CHICAGO, Aug. 8, 2018 /PRNewswire/ -- Cars.com Inc.
(NYSE: CARS) ("CARS" or the "Company"), a leading digital
automotive marketplace, today released its financial results for
the quarter ended June 30, 2018.
Q2 Financial Highlights
- Total revenue of $168.5 million,
up $11.9 million, or 8%
year-over-year
- Net income of $12.7 million, or
$0.18 per diluted share
- Adjusted net income of $34.3
million, or $0.48 per diluted
share
- Adjusted EBITDA of $57.3 million,
down $4.8 million year-over-year,
driven by increased costs related to affiliate conversions,
incremental public company costs and planned marketing
investments
- Net cash provided by operating activities of $70.6 million for the first six months of 2018
with free cash flow of $64.2
million
- Dealer Inspire and Launch Digital Marketing ("LDM") revenue
grew 45% year-over-year on a pro forma basis
Q2 Key Metric Highlights
- Average monthly unique visitors of 19.0 million, up 8%
year-over-year
- Traffic (visits) of 113.0 million, up 8% year-over-year
- Mobile traffic grew 25% year-over-year and accounted for 67% of
total traffic compared to 58% in the second quarter of 2017
- Dealer customer count of 20,720 as of June 30, 2018, including 508 incremental Dealer
Inspire dealer customers, compared to 20,474 as of March 31, 2018, which did not include Dealer
Inspire; Affiliate dealer customers of 4,128 as of June 30, 2018 compared with 4,335 as of
March 31, 2018
- Direct monthly average revenue per dealer ("ARPD") of
$2,064, up 6% year-over-year
- Total average vehicle listings of 4.8 million
Operational Highlights
- Continued Affiliate Conversions: Converted the
Washington, D.C. market effective
August 1, bringing approximately 350
dealers into the Cars.com direct sales channel
- Important senior hires address highest strategic
priorities:
-
- Doug Miller, Chief
Revenue Officer. Doug is a seasoned marketplace executive with more
than 20 years of experience driving growth and building
high-performing teams.
- Matthew Gold, Chief
Strategy Officer. Matt's experience developing strategies and
partnerships to build and deploy commercial products will be
critical as we continue to seek opportunities to capitalize on our
data and intelligence and expand the business into new
markets.
- Realizing synergies from new acquisitions, launched CARS Social
Solutions to tap into new channels and strong dealer demand:
-
- Social Sales Drive, a powerful new product that enables
automotive retailers to extend the reach of their Cars.com vehicle
listings to the one million daily car shoppers on Facebook
Marketplace, boosting exposure in front of a new audience
- Cars Social, an ad product that serves native ads
displaying real-time inventory to consumers on Facebook and
Instagram. By using Cars.com's first-party data, Cars Social
positions inventory in front of Cars.com's unique, unduplicated
audience and targets shoppers who have previously researched
vehicles on Cars.com.
- Created early stage, undecided shopper experience in August to
be supported by differentiated brand campaign, to help early stage
shoppers narrow down their vehicle selection, supporting continued
growth in traffic
- Dealer Inspire secured two new OEM opportunities, including
Porsche dealer website platform program as well as the INFINITI
dealer program
- Technology transformation under way to drive growth, reduce
reliance on third-party services, optimize and migrate technology
systems to drive cost efficiency
- Utilized share repurchase program to purchase a total of 2
million shares, at an average price of $24.84, for a total of $50
million in the second quarter
"We celebrated our 20th anniversary in June, but this
past year has been more transformative than the prior 19. We are
taking direct control of our affiliate markets by converting these
agreements prior to their expirations, at the same time moving from
a classified listings site to a digital automotive marketplace that
simplifies buying and selling," said Alex
Vetter, President and Chief Executive Officer of Cars.com.
"We have expanded into high-growth categories with Dealer Inspire
products including the launch of our proprietary Social Solutions.
I'm pleased with the positive momentum we've experienced with
growth in traffic, unique visitors and now SEO, as well as our
continued success in negotiating early affiliate conversions.
