Openlane, Inc. · NYSE:OPLN
Openlane — KAR Auction Services — INVESTIndiana Equity Conference 2012
24 slides from Openlane's conference presentation, Sep 13, 2012
Slide 1: INVESTIndiana Equity Conference
INVESTIndiana Equity Conference September 13, 2012
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation includes forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Such forward looking statements are subject to certain risks, trends, and uncertainties that could cause actual results to differ material
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA, Adjusted EBITDA, free cash flow, adjusted net income and adjusted net income per share, and percentages or calculations using these measures, as presented herein, are supplemental measures of the company's performance that are not required by, or presented in acco
Slide 4: Leading Provider of Vehicle Auction Services in North America
Leading Provider of Vehicle Auction Services in North America 2011 Revenue: $1,886mm 2011 Adj. EBITDA: $487mm1 ~3.1mm Vehicles Sold in 2011 2011 Revenue2: $1,186mm 2011 Revenue: $700mm 2011 Adj. EBITDA2: $334mm 2011 Adj. EBITDA: $212mm Top 2 whole car auction position Top 2 salvage vehicle aucti
Slide 5: Vehicle Remarketing Life Cycle
Vehicle Remarketing Life Cycle Vehicles in Operation 270 Million units Used Vehicle New Vehicle Registrations Transactions in Removed from North America Operation 12 Million units 10- 15 Million units ~ 40 Million units Salvage Auctions 3 - 4 Million units NAAA Used Vehicle (Whole Car) Dealer Trades
Slide 6: North American Wholesale Volume Forecasts
North American Wholesale Volume Forecasts (1) Units Sold (Millions) 11.0 10.5 10.0 10.0 9.7 9.5 9.5 10.0 9.5 9.5 9.5 9.4 9.5 9.3 9.7 9.5 9.5 9.5 9.5 9.1 9.5 9.4 9.0 9.3 8.6 8.9 8.4 8.4 8.5 8.3 Peak to trough -23% 8.4 8.0 8.4 8.0 7.7 8.1 7.9 7.5 7.7 7.8 7.0 Manheim Kontos TME * Manheim - Manheim Cons
Slide 7: Together with ADESA – The Market Leader with Online Closed Sale Programs
Together with ADESA – The Market Leader with Online Closed Sale Programs OPENLANE Closed Programs ADESA Closed Sale Programs (being migrated to OPENLANE technology platform) On a combined basis, ADESA / OPENLANE is the clear leader in online closed sales programs (“upstream remarketing”) 7
Slide 8: ADESA and OPENLANE – Strategic Rationale for the Combination
ADESA and OPENLANE – Strategic Rationale for the Combination Significantly Increased Customer Significantly Enhanced Marketplace Benefits Capabilities 8
Slide 9: Established Relationships with Vehicle Providers & Buyers
Established Relationships with Vehicle Providers & Buyers The Company does business with major suppliers of whole car and salvage vehicles Average relationship of over ten years with top ten vehicle suppliers Largest customer less than 3% of 2011 consolidated revenue Registered whole car and
Slide 10: IAA – Providing the Advantage in Salvage Auto Auctions
IAA – Providing the Advantage in Salvage Auto Auctions • Leading seller of total loss vehicles • Largest facility footprint in N.A. Overview • Live and “live on-line” model • Revenue + 2% 2012 Q2 • Volume +3% Growth • Approximately 50% of units sold on-line Technology • Integrated into major provide
Slide 11: AFC – Disciplined Growth
AFC – Disciplined Growth • Complements KAR’s offerings • Fee driven business Overview • Retain title as collateral • Revenue +11% 2012 Q2 • Adjusted EBITDA +12% • Loan Transactions +16% Growth • $935M at 6/30/12 • 99% current Portfolio • $750M committed liquidity* • $634M drawn 11 * U.S. & Cdn facil
Slide 12: Second Quarter 2012 Performance
