SANTA MONICA, Calif.,
Aug. 5, 2021 /PRNewswire/
-- TrueCar, Inc. (NASDAQ: TRUE) today announced its
financial results for the second quarter ended June 30, 2021.
Second Quarter 2021 Financial Highlights
The following financial results reflect continuing operations
only:
- Second quarter total revenue of $65.8
million, up 1.0% from the first quarter of 2021 and up 12.3%
from the second quarter of 2020.
- Loss from continuing operations of $(7.1) million, or $(0.07) per share, compared to loss from
continuing operations of $(11.4)
million, or $(0.11) per share,
in the second quarter of 2020.
- Second quarter Adjusted EBITDA(1) of
$4.7 million, representing an
Adjusted EBITDA margin(2) of 7.2%, compared to Adjusted
EBITDA of $8.8 million, representing
an Adjusted EBITDA margin of 15.0%, in the second quarter of
2020.
- $267.1 million of cash and cash
equivalents on the balance sheet as of June
30, 2021.
Management Commentary
"I'm pleased to report that the second quarter was another
strong quarter for TrueCar," said Mike
Darrow, TrueCar's President and Chief Executive Officer.
"Overall, we ended the second quarter above both guidance and
consensus forecasts with revenue of $65.8
million and Adjusted EBITDA of $4.7
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
16.1% to 9.6 million in the second quarter of 2021, up from 8.3
million in the second quarter of 2020.
- Units(4) were 194,791 in the second quarter of
2021, up 3.0% year-over-year.
- Monetization(5) was $336 in the second quarter of 2021, up 15.9%
year-over-year.
- Franchise dealer count(6) was 9,614 as of
June 30, 2021, down from 10,446 as of
March 31, 2021.
- Independent dealer count(7) was 3,545 as of
June 30, 2021, down from 3,702 as of
March 31, 2021.
Business Outlook
Due to the heightened level of uncertainty, especially around
the industry implications resulting from inventory shortages, we
will not be providing formal guidance for the third quarter ending
September 30, 2021 or the full year
ending December 31, 2021 at this
time. However, we expect above breakeven Adjusted EBITDA for the
third quarter ending September 30,
2021.
____________________________
|
(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.
|
Conference Call Information
Members of our management will host a conference call
today, August 5, 2021, to discuss our second quarter 2021
results at 4:30 p.m. Eastern Time. To participate, domestic
callers should dial 1-877-870-4263 and international callers should
dial 1-412-317-0790. A replay of the call may be accessed the same
day from Thursday, August 5, 2021 until 7 p.m. Eastern Time on Thursday, August 12, 2021
by dialing 1-877-344-7529 (domestic) or 1-412-317-0088
(international) and entering replay PIN 10155284. 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, our Quarterly
Report on Form 10-Q for the quarter ended March 31, 2021 filed with the SEC and our
Quarterly Report on Form 10-Q for the quarter ended June 30, 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 reflect the severance charges
associated with restructuring plans;
- Adjusted EBITDA does not reflect the impairment charges on our
right-of-use assets associated with subleasing;
- 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
auto buyers to connect to our nationwide network of Certified
Dealers. We are building the industry's most personalized and
efficient auto 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 auto
buying experience. As part of our marketplace, TrueCar powers
auto-buying programs for over 250 leading brands, including AARP,
Sam's Club and American Express. 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
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Revenues
|
$
|
65,766
|
|
|
$
|
58,554
|
|
|
$
|
130,871
|
|
|
$
|
137,471
|
|
Costs and operating
expenses:
|
|
|
|
|
|
|
|
Cost of
revenue
|
5,746
|
|
|
5,564
|
|
|
11,204
|
|
|
11,739
|
|
Sales and
marketing
|
37,476
|
|
|
33,032
|
|
|
77,575
|
|
|
79,112
|
|
Technology and
development
|
10,780
|
|
|
12,800
|
|
|
21,973
|
|
|
24,699
|
|
General and
administrative
|
13,853
|
|
|
12,849
|
|
|
26,531
|
|
|
24,937
|
|
Depreciation and
amortization
|
4,591
|
|
|
5,175
|
|
|
8,903
|
|
|
10,204
|
|
Goodwill
impairment
|
—
|
|
|
—
|
|
|
—
|
|
|
8,264
|
|
Total costs and
operating expenses
|
72,446
|
|
|
69,420
|
|
|
146,186
|
|
|
158,955
|
|
Loss from
operations
|
(6,680)
|
|
|
(10,866)
|
|
|
(15,315)
|
|
|
(21,484)
|
|
Interest
income
|
13
|
|
|
61
|
|
|
28
|
|
|
439
|
|
Other
income
|
42
|
|
|
—
|
|
|
667
|
|
|
—
|
|
Loss from equity
method investment
|
(357)
|
|
|
(507)
|
|
|
(686)
|
|
|
(889)
