Cars.com(CARS) - 2022 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) This section presents the unaudited consolidated financial statements of Cars.com Inc. for the period ended March 31, 2022, including balance sheets, statements of income, comprehensive income, stockholders' equity, and cash flows, along with detailed notes Consolidated Balance Sheets The Consolidated Balance Sheets show the company's financial position as of March 31, 2022, compared to December 31, 2021, highlighting changes in assets, liabilities, and stockholders' equity Consolidated Balance Sheets (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :-------------------- | :------------- | :---------------- | | Cash and cash equivalents | $30,453 | $39,069 | | Total current assets | $138,403 | $147,437 | | Goodwill | $101,763 | $26,227 | | Total assets | $1,069,217 | $1,007,205 | | Total current liabilities | $95,802 | $94,290 | | Total liabilities | $673,130 | $609,185 | | Total stockholders' equity | $396,087 | $398,020 | Consolidated Statements of Income The Consolidated Statements of Income present the company's financial performance for the three months ended March 31, 2022, compared to the same period in 2021, showing total revenue, operating expenses, operating income, net income, and earnings per share Consolidated Statements of Income (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------------- | :-------------------------------- | :-------------------------------- | | Total revenue | $158,207 | $153,295 | | Total operating expenses | $147,266 | $136,748 | | Operating income | $10,941 | $16,547 | | Income before income taxes | $1,819 | $6,584 | | Net income | $4,340 | $5,278 | | Basic Earnings per share | $0.06 | $0.08 | | Diluted Earnings per share | $0.06 | $0.08 | Consolidated Statements of Comprehensive Income The Consolidated Statements of Comprehensive Income detail the net income and other comprehensive income components, such as reclassification of accumulated other comprehensive loss on interest rate swaps, to arrive at total comprehensive income Consolidated Statements of Comprehensive Income (in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------- | :-------------------------------- | :-------------------------------- | | Net income | $4,340 | $5,278 | | Reclassification of accumulated other comprehensive loss on interest rate swap into Net income | $1,202 | $1,200 | | Total other comprehensive income | $1,202 | $1,200 | | Comprehensive income | $5,542 | $6,478 | Consolidated Statements of Stockholders' Equity The Consolidated Statements of Stockholders' Equity show the changes in each component of equity, including net income, other comprehensive income, common stock repurchases, and stock-based compensation, from December 31, 2021, to March 31, 2022 Consolidated Statements of Stockholders' Equity (in thousands) | Metric | Balance at Dec 31, 2021 | Net Income | Other Comprehensive Income | Repurchases of Common Stock | Stock-Based Compensation | Balance at Mar 31, 2022 | | :-------------------- | :---------------------- | :--------- | :------------------------- | :-------------------------- | :----------------------- | :---------------------- | | Common Stock Amount | $692 | — | — | $(3) | $9 | $698 | | Additional Paid-In Capital | $1,544,712 | — | — | $(4,997) | $(7,705) (net) | $1,537,231 | | Accumulated Deficit | $(1,145,382) | $4,340 | — | — | — | $(1,141,042) | | Accumulated Other Comprehensive Loss | $(2,002) | — | $1,202 | — | — | $(800) | | Total Stockholders' Equity | $398,020 | $4,340 | $1,202 | $(5,000) | $(7,696) (net) | $396,087 | Consolidated Statements of Cash Flows The Consolidated Statements of Cash Flows summarize the cash generated and used by operating, investing, and financing activities for the three months ended March 31, 2022, compared to the same period in 2021 Cash Flow Activity (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $30,358 | $50,362 | | Net cash used in investing activities | $(68,778) | $(6,219) | | Net cash provided by (used in) financing activities | $29,804 | $(58,138) | | Net decrease in cash and cash equivalents | $(8,616) | $(13,995) | | Cash and cash equivalents at end of period | $30,453 | $53,724 | Notes to the Consolidated Financial Statements (Unaudited) These notes provide additional information and details supporting the unaudited consolidated financial statements, covering business description, accounting policies, revenue breakdown, goodwill, business combinations, debt, and income taxes NOTE 1. Description of Business and Summary of Significant Accounting Policies This note describes Cars.com Inc. as a leading automotive marketplace platform offering digital solutions and lists its brand portfolio, outlining the basis of presentation for interim financial statements and a prior period correction - Cars.com Inc. is a leading automotive marketplace platform providing industry-specific digital