TrueCar, Inc. (NASDAQ: TRUE) today announced its financial
results for the third quarter ended September 30, 2019.
Third Quarter 2019 Financial Highlights
- Third quarter total revenue down 3.2% from a year ago at $90.6
million.
- Third quarter net loss of $(7.7) million, or $(0.07) per share,
compared to net loss of $(6.3) million, or $(0.06) per share, in
the third quarter of 2018.
- Third quarter Non-GAAP net income(1) of $0.5 million, or
$0.00 per share, compared to Non-GAAP net income of $4.3 million,
or $0.04 per share, in the third quarter of 2018.
- Third quarter Adjusted EBITDA(2) of $5.9 million,
representing an Adjusted EBITDA margin(3) of 6.5%, compared to
Adjusted EBITDA of $10.0 million, representing an Adjusted EBITDA
margin of 10.7%, in the third quarter of 2018.
Management Commentary
"I can truly sense a change in the momentum here within the
walls of TrueCar," said Mike Darrow, TrueCar's Interim CEO &
President. "We are laser-focused on our near-term business goals,
and energized by our upcoming re-brand and the rapid product
innovation that is enabling the launch of a new and evolved
consumer experience. This will prepare us to meet the needs and
expectations of today's car buyers and pave the way toward a true
end-to-end digital shopping to showroom experience."
"I’m very excited by our third quarter results, highlighted by
revenue and adjusted EBITDA performance above the upper end of our
guidance ranges, which demonstrates that the company is getting on
the right track to achieving our short-term and long-term goals,"
said Noel Watson, TrueCar's Chief Financial Officer. "As a result,
we are raising both our revenue and adjusted EBITDA guidance for
the full year 2019."
(1) Non-GAAP net (loss) income is a Non-GAAP financial
measure. Refer to its definition and accompanying
reconciliation to GAAP net loss below.
(2) Adjusted EBITDA is a Non-GAAP financial measure.
Refer to its definition and accompanying reconciliation to GAAP net
loss below.
(3) Adjusted EBITDA margin is a Non-GAAP financial
measure, calculated as Adjusted EBITDA divided by total
revenue.
Key Operating Metrics
- Average monthly unique visitors(4) decreased 4% to 7.7
million in the third quarter of 2019, down from 8.0 million in the
third quarter of 2018.
- Units(5) were 267,821 in the third quarter of 2019,
compared to 268,026 in the third quarter of 2018.
- Monetization(6) was $320 during the third quarter of 2019,
compared to $331 during the third quarter of 2018.
- Franchise dealer count(7) was 12,711 as of September 30,
2019, compared to 12,549 as of September 30, 2018.
- Independent dealer count(8) was 4,242 as of September 30,
2019, compared to 3,482 as of September 30, 2018.
Business Outlook
Our guidance for the full year ending December 31, 2019 is
as follows:
- Revenues are expected to be in the range of $351 million to
$353 million.
- Adjusted EBITDA is expected to be in the range of $15 million
to $17 million.(9)
(4) We define a monthly unique visitor as an individual
who has visited our website, our landing page on our affinity
group marketing partner sites or our mobile applications within a
calendar month. We calculate average monthly unique visitors as the
sum of the monthly unique visitors divided by the number of months
in the period.
(5) We define units as the number of automobiles purchased
from TrueCar Certified Dealers that are matched to users of
TrueCar.com, our mobile applications or the car-buying sites and
mobile applications we maintain for our affinity group marketing
partners.
(6) We define monetization as the average transaction
revenue per unit, which we calculate by dividing all of our
transaction revenue (dealer revenue and OEM incentives revenue) in
a given period by the number of units in that period.
(7) We define franchise dealer count as the number of
franchise dealers in the network of TrueCar Certified Dealers at
the end of a given period. This number is calculated by counting
the number of brands of new cars sold at each individual location,
or rooftop, regardless of the size of the dealership that owns the
rooftop. Note that this number excludes Genesis franchises on
our program due to Hyundai’s transition of Genesis to a stand-alone
brand. In order to facilitate period over period comparisons, we
have continued to count each Hyundai franchise that also has a
Genesis franchise as one franchise dealer rather than two.
