TrueCar, Inc. (NASDAQ: TRUE) today announced its financial
results for the third quarter ended September 30, 2020.
Third Quarter 2020 Financial Highlights
The following financial results reflect continuing operations
only:
- Third quarter total revenue of $77.2 million, up 31.9% from the
second quarter of 2020 and down (10.0)% from the third quarter of
2019.
- Record third quarter income from continuing operations of $9.6
million, or $0.09 per share, compared to loss from continuing
operations of $(8.8) million, or $(0.08) per share, in the third
quarter of 2019.
- Record third quarter Adjusted EBITDA(1) of $20.5 million,
representing an Adjusted EBITDA margin(2) of 26.5%, compared to
Adjusted EBITDA of $3.1 million, representing an Adjusted EBITDA
margin of 3.6%, in the third quarter of 2019.
- Third quarter Non-GAAP net income(3) of $15.3 million, or
$0.14 per share, compared to Non-GAAP net loss of $(1.0) million,
or $(0.01) per share, in the third quarter of 2019.
- $178.7 million of cash and cash equivalents on the balance
sheet as of September 30, 2020.
Management Commentary
“The momentum we have been building over the past few quarters
continued into the third quarter,” said Mike Darrow, TrueCar’s
President and Chief Executive Officer. “We delivered strong
sequential revenue growth and record-setting Adjusted EBITDA of $20
million. More importantly, we continued our march towards enabling
a flexible and complete, online car buying experience, by driving
strong adoption of our payments and trade tools across our
franchise network. We are well on our way to bringing to market the
modern marketplace experience that has been needed in automotive
retail for many years.”
(1) Adjusted EBITDA is a Non-GAAP financial measure. Refer to
its definition and accompanying reconciliation to GAAP net income
(loss) below.(2) Adjusted EBITDA margin is a Non-GAAP financial
measure, calculated as Adjusted EBITDA divided by total revenue.(3)
Non-GAAP net income (loss) is a Non-GAAP financial measure. Refer
to its definition and accompanying reconciliation to GAAP net
income (loss) below.
Key Operating Metrics
- Average monthly unique visitors(4) increased 23.5% to 9.5
million in the third quarter of 2020, up from 7.7 million in the
third quarter of 2019.
- Units(5) were 213,869 in the third quarter of 2020, down
(20.1)% year-over-year.
- Monetization(6) was $346 during the third quarter of 2020,
compared to $320 during the third quarter of 2019.
- Franchise dealer count(7) was 10,745 as of September 30, 2020,
down from 11,267 as of June 30, 2020.
- Independent dealer count(8) was 3,858 as of September 30, 2020,
down from 4,131 as of June 30, 2020.
Business Outlook
Our guidance for the quarter ending December 31, 2020 is as
follows:
- Revenues are expected to be in the range of $57 million to $59
million.
- Adjusted EBITDA is expected to be in the range of $(1) million
to $1 million.(9)
(4) We define a monthly unique visitor as an individual who has
visited our website, one of our landing pages on our affinity
group marketing partner sites or our mobile application within a
calendar month. We calculate average monthly unique visitors as the
sum of the monthly unique visitors divided by the number of months
in the period.(5) We define units as the number of automobiles
purchased from TrueCar Certified Dealers that are matched to users
of TrueCar.com, our mobile applications or the car-buying sites and
mobile applications we maintain for our affinity group marketing
partners.(6) We define monetization as the average transaction
revenue per unit, which we calculate by dividing all of our
transaction revenue (dealer revenue and OEM incentives revenue) in
a given period by the number of units in that period.(7) We define
franchise dealer count as the number of franchise dealers in the
network of TrueCar Certified Dealers at the end of a given period.
