CHICAGO, Nov. 7, 2018 /PRNewswire/ -- Cars.com Inc.
(NYSE: CARS) ("Cars.com" or the "Company"), a leading digital
automotive marketplace, today released its financial results for
the quarter ended September 30,
2018.
Q3 Financial Highlights
- Total revenue of $169.3 million,
up $9.4 million, or 6%,
year-over-year
- Net income of $15.8 million, or
$0.23 per diluted share, down
$5.2 million, or $0.06 per diluted share, year-over-year
- Adjusted net income of $38.4
million, or $0.55 per diluted
share, up $4.1 million, or
$0.07 per diluted share,
year-over-year
- Adjusted EBITDA of $62.2 million,
or 37% of revenue, down $0.9 million
year-over-year
- Net cash provided by operating activities of $121.1 million for the nine months ended
September 30, 2018, with free cash
flow of $111.1 million
Q3 Key Metric Highlights
- Average monthly unique visitors of 18.9 million, up 10%
year-over-year
- Traffic (visits) of 113.8 million, up 12% year-over-year
- Mobile traffic grew 28% year-over-year and accounted for 68% of
total traffic compared to 59% in the third quarter of 2017
- Dealer customer count of 20,407 as of September 30, 2018, compared with 20,720 as of
June 30, 2018; Direct dealer
customers of 17,011 as of September 30,
2018 compared with 16,592 as of June
30, 2018
- Direct monthly average revenue per dealer ("ARPD") of
$2,116, up 8% year-over-year;
excluding affiliate conversions ARPD grew 1%
- Total average vehicle listings of 4.7 million
Operational Highlights
- McClatchy, tronc and Washington Post markets fully converted as
of October 1, 2018
- Dealer Inspire revenue grew 42% in the third quarter of 2018
year-over-year on a pro forma basis
- Q3 integrated product marketing effort drove outsized business
impact including a 22% growth in conversion and overall brand
awareness up 8% year-over-year
- Dealer solutions strategy building ARPD and strengthening
revenues with franchise dealers:
-
- Dealer Inspire named certified advertising partner by General
Motors and enabled to offer co-op digital advertising
solutions
- DealerRater successful in securing co-op endorsements across
multiple OEMs
- Launched Social Sales Drive enabling dealers to maximize the
value of their listings through leading social channels and a
managed chat solution resulting in increased value delivery that
led to 70% lower cancellation rates among franchise dealers
- Cars Social units grew 30% quarter-over-quarter
- Progress on sales transformation:
-
- Automation of next in class sales enablement tools and customer
reporting to streamline and increase sales productivity
- Cross functional team leveraging third-party expertise on
product packaging and pricing strategies to better align with
dealer preferences to capture value
- Optimizing sales resources and go-to-market strategy
- Continued utilization of share repurchase program; 3.0 million
shares purchased year to date, at an average price of $25.69
"We can take pride in a number of wins this quarter, including
our continued strength in organic traffic, uplift in ARPD,
successes with Matchmaker, Social and Dealer Inspire products and
winning OEM co-op endorsements that further incentivize dealers to
subscribe to our solutions," said Alex
Vetter, President and Chief Executive Officer of Cars.com.
"We recognize that OEM pullbacks and dealer margin pressures have
created a challenging environment, yet we remain confident that our
strategy to combine our increasing audience with leading digital
solutions will improve dealer count and best position our dealers
to efficiently compete for sales."
Financial Results
"Our continuing focus on cost optimization and efficiencies are
contributing to our industry leading profit margins and cash flow,"
said Becky Sheehan, Chief Financial
Officer of Cars.com. "We completed our externally facilitated
technology review and are moving forward with implementation. The
resulting operating cash flow benefits will provide us further
resources for reinvestment for growth or share repurchases."