(8) We define independent dealer count as the number of
dealers in the network of TrueCar Certified Dealers at the end of a
given period that exclusively sell used vehicles and are not
directly affiliated with a new car manufacturer. This number is
calculated by counting each location, or rooftop, individually,
regardless of the size of the dealership that owns the rooftop.
(9) We are unable to provide reconciliations of
forward-looking Adjusted EBITDA without unreasonable effort because
of the uncertainty and potential variability in amount and timing
of stock-based compensation, certain transaction expenses and
certain litigation costs, which are reconciling items between GAAP
net loss and Adjusted EBITDA and could significantly impact GAAP
results.
Conference Call Information
Members of our management will host a conference call
today, November 7, 2019, to discuss our third quarter 2019
results at 4:30 p.m. Eastern Time. To participate, domestic
callers should dial 1-877-407-0789 and international callers should
dial 1-201-689-8562. A replay of the call may be accessed the same
day from 7:30 p.m. Eastern Time on Thursday, November 7, 2019
until 11:59 p.m. Eastern Time on Thursday, November 21, 2019 by
dialing 1-844-512-2921 (domestic) or 1-412-317-6671 (international)
and entering replay PIN 13695869. An archived version of the call
will also be available upon completion on the Investor Relations
section of our website at ir.truecar.com. We have used, and intend
to continue to use, our Investor Relations website
(ir.truecar.com), Twitter (@TrueCar) and Facebook
(www.facebook.com/TrueCar) as means of disclosing material
non-public information and for complying with our disclosure
obligations under Regulation FD.
Forward-Looking Statements
This press release contains forward-looking statements. All
statements contained in this press release other than statements of
historical fact are forward-looking statements, including
statements regarding our future revenue growth potential and
opportunities and our outlook for 2019, including our expectations
regarding future revenue and adjusted EBITDA. These forward-looking
statements are subject to a number of risks, uncertainties and
assumptions that may prove incorrect, any of which could cause our
results to differ materially from those expressed or implied by
such forward-looking statements, and include, among others, those
risks and uncertainties described under the heading “Risk Factors”
in our Annual Report on Form 10-K for the year ended
December 31, 2018 filed with the Securities and Exchange
Commission, or SEC, our Quarterly Reports on Form 10-Q for the
quarters ended March 31, 2019 and June 30, 2019 filed with the SEC
and our Quarterly Report on Form 10-Q for the quarter ended
September 30, 2019 to be filed with the SEC. Moreover, we operate
in a very competitive and rapidly changing environment. New risks
emerge from time to time. It is not possible for our management to
predict all risks, nor can management assess the impact of all
factors on our business or the extent to which any factor, or
combination of factors, may cause actual results to differ
materially from those contained in any forward-looking statements
we may make. All forward-looking statements in this press release
are based on information available to our management as of the
date of this press release and except as required by law,
management assumes no obligation to update those forward-looking
statements, which speak only as of their respective dates.
Use of Non-GAAP Financial Measures
This earnings release includes the following Non-GAAP financial
measures: Adjusted EBITDA, Adjusted EBITDA margin, Non-GAAP net
(loss) income and Non-GAAP net (loss) income per share. We
define Adjusted EBITDA as net loss adjusted to exclude interest
income, interest expense, depreciation and amortization,
stock-based compensation, income (loss) from equity method
investment, certain restructuring costs, certain executive
departure costs, certain transaction expenses, certain litigation
costs, changes in the fair value of contingent consideration, and
income taxes. We define Non-GAAP net (loss) income as net loss
adjusted to exclude stock-based compensation, income (loss) from
equity method investment, certain restructuring costs, certain
executive departure costs, certain transaction expenses, certain
litigation costs, and changes in the fair value of contingent
consideration. We have provided below a reconciliation of each of
Adjusted EBITDA and Non-GAAP net (loss) income to net loss,
the most directly comparable GAAP financial measure. Neither
Adjusted EBITDA nor Non-GAAP net (loss) income should be considered
as an alternative to net loss or any other measure of financial
performance calculated and presented in accordance with GAAP.
