Open Lending Reports Fourth Quarter and Fiscal Year 2021 Financial Results
“We saw incredible growth in 2021, with an 82% increase in certified loan growth, 98% increase in revenue and a 123% increase in adjusted EBITDA for the full year 2021 compared to 2020,” said
Three Months Ended
- The Company facilitated 42,639 certified loans during the fourth quarter of 2021, compared to 26,822 certified loans in the fourth quarter of 2020
- Total revenue was
$51.6 million , compared to$39.6 million in the fourth quarter of 2020 - Gross profit was
$46.9 million , compared to$36.7 million in the fourth quarter of 2020 - GAAP net income was
$27.8 million , compared to$15.2 million in the fourth quarter of 2020 - Adjusted EBITDA was
$36.6 million , compared to$24.8 million in the fourth quarter of 2020
Twelve Months Ended
- The Company facilitated 171,697 certified loans, compared to 94,226 certified loans in 2020
- Total revenue was
$215.7 million , compared to$108.9 million in 2020 - Gross profit was
$197.0 million , compared to$99.1 million in 2020 - GAAP net income was
$146.1 million , compared to GAAP net loss of$(97.6) million in 2020. The GAAP net loss was primarily attributable to$(131.9) million in change in estimated fair value of contingent consideration shares awarded as part of the business combination withNebula Acquisition Corporation onJune 10, 2020 - Adjusted EBITDA was
$155.0 million , compared to$69.5 million in 2020
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 table 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 fourth quarter results and trends into early 2022, the Company is issuing full year 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, plus or minus 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, political and business conditions; the continuing effects of the COVID-19 pandemic on consumer behavior; applicable taxes, inflation, supply chain disruptions, 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 it is 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 (loss) excluding interest expense, income tax expense, depreciation and amortization expense, share-based compensation expense, gain on extinguishment of the Company's tax receivable agreement, loss on extinguishment of debt, change in fair value of contingent consideration, change in measurement - tax receivable agreement and transaction bonuses as a result of the Business Combination. 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, plus or minus 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
Consolidated Balance Sheets (In thousands, except share data) |
||||||||
| 2021 | 2020 | |||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 116,454 | $ | 101,513 | ||||
| Restricted cash | 3,055 | 2,635 | ||||||
| Accounts receivable, net | 6,525 | 4,352 | ||||||
| Current contract assets, net | 70,542 | 50,386 | ||||||
| Income tax receivable | 1,345 | — | ||||||
| Prepaid expenses | 2,479 | 1,873 | ||||||
| Other current assets | 2,394 | 2,018 | ||||||
| Total current assets | 202,794 | 162,777 | ||||||
| Property and equipment, net | 2,663 | 1,201 | ||||||
| Operating lease right-of-use assets, net | 5,189 | 5,733 | ||||||
| Non-current contract assets, net | 42,414 | 38,956 | ||||||
| Deferred tax asset, net | 65,503 | 85,218 | ||||||
| Other non-current assets | 262 | 124 | ||||||
| Total assets | $ | 318,825 | $ | 294,009 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | 1,285 | 3,442 | ||||||
| Accrued expenses | 3,984 | 3,033 | ||||||
| Income tax payable | — | 1,640 | ||||||
| Current portion of debt | 3,125 | 4,888 | ||||||
| Third-party claims administration liability | 3,050 | 2,591 | ||||||
| Other current liabilities | 621 | 1,414 | ||||||
| Total current liabilities | 12,065 | 17,008 | ||||||
| Long-term debt, net of deferred financing costs | 143,135 | 152,859 | ||||||
| Non-current operating lease liabilities | 4,643 | 5,138 | ||||||
| Tax receivable agreement liability | — | 92,369 | ||||||
| Other non-current liabilities | — | 13 | ||||||
| Total liabilities | $ | 159,843 | $ | 267,387 | ||||
| Commitments and contingencies | ||||||||
| Stockholders’ equity | ||||||||
| Preferred stock, outstanding |
— | — | ||||||
| Common stock, issued and 126,212,876 shares outstanding as of shares issued and 126,803,096 shares outstanding as of |
