OPENLANE, Inc. Reports Second Quarter 2023 Financial Results

CARMEL, Ind., Aug. 2, 2023

"I am very pleased with our solid performance in the second quarter. Against an industry backdrop of continued tight supply, we delivered strong growth in revenue, total gross profit and adjusted EBITDA," said Peter Kelly, CEO of OPENLANE. "Our performance was led by our Marketplace segment, which, given the scalability of our asset-light, digital model, is very well positioned to help build on our positive operational and financial performance. And our rebrand and associated platform consolidation strategy is beginning to take meaningful shape, creating more liquid and cost efficient markets that help our customers achieve better outcomes while accelerating innovation and growth at OPENLANE."

Second Quarter 2023 Financial Highlights

• Total revenue of $416.9 million, an increase of 9% year-over-year
• Loss from continuing operations of $193.8 million, or $(1.87) per diluted share, driven by non-cash goodwill and intangibles impairment charges of $221.4 million, net of tax impacts
• Adjusted EBITDA of $83.8 million, an increase of 49%, including receipt of $20.0 million early termination payment
• Marketplace Adjusted EBITDA of $43.5 million, a $38.5 million increase year-over-year including receipt of $20.0 million early termination payment
• Operating adjusted net income from continuing operations of $36.8 million, or $0.25 per diluted share, compared with $6.6 million, or $0.04 per diluted share, for the quarter ended June 30, 2022.
• $142.6 million of cash flow from operating activities for the six months ended June 30, 2023, drove a reduction in net debt of $117.5 million

2023 Guidance
The company's previously stated annual guidance for Adjusted EBITDA remains unchanged, while the company's other guidance measures have been updated as shown below.

	Annual Guidance ARIVA.DE Börsen-Geflüster Kurse Openlane Inc 17,38 $ 0,00%
Income (loss) from continuing operations (in millions)	($166) - ($153)
Adjusted EBITDA (in millions)	$250 - $270
Income (loss) from continuing operations per share - diluted *	($1.92) - ($1.80)
Operating adjusted net income from continuing operations per share - diluted	$0.60 - $0.70

* The company uses the two-class method of calculating income from continuing operations per diluted share. Under the two-class method, income from continuing operations is adjusted for dividends and undistributed earnings (losses) to the holders of the Series A Preferred Stock, and the weighted average diluted shares do not assume conversion of the preferred shares to common shares.

Earnings guidance does not contemplate future items such as business development activities, strategic developments (such as restructurings, spin-offs or dispositions of assets or investments), contingent purchase price adjustments, significant expenses related to litigation and changes in applicable laws and regulations (including significant accounting and tax matters) and intangible impairments. The timing and amounts of these items are highly variable, difficult to predict, and of a potential size that could have a substantial impact on the company's reported results for any given period. Prospective quantification of these items is generally not practicable. Operating adjusted net income from continuing operations per share excludes amortization expense associated with acquired intangible assets, as well as one-time charges, net of taxes. See reconciliations of the company's guidance included below.

Earnings Conference Call Information
OPENLANE will be hosting an earnings conference call and webcast on Thursday, August 3, 2023 at 8:30 a.m. ET. The call will be hosted by OPENLANE Chief Executive Officer Peter Kelly and Chief Financial Officer Brad Lakhia. The conference call may be accessed by calling 1-833-634-2155 and entering participant passcode "OPENLANE." A live webcast will be available at the investor relations section of corporate.openlane.com. Supplemental financial information for OPENLANE's second quarter 2023 results is available at the investor relations section of corporate.openlane.com.

The archive of the webcast will be available following the call at the investor relations section of corporate.openlane.com for a limited time.

About OPENLANE
OPENLANE, Inc. (NYSE: KAR), provides sellers and buyers across the global wholesale used vehicle industry with innovative, technology-driven remarketing solutions. The company's unique end-to-end platform supports whole car, financing, logistics and other ancillary and related services. Our integrated marketplaces reduce risk, improve transparency and streamline transactions for customers around the globe. Headquartered in Carmel, Indiana, the company has employees across the United States, Canada, Europe, Uruguay and the Philippines. For more information and the latest company news, visit corporate.openlane.com.

Forward-Looking Statements
Certain statements contained in this release include "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and which are subject to certain risks, trends and uncertainties. In particular, statements made that are not historical facts may be forward-looking statements. Words such as "should," "may," "will," "can," "of the opinion," "confident," "is set," "is on track," "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates," "continues," "outlook," initiatives," "goals," "opportunities" and similar expressions identify forward-looking statements. Such statements are based on management's current expectations, are not guarantees of future performance and are subject to risks and uncertainties that could cause actual results to differ materially from the results projected, expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include but are not limited to risks and uncertainties regarding the impact of adverse market, economic and geopolitical conditions and those other matters disclosed in the company's Securities and Exchange Commission filings, including those discussed under the heading "Risk Factors" in the company's annual and quarterly periodic reports. The company does not undertake any obligation to update any forward-looking statements.

OPENLANE, Inc. Condensed Consolidated Statements of Income (In millions) (Unaudited)
	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating revenues
Auction fees	$      103.3		$        99.2		$      203.2		$      200.6
Service revenue	155.7		147.3		321.3		284.8
Purchased vehicle sales	60.4		45.8		115.9		92.1
Finance-related revenue	97.5		91.9		197.1		176.1
Total operating revenues	416.9		384.2		837.5		753.6
Operating expenses
Cost of services (exclusive of depreciation and amortization)	222.6		211.9		446.8		422.7
Selling, general and administrative	111.2		124.1		219.2		243.0
Depreciation and amortization	26.8		25.9		49.8		51.9
Goodwill and other intangibles impairment	250.8		—		250.8		—
Total operating expenses	611.4		361.9		966.6		717.6
Operating profit (loss)	(194.5)		22.3		(129.1)		36.0
Interest expense	38.8		25.9		77.1		51.5
Other (income) expense, net	(21.3)		4.0		(14.2)		5.2
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