Openlane, Inc. · NYSE:OPLN
Openlane — KAR Auction Services — Corporate Update (February 2012)
30 slides from Openlane's corporate update, Feb 28, 2012
Slide 1: Corporate Update
Corporate Update KAR March 2012 AUCTION SERVICES.
Slide 2: Forward-Looking Statements
2 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 materi
Slide 3: Non-GAAP Financial Measures
3 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 ac
Slide 4: Leading Provider of Vehicle Auction Services in North America
2011 Revenue: $1,886mm 2011 Adj. EBITDA: $487mm1 ~3.1mm Vehicles Sold in 2011 Top 2 whole car auction position 25% market share (Including OPENLANE) 69 ADESA locations 103 AFC locations OPENLANE online auctions 2011 Revenue2: $1,186mm 2011 Adj. EBITDA2: $334mm 2011 Revenue: $700mm 2011 Adj. EBITDA:
Slide 5: Leader in Whole Car and Salvage Auction Markets
5 Salvage Market Share Manheim Other ADESA Leader in Whole Car and Salvage Auction Markets Copart IAAI Other Source: North American market share based on company estimates.
Slide 6: Vehicle Flow – Whole Car and Salvage Markets
Value-Added Ancillary Services Seller Whole Car Consignors Dealers OEMs and their Captive Finance Arms Commercial Fleet Customers Financial Institutions Rental Car Companies Salvage Vehicle Consignors Insurance Companies Charities Whole Car Providers Whole Car Buyers Salvage Buyers Buyer Auction Fee
Slide 7: North American Wholesale Volume Forecasts
* Manheim - Manheim Consulting/Goldman Sachs * Kontos TME – Kontos Total Market Estimates Units Sold (Millions) Peak to trough -22% 8 North American Wholesale Volume Forecasts (1) (1) Excludes OPENLANE units sold.
Slide 8: Comprehensive End-to-End Remarketing Solutions
Recovery administration (PAR/RDN) Towing / Transportation Vehicle Tracking (AuctionTrac) Inspections and Condition Reports (AutoVin) Marshalling OPENLANE online auctions Secured storage Inspections Body Mechanical Detailing Glass, Keys, PDR (Dent Demon) Titling e-Business Floorplan Financing (AFC) P
Slide 9: OPENLANE Integration Update
10 OPENLANE Integration Update Consolidated and combined sales teams One voice to the customer Positive feedback from customers Single sign-on for ADESA Dealerblock and OPENLANE Q2: ADESA vehicles to be posted to OPENLANE By year end, Dealerblock integrated into OPENLANE CarsArrive rolled out to 7 s
Slide 10: 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 2% of 2011 consolidated revenue Registered whole car and salvage
Slide 11: IAA – Providing the Advantage in Salvage Auto Auctions
Technology Driven 2011 Growth Revenue Adjusted EBITDA Volume Approximately 50% of units sold on-line Integrated into major providers via CSAToday Applications for use on mobile devices Overview Leading seller of total loss vehicles Largest facility footprint in N.A. Live and “live on-line” model 12
Slide 12: AFC – Disciplined Growth
Portfolio 2011 Growth Revenue Margins Adjusted EBITDA Loan Transactions $883M at 12/31/11 99% current $750M committed liquidity* $610M drawn Overview Compliments KAR’s offerings Fee driven business Retain title as collateral * U.S. & Cdn facility commitments through June 2014. 13 AFC – Disciplined G
Slide 13: Fourth Quarter Performance
14 Revenue Gross Profit* ($mm) ($mm) Adjusted EBITDA Adjusted Net Income Per Share ($mm) 44.2% 23.4% 23.2% * Excludes depreciation and amortization expense Fourth Quarter Performance $443 $480 $0 $100 $200 $300 $400 $500 Q4 2010 Q4 2011 $ 0.20 $0.21 $0.00 $0.20 $0.40 $0.60 Q4 2010 Q4 2011 $189 $211
Slide 14: Consolidated Annual Financial Highlights
15 Revenue Gross Profit* ($mm) ($mm) Adjusted EBITDA Adjusted Net Income Per Share ($mm) 44.2% 42.3% 45.1% * Excludes depreciation and amortization expense 25.8% 26.1% 24.5% 44.7% Consolidated Annual Financial Highlights $0 $500 $1,000 $1,500 $2,000 2009 2010 2011 $1,736 $1,823 $1,886 $ 1.05 $1.16 $
Slide 15: Attractive 2011 Adjusted EBITDA Margins
16 * KAR adjusted EBITDA includes holding company $211.7 $232.2 $487.2 Attractive 2011 Adjusted EBITDA Margins (US$ in millions) 30.2% 22.8% 25.8% $0 $100 $200 $300 $400 $500 AFC IAAI ADESA KAR* 60.4% $101.9
