|
Transaction-related
costs
|
|
2,029
|
|
959
|
|
2,205
|
|
5,582
|
Costs associated with
the stockholder activist campaign
|
|
—
|
|
—
|
|
—
|
|
8,825
|
Adjusted
EBITDA*
|
|
$
48,472
|
|
$
39,278
|
|
$
155,882
|
|
$
167,272
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income (loss) to Adjusted net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
7,219
|
|
$
(4,110)
|
|
$
(817,120)
|
|
$
(445,324)
|
Amortization of
intangible assets
|
|
21,889
|
|
25,277
|
|
94,333
|
|
98,611
|
Goodwill and
intangible asset impairment, net of tax
|
|
—
|
|
—
|
|
677,051
|
|
431,225
|
Stock-based
compensation
|
|
4,974
|
|
2,332
|
|
15,450
|
|
7,736
|
Write-off of
long-lived assets and other
|
|
2,602
|
|
177
|
|
9,700
|
|
706
|
Severance,
transformation and other exit costs
|
|
1,462
|
|
963
|
|
7,919
|
|
10,588
|
Transaction-related
costs
|
|
2,029
|
|
959
|
|
2,205
|
|
5,582
|
Costs associated with
the stockholder activist campaign
|
|
—
|
|
—
|
|
—
|
|
8,825
|
Valuation
allowance
|
|
(6,389)
|
|
—
|
|
121,659
|
|
—
|
Tax impact of
adjustments
|
|
(27,754)
|
|
16,570
|
|
(40,871)
|
|
(13,757)
|
Adjusted net
income*
|
|
$
6,032
|
|
$
42,168
|
|
$
70,326
|
|
$
104,192
|
Adjusted net income
per share, diluted
|
|
$
0.09
|
|
$
0.63
|
|
$
1.02
|
|
$
1.55
|
Weighted-average
common shares outstanding, diluted**
|
|
70,312
|
|
67,153
|
|
69,049
|
|
67,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net cash provided by operating activities to Free cash
flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
41,750
|
|
$
20,934
|
|
$
138,616
|
|
$
101,484
|
Purchase of property
and equipment
|
|
(4,109)
|
|
(5,848)
|
|
(16,712)
|
|
(21,257)
|
Free cash
flow
|
|
$
37,641
|
|
$
15,086
|
|
$
121,904
|
|
$
80,227
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* There was no
unfavorable contract liability amortization during 2020 as it was
fully amortized as of September 30, 2019. Additionally for 2019,
amortization of unfavorable contracts liability is not adjusted out
of Adjusted EBITDA or Adjusted net income.
|
** Weighted-average
common shares outstanding, diluted, includes shares excluded from
GAAP loss per share due to the net loss position for the year ended
December 31, 2020 and the three months and year ended December 31,
2019.
|
Cars.com
Inc.
|
Supplemental
Information
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expense category
for the Three Months Ended December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
27,160
|
|
$
—
|
|
$
(242)
|
|
$
26,918
|
Product and
technology
|
|
18,305
|
|
—
|
|
(993)
|
|
17,312
|
Marketing and
sales
|
|
50,714
|
|
—
|
|
(1,233)
|
|
49,481
|
General and
administrative
|
|
15,185
|
|
(1,810)
|
|
(2,506)
|
|
10,869
|
Affiliate revenue
share
|
|
—
|
|
—
|
|
—
|
|
—
|
Depreciation and
amortization
|
|
25,747
|
|
—
|
|
—
|
|
25,747
|
Goodwill and
intangible asset impairment
|
—
|
|
—
|
|
—
|
|
—
|
Total operating
expenses
|
|
$
137,111
|
|
$
(1,810)
|
|
$
(4,974)
|
|
$
130,327
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(15,866)
|
|
$
4,283
|
|
$
—
|
|
$
(11,583)
|
|
|
|
|
|
|
|
|
|
(1)
Includes write-off of long-lived assets and other,
transaction-related costs, severance, transformation and other exit
costs.
