CARS Reports Second Quarter 2020 Results
CHICAGO, July 30, 2020 /PRNewswire/ -- Cars.com Inc. (NYSE: CARS) ("Cars.com," "CARS" or the "Company"), a leading digital marketplace and solutions provider for the automotive industry, today released its financial results for the quarter ended June 30, 2020.
Q2 Financial Highlights
-- Revenue of $102.0 million, down $46.2 million, or 31% year over year
primarily due to the invoice credits of 50% in April 2020 and 30% in May
and June 2020 that we provided to our marketplace customers
-- GAAP Net Loss of $24.6 million, or $0.37 per diluted share, compared to
GAAP Net Loss of $6.0 million, or $0.09 per diluted share in the prior
year period
-- Adjusted Net Income of $8.0 million, or $0.12 per diluted share,
compared to Adjusted Net Income of $20.0 million, or $0.30 per diluted
share in the prior year period
-- Adjusted EBITDA of $23.2 million, or 23% of Revenue, down $20.3 million
year over year
-- Net cash provided by operating activities of $57.6 million for the six
months ended June 30, 2020
-- Free Cash Flow of $48.9 million for the six months ended June 30, 2020
-- $56.9 million of cash and cash equivalents on the balance sheet and
total liquidity of $232.2 million, including availability under our
revolving credit facility, as of June 30, 2020
Q2 Key Metrics Highlights
-- Average Monthly Unique Visitors of 22.8 million, up 6% year over year
-- Traffic (visits) of 144.0 million, up 10% year over year
-- Mobile Traffic was 75% of total Traffic, compared to 71% in the second
quarter of 2019
-- Dealer Customers declined from 18,938 at March 31, 2020, to 18,033 at
June 30, 2020, primarily due to cancellations and lower sales of
marketplace customers as a result of COVID-19, partially offset by
growth in digital solutions customers
-- Monthly average revenue per dealer ("ARPD") was $1,442, down 33% year
over year,?primarily due to financial relief given to dealer customers
in the second quarter as a result of COVID-19
Operational Highlights
-- Brand strength, heightened consumer demand and efficiencies in marketing
generated double digit year over year Traffic growth with substantially
lower spending, demonstrating the value and durability of the CARS brand
-- Leads increased 17% year over year in this pandemic-impacted quarter,
providing greater value and ROI to dealers
-- Conversion rates, from promotional to paid, on our digital solutions
were strong; Online Shopper, our digital retail tool, saw over 50%
conversion and our chat tool, Conversations, had a greater than 30%
conversion rate
-- Received website endorsements from Nissan and others; roll-out of GM
websites began in Q2
-- Continued successful traction of FUEL(TM) In-Market Video product,
positively contributing to both revenue and ARPD
-- Named retail and technology industry financial veteran Sonia Jain as
CFO; elevated seasoned executive Marita Thomas to Chief Communications
Officer
"We executed extremely well in a difficult period by continuing to deliver efficient vehicle sales, industry-leading digital solutions, high-value organic traffic, and an essential online marketplace as consumers and dealers gravitate online. This quarter's results also benefited from swift management actions taken to reduce operating expenses and strengthen our liquidity, while still providing our dealers meaningful financial support, aligned with our longstanding dealer advocacy," said Alex Vetter, President and Chief Executive Officer of CARS.
"Although business conditions remain uncertain, we are confident in the demand for cars as a preferred mode of transport, with new and used car sales bouncing back sequentially during the quarter. This trend is likely to continue with the Centers for Disease Control's recent advisory recommending private car use as a healthier alternative to ride sharing and mass transit. The continued traction of CARS' solutions strategy, including our progress in launching committed GM websites, the contractual uplift from the end of affiliate conversion payments, our liquidity and the flexibility afforded by our recently amended credit agreement, enable us to enter the second half of the year from a position of relative strength."
CARS Commitment to Equality, Diversity, Inclusion and Belonging
CARS has long embraced diversity and inclusion in its core mission and business strategy. We have further committed to making a more profound difference with tangible and sustainable actions in our company, our industry and local communities. We are focused on driving more diverse representation in our industry by partnering with the National Association of Minority Automobile Dealers (NAMAD) to advance its mission in helping Black-owned dealerships thrive through technology and retail solution-based education sessions and training; prioritizing our very important work around diversity, inclusion and belonging by creating a more diverse pipeline of talent and continuing our laser-focus on equitable hiring practices and salary structure at every level. We have also launched CARS Action, which provides volunteer resources and connections to assist our employees in helping to rebuild and revitalize under-resourced communities.
