CARMEL, Ind., Feb. 16, 2021 /PRNewswire/ -- KAR Auction
Services, Inc. (NYSE: KAR), today reported its fourth quarter
financial results for the period ended December 31, 2020. For the fourth quarter of
2020, the company reported revenue of $529.6
million as compared with revenue of $671.3 million for the fourth quarter of 2019.
Net income (loss) from continuing operations for the fourth quarter
of 2020 decreased to a loss of $17.1
million, or $0.21 per diluted
share, as compared with net income from continuing operations of
$15.3 million, or $0.12 per diluted share, in the fourth quarter of
2019. Adjusted EBITDA for the quarter ended December 31, 2020 decreased to $67.5 million, as compared with Adjusted EBITDA
of $122.0 million for the quarter
ended December 31, 2019. Operating
adjusted net income (loss) from continuing operations per diluted
share decreased to a loss of $0.01
for the quarter ended December 31,
2020, as compared with operating adjusted net income from
continuing operations per diluted share of $0.19 for the quarter ended December 31, 2019.
For the year ended December 31,
2020, the company reported revenue of $2,187.7 million as compared with revenue from
continuing operations of $2,781.9
million for the year ended December
31, 2019. For the year ended December
31, 2020, the company reported net income from continuing
operations of $0.5 million and a loss
of $0.16 per diluted share, as
compared with net income from continuing operations of $92.4 million, or $0.70 per diluted share, for the year ended
December 31, 2019. Adjusted EBITDA
for the year ended December 31, 2020
decreased to $375.3 million, as
compared with Adjusted EBITDA of $510.0
million for the year ended December
31, 2019. Operating adjusted net income from continuing
operations per diluted share decreased to $0.51 for the year ended December 31, 2020, as compared with operating
adjusted net income from continuing operations per diluted share of
$1.04 for the year ended December 31, 2019. The company's operating
results for the year ended December 31,
2020 were significantly impacted by the COVID-19 pandemic.
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
The company
has been subject to numerous COVID-19-related orders and directives
that have caused us to modify our business practices. All ADESA
auction locations in the U.S. and Canada are offering vehicles for sale via
ADESA Simulcast, DealerBlock and Simulcast+. Auction locations have
resumed offering ancillary and related services, where possible and
as permitted by government directives. Given the evolving health,
economic, social and governmental environments, the potential
impact that COVID-19 could have on our business remains uncertain.
The broader implications for our business and results of operations
remain uncertain and will depend on many factors outside our
control, including, without limitation, the timing, extent,
trajectory and duration of the pandemic, the development and
availability of effective treatments and vaccines, the imposition
of protective public safety measures, and the timing to which
normal economic and operating conditions resumes. Even after the
COVID-19 outbreak has subsided, we may continue to experience
materially adverse impacts to our business as a result of its
impact.
2021 Guidance
The company expects net income from
continuing operations of at least $90
million and Adjusted EBITDA of at least $475 million. The following table provides a
reconciliation of net income from continuing operations to Adjusted
EBITDA and additional assumptions used in the company's
guidance.
(in millions, except
per share amounts)
|
Annual Guidance
|
|
|
Net income from
continuing operations
|
$90
|
Income tax
expense
|
$38
|
Interest expense, net
of interest income
|
$125
|
Depreciation and
amortization
|
$205
|
EBITDA
|
$458
|
Adjusted EBITDA
addbacks, net
|
$17
|
Adjusted
EBITDA
|
$475
|
Effective tax
rate
|
30%
|
Net income from
continuing operations per share - diluted *
|
$0.30
|
Weighted average
diluted shares *
|
131
|
Operating adjusted net
income per share
|
$0.87
|
Weighted average
diluted shares - including assumed conversion of preferred
shares
|
165
|
* The company used the two-class method of calculating net
income from continuing operations per diluted share. Under the
two-class method, net income from continuing operations is reduced
by dividends and undistributed earnings to the holders of the
Series A Preferred Stock, and the weighted average diluted shares
do not assume conversion of the preferred shares to common
shares.
Earnings guidance does not contemplate future items such as
business development activities, strategic developments (such as
restructurings, spin-offs or dispositions of assets or
investments), gains/losses associated with step acquisitions,
contingent purchase price adjustments, significant expenses related
to litigation and changes in applicable laws and regulations
(including significant accounting and tax matters). The timing and
amounts of these items are highly variable, difficult to predict,
and of a potential size that could have a substantial impact on the
company's reported results for any given period. Prospective
quantification of these items is generally not practicable.
