Launched Cars Commerce, Uniting the Company's
B2B Brands
Delivered 6% Total Revenue Growth and 9% ARPD
Year-Over-Year Growth
Acquired D2C Media Inc., Further Expanding the
Cars Commerce Platform Into Canada
CHICAGO, Nov. 2, 2023
/PRNewswire/ -- Cars.com Inc. (NYSE: CARS) (d/b/a "Cars
Commerce" or "the "Company"), an audience-driven technology company
empowering the automotive industry, today released its financial
results for the third quarter ended September 30, 2023.
Q3 2023 Financial and Key Metric Highlights
- Revenue of $174.3 million, up
$9.7 million, or 6%
year-over-year
- Net income of $4.5 million, or
$0.07 per diluted share, compared to
a Net loss of $2.9 million, or
$0.04 per diluted share, in the prior
year
- Adjusted EBITDA of $49.5 million,
or 28% of Revenue, compared to $49.9
million a year ago
- Average Monthly Unique Visitors ("UVs") of 26.0 million,
compared to 27.3 million a year ago
- Traffic ("Visits") of 151.4 million, compared to 150.4 million
a year ago
- Monthly Average Revenue Per Dealer ("ARPD") of $2,548, up 9% year-over-year
- Dealer Customers were 18,715 as of September 30, 2023, compared to 18,785 as of
June 30, 20231
Operational Highlights
- United the Company's B2B brands under Cars Commerce,
reinforcing its platform strategy and empowering the industry with
a connected portfolio spanning pretail, retail, and post-sale
activities
- Increased Website customers to over 6,300, an 8% increase
year-over-year and website upsells grew by more than 1,000 from a
year ago; Accu-Trade Connected units increased to over 850, up from
400 a year ago
- Completed the 2023 Marketplace Repackaging initiative, a
significant driver of the Company's 9% year-over-year ARPD growth;
results have been strong with nearly 70% of dealer customers opting
into one of the upper tier packages
- Acquired D2C Media Inc, a leading provider of website and
digital advertising solutions in Canada with approximately 1,000 customers and
it supports acceleration of Cars Commerce's profitable growth
trajectory. For more details on the acquisition,
click here.2
"During the quarter, we made strong strategic moves that
advanced our platform strategy and unlocked future growth. We
launched Cars Commerce, our new B2B brand, reflecting our
commitment to unite the industry by simplifying car buying and
selling for consumers, dealers, OEMs and lenders. We delivered
strong results for the quarter driven by increased market adoption
of our products. We are also excited about our acquisition of D2C
Media Inc., which further extends our Canadian presence and growth
opportunities," said Alex Vetter,
Chief Executive Officer of Cars Commerce.
Q3 2023 Results
Revenue for the third quarter totaled $174.3 million, an increase of $9.7 million, or 6%, compared to the prior year
period. Dealer revenue grew 8% year-over-year, driven by continued
growth in solutions and media products, and the 2023 Marketplace
Repackaging initiative. OEM and National revenue totaled
$14.5 million, 2% lower compared to
the prior year. However, OEM customer revenue increased 12%
year-over-year. And sequentially, OEM and National revenue
increased 17%.
Third quarter ARPD grew 9%, or $213, year-over-year to $2,548, primarily driven by the 2023 Marketplace
Repackaging initiative which concluded this quarter. Dealer
Customers also stabilized. As of September
30, 2023, Dealer Customers totaled 18,715, compared to
18,785 at the end of the second quarter of 2023.
Total operating expenses for the third quarter were $160.0 million, compared to $144.7 million for the prior year period.
Adjusted operating expenses for the third quarter were $150.5 million, a $14.3
million increase compared to the prior year period. The
change in adjusted operating expenses is primarily due to increased
investments to support the Company's revenue growth. Marketing and
sales costs increased largely due to investments in Brand Media to
support the Cars.com Possibilities advertising
campaign, in person events, as well as higher compensation. Product
and technology increased due to higher compensation and third-party
costs, including licenses and consulting.
Net income for the quarter was $4.5
million, or $0.07 per diluted
share, compared to a Net loss of $2.9
million, or $0.04 per diluted
share, in the third quarter of 2022. The change in Net income is
primarily attributable to the change in the fair value of
contingent consideration associated with the Company's prior
acquisitions.
Adjusted EBITDA for the quarter totaled $49.5 million, or 28% of revenue, compared to
$49.9 million, or 30% of revenue, for
the prior year period.
