Open Lending Reports First Quarter 2022 Financial Results
“We are pleased with our first quarter results, which included a 32% increase in certified loans, a 14% increase in revenue and a 11% increase in Adjusted EBITDA compared to first quarter of 2021. These strong results are despite near-term headwinds to our business, including low levels of dealer inventory due to the global semiconductor chip shortages and supply chain challenges and inflated used car values and the impact on affordability,” said
Three Months Ended
- The Company facilitated 43,944 certified loans during the first quarter of 2022, compared to 33,318 certified loans in the first quarter of 2021
- Total revenue was
$50.1 million during the first quarter of 2022, compared to$44.0 million in the first quarter of 2021 - Gross profit was
$45.3 million during the first quarter of 2022, compared to$40.6 million in the first quarter of 2021 - Net income was
$23.2 million during the first quarter of 2022, compared to$12.9 million in the first quarter of 2021 - Adjusted EBITDA was
$33.8 million during the first quarter of 2022, compared to$30.3 million in the first quarter of 2021
Adjusted EBITDA is a non-GAAP financial measure. Reconciliations of this non-GAAP financial measure to its most directly comparable GAAP financial measure are provided in the financial tables included at the end of this press release. An explanation of this measure and how it is calculated is also included under the heading “Non-GAAP Financial Measures.”
2022 Outlook
Based on the first quarter results and trends into second quarter 2022, the Company is reaffirming its previously issued guidance of the following:
| Full Year 2022 Outlook | |
| Total Certified Loans | 195,000 - 225,000 |
| Total Revenue | |
| Adjusted EBITDA | |
| Adjusted Operating Cash Flow (a) | |
- Adjusted Operating Cash Flow is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.
The guidance provided above includes forward-looking statements within the meaning of
Conference Call
About
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are forward-looking statements for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995, including statements related to market trends, the impact of the global COVID-19 pandemic on factors impacting the Company’s business, the Company’s new lender pipeline, consumer behavior and demand for automotive loans, as well as future financial performance under the heading “2022 Outlook” above. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These statements are based on various assumptions and on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the Company’s control. These forward-looking statements are subject to a number of risks and uncertainties, including general economic, market, political and business conditions; the continuing effects of the COVID-19 pandemic on consumer behavior; applicable taxes, inflation, supply chain disruptions including global hostilities and responses thereto, interest rates and the regulatory environment; the outcome of judicial proceedings to which
Non-GAAP Financial Measures
The non-GAAP financial measures included in this press release are financial information that has not been prepared in accordance with GAAP. The Company uses Adjusted EBITDA, Adjusted EBITDA margin and Adjusted operating cash flows internally in analyzing our financial results and believes these measures are useful to investors, as a supplement to GAAP measures, in evaluating our ongoing operational performance. The Company believes that the use of non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends and in comparing our financial results with other companies in our industry, many of which present similar non-GAAP financial measures to investors.
The Company believes these measures provide useful information to investors and others in understanding and evaluating its operating results in the same manner as its management and board of directors. In addition, these measures provide useful measures for period-to-period comparisons of our business, as they remove the effect of certain non-cash items and certain non-recurring variable charges. Adjusted EBITDA is defined as GAAP net income excluding interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense and loss on extinguishment of debt. Adjusted EBITDA margin is defined as Adjusted EBITDA expressed as a percentage of total revenue. Adjusted operating cash flows is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.
Non-GAAP financial measures should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. Investors are encouraged to review the reconciliation of non-GAAP financial measures to their most directly comparable GAAP financial measure provided in the financial statement tables included below in this press release.
Contact:
ICR for
Investors
openlending@icrinc.com
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share data)
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 147,404 | $ | 116,454 | ||||
| Restricted cash | 3,031 | 3,055 | ||||||
| Accounts receivable, net | 8,060 | 6,525 | ||||||
| Current contract assets, net | 58,265 | 70,542 | ||||||
| Income tax receivable | 2,090 | 1,345 | ||||||
| Other current assets | 1,749 | 4,873 | ||||||
| Total current assets | 220,599 | 202,794 | ||||||
| Property and equipment, net | 2,792 | 2,663 | ||||||
| Operating lease right-of-use assets, net | 5,048 | 5,189 | ||||||
| Non-current contract assets, net | 49,187 | 42,414 | ||||||
| Deferred tax asset, net | 64,949 | 65,503 | ||||||
| Other non-current assets | 157 | 262 | ||||||
| Total assets | $ | 342,732 | $ | 318,825 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | 195 | 1,285 | ||||||