Q2 Results
Revenue for the second quarter of 2020 was $102.0 million, compared to $148.2 million in the prior year period. The decrease was primarily due to the invoice credits of 50% in April 2020 and 30% in May and June 2020 that we provided to our marketplace customers. National advertising revenue declined 17%, primarily due to higher cancellations principally due to the COVID-19 pandemic and related restrictions.
Total operating expenses for the second quarter of 2020 were $119.2 million compared to $147.2 million for the prior year period. This decrease was primarily due to our actions taken to align expenses with revenue in an uncertain COVID-19 environment driven by lower marketing spend and actions taken to reduce headcount related expenses, including temporary wage cuts, furloughing employees and a reduction in force.
Net loss for the second quarter of 2020 was $24.6 million, or $0.37 per diluted share, compared to Net loss of $6.0 million, or $0.09 per diluted share, in the second quarter of 2019. Adjusted Net Income for the second quarter of 2020 was $8.0 million, or $0.12 per diluted share, compared to $20.0 million, or $0.30 per diluted share, in the second quarter of 2019.
Adjusted EBITDA for the second quarter of 2020 was $23.2 million, or 23% of revenue, compared to $43.5 million, or 29% of revenue, for the prior year period. Lower revenue of $46.2 million was partially offset by cost control measures that resulted in $28.0 million decrease in operating expenses year over year. Additionally, the prior year period included a $6.3 million benefit from the non-cash amortization from the unfavorable contract liability associated with our Affiliate contracts.
For the second quarter, Average Monthly Unique Visitors grew 6% year over year and Traffic grew 10% year over year. Despite the reduced marketing spend, we continue to deliver strong traffic, and high-quality leads to our dealer and OEM customers due to greater efficiencies in performance marketing. Mobile traffic grew 16% year over year and accounted for 75% of total Traffic compared to 71% in the prior year.
Dealer customers were 18,033 as of June 30, 2020, a decrease of 5%, compared to 18,938 dealer customers at March 31, 2020, primarily due to COVID-related cancellations of marketplace customers and lower incremental sales partially offset by growth in digital solutions customers.
ARPD was $1,442 in the second quarter of 2020, down 33% from the prior year period. The decrease was primarily due to the invoice credits of 50% in April 2020 and 30% in May and June 2020 that we provided to our marketplace customers.
"We are pleased with how well we performed during this difficult period. Our performance demonstrates the value of our brand strength, organic traffic delivery and diversified revenue streams," said Sonia Jain, Chief Financial Officer of CARS.
She continued, "We believe that the operating environment may remain uncertain given the continuing COVID-19 pandemic. We demonstrated a commitment to implementing cost efficiencies in Q2 and remain focused on maximizing free cash flow. However, we will reinvest in the business through increased marketing spend and selective hiring to drive growth in the second half."
Cash Flow and Balance Sheet
Net cash provided by operating activities for the six-month period ended June 30, 2020 was $57.6 million, compared to $50.8 million in the prior year. Free Cash Flow for the six-month period ended June 30, 2020, was $48.9 million, compared to $41.4 million in the same period last year.
We also secured substantial liquidity and balance sheet flexibility through an amendment to our credit facility which waives our net leverage and interest coverage covenants for the remainder of 2020.
Cash and cash equivalents was $56.9 million and debt outstanding was $646.3 million as of June 30, 2020. Net leverage at June 30, 2020 was 4.1x. Under the terms of our amended credit facility, our net leverage and interest coverage ratios are waived for the balance of 2020.
Outlook
The effects of the COVID-19 pandemic have and will continue to negatively impact our results of operations, cash flow and financial position; however, the extent of the impact remains highly uncertain and depends on the duration of the pandemic, any subsequent resurgence and severity of the measures taken to address the pandemic and the resulting economic consequences. Accordingly, on March 23, 2020, the Company suspended its 2020 guidance.
Q2 Earnings call
As previously announced, management will hold a conference call and webcast today at 9:00 a.m. Central Time. 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 13, 2020.
