Cars.com Reports Third Quarter 2019 Results
CHICAGO, Nov. 6, 2019 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS) ("Cars.com" or the "Company"), a leading digital marketplace and solutions provider for the automotive industry, today released its financial results for the quarter ended September 30, 2019.
Q3 Financial Highlights
-- Revenue of $152.1 million, down $17.2 million, or 10%, year-over-year,
in line with expectations
-- Non-cash goodwill and intangible asset impairment charge of $431.3
million, net of tax, triggered by a decline in share price following the
completion of the strategic alternatives review, resulted in net loss of
($426.2) million, or ($6.38) per diluted share
-- Adjusted Net Income of $21.3 million, or $0.32 per diluted share,
compared to Adjusted Net Income of $38.4 million, or $0.55 per diluted
share, in the prior year
-- Adjusted EBITDA of $45.9 million, or 30% of revenue, down $16.3 million
year-over-year, in line with expectations
-- Net cash provided by operating activities of $80.6 million for the nine
months ended September 30, 2019, with Free Cash Flow of $65.1 million
-- Completed amendment to existing credit facility, which increases the
maximum total net leverage to 4.50x from 3.75x, increasing flexibility
and further strengthening liquidity position
Q3 Key Metrics and Highlights
-- Average monthly unique visitors of 23.1 million, up 22% year-over-year
-- Traffic (visits) of 144.4 million, up 27% year-over-year
-- Mobile traffic was 73% of total traffic, compared to 68% in the third
quarter of 2018
-- Dealer customers of 18,635 as of September 30, 2019, down compared to
18,891 as of June 30, 2019, driven by affiliate conversions and a
decline in direct marketplace customers, partially offset by growth in
digital solutions customers
-- Direct monthly average revenue per dealer ("ARPD") was $2,069, down 2%
year-over-year, excluding revenue from dealer websites and related
digital solutions from Dealer Inspire; when revenue from dealer websites
and related digital solutions is included, ARPD was $2,174 for the third
quarter of 2019
Operational Highlights
-- Drove audience market share gains, enabled by record organic traffic and
sector leadership in SEO; the third quarter of 2019 marked the strongest
quarter for both SEO traffic and leads in 20 years
-- Completed the final affiliate conversions, providing 100% control over
go-to market capabilities for the first time, expected to unlock $50
million in incremental Free Cash Flow impact beginning in 2020
-- Achieved OEM certifications from General Motors, Hyundai Motor America
and Mitsubishi Motors North America endorsing Dealer Inspire as a
website provider, providing opportunity to sell to over 5,000 dealers
across North America
-- Strong Dealer Inspire revenue continues, achieving 25% year-over-year
growth in Q3
"With the affiliate conversions complete, our traffic and solutions strategy ramping, the tech transformation progressing on schedule, and our continued focus on operational efficiencies, we remain on track to deliver our 2019 outlook," said Alex Vetter, President and Chief Executive Officer of Cars.com.
Financial Results
Revenue for the third quarter of 2019 was $152.1 million, compared to $169.3 million in the prior year period. This decrease was primarily due to a decline in dealer customers and a $7.9 million decline in national advertising revenue, resulting from a reduction in upfront commitments for 2019 and lower close rates from OEMs. These declines were partially offset by growth in digital solutions revenue as well the uplift from affiliate conversions.
In the third quarter, the Company recorded a non-cash goodwill and intangible asset impairment charge of $461.5 million, based on an assessment triggered by a decline in share price following the completion of the strategic alternatives review. The Company does not expect the impairment charge to have any impact on future operations, affect its liquidity, affect cash flows from operating activities, or affect compliance with the financial covenants set forth in its credit agreement. The cash benefit from the deductible goodwill for tax purposes remains intact.
Total operating expenses for the third quarter of 2019 were $599.8 million, or $138.3 million excluding the impairment charge, compared to $141.0 million for the prior year period. This decrease in expense was primarily due to the Company's continued focus on operational efficiencies.
