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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
June 14, 2023
TrueCar, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-36449 | 04-3807511 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
1401 Ocean Avenue, Suite 200
Santa Monica, California 90401
(Address of principal executive offices, including zip code)
(800) 200-2000
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
| Common Stock, par value $0.0001 per share | TRUE | The Nasdaq Global Select Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ¨
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.05 | Costs Associated with Exit or Disposal Activities. |
On June 14, 2023, TrueCar, Inc. (the “Company”) committed to a restructuring plan (the “Plan”) in furtherance of its efforts designed to enhance productivity and efficiency, preserve profitability and streamline its organizational structure to better align operations with its long-term commitment to providing an enhanced consumer experience.
As part of the Plan, the Company will realign its leadership structure and eliminate approximately 24% of organization’s headcount, which it expects will reduce expenses related to headcount (excluding stock-based compensation) by over $20 million on an annualized basis. The Company estimates that it will incur restructuring charges (excluding stock-based compensation) of approximately $7 million primarily in the second and third quarter of 2023 in connection with the implementation of the Plan, primarily in the form of cash expenditures for one-time employee benefits and severance payments, and expects execution of the Plan to be substantially complete by the third quarter. These estimates are subject to a number of assumptions, and actual results may differ materially. The Company may incur other charges or cash expenditures not currently contemplated due to unanticipated events that may occur as a result of or in connection with the implementation of the Plan. The Company intends to exclude the restructuring charges from its non-GAAP financial metrics, including Adjusted EBITDA and Non-GAAP net (loss) income.
This Item 2.05 of this Current Report on Form 8-K contains forward-looking statements, including statements regarding the expected benefits of and timing of completion of the Plan, the expected costs and charges associated therewith, and the intended benefits of such restructuring. Words such as “expects,” “estimates,” “designed,” variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. Actual results and the timing of events may differ materially from those contemplated by such forward-looking statements due to a number of factors that involve substantial known and unknown risks and uncertainties. These risks and uncertainties include, among other things, the risk that the restructuring costs and charges may be greater than anticipated, the risk that the Company’s restructuring efforts may adversely affect its ability to recruit and retain skilled and motivated personnel, and may be distracting to employees and management, the risk that the restructuring efforts may negatively impact the Company’s business operations and reputation with or ability to serve customers, the risk that the restructuring efforts may not generate their intended benefits, including enhanced productivity and efficiency, profitability and better alignment of operations with its long-term commitment to providing an enhanced consumer experience to the extent or as quickly as anticipated; and other risks and uncertainties included in the reports on Forms 10-K, 10-Q and 8-K and in other filings the Company may file with the Securities and Exchange Commission from time to time. Forward-looking statements should be considered in light of these risks and uncertainties. Investors and others are cautioned not to place undue reliance on these forward-looking statements. The forward-looking statements included in this report represent the Company’s views as of the date of this report. The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date subsequent to the date of this filing.
| Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Chief Executive Officer and Board Transition
Also on June 14, 2023, the Board of Directors of the Company (the “Board”) appointed Jantoon Reigersman, the Company’s Chief Operating Officer, as the Company’s President and Chief Executive Officer, effective as of June 15, 2023 (the “Effective Date”). In connection with such appointment, the Board designated Mr. Reigersman as the Company’s “principal executive officer.” Mr. Reigersman is relinquishing his role as Chief Operating Officer.
Also on June 14, 2023, the Company terminated the employment of Michael Darrow as President and Chief Executive Officer of the Company, and each of his other positions at the Company and its affiliates, including his role as “principal executive officer,” as of the Effective Date. Mr. Darrow is also required to resign from the Board upon the termination of his employment pursuant to the terms of his employment agreement. In connection with Mr. Darrow’s termination, the Company anticipates entering into a release and separation agreement which contains a release of claims against the Company by Mr. Darrow and provides for severance benefits consistent with the Employment Agreement, dated March 9, 2020, by and between Mr. Darrow and the Company in connection with a termination without cause.