1,282 | 1,282 | ||||||
| Additional paid-in capital | 496,983 | 491,246 | ||||||
| Accumulated deficit | (282,439 | ) | (428,406 | ) | ||||
| (56,844 | ) | (37,500 | ) | |||||
| Total stockholders’ equity | 158,982 | 26,622 | ||||||
| Total liabilities and stockholders’ equity | $ | 318,825 | $ | 294,009 | ||||
Consolidated Statements of Operations and Comprehensive Income (Loss) (In thousands, except share data) |
||||||||||||||||
| Three Months Ended |
Year Ended |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue | ||||||||||||||||
| Profit share | $ | 31,196 | $ | 25,910 | $ | 133,215 | $ | 60,392 | ||||||||
| Program fees | 18,484 | 12,403 | 75,630 | 43,995 | ||||||||||||
| Claims administration and other service fees | 1,950 | 1,320 | 6,810 | 4,505 | ||||||||||||
| Total revenue | 51,630 | 39,633 | 215,655 | 108,892 | ||||||||||||
| Cost of services | 4,739 | 2,968 | 18,621 | 9,786 | ||||||||||||
| Gross profit | 46,891 | 36,665 | 197,034 | 99,106 | ||||||||||||
| Operating expenses | ||||||||||||||||
| General and administrative | 6,603 | 9,351 | 30,393 | 32,584 | ||||||||||||
| Selling and marketing | 3,341 | 2,350 | 12,000 | 7,841 | ||||||||||||
| Research and development | 1,720 | 678 | 4,352 | 1,964 | ||||||||||||
| Operating income | 35,227 | 24,286 | 150,289 | 56,717 | ||||||||||||
| Interest expense | (489 | ) | (3,621 | ) | (5,859 | ) | (11,601 | ) | ||||||||
| Interest income | 36 | 105 | 213 | 202 | ||||||||||||
| Gain on extinguishment of tax receivable agreement | — | — | 55,422 | — | ||||||||||||
| Loss on extinguishment of debt | — | — | (8,778 | ) | — | |||||||||||
| Change in fair value of contingent consideration | — | — | — | (131,932 | ) | |||||||||||
| Other income (expense) | 11 | (4,380 | ) | (119 | ) | (4,377 | ) | |||||||||
| Income (loss) before income taxes | 34,785 | 16,390 | 191,168 | (90,991 | ) | |||||||||||
| Income tax expense | 6,945 | 1,188 | 45,086 | 6,573 | ||||||||||||
| Net income (loss) and comprehensive income (loss) | $ | 27,840 | $ | 15,202 | $ | 146,082 | $ | (97,564 | ) | |||||||
| Preferred distribution to redeemable convertible Series C preferred units |
— | — | — | (40,689 | ) | |||||||||||
| Accretion to redemption value of redeemable convertible Series C preferred units |
— | — | — | 47,537 | ||||||||||||
| Net income (loss) attributable to common stockholders | $ | 27,840 | $ | 15,202 | $ | 146,082 | $ | (90,716 | ) | |||||||
| Net income (loss) and comprehensive income (loss) per common share |
||||||||||||||||
| Basic | $ | 0.23 | $ | 0.12 | $ | 1.16 | $ | (1.09 | ) | |||||||
| Diluted | $ | 0.23 | $ | 0.12 | $ | 1.16 | $ | (1.09 | ) | |||||||
| Weighted average common shares outstanding | ||||||||||||||||
| Basic | 126,202,593 | 127,823,098 | 126,354,597 | 82,908,772 | ||||||||||||
| Diluted | 126,220,184 | 127,911,031 | 126,390,435 | 82,908,772 | ||||||||||||
Consolidated Statements of Cash Flows (in thousands) |
||||||||
| Year Ended |
||||||||
| 2021 | 2020 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | 146,082 | $ | (97,564 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Share-based compensation | 3,815 | 2,828 | ||||||
| Depreciation and amortization | 1,122 | 1,768 | ||||||
| Non-cash operating lease cost | 544 | — | ||||||
| Gain on extinguishment of tax receivable agreement | (55,422 | ) | — | |||||
| Loss on extinguishment of debt | 8,778 | — | ||||||
| Deferred income taxes | 20,055 | 4,734 | ||||||
| Change in fair value of contingent consideration | — | 131,932 | ||||||
| Changes in assets & liabilities: | ||||||||
| Accounts receivable | (2,181 | ) | (585 | ) | ||||
| Contract assets | (23,763 | ) | (26,391 | ) | ||||
| Operating lease right-of-use assets | — | (548 | ) | |||||
| Prepaid expenses | (606 | ) | (313 | ) | ||||
| Other current and non-current assets | (514 | ) | (1,431 | ) | ||||
| Accounts payable | (2,157 | ) | 2,105 | |||||
| Accrued expenses | 693 | 1,027 | ||||||
| Income tax receivable/payable, net | (450 | ) | 1,640 | |||||
| Operating lease liabilities | (364 | ) | (280 | ) | ||||
| Third-party claims administration liability | 459 | 409 | ||||||
| Other current and noncurrent liabilities | (935 | ) | 5,309 | |||||
| Net cash provided by operating activities | 95,156 | 24,640 | ||||||
