Vehicle listings firm TrueCar Inc. reported Monday a lack of $77.1 million for the third quarter — a drop from a a lot slimmer loss in the identical interval a yr in the past .
The firm mentioned a overwhelming majority of that loss, which compares with a year-earlier internet lack of $6.8 million, could be attributed to a one-time impairment cost of $59.8 million introduced on by the sharp decline in its share value. TrueCar’s share value dropped 55 %, from $3.33 to $1.51, between May 31 and Sept. 30.
TrueCar executives in a Tuesday name with analysts famous that the inventory drop meant an analogous sharp decline within the firm’s market capitalization however didn’t elaborate a lot on the cost.
“This is a non-cash charge, so there’s no impact on our adjusted EBITDA nor our cash balance,” TrueCar CFO Jantoon Reigersman mentioned on the decision.
TrueCar’s adjusted earnings earlier than curiosity, taxes, depreciation and amortization additionally worsened, swinging to a deficit of $8.7 million in contrast with earnings of $1.5 million in final yr’s third quarter.
Revenue tumbled 29 % to $39.1 million. TrueCar attributed the decline to excessive costs on new and used autos pressuring “close rates,” in addition to restricted stock throughout the market.
Traffic, money and equivalents and the corporate’s dealership depend all declined as nicely.
TrueCar executives mentioned progress of the corporate’s TrueCar+ digital gross sales device was a vibrant aspect to the losses seen within the quarter. They additionally mentioned the trade’s stock struggles are bettering.
“The intense pressure on the global supply chain has started to ease in recent months and vehicle production and dealer inventories have started to improve modestly,” TrueCar mentioned in its letter to buyers. “If these trends continue, we expect they will eventually bring about a market shift that runs counter to what has been seen across the automotive industry since the pandemic began.”
TrueCar’s share value declined 18 % to $1.85 as of early Tuesday afternoon.