Slide 1: Second Quarter 2021 Earnings Slides
Second Quarter 2021 Earnings Slides August 3, 2021
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 based on management’s current expectations, are not guarantees of future performance and are subject t
Slide 3: Second Quarter Summary
Second Quarter Summary ❑ Financial Performance o Consolidated revenue of $585.4M ($487.5M excluding purchased vehicles); vehicles sold of 711K o Gross profit was 51.7% of net revenue* o Adjusted EBITDA of $116.5M o Operating adjusted EPS of $0.15 ▪ Includes $11.9M pre-tax of a reduction in unrealize
Slide 4: 2021 Guidance
2021 Guidance ANNUAL GUIDANCE ACTUAL (in millions, except per share amounts) 2021 2020 Net income $90 $0.5 Add back: Income tax expense $38 $4.9 Interest expense, net of interest income $125 $127.3 Depreciation and amortization $205 $191.3 EBITDA $458 $324.0 Total Adjusted EBITDA addbacks, net $17 $
Slide 5: Second Quarter & Year-to-Date Results
S e c o n d Q u a r t e r & Ye a r - t o - D a t e Results 5
Slide 6: KAR Q2 & YTD 2021 Highlights
KAR Q2 & YTD 2021 Highlights* ($ in millions, except per share amounts) KAR Q2 2021 Q2 2020 YTD 2021 YTD 2020 Total operating revenues $585.4 $419.0 $1,167.0 $1,064.5 Gross profit** $252.2 $183.9 $503.4 $434.8 % of revenue** 43.1% 43.9% 43.1% 40.8% SG&A $140.2 $112.3 $289.2 $274.7 Other (income) exp
Slide 7: ADESA Q2 & YTD 2021 Highlights
ADESA Q2 & YTD 2021 Highlights* ($ in millions, except RPU) ADESA Q2 2021 Q2 2020 YTD 2021 YTD 2020 Auction fees $236.7 $177.8 $472.2 $433.1 Service revenue $182.2 $134.8 $369.8 $371.0 Purchased vehicle sales $97.9 $49.6 $190.6 $125.1 Total ADESA Revenue $516.8 $362.2 $1,032.6 $929.2 Gross profit**
Slide 8: AFC Q2 & YTD 2021 Highlights
AFC Q2 & YTD 2021 Highlights* ($ in millions, except for revenue per loan transaction) AFC Q2 2021 Q2 2020 YTD 2021 YTD 2020 Interest and fee income $68.2 $65.1 $136.8 $148.9 Other revenue $2.2 $2.0 $4.2 $4.7 Provision for credit losses ($1.8) ($19.0) ($6.6) ($35.9) Warranty contract revenue $-- $8.
Slide 9: June 30, 2021 Leverage
June 30, 2021 Leverage (US$ in millions) Balance Maturity Term Loan B-6 (Adjusted LIBOR + 2.25%) $933 2026 Revolving Credit Facility (Adjusted LIBOR + 1.75%) - 2024 Senior Notes (Fixed 5.125%) 950 2025 Finance Leases & Other 24 Total 1,907 Less: Available Cash* (592) Net Debt $1,315 Senior Secured N
Slide 10: Historical Data
AUCTION SERVICES. HISTORICAL DATA
Slide 11: ADESA Revenue
ADESA Revenue 2Q21 1Q21 2020 4Q20 3Q20 2Q20 1Q20 2019 4Q19 3Q19 Auction Fees $236.7 $235.5 $887.7 $207.0 $247.6 $177.8 $255.3 $1,115.3 $261.0 $276.0 Service Revenue $182.2 $187.6 $737.4 $173.5 $192.9 $134.8 $236.2 $1,018.2 $243.0 $258.5 Purchased Vehicle $97.9 $92.7 $295.0 $83.7 $86.2 $49.6 $75.5 $2
Slide 12: ADESA Metrics - Annual
ADESA Metrics - Annual 2020 2019 2018 2017 2016 Revenue1 $1,920.1 $2,429.0 $2,101.9 $1,937.5 $1,765.3 On-premise vehicles sold 1,511 2,137 2,124 2,189 2,112 Off-premise vehicles sold 1,551 1,647 1,348 991 773 Total vehicles sold 3,062 3,784 3,472 3,180 2,885 Auction fees per vehicle sold $290 $295 $
Slide 13: ADESA Metrics - Quarter
ADESA Metrics - Quarter 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 3Q19 Revenue1 $516.8 $515.8 $464.2 $526.7 $362.2 $567.0 $583.3 $613.6 On-premise vehicles sold 332 349 328 403 312 468 502 527 Off-premise vehicles sold 379 404 353 468 336 394 385 431 Total vehicles sold 711 753 681 871 648 862 887 958 Auct