| Accrued expenses | 5,510 | 3,984 | ||||||
| Current portion of debt | 3,125 | 3,125 | ||||||
| Third-party claims administration liability | 3,029 | 3,050 | ||||||
| Other current liabilities | 550 | 621 | ||||||
| Total current liabilities | 12,409 | 12,065 | ||||||
| Long-term debt, net of deferred financing costs | 142,437 | 143,135 | ||||||
| Non-current operating lease liabilities | 4,508 | 4,643 | ||||||
| Total liabilities | $ | 159,354 | $ | 159,843 | ||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, |
— | — | ||||||
| Common stock, |
1,282 | 1,282 | ||||||
| Additional paid-in capital | 498,057 | 496,983 | ||||||
| Accumulated deficit | (259,285 | ) | (282,439 | ) | ||||
| (56,676 | ) | (56,844 | ) | |||||
| Total stockholders’ equity | 183,378 | 158,982 | ||||||
| Total liabilities and stockholders’ equity | $ | 342,732 | $ | 318,825 | ||||
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share data)
| Three Months Ended |
|||||||
| 2022 | 2021 | ||||||
| Revenue | |||||||
| Profit share | $ | 28,310 | $ | 27,730 | |||
| Program fees | 19,726 | 14,911 | |||||
| Claims administration and other service fees | 2,032 | 1,367 | |||||
| Total revenue | 50,068 | 44,008 | |||||
| Cost of services | 4,788 | 3,362 | |||||
| Gross profit | 45,280 | 40,646 | |||||
| Operating expenses | |||||||
| General and administrative | 7,482 | 8,212 | |||||
| Selling and marketing | 3,733 | 2,397 | |||||
| Research and development | 1,823 | 591 | |||||
| Total operating expenses | 13,038 | 11,200 | |||||
| Operating income | 32,242 | 29,446 | |||||
| Interest expense | (803 | ) | (3,289 | ) | |||
| Interest income | 25 | 84 | |||||
| Loss on extinguishment of debt | — | (8,778 | ) | ||||
| Other expense | — | (131 | ) | ||||
| Income before income taxes | 31,464 | 17,332 | |||||
| Income tax expense | 8,310 | 4,470 | |||||
| Net income | $ | 23,154 | $ | 12,862 | |||
| Net income per common share | |||||||
| Basic | $ | 0.18 | $ | 0.10 | |||
| Diluted | $ | 0.18 | $ | 0.10 | |||
| Weighted average common shares outstanding | |||||||
| Basic | 126,215,698 | 126,803,096 | |||||
| Diluted | 126,216,197 | 126,837,832 | |||||
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| Three Months Ended |
||||||||
| 2022 | 2021 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 23,154 | $ | 12,862 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Share-based compensation | 1,281 | 701 | ||||||
| Depreciation and amortization | 304 | 388 | ||||||
| Non-cash operating lease cost | 141 | 134 | ||||||
| Loss on extinguishment of debt | — | 8,778 | ||||||
| Deferred income taxes | 554 | 1,330 | ||||||
| Changes in assets & liabilities: | ||||||||
| Accounts receivable, net | (1,535 | ) | (2,451 | ) | ||||
| Contract assets, net | 5,504 | (7,876 | ) | |||||
| Other current and non-current assets | 3,066 | 1,979 | ||||||
| Accounts payable | (1,090 | ) | (611 | ) | ||||
| Accrued expenses | 1,526 | 478 | ||||||
| Income tax payable/receivable | (745 | ) | 3,151 | |||||
| Operating lease liabilities | (119 | ) | (140 | ) | ||||
| Third-party claims administration liability | (21 | ) | 62 | |||||
| Other current and non-current liabilities | (88 | ) | 50 | |||||
| Net cash provided by operating activities | 31,932 | 18,835 | ||||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | (186 | ) | (3 | ) | ||||
| Net cash used in investing activities | (186 | ) | (3 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from term loans | — | 125,000 | ||||||
| Proceeds from revolving facility | — | 50,000 | ||||||
| Payments on term loans | (781 | ) | (166,847 | ) | ||||
| Payment of deferred financing costs | — | (1,491 | ) | |||||
| Shares withheld for taxes for restricted stock units | (39 | ) | — | |||||
| Net cash (used in) provided by financing activities | (820 | ) | 6,662 | |||||
| Net change in cash and cash equivalents and restricted cash | 30,926 | 25,494 | ||||||
| Cash and cash equivalents and restricted cash at the beginning of the period | 119,509 | 104,148 | ||||||
| Cash and cash equivalents and restricted cash at the end of the period | $ | 150,435 | $ | 129,642 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ | 721 | $ | 2,722 | ||||
| Income tax paid (refunded), net | 8,501 | (16 | ) | |||||
| Non-cash investing and financing: | ||||||||
| Internally developed software accrued but not paid | $ | — | $ | 463 | ||||
| Deferred financing costs accrued but not paid | — | 178 | ||||||
Reconciliation of GAAP to Non-GAAP Financial Measures
(Unaudited, in thousands)
| Three Months Ended |
|||||||
| 2022 | 2021 | ||||||
| Net income | $ | 23,154 | $ | 12,862 | |||
| Non-GAAP adjustments: | |||||||
| Interest expense | 803 | 3,289 | |||||
| Income tax expense | 8,310 | 4,470 | |||||
| Depreciation and amortization expense | 221 | 193 | |||||
| Share-based compensation | 1,281 | 701 | |||||
| Loss on extinguishment of debt (1) | — | 8,778 | |||||
| Total adjustments | 10,615 | 17,431 | |||||
| Adjusted EBITDA | 33,769 | 30,293 | |||||
| Total revenue | $ | 50,068 | $ | 44,008 | |||
| Adjusted EBITDA margin | 67 | % | 69 | % | |||
| Adjusted operating cash flows (2) | |||||||
| Adjusted EBITDA | $ | 33,769 | $ | 30,293 | |||
| CAPEX | (186 | ) | (3 | ) | |||
| Decrease (increase) in contract assets, net | 5,504 | (7,876 | ) | ||||
| Adjusted operating cash flows | $ | 39,087 | $ | 22,414 | |||
Notes:
(1) Reflects unamortized deferred financing costs that were written off in connection with the refinancing of our Term Loan due 2027 on
(2) Adjusted operating cash flow is defined as Adjusted EBITDA, minus CAPEX, +/- change in contract assets.
Source: Open Lending Corporation