solutions, showcasing dealer inventory, amplifying brands, connecting sellers with buyers, and empowering shoppers. Its brand portfolio includes Cars.com™, Dealer Inspire®, DealerRater®, FUEL™, Auto.com™, PickupTrucks.com™, CreditIQ™, Accu-Trade™ and NewCars.com®[30] Correction of Certain Amounts Relating to Previously Issued Financial Statements (as of December 31, 2021, in thousands) | Financial Statement Line Item | As Reported | Adjustment | As Adjusted | | :---------------------------- | :---------- | :--------- | :---------- | | Deferred tax liability | $31,086 | $(31,086) | $— | | Total noncurrent liabilities | $545,981 | $(31,086) | $514,895 | | Total liabilities | $640,271 | $(31,086) | $609,185 | | Accumulated deficit | $(1,176,468) | $31,086 | $(1,145,382) | | Total stockholders' equity | $366,934 | $31,086 | $398,020 | NOTE 2. Revenue This note disaggregates the company's total revenue by major products and services for the three months ended March 31, 2022, and 2021, indicating that the company operates as a single reportable segment Revenue by Major Products and Services (in thousands) | Major Products and Services | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Subscription advertising and digital solutions | $132,247 | $125,446 | | Display advertising | $21,049 | $21,957 | | Pay per lead | $2,417 | $3,760 | | Other | $2,494 | $2,132 | | Total revenue | $158,207 | $153,295 | NOTE 3. Goodwill, Indefinite-lived Intangible Asset and Business Combination This note details the changes in goodwill and indefinite-lived intangible assets, primarily due to the Accu-Trade Acquisition in March 2022 and the CreditIQ Acquisition in November 2021, including their preliminary purchase price allocations Changes in Goodwill and Indefinite-lived Intangible Asset (in thousands) | Asset | December 31, 2021 | Additions | Impairment | March 31, 2022 | | :---------------------------- | :---------------- | :-------- | :--------- | :------------- | | Goodwill | $26,227 | $75,536 | $— | $101,763 | | Indefinite-lived intangible asset | $390,020 | $— | $— | $390,020 | - On March 1, 2022, the Company acquired Accu-Trade, which provides vehicle VIN-specific valuation and appraisal data, instant guaranteed offer capabilities, and logistics technology. Total acquisition costs of $1.9 million were expensed, with $0.9 million recorded in Q1 2022. Goodwill of $75.5 million was recorded, primarily attributable to sales growth from existing and future technology, product offerings, customers, and the value of the acquired assembled workforce, and is considered deductible for income tax purposes[42][43][47] Accu-Trade Acquisition Preliminary Purchase Price Allocation (in thousands) | Item | Preliminary Acquisition-date Fair Value | | :---------------------------- | :-------------------------------------- | | Cash consideration | $64,770 | | Other consideration | $5,300 | | Contingent consideration | $22,505 | | Total purchase consideration | $92,575 | | Assets acquired | $1,595 | | Identified intangible assets | $15,679 | | Total assets acquired | $17,274 | | Total liabilities assumed | $(235) | | Net identifiable assets | $17,039 | | Goodwill | $75,536 | - On November 5, 2021, the Company acquired CreditIQ, an automotive fintech platform providing instant online loan screening and approvals. Total acquisition costs of $1.4 million were expensed, with $0.1 million recorded in Q1 2022. Goodwill of $26.2 million was recorded, primarily attributable to sales growth from existing and future technology, product offerings, customers, and the value of the acquired assembled workforce, and is not considered deductible for income tax purposes[50][51][58] CreditIQ Acquisition Preliminary Purchase Price Allocation (in thousands) | Item | Acquisition-date Fair Value | | :---------------------------- | :-------------------------- | | Cash consideration | $29,965 | | Contingent consideration | $23,805 | | Cash settlement of CIQ Acquisition's unvested equity awards | $(9,626) | | Total purchase consideration | $44,144 | | Assets acquired | $193 | | Identified intangible assets | $19,900 | | Total assets acquired | $20,093 | | Total liabilities assumed | $(2,176) | | Net identifiable assets | $17,917 | | Goodwill | $26,227 | NOTE 4. Debt This note provides details on the company's debt instruments, including the Term Loan, Revolving Loan, and Senior Unsecured Notes, their outstanding amounts, interest rates, and fair values, confirming compliance with debt covenants - As of March 31, 2022, the Company was in compliance with the covenants under its debt agreements[59] Debt Outstanding as of March 31, 2022 (in millions) | Debt Instrument | Outstanding Principal | Interest Rate | | :-------------------- | :-------------------- | :------------ | | Term Loan | $75.0 | 2.5% | | Revolving Loan | $45.0 | 2.5% | | Senior Unsecured Notes | $400.0 | 6.375% | | Total Indebtedness | $520.0 | 5.5% (effective) | Fair