Slide 16: Annual Free Cash Flow
17 Annual Free Cash Flow as a % of revenues 10.6 % 13.1% 13.4% Free cash flow represents Adjusted EBITDA less capital expenditures, adjusted cash interest paid and cash taxes paid. Cash paid for interest excludes interest paid for standby letters of credit of $0.6 million for the year ended December
Slide 17: December 31, 2011 Capital Structure
18 December 31, 2011 Capital Structure (US$ in millions) * Various maturities 12/31/2011 Maturity Term Loan Facilities $1,683.9 2017 Revolving Credit Facility $68.9 2016 Floating Rate Notes 150.0 2014 Capital Leases 27.3 * Total 1,930.1 Less: Available Cash (52.7) Net Debt $1,877.4 Net Debt /Adjuste
Slide 18: KAR's Diverse Business Model – Adjusted EBITDA Contribution by Segment
*Percentage calculations exclude holding company. $396M** $394M $426M $475M ** Represents pro forma results for the year ended December 31, 2007 so as to illustrate the estimated effects of the 2007 transactions as if they had occurred on January 1, 2007. $487M 2007 2008 2009 2010 2011 19 KAR’s Dive
Slide 19: 2011 Accomplishments
Strategic Initiatives Capital Structure Growth Dealer consignment IAA non-insurance vehicles OPENLANE integration Revenue Gross Margins Adjusted EBITDA Reduced net debt prior to OPENLANE(1) Benefits from new Term Loan B U.S. & Canadian Securitizations 20 2011 Accomplishments (1) Following the Octobe
Slide 20: Appendix
21 Appendix
Slide 21: EBITDA and Adjusted EBITDA definitions
22 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 described in the company
Slide 22: 2007 Adjusted EBITDA Reconciliation
23 2007 Adjusted EBITDA Reconciliation Year Ended December 31, 2007 (Dollars in millions) ADESA IAAI AFC Corporate Consolidated Net Income (Loss) $37.0 $2.2 $25.9 $(103.4) $(38.3) Add Back: ADESA 2007 Net Income 39.4 – 16.2 (28.7) 26.9 Add Back: ADESA 2007 Discontinued Ops 0.1 – – – 0.1 Add back: IA
Slide 23: 2008 Adjusted EBITDA Reconciliation
24 2008 Adjusted EBITDA Reconciliation Year Ended December 31, 2008 (Dollars in millions) ADESA IAAI AFC Corporate Consolidated Net Income (Loss) $52.5 $9.2 $(151.3) $(126.6) $(216.2) Add back: Income Taxes 33.7 6.3 10.2 (81.6) (31.4) Interest Expense, Net of Interest Income – 0.2 – 213.2 213.4 Depr
Slide 24: 2009 Adjusted EBITDA Reconciliation
25 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 Depreciat
Slide 25: 2010 Adjusted EBITDA Reconciliation
26 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 Depreci
Slide 26: 2011 Adjusted EBITDA Reconciliation
27 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 Deprec
Slide 27: LTM Adjusted EBITDA Reconciliation
28 LTM Adjusted EBITDA Reconciliation Three Months Ended Twelve Months Ended (Dollars in millions) (Unaudited) March 31, 2011 June 30, 2011 September 30, 2011 December 31, 2011 December 31, 2011 Net income (loss) $39.8 ($14.3) $32.2 $14.5 $72.2 Add back: Income taxes 1.0 (6.9) 14.7 9.0 17.8 Interest
Slide 28: Q4 2010 Adjusted EBITDA Reconciliation
29 Q4 2010 Adjusted EBITDA Reconciliation Three Months Ended December 31, 2010 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $8.1 $11.4 $11.2 $(23.4) $7.3 Add back: Income Taxes 4.9 5.2 3.7 (16.3) (2.5) Interest Expense, Net of Interest Income 0.1 0.6 2.1 32.2 35.0 Dep
Slide 29: Q4 2011 Adjusted EBITDA Reconciliation
30 Q4 2011 Adjusted EBITDA Reconciliation Three Months Ended December 31, 2011 (Dollars in millions) ADESA IAA AFC Corporate Consolidated Net Income (Loss) $(2.0) $15.9 $15.0 $(14.4) $14.5 Add back: Income Taxes 3.0 7.2 7.3 (8.5) 9.0 Interest Expense, Net of Interest Income 0.2 0.5 3.5 26.5 30.7 Dep
Slide 30: Adjusted Net Income Per Share Reconciliation
31 Adjusted Net Income Per Share Reconciliation In the second quarter of 2011, there were losses on extinguishments of debt totaling $53.5 million ($33.2 million net of tax). In addition, there was a loss on extinguishment of debt of $25.3 million ($15.7 million net of tax) incurred in the first qua
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