We use Adjusted EBITDA and Non-GAAP net (loss) income as
operating performance measures because each is (i) an integral part
of our reporting and planning processes; (ii) used by our
management and board of directors to assess our operational
performance, and together with operational objectives, as a measure
in evaluating employee compensation and bonuses; and (iii) used by
our management to make financial and strategic planning decisions
regarding future operating investments. We believe that using
Adjusted EBITDA and Non-GAAP net (loss) income facilitates
operating performance comparisons on a period-to-period basis
because these measures exclude variations primarily caused by
changes in the excluded items noted above. In addition, we believe
that Adjusted EBITDA, Non-GAAP net (loss) income and similar
measures are widely used by investors, securities analysts, rating
agencies and other parties in evaluating companies as measures of
financial performance and debt service capabilities.
Our use of each of Adjusted EBITDA and Non-GAAP net (loss)
income has limitations as an analytical tool, and you should not
consider either in isolation or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:
- Adjusted EBITDA does not reflect the payment or receipt of
interest or the payment of income taxes;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
changes in, or cash requirements for, our working capital
needs;
- although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditures or any other contractual commitments;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
severance charges associated with the departures of certain of our
former executives in the second quarter of 2019;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
the severance charges associated with a restructuring plan
initiated and completed in the first quarter of 2019 to improve
efficiency and reduce expenses;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
the legal, accounting, consulting and other third-party fees and
costs we incurred in connection with the evaluation and negotiation
of potential merger and acquisition transactions;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income reflects
the costs to advance our claims in certain litigation or the costs
to defend ourselves in various complaints filed against us;
- neither Adjusted EBITDA nor Non-GAAP net (loss) income
considers the potentially dilutive impact of shares issued or to be
issued in connection with stock-based compensation; and
- other companies, including companies in our own industry, may
calculate Adjusted EBITDA and Non-GAAP net (loss) income
differently than we do, limiting their usefulness as comparative
measures.
Because of these limitations, you should consider Adjusted
EBITDA and Non-GAAP net (loss) income alongside other financial
performance measures, including our net loss, our other GAAP
results and various cash flow metrics. In addition, in evaluating
Adjusted EBITDA and Non-GAAP net (loss) income, you should be aware
that in the future we will incur expenses such as those that are
the subject of adjustments in deriving Adjusted EBITDA and Non-GAAP
net (loss) income and you should not infer from our presentation of
Adjusted EBITDA and Non-GAAP net (loss) income that our future
results will not be affected by these expenses or any unusual or
non-recurring items.
About TrueCar
TrueCar, Inc. (NASDAQ: TRUE) is a digital automotive
marketplace that provides comprehensive pricing transparency about
what other people paid for their cars and enables consumers to
engage with TrueCar Certified Dealers who are committed to
providing a superior purchase experience. TrueCar operates its own
branded site and its nationwide network of more than 16,500
Certified Dealers, and also powers car-buying programs for some of
the largest U.S. membership and service organizations, including
USAA, AARP, American Express, AAA and Sam's Club. Approximately
half of all new car buyers engage with the TrueCar website or one
of our affiliate partners’ websites during their purchasing
process. TrueCar is headquartered in Santa Monica, California, with
an office in Austin, Texas. For more information, go to
www.truecar.com. Follow TrueCar on Facebook or Twitter.
