Exceeded Fourth Quarter Revenue
Guidance
Realized Meaningful Revenue Growth and ARPD from
Dealer Solutions
Generated $129MM of Operating Cash Flow,
Driving Financial Flexibility
CHICAGO, Feb. 23,
2023 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS)
("CARS" or the "Company"), the leading digital automotive platform
that provides a robust set of digital solutions, today released its
financial results for the fourth quarter and year ended
December 31, 2022.
Q4 2022 Financial and Key Metric Highlights
- Revenue of $168.2 million, up
$9.9 million, or 6%
year-over-year
- Net income of $10.3 million, or
$0.15 per diluted share, compared to
Net loss of $2.9 million, or
($0.04) per diluted share, in the
prior year
- Adjusted EBITDA of $49.5 million,
or 29% of revenue, up $2.7 million
year-over-year
- Average Monthly Unique Visitors ("UVs") of 24.6 million, up 5%
year-over-year
- Traffic ("Visits") of 140.4 million, up 5% year-over-year
- Monthly Average Revenue Per Dealer ("ARPD") of $2,361, up $28 from
the prior year period
- Dealer Customers of 19,506 as of December 31, 2022, 79 lower compared to 19,585 as
of September 30, 2022 and 327 higher
compared to the prior year
2022 Full-Year Financial and Key Metric
Highlights
- Revenue of $653.9 million, up
$30.2 million, or 5%
year-over-year
- Net income of $17.2 million, or
$0.25 per diluted share, compared to
Net income1 of $10.8 million, or $0.15 per diluted share, in the prior year
- Adjusted EBITDA of $186.7
million, or 29% of revenue, compared to $189.2 million, or 30% of revenue in the prior
year
- Net cash provided by operating activities of $128.5 million, compared to $138.0 million in the prior year, with Free cash
flow of $108.8 million, compared to
$118.8 million in the prior year
- UVs of 26.4 million, up 5% year-over-year
- Traffic of 587.4 million, down 1% year-over-year
Operational Highlights
- Generated strong Operating cash flow enabling the Company to
paydown $41.3 million of debt,
bringing total net leverage to 2.4x, and returned capital to its
shareholders by repurchasing 4.2 million shares for $49.0 million
- Grew Dealer Inspire website customers by more than 700, ending
the year with 6,050
- Strengthened the CARS platform with the launch of Accu-Trade
Connected, ending the year with over 500 dealer customers into this
solution
"2022 marked a strong year of growth for our business as we
helped consumers, dealers, OEMs and lenders in an environment that
challenged many," said Alex Vetter,
Chief Executive Officer of CARS. "We made strategic operating
investments to further expand the range of customer capabilities on
our platform with the integration of CreditIQ and Accu-Trade."
Q4 2022 Results
Revenue for the fourth quarter totaled $168.2 million, an increase of $9.9 million, or up 6%, compared to the prior
year period. Dealer revenue grew 6% year-over-year, driven by 28%
growth in Dealer Inspire, the continued adoption of the Accu-Trade
Connected solution, and a 2% increase in Dealer Customers. Solid
growth in Dealer and Other revenue was partially offset by a 7%
decline in OEM and National revenue, reflective of OEMs continued
production challenges resulting in lower advertising
investments.
Total operating expenses for the fourth quarter were
$148.4 million, compared to
$154.2 million for the prior year
period. Adjusted Operating Expenses for the quarter were
$140.6 million, a $4.0 million increase compared to the prior year
period. Marketing and sales costs were higher due to an increase in
sales and sales support staff to support new product launches,
higher travel and entertainment expenses, and bad debt. Product and
technology expenses increased, primarily due to incremental costs
related to the acquisition, integration and launch of the
Accu-Trade and CreditIQ products. This was partially offset by
lower Depreciation and amortization.
Net income for the quarter was $10.3
million, or $0.15 per diluted
share, compared to Net loss of $2.9
million, or ($0.04) per
diluted share, in the fourth quarter of 2021.
Adjusted EBITDA for the quarter totaled $49.5 million, or 29% of revenue, compared to
$46.8 million, or 30% of revenue, for
the prior year period.
For the quarter, both Average Monthly Unique Visitors and
Traffic increased 5%, compared to the fourth quarter of 2021.