Revenue for the third quarter of 2018 was $169.3 million, compared to $159.9 million in the prior year period. Dealer
Inspire and LDM contributed $15.8
million to direct revenue. In addition, the conversions of
affiliate markets contributed $25.6
million to direct revenue, while reducing wholesale revenue
$22.6 million ($5.4 million of this reduction was related to the
amortization of unfavorable contracts liability, which is now
recorded as a reduction of affiliate revenue share expense).
Total operating expenses for the third quarter of 2018 were
$141.0 million, compared to
$120.5 million for the prior year
period. This increase was driven by the addition of Dealer Inspire
($16.9 million), a $3.5 million increase in non-recurring costs, a
$2.0 million increase in stock-based
compensation, as well as cost increases related to the affiliate
conversions and planned marketing investments. These increases were
partially offset by efficiencies in product and technology.
Net income for the third quarter of 2018 was $15.8 million, or $0.23 per diluted share, compared to $21.0 million, or $0.29 per diluted share, in the third quarter of
2017. Adjusted net income for the third quarter of 2018 was
$38.4 million, or $0.55 per diluted share, compared to $34.3 million, or $0.48 per diluted share, in the third quarter of
2017.
Adjusted EBITDA for the third quarter of 2018 was $62.2 million, or 37% of revenue, compared to
$63.1 million, or 39% of revenue, for
the prior year period.
For the third quarter, average monthly unique visitor count grew
10% year-over-year and total traffic grew 12% year-over-year
supported by investments in marketing, brand strength and continued
strong SEO growth. Mobile traffic grew 28% year-over-year and
accounted for 68% of total traffic compared to 59% in the prior
year.
Dealer customers of 20,407 as of September 30, 2018 declined 2% sequentially
compared to dealer count of 20,720 as of June 30, 2018. Direct dealer customers of 17,011
increased 419 from June 30, 2018
resulting from 744 dealers converted from affiliate markets,
partially offset by higher cancellation rates in previously
converted markets and lower overall sales.
Direct ARPD grew 8% year-over-year in the third quarter of 2018,
driven by the conversion of affiliate dealer customers in large
markets drawing higher price points. Excluding the impact of
affiliate market conversions, ARPD was up 1%, driven by new product
sales to existing customers.
Cash Flow and Balance Sheet
Net cash provided by operating activities for the nine-month
period ended September 30, 2018 was
$121.1 million, compared with
$147.2 million in the prior year.
Free cash flow for the nine-month period ended September 30, 2018 was $111.1 million, compared with $119.6 million in the same period last year.
Impacting current year cash flow was an increase in non-recurring
expenses, lower adjusted EBITDA and incremental interest, offset in
part by lower capital expenditures.
Cash and cash equivalents was $17.8
million and debt outstanding was $706.9 million as of September 30, 2018. During the nine-month period
ended September 30, 2018, the Company
utilized its share repurchase program to purchase 3.0 million
shares at an average price of $25.69
for a total of $77.2 million. In
addition, during the nine-month period, the Company borrowed
$165 million to fund the acquisition
of Dealer Inspire and paid down $41.9
million of indebtedness, net of revolver borrowings. Net
leverage at September 30, 2018 was
2.9x, calculated in accordance with the Company's credit
agreement.
2018 Outlook
We anticipate being at the lower end of the previously
communicated range for revenue growth of approximately 6 to 7%,
with adjusted EBITDA margin remaining unchanged at approximately
34%.
Q3 Earnings Call
As previously announced, management will hold a conference call
and webcast today at 7:30 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 21, 2018.
About Cars.com
Cars.com™ is a leading two-sided digital automotive marketplace
that creates meaningful connections between buyers and sellers.
Launched in 1998 and headquartered in Chicago, the Company
empowers consumers with resources and information to make informed
buying decisions and enables advertising partners with innovative
digital solutions and data-driven intelligence to increase
inventory turn and gain market share. A pioneer in online
automotive classifieds, the Company has evolved into one of the
largest digital automotive platforms, connecting thousands of local
dealers across the country with millions of consumers. In 2018,
Cars.com acquired Dealer Inspire®, a company that builds technology
that helps future-proof dealerships for changing consumer behaviors
and makes the car buying process faster and easier.
