Openlane, Inc. · NYSE:OPLN
Openlane — KAR Auction Services — Q1 2020 Earnings Presentation
20 slides from Openlane's earnings presentation, May 7, 2020
Slide 1: First Quarter 2020 Earnings Slides
First Quarter 2020 Earnings Slides May 7, 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: Impact of COVID-19 on Company Operations
Impact of COVID-19 on Company Operations March 16, 2020 - the Company announced that it was modifying its North American auction processes and would be holding auctions online only via Simulcast to protect the health and well-being of its workforce and customers. March 20, 2020 - the Company announc
Slide 4: March 31, 2020 Leverage
March 31, 2020 Leverage (US$ in millions) Balance Maturity Term Loan B-6 (Adjusted LIBOR + 2.25%) $945 2026 Revolving Credit Facility (Adjusted LIBOR + 1.75%) & Lines of Credit 18 2024 Senior Notes (Fixed 5.125%) 950 2025 Finance Leases 24 Total 1,937 Less: Available Cash (249) Net Debt $1,688 Senio
Slide 5: KAR Q1 2020 Highlights
KAR Q1 2020 Highlights ($ in millions, except per share amounts) Q1 Q1 KAR Highlights* 2020 2019 Operations shut down the last 2 weeks of March and we Total operating revenues $645.5 $689.6 estimate reduced revenue of over $75 million Labor incurred during last 2 weeks of March when Gross profit** $
Slide 6: ADESA Q1 2020 Highlights
ADESA Q1 2020 Highlights ($ in millions, except RPU) ADESA Q1 2020 Q1 2019 Highlights* Auction fees and services revenue $491.5 $541.9 Operations shut down the last 2 weeks of March Purchased vehicle sales $75.5 $57.8 Includes $12.7M from acquisitions Total ADESA Revenue $567.0 $599.7 $18.3M acquisi
Slide 7: AFC Q1 2020 Highlights
AFC Q1 2020 Highlights ($ in millions, except for revenue per loan transaction),1 Q1 Q1 AFC 2020 2019 Highlights* Interest and fee income $83.8 $86.9 Other revenue $2.7 $2.8 Provision for credit losses ($16.9) ($8.2) Warranty contract revenue $8.9 $8.4 PWI revenue Total AFC revenue $78.5 $89.9 -12%
Slide 8: Historical Data
AUCTION SERVICES. HISTORICAL DATA
Slide 9: ADESA Revenue
ADESA Revenue 2Q18 3Q18 4Q18 2018 1Q19 2Q19 3Q19 4Q19 2019 1Q20 Auction Fees & $511.1 $496.0 $475.3 $1,985.1 $541.9 $553.1 $534.5 $504.0 $2,133.5 $491.5 Services Revenue Purchased Vehicle $27.2 $31.0 $33.2 $116.8 $57.8 $79.3 $79.1 $79.3 $295.5 $75.5 Sales Total ADESA $538.3 $527.0 $508.5 $2,101.9 $5
Slide 10: 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 11: ADESA Metrics - Quarter
ADESA Metrics - Quarter 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18 Revenue2 $567.0 $583.3 $613.6 $632.4 $599.7 $508.5 $527.0 $538.3 $528.1 Total Volume 862 887 957 994 945 811 876 907 878 Online Only Volume 367 355 396 416 367 306 343 346 309 (N.A.) Total Online Volume %3 63% 59% 59% 59% 57% 54% 5
Slide 12: 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 13: AFC Metrics - Quarter
AFC Metrics - Quarter 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18 Revenue $78.5 $88.0 $88.3 $86.7 $89.9 $85.3 $85.4 $85.1 $85.1 Loan Transaction Units 448 443 442 437 461 428 433 435 464 (LTU) Revenue per Loan Transaction, Excluding $155 $178 $180 $178 $177 $180 $177 $177 $166 “Warranty Contract Re
Slide 14: 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 15: AFC Provision for Credit Losses - Quarterly
AFC Provision for Credit Losses - Quarterly 1Q20 4Q19 3Q19 2Q19 1Q19 4Q18 3Q18 2Q18 1Q18 Ending Managed $1,954.8 $2,115.2 $2,110.4 $2,070.1 $1,989.1 $2,014.8 $1,979.7 $1,958.6 $1,933.2 Receivables Average Managed $2,035.0 $2,112.8 $2,090.3 $2,029.6 $2,002.0 $1,997.3 $1,969.2 $1,945.9 $1,922.9 Receiv
Slide 16: Appendix
AUCTION SERVICES. APPENDIX
Slide 17: Non-GAAP Financial Measures
Non-GAAP Financial Measures EBITDA is defined as net income (loss), plus interest expense net of interest income, income tax provision (benefit), depreciation and amortization. Adjusted EBITDA is EBITDA adjusted for the items of income and expense and expected incremental revenue and cost savings as
Slide 18: Q1 2020 Adjusted EBITDA Reconciliation
Q1 2020 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended March 31, 2020 ADESA AFC Corporate Consolidated Net income (loss) from continuing $24.1 $24.6 ($45.9) $2.8 operations Add back: Income taxes 8.8 8.1 (14.9) 2.0 Interest expense, net of interest income 0.6 13.5 23.1 37.2 Deprec
Slide 19: Q1 2019 Adjusted EBITDA Reconciliation
Q1 2019 Adjusted EBITDA Reconciliation ($ in millions) Three Months ended March 31, 2019 ADESA AFC Corporate Consolidated Net income (loss) from continuing $42.4 $30.5 ($57.6) $15.3 operations Add back: Income taxes 15.9 10.8 (20.2) 6.5 Interest expense, net of interest income 0.4 16.9 38.6 55.9 Dep
Slide 20: Operating Adjusted Net Income from Continuing Operations per Share Reconciliation
Operating Adjusted Net Income from Continuing Operations per Share Reconciliation ($ in millions, except per share amounts), (unaudited) Three Months ended March 31, 2020 2019 Net income $2.8 $77.8 Less: Income from discontinued operations - (62.5) Net income from continuing operations $2.8 $15.3 Ac