As of December 31, 2022, Dealer
Customers totaled 19,506, 79 lower compared to September 30, 2022, due to cancellations related
to a single digital dealer. Excluding these cancellations, Dealer
Customers would have increased during the quarter. Compared to
December 31, 2021, Dealer Customers
increased 327, or 2% driven by new customer additions.
Fourth quarter ARPD totaled $2,361, a $28
increase compared to a year ago.
2022 Full-Year Results
Revenue for the year totaled $653.9
million, an increase of $30.2
million, or up 5%, compared to the prior year period.
For the year, total operating expenses were $587.8 million, compared to $575.3 million in 2021. Adjusted Operating
Expenses for the year were $555.9
million, a $19.7 million
increase compared to the prior year that was largely driven by
Marketing and sales and Product and technology. Marketing and sales
increased due to higher sales and sales support staff to support
new product launches, as well as increased marketing investments to
raise awareness of new products and costs associated with a return
to in-person marketing events. The increase in Product and
technology was primarily attributable to the acquisition,
integration and launch of Accu-Trade and CreditIQ products. This
was partially offset by lower Depreciation and amortization.
2022 Net income totaled $17.2
million, or $0.25 per diluted
share, compared to Net income of $10.8
million, or $0.15 per diluted
share in the prior year.
Adjusted EBITDA for the year totaled $186.7 million, or 29% of revenue, compared to
$189.2 million, or 30% of revenue, in
the prior year period.
Average Monthly Unique Visitors for the year grew 5% compared to
the prior year and Traffic was 1% lower.
Cash Flow and Balance Sheet
Net cash provided by operating activities in 2022 was
$128.5 million, compared to
$138.0 million in the prior year.
Free Cash Flow in 2022 totaled $108.8
million compared to $118.8
million in 2021. The decline was primarily due to a
$9.1 million income tax refund
received in the first quarter of 2021 related to the carryback of
NOLs.
The Company paid down $41.3
million in debt during 2022, offsetting most of the
$45.0 million borrowed in the first
quarter of 2022 to partially fund the acquisition of Accu-Trade.
Total debt outstanding was $481.3
million as of December 31,
2022, and total net leverage improved to 2.4x, placing the
Company within its target net leverage range of 2.0x to 2.5x. Total
liquidity was $246.7 million,
including cash and cash equivalents of $31.7
million and $215.0 million of
revolver capacity, as of December 31,
2022.
As of December 31, 2022, the
Company's floating rate debt was only 17% of total outstanding
debt, limiting the Company's exposure to rising interest rates.
For the year, the Company repurchased 4.2 million of its common
shares, or 6.0% of the 69.2 million shares outstanding at
December 31, 2021, for $49.0 million.
"We delivered another year of strong operating and financial
performance on both an absolute and relative basis. The strength
and stability of our cash flow, coupled with our modest leverage
give us the financial flexibility to continue to deploy a balanced
capital allocation strategy that includes value-accretive
investments in our platform strategy creating long-term value for
shareholders," said Sonia Jain,
Chief Financial Officer of CARS.
2023 Outlook
The Company's diversified platform strategy provides a solid
foundation for growth. First quarter revenue is expected to be
between $166 million and $168 million, a year-over-year revenue growth of
5% to 6%. First quarter revenue outlook assumes a continued
pull-back by digital dealers and lower OEM and National Advertising
spend relative to fourth quarter of last year.
There continue to be mixed signals across the automotive
industry driven by supply chain challenges. This is reflected in
the Company's full year revenue growth guidance, of 3% to 6%, which
assumes that lower inventory levels will persist throughout the
year. Recall, despite recent increases in vehicle listings on the
Company's website, overall listings remain down 41% compared to 4.3
million as of the first quarter 2020. The Company's growth
expectations would be higher in a less constrained inventory
environment.
The Company's strong and consistent Adjusted EBITDA margin
profile reflects its disciplined approach to capital allocation and
incremental investment. The Company's ROI driven approach to
investing has allowed it to maintain strong margins even as it
scales new products, like Accu-Trade and CreditIQ, which can
require upfront investment prior to launch while experiencing
softness in its OEM revenues. Adjusted EBITDA margin for the first
quarter of 2023 is expected to be between 25% and 27%. Margins are
expected to improve over the course of the year, and the Company
expects to exit the year with fourth quarter Adjusted EBITDA
margins approaching 30%. Recall, the Company has seasonally higher
investments in Marketing and sales in the first quarter due to the
timing of in-person industry events.