However, our first-half subscription revenues are behind our plan,
and as a result we have taken down our full-year outlook. As we
welcome Doug Miller as Chief Revenue
Officer, I am confident he will be instrumental in delivering our
growth strategies to expand our suite of digital solutions and
increase our customer network."
Revenue for the second quarter of 2018 was $168.5 million, compared to $156.6 million in the prior year period. Dealer
Inspire and LDM contributed $14.5
million to retail revenue. In addition, the conversions of
affiliate markets contributed $21.2
million to retail revenue, while reducing wholesale revenue
$18.9 million ($4.4 million of the reduction was related to the
amortization of unfavorable contracts liability, which is now
recorded as a reduction of affiliate revenue share expense).
Total operating expenses for the second quarter of 2018 were
$144.0 million, compared to
$127.8 million for the prior year
period. This increase was driven by the addition of the Dealer
Inspire and LDM businesses ($18.0
million), an increase in costs related to the affiliate
conversions and planned increases in marketing spend, offset in
part by a decrease in non-recurring costs.
Net income for the second quarter of 2018 was $12.7 million compared to $24.8 million in the second quarter of 2017.
Adjusted net income for the quarter was $34.3 million compared to $50.5 million for the prior year period. These
comparisons to prior year are impacted by changes in capital
structure, including additions of interest and tax expense – which
occurred in conjunction with the spin-off during the second quarter
of 2017.
Adjusted EBITDA for the second quarter of $57.3 million, or 34.0% of revenue, compared to
$62.1 million, or 39.7% of revenue,
for the prior year period.
For the second quarter, both average monthly unique visitor
count and total traffic grew 8% year-over-year. Mobile traffic grew
25% year-over-year and accounted for 67% of total traffic compared
to 58% in the prior year. SEO traffic grew year-over-year in each
month of the second quarter, accelerating toward expected double
digit growth for the full year.
Dealer customers of 20,720 as of June 30,
2018 grew 1% compared to 20,474 as of March 31, 2018 due to the addition of 508 Dealer
Inspire dealer customers. Excluding Dealer Inspire, dealer
customers declined 1% compared to March 31,
2018. Excluding affiliate market conversions, 73% of this
decline was attributable to fewer dealers in affiliate markets and
dealer cancellations resulting from the sunsetting of a lower
priced, legacy DealerRater baseline product. Direct dealer
customers declined 72, an improvement from a decline of 231 in the
first quarter.
The conversion of affiliate dealer customers, which provides
direct access to new, larger markets with customers at higher price
points, has resulted in 6% growth in direct ARPD compared to a year
ago.
Cash Flow and Balance Sheet
Net cash provided by operating activities for the six-month
period ended June 30, 2018 was
$70.6 million compared with
$96.7 million in the prior year. Free
cash flow for the six-month period ended June 30, 2018 was $64.2
million, compared with $77.8
million in the same period last year. Impacting current year
cash flow was incremental interest expense, additional
non-recurring expenses, offset in part by lower capital
expenditures.
Cash and cash equivalents was $18.4
million and debt outstanding was $727.5 million as of June
30, 2018. During the second quarter, the Company utilized
$50 million to purchase 2.0 million
shares under its share repurchase program, at an average price of
$24.84. Net leverage at June 30, 2018 was 3.0x, calculated in accordance
with the Company's credit agreement.
"We're encouraged to see continued rapid growth in our Dealer
Inspire and LDM businesses and affiliate markets, and we will
continue to utilize our flexible capital structure and strong
balance sheet to reinvest in the Cars.com brand and product to
drive long-term growth in the business," said Becky Sheehan, Chief Financial Officer of
Cars.com.
2018 Outlook
Due to lower subscription revenue in the first half of the year
and lower growth in our national advertising business, the Company
is revising its full year 2018 guidance. The Company now expects
approximately 6 to 7% revenue growth with Adjusted EBITDA margin of
approximately 34%.
Second Quarter Earnings Call
As previously announced, management will hold a conference call
and webcast today at 7:30 a.m. CDT.