Slide 14: AFC Metrics - Annual
AFC Metrics - Annual 2020 2019 2018 2017 2016 Revenue $267.6 $352.9 $340.9 $301.3 $286.8 Loan Transaction Units (LTU) 1,519 1,783 1,760 1,688 1,718 Revenue per Loan Transaction, Excluding $156 $178 $175 $159 $148 Warranty Contract Revenue Ending Managed Finance Receivables $1,911.0 $2,115.2 $2,014.8
Slide 15: AFC Metrics - Quarter
AFC Metrics - Quarter 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 3Q19 Revenue $68.6 $65.8 $65.4 $66.9 $56.8 $78.5 $88.0 $88.3 Loan Transaction Units (LTU) 356 372 327 324 420 448 443 442 Revenue per Loan Transaction, Excluding “Warranty Contract $193 $177 $186 $179 $115 $155 $178 $180 Revenue” Ending Manage
Slide 16: AFC Provision for Credit Losses - Annual
AFC Provision for Credit Losses - Annual 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Ending Managed $1,911.0 $2,115.2 $2,014.8 $1,912.6 $1,792.2 $1,641.0 $1,371.1 $1,107.6 $1,004.2 $883.2 $771.6 $613.0 $506.6 $847.9 Receivables Average Managed $1,854.8 $2,059.9 $1,959.8 $1,
Slide 17: AFC Provision for Credit Losses - Quarterly
AFC Provision for Credit Losses - Quarterly 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 3Q19 Ending Managed $2,108.9 $1,984.4 $1,911.0 $1,744.8 $1,548.3 $1,954.8 $2,115.2 $2,110.4 Receivables Average Managed $2,046.7 $1,947.7 $1,827.9 $1,646.6 $1,751.6 $2,035.0 $2,112.8 $2,090.3 Receivables Provision for Cre
Slide 18: Appendix
AUCTION SERVICES. APPENDIX
Slide 19: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as
Slide 20: Q2 2021 Adjusted EBITDA Reconciliation
Q2 2021 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended June 30, 2021 ADESA AFC Consolidated Net income (loss) ($5.2) $16.7 $11.5 Add back: Income taxes 3.4 5.7 9.1 Interest expense, net of interest income 21.6 9.4 31.0 Depreciation and amortization 42.9 2.5 45.4 Intercompany inter
Slide 21: Q2 2020 Adjusted EBITDA Reconciliation
Q2 2020 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended June 30, 2020 ADESA AFC Consolidated Net income (loss) ($45.5) $13.2 ($32.3) Add back: Income taxes (9.5) 4.9 (4.6) Interest expense, net of interest income 21.4 9.2 30.6 Depreciation and amortization 43.3 3.2 46.5 Intercompan
Slide 22: YTD 2021 Adjusted EBITDA Reconciliation
YTD 2021 Adjusted EBITDA Reconciliation ($ in millions) Six Months ended June 30, 2021 ADESA AFC Consolidated Net income (loss) ($11.0) $73.4 $62.4 Add back: Income taxes 7.5 25.2 32.7 Interest expense, net of interest income 43.0 18.7 61.7 Depreciation and amortization 87.5 4.9 92.4 Intercompany in
Slide 23: YTD 2020 Adjusted EBITDA Reconciliation
YTD 2020 Adjusted EBITDA Reconciliation ($ in millions) Six Months ended June 30, 2020 ADESA AFC Consolidated Net income (loss) ($64.1) $34.6 ($29.5) Add back: Income taxes (14.7) 12.1 (2.6) Interest expense, net of interest income 45.1 22.7 67.8 Depreciation and amortization 87.7 6.5 94.2 Intercomp
Slide 24: Operating Adjusted Net Income per Share Reconciliation
Operating Adjusted Net Income per Share Reconciliation ($ in millions, except per share amounts), (unaudited) Three Months ended Six Months ended June 30, June 30, 2021 2020 2021 2020 Net income (loss) (1) $11.5 ($32.3) $62.4 ($29.5) Acquired amortization expense 13.6 14.1 29.2 28.4 Contingent consi