The Company remains focused on driving high-quality traffic at
scale. Organic traffic remained strong at 62% for the quarter.
Average Monthly Unique Visitors were 26.0 million and total Traffic
increased to 151.4 million.
Cash Flow and Balance Sheet
Net cash provided by operating activities for the nine-month
period ended September 30, 2023 was
$91.6 million, compared to
$91.3 million in the prior year. Free
Cash Flow for the nine-month period ended September 30, 2023 was $76.0 million compared to $76.9 million in the prior year. The variance in
free cash flow was primarily due to a year-over-year increase in
cash taxes of $16.4 million, the
majority of which was offset by favorable changes in working
capital.
During the first nine months of 2023, the Company paid down
$26.3 million of debt, reducing total
debt outstanding to $455.0 million,
as of September 30, 2023. At
quarter-end, the Company's net leverage ratio (as defined in the
Company's credit facility) was 2.1x, at the low end of its target
net leverage range of 2.0x to 2.5x. Total liquidity remains strong
at $279.1 million, including cash and
cash equivalents of $49.1 million and
$230.0 million of undrawn revolver
capacity, as of September 30,
2023.
Year-to-date, the Company repurchased 1.3 million of its common
shares for $23.6 million.
The Company funded the acquisition of D2C Media Inc. through a
combination of cash on hand and borrowings under the Company's
existing revolving credit facility. Pro forma for the acquisition,
net leverage as of September 30, 2023
would have been 2.5x, at the high end, but still within the
Company's target net leverage range.
"Our strong third quarter results demonstrate the depth and
strength of our platform strategy, which creates great value for
our customers and supports our strong cash flow generation. This
strong cash flow, coupled with our flexible capital structure,
enables us to repay debt, repurchase shares and to invest in
organic and inorganic growth opportunities like D2C Media Inc.,"
said Sonia Jain, Chief Financial
Officer of Cars Commerce.
2023 Outlook
The Company is well-positioned to deliver profitable growth
through continued dealer and OEM adoption of the Cars Commerce
Platform. Fourth quarter revenue is expected to be between
$177 million and $179 million, reflecting continued year-over-year
revenue growth of 5.2% to 6.4%. The Company's guidance reflects
anticipated continued growth in its Dealer Revenue driven by
adoption of dealer solutions and media products, as well as modest
sequential improvement expected in OEM and National Revenue.
Additionally, guidance includes revenue associated with the
acquisition of D2C Media Inc., which the Company expects will
contribute approximately 1.5% of its total revenue dollars in the
fourth quarter. Year-over-year revenue growth rates reflect the
launch of Accu-Trade Connected and favorable renegotiation of key
website agreements in the prior year period.
For the full year, the Company's fourth quarter guidance coupled
with performance to date, places the Company within its previously
shared revenue guidance range. Full year performance reflects
the benefit of this year's 2023 Marketplace Repackaging Initiative,
growth in its portfolio of dealer products, and modest improvement
in OEM Revenue offset by a challenging environment for auto
adjacent advertisers, including insurance companies.
Adjusted EBITDA margin for the fourth quarter is expected to be
between 29.5% and 30.5%, reflecting fourth quarter revenue guidance
and sequential changes in investment mix.
Q3 2023 Earnings Call
As previously announced, management will hold a conference call
and webcast today at 8:00 a.m. CT.
This webcast may be accessed at the Cars Commerce Investor
Relations website, investor.cars.com. An archive of the
webcast will be available at investor.cars.com following
the conclusion of the call.
About Cars Commerce
Cars Commerce is an audience-driven technology company
empowering automotive that simplifies everything about buying and
selling cars. The Cars Commerce platform includes the flagship
automotive marketplace and dealer reputation
site Cars.com, innovative digital marketing technology
and services from Dealer Inspire, industry-leading trade-in and
appraisal technology from Accu-Trade, an exclusive in-market media
network, and powerful and predictive AI technologies that enable
more efficient and profitable retail operations. Cars Commerce is
the essential partner to stay one step ahead in automotive. Learn
more at www.carscommerce.inc.
Non-GAAP Financial Measures
This earnings release discusses Adjusted EBITDA, Adjusted EBITDA
margin, Free Cash Flow and Adjusted Operating Expenses. 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
the Company believes they provide meaningful information regarding
the Company's performance and provide a basis to compare operating
results between periods. In addition, the Company uses Adjusted
EBITDA as a measure for determining incentive compensation targets.
