Openlane, Inc. · NYSE:OPLN
Openlane — Q3 2020 Earnings Presentation
27 slides from Openlane's earnings presentation, Nov 3, 2020
Slide 1: Third Quarter 2020 Earnings Slides
Third Quarter 2020 Earnings Slides November 3, 2020
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: Third Quarter Summary
Third Quarter Summary ❑ Financial Performance o Consolidated revenue declined 15%, vehicles sold declined 9% o Adjusted EBITDA increased 8% o Operating adjusted EPS increased 29% ❑ Operations o 100% of transactions online o Ancillary and related services limited due to social distancing o Improved g
Slide 4: September 30, 2020 Leverage
September 30, 2020 Leverage (US$ in millions) Balance Maturity Term Loan B-6 (Adjusted LIBOR + 2.25%) $941 2026 Revolving Credit Facility (Adjusted LIBOR + 1.75%) - 2024 Senior Notes (Fixed 5.125%) 950 2025 Finance Leases & Other 34 Total 1,925 Less: Available Cash* (1,226) Net Debt $699 Senior Secu
Slide 5: Third Quarter Results
WANS AUCTION SERVICES« Third Quarter Results
Slide 6: KAR Q3 2020 Highlights
KAR Q3 2020 Highlights ($ in millions, except per share amounts) Q3 Q3 KAR Highlights* 2020 2019 Total operating revenues $593.6 $701.9 Gross profit** $263.9 $291.0 % of revenue 44.5% 41.5% 52% in Q3 2020, excluding purchased vehicle sales SG&A $131.0 $158.9 EBITDA $133.7 $131.2 Adjusted EBITDA $139
Slide 7: ADESA Q3 2020 Highlights
ADESA Q3 2020 Highlights ($ in millions, except RPU) ADESA Q3 2020 Q3 2019 Highlights* Auction fees and services revenue $440.5 $534.5 Purchased vehicle sales $86.2 $79.1 Total ADESA Revenue $526.7 $613.6 Decrease in vehicles sold and average revenue per vehicle sold Gross profit** $217.3 $227.4 % o
Slide 8: AFC Q3 2020 Highlights
AFC Q3 2020 Highlights ($ in millions, except for revenue per loan transaction) Q3 Q3 AFC 2020 2019 Highlights* Interest and fee income $55.8 $85.5 Other revenue $2.1 $2.7 Provision for credit losses -- ($8.9) Warranty contract revenue $9.0 $9.0 PWI revenue Total AFC revenue $66.9 $88.3 -1% revenue
Slide 9: Year-to-Date Results
WANS AUCTION SERVICES« Year-to-Date Results
Slide 10: KAR Nine Months Ended September 30, 2020 Highlights
KAR Nine Months Ended September 30, 2020 Highlights ($ in millions, except per share amounts) KAR YTD 2020 YTD 2019 Highlights* Total operating revenues $1,658.1 $2,110.6 Gross profit** $698.7 $888.4 % of revenue 42.1% 42.1% 48.3% YTD 2020, excluding purchased vehicle sales SG&A $405.7 $497.3 YTD 20
Slide 11: ADESA Nine Months Ended September 30, 2020 Highlights
ADESA Nine Months Ended September 30, 2020 Highlights ($ in millions, except RPU) ADESA YTD 2020 YTD 2019 Highlights* Auction fees and services revenue $1,244.6 $1,629.5 Purchased vehicle sales $211.3 $216.2 Includes $12.7M from acquisitions Total ADESA Revenue $1,455.9 $1,845.7 Decrease in vehicles
Slide 12: AFC Nine Months Ended September 30, 2020 Highlights
AFC Nine Months Ended September 30, 2020 Highlights ($ in millions, except for revenue per loan transaction) YTD YTD AFC 2020 2019 Highlights* Interest and fee income $204.7 $256.1 Other revenue $6.8 $8.1 Provision for credit losses ($35.9) ($25.5) Warranty contract revenue $26.6 $26.2 PWI revenue T
Slide 13: Historical Data
AUCTION SERVICES. HISTORICAL DATA
Slide 14: ADESA Revenue & Gross Profit
ADESA Revenue & Gross Profit 3Q20 2Q20 1Q20 2019 4Q19 3Q19 2Q19 1Q19 2018 4Q18 Auction Fees & $440.5 $312.6 $491.5 $2,133.5 $504.0 $534.5 $553.1 $541.9 $1,985.1 $475.3 Services Revenue Purchased Vehicle $86.2 $49.6 $75.5 $295.5 $79.3 $79.1 $79.3 $57.8 $116.8 $33.2 Sales Total ADESA $526.7 $362.2 $56
Slide 15: ADESA Metrics - Annual