About CARS
CARS 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 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 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 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 properties include Cars.com, DealerRater®, DealerInspire®, Auto.com(TM), PickupTrucks.com(TM) 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 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 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, (6) unrealized mark-to-market adjustments related to derivative instruments, and (7) 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, (3) unrealized mark-to-market adjustments related to derivative instruments, and (4) 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 fundamental to our business. Traffic to the CARS 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 desktop and mobile properties (responsive sites and mobile apps), measured using Adobe Analytics. Traffic does not include traffic to Dealer Inspire websites. Visits refers to the number of times visitors accessed CARS 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 dealer customers 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 property on an individual device/browser combination or installs one of our mobile apps on an individual device. If a visitor 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. UVs do not include Dealer Inspire 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 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 monthly average number of direct Dealer Customers during the same period.
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 impact of the COVID-19 pandemic on our industry, our dealer customers and our results of operations, our business strategies, strategic alternatives, plans and objectives, market potential, outlook, trends, future financial performance, planned operational and product improvements, potential strategic transactions, liquidity, including expense reduction and draws from our revolving credit facility, and other matters and involve known and unknown risks that are difficult to predict. As a result, our actual financial results, performance, achievements, strategic actions or prospects may differ materially from those expressed or implied by these forward-looking statements. These statements often include words such as "believe," "expect," "project," "anticipate," "outlook," "intend," "strategy," "plan," "estimate," "target," "seek," "will," "may," "would," "should," "could," "forecasts," "mission," "strive," "more," "goal" or similar expressions. 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, current developments regarding the COVID-19 pandemic 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 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 our control.
Forward-looking statements are subject to a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results and strategic actions to differ materially from those expressed in the forward-looking statements contained in this press release. For a detailed discussion of many of these and other risks and uncertainties, see our Annual Report on Form 10-K for the year ended December 31, 2019, our subsequent Quarterly Reports on Form 10-Q and 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 report are intended to be subject to the safe harbor protection provided by the federal securities laws.
Cars.com Inc.
Consolidated Statements of Loss
(In thousands, except per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Revenue:
Direct $83,242 $111,190 $208,603 $226,284
National advertising 16,021 19,296 35,414 39,591
Other 2,746 3,624 6,086 7,573
Retail 102,009 134,110 250,103 273,448
Wholesale 14,097 28,957
Total revenue 102,009 148,207 250,103 302,405
Operating expenses:
Cost of revenue and operations 22,912 24,319 48,942 49,898
Product and technology 12,031 15,339 26,904 33,202
Marketing and sales 32,036 53,740 86,958 114,083
General and administrative 16,460 21,963 30,577 45,851
Affiliate revenue share 4,601 2,176 10,970 4,630
Depreciation and amortization 31,193 29,666 62,154 57,791
Goodwill and intangible asset impairment 905,885
Total operating expenses 119,233 147,203 1,172,390 305,455
Operating (loss) income (17,224) 1,004 (922,287) (3,050)
Nonoperating expense:
Interest expense, net (7,924) (7,711) (15,450) (15,277)
Other income (expense), net 557 9 (8,944) 128
Total nonoperating expense, net (7,367) (7,702) (24,394) (15,149)
Loss before income taxes (24,591) (6,698) (946,681) (18,199)
Income tax expense (benefit) 53 (672) (134,603) (3,142)
Net loss $(24,644) $(6,026) $(812,078) $(15,057)
Weighted-average common
shares outstanding:
Basic 67,256 66,779 67,095 67,181
Diluted 67,256 66,779 67,095 67,181
Loss per share:
Basic $(0.37) $(0.09) $(12.10) $(0.22)
Diluted (0.37) (0.09) (12.10) (0.22)
Cars.com Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
June 30, 2020
December 31, 2019
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $56,945 $13,549
Accounts receivable, net 74,553 101,762
Prepaid expenses 7,065 6,526
Other current assets 2,959 603
Total current assets 141,522 122,440
Property and equipment, net 40,674 43,696
Goodwill 505,885