Forward-looking non-GAAP guidance excludes amortization expense
associated with acquired intangible assets, as well as one-time
charges, net of taxes. See reconciliations of the company's
guidance on pages 8 and 9.
Earnings Conference Call Information
KAR will be
hosting an earnings conference call and webcast on Wednesday, February 17, 2021 at 8:30 a.m. EST. 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 7675889, while the
live web cast will be available at the investors section of
www.karglobal.com. Supplemental financial information for KAR's
fourth quarter 2020 results is available at the investors section
of www.karglobal.com.
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. d/b/a KAR Global
(NYSE: KAR), 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 3.1 million units
valued at approximately $30 billion
through our auctions in 2020. Our integrated physical, online and
mobile marketplaces reduce risk, improve transparency and
streamline transactions for customers in about 75 countries.
Headquartered in Carmel, Indiana,
KAR Global has employees across the
United States, Canada,
Mexico, Uruguay, U.K. and Europe. For more information and the latest
KAR Global news, go to www.karglobal.com and 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
|
Tobin
Richer
|
(317)
249-4559
|
(317)
249-4521
|
mike.eliason@karglobal.com
|
tobin.richer@karglobal.com
|
KAR Auction
Services, Inc.
|
Condensed
Consolidated Statements of Income
|
(In millions)
(Unaudited)
|
|
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Operating
revenues
|
|
|
|
|
|
|
|
Auction
fees
|
$
|
207.0
|
|
|
$
|
261.0
|
|
|
$
|
887.7
|
|
|
$
|
1,115.3
|
|
Service
revenue
|
173.5
|
|
|
243.0
|
|
|
737.4
|
|
|
1,018.2
|
|
Purchased vehicle
sales
|
83.7
|
|
|
79.3
|
|
|
295.0
|
|
|
295.5
|
|
Finance-related
revenue
|
65.4
|
|
|
88.0
|
|
|
267.6
|
|
|
352.9
|
|
Total operating
revenues
|
529.6
|
|
|
671.3
|
|
|
2,187.7
|
|
|
2,781.9
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of services
(exclusive of depreciation and
amortization)
|
325.4
|
|
|
394.9
|
|
|
1,284.8
|
|
|
1,617.1
|
|
Selling, general and
administrative
|
139.7
|
|
|
164.7
|
|
|
545.4
|
|
|
662.0
|
|
Depreciation and
amortization
|
50.6
|
|
|
50.1
|
|
|
191.3
|
|
|
188.7
|
|
Goodwill and other
intangibles impairment
|
—
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
Total operating
expenses
|
515.7
|
|
|
609.7
|
|
|
2,051.3
|
|
|
2,467.8
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
13.9
|
|
|
61.6
|
|
|
136.4
|
|
|
314.1
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
30.5
|
|
|
39.5
|
|
|
128.9
|
|
|
189.5
|
|
Other (income)
expense, net
|
3.9
|
|
|
(2.5)
|
|
|
2.1
|
|
|
(7.7)
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations before
income taxes
|
(20.5)
|
|
|
24.6
|
|
|
5.4
|
|
|
130.1
|
|
|
|
|
|
|
|
|
|
Income
taxes
|
(3.4)
|
|
|
9.3
|
|
|
4.9
|
|
|
37.7
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
(17.1)
|
|
|
15.3
|
|
|
0.5
|
|
|
92.4
|
|
Income from
discontinued operations, net of income
taxes
|
—
|
|
|
4.5
|
|
|
—
|
|
|
96.1
|
|
Net income
(loss)
|
$
|
(17.1)
|
|
|
$
|
19.8
|
|
|
$
|
0.5
|
|
|
$
|
188.5
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - basic
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
(0.21)
|
|
|
$
|
0.12
|
|
|
$
|
(0.16)
|
|
|
$
|
0.70
|
|
Income from
discontinued operations
|
—
|
|
|
0.03
|
|
|
—
|
|
|
0.73
|
|
Net income (loss) per
share - basic
|
$
|
(0.21)
|
|
|
$
|
0.15
|
|
|
$
|
(0.16)
|
|
|
$
|
1.43
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share - diluted
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$
|
(0.21)
|
|
|
$
|
0.12
|
|
|
$
|
(0.16)
|
|
|
$
|
0.70
|
|
Income from
discontinued operations
|
—
|
|
|
0.03
|
|
|
—
|
|
|
0.72
|
|
Net income (loss) per
share - diluted
|
$
|
(0.21)
|
|
|
$
|
0.15
|
|
|
$
|
(0.16)
|
|
|
$
|
1.42
|
|
|
|
|
|
|
|
|
|
Dividends declared
per common share
|
$
|
—
|
|
|
$
|
0.19
|
|
|
$
|
0.19
|
|
|
$
|
1.08
|
|
KAR Auction
Services, Inc.