|
|
Loss from continuing
operations before income taxes
|
(6,982)
|
|
|
(11,312)
|
|
|
(15,306)
|
|
|
(21,934)
|
|
Provision for
(benefit from) income taxes
|
133
|
|
|
62
|
|
|
227
|
|
|
(170)
|
|
Loss from continuing
operations
|
(7,115)
|
|
|
(11,374)
|
|
|
(15,533)
|
|
|
(21,764)
|
|
(Loss) income from
discontinued operations, net of taxes
|
(168)
|
|
|
132
|
|
|
(168)
|
|
|
(147)
|
|
Net loss
|
$
|
(7,283)
|
|
|
$
|
(11,242)
|
|
|
$
|
(15,701)
|
|
|
$
|
(21,911)
|
|
(Loss) income per
share, basic and diluted:
|
|
|
|
|
|
|
|
Continuing
operations
|
$
|
(0.07)
|
|
|
$
|
(0.11)
|
|
|
$
|
(0.16)
|
|
|
$
|
(0.20)
|
|
Discontinued
operations
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
$
|
0.00
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding, basic and diluted
|
98,810
|
|
|
107,535
|
|
|
98,696
|
|
|
107,279
|
|
TRUECAR,
INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
(Unaudited)
|
|
|
June 30,
2021
|
|
December 31,
2020
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
267,073
|
|
|
$
|
273,314
|
|
Accounts receivable,
net
|
22,835
|
|
|
32,923
|
|
Prepaid
expenses
|
8,499
|
|
|
5,800
|
|
Other current
assets
|
3,991
|
|
|
12,901
|
|
Total current
assets
|
302,398
|
|
|
324,938
|
|
Property and
equipment, net
|
19,456
|
|
|
21,421
|
|
Operating lease
right-of-use assets
|
25,758
|
|
|
29,192
|
|
Goodwill
|
51,205
|
|
|
51,205
|
|
Intangible assets,
net
|
5,775
|
|
|
6,600
|
|
Equity method
investment
|
19,219
|
|
|
19,905
|
|
Other
assets
|
4,723
|
|
|
4,800
|
|
Total
assets
|
$
|
428,534
|
|
|
$
|
458,061
|
|
Liabilities and
Stockholders' Equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts
payable
|
$
|
16,397
|
|
|
$
|
13,198
|
|
Accrued employee
expenses
|
5,358
|
|
|
6,506
|
|
Operating lease
liabilities, current
|
4,971
|
|
|
4,771
|
|
Accrued expenses and
other current liabilities
|
14,243
|
|
|
18,402
|
|
Total current
liabilities
|
40,969
|
|
|
42,877
|
|
Deferred tax
liabilities
|
90
|
|
|
40
|
|
Operating lease
liabilities, net of current portion
|
29,223
|
|
|
31,974
|
|
Other
liabilities
|
22
|
|
|
388
|
|
Total
liabilities
|
70,304
|
|
|
75,279
|
|
Stockholders'
Equity
|
|
|
|
Common
stock
|
10
|
|
|
10
|
|
Additional paid-in
capital
|
729,439
|
|
|
738,290
|
|
Accumulated
deficit
|
(371,219)
|
|
|
(355,518)
|
|
Total stockholders'
equity
|
358,230
|
|
|
382,782
|
|
Total liabilities
and stockholders' equity
|
$
|
428,534
|
|
|
$
|
458,061
|
|
TRUECAR,
INC.
|
RECONCILIATION OF
NET LOSS TO ADJUSTED EBITDA
|
(In
thousands)
|
(Unaudited)
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Net loss
|
$
|
(7,283)
|
|
|
$
|
(11,242)
|
|
|
$
|
(15,701)
|
|
|
$
|
(21,911)
|
|
Loss (income) from
discontinued operations, net of tax
|
168
|
|
|
(132)
|
|
|
168
|
|
|
147
|
|
Loss from continuing
operations
|
(7,115)
|
|
|
(11,374)
|
|
|
(15,533)
|
|
|
(21,764)
|
|
|
|
|
|
|
|
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
Interest
income
|
(13)
|
|
|
(61)
|
|
|
(28)
|
|
|
(439)
|
|
Depreciation and
amortization
|
4,591
|
|
|
5,175
|
|
|
8,903
|
|
|
10,204
|
|
Stock-based
compensation
|
5,157
|
|
|
6,111
|
|
|
11,542
|
|
|
12,025
|
|
Share of net loss of
equity method investment
|
357
|
|
|
507
|
|
|
686
|
|
|
889
|
|
Certain litigation
costs (1)
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,939)
|
|
Restructuring charges
(2)
|
—
|
|
|
8,346
|
|
|
—
|
|
|
8,346
|
|
Change in the fair
value of contingent consideration
|
10
|
|
|
46
|
|
|
41
|
|
|
121
|
|
Goodwill impairment
(3)
|
—
|
|
|
—
|
|
|
—
|
|
|
8,264
|
|
Other
income
|
(42)
|
|
|
—
|
|
|
(667)
|
|
|
—
|
|
Impairment of
right-of-use ("ROU") assets (4)
|
1,652
|
|
|
—
|
|
|
1,652
|
|
|
—
|
|
Provision for (benefit
from) income taxes
|
133
|
|
|
62
|
|
|
227
|
|
|
(170)
|
|
Adjusted
EBITDA
|
$
|
4,730
|
|
|
$
|
8,812
|
|
|
$
|
6,823
|
|
|
$
|
15,537
|
|
_________________
|
(1)
|
|
For the six months
ended June 30, 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 amounts
represent charges associated with the restructuring plans
undertaken in 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.
|
(3)
|
|
The excluded amount
represents a non-cash impairment charge we recognized on our
goodwill during the first quarter of 2020.
|
(4)
|
|
The excluded amounts
represent an impairment charge on our ROU assets associated with
certain of our existing office locations. We consider these charges
to be unrelated to our underlying results of operations and believe
that their exclusion is appropriate to facilitate period-to-period
operating performance comparisons.
|
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SOURCE TrueCar, Inc.