OPENLANE(US:KAR)2023-03-08 16:00Revenue and Financial Performance - For the year ended December 31, 2022, total revenues from continuing operations were $1,519.4 million, an increase of 5% compared to $1,450.6 million in 2021[192]. - Total operating revenues for 2022 were $1,519.4 million, an increase of 4.7% from $1,450.6 million in 2021[332]. - Net income for the year ended December 31, 2022, was $241.2 million, compared to a net loss of $0.3 million for the same period in 2021[275]. - The company reported a net income of $241.2 million for the year ended December 31, 2022, compared to a net income of $66.5 million in 2021, marking an increase of approximately 262.5%[345]. - The company reported a comprehensive income of $216.4 million for 2022, compared to $74.5 million in 2021[335]. - Adjusted EBITDA for the year ended December 31, 2022, was $231.2 million, down from $270.2 million in 2021, indicating a decrease of 14.4%[274]. - For the three months ended December 31, 2022, consolidated income from continuing operations was $41.9 million, compared to $15.2 million for the same period in 2021, representing a year-over-year increase of 175.8%[273]. Segment Performance - The Marketplace segment's revenues primarily include auction fees and service revenue, with auction fees representing a significant portion of total revenue[189]. - Total Marketplace revenue decreased by $17.9 million, or 2%, to $1,143.5 million for the year ended December 31, 2022, compared to $1,161.4 million for 2021[204]. - The company reported a loss from continuing operations of $105.7 million in the Marketplace segment for the year ended December 31, 2022, compared to a loss of $126.2 million in 2021, showing an improvement of 4.0%[274]. - Finance segment revenue increased by $86.7 million, or 30%, to $375.9 million for the year ended December 31, 2022, compared to $289.2 million for 2021[214]. - Gross profit for the Finance segment increased by $79.0 million, or 34%, to $312.8 million for the year ended December 31, 2022, compared to $233.8 million for 2021[217]. Auction and Vehicle Sales - Auction fees decreased to $370.3 million in 2022 from $399.2 million in 2021, while service revenue increased to $590.3 million from $541.3 million[192]. - The number of vehicles sold decreased by 19%, with a 30% decline in commercial volumes and a 2% decrease in dealer consignment volumes[205]. - Approximately 487,000 vehicles were sold in the North American digital dealer-to-dealer marketplace for the year ended December 31, 2022, down from 550,000 in 2021[184]. - Auction fees decreased by $28.9 million, or 7%, to $370.3 million for the year ended December 31, 2022, compared to $399.2 million for 2021[206]. Expenses and Costs - Depreciation and amortization decreased by $9.7 million, or 9%, to $100.2 million for the year ended December 31, 2022, compared to $109.9 million for 2021[194]. - Interest expense decreased by $6.5 million, or 5%, to $119.2 million for the year ended December 31, 2022, compared to $125.7 million for 2021[196]. - Selling, general and administrative expenses for the Finance segment increased by $1.1 million, or 12%, to $10.2 million for the three months ended December 31, 2022[246]. - Total interest expense, net of interest income, for the year ended December 31, 2022, was $116.5 million, compared to $124.8 million in 2021, reflecting a decrease of 6.5%[274]. Cash Flow and Liquidity - Cash provided by operating activities from continuing operations decreased significantly to $4.1 million in 2022 from $233.9 million in 2021, primarily due to changes in working capital[276]. - Net cash used by financing activities for continuing operations was $1,621.9 million in 2022, compared to net cash provided of $204.0 million in 2021, mainly due to long-term debt payments[280]. - Cash flow from investing activities for continuing operations was $70.0 million in 2022, a significant recovery from a cash outflow of $1,186.4 million in 2021[279]. - As of December 31, 2022, cash and cash equivalents totaled $225.7 million, with an additional $161.0 million available under the Revolving Credit Facility[248][262]. Debt and Financial Obligations - The Company incurred a non-cash loss of $7.7 million on the extinguishment of debt in the second quarter of 2022 due to the prepayment of Term Loan B-6[251]. - The company incurred a loss on extinguishment of debt amounting to $17.2 million in 2022[332]. - The total contractual cash obligations as of December 31, 2022, amounted to $673.1 million, with $344.6 million due within one year[285]. - The company had $145.0 million drawn on the Revolving Credit Facility as of December 31, 2022, with no borrowings on the facility at December 31, 2021[254]. Goodwill and Assets - Following the sale of the ADESA U.S. physical auction business in 2022, approximately $1.1 billion of goodwill was allocated to the disposal group, with no impairment identified during the quantitative assessment[301]. - The carrying value of the U.S. Dealer-to-Dealer reporting unit's goodwill was $306.2 million as of December 31, 2022, with a fair value substantially exceeding its carrying value[303]. - Total current assets decreased to $3,022.4 million in 2022 from $3,391.8 million in 2021, primarily due to a reduction in trade receivables[339]. - The total assets of the company decreased to $5,119.8 million in 2022 from $7,450.7 million in 2021[339]. Credit Losses and Provisions - The allowance for credit losses was $21.5 million as of December 31, 2022, compared to $23.0 million at December 31, 2021[267]. - The provision for credit losses increased to 1.1% of average managed receivables for the three months ended December 31, 2022, compared to (0.2%) in the prior year[244]. - The allowance for credit losses (ACL) as of December 31, 2022, was $21.5 million, reflecting management's assessment of qualitative risk factors[324]. Stockholder Information - Series A Preferred Stock holders received cash dividends totaling $22.2 million for the year ended December 31, 2022, while dividends in kind were approximately $21.6 million and $41.1 million for the years ended December 31, 2022 and 2021, respectively[289]. - The company has suspended its quarterly common stock dividend, with future decisions dependent on financial condition, contractual restrictions, and capital requirements[290]. - The number of issued and outstanding shares decreased from 121,163,050 in 2021 to 108,914,678 in 2022, a reduction of about 10.1%[345]. Miscellaneous - The company operates through two segments: Marketplace and Finance, with performance measured through detailed budgeting and monitoring[368]. - The integration of the CARWAVE digital auction platform with BacklotCars was completed in Q4 2022, enhancing marketplace functionality[356]. - The company maintains a minimum cash reserve of 1% to 3% of total receivables sold as security for receivables, classified as "Restricted cash" on the balance sheets[372].