PR Contact:Shadee
MalekafzaliShadee@truecar.com
TRUECAR,
INC.CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except per share
data)(Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Revenues |
$ |
90,555 |
|
|
$ |
93,586 |
|
|
$ |
264,212 |
|
|
$ |
262,497 |
|
Costs and operating
expenses: |
|
|
|
|
|
|
|
Cost of revenue |
8,391 |
|
|
7,737 |
|
|
25,659 |
|
|
22,941 |
|
Sales and marketing |
57,961 |
|
|
57,031 |
|
|
172,932 |
|
|
157,463 |
|
Technology and development |
13,027 |
|
|
15,345 |
|
|
44,726 |
|
|
46,633 |
|
General and administrative |
13,018 |
|
|
14,030 |
|
|
49,504 |
|
|
41,005 |
|
Depreciation and amortization |
6,145 |
|
|
5,992 |
|
|
19,327 |
|
|
16,808 |
|
Total costs and operating expenses |
98,542 |
|
|
100,135 |
|
|
312,148 |
|
|
284,850 |
|
Loss from operations |
(7,987 |
) |
|
(6,549 |
) |
|
(47,936 |
) |
|
(22,353 |
) |
Interest income |
855 |
|
|
888 |
|
|
2,822 |
|
|
2,242 |
|
Interest expense |
— |
|
|
(662 |
) |
|
— |
|
|
(1,985 |
) |
Loss from equity method
investment |
(464 |
) |
|
— |
|
|
(737 |
) |
|
— |
|
Loss before income taxes |
(7,596 |
) |
|
(6,323 |
) |
|
(45,851 |
) |
|
(22,096 |
) |
Provision for (benefit from)
income taxes |
56 |
|
|
(72 |
) |
|
226 |
|
|
(168 |
) |
Net loss |
$ |
(7,652 |
) |
|
$ |
(6,251 |
) |
|
$ |
(46,077 |
) |
|
$ |
(21,928 |
) |
Net loss per share: |
|
|
|
|
|
|
|
Basic and diluted |
$ |
(0.07 |
) |
|
$ |
(0.06 |
) |
|
$ |
(0.44 |
) |
|
$ |
(0.22 |
) |
Weighted average common shares
outstanding, basic and diluted |
106,239 |
|
|
102,765 |
|
|
105,510 |
|
|
101,503 |
|
TRUECAR,
INC.CONSOLIDATED BALANCE
SHEETS(In
thousands)(Unaudited)
|
September 30, 2019 |
|
December 31, 2018 |
Assets |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
$ |
172,463 |
|
|
$ |
196,128 |
|
Accounts receivable, net |
45,607 |
|
|
47,760 |
|
Prepaid expenses |
8,347 |
|
|
7,468 |
|
Other current assets |
34,842 |
|
|
4,103 |
|
Total current assets |
261,259 |
|
|
255,459 |
|
Property and equipment, net |
30,949 |
|
|
61,511 |
|
Operating lease right-of-use assets |
37,573 |
|
|
— |
|
Goodwill |
73,311 |
|
|
73,311 |
|
Intangible assets, net |
18,807 |
|
|
23,451 |
|
Equity method investment |
22,437 |
|
|
— |
|
Other assets |
4,247 |
|
|
7,228 |
|
Total assets |
$ |
448,583 |
|
|
$ |
420,960 |
|
Liabilities and
Stockholders’ Equity |
|
|
|
Current liabilities |
|
|
|
Accounts payable |
$ |
21,486 |
|
|
$ |
26,305 |
|
Accrued employee expenses |
6,216 |
|
|
4,349 |
|
Operating lease liabilities, current |
6,383 |
|
|
— |
|
Accrued expenses and other current liabilities |
43,138 |
|
|
10,908 |
|
Total current liabilities |
77,223 |
|
|
41,562 |
|
Deferred tax liabilities |
736 |
|
|
568 |
|
Lease financing obligations, net of current portion |
— |
|
|
22,987 |
|
Operating lease liabilities, net of current portion |
38,340 |
|
|
— |
|
Other liabilities |
2,306 |
|
|
9,290 |
|
Total liabilities |
118,605 |
|
|
74,407 |
|
Stockholders’
Equity |
|
|
|
Common stock |
10 |
|
|
10 |
|
Additional paid-in capital |
753,217 |
|
|
720,025 |
|
Accumulated deficit |
(423,249 |
) |
|
(373,482 |
) |
Total stockholders’ equity |
329,978 |
|
|
346,553 |
|
Total liabilities and stockholders’ equity |
$ |
448,583 |
|
|
$ |
420,960 |
|
TRUECAR,
INC.RECONCILIATION OF NET LOSS TO ADJUSTED
EBITDA (In
thousands)(Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net loss |
$ |
(7,652 |
) |
|
$ |
(6,251 |
) |
|
$ |
(46,077 |
) |
|
$ |
(21,928 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Interest income |
(855 |
) |
|
(888 |
) |
|
(2,822 |
) |
|
(2,242 |
) |
Interest expense |
— |
|
|
662 |
|
|
— |
|
|
1,985 |
|
Depreciation and amortization |
6,145 |
|
|
5,992 |
|
|
19,327 |
|
|
16,808 |
|
Stock-based compensation (1) |
7,191 |
|
|
10,247 |
|
|
31,382 |
|
|
28,316 |
|
Loss from equity method investment |
464 |
|
|
— |
|
|
737 |
|
|
— |
|