Adjusted EBITDA also is used as a performance measure under the
Company's 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 the Company's lenders, securities analysts,
investors and other interested parties to evaluate companies in the
Company's 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, 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.
The Company defines 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 and cash transactions related to derivative
instruments, and (7) certain other items, such as
transaction-related items, severance, transformation and other exit
costs and write-off and impairments of goodwill, intangible assets
and other long-lived assets.
Transaction-related items result 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 items may also include,
without limitation, transition and integration costs such as
retention bonuses and acquisition-related milestone payments to
acquired employees, consulting, compensation and other incremental
costs associated with integration projects, fair value changes to
contingent considerations and amortization of deferred revenue
related to the Accu-Trade acquisition.
The Company defines Free Cash Flow as net cash provided by
operating activities less capital expenditures, including purchases
of property and equipment and capitalization of internally
developed technology.
The Company defines Adjusted Operating Expenses as total
operating expenses adjusted to exclude stock-based compensation,
write-off and impairments of goodwill, intangible assets,
long-lived assets, severance, transformation and other exit costs
and transaction-related items.
Key Metric Definitions
Average Monthly Unique Visitors ("UVs") and Traffic ("Visits").
The Company defines UVs in a given month as the number of distinct
visitors that engage with its platform during that month. Visitors
are identified when a user first visits an individual Cars Commerce
property on an individual device/browser combination or installs
one of its mobile apps on an individual device. If a visitor
accesses more than one of its 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. Traffic is defined as the number of visits to Cars Commerce
desktop and mobile properties (responsive sites and mobile apps).
The Company measures UVs and Traffic via Adobe Analytics. These
metrics do not include traffic to Dealer Inspire websites.
Monthly Average Revenue Per Dealer ("ARPD"). The Company
believes that its ability to grow ARPD is an indicator of the value
proposition of its platform. The Company defines ARPD as Dealer
revenue, excluding digital advertising services, during the period
divided by the monthly average number of Dealer Customers during
the same period. Beginning with the three months ended June 30, 2022, Accu-Trade is included in our ARPD
metric. No prior period has been recast as it would be
impracticable to do so and the inclusion of Accu-Trade would have
had an immaterial impact on ARPD for prior periods
Dealer Customers. Dealer Customers represent dealerships using
the Company's 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. Beginning June 30, 2022, this key operating metric includes
Accu-Trade; however, no prior period has been recast as it would be
impracticable to do so.
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
goals, plans, expectations, projections regarding the expected
benefits of the transaction, management's plans, projections and
objectives for the transaction, future operations, scale and
performance, integration plans and expected synergies therefrom,
and our financial position, results of operations, market position,
capital allocation strategy, initiatives, business strategy and
expectations of our 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.
All forward-looking statements contained in this press release are
qualified by these cautionary statements. Forward-looking
statements are based on our current expectations, beliefs,
strategies, estimates, projections and assumptions, experience in
the industry as well as our perceptions of historical trends,
current conditions, expected future developments, global supply
chain shortages, fluctuating fuel prices, rising interest rates,
inflation and other factors we think are appropriate. Such
forward-looking statements are based on 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. While the Company and its
management make such statements in good faith and believe such
judgments are reasonable, you should understand that these
statements are not guarantees of future strategic action,
performance or results. Our actual results, performance,
achievements, strategic actions , or prospects could differ
materially from those expressed or implied by these
forward-looking statements. Given these uncertainties, you should
not rely on forward-looking statements in making investment
decisions. When we make comparisons of results between current and
prior periods, we do not intend to express any future trends, or
indications of future performance, unless expressed as such, and
you should view such comparisons 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 "Part I, Item 1A., Risk Factors" and "Part II,
Item 7., Management's Discussion and Analysis of Financial
Condition and Results of Operations" in our Annual Report on Form
10-K for the year ended December 31,
2022, as filed with the Securities and Exchange Commission
("SEC") on February 23, 2023 and our
other filings filed with the SEC and available on our website at
investor.cars.com or via EDGAR at www.sec.gov.
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.
|
|
|
|
|
|
1 The
decline of the digital dealer industry negatively impacted our
Dealer Customer count by over 650 cancellations which started in
the second quarter of 2022. There are effectively no digital
dealers in the Company's Dealer Customer count.
|
2 Links
to the website are provided solely for convenience purposes.