This webcast may be accessed at investor.cars.com. A replay of the
webcast and the slideshow will be available at this website
following the conclusion of the call until August 23, 2018.
About Cars.com
Cars.com™ is a leading two-sided digital automotive marketplace
that creates meaningful connections between buyers and sellers.
Launched in 1998 and headquartered in Chicago, the Company
empowers consumers with resources and information to make informed
buying decisions and enables advertising partners with innovative
digital solutions and data-driven intelligence to increase
inventory turn and gain market share. A pioneer in online
automotive classifieds, the Company has evolved into one of the
largest digital automotive platforms, connecting thousands of local
dealers across the country with millions of consumers. In 2018,
Cars.com acquired Dealer Inspire®, a company that builds technology
that helps future-proof dealerships for changing consumer behaviors
and makes the car buying process faster and easier.
Cars.com properties
include DealerRater®, DealerInspire®,
Auto.com™, PickupTrucks.com™ and NewCars.com®.
Non-GAAP Financial Measures
This earnings release discusses Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted Net Income and Free Cash Flow. These are not
financial measures as defined by 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 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
our lenders, securities analysts, investors and other interested
parties to evaluate companies in our industry.
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.
The Company defines Adjusted EBITDA as net income (loss) before
(1) interest expense (income), net, (2) income tax expense
(benefit), (3) depreciation, (4) amortization of intangible assets,
(5) stock-based compensation expense, plus (6) certain other items,
such as transaction-related costs, costs associated with the
stockholder activist campaign, restructuring and other exit costs,
costs related to the headquarters move 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.
The Company defines Adjusted Net Income as net income (loss)
excluding the after-tax impact of (1) amortization of intangible
assets, (2) stock-based compensation expense, and (3) certain other
items, such as transaction-related costs, costs associated with the
stockholder activist campaign, restructuring and other exit costs,
costs related to the headquarters move 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.
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 internal-use
software development costs.
Key Metric Definitions
Traffic (Visits). Traffic (visits) and our ability
to generate traffic are key to our business. Tracking our traffic
performance is a critical measure. Traffic to
the Cars.com 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 an internal metric representing the
number of visits to Cars.com desktop and mobile
properties (web browser and apps). Visits refer to the number of
times visitors accessed Cars.com properties during the
period, no matter how many visitors make up those visits. We
measure traffic using Adobe Analytics. Traffic (visits) numbers
provide an indication of our consumer reach. Although our consumer
reach does not directly result in revenue, we believe our ability
to reach diverse demographic audiences is attractive to our dealer
customers and national advertisers.
Dealer Customers. Our value to consumers tracks to
our ability to showcase the inventory of our dealer and Original
Equipment Manufacturer ("OEM") customers. The larger the advertiser
base, the more inventory and options that are available for
consumers to review. Dealer Customers represents the car
dealerships using our products as of the end of each reporting
period. Each 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 Vehicle Listings. Our value to consumers
tracks to our ability to showcase the inventory of our dealer and
OEM customers. The more vehicle listings that are available for
consumers to review, the more traffic we attract and the higher the
consumer engagement. Average Vehicle Listings represents the daily
average of vehicles listed for sale
on Cars.com properties. The daily average is calculated
on a monthly basis and averaged for the reporting period.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the federal securities laws, including those
statements under "2018 Outlook." All statements other than
statements of historical facts are forward-looking statements.
Forward-looking statements include information concerning our
business strategies, plans and objectives, market potential, future
financial performance, planned operational and product
improvements, liquidity and other matters. These statements often
include words such as "believe," "expect," "project," "anticipate,"
"intend," "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, estimates,
projections and assumptions, based on our experience in the
industry as well as our perceptions of historical trends, current
conditions, expected future developments and other factors we think
are appropriate. 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 performance
or results. Our actual results 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.
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 to differ
materially from those expressed in the forward-looking statements
contained in this press release. Such risks, uncertainties, and
other important factors include, among others, risks related to our
business, our separation from our parent company and our common
stock. For a detailed discussion of many of these risks and
uncertainties, see Part I, Item 1A – "Risk Factors," in our Annual
Report on Form 10-K for the year ended December 31, 2017 as filed with the Securities
and Exchange Commission. All forward-looking statements contained
in this press release are qualified by these cautionary statements.