|
|
|
|
|
|
|
|
|
|
Expense category
for the Three Months Ended December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
24,562
|
|
$
—
|
|
$
(23)
|
|
$
24,539
|
Product and
technology
|
|
14,734
|
|
—
|
|
(487)
|
|
14,247
|
Marketing and
sales
|
|
52,560
|
|
—
|
|
(391)
|
|
52,169
|
General and
administrative
|
|
14,507
|
|
(2,099)
|
|
(1,431)
|
|
10,977
|
Affiliate revenue
share
|
|
11,002
|
|
—
|
|
—
|
|
11,002
|
Depreciation and
amortization
|
|
30,116
|
|
—
|
|
—
|
|
30,116
|
Goodwill and
intangible asset impairment
|
—
|
|
—
|
|
—
|
|
—
|
Total operating
expenses
|
|
$
147,481
|
|
$
(2,099)
|
|
$
(2,332)
|
|
$
143,050
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(7,760)
|
|
$
—
|
|
$
—
|
|
$
(7,760)
|
|
|
|
|
|
|
|
|
|
(1)
Includes severance, transformation and other exit costs,
transaction-related costs, write-off of long-lived assets and
other.
|
|
|
|
|
|
|
|
|
|
Expense category
for the Year Ended December 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
101,536
|
|
$
—
|
|
$
(608)
|
|
$
100,928
|
Product and
technology
|
|
60,664
|
|
—
|
|
(3,423)
|
|
57,241
|
Marketing and
sales
|
|
183,448
|
|
—
|
|
(3,722)
|
|
179,726
|
General and
administrative
|
|
59,051
|
|
(8,576)
|
|
(7,697)
|
|
42,778
|
Affiliate revenue
share
|
|
10,970
|
|
—
|
|
—
|
|
10,970
|
Depreciation and
amortization
|
|
113,276
|
|
—
|
|
—
|
|
113,276
|
Goodwill and
intangible asset impairment
|
905,885
|
|
(905,885)
|
|
—
|
|
—
|
Total operating
expenses
|
|
$
1,434,830
|
|
$
(914,461)
|
|
$
(15,450)
|
|
$
504,919
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(49,082)
|
|
$
11,248
|
|
$
—
|
|
$
(37,834)
|
|
|
|
|
|
|
|
|
|
(1)
Includes write-off and impairments of goodwill, intangible assets
and other long-lived assets and other, severance, transformation
and other exit costs, and transaction-related costs.
|
|
|
|
|
|
|
|
|
|
Expense category
for the Year Ended December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
99,549
|
|
$
—
|
|
$
(91)
|
|
$
99,458
|
Product and
technology
|
|
62,859
|
|
—
|
|
(1,145)
|
|
61,714
|
Marketing and
sales
|
|
217,432
|
|
—
|
|
(1,561)
|
|
215,871
|
General and
administrative
|
|
73,772
|
|
(27,101)
|
|
(4,939)
|
|
41,732
|
Affiliate revenue
share
|
|
20,790
|
|
—
|
|
—
|
|
20,790
|
Depreciation and
amortization
|
|
116,877
|
|
—
|
|
—
|
|
116,877
|
Goodwill and
intangible asset impairment
|
461,463
|
|
(461,463)
|
|
—
|
|
—
|
Total operating
expenses
|
|
$
1,052,742
|
|
$
(488,564)
|
|
$
(7,736)
|
|
$
556,442
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(29,219)
|
|
$
(1,400)
|
|
$
—
|
|
$
(30,619)
|
|
|
|
|
|
|
|
|
|
(1
)Includes write-off and impairments of goodwill, intangible
assets and other long-lived assets and other, severance,
transformation and other exit costs, costs associated with the
stockholder activist campaign and transaction-related
costs.
|
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SOURCE Cars.com Inc.