Cars.com properties
include DealerRater®, DealerInspire®, Auto.com™, PickupTrucks.com™
and NewCars.com®.
Non-GAAP Financial Measures
This earnings release discusses adjusted EBITDA, adjusted EBITDA
margin, adjusted net income and free cash flow. These are not
financial measures as defined by GAAP. These financial measures are
presented as supplemental measures of operating performance because
we believe they provide meaningful information regarding our
performance and provide a basis to compare operating results
between periods. In addition, we use adjusted EBITDA as a measure
for determining incentive compensation targets. Adjusted EBITDA
also is used as a performance measure under the Company's credit
agreement and includes adjustments such as the items defined below
and other further adjustments, which are defined in the credit
agreement. These non-GAAP financial measures are frequently used by
our lenders, securities analysts, investors and other interested
parties to evaluate companies in our industry.
Other companies may define or calculate these measures
differently, limiting their usefulness as comparative measures.
Because of these limitations, these non-GAAP financial measures
should not be considered in isolation or as substitutes for
performance measures calculated in accordance with GAAP.
Definitions of these non-GAAP financial measures and
reconciliations to the most directly comparable GAAP financial
measures are presented in the tables below.
The Company defines adjusted EBITDA as net income (loss) before
(1) interest expense (income), net, (2) income tax expense
(benefit), (3) depreciation, (4) amortization of intangible assets,
(5) stock-based compensation expense, plus (6) certain other items,
such as transaction-related costs, costs associated with the
stockholder activist campaign, restructuring and other exit costs,
costs related to the headquarters move and write-off and
impairments of goodwill, intangible assets and other long-lived
assets. Amortization of unfavorable contracts liability is not
adjusted out of adjusted EBITDA.
The Company defines adjusted net income as net income (loss)
excluding the after-tax impact of (1) amortization of intangible
assets, (2) stock-based compensation expense, and (3) certain other
items, such as transaction-related costs, costs associated with the
stockholder activist campaign, restructuring and other exit costs,
costs related to the headquarters move and write-off and
impairments of goodwill, intangible assets and other long-lived
assets. Amortization of unfavorable contracts liability is not
adjusted out of adjusted net income.
Transaction-related costs are certain expense items resulting
from actual or potential transactions such as business
combinations, mergers, acquisitions, dispositions, spin-offs,
financing transactions, and other strategic transactions,
including, without limitation, (1) transaction-related bonuses and
(2) expenses for advisors and representatives such as investment
bankers, consultants, attorneys and accounting firms.
Transaction-related costs may also include, without limitation,
transition and integration costs such as retention bonuses and
acquisition-related milestone payments to acquired employees, in
addition to consulting, compensation and other incremental costs
associated with integration projects.
The Company defines free cash flow as net cash provided by
operating activities less capital expenditures, including purchases
of property and equipment and capitalization of internal-use
software and website development costs.
Key Metric Definitions
Traffic (Visits). Traffic and our ability to
generate traffic are key to our business. Tracking our traffic
performance is a critical measure. Traffic to
the Cars.com network of websites and mobile apps provides
value to our advertisers in terms of audience, awareness,
consideration and conversion. In addition to tracking traffic
volume and sources, we monitor activity on our properties, allowing
us to innovate and refine our consumer-facing
offerings. Traffic is an internal metric representing the
number of visits to Cars.com desktop and mobile
properties (web browser and apps). Traffic refers to the number of
times visitors accessed Cars.com properties during the
period, no matter how many visitors make up those visits. We
measure traffic using Adobe Analytics. Traffic provides an
indication of our consumer reach. Although our consumer reach does
not directly result in revenue, we believe our ability to reach
diverse demographic audiences is attractive to our dealer customers
and national advertisers.