Content on the Company's website, is not, and shall not be deemed
to be, incorporated by reference herein.
|
Cars Commerce Investor Relations Contact:
Robbin Moore-Randolph
rmr@carscommerce.com
312.601.5929
Cars Commerce Media Contact:
Marita Thomas
mthomas@carscommerce.com
312.601.5692
Cars.com
Inc.
|
Consolidated
Statements of Income (Loss)
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Revenue:
|
|
|
|
|
|
|
|
|
Dealer
|
|
$
157,116
|
|
$
145,395
|
|
$
460,268
|
|
$
429,798
|
OEM and
National
|
|
14,549
|
|
14,909
|
|
40,494
|
|
44,227
|
Other
|
|
2,668
|
|
4,291
|
|
8,815
|
|
11,650
|
Total
revenue
|
|
174,333
|
|
164,595
|
|
509,577
|
|
485,675
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of revenue
and operations
|
|
31,077
|
|
28,828
|
|
91,287
|
|
86,084
|
Product and
technology
|
|
25,297
|
|
21,425
|
|
74,354
|
|
65,849
|
Marketing and
sales
|
|
60,186
|
|
53,615
|
|
176,636
|
|
165,364
|
General and
administrative
|
|
17,785
|
|
17,694
|
|
53,738
|
|
51,465
|
Depreciation and
amortization
|
|
25,670
|
|
23,134
|
|
74,381
|
|
70,688
|
Total operating
expenses
|
|
160,015
|
|
144,696
|
|
470,396
|
|
439,450
|
Operating income
|
|
14,318
|
|
19,899
|
|
39,181
|
|
46,225
|
Nonoperating
expense:
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
(7,777)
|
|
(8,501)
|
|
(24,171)
|
|
(26,878)
|
Other (expense)
income, net
|
|
(3,902)
|
|
(13,387)
|
|
1,204
|
|
(13,233)
|
Total
nonoperating expense, net
|
|
(11,679)
|
|
(21,888)
|
|
(22,967)
|
|
(40,111)
|
Income (loss)
before income taxes
|
|
2,639
|
|
(1,989)
|
|
16,214
|
|
6,114
|
Income tax
(benefit) expense
|
|
(1,852)
|
|
952
|
|
(93,882)
|
|
(830)
|
Net income (loss)
|
|
$
4,491
|
|
$
(2,941)
|
|
$
110,096
|
|
$
6,944
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
66,773
|
|
67,680
|
|
66,820
|
|
68,775
|
Diluted
|
|
68,508
|
|
67,680
|
|
68,199
|
|
70,023
|
Earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.07
|
|
$
(0.04)
|
|
$
1.65
|
|
$
0.10
|
Diluted
|
|
0.07
|
|
(0.04)
|
|
1.61
|
|
0.10
|
Cars.com
Inc.
|
Consolidated Balance
Sheets
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
Assets:
|
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
49,085
|
|
$
31,715
|
Accounts receivable,
net
|
|
118,285
|
|
107,930
|
Prepaid
expenses
|
|
13,537
|
|
8,377
|
Other current
assets
|
|
8,429
|
|
605
|
Total current
assets
|
|
189,336
|
|
148,627
|
Property and equipment,
net
|
|
44,005
|
|
45,218
|
Goodwill
|
|
102,856
|
|
102,856
|
Intangible assets,
net
|
|
649,074
|
|
707,088
|
Deferred tax assets,
net
|
|
97,490
|
|
48
|
Investments and other
assets, net
|
|
20,427
|
|
21,033
|
Total assets
|
|
$
1,103,188
|
|
$
1,024,870
|
Liabilities and
stockholders' equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
18,703
|
|
$
18,230
|
Accrued
compensation
|
|
21,057
|
|
19,316
|
Current portion of
long-term debt, net
|
|
18,062
|
|
14,134
|
Other accrued
liabilities
|
|
73,143
|
|
54,332
|
Total current
liabilities
|
|
130,965
|
|
106,012
|
Noncurrent
liabilities:
|
|
|
|
|
Long-term debt,
net
|
|
429,679
|
|
458,249
|
Other noncurrent
liabilities
|
|
59,534
|
|
76,179
|
Total noncurrent
liabilities
|
|
489,213
|
|
534,428
|
Total
liabilities
|
|
620,178
|
|
640,440
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred Stock at par,
$0.01 par value; 5,000 shares authorized; no shares
issued and outstanding as of September 30, 2023 and
December 31, 2022,
respectively
|
|
—
|
|
—
|
Common Stock at par,
$0.01 par value; 300,000 shares authorized; 66,189 and
66,287 shares issued and outstanding as of September
30, 2023 and
December 31, 2022, respectively
|
|
662
|
|
662
|
Additional paid-in
capital
|
|
1,500,428
|
|
1,511,944
|
Accumulated
deficit
|
|
(1,018,080)
|
|
(1,128,176)
|
Total stockholders'
equity
|
|
483,010
|
|
384,430
|
Total liabilities and
stockholders' equity
|
|
$
1,103,188
|
|
$
1,024,870
|
Cars.com
Inc.
