Openlane, Inc. · NYSE:OPLN

Openlane — KAR Auction Services — Stephens Spring Investment Conference 2012

23 slides from Openlane's conference presentation, Jun 6, 2012

  1. Slide 1: Stephens Spring Investment Conference June 6, 2012

    Stephens Spring Investment Conference June 6, 2012

  2. 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

  3. 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

  4. Slide 4: 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

  5. Slide 5: 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

  6. Slide 6: 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”) 6

  7. Slide 7: ADESA and OPENLANE – Strategic Rationale for the Combination

    ADESA and OPENLANE – Strategic Rationale for the Combination Significantly Increased Customer Significantly Enhanced Marketplace Benefits Capabilities 7

  8. Slide 8: 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

  9. Slide 9: 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 + 8% 2012 Q1 • Adjusted EBITDA +3% Growth • Volume +6% • Approximately 50% of units sold on-line Technology • Integra

  10. Slide 10: AFC – Disciplined Growth

    AFC – Disciplined Growth • Complements KAR’s offerings • Fee driven business Overview • Retain title as collateral • Revenue +16% 2012 Q1 • Adjusted EBITDA +17% • Loan Transactions +17% Growth • $868M at 3/31/12 • 99% current Portfolio • $750M committed liquidity* • $586M drawn 10 * U.S. & Cdn facil

  11. Slide 11: First Quarter 2012 Performance

    First Quarter 2012 Performance Revenue Gross Profit* $600 $485 $507 $500 $400 $300 $238 ($mm) ($mm) $200 $250 $220 $100 $125 44.2% 45.4% 46.9% $0 $0 Q1 2011 Q1 2012 Q1 2011 Q1 2012 Adjusted EBITDA Adjusted Net Income Per Share $0.60 $150 $127 $135 $0.41 $0.40 $100 $0.31 ($mm) $50 26.3% 26.6% $0.20 $

  12. Slide 12: March 31, 2012 Capital Structure

    March 31, 2012 Capital Structure (US$ in millions) 3/31/2012 Maturity Term Loan Facilities $1,680.0 2017 Revolving Credit Facility $0.0 2016 Floating Rate Notes 150.0 2014 Capital Leases 28.8 * Total 1,858.8 Less: Available Cash (62.1) Net Debt $1,796.7 Net Debt /Adjusted EBITDA 3.63X * Various matu

  13. Slide 13: 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

  14. Slide 14: Appendix

    Appendix 14

  15. Slide 15: 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

  16. Slide 16: 2009 Adjusted EBITDA Reconciliation

    2009 Adjusted EBITDA Reconciliation Year Ended December 31, 2009 (Dollars in millions) ADESA IAAI 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

  17. Slide 17: 2010 Adjusted EBITDA Reconciliation

    2010 Adjusted EBITDA Reconciliation Year Ended December 31, 2010 (Dollars in millions) ADESA IAAI 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 Depreciati

  18. Slide 18: 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

  19. Slide 19: Q1 2011 Adjusted EBITDA Reconciliation

    Q1 2011 Adjusted EBITDA Reconciliation Three Months Ended March 31, 2011 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $25.8 $19.2 $15.0 $(20.2) $39.8 Add back: Income Taxes (2.1) 9.4 6.2 (12.5) 1.0 Interest Expense, Net of Interest Income 0.2 0.6 2.1 30.3 33.2 Depreci

  20. Slide 20: Q1 2012 Adjusted EBITDA Reconciliation

    Q1 2012 Adjusted EBITDA Reconciliation Three Months Ended March 31, 2012 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $9.0 $18.3 $16.3 $(17.6) $26.0 Add back: Income Taxes 7.2 12.1 9.6 (10.5) 18.4 Interest Expense, Net of Interest Income 0.3 0.4 3.7 25.9 30.3 Deprecia

  21. Slide 21: LTM Adjusted EBITDA Reconciliation

    LTM Adjusted EBITDA Reconciliation Twelve Months Three Months Ended Ended June 30, September 30, December 31, March 31, March 31, 2011 2011 2011 2012 2012 (Dollars in millions) (Unaudited) Net income (loss) ($14.3) $32.2 $14.5 $26.0 $58.4 Add back: Income taxes (6.9) 14.7 9.0 18.4 35.2 Interest expe

  22. Slide 22: Adjusted Net Income Per Share Reconciliation (Q1 2012 & Q1 2011)

    Adjusted Net Income Per Share Reconciliation (Q1 2012 & Q1 2011) Three Months Ended March 31, (In millions, except per share amounts ) 2012 2011 Net income $ 26.0 $ 39.8 Stepped up depreciation and amortization expense, net of tax (1) 9.9 9.9 (2) Stock-based compensation, net of tax 6.9 6.1 (3) Cont

  23. Slide 23: 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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