The forward-looking statements contained in this press release
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. 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.
The forward-looking statements in this press release are
intended to be subject to the safe harbor protection provided by
the Federal securities laws.
Cars.com
Inc.
|
Consolidated and
Combined Balance Sheets
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
June 30,
2018
|
|
December 31,
2017
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
18,394
|
|
$
20,563
|
Accounts receivable,
net
|
|
105,184
|
|
100,857
|
Prepaid
expenses
|
|
13,772
|
|
11,408
|
Other current
assets
|
|
10,567
|
|
9,811
|
Total current
assets
|
|
147,917
|
|
142,639
|
Property and
equipment, net
|
|
40,907
|
|
39,740
|
Goodwill
|
|
884,480
|
|
788,107
|
Intangible assets,
net
|
|
1,556,654
|
|
1,529,500
|
Investments and other
assets
|
|
10,439
|
|
11,053
|
Total
assets
|
|
$
2,640,397
|
|
$
2,511,039
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
7,505
|
|
$
6,581
|
Accrued
compensation
|
|
12,610
|
|
14,185
|
Unfavorable contracts
liability
|
|
25,200
|
|
25,200
|
Current portion of
long-term debt
|
|
21,211
|
|
21,158
|
Other accrued
liabilities
|
|
37,905
|
|
23,025
|
Total current
liabilities
|
|
104,431
|
|
90,149
|
Noncurrent
liabilities:
|
|
|
|
|
Unfavorable contracts
liability
|
|
6,285
|
|
18,885
|
Long-term
debt
|
|
701,534
|
|
557,194
|
Deferred tax
liability
|
|
164,368
|
|
146,482
|
Other noncurrent
liabilities
|
|
19,678
|
|
19,201
|
Total noncurrent
liabilities
|
|
891,865
|
|
741,762
|
Total
liabilities
|
|
996,296
|
|
831,911
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred Stock at
par, $0.01 par value; 5,000 shares authorized; no
shares issued and outstanding as of June 30, 2018 and December
31, 2017
|
|
—
|
|
—
|
Common Stock at par,
$0.01 par value; 300,000 shares authorized; 69,896 and 71,628
shares issued and outstanding as of June 30, 2018 and December 31,
2017, respectively
|
|
699
|
|
716
|
Additional paid-in
capital
|
|
1,503,145
|
|
1,501,830
|
Retained
earnings
|
|
140,257
|
|
176,582
|
Total stockholders'
equity
|
|
1,644,101
|
|
1,679,128
|
Total liabilities and
stockholders' equity
|
|
$
2,640,397
|
|
$
2,511,039
|
Cars.com
Inc.
