Cars.com CEO Alex Vetter said Thursday in a conference call with analysts and investors that a strategic review of the company’s business continues.
“The process is ongoing and we’re engaged with multiple parties,” Vetter said.
There were no comments on the initiative beyond that in the call to discuss the company’s fourth-quarter and full-year results. Cars.com has said that its strategic review could lead to a sale of the company. In acknowledging the review in January, Cars.com said it did not have a timetable for the process to be completed and also said it may not lead to a sale.
In the fourth quarter, Cars.com’s net income plummeted to $9.4 million, compared with $151.8 million in the year-ago period, when the company had a tax benefit of $118.1 million. The company said on Thursday that its operating income fell 39 percent to $23.9 million, on revenues that were up 5 percent to $164.3 million.
Full-year results
For the full year, the company’s net income plunged to $38.8 million, compared to $224.4 million last year. Cars.com’s 2017 net income included a tax benefit of $102.3 million.
Operating income fell to $83.9 million, vs. $134.3 million in 2017. The company’s increase in operating expenses were primarily related to the addition of Dealer Inspire, which added $58.6 million in costs, as well as to $17.4 million in nonrecurring costs, a $6.8 million increase in stock-based compensation and cost increases as part of planned affiliate conversions and marketing investments.
Revenues improved 6 percent to $662.1 million and were boosted by $53.1 million from the acquisition of Dealer Inspire in February 2018.
Dealer count, outlook
The company ended the year with 19,921 dealer customers, which was down 2 percent from the third quarter. The company did not provide a year-over-year comparison for the dealer count in its earnings release.
With a lower dealer count to start the year, the company forecasts revenues for 2019 to range between a 5 percent decline and 2 percent increase, with adjusted earnings margins between 30 and 31 percent. The company said in both 2020 and 2021 it expects annual revenue growth of 5 to 12 percent and earnings margins of 32 to 34 percent.
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