Dealer Customers. Our value to consumers tracks to
our ability to showcase the inventory of our dealer and Original
Equipment Manufacturer ("OEM") customers. The larger the advertiser
base, the more inventory and options that are available for
consumers to review. Dealer Customers represents the car
dealerships using our products as of the end of each reporting
period. Each dealership location is counted separately, whether it
is a single-location proprietorship or part of a large consolidated
dealer group. Multi-franchise dealerships at a single location are
counted as one dealer. Beginning June 30,
2018, this key operating metric now includes DI dealer
customers.
Average Vehicle Listings. Our value to consumers
tracks to our ability to showcase the inventory of our dealer and
OEM customers. The more vehicle listings that are available for
consumers to review, the more traffic we attract and the higher the
consumer engagement. Average Vehicle Listings represents the daily
average of vehicles listed for sale
on Cars.com properties. The daily average is calculated
on a monthly basis and averaged for the reporting period.
Forward-Looking Statements
This press release contains "forward-looking statements" within
the meaning of the federal securities laws, including those
statements under "Financial Objectives." All statements other than
statements of historical facts are forward-looking statements.
Forward-looking statements include information concerning our
business strategies, plans and objectives, market potential, future
financial performance, planned operational and product
improvements, liquidity and other matters. These statements often
include words such as "believe," "expect," "project," "anticipate,"
"intend," "plan," "estimate," "target," "seek," "will," "may,"
"would," "should," "could," "forecasts," "mission," "strive,"
"more," "goal" or similar expressions. Forward-looking statements
are based on our current expectations, beliefs, estimates,
projections and assumptions, based on our experience in the
industry as well as our perceptions of historical trends, current
conditions, expected future developments and other factors we think
are appropriate. These statements are expressed in good faith and
we believe these judgments are reasonable. However, you should
understand that these statements are not guarantees of performance
or results. Our actual results could differ materially from those
expressed in the forward-looking statements. Given these
uncertainties, forward-looking statements should not be relied on
in making investment decisions.
Forward-looking statements are subject to a number of risks,
uncertainties and other important factors, many of which are beyond
our control, that could cause our actual results to differ
materially from those expressed in the forward-looking statements
contained in this press release. Such risks, uncertainties, and
other important factors include, among others, risks related to our
business, our separation from our parent company and our common
stock. For a detailed discussion of many of these risks and
uncertainties, see the section entitled "Risk Factors" in our
Annual Report on Form 10-K for the period ended December 31, 2017 which was filed with the
Securities and Exchange Commission (the "Commission") on
March 6, 2018 and our other filings
with the Commission. All forward-looking statements contained in
this press release are qualified by these cautionary statements.
The forward-looking statements contained in this press release
speak only as of the date of this press release. We undertake no
obligation, other than as may be required by law, to update or
revise any forward-looking or cautionary statements to reflect
changes in assumptions, the occurrence of events, unanticipated or
otherwise, or changes in future operating results over time or
otherwise. Comparisons of results between current and prior periods
are not intended to express any future trends, or indications of
future performance, unless expressed as such, and should only be
viewed as historical data.
The forward-looking statements in this press release are
intended to be subject to the safe harbor protection provided by
the Federal securities laws.
Cars.com
Inc.