|
Consolidated
Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
110,096
|
|
$
6,944
|
Adjustments to
reconcile Net income to Net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
16,367
|
|
11,833
|
Amortization of
intangible assets
|
|
58,014
|
|
58,855
|
Amortization of
Accumulated other comprehensive loss on interest rate
swap
|
|
—
|
|
2,362
|
Changes in fair value
of contingent consideration
|
|
(1,280)
|
|
13,360
|
Stock-based
compensation
|
|
20,930
|
|
17,103
|
Deferred income
taxes
|
|
(98,821)
|
|
676
|
Provision for doubtful
accounts
|
|
2,117
|
|
1,047
|
Amortization of debt
issuance costs
|
|
2,303
|
|
2,440
|
Amortization of
deferred revenue related to Accu-Trade Acquisition
|
|
(883)
|
|
(3,092)
|
Other, net
|
|
640
|
|
279
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
Accounts
receivable
|
|
(12,472)
|
|
(7,532)
|
Prepaid expenses and
other assets
|
|
(13,073)
|
|
(7,279)
|
Accounts
payable
|
|
473
|
|
2,882
|
Accrued
compensation
|
|
1,741
|
|
(7,885)
|
Other
liabilities
|
|
5,428
|
|
(702)
|
Net cash provided by
operating activities
|
|
91,580
|
|
91,291
|
Cash flows from
investing activities:
|
|
|
|
|
Payments for acquisitions,
net of cash acquired
|
|
—
|
|
(64,770)
|
Capitalization of internally
developed technology
|
|
(14,838)
|
|
(13,147)
|
Purchase of property and
equipment
|
|
(737)
|
|
(1,252)
|
Net cash used in
investing activities
|
|
(15,575)
|
|
(79,169)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from Revolving Loan
borrowings
|
|
—
|
|
45,000
|
Payments of long-term
debt
|
|
(26,250)
|
|
(17,500)
|
Payments for stock-based
compensation plans, net
|
|
(9,069)
|
|
(6,838)
|
Repurchases of common
stock
|
|
(23,316)
|
|
(39,933)
|
Net cash used in
financing activities
|
|
(58,635)
|
|
(19,271)
|
Net increase (decrease)
in cash and cash equivalents
|
|
17,370
|
|
(7,149)
|
Cash and cash
equivalents at beginning of period
|
|
31,715
|
|
39,069
|
Cash and cash
equivalents at end of period
|
|
$
49,085
|
|
$
31,920
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for income
taxes
|
|
$
17,107
|
|
$
741
|
Cash paid for interest
and swap
|
|
16,806
|
|
19,041
|
Cars.com
Inc.