|
Condensed
Consolidated Balance Sheets
|
(In millions)
(Unaudited)
|
|
|
December
31,
2020
|
|
December
31,
2019
|
Cash and cash
equivalents
|
$
|
752.1
|
|
|
$
|
507.6
|
|
Restricted
cash
|
60.2
|
|
|
53.3
|
|
Trade receivables,
net of allowances
|
367.2
|
|
|
457.5
|
|
Finance receivables,
net of allowances
|
1,889.0
|
|
|
2,100.2
|
|
Other current
assets
|
106.7
|
|
|
125.9
|
|
Total current
assets
|
3,175.2
|
|
|
3,244.5
|
|
|
|
|
|
Goodwill
|
2,140.2
|
|
|
1,821.7
|
|
Customer
relationships, net of accumulated amortization
|
211.3
|
|
|
207.9
|
|
Operating lease
right-of-use assets
|
350.6
|
|
|
364.1
|
|
Property and
equipment, net of accumulated depreciation
|
589.9
|
|
|
609.0
|
|
Intangible and other
assets
|
331.0
|
|
|
334.0
|
|
Total
assets
|
$
|
6,798.2
|
|
|
$
|
6,581.2
|
|
|
|
|
|
Current liabilities,
excluding obligations collateralized by
finance receivables and current maturities
of debt
|
$
|
965.1
|
|
|
$
|
1,027.7
|
|
Obligations
collateralized by finance receivables
|
1,261.2
|
|
|
1,461.2
|
|
Current maturities of
debt
|
24.3
|
|
|
28.8
|
|
Total current
liabilities
|
2,250.6
|
|
|
2,517.7
|
|
|
|
|
|
Long-term
debt
|
1,853.8
|
|
|
1,861.3
|
|
Operating lease
liabilities
|
344.2
|
|
|
358.3
|
|
Other non-current
liabilities
|
184.0
|
|
|
193.7
|
|
Temporary
equity
|
549.8
|
|
|
—
|
|
Stockholders'
equity
|
1,615.8
|
|
|
1,650.2
|
|
Total liabilities,
temporary equity and stockholders' equity
|
$
|
6,798.2
|
|
|
$
|
6,581.2
|
|
KAR Auction
Services, Inc.
|
Condensed
Consolidated Statements of Cash Flows
|
(In millions)
(Unaudited)
|
|
|
Year
Ended December
31,
|
|
2020
|
|
2019
|
Operating
activities
|
|
|
|
Net income
|
$
|
0.5
|
|
|
$
|
188.5
|
|
Net income from
discontinued operations
|
—
|
|
|
(96.1)
|
|
Adjustments to reconcile
net income to net cash provided by operating
activities:
|
|
|
|
Depreciation and
amortization
|
191.3
|
|
|
188.7
|
|
Provision for credit
losses
|
43.8
|
|
|
40.1
|
|
Deferred income
taxes
|
(7.2)
|
|
|
(3.3)
|
|
Amortization of debt
issuance costs
|
11.7
|
|
|
12.2
|
|
Stock-based
compensation
|
14.0
|
|
|
19.6
|
|
Goodwill and other
intangibles impairment
|
29.8
|
|
|
—
|
|
Loss on extinguishment
of debt
|
—
|
|
|
2.2
|
|
Other non-cash,
net
|
9.7
|
|
|
12.1
|
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
Trade receivables and other
assets
|
117.9
|
|
|
(3.0)
|
|
Accounts payable and accrued
expenses
|
(27.1)
|
|
|
19.8
|
|
Net cash provided
by operating activities - continuing operations
|
384.4
|
|
|
380.8
|
|
Net cash provided
by operating activities - discontinued operations
|
—
|
|
|
161.2
|
|
Investing
activities
|
|
|
|
Net decrease (increase) in
finance receivables held for investment
|
170.6
|
|
|
(132.7)
|
|
Acquisition of businesses
(net of cash acquired)
|
(421.0)
|
|
|
(120.7)
|
|
Purchases of property,
equipment and computer software
|
(101.4)
|
|
|
(161.6)
|
|
Proceeds from the sale of
PWI
|
24.3
|
|
|
—
|
|
Proceeds from the sale of
property and equipment
|
0.9
|
|
|
—
|
|
Net cash used by
investing activities - continuing operations
|
(326.6)
|
|
|
(415.0)
|
|
Net cash used by
investing activities - discontinued operations
|
—
|
|
|
(37.4)
|
|
Financing
activities
|
|
|
|
Net decrease in book
overdrafts
|
(6.9)
|
|
|
(4.7)
|
|
Net (decrease) increase in
borrowings from lines of credit
|
(14.0)
|
|
|
19.3
|
|
Net (decrease) increase in
obligations collateralized by finance receivables