|
Consolidated and
Combined Balance Sheets
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
September 30,
2018
|
|
December 31,
2017
|
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
17,809
|
|
$
20,563
|
Accounts receivable,
net
|
|
107,687
|
|
100,857
|
Prepaid
expenses
|
|
11,662
|
|
11,408
|
Other current
assets
|
|
9,558
|
|
9,811
|
Total current
assets
|
|
146,716
|
|
142,639
|
Property and
equipment, net
|
|
40,850
|
|
39,740
|
Goodwill
|
|
884,339
|
|
788,107
|
Intangible assets,
net
|
|
1,533,442
|
|
1,529,500
|
Investments and other
assets
|
|
10,451
|
|
11,053
|
Total
assets
|
|
$
2,615,798
|
|
$
2,511,039
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
8,040
|
|
$
6,581
|
Accrued
compensation
|
|
10,889
|
|
14,185
|
Unfavorable contracts
liability
|
|
25,185
|
|
25,200
|
Current portion of
long-term debt
|
|
24,022
|
|
21,158
|
Other accrued
liabilities
|
|
45,736
|
|
23,025
|
Total current
liabilities
|
|
113,872
|
|
90,149
|
Noncurrent
liabilities:
|
|
|
|
|
Unfavorable contracts
liability
|
|
—
|
|
18,885
|
Long-term
debt
|
|
678,426
|
|
557,194
|
Deferred tax
liability
|
|
168,360
|
|
146,482
|
Other noncurrent
liabilities
|
|
20,297
|
|
19,201
|
Total noncurrent
liabilities
|
|
867,083
|
|
741,762
|
Total
liabilities
|
|
980,955
|
|
831,911
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred Stock at
par, $0.01 par value; 5,000 shares authorized; no shares issued and
outstanding as of September 30, 2018 and December 31,
2017
|
|
—
|
|
—
|
Common Stock at par,
$0.01 par value; 300,000 shares authorized; 68,926 and 71,628
shares issued and outstanding as of September 30, 2018 and December
31, 2017, respectively
|
|
689
|
|
716
|
Additional paid-in
capital
|
|
1,505,279
|
|
1,501,830
|
Retained
earnings
|
|
128,875
|
|
176,582
|
Total stockholders'
equity
|
|
1,634,843
|
|
1,679,128
|
Total liabilities and
stockholders' equity
|
|
$
2,615,798
|
|
$
2,511,039
|
|
|
|
|
|
Cars.com
Inc.
|
Consolidated and
Combined Statements of Income
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Revenues:
|
|
|
|
|
|
|
|
|
Direct
|
|
$
119,510
|
|
$
82,504
|
|
$
336,521
|
|
$
249,412
|
National
advertising
|
|
28,107
|
|
32,002
|
|
82,155
|
|
85,379
|
Other
|
|
4,010
|
|
4,319
|
|
12,152
|
|
11,989
|
Retail
|
|
151,627
|
|
118,825
|
|
430,828
|
|
346,780
|
Wholesale
|
|
17,685
|
|
41,074
|
|
66,953
|
|
122,917
|
Total
revenues
|
|
169,312
|
|
159,899
|
|
497,781
|
|
469,697
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
Cost of
revenues and operations
|
|
24,034
|
|
18,176
|
|
65,924
|
|
49,618
|
Product and
technology
|
|
15,918
|
|
18,422
|
|
56,202
|
|
56,861
|
Marketing and
sales
|
|
56,083
|
|
50,733
|
|
181,645
|
|
160,246
|
General and
administrative
|
|
14,345
|
|
9,180
|
|
45,609
|
|
34,364
|
Affiliate
revenue share
|
|
4,097
|
|
2,121
|
|
11,193
|
|
6,837
|
Depreciation
and amortization
|
|
26,504
|
|
21,893
|
|
77,154
|
|
66,343
|
Total operating
expenses
|
|
140,981
|
|
120,525
|
|
437,727
|
|
374,269
|
Operating
income
|
|
28,331
|
|
39,374
|
|
60,054
|
|
95,428
|
Nonoperating
(expense) income:
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
|
(7,005)
|
|
(5,431)
|
|
(20,305)
|
|
(7,160)
|
Other income,
net
|
|
65
|
|
64
|
|
76
|
|
199
|
Total nonoperating expense,
net
|
|
(6,940)
|
|
(5,367)
|
|
(20,229)
|
|
(6,961)
|
Income before
income taxes
|
|
21,391
|
|
34,007
|
|
39,825
|
|
88,467
|
Income tax
expense
|
|
5,594
|
|
13,019
|
|
10,373
|
|
15,782
|
Net
income
|
|
$
15,797
|
|
$
20,988
|
|
$
29,452
|
|
$
72,685
|
Weighted-average common shares
outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
69,652
|
|
71,699
|
|
70,900
|
|
71,693
|
Diluted
|
|
70,029
|
|
71,767
|
|
71,153
|
|
71,763
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.23
|
|
$
0.29
|
|
$
0.42
|
|
$
1.01
|
Diluted
|
|
0.23
|
|
0.29
|
|
0.41
|
|
1.01
|
Cars.com
Inc.