ADESA Metrics - Annual 2019 2018 2017 2016 2015 Revenue2 $2,429.0 $2,101.9 $1,937.5 $1,765.3 $1,427.8 Total Volume 3,784 3,472 3,180 2,885 2,465 Online Only Volume (N.A.) 1,533 1,304 938 743 592 Total Online Volume %3 58% 54% 46% 42% 40% Physical Conversion % (N.A.) 62.8% 61.6% 60.4% 58.0% 58.3% Dea
Slide 16: ADESA Metrics - Quarter
ADESA Metrics - Quarter 3Q20 2Q20 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 Revenue2 $526.7 $362.2 $567.0 $583.3 $613.6 $632.4 $599.7 $508.5 $527.0 Total Volume 871 648 862 887 957 994 945 811 876 Online Only Volume (N.A.) 437 321 367 355 396 416 367 306 343 Total Online Volume %3 100% 100% 63% 59% 59% 59%
Slide 17: AFC Metrics - Annual
AFC Metrics - Annual 2019 2018 2017 2016 2015 Revenue $352.9 $340.9 $301.3 $286.8 $268.4 Loan Transaction Units (LTU) 1,783 1,760 1,688 1,718 1,607 Revenue per Loan Transaction, $178 $175 $159 $148 $150 Excluding “Warranty Contract Revenue” Ending Managed Finance Receivables $2,115.2 $2,014.8 $1,912
Slide 18: AFC Metrics - Quarter
AFC Metrics - Quarter 3Q20 2Q20 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 Revenue $66.9 $56.8 $78.5 $88.0 $88.3 $86.7 $89.9 $85.3 $85.4 Loan Transaction Units 324 420 448 443 442 437 461 428 433 (LTU) Revenue per Loan Transaction, Excluding $179 $115 $155 $178 $180 $178 $177 $180 $177 “Warranty Contract Re
Slide 19: AFC Provision for Credit Losses - Annual
AFC Provision for Credit Losses - Annual 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007 Ending Managed $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 $2,059.9 $1,959.8 $1,802.2 $1,732.5 $1,474.9
Slide 20: AFC Provision for Credit Losses - Quarterly
AFC Provision for Credit Losses - Quarterly 3Q20 2Q20 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 Ending Managed $1,744.8 $1,548.3 $1,954.8 $2,115.2 $2,110.4 $2,070.1 $1,989.1 $2,014.8 $1,979.7 Receivables Average Managed $1,646.6 $1,751.6 $2,035.0 $2,112.8 $2,090.3 $2,029.6 $2,002.0 $1,997.3 $1,969.2 Receiv
Slide 21: Appendix
AUCTION SERVICES. APPENDIX
Slide 22: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as
Slide 23: Q3 2020 Adjusted EBITDA Reconciliation
Q3 2020 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2020 ADESA AFC Corporate Consolidated Net income (loss) from continuing $70.2 $26.4 ($49.5) $47.1 operations Add back: Income taxes 26.0 4.3 (19.4) 10.9 Interest expense, net of interest income 0.7 7.5 21.0 29.2
Slide 24: Q3 2019 Adjusted EBITDA Reconciliation
Q3 2019 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2019 ADESA AFC Corporate Consolidated Net income (loss) from continuing $46.4 $30.7 ($42.7) $34.4 operations Add back: Income taxes 16.3 10.1 (13.2) 13.2 Interest expense, net of interest income 0.8 15.6 20.8 37.
Slide 25: YTD 2020 Adjusted EBITDA Reconciliation
YTD 2020 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2020 ADESA AFC Corporate Consolidated Net income (loss) from continuing $89.9 $67.0 ($139.3) $17.6 operations Add back: Income taxes 37.3 18.0 (47.0) 8.3 Interest expense, net of interest income 1.9 30.2 64.9 97.
Slide 26: YTD 2019 Adjusted EBITDA Reconciliation
YTD 2019 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2019 ADESA AFC Corporate Consolidated Net income (loss) from continuing $139.3 $88.6 ($150.8) $77.1 operations Add back: Income taxes 54.0 32.2 (57.8) 28.4 Interest expense, net of interest income 1.8 48.6 97.7 1
Slide 27: Operating Adjusted Net Income from Continuing Operations per Share Reconciliation
Operating Adjusted Net Income from Continuing Operations per Share Reconciliation ($ in millions, except per share amounts), (unaudited) Three Months ended Nine Months ended September 30, September 30, 2020 2019 2020 2019 Net income $47.1 $35.3 $17.6 $168.7 Less: Income from discontinued operations