Q4 2022 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 CARS' 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
CARS is the leading automotive marketplace platform that
provides a robust set of digital solutions to connect 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
and OEMs. 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, DealerRater, a
leading car dealer review and reputation management platform,
automotive fintech platform CreditIQ, and Accu-Trade, a leading
provider of vehicle acquisition technology and valuation data.
The full suite of CARS properties includes Cars.com™, Dealer
Inspire®, FUEL™, DealerRater®, CreditIQ®, Accu-Trade™ and
NewCars.com®. For more information, visit www.Cars.com.
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 internal-use
software and website development costs.
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 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 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, which had an immaterial impact on ARPD for the annual and
quarterly periods. No prior period has been recast as it would be
impracticable to do so.
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 the
Company's industry, Dealer Customers, results of operations,
business strategies, plans and objectives, market potential,
outlook, trends, future financial performance, planned operational
and product improvements, potential strategic transactions, recent
acquisitions, such as CreditIQ and Accu-Trade, liquidity, including
draws from the Company's revolving credit facility, expense
management and other matters and involve known and unknown risks
that are difficult to predict. 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. As a result,
the Company's actual financial results, performance, achievements,
strategic actions or prospects may differ materially from those
expressed or implied by these forward-looking statements.
Forward-looking statements are based on the Company's current
expectations, beliefs, strategies, estimates, projections and
assumptions, based on its experience in the industry as well as the
Company's perceptions of historical trends, current conditions,
expected future developments, current developments regarding the
COVID-19 pandemic, global supply chain shortages, fluctuating fuel
prices and other factors the Company thinks 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 the Company believes these
judgments are reasonable. However, you should understand that these
statements are not guarantees of strategic action, performance or
results. The Company's 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 the
Company's control.
Forward-looking statements are subject to a number of risks,
uncertainties and other important factors, many of which are beyond
the Company's control, that could cause its 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 the Company's Annual Report on Form 10-K, its
Quarterly Reports on Form 10-Q, its Current Reports on Form 8-K and
its other filings with the Securities and Exchange Commission,
available on the Company's 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 the Company and
speak only as of the date of this press release. The Company
undertakes 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:
Robbin Moore-Randolph
rmr@cars.com
312.601.5929
CARS Media Contact:
Marita
Thomas
mthomas@cars.com
312.601.5692
1During the year ended December
31, 2022, the Company recorded an immaterial income tax adjustment
relating to a prior period. The Company has concluded that item is
not material to the previously issued Consolidated Financial
Statements and has therefore corrected these prior period amounts
as presented in the current period Consolidated Financial
Statements. See further discussion within the Company's Form 10-K
for the period ended December 31, 2022.
|
Cars.com
Inc.
|
Consolidated
Statements of Income (Loss)
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021 (1)
|
|
2022
|
|
2021 (1)
|
Revenue:
|
|
|
|
|
|
|
|
|
Dealer
|
|
$
149,424
|
|
$
140,778
|
|
$
579,222
|
|
$
549,923
|
OEM and
National
|
|
14,330
|
|
15,414
|
|
58,557
|
|
65,085
|
Other
|
|
4,447
|
|
2,113
|
|
16,097
|
|
8,675
|
Total
revenue
|
|
168,201
|
|
158,305