|
Consolidated and
Combined Statements of Income
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
|
Direct
|
|
$ 115,533
|
|
$
83,273
|
|
$ 217,011
|
|
$ 166,908
|
National
advertising
|
|
27,230
|
|
28,441
|
|
54,048
|
|
53,377
|
Other
|
|
4,095
|
|
3,996
|
|
8,142
|
|
7,670
|
Retail
|
|
146,858
|
|
115,710
|
|
279,201
|
|
227,955
|
Wholesale
|
|
21,654
|
|
40,914
|
|
49,268
|
|
81,843
|
Total
revenues
|
|
168,512
|
|
156,624
|
|
328,469
|
|
309,798
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues and operations
|
|
22,804
|
|
15,540
|
|
41,890
|
|
31,442
|
Product and
technology
|
|
17,951
|
|
19,522
|
|
40,284
|
|
38,439
|
Marketing and
sales
|
|
59,527
|
|
50,512
|
|
125,562
|
|
109,513
|
General and
administrative
|
|
13,148
|
|
17,445
|
|
31,264
|
|
25,184
|
Affiliate
revenue share
|
|
3,813
|
|
2,355
|
|
7,096
|
|
4,716
|
Depreciation
and amortization
|
|
26,712
|
|
22,377
|
|
50,650
|
|
44,450
|
Total operating
expenses
|
|
143,955
|
|
127,751
|
|
296,746
|
|
253,744
|
Operating income
|
|
24,557
|
|
28,873
|
|
31,723
|
|
56,054
|
Nonoperating
(expense) income:
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
(7,343)
|
|
(1,770)
|
|
(13,300)
|
|
(1,729)
|
Other income,
net
|
|
27
|
|
51
|
|
11
|
|
135
|
Total nonoperating expense,
net
|
|
(7,316)
|
|
(1,719)
|
|
(13,289)
|
|
(1,594)
|
Income before
income taxes
|
|
17,241
|
|
27,154
|
|
18,434
|
|
54,460
|
Income tax
expense
|
|
4,515
|
|
2,345
|
|
4,779
|
|
2,763
|
Net income
|
|
$
12,726
|
|
$
24,809
|
|
$
13,655
|
|
$
51,697
|
Earnings per share,
basic
|
|
$
0.18
|
|
$
0.35
|
|
$
0.19
|
|
$
0.72
|
Weighted-average
common shares outstanding, basic
|
|
71,119
|
|
71,716
|
|
71,531
|
|
71,716
|
Earnings per share,
diluted
|
|
$
0.18
|
|
$
0.35
|
|
$
0.19
|
|
$
0.72
|
Weighted-average
common shares outstanding, diluted
|
|
71,330
|
|
71,780
|
|
71,721
|
|
71,780
|
Cars.com
Inc.
|
Consolidated and
Combined Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended
June 30,
|
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
13,655
|
|
$
51,697
|
Adjustments to
reconcile Net income to Net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
5,903
|
|
5,515
|
Amortization of
intangible assets
|
|
44,747
|
|
38,935
|
Amortization of
unfavorable contracts liability
|
|
(12,600)
|
|
(12,600)
|
Stock-based
compensation expense
|
|
4,476
|
|
481
|
Deferred income
taxes
|
|
3,145
|
|
1,731
|
Provision for
doubtful accounts
|
|
2,164
|
|
1,627
|
Amortization of debt
issuance costs
|
|
643
|
|
112
|
Other, net
|
|
500
|
|
1,247
|
Changes in operating
assets and liabilities, net of Acquisition:
|
|
|
|
|
Accounts
receivable
|
|
4,934
|
|
6,614
|
Prepaid
expenses
|
|
(2,044)
|
|
(2,035)
|
Other current
assets
|
|
(545)
|
|
(10,469)
|
Other
assets
|
|
614
|
|
684
|
Accounts
payable
|
|
(1,541)
|
|
(1,778)
|
Accrued
compensation
|
|
(1,792)
|
|
(9,205)
|
Other accrued
liabilities
|
|
10,088
|
|
10,026
|
Other noncurrent
liabilities
|
|
(1,723)
|
|
9,075
|
Cash received from
lessor for lease incentives
|
|
—
|
|
5,075
|
Net cash provided by
operating activities
|
|
70,624
|
|
96,732
|
Cash flows from
investing activities:
|
|
|
|
|
Payment for Acquisition,
net
|
|
(156,968)
|
|
—
|
Purchase of property and
equipment
|
|
(6,417)
|
|
(18,910)
|
Net cash used in
investing activities
|
|
(163,385)
|
|
(18,910)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from issuance of
long-term debt
|
|
190,000
|
|
675,000
|
Payments of debt issuance
costs and other fees
|
|
—
|
|
(5,918)
|
Payments of long-term
debt
|
|
(46,250)
|
|
—
|
Payments related to
stock-based compensation plans, net
|
|
(475)
|
|
—
|
Repurchases of common
stock
|
|
(50,000)
|
|
—
|
Cash distribution to TEGNA
related to Separation
|
|
—
|
|
(650,000)
|
Transactions with TEGNA,
net
|
|
(2,683)
|
|
(69,200)
|
Net cash provided by
(used in) financing activities
|
|
90,592
|
|
(50,118)
|
Net (decrease)
increase in cash and cash equivalents
|
|
(2,169)
|
|
27,704
|
Cash and cash
equivalents at beginning of period
|
|
20,563
|
|
8,896
|
Cash and cash
equivalents at end of period
|
|
$
18,394
|
|
$
36,600
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
Cash paid for income
taxes, net of refunds
|
|
$
293
|
|
$
—
|
Cash paid for
interest
|
|
12,487
|
|
574
|
Cars.com
Inc.