Intangible assets, net 878,943 1,329,499
Investments and other assets 16,503 26,471
Total assets $1,077,642 $2,027,991
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable $14,404 $12,431
Accrued compensation 10,796 16,738
Current portion of long-term debt 29,780 31,391
Other accrued liabilities 40,019 38,246
Total current liabilities 94,999 98,806
Noncurrent liabilities:
Long-term debt 609,066 611,277
Deferred tax liability 132,996
Other noncurrent liabilities 44,796 43,844
Total noncurrent liabilities 653,862 788,117
Total liabilities 748,861 886,923
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, 2020 and December 31, 2019, respectively
Common Stock at par, $0.01 par value; 300,000 shares authorized; 67,200 and 672 668
66,764 shares issued and outstanding as of June 30, 2020 and
December 31, 2019, respectively
Additional paid-in capital 1,521,062 1,515,109
Accumulated deficit (1,179,145) (367,067)
Accumulated other comprehensive loss (13,808) (7,642)
Total stockholders' equity 328,781 1,141,068
Total liabilities and stockholders' equity $1,077,642 $2,027,991
Cars.com Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended June 30,
2020 2019
Cash flows from operating activities:
Net loss $(812,078) $(15,057)
Adjustments to reconcile Net loss to Net cash provided by operating activities:
Depreciation 11,599 9,078
Amortization of intangible assets 50,555 48,713
Amortization of unfavorable contracts liability (12,600)
Goodwill and intangible asset impairment 905,885
Impairment of non-marketable security 9,447
Unrealized gain on interest rate swap (558)
Amortization of accumulated other comprehensive loss on interest rate swap 300
Stock-based compensation 6,266 6,329
Deferred income taxes (133,064) (18,260)
Provision for doubtful accounts 2,846 2,165
Amortization of debt issuance costs 1,377 632
Other, net 142 495
Changes in operating assets and liabilities:
Accounts receivable 24,363 11,559
Prepaid expenses (540) 1,348
Other current assets (2,368) 10,225
Other assets 589 (16,550)
Accounts payable 1,973 1,909
Accrued compensation (5,942) (6,231)
Other accrued liabilities (933) 10,301
Other noncurrent liabilities (2,230) 16,699
Net cash provided by operating activities 57,629 50,755
Cash flows from investing activities:
Purchase of property and equipment (8,725) (9,354)
Other, net (599)
Net cash used in investing activities (8,725) (9,953)
Cash flows from financing activities:
Proceeds from revolving loan borrowings 165,000 10,000
Payments of debt issuance costs and other fees (3,324)
Payments of long-term debt (166,875) (26,250)
Stock-based compensation plans, net (309) (295)
Repurchases of common stock (40,000)
Other (181)
Net cash used in financing activities (5,508) (56,726)
Net increase (decrease) in cash and cash equivalents 43,396 (15,924)
Cash and cash equivalents at beginning of period 13,549 25,463
Cash and cash equivalents at end of period $56,945 $9,539
Supplemental cash flow information:
Cash paid for income taxes, net of refunds $318 $53
Cash paid for interest 13,889 14,916
Cars.com Inc.
Non-GAAP Reconciliations
(In thousands, except per share data)
(Unaudited)
Three Months Ended June 30, Six Months Ended June 30,
2020 2019 2020 2019
Reconciliation of Net loss to Adjusted EBITDA
Net loss $(24,644) $(6,026) $(812,078) $(15,057)
Interest expense, net 7,924 7,711 15,450 15,277
Income tax expense (benefit) 53 (672) (134,603) (3,142)
Depreciation and amortization 31,193 29,666 62,154 57,791
Goodwill and intangible asset impairment 905,885
Stock-based compensation 4,376 3,465 6,287 6,564
Write-off of long-lived assets and other 95 529 9,578 640
Severance, transformation and other exit costs 4,764 1,058 6,168 7,511
Transaction-related costs 20 2,579 117 4,623
Costs associated with the stockholder activist campaign 5,225 7,920
Unrealized gain on interest rate swap (558) (558)
Adjusted EBITDA* $23,223 $43,535 $58,400 $82,127
Reconciliation of Net loss to Adjusted net income
Net loss $(24,644) $(6,026) $(812,078) $(15,057)
Amortization of intangible assets 25,277 24,621 50,555 48,713
Goodwill and intangible asset impairment 905,885
Stock-based compensation 4,376 3,465 6,287 6,564
Write-off of long-lived assets and other 95 529 9,578 640
Severance, transformation and other exit costs 4,764 1,058 6,168 7,511
Transaction-related costs 20 2,579 117 4,623
Costs associated with the stockholder activist campaign 5,225 7,920
Unrealized gain on interest rate swap (558) (558)
Tax impact of adjustments (1,366) (11,501) (136,226) (20,218)
Adjusted net income* $7,964 $19,950 $29,728 $40,696
Adjusted net income per share, diluted $0.12 $0.30 $0.44 $0.60
Weighted-average common shares outstanding, diluted** 67,875 67,007 67,563 67,628
Reconciliation of Net cash provided by operating activities to Free cash flow
Net cash provided by operating activities $28,737 $12,366 $57,629 $50,755
Purchase of property and equipment (2,970) (5,991) (8,725) (9,354)
Free cash flow $25,767 $6,375 $48,904 $41,401
* There was no unfavorable contract liability amortization during 2020 as it was fully amortized as of September 30, 2019. Additionally for 2019, 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 six months ended June 30, 2020 and June 30, 2019.