|
(191.1)
|
|
|
3.8
|
|
Proceeds from issuance
of Series A Preferred Stock
|
550.1
|
|
|
—
|
|
Payments for issuance
costs of Series A Preferred Stock
|
(21.9)
|
|
|
—
|
|
Proceeds from long
term debt
|
—
|
|
|
947.6
|
|
Payments for debt
issuance costs/amendments
|
(18.5)
|
|
|
(14.1)
|
|
Payments on long-term
debt
|
(9.5)
|
|
|
(1,749.0)
|
|
Payments on finance
leases
|
(16.1)
|
|
|
(15.9)
|
|
Payments of contingent
consideration and deferred acquisition costs
|
(31.2)
|
|
|
(9.4)
|
|
Issuance of common stock
under stock plans
|
2.1
|
|
|
4.3
|
|
Issuance of common stock -
private placement
|
15.0
|
|
|
—
|
|
Tax withholding payments for
vested RSUs
|
(4.0)
|
|
|
(10.8)
|
|
Repurchase and retirement of
common stock
|
(10.2)
|
|
|
(119.7)
|
|
Dividends paid to
stockholders
|
(49.0)
|
|
|
(164.3)
|
|
Cash transferred to
IAA
|
—
|
|
|
(50.9)
|
|
Net cash provided
by (used by) financing activities - continuing
operations
|
194.8
|
|
|
(1,163.8)
|
|
Net cash provided
by (used by) financing activities - discontinued
operations
|
—
|
|
|
1,317.6
|
|
Effect of exchange
rate changes on cash
|
(1.2)
|
|
|
12.8
|
|
Net increase in
cash, cash equivalents and restricted cash
|
251.4
|
|
|
256.2
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
560.9
|
|
|
304.7
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
812.3
|
|
|
$
|
560.9
|
|
Cash paid for
interest, net of proceeds from interest rate derivatives
|
$
|
116.6
|
|
|
$
|
170.0
|
|
Cash paid for taxes,
net of refunds - continuing operations
|
$
|
16.6
|
|
|
$
|
37.8
|
|
Cash paid for taxes,
net of refunds - discontinued operations
|
$
|
—
|
|
|
$
|
41.4
|
|
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
December 31,
|
|
Year Ended
December 31,
|
(in
millions), (unaudited)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
(loss)
|
$
|
(17.1)
|
|
|
$
|
19.8
|
|
|
$
|
0.5
|
|
|
$
|
188.5
|
|
Less: Income from
discontinued operations
|
—
|
|
|
(4.5)
|
|
|
—
|
|
|
(96.1)
|
|
Net income (loss)
from continuing operations
|
(17.1)
|
|
|
15.3
|
|
|
0.5
|
|
|
92.4
|
|
Add back:
|
|
|
|
|
|
|
|
Income
taxes
|
(3.4)
|
|
|
9.3
|
|
|
4.9
|
|
|
37.7
|
|
Interest expense, net
of interest income
|
30.3
|
|
|
38.3
|
|
|
127.3
|
|
|
186.4
|
|
Depreciation and
amortization
|
50.6
|
|
|
50.1
|
|
|
191.3
|
|
|
188.7
|
|
EBITDA
|
60.4
|
|
|
113.0
|
|
|
324.0
|
|
|
505.2
|
|
Non-cash stock-based
compensation
|
3.0
|
|
|
5.2
|
|
|
15.1
|
|
|
20.3
|
|
Loss on
extinguishment of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
Acquisition related
costs
|
4.1
|
|
|
1.9
|
|
|
8.8
|
|
|
12.2
|
|
Securitization
interest
|
(6.2)
|
|
|
(13.0)
|
|
|
(27.3)
|
|
|
(54.9)
|
|
Loss on asset
sales
|
0.2
|
|
|
0.4
|
|
|
1.3
|
|
|
2.1
|
|
Severance
|
0.9
|
|
|
9.6
|
|
|
11.5
|
|
|
15.3
|
|
Foreign currency
(gains)/losses
|
1.7
|
|
|
0.3
|
|
|
4.9
|
|
|
(0.7)
|
|
Goodwill and other
intangibles impairment
|
—
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
IAA allocated
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
Contingent
consideration adjustment
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
Other
|
(1.3)
|
|
|
4.6
|
|
|
2.5
|
|
|
6.0
|
|
Total
addbacks
|
7.1
|
|
|
9.0
|
|
|
51.3
|
|
|
4.8
|
|
Adjusted
EBITDA
|
$
|
67.5
|
|
|
$
|
122.0
|
|
|
$
|
375.3
|
|
|
$
|
510.0
|
|
The following table reconciles operating adjusted net income
(loss) from continuing operations and operating adjusted net income