|
Consolidated and
Combined Statements of Cash Flows
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
Cash flows from
operating activities:
|
|
|
|
|
Net income
|
|
$
29,452
|
|
$
72,685
|
Adjustments to
reconcile Net income to Net cash provided by operating
activities:
|
|
|
|
|
Depreciation
|
|
9,195
|
|
7,941
|
Amortization of
intangible assets
|
|
67,959
|
|
58,402
|
Amortization of
unfavorable contracts liability
|
|
(18,900)
|
|
(18,900)
|
Stock-based
compensation expense
|
|
7,495
|
|
1,493
|
Deferred income
taxes
|
|
7,137
|
|
8,388
|
Provision for
doubtful accounts
|
|
3,451
|
|
2,561
|
Amortization of debt
issuance costs
|
|
971
|
|
463
|
Other, net
|
|
762
|
|
1,247
|
Changes in operating
assets and liabilities, net of Acquisition:
|
|
|
|
|
Accounts
receivable
|
|
1,119
|
|
2,665
|
Prepaid
expenses
|
|
66
|
|
(238)
|
Other current
assets
|
|
330
|
|
(5,519)
|
Other
assets
|
|
602
|
|
616
|
Accounts
payable
|
|
(2,397)
|
|
(209)
|
Accrued
compensation
|
|
(3,363)
|
|
(8,451)
|
Other accrued
liabilities
|
|
18,306
|
|
10,430
|
Other
noncurrent liabilities
|
|
(1,104)
|
|
3,652
|
Cash received from
lessor for lease incentives
|
|
—
|
|
9,970
|
Net cash provided by
operating activities
|
|
121,081
|
|
147,196
|
Cash flows from
investing activities:
|
|
|
|
|
Payment for Acquisition,
net
|
|
(157,153)
|
|
—
|
Purchase of property and
equipment
|
|
(9,966)
|
|
(27,631)
|
Net cash used in
investing activities
|
|
(167,119)
|
|
(27,631)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from issuance of
long-term debt
|
|
195,000
|
|
675,000
|
Payments of debt issuance
costs and other fees
|
|
—
|
|
(6,208)
|
Payments of long-term
debt
|
|
(71,875)
|
|
(50,625)
|
Payments related to
stock-based compensation plans, net
|
|
(477)
|
|
—
|
Repurchases of common
stock
|
|
(76,681)
|
|
—
|
Cash distribution to TEGNA
related to Separation
|
|
—
|
|
(650,000)
|
Transactions with TEGNA,
net
|
|
(2,683)
|
|
(69,200)
|
Net cash provided by
(used in) financing activities
|
|
43,284
|
|
(101,033)
|
Net (decrease)
increase in cash and cash equivalents
|
|
(2,754)
|
|
18,532
|
Cash and cash
equivalents at beginning of period
|
|
20,563
|
|
8,896
|
Cash and cash
equivalents at end of period
|
|
$
17,809
|
|
$
27,428
|
|
|
|
|
|
Supplemental cash
flow information:
|
|
|
|
|
Cash paid for income
taxes, net of refunds
|
|
$
500
|
|
$
5,726
|
Cash paid for
interest
|
|
19,472
|
|
6,826
|
Cars.com
Inc.
