Openlane, Inc. · NYSE:OPLN
Openlane — KAR Holdings — Bank of America 2008 Credit Conference
24 slides from Openlane's conference presentation, Nov 20, 2008
Slide 1: Bank of America 2008 Credit Conference
Bank of America 2008 Credit Conference November 20, 2008 Exhibit 99.1
Slide 2: Company Overview
KAR Holdings, Inc. Total 2007 Revenue: $1,589 million Total 2007 PF Adjusted EBITDA: $405 million ADESA Auctions 2007 Revenue: $965 million Company Overview ($ in millions) IAAI Salvage 2007 Revenue: $483 million Used vehicle auctioneer Remarkets used vehicles from large institutions and dealers Sal
Slide 3: Broad Geographic Footprint
Broad geographic footprint positions the Company as the preferred auction & floorplan financing provider for its customers. Broad Geographic Footprint The Company has the largest combined network of Used Car and Salvage Auctions in N.A. ADESA Auctions —61 auction sites IAAI Salvage —151 auction site
Slide 4: Leading Market Positions
Leading Market Positions North American Used Vehicle Auction Market – 9.5 Million Units North American Salvage Auction Market – 3.2 Million Units Source: GVR Report and Company estimates Copart 37% Insurance Auto Auctions 35% Independents 28% Manheim 51% ADESA 19% Independents 30%
Slide 5: ADESA Auctions
ADESA Auctions Auctions strive to maximize the auction sales price for sellers by effectively and efficiently transferring the vehicles, paperwork and funds as quickly as possible Fleet/Lease 30% OEM 13% Second largest whole car vehicle auctioneer in the U.S. and the largest in Canada • Operates 61
Slide 6: IAAI Salvage
IAAI Salvage Percentage of Claims Resulting in Total Loss One of only two salvage auctioneers with a national footprint • Serves all top 75 U.S. metropolitan markets Hybrid auction format, combining Internet and live auctions: • Leads to higher proceeds for suppliers • Increases international buyers
Slide 7: AFC
Facilitates growth of vehicle sales at auction and allows ADESA and IAAI to have larger role in entire vehicle redistribution industry. AFC Provides floorplan financing to independent dealers • 30 to 60 day loan terms • Serves over 800 auctions Market leader- In a market of 43,000 registered dealers
Slide 8: Major Initiatives
Major Initiatives Market Share Improvement Domestic Expansion E-Business Improved Earnings through Cost Savings and Operations Initiatives Stabilize performance of AFC
Slide 9: Market Share Improvement
Market Share Improvement Significant institutional customer wins Site expansions & improvements in meeting customer needs Improved business information systems to enhance customer reporting Increased dealer consignment sales
Slide 10: Domestic Expansion
Domestic Expansion Relocations of capacity-constrained facilities: • Dallas (used car) • Phoenix (used car) • Kansas City (used car) • Toronto (salvage) Acquisitions of independent used vehicle auctions Acquisitions of independent salvage auctions • Reduce customer towing costs • Ease capacity const
Slide 11: ADESA E-Business
ADESA E-Business Improve upstream and mid-stream product offerings via: • Centralization of e-business operations • Develop new e-business technology • Upgrade and add personnel Significant new customers • 2008 wins include Nissan and Chrysler • Targets include Mercedes, Hyundai, and Kia New feature
Slide 12: Cost Savings
Cost Savings Implementing consistent used car auction operating practices • 31 of 61 sites completed to date • Operational audit team in place to verify compliance Improved technology to support auction operations • Reduced administrative effort and elimination of redundant processes • Improved cust
Slide 13: Stabilize AFC Performance
Stabilize AFC Performance Focus on improving credit quality • Tightening credit underwriting standards • Reducing curtailment exceptions Increasing focus on collections & resolution of A/R Reducing headcount to match current volume Closing offices in non-strategic locations
Slide 14: KAR Holdings Consolidated Financial Summary
KAR Holdings Consolidated Financial Summary
Slide 15: Long-Term Debt Structure
Long-Term Debt Structure (millions of US dollars) As of Description 9/30/2008 Rate Maturity Term B Loan - Hedged* 800.0 $ 5.34% + 225 Term B Loan - Unhedged 701.5 Libor + 225 Senior Credit Facility 1,501.5 $ Floating Rate Senior Notes 150.0 $ Libor + 400 Fixed Rate Senior Notes 450.0 8.75% Senior Su
Slide 16: Consolidated Balance Sheet
Consolidated Balance Sheet (millions of US dollars) 12/31/2007 9/30/2008 Cash & equivalents $221 $212 Other current assets Total current assets PP&E and Other assets 3,629 3,441 Total Assets 4,531 4,345 Current liabilities Long-term debt 2,566 2,527 Other non-current liabilities* Total Equity 1,014
Slide 17: De-leveraging Initiatives
De-leveraging Initiatives Increased profitability through cost savings initiatives Acquisitions at attractive multiples Securitization of the AFC rental portfolio Sale/leaseback of owned ADESA property and related repayment of debt
Slide 18: Financial Highlights - Consolidated
YTD Operating Profit Financial Highlights - Consolidated Q3 Revenue Q3 Operating Profit YTD Revenue Results for ADESA and IAAI prior to the April 20, 2007 merger transactions have been combined to illustrate the effect of the merger transactions as if they had occurred on January 1, 2007. * Excludes
Slide 19: Financial Highlights – ADESA Auctions
Financial Highlights – ADESA Auctions YTD Revenue YTD Operating Profit YTD Revenue YTD Operating Profit 8% 20% Results for ADESA and IAAI prior to the April 20, 2007 merger transactions have been combined to illustrate the effect of the merger transactions as if they had occurred on January 1, 2007.
Slide 20: Financial Highlights - IAAI
Financial Highlights - IAAI YTD Revenue YTD Operating Profit YTD Revenue YTD Operating Profit 18% Results for ADESA and IAAI prior to the April 20, 2007 merger transactions have been combined to illustrate the effect of the merger transactions as if they had occurred on January 1, 2007. 77% $361 $42
Slide 21: Financial Highlights - AFC
Financial Highlights - AFC YTD Operating Profit YTD Revenue YTD Operating Profit 22% 49% YTD Revenue * Excludes non-cash goodwill and other intangibles impairment charge of $164.4 million $110 $86 $0 $30 $60 $90 $120 $150 $28 $55 $0 $40 $80 2008*
Slide 22: Appendix: Discussion of Non-GAAP Measures
Appendix Discussion of Non-GAAP Measures: EBITDA, Adjusted EBITDA and Adjusted EBITDA per the Credit Agreement – The Company’s management believes that EBITDA is a useful supplement and meaningful indicator of earnings performance to be used by its investors, financial analysts and others to analyze
Slide 23: Adjusted EBITDA Reconciliation For the Twelve Months Ended September 30, 2008
Adjusted EBITDA Reconciliation For the Twelve Months Ended September 30, 2008 Three Months Ended Twelve Months Ended (In millions) December 31, 2007 March 31, June 30, September 30, 2008 September 30, 2008 Net income (loss) ($34.3) ($3.2) $6.2 ($169.9) ($201.2) Add back: Income taxes (16.5) (3.7) 4.
Slide 24: Adjusted EBITDA Reconciliation For the Year Ended December 31, 2007
Adjusted EBITDA Reconciliation For the Year Ended December 31, 2007 Three Months Ended Year Ended (In millions) March 31, June 30, September 30, 2007 December 31, 2007 December 31, 2007 Net income (loss) $38.4 ($7.3) ($8.6) ($34.3) ($11.8) Add back: discontinued operations 0.1 -- -- -- 0.1 Income (l
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