| Cash flows from investing activities | ||||||||
| Purchase of property and equipment | (1,987 | ) | (1,196 | ) | ||||
| Net cash used in investing activities | (1,987 | ) | (1,196 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from term loans | 125,000 | 170,000 | ||||||
| Proceeds from revolving facility | 50,000 | — | ||||||
| Payments on term loans | (169,191 | ) | (6,521 | ) | ||||
| Payments on revolving facility | (25,000 | ) | — | |||||
| Payment of deferred financing costs | (1,669 | ) | (10,061 | ) | ||||
| Share repurchase | (20,000 | ) | (37,500 | ) | ||||
| Settlement of tax receivable agreement | (36,948 | ) | — | |||||
| Distributions to |
— | (135,598 | ) | |||||
| Proceeds from stock warrant exercises | — | 105,349 | ||||||
| Recapitalization transaction, net of transaction costs | — | (14,863 | ) | |||||
| Net cash (used in) provided by financing activities | (77,808 | ) | 70,806 | |||||
| Net change in cash and cash equivalents and restricted cash | 15,361 | 94,250 | ||||||
| Cash and cash equivalents and restricted cash at the beginning of the period | 104,148 | 9,898 | ||||||
| Cash and cash equivalents and restricted cash at the end of the period | $ | 119,509 | $ | 104,148 | ||||
| Supplemental disclosure of cash flow information: | ||||||||
| Interest paid | $ | 5,243 | $ | 10,444 | ||||
| Income tax paid, net | 25,280 | 144 | ||||||
| Property and equipment accrued but not paid | 24 | — | ||||||
| Right of use assets obtained in exchange for lease obligations | — | 5,362 | ||||||
| Non-cash investing and financing: | ||||||||
| Change in fair value of redeemable convertible Series C preferred units | $ | — | $ | (47,537 | ) | |||
| Conversion of preferred stock to common stock | — | 257,406 | ||||||
Reconciliation of GAAP to Non-GAAP Financial Measures (Unaudited, in thousands) |
||||||||||||||||
| Three Months Ended |
Year Ended |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Adjusted EBITDA | ||||||||||||||||
| Net income (loss) | $ | 27,840 | $ | 15,202 | $ | 146,082 | $ | (97,564 | ) | |||||||
| Non-GAAP adjustments: | ||||||||||||||||
| Interest expense | 489 | 3,621 | 5,859 | 11,601 | ||||||||||||
| Income tax expense | 6,945 | 1,188 | 45,086 | 6,573 | ||||||||||||
| Depreciation and amortization expense | 202 | 346 | 792 | 752 | ||||||||||||
| Share-based compensation (1) | 1,089 | 152 | 3,815 | 2,828 | ||||||||||||
| Gain on extinguishment of tax receivable agreement (2) | — | — | (55,422 | ) | — | |||||||||||
| Loss on extinguishment of debt (3) | — | — | 8,778 | — | ||||||||||||
| Change in fair value of contingent consideration (4) | — | — | — | 131,932 | ||||||||||||
| Change in measurement – tax receivable agreement (5) | — | 4,292 | — | 4,292 | ||||||||||||
| Transaction bonuses (6) | — | — | — | 9,112 | ||||||||||||
| Total adjustments | 8,725 | 9,599 | 8,908 | 167,090 | ||||||||||||
| Adjusted EBITDA | 36,565 | 24,801 | 154,990 | 69,526 | ||||||||||||
| Total revenue | $ | 51,630 | $ | 39,633 | $ | 215,655 | $ | 108,892 | ||||||||
| Adjusted EBITDA margin | 71 | % | 63 | % | 72 | % | 64 | % | ||||||||
| Adjusted operating cash flows (7) | ||||||||||||||||
| Adjusted EBITDA | $ | 36,565 | $ | 24,801 | $ | 154,990 | $ | 69,526 | ||||||||
| CAPEX | (202 | ) | (99 | ) | (1,987 | ) | (1,196 | ) | ||||||||
| Decrease (increase) in contract assets | 1,157 | (16,354 | ) | (23,763 | ) | (26,391 | ) | |||||||||
| Adjusted operating cash flows | $ | 37,520 | $ | 8,348 | $ | 129,240 | $ | 41,939 | ||||||||
Notes:
(1) Includes
(2) Reflects the gain recognized as a result of the early termination and settlement of the tax receivable agreement.
(3) Reflects the loss recognized in connection with the refinancing of our Term Loan due 2027 on
(4) Reflects non-cash charges for the change in the estimated fair value of contingent consideration from
(5) Reflects non-cash charges due to changes in the measurement of our Tax Receivable Agreement liability as a result of changes in our blended state tax rate.
(6) Reflects transaction bonuses awarded to key employees and directors in connection with the Business Combination.
(7) Adjusted operating cash flow is defined as adjusted EBITDA, minus CAPEX, plus or minus change in contract assets.
Source: Open Lending Corporation