SLIDE 1
Q1 2020 Investor Presentation
May 2020
2
Disclaimer
This presentation is for informational purposes only. This presentation is not an offer to sell, or the solicitation of an offer to buy, any securities of IAA, Inc. Forward-Looking Statements Certain statements contained in this presentation include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, statements made that are not historical facts may be forward-looking statements and can be identified by words such as “should,” “may,” “will,” “anticipates,” “expects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” and similar expressions. In this presentation, such forward-looking statements include statements regarding the expected impact of COVID-19; our growth strategies, including the expected timing and associated benefits of our margin expansion plan and our long-term capital allocation priorities. 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. These risks and uncertainties include: uncertainties regarding the impact of the COVID-19 outbreak, and measures to prevent its spread, on our business and the economy generally; the loss of one or more significant suppliers or a reduction in significant volume from such suppliers; our ability to meet or exceed customers’ demand and expectations; significant current competition and the introduction of new competitors or other disruptive entrants in our industry; the risk that our facilities lack the capacity to accept additional vehicles and
- ur ability to obtain land or renew/enter into new leases at commercially reasonable rates; our ability to effectively maintain or update information and technology systems; our ability to
implement and maintain measures to protect against cyberattacks and comply with applicable privacy and data security requirements; our ability to successfully implement our business strategies or realize expected cost savings and revenue enhancements, including from our margin expansion program; business development activities, including acquisitions and integration of acquired businesses; our expansion into markets outside the U.S. and the operational, competitive and regulatory risks facing our non-U.S. based operations; our reliance on subhaulers and trucking fleet operations; changes in used-vehicle prices and the volume of damaged and total loss vehicles we purchase; economic conditions, including fuel prices, commodity prices, foreign exchange rates and interest rate fluctuations; trends in new- and used-vehicle sales and incentives; and other risks and uncertainties identified in our filings with the Securities and Exchange Commission (the “SEC”), including under "Risk Factors" in our Form 10-K for the year ended December 29, 2019 filed with the SEC on March 18, 2020. Additional information regarding risks and uncertainties will also be contained in subsequent annual and quarterly reports we file with the SEC. The forward-looking statements included in this release are made as of the date hereof, and we undertake no obligation to publicly update or revise any forward-looking statement to reflect new information or events, except as required by law. Market & Industry Data Projections, estimates, industry data and information contained in this presentation, including the company's general expectations and market position and market opportunity, are based on information from third-party sources and management estimates. The company's management estimates are derived from third-party sources, publicly available information, the company's knowledge of its industry and assumptions based on such information and knowledge. The company's management estimates have not been verified by any independent source. All of the projections, estimates, market data and industry information used in this presentation involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such
- information. In addition, projections, estimates and assumptions relating to the company's and its industry's future performance are necessarily subject to a high degree of uncertainty and risk
due to a variety of factors, including, but not limited to, those described above, that could cause future performance to differ materially from the company's expressed projections, estimates and assumptions or those provided by third parties. Non-GAAP Financial Measures This presentation contains certain financial measures that are not presented in accordance with generally accepted accounting principles in the United States (“GAAP”). The non-GAAP financial measures presented herein include EBITDA, Adjusted EBITDA, Adjusted EBITDA less CapEx and estimated annual net Adjusted EBITDA run-rate benefit. An explanation of these non-GAAP financial measures and a reconciliation to the comparable GAAP financial measure, net income, is included in the Appendices to this presentation, with the exception of estimated net Adjusted EBITDA run-rate benefit. The non-GAAP financial measures presented herein do not represent financial performance under GAAP and should not be considered in isolation, as an alternative to net income or as an indicator of any other performance measure determined in accordance with GAAP. You should not rely on non-GAAP financial information as a substitute for GAAP financial information, and should recognize that the non-GAAP financial measures presented herein may not compare to similarly-termed non-GAAP financial measures of other companies (i.e. because other companies may not always calculate their non-GAAP financial measures using the same adjustments we do. We have not provided a reconciliation of estimated net annual adjusted EBITDA run-rate benefit to the most directly comparable GAAP measure because, without unreasonable efforts, we are unable to predict with reasonable certainty the amount of timing of non-GAAP adjustments that are used to calculate this measure, including, but not limited to, (a) one-time transaction and other costs related to the spin-off from KAR Auction Services in the second quarter of 2019, (b) severance, restructuring and other retention expenses, (c) costs and expenses associated with COVID-19, (d) the net loss or gains on the sale of assets or expenses associated with certain M&A, financing and other transactions, (e) other expenses that we do not believe are indicative of our ongoing operations, as well as (f) gains and losses related to foreign currency exchange rates.