|
Non-GAAP
Reconciliations
|
(In thousands,
except per share data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
Reconciliation of
Net income to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
15,797
|
|
$
20,988
|
|
$
29,452
|
|
$
72,685
|
Interest expense,
net
|
|
7,005
|
|
5,431
|
|
20,305
|
|
7,160
|
Income tax
expense
|
|
5,594
|
|
13,019
|
|
10,373
|
|
15,782
|
Depreciation and
amortization
|
|
26,504
|
|
21,893
|
|
77,154
|
|
66,343
|
Stock-based
compensation expense
|
|
3,019
|
|
1,012
|
|
7,495
|
|
1,493
|
Transaction-related
costs
|
|
897
|
|
321
|
|
12,030
|
|
4,979
|
Costs associated with
the stockholder activist campaign
|
|
2,869
|
|
—
|
|
7,766
|
|
—
|
Restructuring and
other exit costs
|
|
175
|
|
280
|
|
1,272
|
|
1,951
|
Write-off of
long-lived assets and other
|
|
330
|
|
59
|
|
691
|
|
1,448
|
Costs related to the
headquarters move
|
|
—
|
|
130
|
|
—
|
|
3,558
|
Adjusted
EBITDA*
|
|
$
62,190
|
|
$
63,133
|
|
$
166,538
|
|
$
175,399
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net income to Adjusted net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
15,797
|
|
$
20,988
|
|
$
29,452
|
|
$
72,685
|
Amortization of
intangible assets
|
|
23,212
|
|
19,467
|
|
67,959
|
|
58,402
|
Stock-based
compensation expense
|
|
3,019
|
|
1,012
|
|
7,495
|
|
1,493
|
Transaction-related
costs
|
|
897
|
|
321
|
|
12,030
|
|
4,979
|
Costs associated with
the stockholder activist campaign
|
|
2,869
|
|
—
|
|
7,766
|
|
—
|
Restructuring and
other exit costs
|
|
175
|
|
280
|
|
1,272
|
|
1,951
|
Write-off of
long-lived assets and other
|
|
330
|
|
59
|
|
691
|
|
1,448
|
Costs related to the
headquarters move
|
|
—
|
|
130
|
|
—
|
|
3,558
|
Tax impact of
adjustments
|
|
(7,879)
|
|
(7,981)
|
|
(25,504)
|
|
(13,060)
|
Adjusted net
income*
|
|
$
38,420
|
|
$
34,276
|
|
$
101,161
|
|
$
131,456
|
Adjusted net income
per share, diluted
|
|
$
0.55
|
|
$
0.48
|
|
$
1.42
|
|
$
1.83
|
Weighted-average
common shares outstanding, diluted
|
|
70,029
|
|
71,767
|
|
71,153
|
|
71,763
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net cash provided by operating activities to Free cash
flow
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
50,457
|
|
$
50,464
|
|
$
121,081
|
|
$
147,196
|
Purchase of property
and equipment
|
|
(3,549)
|
|
(8,721)
|
|
(9,966)
|
|
(27,631)
|
Free cash
flow
|
|
$
46,908
|
|
$
41,743
|
|
$
111,115
|
|
$
119,565
|
|
* Amortization of
unfavorable contracts liability is not adjusted out of Adjusted
EBITDA or Adjusted net income.
|
Cars.com
Inc.
|
Supplemental
Information
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Three Months Ended September 30,
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
24,034
|
|
$
(226)
|
|
$
(76)
|
|
$
23,732
|
Product and
technology
|
|
15,918
|
|
(302)
|
|
(571)
|
|
15,045
|
Marketing and
sales
|
|
56,083
|
|
(258)
|
|
(583)
|
|
55,242
|
General and
administrative
|
|
14,345
|
|
(3,485)
|
|
(1,789)
|
|
9,071
|
Affiliate revenue
share
|
|
4,097
|
|
—
|
|
—
|
|
4,097
|
Depreciation and
amortization
|
|
26,504
|
|
—
|
|
—
|
|
26,504
|
Total operating
expenses
|
|
$
140,981
|
|
$
(4,271)
|
|
$
(3,019)
|
|
$
133,691
|
|
|
|
|
|
|
|
|
|
(1)
Includes costs associated with the stockholder activist campaign,
transaction-related costs, write-off of long-lived assets and
other, restructuring and other exit costs.