This number is calculated by counting the number of brands of new
cars sold at each individual location, or rooftop, regardless of
the size of the dealership that owns the rooftop.(8) We define
independent dealer count as the number of dealers in the network of
TrueCar Certified Dealers at the end of a given period that
exclusively sell used vehicles and are not directly affiliated with
a new car manufacturer. This number is calculated by counting each
location, or rooftop, individually, regardless of the size of the
dealership that owns the rooftop.(9) We are unable to provide
reconciliations of forward-looking Adjusted EBITDA without
unreasonable effort because of the uncertainty and potential
variability in amount and timing of stock-based compensation, which
is a reconciling item between GAAP net income (loss) and Adjusted
EBITDA and could significantly impact GAAP results.
Conference Call Information
Members of our management will host a conference call
today, November 5, 2020, to discuss our third quarter 2020
results at 4:30 p.m. Eastern Time. To participate, domestic
callers should dial 1-877-407-0789 and international callers should
dial 1-201-689-8562. A replay of the call may be accessed the same
day from 7:30 p.m. Eastern Time on Thursday, November 5, 2020
until 11:59 p.m. Eastern Time on Thursday, November 19, 2020 by
dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international)
and entering replay PIN 13711379. An archived version of the
call will also be available upon completion on the Investor
Relations section of our website at ir.true.com. We have used, and
intend to continue to use, our Investor Relations website
(ir.true.com), Twitter (@TrueCar) and Facebook
(www.facebook.com/TrueCar) as means of disclosing material
non-public information and for complying with our disclosure
obligations under Regulation FD.
Forward-Looking Statements
This press release contains forward-looking statements. All
statements contained in this press release other than statements of
historical fact are forward-looking statements, including
statements regarding our ability to improve the car-buying
experience and deliver a modern automotive marketplace. These
forward-looking statements are subject to a number of risks,
uncertainties and assumptions that may prove incorrect, any of
which could cause our results to differ materially from those
expressed or implied by such forward-looking statements, and
include, among others, those risks and uncertainties described
under the heading “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2019 filed with
the Securities and Exchange Commission, or SEC, our Quarterly
Reports on Form 10-Q for the quarters ended March 31, 2020 and June
30, 2020 filed with the SEC and our Quarterly Report on Form 10-Q
for the quarter ended September 30, 2020 to be filed with the SEC.
Moreover, we operate in a very competitive and rapidly changing
environment. New risks emerge from time to time. It is not possible
for our management to predict all risks, nor can management assess
the impact of all factors on our business or the extent to which
any factor, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements we may make. All forward-looking statements in this
press release are based on information available to our
management as of the date of this press release and except as
required by law, management assumes no obligation to update those
forward-looking statements, which speak only as of their respective
dates.
Use of Non-GAAP Financial Measures
This earnings release includes the following Non-GAAP financial
measures: Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP net
income (loss) and Non-GAAP net income (loss) per share. We
define Adjusted EBITDA as net income (loss) adjusted to exclude
interest income, depreciation and amortization, stock-based
compensation, income (loss) from equity method investment, certain
restructuring costs, certain executive departure costs, certain
transaction expenses, certain litigation costs, changes in the fair
value of contingent consideration, goodwill impairment, other
income and income taxes. We define Non-GAAP net income (loss) as
net income (loss) adjusted to exclude stock-based compensation,
income (loss) from equity method investment, certain restructuring
costs, certain executive departure costs, certain transaction
expenses, certain litigation costs, changes in the fair value of
contingent consideration, goodwill impairment and other income. We
have provided below a reconciliation of each of Adjusted EBITDA and
Non-GAAP net income (loss) to net income (loss), the most
directly comparable GAAP financial measure. Neither Adjusted EBITDA
nor Non-GAAP net income (loss) should be considered as an
alternative to net loss or any other measure of financial
performance calculated and presented in accordance with GAAP.
We use Adjusted EBITDA and Non-GAAP net income (loss) as
operating performance measures because each is (i) an integral part
of our reporting and planning processes; (ii) used by our
management and board of directors to assess our operational
performance, and together with operational objectives, as a measure
in evaluating employee compensation and bonuses; and (iii) used by
our management to make financial and strategic planning decisions
regarding future operating investments. We believe that using
Adjusted EBITDA and Non-GAAP net income (loss) facilitates
operating performance comparisons on a period-to-period basis
because these measures exclude variations primarily caused by
changes in the excluded items noted above. In addition, we believe
that Adjusted EBITDA, Non-GAAP net income (loss) and similar
measures are widely used by investors, securities analysts, rating
agencies and other parties in evaluating companies as measures of
financial performance and debt service capabilities.