Net loss for the third quarter of 2019 was ($426.2) million, or ($6.38) per diluted share, compared to net income of $15.8 million, or $0.23 per diluted share, in the third quarter of 2018. Adjusted Net Income for the third quarter of 2019 was $21.3 million, or $0.32 per diluted share, compared to $38.4 million, or $0.55 per diluted share, in the third quarter of 2018.
Adjusted EBITDA for the third quarter of 2019 was $45.9 million, or 30% of revenue, compared to $62.2 million, or 37% of revenue, for the prior year period.
For the third quarter, average monthly unique visitors grew 22% year-over-year and total traffic grew 27% year-over-year, supported by product innovations and investments in and efficiencies gained in SEO, brand awareness and paid channels. Mobile traffic grew 37% year-over-year and accounted for 73% of total traffic compared to 68% in the prior year.
Dealer customers were 18,635 as of September 30, 2019, a decline of 1%, compared to 18,891 dealer customers as of June 30, 2019, primarily due to a decline of 198 affiliate customers, as well as a decline in direct marketplace dealer customers, partially offset by growth in digital solutions customers.
ARPD was $2,174 in the third quarter of 2019. ARPD excluding revenue from dealer websites and related digital solutions from Dealer Inspire was $2,069, down 2% year-over-year.
"Our results were in line with expectations this quarter. We continue to generate significant Free Cash Flow, thanks to the strength of our business model and continued focus on operational efficiency. Additionally, the recent amendment to our credit facility provides flexibility to respond to marketplace changes, if and when they arise, and demonstrates the continuation of our strong financial position," said Becky Sheehan, Chief Financial Officer of Cars.com.
Cash Flow and Balance Sheet
Net cash provided by operating activities for the nine-month period ended September 30, 2019 was $80.6 million, compared to $121.1 million in the prior year. Free Cash Flow for the nine-month period ended September 30, 2019 was $65.1 million, compared to $111.1 million in the same period last year. Cash flow was impacted in both periods by payments associated with the early conversion of affiliate markets.
Cash and cash equivalents was $19.8 million and debt outstanding was $666.6 million as of September 30, 2019. During the nine-month period, the Company paid down $29.7 million of indebtedness, net of borrowings. Net leverage at September 30, 2019 was 3.4x, calculated in accordance with the Company's credit agreement.
In October, the Company amended its existing credit agreement to reset the total net leverage covenant during the remaining term of the credit agreement while preserving the favorable pricing structure from the original agreement. The amendment increased the Company's maximum total net leverage ratio from 3.75x to 4.50x with incremental step downs through the maturity of the term loan and the revolving loan on May 31, 2022.
Outlook
The Company reaffirms the previously communicated 2019 outlook of revenue declines between 6% and 9%, with Adjusted EBITDA margin between 27% and 29%.
Q3 Earnings Call
As previously announced, management will hold a conference call and webcast today at 9:00 a.m. CST. This webcast may be accessed at investor.cars.com. A replay of the webcast and the slideshow will be available at this website following the conclusion of the call until November 20, 2019.
About Cars.com
Cars.com is a leading digital marketplace and solutions provider for the automotive industry that connects car shoppers with sellers. Launched in 1998 with the flagship marketplace site Cars.com and headquartered in Chicago, the Company empowers shoppers with the data, resources and digital tools needed to make informed buying decisions and seamlessly connect with automotive retailers. In a rapidly changing market, Cars.com 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 2018, Cars.com acquired Dealer Inspire®, an innovative technology company building solutions that future-proof dealerships with more efficient operations, a faster and easier car buying process, and connected digital experiences that sell and service more vehicles.
Cars.com properties include DealerRater®, Dealer Inspire®, Auto.com(TM), PickupTrucks.com® and NewCars.com®. For more information, visit www.Cars.com.
Non-GAAP Financial Measures
This earnings release discusses Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Net Income, Adjusted Net Income per diluted share and Free Cash Flow. These 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 our credit agreement and includes adjustments such as the items defined below and other further adjustments, which are defined in the credit agreement. These non-GAAP financial measures are frequently used by our lenders, securities analysts, investors and other interested parties to evaluate companies in our industry. For a reconciliation of the non-GAAP measures presented in this earnings release to their most directly comparable financial measure prepared in accordance with GAAP, see "Non-GAAP Reconciliations" below.