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Three Months Ended September 30,
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
18,176
|
|
$
—
|
|
$
—
|
|
$
18,176
|
Product and
technology
|
|
18,422
|
|
(231)
|
|
—
|
|
18,191
|
Marketing and
sales
|
|
50,733
|
|
—
|
|
—
|
|
50,733
|
General and
administrative
|
|
9,180
|
|
(559)
|
|
(1,012)
|
|
7,609
|
Affiliate revenue
share
|
|
2,121
|
|
—
|
|
—
|
|
2,121
|
Depreciation and
amortization
|
|
21,893
|
|
—
|
|
—
|
|
21,893
|
Total operating
expenses
|
|
$
120,525
|
|
$
(790)
|
|
$
(1,012)
|
|
$
118,723
|
|
|
|
|
|
|
|
|
|
(1)
Includes transaction-related costs, restructuring and other exit
costs, costs related to the headquarters move, write-off of
long-lived assets and other.
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Nine Months Ended September 30,
2018:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
65,924
|
|
$
(1,631)
|
|
$
(175)
|
|
$
64,118
|
Product and
technology
|
|
56,202
|
|
(4,987)
|
|
(1,386)
|
|
49,829
|
Marketing and
sales
|
|
181,645
|
|
(1,477)
|
|
(1,351)
|
|
178,817
|
General and
administrative
|
|
45,609
|
|
(13,664)
|
|
(4,583)
|
|
27,362
|
Affiliate revenue
share
|
|
11,193
|
|
—
|
|
—
|
|
11,193
|
Depreciation and
amortization
|
|
77,154
|
|
—
|
|
—
|
|
77,154
|
Total operating
expenses
|
|
$
437,727
|
|
$
(21,759)
|
|
$
(7,495)
|
|
$
408,473
|
|
|
|
|
|
|
|
|
|
(1)
Includes transaction-related costs, costs associated with the
stockholder activist campaign, restructuring and other exit costs,
write-off of long-lived assets and other.
|
|
|
|
|
|
|
|
|
|
Operating expense
category for the Nine Months Ended September 30,
2017:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
Reported
|
|
Adjustments
(1)
|
|
Stock-Based
Compensation
|
|
As
Adjusted
|
Cost of revenues and
operations
|
|
$
49,618
|
|
$
—
|
|
$
—
|
|
$
49,618
|
Product and
technology
|
|
56,861
|
|
(231)
|
|
—
|
|
56,630
|
Marketing and
sales
|
|
160,246
|
|
—
|
|
—
|
|
160,246
|
General and
administrative
|
|
34,364
|
|
(11,705)
|
|
(1,493)
|
|
21,166
|
Affiliate revenue
share
|
|
6,837
|
|
—
|
|
—
|
|
6,837
|
Depreciation and
amortization
|
|
66,343
|
|
—
|
|
—
|
|
66,343
|
Total operating
expenses
|
|
$
374,269
|
|
$
(11,936)
|
|
$
(1,493)
|
|
$
360,840
|
|
|
|
|
|
|
|
|
|
(1)
Includes transaction-related costs, costs related to the
headquarters move, restructuring and other exit costs, write-off of
long-lived assets and other.
|
View original content to download
multimedia:http://www.prnewswire.com/news-releases/carscom-reports-third-quarter-2018-results-300745304.html
SOURCE Cars.com Inc.