SANTA MONICA, Calif., Feb. 15, 2018 (GLOBE NEWSWIRE) -- TrueCar, Inc. (NASDAQ:TRUE) today announced its financial results for the fourth quarter and year-ended December 31, 2017.
Management Commentary
"We’ve made significant progress throughout 2017; however there is still much we need to do. We believe our work this year will set us up for a strong 2019," said Chip Perry, TrueCar’s President and Chief Executive Officer.
"We are pleased with our financial results and performance in the fourth quarter of 2017," continued John Pierantoni, Interim Chief Financial Officer. "As we focus on key initiatives, including growing our OEM business and the national roll-out of our trade-in product in 2018, we are well positioned to execute our long-term vision."
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(1) Non-GAAP net income (loss) is a Non-GAAP financial measure. Refer to its definition and accompanying reconciliation to GAAP net loss below.
(2) Adjusted EBITDA is a Non-GAAP financial measure. Refer to its definition and accompanying reconciliation to GAAP net loss below.
(3) Adjusted EBITDA margin is a Non-GAAP financial measure, calculated as Adjusted EBITDA, divided by total revenue.
(4) Units: We define units as the number of automobiles purchased by our users from TrueCar Certified Dealers through TrueCar.com and our mobile applications or the car buying sites and mobile applications we maintain for our affinity group marketing partners.
(5) Franchise Dealer count: We define franchise dealer count as the number of franchise dealers in the network of TrueCar Certified Dealers at the end of a given period. This number is calculated by counting the number of brands of new cars sold by dealers in the TrueCar Certified Dealer network at their locations, and includes both single-location proprietorships as well as large consolidated dealer groups. Note that this number excludes Genesis franchises on our program due to Hyundai’s recent transition of Genesis to a stand-alone brand. In order to facilitate period over period comparisons, we have continued to count each Hyundai franchise that also has a Genesis franchise as one franchise dealer rather than two.
(6) Independent Dealer count: We define independent dealer count as the number of dealers in the network of TrueCar certified Dealers at the end of a given period that exclusively sell used vehicles and are not directly affiliated with a new car manufacturer. This number is calculated by counting each location individually, and includes both single-location proprietorships as well as large consolidated dealer groups.
Fourth Quarter 2017 Financial Highlights
2017 Financial Highlights
Key Operating Metrics
Business Outlook
TrueCar’s guidance for the first quarter ending March 31, 2018 is as follows:
TrueCar's guidance for the full year ending December 31, 2018 is as follows:
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(7) Average monthly unique visitors: We define a monthly unique visitor as an individual who has visited our website, our landing page on our affinity group marketing partner sites, or our mobile applications within a calendar month. We calculate average monthly unique visitors as the sum of the monthly unique visitors divided by the number of months in that period
(8) Monetization: We define monetization as the average transaction revenue per unit, which we calculate by dividing all of our transaction revenue in a given period by the number of units in that period.
(9) We are unable to provide reconciliations of forward-looking Adjusted EBITDA without unreasonable effort because we are unable to provide a forward-looking estimate of certain reconciling items between GAAP net loss and Adjusted EBITDA due to uncertainty regarding, and the potential variability of, certain litigation costs due to timing, status and cost of litigation, which may have a significant impact on GAAP results.
Conference Call Information
Members of TrueCar management will host a conference call today, February 15, 2018, to discuss the fourth quarter and full year 2017 results at 4:30 p.m. Eastern Time. To participate, domestic callers should dial 1-877-407-0789 and international callers should dial 1-201-689-8562. A replay of the call may be accessible the same day from 7:30 p.m. until 11:59 p.m. Eastern Time on Thursday, March 1, 2018 by dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international) and entering replay pin number: 13675114. An archived version of the call will also be available upon completion on the Investor Relations section of TrueCar's website at ir.true.com. TrueCar has used, and intends to continue to use, its Investor Relations website (ir.true.com), Twitter (@TrueCar), and Facebook (www.facebook.com/TrueCar), as means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.
Forward-Looking Statements
This press release contains forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding TrueCar’s future growth potential and opportunities, outlook for the first quarter and full year 2018, and beyond, planned product offerings, including research and discovery, digital retailing, and expansion of vehicle trade-in offerings, growth in our OEM business, future financial results, including expectations regarding future revenue and adjusted EBITDA, business strategy, plans and objectives are forward-looking statements. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions that may prove incorrect, any of which could cause TrueCar’s results to differ materially from those expressed or implied by such forward-looking statements. Among the risks and uncertainties that could cause TrueCar’s results to differ materially from those expressed or implied by such forward-looking statements include: the ability to maintain and improve our relationship with, and perception among, car dealerships and grow our network of Certified Dealers, on an overall basis, among dealers representing high volume brands and in important geographies, as well as the ability to grow the revenue TrueCar derives from car manufacturer incentive programs; dependence upon affinity group marketing partners, especially USAA; compliance with U.S. federal and state laws and regulations directly or indirectly applicable to TrueCar’s business; the ability to scale and compete effectively in an increasingly competitive market and to grow and enhance TrueCar’s brand; the ability to increase revenue from dealers on the subscription pricing model; the successful improvement of TrueCar’s technology infrastructure; macro-economic issues that affect the automobile industry; the ability to attract, retain, and integrate qualified personnel, including recently hired members of management and the hiring of additional personnel in our technology and dealer teams; the ability to successfully resolve litigation to which TrueCar is subject; and other risks and uncertainties described more fully under the heading “Risk Factors” in TrueCar’s Annual Report on Form 10-K for the year ended December 31, 2016 and its subsequent Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, or SEC, and its Annual Report on Form 10-K for the year ended December 31, 2017 to be filed with the SEC. Moreover, TrueCar operates in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for TrueCar's management to predict all risks, nor can management assess the impact of all factors on its business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward- looking statements TrueCar may make. All forward-looking statements in this press release are based on information available to TrueCar's management as of the date hereof, and except as required by law, management assumes no obligation to update these forward-looking statements, which speak only as of their respective dates.