|
|
653,876
|
|
623,683
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of revenue
and operations
|
|
28,875
|
|
29,222
|
|
114,959
|
|
114,200
|
Product and
technology
|
|
23,166
|
|
20,990
|
|
89,015
|
|
77,316
|
Marketing and
sales
|
|
56,515
|
|
51,867
|
|
221,879
|
|
208,335
|
General and
administrative
|
|
16,128
|
|
26,762
|
|
67,593
|
|
73,562
|
Depreciation and
amortization
|
|
23,706
|
|
25,402
|
|
94,394
|
|
101,932
|
Total operating
expenses
|
|
148,390
|
|
154,243
|
|
587,840
|
|
575,345
|
Operating income
|
|
19,811
|
|
4,062
|
|
66,036
|
|
48,338
|
Nonoperating
expense:
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
(8,442)
|
|
(9,367)
|
|
(35,320)
|
|
(38,729)
|
Other income
(expense), net
|
|
5,093
|
|
(144)
|
|
(8,140)
|
|
(126)
|
Total
nonoperating expense, net
|
|
(3,349)
|
|
(9,511)
|
|
(43,460)
|
|
(38,855)
|
Income (loss)
before income taxes
|
|
16,462
|
|
(5,449)
|
|
22,576
|
|
9,483
|
Income tax
expense (benefit)
|
|
6,200
|
|
(2,565)
|
|
5,370
|
|
(1,308)
|
Net income (loss)
|
|
$
10,262
|
|
$
(2,884)
|
|
$
17,206
|
|
$
10,791
|
Weighted-average
common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
66,546
|
|
69,176
|
|
68,215
|
|
68,727
|
Diluted
|
|
68,513
|
|
69,176
|
|
69,649
|
|
71,337
|
Earnings (loss)
per share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.15
|
|
$
(0.04)
|
|
$
0.25
|
|
$
0.16
|
Diluted
|
|
0.15
|
|
(0.04)
|
|
0.25
|
|
0.15
|
|
(1)
During the year ended December 31, 2022,
the Company recorded an immaterial income tax adjustment relating
to a prior period. The Company has concluded that item is not
material to the previously issued Consolidated Financial Statements
and has therefore corrected these prior period amounts as presented
in the current period Consolidated Financial Statements. See
further discussion within the Company's Form 10-K for the period
ended December 31, 2022.
|
Cars.com
Inc.
|
Consolidated Balance
Sheets
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
December 31,
2022
|
|
December 31, 2021
(1)
|
Assets:
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
31,715
|
|
$
39,069
|
Accounts receivable,
net
|
|
107,930
|
|
98,893
|
Prepaid
expenses
|
|
8,377
|
|
7,810
|
Other current
assets
|
|
605
|
|
1,665
|
Total current
assets
|
|
148,627
|
|
147,437
|
Property and equipment,
net
|
|
45,218
|
|
43,005
|
Goodwill
|
|
102,856
|
|
26,227
|
Intangible assets,
net
|
|
707,088
|
|
769,424
|
Investments and other
assets, net
|
|
21,081
|
|
21,112
|
Total assets
|
|
$
1,024,870
|
|
$
1,007,205
|
Liabilities and
stockholders' equity:
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
18,230
|
|
$
15,420
|
Accrued
compensation
|
|
19,316
|
|
23,612
|
Current portion of
long-term debt, net
|
|
14,134
|
|
8,941
|
Other accrued
liabilities
|
|
54,332
|
|
46,317
|
Total current
liabilities
|
|
106,012
|
|
94,290
|
Noncurrent
liabilities:
|
|
|
|
|
Long-term debt,
net
|
|
458,249
|
|
457,383
|
Other noncurrent
liabilities
|
|
76,179
|
|
57,512
|
Total noncurrent
liabilities
|
|
534,428
|
|
514,895
|
Total
liabilities
|
|
640,440
|
|
609,185
|
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, 2022 and
2021, respectively
|
|
—
|
|
—
|
Common Stock at par,
$0.01 par value; 300,000 shares authorized; 66,287 and
69,170 shares issued and outstanding as of December
31, 2022 and 2021, respectively
|
|
662
|
|
692
|
Additional paid-in
capital
|
|
1,511,944
|
|
1,544,712
|
Accumulated
deficit
|
|
(1,128,176)
|
|
(1,145,382)
|
Accumulated other
comprehensive loss
|
|
—
|
|
(2,002)
|
Total stockholders'
equity
|
|
384,430
|
|
398,020
|
Total liabilities and
stockholders' equity
|
|
$
1,024,870
|
|
$
1,007,205
|
|
(1)
During the year ended December 31, 2022,
the Company identified a $30.8 million overstatement of the
valuation allowance recorded against deferred tax assets that
originated in 2020. The Company also recorded an immaterial income
tax adjustment relating to a prior period. The Company has
concluded these items are not material to the previously issued
Consolidated Financial Statements and has therefore corrected these
prior period amounts as presented in the current period
Consolidated Financial Statements. See further discussion within
the Company's Form 10-K for the period ended December 31,
2022.
