OPENLANE, Inc. Reports Third Quarter 2024 Financial Results
CARMEL, Ind., Nov. 6, 2024 /PRNewswire/ -- OPENLANE, Inc. (NYSE:KAR), today reported its third quarter financial results for the period ended September 30, 2024.
"OPENLANE delivered strong third quarter results while advancing a differentiated pipeline of innovation and expanding our investments in people, technology and the customer experience," said Peter Kelly, CEO of OPENLANE. "I'm particularly pleased with the performance of our marketplace business, which grew volumes, gross profit and adjusted EBITDA with positive contributions from our US, Canadian and European marketplaces."
"OPENLANE extended its track record of strong financial and operational performance in the third quarter," said Brad Lakhia, EVP and CFO of OPENLANE. "On a consolidated basis, we delivered revenue of $448 million driven by 6% volume growth, income from continuing operations of $28 million, adjusted EBITDA of $75 million, and year-to-date cash flow from operating activities of $260 million. Our marketplace segment also demonstrated continued resiliency and profitability, with significant adjusted EBITDA growth while increasing our Gross Merchandise Value by 12% to nearly $7 billion."
Third Quarter 2024 Financial Highlights
Total revenue of $448 million in Q3 2024, representing 8% YoY growth
Consolidated income from continuing operations of $28 million, with Marketplace contributing $5 million
Consolidated adjusted EBITDA of $75 million in Q3 2024, representing 10% YoY growth
$260 million of cash flow from operating activities on a year-to-date basis
Marketplace revenue of $354 million in Q3 2024, representing 12% YoY growth
Marketplace adjusted EBITDA of $36 million, representing 34% YoY growth
Marketplace volumes increased 6% YoY
Gross Merchandise Value (GMV) of approximately $7 billion, representing 12% YoY growth
2024 Guidance
The company is updating its annual guidance to the following:
Annual
Guidance
Income from continuing operations (in millions)
$73 - $81
Adjusted EBITDA (in millions)
$285 - $295
Income from continuing operations per share - diluted *
$0.21 - $0.27
Operating adjusted net income from continuing operations per share - diluted
$0.81 - $0.87
* The company uses the two-class method of calculating income from continuing operations per diluted share. Under the two-class method, income from continuing operations is adjusted for dividends and undistributed earnings (losses) to the holders of the Series A Preferred Stock, and the weighted average diluted shares do not assume conversion of the preferred shares to common shares.
Earnings guidance does not contemplate future items such as business development activities, strategic developments (such as restructurings, spin-offs or dispositions of assets or investments), contingent purchase price adjustments, significant expenses related to litigation, tax adjustments and changes in applicable laws and regulations (including significant accounting and tax matters) and intangible impairments. The timing and amounts of these items are highly variable, difficult to predict, and of a potential size that could have a substantial impact on the company's reported results for any given period. Prospective quantification of these items is generally not practicable. Operating adjusted net income from continuing operations per share excludes amortization expense associated with acquired intangible assets, as well as one-time charges, net of taxes. See reconciliations of the company's guidance included below.
Share Repurchase AuthorizationThe board of directors authorized an increase in the size of the company's share repurchase program by approximately $5 million and an extension of the share repurchase program through December 31, 2025. With the increase, and giving effect to the company's previous repurchases, approximately $100 million remains available for repurchases under the share repurchase program.
Earnings Conference Call InformationOPENLANE will be hosting an earnings conference call and webcast on Wednesday, November 6, 2024 at 5:00 p.m. ET. The call will be hosted by OPENLANE Chief Executive Officer Peter Kelly and Chief Financial Officer Brad Lakhia. The conference call may be accessed by calling 1-833-634-2155 and asking to join the OPENLANE call. A live webcast will be available at the investor relations section of corporate.openlane.com. Supplemental financial information for OPENLANE's third quarter 2024 results is available at the investor relations section of corporate.openlane.com.
The archive of the webcast will be available following the call at the investor relations section of corporate.openlane.com for a limited time.
About OPENLANEOPENLANE, Inc. (NYSE:KAR), provides sellers and buyers across the global wholesale used vehicle industry with innovative, technology-driven remarketing solutions. OPENLANE's unique end-to-end platform supports whole car, financing, logistics and other ancillary and related services. Our integrated marketplaces reduce risk, improve transparency and streamline transactions for customers around the globe. Headquartered in Carmel, Indiana, OPENLANE has employees across the United States, Canada, Europe, Uruguay and the Philippines. For more information and the latest OPENLANE news, visit corporate.openlane.com.
Forward-Looking StatementsCertain statements contained in this release include, and the company may make related oral, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made that are not historical facts may be forward-looking statements. Words such as "should," "may," "will," "would," "anticipate," "expect," "project," "intend," "contemplate," "plan," "believe," "seek," "estimate," "assume," "can," "could," "continue," "of the opinion," "confident," "is set," "is on track," "outlook," "target," "positioned," "predict," "initiative," "goal," "opportunity" and similar expressions identify forward-looking statements. Such statements are based on management's current assumptions, expectations and/or beliefs, are not guarantees of future performance and are subject to substantial risks, uncertainties and changes that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section entitled "Risk Factors" in the company's Form 10-K for the year ended December 31, 2023 and in the company's other filings and reports filed with the Securities and Exchange Commission. The forward-looking statements are made as of the date of this release. The company undertakes no obligation to update any forward-looking statements.
OPENLANE, Inc.
Condensed Consolidated Statements of Income
(In millions) (Unaudited)
Three Months Ended September 30,
Nine Months Ended September 30,
2024
2023
2024
2023
Operating revenues
Auction fees
$ 113.2
$ 102.1
$ 331.8
$ 305.3
Service revenue
148.1
153.9
445.4
475.2
Purchased vehicle sales
93.0
60.6
231.4
176.5
Finance-related revenue
94.1
99.7
287.9
296.8
Total operating revenues
448.4
416.3
1,296.5
1,253.8
Operating expenses
Cost of services (exclusive of depreciation and amortization)
252.0
216.0
711.8
662.8
Selling, general and administrative
99.4
107.4
314.1
326.6
Depreciation and amortization
23.8
26.4
72.2
76.2
Goodwill and other intangibles impairment
—
—
—
250.8
Total operating expenses
375.2
349.8
1,098.1
1,316.4
Operating profit (loss)
73.2
66.5
198.4
(62.6)
Interest expense
35.3
39.4
112.4
116.5
Other (income) expense, net
(3.6)
1.7
(2.9)
(12.5)
Loss on extinguishment of debt
—
—
—
1.1
Income (loss) from continuing operations before income taxes
41.5
25.4
88.9
(167.7)
Income taxes
13.1
12.7
31.3
0.7
Income (loss) from continuing operations
28.4
12.7
57.6
(168.4)
Income from discontinued operations, net of income taxes
—
—
—
—
Net income (loss)
$ 28.4
$ 12.7
$ 57.6
$ (168.4)
Net income (loss) per share - basic
Income (loss) from continuing operations
$ 0.12
$ 0.01
$ 0.17
$ (1.84)
Income from discontinued operations
—
—
—
—
Net income (loss) per share - basic
$ 0.12
$ 0.01
$ 0.17
$ (1.84)
Net income (loss) per share - diluted
Income (loss) from continuing operations
$ 0.12
$ 0.01
$ 0.17
$ (1.84)
Income from discontinued operations
—
—
—
—
Net income (loss) per share - diluted
$ 0.12
$ 0.01
$ 0.17
$ (1.84)
OPENLANE, Inc.
Condensed Consolidated Balance Sheets
(In millions) (Unaudited)
September 30,
2024