|
Non-GAAP
Reconciliations
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Reconciliation of
Net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 12,726
|
|
$ 24,809
|
|
$
13,655
|
|
$
51,697
|
Interest expense,
net
|
|
7,343
|
|
1,770
|
|
13,300
|
|
1,729
|
Income tax
expense
|
|
4,515
|
|
2,345
|
|
4,779
|
|
2,763
|
Depreciation and
amortization
|
|
26,712
|
|
22,377
|
|
50,650
|
|
44,450
|
Stock-based
compensation expense
|
|
2,876
|
|
481
|
|
4,476
|
|
481
|
Transaction-related
costs
|
|
1,026
|
|
—
|
|
11,133
|
|
—
|
Costs associated with
the stockholder activist campaign
|
|
1,112
|
|
—
|
|
4,897
|
|
—
|
Restructuring and
other exit costs
|
|
590
|
|
1,671
|
|
1,097
|
|
1,671
|
Write-off of
long-lived assets and other
|
|
401
|
|
1,385
|
|
361
|
|
1,389
|
Separation-related
costs
|
|
—
|
|
4,558
|
|
—
|
|
4,658
|
Costs related to the
headquarters move
|
|
—
|
|
2,731
|
|
—
|
|
3,428
|
Adjusted
EBITDA*
|
|
$ 57,301
|
|
$ 62,127
|
|
$ 104,348
|
|
$ 112,266
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income to Adjusted net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ 12,726
|
|
$ 24,809
|
|
$
13,655
|
|
$
51,697
|
Amortization of
intangible assets
|
|
23,570
|
|
19,468
|
|
44,747
|
|
38,935
|
Stock-based
compensation expense
|
|
2,876
|
|
481
|
|
4,476
|
|
481
|
Transaction-related
costs
|
|
1,026
|
|
—
|
|
11,133
|
|
—
|
Costs associated with
the stockholder activist campaign
|
|
1,112
|
|
—
|
|
4,897
|
|
—
|
Restructuring and
other exit costs
|
|
590
|
|
1,671
|
|
1,097
|
|
1,671
|
Write-off of
long-lived assets and other
|
|
401
|
|
1,385
|
|
361
|
|
1,389
|
Separation-related
costs
|
|
—
|
|
4,558
|
|
—
|
|
4,658
|
Costs related to the
headquarters move
|
|
—
|
|
2,731
|
|
—
|
|
3,428
|
Tax impact of
adjustments
|
|
(8,020)
|
|
(4,563)
|
|
(17,625)
|
|
(5,079)
|
Adjusted net
income*
|
|
$ 34,281
|
|
$ 50,540
|
|
$
62,741
|
|
$
97,180
|
Adjusted net income
per share, diluted
|
|
$
0.48
|
|
$
0.70
|
|
$
0.87
|
|
$
1.35
|
Weighted-average
common shares outstanding, diluted
|
|
71,330
|
|
71,780
|
|
71,721
|
|
71,780
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net cash provided by operating activities to Free cash
flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$ 43,963
|
|
$ 53,016
|
|
$
70,624
|
|
$
96,732
|
Purchase of property
and equipment
|
|
(3,904)
|
|
(13,301)
|
|
(6,417)
|
|
(18,910)
|
Free cash
flow
|
|
$ 40,059
|
|
$ 39,715
|
|
$
64,207
|
|
$
77,822
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* Amortization of
unfavorable contracts liability is not adjusted out of Adjusted
EBITDA or Adjusted net income.
|
Cars.com
Inc.
