Kar Auction Services (KAR) Withdraws FY21 Guidance and Introduces Long-Term Targets

KAR Auction Services, Inc. d/b/a KAR Global (NYSE: KAR), a leading global wholesale used vehicle digital marketplace operator, today announced that as a result of the continued disruption caused by the chip shortage and the corresponding lack of visibility into used vehicle volumes in its marketplaces, the company is withdrawing its previously provided financial outlook for fiscal 2021. The company expects $95 million to $100 million of Adjusted EBITDA for the third quarter 2021 and expects approximately 2.6 million vehicles sold in 2021. Due to the market uncertainty, the company does not intend to provide fourth quarter expectations at this time.

The company will host a conference call today at 5:30 p.m. ET to discuss its updated outlook in advance of the Analyst Day event. The conference call may be accessed by calling 1 (844) 778-4145 and entering participant passcode 1354858, with the live webcast available on the company's website at ir.karglobal.com (an archived version of the webcast will be available for a limited time). A telephone replay will be available for two weeks and can be accessed by calling 1 (855) 859-2056 and entering passcode 1354858.

Analyst DayThe company's previously announced virtual Analyst Day will be held tomorrow, Tuesday, September 21, 2021, at 11:00 a.m. ET and is expected to conclude at 2:00 p.m. ET. An interactive Q&A session will follow the presentations. The virtual event will be available in its entirety through a live webcast at ir.karglobal.com, and a replay will be made available after the event for a limited time.

During the event, the company will discuss the current market outlook and provide an in-depth review of its strategic direction, operating model, financial performance and long-term roadmap, including the following:

• KAR is a digital marketplace business, with industry leading digital platforms supported by a coast-to-coast network of facilities dedicated to preparing vehicles for sale.
• KAR expects to see a cyclical recovery in commercial volumes that will positively impact its business.
• KAR expects to grow dealer-to-dealer channel volumes, principally through gaining share via its digital platforms.
• KAR expects to continue to maintain strong cost discipline through a more digital operating model.

The company will also discuss the following long-term targets:

• 4.25 million vehicles sold in 2025
• Revenue of $3.4 to $3.5 billion in 2025
• $750 to $800 million in Adjusted EBITDA for 2025
• Approximately $1.5 billion in cash from operations for the period 2021 through 2025

"Although the current operating environment is challenged due to semiconductor shortage related impacts on used vehicle volumes in our marketplaces, we are excited for future opportunities once our markets recover. We expect that we will deliver significant growth in volumes, profitability and cash flow as we progress through the next four years," said Peter Kelly, Chief Executive Officer.

You May Also Be Interested In

• Zscaler to cut 3% staff
• Dubai's VARA and Securitize sign MoU on tokenized markets
• SentinelOne expands AI security services with OpenAI models