Use of Non-GAAP Financial Measures
This earnings release includes the following Non-GAAP financial measures; Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP net income (loss), and Non-GAAP net income (loss) per share. We define Adjusted EBITDA as net loss adjusted to exclude interest income, interest expense, depreciation and amortization, stock-based compensation, non-cash warrant expense, certain litigation costs, severance charges, lease exit costs and income taxes. We define Non-GAAP net income (loss) as net loss adjusted to exclude stock-based compensation, non-cash warrant expense, certain litigation costs, severance charges and lease exit costs. We have provided below a reconciliation of each of Adjusted EBITDA and Non-GAAP net income (loss) to net loss, the most directly comparable GAAP financial measure. Neither Adjusted EBITDA nor Non-GAAP net income (loss) should be considered as an alternative to net loss or any other measure of financial performance calculated and presented in accordance with GAAP. In addition, our Adjusted EBITDA and Non-GAAP net income (loss) measures may not be comparable to similarly titled measures of other organizations as they may not calculate Adjusted EBITDA or Non-GAAP net income (loss) in the same manner as we calculate these measures.
We use Adjusted EBITDA and Non-GAAP net income (loss) as operating performance measures as each is (i) an integral part of our reporting and planning processes; (ii) used by our management and board of directors to assess our operational performance, and together with operational objectives, as a measure in evaluating employee compensation and bonuses; and (iii) used by our management to make financial and strategic planning decisions regarding future operating investments. We believe that using Adjusted EBITDA and Non-GAAP net income (loss) facilitates operating performance comparisons on a period-to-period basis because these measures exclude variations primarily caused by changes in the excluded items noted above. In addition, we believe that Adjusted EBITDA, Non-GAAP net (income) loss and similar measures are widely used by investors, securities analysts, rating agencies and other parties in evaluating companies as measures of financial performance and debt service capabilities.
Our use of each of Adjusted EBITDA and Non-GAAP net income (loss) has limitations as an analytical tool, and you should not consider either in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
Because of these limitations, you should consider Adjusted EBITDA and Non-GAAP net income (loss) alongside other financial performance measures, including our net loss, our other GAAP results, and various cash flow metrics. In addition, in evaluating Adjusted EBITDA and Non-GAAP net income (loss), you should be aware that in the future we will incur expenses such as those that are the subject of adjustments in deriving Adjusted EBITDA and Non-GAAP net income (loss), and you should not infer from our presentation of Adjusted EBITDA and Non-GAAP net income (loss) that our future results will not be affected by these expenses or any unusual or non-recurring items.
About TrueCar
TrueCar, Inc. (NASDAQ:TRUE) is a digital automotive marketplace that provides comprehensive pricing transparency about what other people paid for their cars and enables consumers to engage with TrueCar Certified Dealers who are committed to providing a superior purchase experience. TrueCar operates its own branded site and its nationwide network of more than 15,000 Certified Dealers, and also powers car-buying programs for some of the largest U.S. membership and service organizations, including USAA, AARP, American Express, AAA and Sam’s Club. Over one-half of all new car buyers engage with the TrueCar network during their purchasing process. TrueCar is headquartered in Santa Monica, California, with offices in San Francisco and Austin, Texas. For more information, go to www.truecar.com. Follow TrueCar on Facebook or Twitter.