Our use of each of Adjusted EBITDA and Non-GAAP net income
(loss) has limitations as an analytical tool, and you should not
consider either in isolation or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:
- Adjusted EBITDA does not reflect the receipt of interest or the
payment of income taxes;
- neither Adjusted EBITDA nor Non-GAAP net income (loss) reflects
changes in, or cash requirements for, our working capital
needs;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditures or any other contractual commitments;
- neither Adjusted EBITDA nor Non-GAAP net income (loss) reflects
the severance charges associated with a restructuring plan
initiated and completed in the first quarter of 2019 and the second
quarter of 2020 to improve efficiency and reduce expenses;
- neither Adjusted EBITDA nor Non-GAAP net income (loss) reflects
the legal, accounting, consulting and other third-party fees and
costs we incurred in connection with the evaluation and negotiation
of potential merger and acquisition transactions;
- neither Adjusted EBITDA nor Non-GAAP net income (loss) reflects
the costs to advance our claims in certain litigation or the costs
to defend ourselves in various complaints filed against us;
- neither Adjusted EBITDA nor Non-GAAP net income (loss)
considers the potentially dilutive impact of shares issued or to be
issued in connection with stock-based compensation; and
- other companies, including companies in our own industry, may
calculate Adjusted EBITDA and Non-GAAP net income (loss)
differently than we do, limiting their usefulness as comparative
measures.
Because of these limitations, you should consider Adjusted
EBITDA and Non-GAAP net income (loss) alongside other financial
performance measures, including our net income (loss), our other
GAAP results and various cash flow metrics. In addition, in
evaluating Adjusted EBITDA and Non-GAAP net income (loss), you
should be aware that in the future we will incur expenses such as
those that are the subject of adjustments in deriving Adjusted
EBITDA and Non-GAAP net income (loss) and you should not infer from
our presentation of Adjusted EBITDA and Non-GAAP net income
(loss) that our future results will not be affected by these
expenses or any unusual or non-recurring items.
About TrueCar
TrueCar is a leading automotive digital marketplace that enables
car buyers to connect to our nationwide network of Certified
Dealers. We are building the industry's most personalized and
efficient car buying experience as we seek to bring more of the
purchasing process online. Consumers who visit our marketplace will
find a suite of vehicle discovery tools, price ratings and market
context on new and used cars — all with a clear view of what's a
great deal. When they are ready, TrueCar will enable them to
connect with a local Certified Dealer who shares in our belief that
truth, transparency and fairness are the foundation of a great car
buying experience. As part of our marketplace, TrueCar powers
car-buying programs for over 250 leading brands, including AARP,
Sam's Club and American Express. Nearly half of all new-car buyers
engage with TrueCar powered sites, where they buy smarter and drive
happier. TrueCar is headquartered in Santa Monica, California, with
offices in Austin, Texas and Boston, Massachusetts.