Second Quarter 2012 Performance Revenue Gross Profit* $600 $500 $473 $488 $300 $250 $218 $225 $400 $200 $300 ($mm) ($mm) $150 $200 $100 46.2% 46.1% $100 $50 $0 $0 Q2 2011 Q2 2012 Q2 2011 Q2 2012 Adjusted EBITDA Adjusted Net Income Per Share $0.60 $150 $132 $128 $0.40 $0.32 $0.26 ($mm) $100 $50 27.9%
Slide 13: June 30, 2012 Capital Structure
June 30, 2012 Capital Structure (US$ in millions) 6/30/2012 Maturity Term Loan Facilities $1,676.1 2017 Revolving Credit Facility $0.0 2016 Floating Rate Notes 150.0 2014 Capital Leases 30.5 * Total 1,856.6 Less: Available Cash (83.9) Net Debt $1,772.7 Net Debt /Adjusted EBITDA 3.61X * Various matur
Slide 14: Investment Summary: Diverse Business Model / Strong Free Cash Flow
Investment Summary: Diverse Business Model / Strong Free Cash Flow Adjusted EBITDA Contribution Free Cash Flow** By Segment* $426M $475M $487M 100% 10% 15% 19% $300 $238M $253M 44.2% 30% 35% $200 $184M 39% 50% $100 60% 50% $0 42% 2009 2010 2011 0% 2009 2010 2011 10.6% 13.1% 13.4% Annual Free Cash Fl
Slide 15: Appendix
Appendix 15
Slide 16: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as
Slide 17: 2009 Adjusted EBITDA Reconciliation
2009 Adjusted EBITDA Reconciliation Year Ended December 31, 2009 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $94.4 $25.8 $19.1 $(116.1) $23.2 Add back: Income Taxes 56.0 16.2 8.4 (69.5) 11.1 Interest Expense, Net of Interest Income 0.5 1.4 – 170.3 172.2 Depreciation
Slide 18: 2010 Adjusted EBITDA Reconciliation
2010 Adjusted EBITDA Reconciliation Year Ended December 31, 2010 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $80.1 $44.7 $38.4 $(93.6) $69.6 Add back: Income Taxes 43.6 26.7 21.1 (64.2) 27.2 Interest Expense, Net of Interest Income 0.9 2.3 7.2 130.9 141.3 Depreciatio
Slide 19: 2011 Adjusted EBITDA Reconciliation
2011 Adjusted EBITDA Reconciliation Year Ended December 31, 2011 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $55.8 $65.5 $57.2 $(106.3) $72.2 Add back: Income Taxes 17.9 36.1 29.6 (65.8) 17.8 Interest Expense, Net of Interest Income 0.7 2.1 12.0 128.0 142.8 Depreciat
Slide 20: Q2 2011 Adjusted EBITDA Reconciliation
Q2 2011 Adjusted EBITDA Reconciliation Three Months Ended June 30, 2011 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $17.9 $20.7 $13.1 $(66.0) $(14.3) Add back: Income Taxes 13.1 12.6 8.1 (40.7) (6.9) Interest Expense, Net of Interest Income 0.2 0.5 3.0 45.9 49.6 Depr
Slide 21: Q2 2012 Adjusted EBITDA Reconciliation
Q2 2012 Adjusted EBITDA Reconciliation Three Months Ended June 30, 2012 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $7.3 $16.2 $16.2 $(15.8) $23.9 Add back: Income Taxes 7.7 11.0 9.3 (7.8) 20.2 Interest Expense, Net of Interest Income 0.3 0.4 3.7 25.2 29.6 Depreciati
Slide 22: LTM Adjusted EBITDA Reconciliation
LTM Adjusted EBITDA Reconciliation Twelve Months Three Months Ended Ended September 30, December 31, March 31, June 30, June 30, 2011 2011 2012 2012 2012 (Dollars in millions) (Unaudited) Net income (loss) $32.2 $14.5 $26.0 $23.9 $96.6 Add back: Income taxes 14.7 9.0 18.4 20.2 62.3 Interest expense,
Slide 23: Adjusted Net Income Per Share Reconciliation (Q2 2012 & Q2 2011)
Adjusted Net Income Per Share Reconciliation (Q2 2012 & Q2 2011) Three Months Ended June 30, (In millions, except per share amounts) 2012 2011 Net income (loss) $ 23.9 $ (14.3) Loss on extinguishment of debt, net of tax (1) - 33.2 Swap termination, net of tax (2) - 9.0 Stepped up depreciation and am
Slide 24: Free Cash Flow Calculation – Explanatory Footnotes
Free Cash Flow Calculation – Explanatory Footnotes (1) Free cash flow represents Adjusted EBITDA less capital expenditures, adjusted cash interest paid and cash taxes paid. (2) Cash paid for interest excludes interest paid for standby letters of credit of $0.6 million for the year ended December 31,
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