Investor/Media Contact:
Alison Sternberg
Vice President, Investor Relations and Communications
424-258-8771
asternberg@truecar.com
TRUECAR, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Revenues | $ | 83,133 | $ | 74,081 | $ | 323,149 | $ | 277,507 | |||||||
Costs and operating expenses: | |||||||||||||||
Cost of revenue | 7,617 | 6,257 | 28,227 | 25,167 | |||||||||||
Sales and marketing | 47,899 | 41,609 | 185,397 | 154,406 | |||||||||||
Technology and development | 15,953 | 13,265 | 59,070 | 53,580 | |||||||||||
General and administrative | 17,612 | 14,649 | 61,646 | 59,908 | |||||||||||
Depreciation and amortization | 4,955 | 5,538 | 22,472 | 23,345 | |||||||||||
Total costs and operating expenses | 94,036 | 81,318 | 356,812 | 316,406 | |||||||||||
Loss from operations | (10,903 | ) | (7,237 | ) | (33,663 | ) | (38,899 | ) | |||||||
Interest income | 476 | 90 | 1,260 | 376 | |||||||||||
Interest expense | (655 | ) | (645 | ) | (2,610 | ) | (2,530 | ) | |||||||
Loss before income taxes | (11,082 | ) | (7,792 | ) | (35,013 | ) | (41,053 | ) | |||||||
(Benefit from) / provision for income taxes | (2,607 | ) | 158 | (2,164 | ) | 655 | |||||||||
Net loss | $ | (8,475 | ) | $ | (7,950 | ) | $ | (32,849 | ) | $ | (41,708 | ) | |||
Net loss per share: | |||||||||||||||
Basic and diluted | $ | (0.08 | ) | $ | (0.09 | ) | $ | (0.35 | ) | $ | (0.49 | ) | |||
Weighted average common shares outstanding, basic and diluted | 100,081 | 85,698 | 94,865 | 84,483 |
TRUECAR, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, | |||||||
2017 | 2016 | ||||||
Assets | |||||||
Current assets | |||||||
Cash and cash equivalents | $ | 197,762 | $ | 107,721 | |||
Accounts receivable, net | 39,169 | 36,867 | |||||
Prepaid expenses | 5,475 | 6,044 | |||||
Other current assets | 1,145 | 2,278 | |||||
Total current assets | 243,551 | 152,910 | |||||
Property and equipment, net | 70,710 | 66,941 | |||||
Goodwill | 53,270 | 53,270 | |||||
Intangible assets, net | 15,912 | 19,774 | |||||
Other assets | 1,391 | 1,553 | |||||
Total assets | $ | 384,834 | $ | 294,448 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities | |||||||
Accounts payable | $ | 18,620 | $ | 13,827 | |||
Accrued employee expenses | 6,568 | 8,951 | |||||
Accrued expenses and other current liabilities | 12,790 | 12,583 | |||||
Total current liabilities | 37,978 | 35,361 | |||||
Deferred tax liabilities | 812 | 2,994 | |||||
Lease financing obligations, net of current portion | 29,129 | 28,833 | |||||
Other liabilities | 3,797 | 2,679 | |||||
Total liabilities | 71,716 | 69,867 | |||||
Stockholders’ Equity | |||||||
Common stock | 10 | 9 | |||||
Additional paid-in capital | 664,192 | 542,807 | |||||
Accumulated deficit | (351,084 | ) | (318,235 | ) | |||
Total stockholders’ equity | 313,118 | 224,581 | |||||
Total liabilities and stockholders’ equity | $ | 384,834 | $ | 294,448 |
TRUECAR, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss | $ | (8,475 | ) | $ | (7,950 | ) | $ | (32,849 | ) | $ | (41,708 | ) | |||
Non-GAAP adjustments: | |||||||||||||||
Interest income | (476 | ) | (90 | ) | (1,260 | ) | (376 | ) | |||||||
Interest expense | 655 | 645 | 2,610 | 2,530 | |||||||||||
Depreciation and amortization | 4,955 | 5,538 | 22,472 | 23,345 | |||||||||||
Stock-based compensation | 9,580 | 6,706 | 32,241 | 24,739 | |||||||||||
Warrant expense | — | 33 | — | 46 | |||||||||||
Certain litigation costs (1) | 3,827 | 345 | 7,967 | 960 | |||||||||||
Severance charges (2) | — | — | — | 1,783 | |||||||||||
Lease exit costs (3) | — | 381 | (133 | ) | 3,065 | ||||||||||
(Benefit from) / provision for income taxes | (2,607 | ) | 158 | (2,164 | ) | 655 | |||||||||
Adjusted EBITDA | $ | 7,459 | $ | 5,766 | $ | 28,884 | $ | 15,039 |
TRUECAR, INC.
RECONCILIATION OF NET LOSS TO NON-GAAP NET INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended December 31, | Year Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Net loss | $ | (8,475 | ) | $ | (7,950 | ) | $ | (32,849 | ) | $ | (41,708 | ) | |||
Non-GAAP adjustments: | |||||||||||||||
Stock-based compensation | 9,580 | 6,706 | 32,241 | 24,739 | |||||||||||
Warrant expense | — | 33 | — | 46 | |||||||||||
Certain litigation costs (1) | 3,827 | 345 | 7,967 | 960 | |||||||||||
Severance charges (2) | — | — | — | 1,783 | |||||||||||
Lease exit costs (3) | — | 381 | (133 | ) | 3,065 | ||||||||||
Non-GAAP net income (loss) (4) | $ | 4,932 | $ | (485 | ) | $ | 7,226 | $ | (11,115 | ) | |||||
Non-GAAP net income (loss) per share: | |||||||||||||||
Basic | $ | 0.05 | $ | (0.01 | ) | $ | 0.08 | $ | (0.13 | ) | |||||
Diluted | $ | 0.05 | $ | (0.01 | ) | $ | 0.07 | $ | (0.13 | ) | |||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 100,081 | 85,698 | 94,865 | 84,483 | |||||||||||
Diluted | 103,645 | 85,698 | 99,923 | 84,483 |