For more information, please visit www.truecar.com, and follow
us on Facebook or Twitter. TrueCar media line: +1-844-469-8442 (US
toll-free) | Email: pr@truecar.com
Investor Relations Contact:Danny VivierVice
President, Investor Relations & Strategic
Financeinvestors@truecar.com (424) 258-8771
Public Relations Contact: Shadee
Malekafzalishadee@truecar.com (424)
258-8694
TRUECAR,
INC.CONSOLIDATED STATEMENTS OF INCOME
(LOSS)(In thousands, except per share
data)(Unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Revenues |
$ |
77,247 |
|
|
|
$ |
85,785 |
|
|
|
$ |
214,718 |
|
|
|
$ |
250,162 |
|
|
Costs and operating
expenses: |
|
|
|
|
|
|
|
Cost of revenue |
4,664 |
|
|
|
6,982 |
|
|
|
16,403 |
|
|
|
21,558 |
|
|
Sales and marketing |
36,254 |
|
|
|
57,430 |
|
|
|
115,366 |
|
|
|
171,122 |
|
|
Technology and development |
10,162 |
|
|
|
12,782 |
|
|
|
34,861 |
|
|
|
43,899 |
|
|
General and administrative |
11,315 |
|
|
|
12,842 |
|
|
|
36,252 |
|
|
|
48,938 |
|
|
Depreciation and amortization |
5,117 |
|
|
|
4,951 |
|
|
|
15,321 |
|
|
|
15,623 |
|
|
Goodwill impairment |
— |
|
|
|
— |
|
|
|
8,264 |
|
|
|
— |
|
|
Total costs and operating expenses |
67,512 |
|
|
|
94,987 |
|
|
|
226,467 |
|
|
|
301,140 |
|
|
Income (loss) from
operations |
9,735 |
|
|
|
(9,202 |
) |
|
|
(11,749 |
) |
|
|
(50,978 |
) |
|
Interest income |
13 |
|
|
|
594 |
|
|
|
452 |
|
|
|
2,003 |
|
|
Other income |
450 |
|
|
|
— |
|
|
|
450 |
|
|
|
— |
|
|
Loss from equity method
investment |
(571 |
) |
|
|
(464 |
) |
|
|
(1,460 |
) |
|
|
(737 |
) |
|
Income (loss) before income
taxes |
9,627 |
|
|
|
(9,072 |
) |
|
|
(12,307 |
) |
|
|
(49,712 |
) |
|
Provision for (benefit from)
income taxes |
38 |
|
|
|
(263 |
) |
|
|
(132 |
) |
|
|
(1,080 |
) |
|
Income (loss) from continuing
operations |
9,589 |
|
|
|
(8,809 |
) |
|
|
(12,175 |
) |
|
|
(48,632 |
) |
|
Income from discontinued
operations, net of taxes |
2,000 |
|
|
|
1,157 |
|
|
|
1,853 |
|
|
|
2,555 |
|
|
Net income (loss) |
$ |
11,589 |
|
|
|
$ |
(7,652 |
) |
|
|
$ |
(10,322 |
) |
|
|
$ |
(46,077 |
) |
|
Net income (loss) per share,
basic |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.09 |
|
|
|
$ |
(0.08 |
) |
|
|
$ |
(0.11 |
) |
|
|
$ |
(0.46 |
) |
|
Discontinued operations |
$ |
0.02 |
|
|
|
$ |
0.01 |
|
|
|
$ |
0.02 |
|
|
|
$ |
0.02 |
|
|
Net income (loss) per share,
diluted |
|
|
|
|
|
|
|
Continuing operations |
$ |
0.09 |
|
|
|
$ |
(0.08 |
) |
|
|
$ |
(0.11 |
) |
|
|
$ |
(0.46 |
) |
|
Discontinued operations |
$ |
0.02 |
|
|
|
$ |
0.01 |
|
|
|
$ |
0.02 |
|
|
|
$ |
0.02 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding, basic |
107,693 |
|
|
|
106,239 |
|
|
|
107,418 |
|
|
|
105,510 |
|
|
Weighted average common shares
outstanding, diluted |
110,011 |
|
|
|
106,239 |
|
|
|
107,418 |
|
|
|
105,510 |
|
|
TRUECAR,
INC. CONSOLIDATED BALANCE
SHEETS (In
thousands)(Unaudited)
|
September 30, 2020 |
|
December 31, 2019 |
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
178,699 |
|
|
|
$ |
181,534 |
|
|
Accounts receivable, net |
40,723 |
|
|
|
38,239 |
|
|
Prepaid expenses |
7,197 |
|
|
|
7,158 |
|
|
Other current assets |
5,904 |
|
|
|
6,033 |
|
|
Current assets of discontinued operations |
27,280 |
|
|
|
6,777 |
|
|
Total current assets |
259,803 |
|
|
|
239,741 |
|
|
Property and equipment, net |
23,789 |
|
|
|
27,781 |
|
|
Operating lease right-of-use assets |
31,752 |
|
|
|
36,064 |
|
|
Goodwill |
51,205 |
|
|
|
59,469 |
|
|
Intangible assets, net |
7,200 |
|
|
|
9,000 |
|
|
Equity method investment |
20,433 |
|
|
|
21,894 |
|
|
Other assets |
3,367 |
|
|
|
3,620 |
|
|
Noncurrent assets of discontinued operations |
— |
|
|
|
24,118 |
|
|