|
Cars.com
Inc.
|
Consolidated
Statements of Cash Flows
|
(In
thousands)
|
|
|
|
|
|
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021 (1)
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
17,206
|
|
$
10,791
|
Adjustments to
reconcile Net income to Net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
16,380
|
|
16,290
|
Amortization of
intangible assets
|
|
78,014
|
|
85,642
|
Amortization of
accumulated other comprehensive loss on interest rate
swap
|
|
2,362
|
|
5,670
|
Changes in fair value
of contingent consideration
|
|
8,130
|
|
—
|
Stock-based
compensation
|
|
22,342
|
|
21,431
|
Deferred income
taxes
|
|
1,283
|
|
(2,927)
|
Provision for doubtful
accounts
|
|
1,888
|
|
164
|
Amortization of debt
issuance costs
|
|
3,235
|
|
3,360
|
Amortization of
deferred revenue related to Accu-Trade Acquisition
|
|
(4,417)
|
|
—
|
Other, net
|
|
1,202
|
|
1,416
|
Changes in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
Accounts
receivable
|
|
(9,337)
|
|
(5,352)
|
Prepaid expenses and
other assets
|
|
(423)
|
|
6,141
|
Accounts
payable
|
|
2,611
|
|
(1,099)
|
Accrued
compensation
|
|
(4,296)
|
|
5,293
|
Other
liabilities
|
|
(7,669)
|
|
(8,817)
|
Net cash provided by
operating activities
|
|
128,511
|
|
138,003
|
Cash flows from
investing activities:
|
|
|
|
|
Payments for acquisitions,
net of cash acquired
|
|
(64,663)
|
|
(20,258)
|
Purchase of property and
equipment
|
|
(19,714)
|
|
(19,192)
|
Net cash used in
investing activities
|
|
(84,377)
|
|
(39,450)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from Revolving Loan
borrowings
|
|
45,000
|
|
—
|
Payments of long-term
debt
|
|
(41,250)
|
|
(120,000)
|
Payments for stock-based
compensation plans, net
|
|
(6,256)
|
|
(7,194)
|
Repurchases of common
stock
|
|
(48,982)
|
|
—
|
Payments of debt issuance
costs and other fees
|
|
—
|
|
(9)
|
Net cash used in
financing activities
|
|
(51,488)
|
|
(127,203)
|
Net decrease in cash
and cash equivalents
|
|
(7,354)
|
|
(28,650)
|
Cash and cash
equivalents at beginning of period
|
|
39,069
|
|
67,719
|
Cash and cash
equivalents at end of period
|
|
$
31,715
|
|
$
39,069
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid (received)
for income taxes
|
|
$
545
|
|
$
(7,992)
|
Cash paid for interest
and swap
|
|
33,370
|
|
38,342
|
|
(1)
During the year ended December 31, 2022,
the Company recorded an immaterial income tax adjustment relating
to a prior period. The Company has concluded that item is not
material to the previously issued Consolidated Financial Statements
and has therefore corrected these prior period amounts as presented
in the current period Consolidated Financial Statements. See
further discussion within the Company's Form 10-K for the period
ended December 31, 2022.
|
Cars.com
Inc.