(loss) from continuing operations per diluted share to net income
(loss) for the periods presented:
|
Three Months
Ended
December 31,
|
|
Year Ended
December 31,
|
(in millions,
except per share amounts), (unaudited)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
Net income
(loss)
|
$
|
(17.1)
|
|
|
$
|
19.8
|
|
|
$
|
0.5
|
|
|
$
|
188.5
|
|
Less: income from
discontinued operations
|
—
|
|
|
(4.5)
|
|
|
—
|
|
|
(96.1)
|
|
Net income (loss)
from continuing operations (1)
|
(17.1)
|
|
|
15.3
|
|
|
0.5
|
|
|
92.4
|
|
Acquired
amortization expense
|
15.3
|
|
|
14.4
|
|
|
57.7
|
|
|
58.3
|
|
IAA allocated
costs
|
—
|
|
|
—
|
|
|
—
|
|
|
2.3
|
|
Acceleration of debt
issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
Loss on extinguishment
of debt
|
—
|
|
|
—
|
|
|
—
|
|
|
2.2
|
|
Contingent
consideration adjustment
|
4.7
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
Goodwill and
other intangibles impairment
|
—
|
|
|
—
|
|
|
29.8
|
|
|
—
|
|
Income
taxes (2)
|
(4.6)
|
|
|
(5.4)
|
|
|
(17.3)
|
|
|
(18.7)
|
|
Operating adjusted
net income (loss) from continuing operations
|
$
|
(1.7)
|
|
|
$
|
24.3
|
|
|
$
|
75.4
|
|
|
$
|
138.3
|
|
|
|
|
|
|
|
|
|
Operating adjusted
net income (loss) from continuing operations
per share - diluted
|
$
|
(0.01)
|
|
|
$
|
0.19
|
|
|
$
|
0.51
|
|
|
$
|
1.04
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares
|
161.8
|
|
|
130.1
|
|
|
147.0
|
|
|
132.9
|
|
(1)
|
The Series A
Preferred Stock dividends have not been included in the calculation
of operating adjusted net income (loss) from continuing operations
and operating adjusted net income (loss) from continuing operations
per diluted share.
|
|
|
(2)
|
The effective tax
rate at the end of each period presented in 2019 was used to
determine the amount of income tax on the adjustments to net
income. For 2020, an effective tax rate of 30% was applied to the
acquired amortization expense. There was no income tax benefit
related to the contingent consideration adjustment or the goodwill
and other intangibles impairment because these items were not
deductible for income tax purposes.
|
The following table reconciles EBITDA and Adjusted EBITDA to net
income from continuing operations for the 2021 guidance
presented:
(in
millions), (unaudited)
|
2021
Guidance
|
Net income from
continuing operations
|
$
|
90
|
|
Add back:
|
|
Income tax
expense
|
38
|
|
Interest expense, net
of interest income
|
125
|
|
Depreciation and
amortization
|
205
|
|
EBITDA
|
458
|
|
Total
addbacks, net
|
17
|
|
Adjusted
EBITDA
|
$
|
475
|
|
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 from
continuing operations for the 2021 guidance presented:
(in millions,
except per share amounts), (unaudited)
|
2021
Guidance
|
Net income from
continuing operations
|
$
|
90.0
|
|
Acquired
amortization expense
|
51.2
|
|
Contingent
consideration adjustment
|
17.0
|
|
Income
taxes
|
(15.4)
|
|
Operating adjusted
net income from continuing operations
|
$
|
142.8
|
|
|
|
Operating adjusted
net income from continuing operations per share –
diluted
|
$
|
0.87
|
|
|
|
Weighted average
diluted shares
|
165
|
|
In the table above, operating adjusted net income from
continuing operations per diluted share is computed using the
weighted average diluted shares assuming conversion of the
preferred shares to common shares.
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SOURCE KAR Auction Services