SANTA MONICA, Calif.,
May 6, 2021 /PRNewswire/ -- TrueCar, Inc. (NASDAQ:
TRUE) today announced its financial results for the first quarter
ended March 31, 2021.
First Quarter 2021 Financial Highlights
The following financial results reflect continuing operations
only:
- First quarter total revenue of $65.1
million, up 1.8% from the fourth quarter of 2020 and down
(17.5)% from the first quarter of 2020.
- Loss from continuing operations of $(8.4) million, or $(0.09) per share, compared to loss from
continuing operations of $(10.4)
million, or $(0.10) per share,
in the first quarter of 2020.
- First quarter Adjusted EBITDA(1) of $2.1 million, representing an Adjusted EBITDA
margin(2) of 3.2%, compared to Adjusted EBITDA of
$6.7 million, representing an
Adjusted EBITDA margin of 8.5%, in the first quarter of 2020.
- $274.6 million of cash and cash
equivalents on the balance sheet as of March
31, 2021.
Management Commentary
"Through the unwavering and tireless efforts of the entire
TrueCar team, we reported another strong quarter in Q1," said
Mike Darrow, TrueCar's President and
Chief Executive Officer. "We ended Q1 above both guidance and
consensus forecasts with revenue of $65.1
million and Adjusted EBITDA of $2.1
million."
_________________
|
(1)
|
Adjusted EBITDA is a
Non-GAAP financial measure. Refer to its definition and
accompanying reconciliation to GAAP net loss below.
|
|
|
(2)
|
Adjusted EBITDA
margin is a Non-GAAP financial measure, calculated as Adjusted
EBITDA divided by total revenue.
|
Key Operating Metrics
- Average monthly unique visitors(3) increased 18.4%
to 9.2 million in the first quarter of 2021, up from 7.8 million in
the first quarter of 2020.
- Units(4) were 165,858 in the first quarter of 2021,
down (15.8)% year-over-year.
- Monetization(5) was $391 in the first quarter of 2021, flat
year-over-year.
- Franchise dealer count(6) was 10,446 as of
March 31, 2021, down from 10,589 as
of December 31, 2020.
- Independent dealer count(7) was 3,702 as of
March 31, 2021, down from 3,794 as of
December 31, 2020.
Business Outlook
Our guidance for the quarter ending June
30, 2021 is as follows:
- Revenues are expected to be in the range of $65 million to $66
million.
- Adjusted EBITDA is expected to be above
breakeven.(8)
_________________
|
(3)
|
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.
|
|
|
(4)
|
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.
|
|
|
(5)
|
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.
|
|
|
(6)
|
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.
|
|
|
(7)
|
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.
|
|
|
(8)
|
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 and
impairments of right-of-use assets, each of which are reconciling
items between GAAP net loss and Adjusted EBITDA and could
significantly impact GAAP results.
|
Conference Call Information
Members of our management will host a conference call
today, May 6, 2021, to discuss our first quarter 2021 results
at 4:30 p.m. Eastern Time. To participate, domestic callers
should dial 1-888-428-7458 and international callers should dial
1-862-298-0702. A replay of the call may be accessed the same day
from Thursday, May 6, 2021 until 7 p.m.
Eastern Time on Thursday, May 13, 2021 by dialing
1-888-539-4649 (domestic) or 1-754-333-7735 (international) and
entering replay PIN 155575. An archived version of the call will
also be available upon completion on the Investor Relations section
of our website at ir.truecar.com. We have used, and intend to
continue to use, our Investor Relations website (ir.truecar.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 our
expectations regarding future revenue and Adjusted EBITDA. 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, 2020 filed with
the Securities and Exchange Commission, or SEC, and our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2021 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 and Adjusted EBITDA margin. We
define Adjusted EBITDA as net income (loss) adjusted to exclude
interest income, interest expense, 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 expense (income), impairment of lease
right-of-use assets, and income taxes. We have provided below a
reconciliation of Adjusted EBITDA to net loss, the most
directly comparable GAAP financial measure. Adjusted EBITDA should
not 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 as an operating performance measure
because it 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
facilitates operating performance comparisons on a period-to-period
basis because it excludes variations primarily caused by changes in
the excluded items noted above. In addition, we believe that
Adjusted EBITDA 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 Adjusted EBITDA has limitations as an analytical
tool, and you should not consider it 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 payment or receipt of
interest or the payment of income taxes;
- Adjusted EBITDA does not reflect 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;
- Adjusted EBITDA does not reflect the legal, accounting,
consulting and other third-party fees and costs that we incurred in
connection with the evaluation and negotiation of potential merger
and acquisition transactions;
- Adjusted EBITDA does not reflect the costs to advance our
claims in certain litigation or the costs to defend ourselves in
various complaints filed against us;
- Adjusted EBITDA does not consider 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 differently than we do, limiting its
usefulness as a comparative measure.
Because of these limitations, you should consider Adjusted
EBITDA alongside other financial performance measures, including
our net loss, our other GAAP results and various cash flow metrics.
In addition, in evaluating Adjusted EBITDA, 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 you
should not infer from our presentation of Adjusted EBITDA 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 an office in
Austin, Texas.