|
Non-GAAP
Reconciliations
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2023
|
|
2022
|
|
2023
|
|
2022
|
Reconciliation of
Net income (loss) to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
4,491
|
|
$
(2,941)
|
|
$
110,096
|
|
$
6,944
|
Interest expense,
net
|
|
7,777
|
|
8,501
|
|
24,171
|
|
26,878
|
Income tax (benefit)
expense
|
|
(1,852)
|
|
952
|
|
(93,882)
|
|
(830)
|
Depreciation and
amortization
|
|
25,670
|
|
23,134
|
|
74,381
|
|
70,688
|
Stock-based
compensation
|
|
7,611
|
|
5,578
|
|
22,283
|
|
17,576
|
Write-off of long-lived
assets and other
|
|
308
|
|
100
|
|
638
|
|
70
|
Severance,
transformation and other exit costs
|
|
470
|
|
1,558
|
|
2,348
|
|
3,369
|
Transaction-related
items
|
|
5,019
|
|
13,001
|
|
(555)
|
|
12,514
|
Adjusted
EBITDA
|
|
$
49,494
|
|
$
49,883
|
|
$
139,480
|
|
$
137,209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net cash provided by operating activities to Free cash
flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
35,398
|
|
$
49,011
|
|
$
91,580
|
|
$
91,291
|
Capitalization of
internally developed technology
|
|
(4,777)
|
|
(5,523)
|
|
(14,838)
|
|
(13,147)
|
Purchase of property
and equipment
|
|
(229)
|
|
(321)
|
|
(737)
|
|
(1,252)
|
Free cash
flow
|
|
$
30,392
|
|
$
43,167
|
|
$
76,005
|
|
$
76,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating expenses to Adjusted operating expenses for the Three
Months Ended September 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments (1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
31,077
|
|
$
—
|
|
$
(425)
|
|
$
30,652
|
Product and
technology
|
|
25,297
|
|
—
|
|
(2,413)
|
|
22,884
|
Marketing and
sales
|
|
60,186
|
|
—
|
|
(1,548)
|
|
58,638
|
General and
administrative
|
|
17,785
|
|
(1,895)
|
|
(3,225)
|
|
12,665
|
Depreciation and
amortization
|
|
25,670
|
|
—
|
|
—
|
|
25,670
|
Total operating
expenses
|
|
$
160,015
|
|
$
(1,895)
|
|
$
(7,611)
|
|
$
150,509
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(11,679)
|
|
$
3,902
|
|
$
—
|
|
$
(7,777)
|
|
|
|
|
|
|
|
|
|
(1) Includes transaction related items, severance,
transformation and other exit costs, and write-off of long-lived
assets and other.
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating expenses to Adjusted operating expenses for the Three
Months Ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments (1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
28,828
|
|
$
—
|
|
$
(240)
|
|
$
28,588
|
Product and
technology
|
|
21,425
|
|
—
|
|
(1,754)
|
|
19,671
|
Marketing and
sales
|
|
53,615
|
|
—
|
|
(1,132)
|
|
52,483
|
General and
administrative
|
|
17,694
|
|
(2,924)
|
|
(2,452)
|
|
12,318
|
Depreciation and
amortization
|
|
23,134
|
|
—
|
|
—
|
|
23,134
|
Total operating
expenses
|
|
$
144,696
|
|
$
(2,924)
|
|
$
(5,578)
|
|
$
136,194
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(21,888)
|
|
$
13,360
|
|
$
—
|
|
$
(8,528)
|
|
|
|
|
|
|
|
|
|
(1) Includes transaction related items, severance,
transformation and other exit costs, and write-off of long-lived
assets and other.
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating expenses to Adjusted operating expenses for the Nine
Months Ended September 30, 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments (1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
91,287
|
|
$
—
|
|
$
(1,175)
|
|
$
90,112
|
Product and
technology
|
|
74,354
|
|
—
|
|
(6,842)
|
|
67,512
|
Marketing and
sales
|
|
176,636
|
|
—
|
|
(4,512)
|
|
172,124
|
General and
administrative
|
|
53,738
|
|
(4,794)
|
|
(9,754)
|
|
39,190
|
Depreciation and
amortization
|
|
74,381
|
|
—
|
|
—
|
|
74,381
|
Total operating
expenses
|
|
$
470,396
|
|
$
(4,794)
|
|
$
(22,283)
|
|
$
443,319
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(22,967)
|
|
$
(1,280)
|
|
$
—
|
|
$
(24,247)
|
|
|
|
|
|
|
|
|
|
(1) Includes transaction related items, severance,
transformation and other exit costs, and write-off of long-lived
assets and other.
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating expenses to Adjusted operating expenses for the Nine
Months Ended September 30, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments (1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
86,084
|
|
$
—
|
|
$
(759)
|
|
$
85,325
|
Product and
technology
|
|
65,849
|
|
—
|
|
(5,086)
|
|
60,763
|
Marketing and
sales
|
|
165,364
|
|
—
|
|
(3,904)
|
|
161,460
|
General and
administrative
|
|
51,465
|
|
(6,570)
|
|
(7,827)
|
|
37,068
|
Depreciation and
amortization
|
|
70,688
|
|
—
|
|
—
|
|
70,688
|
Total operating
expenses
|
|
$
439,450
|
|
$
(6,570)
|
|
$
(17,576)
|
|
$
415,304
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(40,111)
|
|
$
13,175
|
|
$
—
|
|
$
(26,936)
|
|
|
|
|
|
|
|
|
|
(1) Includes transaction related items, severance,
transformation and other exit costs, and write-off of long-lived
assets and other.
|
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SOURCE Cars.com Inc.