Other companies may define or calculate these measures differently, limiting their usefulness as comparative measures. Because of these limitations, these non-GAAP financial measures should not be considered in isolation or as substitutes for performance measures calculated in accordance with GAAP. Definitions of these non-GAAP financial measures and reconciliations to the most directly comparable GAAP financial measures are presented in the tables below.
We define Adjusted EBITDA as net income (loss) before (1) interest expense (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, severance, transformation and other exit costs and write-off and impairments of goodwill, intangible assets and other long-lived assets. Amortization of unfavorable contracts liability is not adjusted out of Adjusted EBITDA.
We define Adjusted Net Income as net income (loss) excluding the after-tax impact of (1) amortization of intangible assets, (2) stock-based compensation expense, and (3) certain other items, such as transaction-related costs, costs associated with the stockholder activist campaign, severance, transformation and other exit costs and write-off and impairments of goodwill, intangible assets and other long-lived assets. Amortization of unfavorable contracts liability is not adjusted out of Adjusted Net Income.
Transaction-related costs are certain expense items resulting from actual or potential transactions such as business combinations, mergers, acquisitions, dispositions, spin-offs, financing transactions, and other strategic transactions, including, without limitation, (1) transaction-related bonuses and (2) expenses for advisors and representatives such as investment bankers, consultants, attorneys and accounting firms. Transaction-related costs may also include, without limitation, transition and integration costs such as retention bonuses and acquisition-related milestone payments to acquired employees, in addition to consulting, compensation and other incremental costs associated with integration projects.
We define Free Cash Flow as net cash provided by operating activities less capital expenditures, including purchases of property and equipment and capitalization of internal-use software and website development costs.
Key Metric Definitions
Traffic (Visits). Traffic is critical to our business. 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 defined as the number of visits to Cars.com desktop and mobile properties (responsive sites and mobile apps), using Adobe Analytics. Visits refers to the number of times visitors accessed Cars.com properties during the period, no matter how many visitors make up those visits. Traffic provides an indication of our consumer reach. Although our consumer reach does not directly result in revenue, we believe our ability to reach in-market car shoppers is attractive to our dealers and national advertisers.
Average Monthly Unique Visitors ("UVs"). Growth in unique visitors and consumer traffic to our network of websites and mobile apps increases the number of impressions, clicks, leads and other events we can monetize to generate revenue. We define UVs in a given month as the number of distinct visitors that engage with our platform during that month. Visitors are identified when a user first visits an individual Cars.com property on an individual device/browser combination or installs one of our mobile apps on an individual device. If an individual accesses more than one of our web properties or apps or uses more than one device or browser, each of those unique property/browser/app/device combinations counts towards the number of UVs. We measure UVs using Adobe Analytics.
Dealer Customers. Dealer Customers represent dealerships using our products as of the end of each reporting period. Each physical or virtual dealership location is counted separately, whether it is a single-location proprietorship or part of a large consolidated dealer group. Multi-franchise dealerships at a single location are counted as one dealer.
Average Revenue Per Dealer ("ARPD"). We believe that our ability to grow ARPD is an indicator of the value proposition of our products. We define ARPD as Direct retail revenue during the period divided by the average number of direct Dealer Customers during the same period. Beginning the first quarter of 2019, this key operating metric includes revenue from dealer websites and related digital solutions. ARPD prior to the first quarter of 2019 has not been recast to include Dealer Inspire 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 our business strategies, strategic alternatives review process, plans and objectives, market potential, outlook, trends, future financial performance, planned operational and product improvements, potential strategic transactions, liquidity 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," "intend," "strategy," "plan," "estimate," "target," "seek," "will," "may," "would," "should," "could," "forecasts," "mission," "strive," "more," "goal" or similar expressions. Forward-looking statements are based on our current expectations, beliefs, strategies, estimates, projections and assumptions, based on our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we think are appropriate. Such forward-looking statements are necessarily based upon estimates and assumptions that, while considered reasonable by the Company and its management based on their knowledge and understanding of the business and industry, are inherently uncertain. These statements are expressed in good faith and we believe these judgments are reasonable. However, you should understand that these statements are not guarantees of strategic action, performance or results. Our actual results could differ materially from those expressed in the forward-looking statements. Given these uncertainties, forward-looking statements should not be relied on in making investment decisions. Comparisons of results between current and prior periods are not intended to express any future trends, or indications of future performance, unless expressed as such, and should only be viewed as historical data. Whether or not any such forward-looking statement is in fact achieved will depend on future events, some of which are beyond our control.