Certain litigation costs (2) |
157 |
|
|
335 |
|
|
1,436 |
|
|
1,996 |
|
Executive departure costs (3) |
270 |
|
|
— |
|
|
4,951 |
|
|
— |
|
Restructuring charges (4) |
— |
|
|
— |
|
|
3,280 |
|
|
— |
|
Transaction costs (5) |
— |
|
|
— |
|
|
1,926 |
|
|
— |
|
Change in the fair value of contingent consideration |
75 |
|
|
— |
|
|
225 |
|
|
— |
|
Provision for (benefit from) income taxes |
56 |
|
|
(72 |
) |
|
226 |
|
|
(168 |
) |
Adjusted EBITDA |
$ |
5,851 |
|
|
$ |
10,025 |
|
|
$ |
14,591 |
|
|
$ |
24,767 |
|
____________________
- For the nine months ended September 30, 2019, the excluded
amounts included stock-based compensation of $7.2 million incurred
in the second quarter of 2019 associated with the acceleration of
certain equity awards and the extension of the exercise period for
certain vested stock options related to the departures of certain
executives, including our former chief executive officer.
- The excluded amounts relate to legal costs incurred in
connection with complaints filed by non-TrueCar dealers and the
California New Car Dealers Association against TrueCar and consumer
class action lawsuits. We believe the exclusion of these costs is
appropriate to facilitate comparisons of our core operating
performance on a period-to-period basis. Based on the nature of the
specific claims underlying the excluded litigation matters, once
these matters are resolved, we do not believe our operations are
likely to entail defending against the types of claims raised by
these matters. We expect the cost of defending these claims to
continue to be significant pending that resolution.
- The excluded amounts represent severance charges associated
with the separation of our former chief executive officer and the
termination of executive-level employees in connection with the
change in CEO and related recruiting fees for the search of a new
chief executive officer. For the three months ended September 30,
2019, we incurred $0.3 million in related recruiting fees. For the
nine months ended September 30, 2019, we incurred $4.6 million in
executive severance costs, as well as related recruiting fees of
$0.4 million. We believe excluding the impact of these terminations
and the associated chief executive officer recruiting fees is
consistent with our use of these non-GAAP measures as we do not
believe they are a useful indicator of our ongoing operating
results. We expect to incur an additional $0.1 million in
related executive recruiting fees in the fourth quarter of
2019.
- The excluded amounts represent charges associated with a
restructuring plan initiated and completed in the first quarter of
2019 to improve efficiency and reduce expenses. We believe
excluding the impact of these charges is consistent with our use of
these non-GAAP measures as we do not believe they are a useful
indicator of our ongoing operating results.
- The excluded amounts represent external legal, accounting,
consulting and other third-party fees and costs we incurred in
connection with the evaluation and negotiation of potential
acquisition transactions. These expenses are included in general
and administrative expenses in our consolidated statements of
operations. We consider these fees and costs, which are
associated with potential merger and acquisition transactions
outside the normal course of our operations, to be unrelated to our
underlying results of operations and believe that their exclusion
provides investors with a more complete understanding of the
factors and trends affecting our business operations. We also
incurred $0.6 million of such transaction expenses in the three
months ended December 31, 2018 and will recast our prior-period
Adjusted EBITDA presented in previous filings to reflect the
exclusion of such expenses in future filings that present Adjusted
EBITDA figures for such three-month period.