Value vs. Carrying Value of Debt (in millions) | Date | Fair Value | Carrying Value | | :------------- | :--------- | :------------- | | March 31, 2022 | $513.3 | $520.0 | | December 31, 2021 | $502.7 | $477.5 | NOTE 5. Interest Rate Swap This note describes the interest rate swap used to manage floating interest rate risk on the Term Loan, detailing its fixed rate, notional amount, and the reclassification of its unrealized loss from accumulated other comprehensive income to interest expense - The Company entered into an interest rate swap effective December 31, 2018, locking into a fixed rate of 2.96% plus an applicable margin on a notional amount of $300 million until May 31, 2022. Hedge accounting was discontinued in June 2020, with the accumulated loss amortized into the Consolidated Statements of Income[63] Interest Rate Swap Fair Value and Impact (in thousands) | Metric | March 31, 2022 | December 31, 2021 | | :------------------------------------------ | :------------- | :---------------- | | Fair value of Swap (unrealized loss) | $(1,200) | $(3,500) | | Reclassified from AOCI to Interest expense, net (Q1) | $1,400 | $1,400 | | Payments related to Swap (Q1) | $2,100 | N/A | | Reclassified tax benefit from AOCI to Income tax (benefit) expense (Q1) | $200 | N/A | NOTE 6. Commitments and Contingencies This note outlines the company's involvement in legal and administrative proceedings incidental to its business and its policy for recording liabilities when a loss is probable and estimable - The Company is involved in legal and administrative proceedings incidental to its business and records a liability when a loss is probable and reasonably estimable, with ongoing quarterly evaluations[67] NOTE 7. Stockholders' Equity This note details the share repurchase program authorized by the Board of Directors in February 2022, allowing for up to $200 million in common stock repurchases over three years, and reports the repurchase activity - In February 2022, the Board authorized a three-year share repurchase program for up to $200 million of common stock. During Q1 2022, the Company repurchased and retired 0.3 million shares for $5.0 million at an average price of $14.78 per share[68] NOTE 8. Stock-Based Compensation This note provides activity and fair value information for the company's stock-based compensation plans, including Restricted Share Units (RSUs), Performance Share Units (PSUs), and Stock Options Restricted Share Units (RSUs) Activity (in thousands, except for weighted-average grant date fair value) | Metric | Number of RSUs | Weighted-Average Grant Date Fair Value | | :------------------------------------ | :------------- | :------------------------------------- | | Outstanding as of December 31, 2021 | 3,683 | $10.95 | | Granted | 1,814 | $15.07 | | Vested and delivered | (1,433) | $10.28 | | Forfeited | (61) | $12.69 | | Outstanding as of March 31, 2022 | 4,003 | $13.03 | Performance Share Units (PSUs) Activity (in thousands, except for weighted-average grant date fair value) | Metric | Number of PSUs | Weighted-Average Grant Date Fair Value | | :------------------------------------ | :------------- | :------------------------------------- | | Outstanding as of December 31, 2021 | 142 | $23.98 | | Granted | 275 | $15.07 | | Vested and delivered | (142) | $23.98 | | Forfeited | — | — | | Outstanding as of March 31, 2022 | 275 | $15.07 | Stock Options Activity (in thousands, except for weighted-average grant date fair value and weighted-average remaining contractual term) | Metric | Number of Options | Weighted-Average Grant Date Fair Value | Weighted-Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value | | :------------------------------------ | :---------------- | :------------------------------------- | :----------------------------------------------------- | :------------------------ | | Outstanding as of December 31, 2021 | 804 | $5.27 | 8.58 | $5,754 | | Granted | 263 | $9.39 | — | — | | Outstanding as of March 31, 2022 | 1,067 | $6.28 | 8.73 | $4,634 | Black-Scholes Option Pricing Model Assumptions | Assumption | 2022 | 2021 | | :-------------------------- | :-------- | :-------- | | Risk-free interest rate | 2.21 % | 1.15 % | | Weighted-average volatility | 65.22 % | 69.00 % | | Dividend yield | 0 % | 0 % | | Expected years until exercise | 6.5 | 6.5 | NOTE 9. Earnings Per Share This note details the calculation of basic and diluted earnings per share for the three months ended March 31, 2022, and 2021, including the impact of dilutive stock-based compensation awards Earnings Per Share Calculation (in thousands, except per share data) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income | $4,340 | $5,278 | | Basic weighted-average common shares outstanding | 69,463 | 67,787 | | Effect of dilutive stock-based compensation awards | 1,436 | 2,467 | | Diluted weighted-average common shares outstanding | 70,899 | 70,254 | | Earnings per share, basic | $0.06 | $0.08 | | Earnings per share, diluted | $0.06 | $0.08 | NOTE 10. Income Taxes This note discusses the company's deferred tax assets, the requirement for a valuation allowance due to a history of recent losses, and the effective income tax rate for Q1 2022, explaining the variance from the statutory federal income tax rate - The Company has recorded a valuation allowance against its deferred tax assets as of March 31, 2022, due to a history of recent losses, primarily from goodwill and indefinite-lived intangible asset impairments[75] Effective Income Tax Rate Reconciliation (Three Months Ended March 31, 2022, in thousands, except percentages) | Item | Amount | % of Income Before Tax | | :------------------------------------------ | :------- | :--------------------- | | Income tax provision at statutory rate | $382 | 21.0 % | | State income taxes, net of federal income tax benefit | $204 | 11.2 | | Stock-based compensation | $(1,425) | (78.3) | | Uncertain tax positions | $(1,015) | (55.8) | | Valuation allowance | $(917) | (50.4) | | Other, net | $250 | 13.7 | | Income tax benefit | $(2,521) | (138.6)% | Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a comprehensive discussion and analysis of Cars.com Inc.'s business, financial condition, and results of operations for the three months ended March 31, 2022, including an overview of its business, key highlights, operating metrics, factors affecting performance, detailed results, and liquidity Business Overview Cars.com Inc. operates as a leading automotive marketplace platform, offering a suite of industry-specific digital solutions to connect sellers with buyers and empower car-buying decisions, supported by a portfolio of brands - Cars.com Inc. is a leading automotive marketplace platform providing digital solutions to showcase dealer inventory, amplify brands, connect sellers with buyers, and empower shoppers. Its brand portfolio includes Cars.com™, Dealer Inspire®, DealerRater®, FUEL™, Auto.com™, PickupTrucks.com™, CreditIQ™, Accu-Trade™ and NewCars.com®[88] 2022 Highlights and Trends Key highlights for Q1 2022 include a 2% increase in Dealer Customers, the acquisition of Accu-Trade for $64.8 million cash and $5.3 million other consideration, the CreditIQ acquisition in November 2021 for $30.0 million cash, and the authorization of a $200 million share repurchase program - Dealer Customers increased by 2% to 19,500 in Q1 2022 compared to December 31, 2021, marking seven consecutive quarters of growth, driven by high retention and strong new sales[89] - In March 2022, the Company acquired Accu-Trade for $64.8 million cash and $5.3 million in other consideration, gaining real-time VIN-specific appraisal and valuation data, instant guaranteed offer capabilities, and logistics technology[90] - In November 2021, the Company acquired CreditIQ for $30.0 million cash, integrating an automotive fintech platform for instant online loan screening and approvals across the CARS platform[91] - In February 2022, the Board authorized a three-year share repurchase program for up to $200 million of common stock. In Q1 2022, 0.3 million shares were repurchased for $5.0 million at an average price of $14.78 per share[92] Overview of Results Total revenue for the three months ended March 31, 2022, increased to $158.2 million from $153.3 million in the prior year Revenue (in thousands) | Period | Revenue | | :-------------------- | :-------- | | Three Months 2022 | $158,207 | | Three Months 2021 | $153,295 | Key Operating Metrics The company's key operating metrics for Q1 2022 show a 5% decline in Traffic but a 2% increase in Average Monthly Unique Visitors year-over-year. Dealer Customers grew by 4% year-over-year, while Monthly Average Revenue Per Dealer (ARPD) increased by 1% year-over-year but decreased by 2% quarter-over-quarter Traffic and Average Monthly Unique Visitors (in thousands) | Metric | 2022 | 2021 | % Change | | :-------------------------- | :------ | :------ | :------- | | Traffic | 148,491 | 156,604 | (5)% | | Average Monthly Unique Visitors | 26,562 | 25,957 | 2% | - Traffic declined primarily due to elevated traffic in the prior year period related to increased consumer confidence and heightened consumer demand from the Federal economic stimulus program in Q1 2021[98] - The growth in Average Monthly Unique Visitors despite declining Traffic was primarily related to changes in traffic mix and a shorter shopping lifecycle for users due to continued lower vehicle inventory levels[100] Dealer Customers and Monthly Average Revenue Per Dealer | Metric | March 31, 2022 | March 31, 2021 | % Change (YoY) | December 31, 2021 | % Change (QoQ) | | :-------------------------- | :------------- | :------------- | :------------- | :---------------- | :------------- | | Dealer Customers | 19,500 | 18,823 | 4% | 19,179 | 2% | | Monthly Average Revenue Per Dealer | $2,291 | $2,268 | 1% | $2,333 | (2)% | - ARPD increased 1% year-over-year driven by growth in digital solutions and FUEL revenue, but decreased 2% quarter-over-quarter due to lower FUEL sales and changes in customer mix[102][103] - Dealer Customers increased 4% year-over-year and 2% quarter-over-quarter, driven by sustained high retention rates and strong new sales[105] Factors Affecting Our Performance The company's performance is influenced by the broader automotive ecosystem, including inventory supply disruptions, advertising trends, and macroeconomic factors. The company is focused on evolving its business towards a multi-faceted suite of digital solutions to navigate these challenges and the ongoing impacts of the COVID-19 pandemic - Business performance is impacted by changes in the automotive ecosystem, including inventory supply (semiconductor shortages), advertising trends, and macroeconomic factors. Vehicle sales volumes influence OEM and dealership investment in technology solutions[107] - The Company's long-term success depends on evolving towards a multi-faceted suite of digital solutions, leveraging its strong brand portfolio, growing audience, and innovative solutions to help dealers compete in an increasingly online car-buying environment[108] - The future effects of the COVID-19 pandemic are uncertain, but the company believes its marketplace, advertising, and digital solutions remain critical tools for customers to navigate current and future challenges[109] Results of Operations For the three months ended March 31, 2022, total revenue increased by 3% year-over-year, driven by a 6% rise in Dealer revenue, partially offset by a 16% decline in OEM and National revenue. Operating expenses increased by 8%, leading to a 34% decrease in operating income and an 18% decrease in net income Revenue (in thousands) | Revenue Source | 2022 | 2021 | $ Change | % Change | | :------------------ | :--------- | :--------- | :--------- | :------- | | Dealer | $140,416 | $132,958 | $7,458 | 6% | | OEM and National | $15,174 | $18,069 | $(2,895) | (16)% | | Other | $2,617 | $2,268 | $349 | 15% | | Total revenue | $158,207 | $153,295 | $4,912 | 3% | - Dealer revenue, the largest revenue stream (89% of total revenue), increased by 6% due to a 4% increase in Dealer Customers and a 1% increase in ARPD[111] - OEM and National revenue declined by 16% primarily due to pullbacks in OEM spending associated with fewer new model releases and continued production shortages driven by supply-chain disruptions[112][113] Operating Expenses (in thousands) | Operating Expense | 2022 | 2021 | $ Change | % Change | | :-------------------------------- | :--------- | :--------- | :--------- | :------- | | Cost of revenue and operations | $27,752 | $27,831 | $(79) | (0)% | | Product and technology | $21,307 | $16,760 | $4,547 | 27% | | Marketing and sales | $57,094 | $53,211 | $3,883 | 7% | | General and administrative | $16,560 | $13,266 | $3,294 | 25% | | Depreciation and amortization | $24,553 | $25,680 | $(1,127) | (4)% | | Total operating expenses | $147,266 | $136,748 | $10,518 | 8% | | Operating income | $10,941 | $16,547 | $(5,606) | (34)% | | Income before income taxes | $1,819 | $6,584 | $(4,765) | (72)% | | Net income | $4,340 | $5,278 | $(938) | (18)% | - Product and technology expense increased by 27% due to higher compensation, consulting, and licensing costs[115] - Marketing and sales expense increased by 7% due to continued investment in marketing and a return to in-person industry events[116] - General and administrative expense increased by 25% due to higher compensation costs (including stock-based compensation) and transaction-related costs from the Accu-Trade Acquisition[117] - Depreciation and amortization expense decreased by 4% as certain assets became fully depreciated/amortized, partially offset by new asset acquisitions[118] - Interest expense, net, decreased by $0.7 million due to a reduction in total indebtedness[119] - The effective income tax rate was (138.6)% for Q1 2022, resulting in a $2.5 million income tax benefit, primarily due to benefits from stock-based compensation, uncertain tax positions, and a partial release of the valuation allowance[120] Liquidity and Capital Resources The company's primary liquidity sources are cash flows from operations, available cash reserves, and debt capacity. As of March 31, 2022, total liquidity was $215.5 million. Cash flows from operating activities decreased, while investing activities increased significantly due to the Accu-Trade acquisition, and financing activities shifted from a net use to a net provision of cash - Primary liquidity sources are cash flows from operations, available cash reserves, and debt capacity. As of March 31, 2022, Cash and cash equivalents were $30.5 million, and total liquidity (including undrawn Revolving Loan) was $215.5 million[122][124] Indebtedness as of March 31, 2022 (in millions) | Debt Instrument | Outstanding Principal | Interest Rate | | :-------------------- | :-------------------- | :------------ | | Term Loan | $75.0 | 2.5% | | Revolving Loan | $45.0 | 2.5% | | Senior Unsecured Notes | $400.0 | 6.375% | | Total Indebtedness | $520.0 | 5.5% (effective) | - The interest rate swap had an unrealized loss of $1.2 million as of March 31, 2022, and $1.4 million was reclassified from Accumulated other comprehensive loss to Interest expense, net during Q1 2022[127] Cash Flows Summary (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | Change | | :---------------------------------- | :-------------------------------- | :-------------------------------- | :---------- | | Net cash provided by operating activities | $30,358 | $50,362 | $(20,004) | | Net cash used in investing activities | $(68,778) | $(6,219) | $(62,559) | | Net cash provided by (used in) financing activities | $29,804 | $(58,138) | $87,942 | | Net change in cash and cash equivalents | $(8,616) | $(13,995) | $5,379 | - The decrease in operating cash flow was primarily due to changes in operating assets and liabilities, including timing of payables, and a $9.1 million tax refund received in Q1 2021 related to the CARES Act[128] - The increase in cash used in investing activities was primarily related to the Accu-Trade Acquisition[129] - Cash provided by financing activities in Q1 2022 was mainly from $45.0 million in Revolving Loan borrowings for the Accu-Trade Acquisition, partially offset by tax payments for equity awards and common stock repurchases. In Q1 2021, cash was used primarily for $52.5 million in debt repayments[131] - The company has no material off-balance sheet arrangements and no changes to critical accounting policies during the period[133][134] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the company's Annual Report on Form 10-K for detailed quantitative and qualitative disclosures about market risk, stating that there have been no material changes since December 31, 2021 - The company's exposures to market risk have not changed materially since December 31, 2021, with detailed disclosures available in the Annual Report on Form 10-K[137] Item 4. Controls and Procedures Management, with the participation of the CEO and CFO, evaluated the effectiveness of the company's disclosure controls and procedures as of March 31, 2022, concluding they were effective. No material changes in internal control over financial reporting occurred during the period - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2022, providing reasonable assurance that required information is recorded, processed, summarized, and reported timely[138] - There were no changes in internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting during the period[140] PART II. OTHER INFORMATION Item 1. Legal Proceedings This section refers to Note 6 of the Consolidated Financial Statements for information regarding legal proceedings - Information relating to legal proceedings is provided in Note 6 (Commitments and Contingencies) to the accompanying Consolidated Financial Statements[143] Item 1A. Risk Factors This section refers to the Annual Report on Form 10-K for a comprehensive discussion of risk factors, stating that there have been no material changes from those previously described - There have been no material changes from the risk factors described in the Annual Report on Form 10-K for the year ended December 31, 2021[144] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details the company's common stock repurchase activity for the three months ended March 31, 2022, under its authorized share repurchase program Common Stock Repurchase Activity (Three Months Ended March 31, 2022) | Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in thousands) | | :------------------------------ | :------------------------------- | :--------------------------- | :------------------------------------------------------------------------------- | :-------------------------------------------------------------------------------------------------- | | January 1 through January 31, 2022 | — | — | — | — | | February 1 through February 28, 2022 | — | — | — | 200,000 | | March 1 through March 31, 2022 | 338,243 | $14.78 | 338,243 | 195,000 | | Total | 338,243 | | 338,243 | | Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities[148] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[149] Item 5. Other Information This section states that there is no other information to report - No other information is reported[150] Item 6. Exhibits This section provides an index of exhibits filed with the Quarterly Report on Form 10-Q, including certifications from executive officers and various Inline XBRL documents - The exhibit index includes certifications of principal executive and financial officers (31.1, 31.2, 32.1, 32.2) and various Inline XBRL documents (101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE, 104)[153]