Cars.com Inc.
Supplemental Information
(In thousands)
(Unaudited)
Expense category for the Three Months Ended June 30, 2020:
As Reported
Adjustments (1)
Stock-Based Compensation As Adjusted
Cost of revenue and operations $22,912
$ - $(164) $22,748
Product and technology 12,031 (921) 11,110
Marketing and sales 32,036 (983) 31,053
General and administrative 16,460 (4,879) (2,308) 9,273
Affiliate revenue share 4,601 4,601
Depreciation and amortization 31,193 31,193
Goodwill and intangible asset impairment -
Total operating expenses $119,233 $(4,879) $(4,376) $109,978
Total nonoperating expense, net $(7,367)
$ -
$ - $(7,367)
(1) Includes severance, transformation and other exit costs, write-off of long-lived assets and other, and transaction-related costs.
Expense category for the Three Months Ended June 30, 2019:
As Reported
Adjustments (1)
Stock-Based Compensation As Adjusted
Cost of revenue and operations $24,319
$ - $(80) $24,239
Product and technology 15,339 (788) 14,551
Marketing and sales 53,740 (553) 53,187
General and administrative 21,963 (9,391) (2,044) 10,528
Affiliate revenue share 2,176 2,176
Depreciation and amortization 29,666 29,666
Goodwill and intangible asset impairment -
Total operating expenses $147,203 $(9,391) $(3,465) $134,347
Total nonoperating expense, net $(7,702)
$ -
$ - $(7,702)
(1) Includes costs associated with the stockholder activist campaign, transaction-related costs, severance, transformation and other exit costs, write-off of long-lived assets and other.
Expense category for the Six Months Ended June 30, 2020:
As Reported
Adjustments (1)
Stock-Based Compensation As Adjusted
Cost of revenue and operations $48,942
$ - $(201) $48,741
Product and technology 26,904 (1,487) 25,417
Marketing and sales 86,958 (1,479) 85,479
General and administrative 30,577 (6,416) (3,120) 21,041
Affiliate revenue share 10,970 10,970
Depreciation and amortization 62,154 62,154
Goodwill and intangible asset impairment 905,885 (905,885) -
Total operating expenses $1,172,390 $(912,301) $(6,287) $253,802
Total nonoperating expense, net $(24,394) $9,447
$ - $(14,947)
(1) Includes write-off and impairments of goodwill, intangible assets and other long-lived assets and other, severance, transformation and other exit costs, and transaction-related costs.
Expense category for the Six Months Ended June 30, 2019:
As Reported
Adjustments (1)
Stock-Based Compensation As Adjusted
Cost of revenue and operations $49,898
$ - $(147) $49,751
Product and technology 33,202 (1,551) 31,651
Marketing and sales 114,083 (998) 113,085
General and administrative 45,851 (20,694) (3,868) 21,289
Affiliate revenue share 4,630 4,630
Depreciation and amortization 57,791 57,791
Goodwill and intangible asset impairment -
Total operating expenses $305,455 $(20,694) $(6,564) $278,197
Total nonoperating expense, net $(15,149)
$ -
$ - $(15,149)
(1) Includes costs associated with the stockholder activist campaign, severance, transformation and other exit costs, transaction-related costs, write-off of long-lived assets and other.
CARS Investor Relations Contact:
Kamal Hamid
khamid@cars.com
312.601.5110
CARS Media Contact:
Marita Thomas
mthomas@cars.com
312.601.5692
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SOURCE Cars.com Inc.