Total assets |
$ |
397,549 |
|
|
|
$ |
421,687 |
|
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
13,140 |
|
|
|
$ |
21,319 |
|
|
Accrued employee expenses |
5,117 |
|
|
|
5,969 |
|
|
Operating lease liabilities, current |
4,625 |
|
|
|
5,875 |
|
|
Accrued expenses and other current liabilities |
16,196 |
|
|
|
20,252 |
|
|
Current liabilities of discontinued operations |
754 |
|
|
|
755 |
|
|
Total current liabilities |
39,832 |
|
|
|
54,170 |
|
|
Deferred tax liabilities |
442 |
|
|
|
783 |
|
|
Operating lease liabilities, net of current portion |
33,312 |
|
|
|
37,127 |
|
|
Other liabilities |
2,060 |
|
|
|
2,336 |
|
|
Total liabilities |
75,646 |
|
|
|
94,416 |
|
|
Stockholders’
Equity |
|
|
|
Common stock |
11 |
|
|
|
11 |
|
|
Additional paid-in capital |
764,276 |
|
|
|
759,322 |
|
|
Accumulated deficit |
(442,384 |
) |
|
|
(432,062 |
) |
|
Total stockholders’ equity |
321,903 |
|
|
|
327,271 |
|
|
Total liabilities and stockholders’ equity |
$ |
397,549 |
|
|
|
$ |
421,687 |
|
|
TRUECAR,
INC. RECONCILIATION OF NET INCOME (LOSS) TO
ADJUSTED EBITDA (In
thousands)(Unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income (loss) |
$ |
11,589 |
|
|
|
$ |
(7,652 |
) |
|
|
$ |
(10,322 |
) |
|
|
$ |
(46,077 |
) |
|
Income from discontinued
operations, net of tax |
(2,000 |
) |
|
|
(1,157 |
) |
|
|
(1,853 |
) |
|
|
(2,555 |
) |
|
Income (loss) from continuing
operations |
9,589 |
|
|
|
(8,809 |
) |
|
|
(12,175 |
) |
|
|
(48,632 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Interest income |
(13 |
) |
|
|
(594 |
) |
|
|
(452 |
) |
|
|
(2,003 |
) |
|
Depreciation and amortization |
5,117 |
|
|
|
4,951 |
|
|
|
15,321 |
|
|
|
15,623 |
|
|
Stock-based compensation (1) |
5,607 |
|
|
|
6,805 |
|
|
|
17,632 |
|
|
|
30,260 |
|
|
Loss from equity method investment |
571 |
|
|
|
464 |
|
|
|
1,460 |
|
|
|
737 |
|
|
Certain litigation costs (2) |
— |
|
|
|
157 |
|
|
|
(1,939 |
) |
|
|
1,436 |
|
|
Executive departure costs (3) |
— |
|
|
|
270 |
|
|
|
— |
|
|
|
4,951 |
|
|
Restructuring charges (4) |
— |
|
|
|
— |
|
|
|
8,346 |
|
|
|
3,015 |
|
|
Transaction costs (5) |
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,926 |
|
|
Change in the fair value of contingent consideration |
30 |
|
|
|
75 |
|
|
|
151 |
|
|
|
225 |
|
|
Goodwill impairment (6) |
— |
|
|
|
— |
|
|
|
8,264 |
|
|
|
— |
|
|
Other income (7) |
(450 |
) |
|
|
— |
|
|
|
(450 |
) |
|
|
— |
|
|
Provision for (benefit from) income taxes |
38 |
|
|
|
(263 |
) |
|
|
(132 |
) |
|
|
(1,080 |
) |
|
Adjusted EBITDA |
$ |
20,489 |
|
|
|
$ |
3,056 |
|
|
|
$ |
36,026 |
|
|
|
$ |
6,458 |
|
|
_________________(1) For the nine months ended September 30,
2019, the excluded amounts include stock-based compensation of $7.2
million incurred in the second quarter of 2019 associated with the
acceleration of certain equity awards and the extension of the
exercise period for certain vested stock options related to the
departures of certain executives, including our former chief
executive officer.(2) The excluded amounts relate to legal costs
incurred in connection with complaints filed by non-TrueCar dealers
against TrueCar and consumer class action lawsuits. For the nine
months ended September 30, 2020, the excluded amount also includes
a $2.0 million payment received from one of our insurance carriers
in settlement of a lawsuit we brought in the fourth quarter of 2017
to recover insured legal fees. We believe the exclusion of these
costs and recovery is appropriate to facilitate comparisons of our
core operating performance on a period-to-period basis. Based on
the nature of the specific claims underlying the excluded
