Slide 1: Third Quarter 2021 Earnings Slides
Third Quarter 2021 Earnings Slides November 2, 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: Third Quarter Summary
Third Quarter Summary ❑ KAR Financial Performance o Consolidated revenue of $535.2M ($443.0M excluding purchased vehicles) o Gross profit of $222.1M was 50.1% of net revenue 1 o SG&A of $134.1 o Adjusted EBITDA of $96.6M o Cash flow from operations $56.9M o Operating adjusted EPS of $0.08 – includes
Slide 4: Third Quarter & Year-to-Date Results
T h i r d Q u a r t e r & Ye a r - t o - D a t e Results 4
Slide 5: KAR Q3 & YTD 2021 Highlights
KAR Q3 & YTD 2021 Highlights* ($ in millions, except per share amounts) KAR Q3 2021 Q3 2020 YTD 2021 YTD 2020 Total operating revenues $535.2 $593.6 $1,702.2 $1,658.1 Gross profit** $222.1 $263.9 $725.5 $698.7 % of revenue** 41.5% 44.5% 42.6% 42.1% SG&A $134.1 $131.0 $423.3 $405.7 Other (income) exp
Slide 6: ADESA Q3 & YTD 2021 Highlights
ADESA Q3 & YTD 2021 Highlights* ($ in millions, except RPU) ADESA Q3 2021 Q3 2020 YTD 2021 YTD 2020 Auction fees $198.2 $247.6 $670.4 $680.7 Service revenue $169.2 $192.9 $539.0 $563.9 Purchased vehicle sales $92.2 $86.2 $282.8 $211.3 Total ADESA Revenue $459.6 $526.7 $1,492.2 $1,455.9 Gross profit*
Slide 7: AFC Q3 & YTD 2021 Highlights
AFC Q3 & YTD 2021 Highlights* ($ in millions, except for revenue per loan transaction) AFC Q3 2021 Q3 2020 YTD 2021 YTD 2020 Interest and fee income $71.2 $55.8 $208.0 . $204.7 Other revenue $2.2 $2.1 $6.4 $6.8 Net recovery (provision) for credit losses $2.2 $-- ($4.4) ($35.9) Warranty contract reve
Slide 8: September 30, 2021 Leverage
September 30, 2021 Leverage (US$ in millions) Balance Maturity Term Loan B-6 (Adjusted LIBOR + 2.25%) $931 2026 Revolving Credit Facility (Adjusted LIBOR + 1.75%) - 2024 Senior Notes (Fixed 5.125%) 950 2025 Finance Leases & Other 19 Total 1,900 Less: Available Cash* (623) Net Debt $1,277 Senior Secu
Slide 9: Historical Data
AUCTION SERVICES. HISTORICAL DATA
Slide 10: ADESA Revenue
ADESA Revenue 3Q21 2Q21 1Q21 2020 4Q20 3Q20 2Q20 1Q20 2019 4Q19 Auction Fees $198.2 $236.7 $235.5 $887.7 $207.0 $247.6 $177.8 $255.3 $1,115.3 $261.0 Service Revenue $169.2 $182.2 $187.6 $737.4 $173.5 $192.9 $134.8 $236.2 $1,018.2 $243.0 Purchased Vehicle $92.2 $97.9 $92.7 $295.0 $83.7 $86.2 $49.6 $7
Slide 11: ADESA Metrics - Annual
ADESA Metrics - Annual YTD 2021 2020 2019 2018 2017 2016 Revenue1 $1,492.2 $1,920.1 $2,429.0 $2,101.9 $1,937.5 $1,765.3 Commercial vehicles sold 1,237 2,265 2,726 2,446 2,148 1,865 Dealer consignment vehicles sold 813 797 1,058 1,026 1,032 1,020 Total vehicles sold 2,050 3,062 3,784 3,472 3,180 2,88
Slide 12: ADESA Metrics - Quarter
ADESA Metrics - Quarter 3Q21 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 Revenue1 $459.6 $516.8 $515.8 $464.2 $526.7 $362.2 $567.0 $583.3 Commercial vehicles sold 312 420 505 474 642 511 638 642 Dealer consignment 274 291 248 207 229 137 224 245 vehicles sold Total vehicles sold 586 711 753 681 871 648 862 8
Slide 13: 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 14: AFC Metrics - Quarter
AFC Metrics - Quarter 3Q21 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 Revenue $75.6 $68.6 $65.8 $65.4 $66.9 $56.8 $78.5 $88.0 Loan Transaction Units (LTU) 351 356 372 327 324 420 448 443 Revenue per Loan Transaction, Excluding “Warranty Contract $215 $193 $177 $186 $179 $115 $155 $178 Revenue” Ending Manage
Slide 15: 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 16: AFC Provision for Credit Losses - Quarterly
AFC Provision for Credit Losses - Quarterly 3Q21 2Q21 1Q21 4Q20 3Q20 2Q20 1Q20 4Q19 Ending Managed $2,191.7 $2,108.9 $1,984.4 $1,911.0 $1,744.8 $1,548.3 $1,954.8 $2,115.2 Receivables Average Managed $2,150.3 $2,046.7 $1,947.7 $1,827.9 $1,646.6 $1,751.6 $2,035.0 $2,112.8 Receivables Net (Recovery) Pr
Slide 17: Appendix
AUCTION SERVICES. APPENDIX
Slide 18: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as
Slide 19: Q3 2021 Adjusted EBITDA Reconciliation
Q3 2021 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2021 ADESA AFC Consolidated Net income (loss) ($24.0) $23.0 ($1.0) Add back: Income taxes (8.1) 6.9 (1.2) Interest expense, net of interest income 21.7 10.3 32.0 Depreciation and amortization 42.5 2.2 44.7 Interc
Slide 20: Q3 2020 Adjusted EBITDA Reconciliation
Q3 2020 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended September 30, 2020 ADESA AFC Consolidated Net income (loss) $23.5 $23.6 $47.1 Add back: Income taxes 7.4 3.5 10.9 Interest expense, net of interest income 21.7 7.5 29.2 Depreciation and amortization 43.4 3.1 46.5 Intercompany
Slide 21: YTD 2021 Adjusted EBITDA Reconciliation
YTD 2021 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2021 ADESA AFC Consolidated Net income (loss) ($35.0) $96.4 $61.4 Add back: Income taxes (0.6) 32.1 31.5 Interest expense, net of interest income 64.7 29.0 93.7 Depreciation and amortization 130.0 7.1 137.1 Inter
Slide 22: YTD 2020 Adjusted EBITDA Reconciliation
YTD 2020 Adjusted EBITDA Reconciliation ($ in millions) Nine Months ended September 30, 2020 ADESA AFC Consolidated Net income (loss) ($40.6) $58.2 $17.6 Add back: Income taxes (7.3) 15.6 8.3 Interest expense, net of interest income 66.8 30.2 97.0 Depreciation and amortization 131.1 9.6 140.7 Interc
Slide 23: Operating Adjusted Net Income per Share Reconciliation
Operating Adjusted Net Income per Share Reconciliation ($ in millions, except per share amounts), (unaudited) Three Months ended Nine Months ended September 30, September 30, 2021 2020 2021 2020 Net income (loss) (1) ($1.0) $47.1 $61.4 $17.6 Acquired amortization expense 12.4 14.0 41.6 42.4 Continge