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
Contact:
investors@truecar.com
TRUECAR,
INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In
thousands, except per share
data) (Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
Revenues
|
$
|
65,105
|
|
|
$
|
78,917
|
|
Costs and operating
expenses:
|
|
|
|
Cost of
revenue
|
5,458
|
|
|
6,175
|
|
Sales and
marketing
|
40,099
|
|
|
46,080
|
|
Technology and
development
|
11,193
|
|
|
11,899
|
|
General and
administrative
|
12,678
|
|
|
12,088
|
|
Depreciation and
amortization
|
4,312
|
|
|
5,029
|
|
Goodwill
impairment
|
—
|
|
|
8,264
|
|
Total costs and
operating expenses
|
73,740
|
|
|
89,535
|
|
Loss from
operations
|
(8,635)
|
|
|
(10,618)
|
|
Interest
income
|
15
|
|
|
378
|
|
Other
income
|
625
|
|
|
—
|
|
Loss from equity
method investment
|
(329)
|
|
|
(382)
|
|
Loss from continuing
operations before income taxes
|
(8,324)
|
|
|
(10,622)
|
|
Provision for
(benefit from) income taxes
|
94
|
|
|
(232)
|
|
Loss from continuing
operations
|
(8,418)
|
|
|
(10,390)
|
|
Loss from
discontinued operations, net of taxes
|
—
|
|
|
(279)
|
|
Net loss
|
$
|
(8,418)
|
|
|
$
|
(10,669)
|
|
Loss per share, basic
and diluted
|
|
|
|
Continuing
operations
|
$
|
(0.09)
|
|
|
$
|
(0.10)
|
|
Discontinued
operations
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
Weighted average
common shares outstanding, basic and diluted
|
98,581
|
|
|
107,024
|
|
TRUECAR,
INC.
CONSOLIDATED BALANCE SHEETS
(In thousands) (Unaudited)
|
|
|
March 31,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
274,573
|
|
|
$
|
273,314
|
|
Accounts receivable,
net
|
28,308
|
|
|
32,923
|
|
Prepaid
expenses
|
4,905
|
|
|
5,800
|
|
Other current
assets
|
4,057
|
|
|
12,901
|
|
Total current
assets
|
311,843
|
|
|
324,938
|
|
Property and
equipment, net
|
20,626
|
|
|
21,421
|
|
Operating lease
right-of-use assets
|
28,124
|
|
|
29,192
|
|
Goodwill
|
51,205
|
|
|
51,205
|
|
Intangible assets,
net
|
6,188
|
|
|
6,600
|
|
Equity method
investment
|
19,576
|
|
|
19,905
|
|
Other
assets
|
4,709
|
|
|
4,800
|
|
Total
assets
|
$
|
442,271
|
|
|
$
|
458,061
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
13,831
|
|
|
$
|
13,198
|
|
Accrued employee
expenses
|
4,549
|
|
|
6,506
|
|
Operating lease
liabilities, current
|
4,847
|
|
|
4,771
|
|
Accrued expenses and
other current liabilities
|
16,064
|
|
|
18,402
|
|
Total current
liabilities
|
39,291
|
|
|
42,877
|
|
Deferred tax
liabilities
|
57
|
|
|
40
|
|
Operating lease
liabilities, net of current portion
|
30,645
|
|
|
31,974
|
|
Other
liabilities
|
86
|
|
|
388
|
|
Total
liabilities
|
70,079
|
|
|
75,279
|
|
Stockholders'
Equity
|
|
|
|
Common
stock
|
10
|
|
|
10
|
|
Additional paid-in
capital
|
736,118
|
|
|
738,290
|
|
Accumulated
deficit
|
(363,936)
|
|
|
(355,518)
|
|
Total stockholders'
equity
|
372,192
|
|
|
382,782
|
|
Total liabilities
and stockholders' equity
|
$
|
442,271
|
|
|
$
|
458,061
|
|
TRUECAR,
INC.
RECONCILIATION OF NET LOSS TO ADJUSTED
EBITDA (In
thousands) (Unaudited)
|
|
|
Three Months
Ended
March
31,
|
|
2021
|
|
2020
|
Net loss
|
$
|
(8,418)
|
|
|
$
|
(10,669)
|
|
Loss from
discontinued operations, net of tax
|
—
|
|
|
279
|
|
Loss from continuing
operations
|
(8,418)
|
|
|
(10,390)
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
Interest
income
|
(15)
|
|
|
(378)
|
|
Depreciation and
amortization
|
4,312
|
|
|
5,029
|
|
Stock-based
compensation
|
6,385
|
|
|
5,914
|
|
Share of net loss of
equity method investment
|
329
|
|
|
382
|
|
Certain litigation
costs (1)
|
—
|
|
|
(1,939)
|
|
Change in the fair
value of contingent consideration
|
31
|
|
|
75
|
|
Goodwill impairment
(2)
|
—
|
|
|
8,264
|
|
Other income
(3)
|
(625)
|
|
|
—
|
|
Provision for (benefit
from) income taxes
|
94
|
|
|
(232)
|
|
Adjusted
EBITDA
|
$
|
2,093
|
|
|
$
|
6,725
|
|
|
_________________
|
(1)
|
For the three months
ended March 31, 2020, the excluded amount relates to legal costs
incurred in connection with complaints filed by non-TrueCar dealers
against TrueCar and consumer class action lawsuits, offset by a
$2.0 million payment. The $2.0 million payment received from one of
our insurance carriers reflects a 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.
|
|
|
(2)
|
The excluded amount
represents a non-cash impairment charge we recognized on our
goodwill during the first quarter of 2020.
|
|
|
(3)
|
Other income
primarily consists of fees earned associated with the transition
services agreement we entered into with J.D. Power in connection
with our ALG divestiture.
|
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SOURCE TrueCar, Inc.