litigation matters, once these matters are resolved, we do not
believe our operations are likely to entail defending against the
types of claims raised by these matters.(3) The excluded amounts
represent severance charges associated with the separation of our
former chief executive officer and the termination of
executive-level employees in connection with the change in CEO of
$4.6 million, as well as related recruiting fees of $0.4 million
for the search for a new chief executive officer. We believe
excluding the impact of these terminations and the associated chief
executive officer recruiting fees is consistent with our use of
these non-GAAP measures as we do not believe they are a useful
indicator of our ongoing operating results.(4) The excluded amounts
represent charges associated with the restructuring plans
undertaken in the first quarter of 2019 and the second quarter of
2020 to improve efficiency and reduce expenses. We believe
excluding the impact of these charges is consistent with our use of
these non-GAAP measures as we do not believe they are a useful
indicator of our ongoing operating results.(5) The excluded amounts
represent external legal, accounting, consulting and other
third-party fees and costs we incurred in connection with the
evaluation and negotiation of potential merger and acquisition
transactions. These expenses are included in general and
administrative expenses in our consolidated statements of
comprehensive loss. We consider these fees and costs, which are
associated with potential merger and acquisition transactions
outside the normal course of our operations, to be unrelated to our
underlying results of operations and believe that their exclusion
provides investors with a more complete understanding of the
factors and trends affecting our business operations.(6) The
excluded amount represents a non-cash impairment charge we
recognized on our goodwill during the first quarter of 2020.(7) The
excluded amount represents a non-recurring gain associated with the
sale of a domain name.
TRUECAR,
INC. RECONCILIATION OF NET INCOME (LOSS) TO
NON-GAAP NET INCOME (LOSS) (In
thousands, except per share
amounts)(Unaudited)
|
Three Months Ended September
30, |
|
Nine Months Ended September
30, |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Net income (loss) |
$ |
11,589 |
|
|
|
$ |
(7,652 |
) |
|
|
$ |
(10,322 |
) |
|
|
$ |
(46,077 |
) |
|
Income from discontinued
operations, net of tax |
(2,000 |
) |
|
|
(1,157 |
) |
|
|
(1,853 |
) |
|
|
(2,555 |
) |
|
Income (loss) from continuing
operations |
9,589 |
|
|
|
(8,809 |
) |
|
|
(12,175 |
) |
|
|
(48,632 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Stock-based compensation (1) |
5,607 |
|
|
|
6,805 |
|
|
|
17,632 |
|
|
|
30,260 |
|
|
Loss from equity method investment |
571 |
|
|
|
464 |
|
|
|
1,460 |
|
|
|
737 |
|
|
Certain litigation costs (2) |
— |
|
|
|
157 |
|
|
|
(1,939 |
) |
|
|
1,436 |
|
|
Executive departure costs (3) |
— |
|
|
|
270 |
|
|
|
— |
|
|
|
4,951 |
|
|
Restructuring charges (4) |
— |
|
|
|
— |
|
|
|
8,346 |
|
|
|
3,015 |
|
|
Transaction costs (5) |
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,926 |
|
|
Change in the fair value of contingent consideration |
30 |
|
|
|
75 |
|
|
|
151 |
|
|
|
225 |
|
|
Goodwill impairment (6) |
— |
|
|
|
— |
|
|
|
8,264 |
|
|
|
— |
|
|
Other income (7) |
(450 |
) |
|
|
— |
|
|
|
(450 |
) |
|
|
— |
|
|
Non-GAAP net income (loss)
(8) |
$ |
15,347 |
|
|
|
$ |
(1,038 |
) |
|
|
$ |
21,289 |
|
|
|
$ |
(6,082 |
) |
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.14 |
|
|
|
$ |
(0.01 |
) |
|
|
$ |
0.20 |
|
|
|
$ |
(0.06 |
) |
|
Diluted |
$ |
0.14 |
|
|
|
$ |
(0.01 |