Forward-looking statements are subject to a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from those expressed in the forward-looking statements contained in this press release. For a detailed discussion of many of these and other risks and uncertainties, see our Annual Report on Form 10-K for the year ended December 31, 2018, our subsequent Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K and our other filings with the Securities and Exchange Commission available on our website at investor.cars.com or via EDGAR at www.sec.gov. All forward-looking statements contained in this press release are qualified by these cautionary statements. You should evaluate all forward-looking statements made in this press release in the context of these risks and uncertainties. The forward-looking statements contained in this press release are based only on information currently available to us and speak only as of the date of this press release. We undertake no obligation, other than as may be required by law, to update or revise any forward-looking or cautionary statements to reflect changes in assumptions, the occurrence of events, unanticipated or otherwise, or changes in future operating results over time or otherwise.
The forward-looking statements in this press release are intended to be subject to the safe harbor protection provided by the federal securities laws.
Cars.com Inc.
Consolidated Statements of (Loss) Income
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Revenue:
Direct $122,878 $119,510 $349,162 $336,521
National advertising 20,161 28,107 59,752 82,155
Other 3,642 4,010 11,215 12,152
Retail 146,681 151,627 420,129 430,828
Wholesale 5,409 17,685 34,366 66,953
Total revenue 152,090 169,312 454,495 497,781
Operating expenses:
Cost of revenue and operations 25,089 23,808 74,987 64,293
Product and technology 14,923 15,616 48,125 51,215
Marketing and sales 50,789 55,825 164,872 180,168
General and administrative 13,414 15,131 59,265 53,704
Affiliate revenue share 5,158 4,097 9,788 11,193
Depreciation and amortization 28,970 26,504 86,761 77,154
Goodwill and intangible asset
impairment 461,463 461,463
Total operating expenses 599,806 140,981 905,261 437,727
Operating (loss) income (447,716) 28,331 (450,766) 60,054
Nonoperating (expense) income:
Interest expense, net (7,712) (7,005) (22,989) (20,305)
Other income, net 1,402 65 1,530 76
Total nonoperating expense,
net (6,310) (6,940) (21,459) (20,229)
(Loss) income before income
taxes (454,026) 21,391 (472,225) 39,825
Income tax (benefit) expense (27,869) 5,594 (31,011) 10,373
Net (loss) income $(426,157) $15,797 $(441,214) $29,452
Weighted-average common
shares outstanding:
Basic 66,769 69,652 67,043 70,900
Diluted 66,769 70,029 67,043 71,153
(Loss) earnings per share:
Basic $(6.38) $0.23 $(6.58) $0.42
Diluted (6.38) 0.23 (6.58) 0.41
Cars.com Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
September 30, 2019
December 31, 2018
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $19,773 $25,463
Accounts receivable, net 101,782 108,921
Prepaid expenses 7,592 9,264
Other current assets 425 10,289
Total current assets 129,572 153,937
Property and equipment, net 42,857 41,482
Goodwill 505,885 884,449
Intangible assets, net 1,354,777 1,510,410
Investments and other assets 26,788 10,271
Total assets $2,059,879 $2,600,549
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable $6,280 $11,631
Accrued compensation 14,588 16,821
Unfavorable contracts liability 18,885
Current portion of long-term debt 32,518 26,853
Other accrued liabilities 68,419 36,520
Total current liabilities 121,805 110,710
Noncurrent liabilities:
Long-term debt 630,913 665,306
Deferred tax liability 125,175 177,916
Other noncurrent liabilities 40,501 19,694
Total noncurrent liabilities 796,589 862,916
Total liabilities 918,394 973,626
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, 2019 and December 31, 2018,
respectively
Common Stock at par, $0.01 par value; 300,000 shares authorized; 66,678 667 683
and 68,262 shares issued and outstanding as of September 30, 2019 and
December 31, 2018, respectively