TRUECAR,
INC.RECONCILIATION OF NET LOSS TO NON-GAAP NET
INCOME (LOSS) (In thousands, except per
share amounts)(Unaudited)
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Net loss |
$ |
(7,652 |
) |
|
$ |
(6,251 |
) |
|
$ |
(46,077 |
) |
|
$ |
(21,928 |
) |
Non-GAAP adjustments: |
|
|
|
|
|
|
|
Stock-based compensation (1) |
7,191 |
|
|
10,247 |
|
|
31,382 |
|
|
28,316 |
|
Loss from equity method investment |
464 |
|
|
— |
|
|
737 |
|
|
— |
|
Certain litigation costs (2) |
157 |
|
|
335 |
|
|
1,436 |
|
|
1,996 |
|
Executive departure costs (3) |
270 |
|
|
— |
|
|
4,951 |
|
|
— |
|
Restructuring charges (4) |
— |
|
|
— |
|
|
3,280 |
|
|
— |
|
Transaction costs (5) |
— |
|
|
— |
|
|
1,926 |
|
|
— |
|
Change in the fair value of contingent consideration |
75 |
|
|
— |
|
|
225 |
|
|
— |
|
Non-GAAP net income (loss)
(6) |
$ |
505 |
|
|
$ |
4,331 |
|
|
$ |
(2,140 |
) |
|
$ |
8,384 |
|
|
|
|
|
|
|
|
|
Non-GAAP net income (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.00 |
|
|
$ |
0.04 |
|
|
$ |
(0.02 |
) |
|
$ |
0.08 |
|
Diluted |
$ |
0.00 |
|
|
$ |
0.04 |
|
|
$ |
(0.02 |
) |
|
$ |
0.08 |
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding: |
|
|
|
|
|
|
|
Basic |
106,239 |
|
|
102,765 |
|
|
105,510 |
|
|
101,503 |
|
Diluted |
106,321 |
|
|
105,747 |
|
|
105,510 |
|
|
103,850 |
|
____________________
- For the nine months ended September 30, 2019, the excluded
amounts include stock-based compensation of $7.2 million incurred
in the second quarter of 2019 associated with the acceleration of
certain equity awards and the extension of the exercise period for
certain vested stock options related to the departures of certain
executives, including our former chief executive officer.
- The excluded amounts relate to legal costs incurred in
connection with complaints filed by non-TrueCar dealers and the
California New Car Dealers Association against TrueCar and consumer
class action lawsuits. We believe the exclusion of these costs is
appropriate to facilitate comparisons of our core operating
performance on a period-to-period basis. Based on the nature of the
specific claims underlying the excluded litigation matters, once
these matters are resolved, we do not believe our operations are
likely to entail defending against the types of claims raised by
these matters. We expect the cost of defending these claims to
continue to be significant pending that resolution.
- The excluded amounts represent severance charges associated
with the separation of our former chief executive officer and the
termination of executive-level employees in connection with the
change in CEO and related recruiting fees for the search of a new
chief executive officer. For the three months ended September 30,
2019, we incurred $0.3 million in related recruiting fees. For the
nine months ended September 30, 2019, we incurred $4.6 million in
executive severance costs, as well as related recruiting fees of
$0.4 million. We believe excluding the impact of these terminations
and the associated chief executive officer recruiting fees is
consistent with our use of these non-GAAP measures as we do not
believe they are a useful indicator of our ongoing operating
results. We expect to incur an additional $0.1 million in
related executive recruiting fees in the fourth quarter of
2019.
- The excluded amounts represent charges associated with a
restructuring plan initiated and completed in the first quarter of
2019 to improve efficiency and reduce expenses. We believe
excluding the impact of these charges is consistent with our use of
these non-GAAP measures as we do not believe they are a useful
indicator of our ongoing operating results.
- The excluded amounts represent external legal, accounting,
consulting and other third-party fees and costs we incurred in
connection with the evaluation and negotiation of potential
acquisition transactions. These expenses are included in general
and administrative expenses in our consolidated statements of
operations. We consider these fees and costs, which are
associated with potential merger and acquisition transactions
outside the normal course of our operations, to be unrelated to our
underlying results of operations and believe that their exclusion
provides investors with a more complete understanding of the
factors and trends affecting our business operations. We also
incurred $0.6 million of such transaction expenses in the three
months ended December 31, 2018 and will recast our prior-period
Non-GAAP net (loss) income presented in previous filings to reflect
the exclusion of such expenses in future filings that present
Non-GAAP net (loss) income figures for such three-month
period.
- There is no income tax impact related to the adjustments made
to calculate Non-GAAP net income (loss) because of our available
net operating loss carryforwards and the full valuation allowance
recorded against our net deferred tax assets at September 30,
2019 and 2018.
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