) |
|
|
$ |
0.20 |
|
|
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
107,693 |
|
|
|
106,239 |
|
|
|
107,418 |
|
|
|
105,510 |
|
|
Diluted |
110,011 |
|
|
|
106,239 |
|
|
|
108,366 |
|
|
|
105,510 |
|
|
____________________(1) For the nine months ended September 30,
2019, the excluded amounts include stock-based compensation of $7.2
million incurred in the second quarter of 2019 associated with the
acceleration of certain equity awards and the extension of the
exercise period for certain vested stock options related to the
departures of certain executives, including our former chief
executive officer.(2) The excluded amounts relate to legal costs
incurred in connection with complaints filed by non-TrueCar dealers
against TrueCar and consumer class action lawsuits. For the nine
months ended September 30, 2020, the excluded amount also includes
a $2.0 million payment received from one of our insurance carriers
in settlement of a lawsuit we brought in the fourth quarter of 2017
to recover insured legal fees. We believe the exclusion of these
costs and recovery is appropriate to facilitate comparisons of our
core operating performance on a period-to-period basis. Based on
the nature of the specific claims underlying the excluded
litigation matters, once these matters are resolved, we do not
believe our operations are likely to entail defending against the
types of claims raised by these matters.(3) The excluded amounts
represent severance charges associated with the separation of our
former chief executive officer and the termination of
executive-level employees in connection with the change in CEO of
$4.6 million, as well as related recruiting fees of $0.4 million
for the search for a new chief executive officer. We believe
excluding the impact of these terminations and the associated chief
executive officer recruiting fees is consistent with our use of
these non-GAAP measures as we do not believe they are a useful
indicator of our ongoing operating results.(4) The excluded amounts
represent charges associated with the restructuring plans
undertaken in the first quarter of 2019 and the second quarter of
2020 to improve efficiency and reduce expenses. We believe
excluding the impact of these charges is consistent with our use of
these non-GAAP measures as we do not believe they are a useful
indicator of our ongoing operating results.(5) The excluded amounts
represent external legal, accounting, consulting and other
third-party fees and costs we incurred in connection with the
evaluation and negotiation of potential merger and acquisition
transactions. These expenses are included in general and
administrative expenses in our consolidated statements of
comprehensive loss. We consider these fees and costs, which are
associated with potential merger and acquisition transactions
outside the normal course of our operations, to be unrelated to our
underlying results of operations and believe that their exclusion
provides investors with a more complete understanding of the
factors and trends affecting our business operations.(6) The
excluded amount represents a non-cash impairment charge we
recognized on our goodwill during the first quarter of 2020.(7) The
excluded amount represents a non-recurring gain associated with the
sale of a domain name.(8) There is no income tax impact related to
the adjustments made to calculate Non-GAAP net income (loss)
because of our available net operating loss carryforwards and the
full valuation allowance recorded against our net deferred tax
assets at September 30, 2020 and 2019.
TrueCar (NASDAQ:TRUE)
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