|
Supplemental
Information
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Three Months Ended June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
22,804
|
|
$
(304)
|
|
$
(73)
|
|
$
22,427
|
Product and
technology
|
|
17,951
|
|
(260)
|
|
(550)
|
|
17,141
|
Marketing and
sales
|
|
59,527
|
|
(591)
|
|
(471)
|
|
58,465
|
General and
administrative
|
|
13,148
|
|
(1,974)
|
|
(1,782)
|
|
9,392
|
Affiliate revenue
share
|
|
3,813
|
|
—
|
|
—
|
|
3,813
|
Depreciation and
amortization
|
|
26,712
|
|
—
|
|
—
|
|
26,712
|
Total operating
expenses
|
|
$
143,955
|
|
$
(3,129)
|
|
$
(2,876)
|
|
$ 137,950
|
|
|
|
|
|
|
|
|
|
(1)
Includes costs associated with the stockholder activist campaign,
transaction-related costs, restructuring and other exit costs, write-off of long-lived assets and
other.
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Three Months Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
15,540
|
|
$
—
|
|
$
—
|
|
$
15,540
|
Product and
technology
|
|
19,522
|
|
—
|
|
—
|
|
19,522
|
Marketing and
sales
|
|
50,512
|
|
—
|
|
—
|
|
50,512
|
General and
administrative
|
|
17,445
|
|
(10,345)
|
|
(481)
|
|
6,619
|
Affiliate revenue
share
|
|
2,355
|
|
—
|
|
—
|
|
2,355
|
Depreciation and
amortization
|
|
22,377
|
|
—
|
|
—
|
|
22,377
|
Total operating
expenses
|
|
$
127,751
|
|
$
(10,345)
|
|
$
(481)
|
|
$ 116,925
|
|
|
|
|
|
|
|
|
|
(1)
Includes separation-related costs, costs related to the
headquarters move, restructuring and other exit costs,
write-off of long-lived assets and
other.
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Six Months Ended June 30, 2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
41,890
|
|
$
(1,405)
|
|
$
(99)
|
|
$
40,386
|
Product and
technology
|
|
40,284
|
|
(4,685)
|
|
(815)
|
|
34,784
|
Marketing and
sales
|
|
125,562
|
|
(1,219)
|
|
(768)
|
|
123,575
|
General and
administrative
|
|
31,264
|
|
(10,179)
|
|
(2,794)
|
|
18,291
|
Affiliate revenue
share
|
|
7,096
|
|
—
|
|
—
|
|
7,096
|
Depreciation and
amortization
|
|
50,650
|
|
—
|
|
—
|
|
50,650
|
Total operating
expenses
|
|
$
296,746
|
|
$
(17,488)
|
|
$
(4,476)
|
|
$ 274,782
|
|
|
|
|
|
|
|
|
|
(1)
Includes transaction-related costs, costs associated with the
stockholder activist campaign, restructuring and
other exit costs, write-off of long-lived
assets and other.
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Six Months Ended June 30, 2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
31,442
|
|
$
—
|
|
$
—
|
|
$
31,442
|
Product and
technology
|
|
38,439
|
|
—
|
|
—
|
|
38,439
|
Marketing and
sales
|
|
109,513
|
|
—
|
|
—
|
|
109,513
|
General and
administrative
|
|
25,184
|
|
(11,146)
|
|
(481)
|
|
13,557
|
Affiliate revenue
share
|
|
4,716
|
|
—
|
|
—
|
|
4,716
|
Depreciation and
amortization
|
|
44,450
|
|
—
|
|
—
|
|
44,450
|
Total operating
expenses
|
|
$
253,744
|
|
$
(11,146)
|
|
$
(481)
|
|
$ 242,117
|
|
|
|
|
|
|
|
|
|
(1)
Includes separation-related costs, costs related to the
headquarters move, restructuring and other exit costs,
write-off of long-lived assets and
other.
|
View original content with
multimedia:http://www.prnewswire.com/news-releases/carscom-reports-second-quarter-2018-results-300693773.html
SOURCE Cars.com Inc.