|
Non-GAAP
Reconciliations
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended December
31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Reconciliation of
Net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
10,262
|
|
$
(2,884)
|
|
$
17,206
|
|
$
10,791
|
Interest expense,
net
|
|
8,442
|
|
9,367
|
|
35,320
|
|
38,729
|
Income tax expense
(benefit)
|
|
6,200
|
|
(2,565)
|
|
5,370
|
|
(1,308)
|
Depreciation and
amortization
|
|
23,706
|
|
25,402
|
|
94,394
|
|
101,932
|
Stock-based
compensation
|
|
5,390
|
|
5,435
|
|
22,966
|
|
22,195
|
Write-off of long-lived
assets and other
|
|
929
|
|
499
|
|
999
|
|
1,387
|
Severance,
transformation and other exit costs
|
|
960
|
|
748
|
|
4,329
|
|
3,528
|
Transaction-related
items
|
|
(6,370)
|
|
10,814
|
|
6,144
|
|
11,948
|
Adjusted
EBITDA
|
|
$
49,519
|
|
$
46,816
|
|
$
186,728
|
|
$
189,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net cash provided by operating activities to Free cash
flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
37,220
|
|
$
21,777
|
|
$
128,511
|
|
$
138,003
|
Purchase of property
and equipment
|
|
(5,315)
|
|
(1,313)
|
|
(19,714)
|
|
(19,192)
|
Free cash
flow
|
|
$
31,905
|
|
$
20,464
|
|
$
108,797
|
|
$
118,811
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Operating expenses to Adjusted operating expenses for the Three
Months Ended December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
28,875
|
|
$
—
|
|
$
(224)
|
|
$
28,651
|
Product and
technology
|
|
23,166
|
|
—
|
|
(1,765)
|
|
21,401
|
Marketing and
sales
|
|
56,515
|
|
—
|
|
(1,164)
|
|
55,351
|
General and
administrative
|
|
16,128
|
|
(2,373)
|
|
(2,237)
|
|
11,518
|
Depreciation and
amortization
|
|
23,706
|
|
—
|
|
—
|
|
23,706
|
Total operating
expenses
|
|
$
148,390
|
|
$
(2,373)
|
|
$
(5,390)
|
|
$
140,627
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(3,349)
|
|
$
(5,229)
|
|
$
—
|
|
$
(8,578)
|
|
|
|
|
|
|
|
|
|
(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 December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
29,222
|
|
$
—
|
|
$
(179)
|
|
$
29,043
|
Product and
technology
|
|
20,990
|
|
—
|
|
(1,261)
|
|
19,729
|
Marketing and
sales
|
|
51,867
|
|
—
|
|
(1,267)
|
|
50,600
|
General and
administrative
|
|
26,762
|
|
(12,197)
|
|
(2,728)
|
|
11,837
|
Depreciation and
amortization
|
|
25,402
|
|
—
|
|
—
|
|
25,402
|
Total operating
expenses
|
|
$
154,243
|
|
$
(12,197)
|
|
$
(5,435)
|
|
$
136,611
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(9,511)
|
|
$
(136)
|
|
$
—
|
|
$
(9,647)
|
|
|
|
|
|
|
|
|
|
(1)
Includes transaction related costs,
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 Year
Ended December 31, 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
114,959
|
|
$
—
|
|
$
(983)
|
|
$
113,976
|
Product and
technology
|
|
89,015
|
|
—
|
|
(6,851)
|
|
82,164
|
Marketing and
sales
|
|
221,879
|
|
—
|
|
(5,068)
|
|
216,811
|
General and
administrative
|
|
67,593
|
|
(8,943)
|
|
(10,064)
|
|
48,586
|
Depreciation and
amortization
|
|
94,394
|
|
—
|
|
—
|
|
94,394
|
Total operating
expenses
|
|
$
587,840
|
|
$
(8,943)
|
|
$
(22,966)
|
|
$
555,931
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(43,460)
|
|
$
7,946
|
|
$
—
|
|
$
(35,514)
|
|
|
|
|
|
|
|
|
|
(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 Year
Ended December 31, 2021:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenue and
operations
|
|
$
114,200
|
|
$
—
|
|
$
(909)
|
|
$
113,291
|
Product and
technology
|
|
77,316
|
|
—
|
|
(5,660)
|
|
71,656
|
Marketing and
sales
|
|
208,335
|
|
—
|
|
(5,402)
|
|
202,933
|
General and
administrative
|
|
73,562
|
|
(16,874)
|
|
(10,224)
|
|
46,464
|
Depreciation and
amortization
|
|
101,932
|
|
—
|
|
—
|
|
101,932
|
Total operating
expenses
|
|
$
575,345
|
|
$
(16,874)
|
|
$
(22,195)
|
|
$
536,276
|
|
|
|
|
|
|
|
|
|
Total nonoperating
expense, net
|
|
$
(38,855)
|
|
$
(11)
|
|
$
—
|
|
$
(38,866)
|
|
|
|
|
|
|
|
|
|
(1)
Includes transaction related costs,
severance, transformation and other exit costs, and write-off of
long-lived assets and other.
|
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SOURCE Cars.com Inc.