Additional paid-in capital 1,512,713 1,508,001
(Accumulated deficit) retained earnings (362,957) 118,239
Accumulated other comprehensive loss (8,938)
Total stockholders' equity 1,141,485 1,626,923
Total liabilities and stockholders' equity $2,059,879 $2,600,549
Cars.com Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended September 30,
2019 2018
Cash flows from operating
activities:
Net (loss) income $(441,214) $29,452
Adjustments to reconcile Net (loss)
income to Net cash provided by
operating activities:
Depreciation 13,427 9,195
Amortization of intangible assets 73,334 67,959
Amortization of unfavorable
contracts liability (18,885) (18,900)
Goodwill and intangible asset
impairment 461,463
Stock-based compensation 5,258 7,495
Deferred income taxes (52,741) 7,137
Provision for doubtful accounts 3,844 3,451
Amortization of debt issuance costs 959 971
Other, net 411 762
Changes in operating assets and
liabilities:
Accounts receivable 3,295 1,119
Prepaid expenses 1,672 66
Other current assets 9,992 330
Other assets (16,517) 602
Accounts payable (5,363) (2,397)
Accrued compensation (2,233) (3,363)
Other accrued liabilities 28,627 18,306
Other noncurrent liabilities 15,221 (1,104)
Net cash provided by operating
activities 80,550 121,081
Cash flows from investing
activities:
Purchase of property and equipment (15,409) (9,966)
Payment for DI Acquisition, net (157,153)
Other, net (599)
Net cash used in investing
activities (16,008) (167,119)
Cash flows from financing
activities:
Proceeds from issuance of long-term
debt 10,000 195,000
Payments of long-term debt (39,688) (71,875)
Stock-based compensation plans, net (352) (477)
Repurchases of common stock (40,000) (76,681)
Transactions with TEGNA, net (192) (2,683)
Net cash (used in) provided by
financing activities (70,232) 43,284
Net decrease in cash and cash
equivalents (5,690) (2,754)
Cash and cash equivalents at
beginning of period 25,463 20,563
Cash and cash equivalents at end of
period $19,773 $17,809
Supplemental cash flow information:
Cash paid for income taxes, net of
refunds $168 $500
Cash paid for interest 22,413 19,472
Cars.com Inc.
Non-GAAP Reconciliations
(In thousands, except per share data)
(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,
2019 2018 2019 2018
Reconciliation of Net (loss) income to Adjusted EBITDA
Net (loss) income $(426,157) $15,797 $(441,214) $29,452
Interest expense, net 7,712 7,005 22,989 20,305
Income tax (benefit) expense (27,869) 5,594 (31,011) 10,373
Depreciation and
amortization 28,970 26,504 86,761 77,154
Goodwill and intangible
asset impairment 461,463 461,463
Stock-based compensation (1,160) 3,019 5,404 7,495
Severance, transformation
and other exit costs 2,114 175 9,625 1,272
Costs associated with the
stockholder activist
campaign 905 2,869 8,825 7,766
Transaction-related costs 897 4,623 12,030
Write-off of long-lived
assets and other (111) 330 529 691
Adjusted EBITDA* $45,867 $62,190 $127,994 $166,538
Reconciliation of Net (loss) income to Adjusted net income
Net (loss) income $(426,157) $15,797 $(441,214) $29,452
Amortization of intangible
assets 24,621 23,212 73,334 67,959
Goodwill and intangible
asset impairment 461,463 461,463
Stock-based compensation (1,160) 3,019 5,404 7,495
Severance, transformation
and other exit costs 2,114 175 9,625 1,272
Costs associated with the
stockholder activist
campaign 905 2,869 8,825 7,766
Transaction-related costs 897 4,623 12,030
Write-off of long-lived
assets and other (111) 330 529 691
Tax impact of adjustments (40,347) (7,879) (60,565) (25,504)
Adjusted net income* $21,328 $38,420 $62,024 $101,161
Adjusted net income per
share, diluted $0.32 $0.55 $0.92 $1.42
Weighted-average common
shares outstanding,
diluted** 66,935 70,029 67,395 71,153
Reconciliation of Net cash provided by operating activities to Free cash flow
Net cash provided by
operating activities $29,795 $50,457 $80,550 $121,081
Purchase of property and
equipment (6,055) (3,549) (15,409) (9,966)
Free cash flow $23,740 $46,908 $65,141 $111,115
* Amortization of unfavorable
contracts liability is not
adjusted out of Adjusted EBITDA
or Adjusted net income.
** Weighted-average common
shares outstanding, diluted,
includes shares excluded from
GAAP loss per share due to the
net loss position for the three
and nine months ended September
30, 2019.
Cars.com Inc.
Supplemental Information
(In thousands)
(Unaudited)
Expense category for the Three Months Ended September 30, 2019:
As Reported
Adjustments (1)
Stock-Based
As Adjusted
Compensation
Cost of revenue and operations $25,089
$ - $79 $25,168
Product and technology 14,923 893 15,816
Marketing and sales 50,789 (172) 50,617
General and administrative 13,414 (4,308) 360 9,466
Affiliate revenue share 5,158 5,158
Depreciation and amortization 28,970 28,970
Goodwill and intangible asset impairment 461,463 (461,463)
Total operating expenses $599,806 $(465,771) $1,160 $135,195
Total nonoperating expense, net $6,310 $1,400
$ - $7,710
(1) Includes write-off and impairments of goodwill, intangible assets and other long-lived assets and other, severance,
transformation and other exit costs and costs associated with the stockholder activist campaign.
Expense category for the Three Months Ended September 30, 2018:
As Reported
Adjustments (1)
Stock-Based
As Adjusted
Compensation
Cost of revenue and operations $23,808
$ - $(76) $23,732
Product and technology 15,616 (571) 15,045
Marketing and sales 55,825 (583) 55,242
General and administrative 15,131 (4,271) (1,789) 9,071
Affiliate revenue share 4,097 4,097
Depreciation and amortization 26,504 26,504
Goodwill and intangible asset impairment
Total operating expenses $140,981 $(4,271) $(3,019) $133,691
Total nonoperating expense, net $6,940
$ -
$ - $6,940
(1) Includes costs associated with the stockholder activist campaign, transaction-related costs, write-off of long-lived
assets and other, and severance, transformation and other exit costs.
Expense category for the Nine Months Ended September 30, 2019:
As Reported
Adjustments (1)
Stock-Based
As Adjusted
Compensation
Cost of revenue and operations $74,987
$ - $(68) $74,919
Product and technology 48,125 (658) 47,467
Marketing and sales 164,872 (1,170) 163,702
General and administrative 59,265 (25,002) (3,508) 30,755
Affiliate revenue share 9,788 9,788
Depreciation and amortization 86,761 86,761
Goodwill and intangible asset impairment 461,463 (461,463)
Total operating expenses $905,261 $(486,465) $(5,404) $413,392
Total nonoperating expense, net $21,459 $1,400
$ - $22,859
(1) Includes write-off and impairments of goodwill, intangible assets and other long-lived assets and other, severance,
transformation and other exit costs, costs associated with the stockholder activist campaign and transaction-related costs.
Expense category for the Nine Months Ended September 30, 2018:
As Reported
Adjustments (1)
Stock-Based
As Adjusted
Compensation
Cost of revenue and operations $64,293
$ - $(175) $64,118
Product and technology 51,215 (1,386) 49,829
Marketing and sales 180,168 (1,351) 178,817
General and administrative 53,704 (21,759) (4,583) 27,362
Affiliate revenue share 11,193 11,193
Depreciation and amortization 77,154 77,154
Goodwill and intangible asset impairment
Total operating expenses $437,727 $(21,759) $(7,495) $408,473
Total nonoperating expense, net $20,229
$ -
$ - $20,229
(1) Includes transaction-related costs, costs associated with the stockholder activist campaign, severance,
transformation and other exit costs, write-off of long-lived assets and other.
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SOURCE Cars.com Inc.