Jantoon Reigersman, 41, has served as the Company’s Chief Operating Officer since March 2022. From January 2021 to February 2023, he also served as the Company’s Chief Financial Officer. Before joining the Company, he served from December 2017 to May 2020 as the Chief Financial Officer of Leaf Group, Ltd., a diversified Internet, media and e-commerce company, and from January 2014 until joining Leaf, he served as Chief Financial Officer of Ogin, Inc., a clean technology company. Prior to Ogin, he was in the Special Situations Group at Goldman Sachs and the M&A investment banking group at Morgan Stanley. Mr. Reigersman holds an M.S. and a B.S. in International Business Administration from the Rotterdam School of Management at Erasmus University, a CEMS Masters in International Management from the Rotterdam School of Management and the École des Hautes Études Commerciales de Paris and is a graduate of the General Management Program at the Harvard Business School.
There are no arrangements or understandings between Mr. Reigersman and any other person pursuant to which he was selected for the positions to which he was appointed. There are no family relationships between Mr. Reigersman and any director or executive officer of the Company and Mr. Reigersman has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended.
| Item 7.01 | Regulation FD Disclosure. |
On June 14, 2023, the Company issued a press release regarding the Plan, Mr. Reigersman’s appointment and Mr. Darrow’s termination. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 7.01 and in Item 9.01 of this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall they be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
99.1 Press Release Issued by TrueCar, Inc., dated June 14, 2023
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: June 14, 2023 | TRUECAR, INC. | |
| By: | /s/ Jeff Swart | |
| Jeff Swart | ||
| EVP, General Counsel & Secretary |
Exhibit 99.1
TRUECAR ANNOUNCES STRATEGIC RESTRUCTURING AND LEADERSHIP TRANSITION
Restructuring Expected to Streamline Organization and Reduce Annualized Expenses by Over $20 Million
Jantoon Reigersman Appointed President and Chief Executive Officer
Michael Darrow to Depart from Company
June 14, 2023
SANTA MONICA, Calif., June 14, 2023 / PRNewswire/ -- TrueCar, Inc. (NASDAQ: TRUE) today announced a strategic restructuring to streamline the organization, including a workforce reduction impacting approximately 102 positions, or 24% of the Company’s headcount, and the appointment of Jantoon Reigersman as President and Chief Executive Officer. Mr. Reigersman succeeds Michael Darrow, who is departing TrueCar and vacating his position on the Board.
The restructuring is expected to result in non-recurring cash payments of approximately $7 million, primarily in the second and third quarters of 2023, and an annualized reduction in expenses exclusive of stock-based compensation of over $20 million. As of May 31, 2023, TrueCar had cash and cash equivalents of approximately $146.5 million. Although management expects that in the near term this aggregate cash balance could drop below $125 million, it continues to anticipate breakeven or positive Adjusted EBITDA1 and double-digit year-over-year revenue growth in the fourth quarter of 2023.
“The restructuring announced today better aligns our cost structure with our revenue base and is designed to make TrueCar a nimbler, more efficient company,” said Barbara Carbone, incoming Chair of the Board. “We made this difficult decision after an extensive review and believe that it is necessary to enable TrueCar to achieve its strategic priorities and create long-term shareholder value.”
“As part of the reorganization, the Board has appointed Jantoon Reigersman as TrueCar’s new President and Chief Executive Officer. Jantoon has been with us for over two years, first as our Chief Financial Officer and more recently as our Chief Operating Officer, during which time he has worked tirelessly to ensure TrueCar’s success and improve its financial condition. The Board is confident that he is well suited to successfully navigate a challenging macroeconomic environment while positioning the Company for profitable growth. He has a clear vision for TrueCar’s future and I and the rest of the Board look forward to working together with him to execute on it.”
Ms. Carbone continued, “On behalf of the Board of Directors, I thank Mike Darrow for his steadfast leadership and many contributions to TrueCar, including leading us since 2019 through unprecedented challenges for our Company and industry. We are grateful to him for his passion and dedication to TrueCar over more than six years of service and wish him all the best.”
Mr. Darrow said, “Leading this great company for the last four years has been a tremendous honor. Through it all, TrueCar has remained guided by its north star, building the industry’s most personalized and efficient auto shopping experience and bringing more of the process online. I am proud of the groundwork that has been laid as the Company’s transformation is underway. Furthermore, we have established a strong leadership team to take the Company to the next chapter. I wish Jantoon and the rest of the leadership team the best of luck in writing that chapter.”
1 Adjusted EBITDA is a non-GAAP financial measure. Refer to its definition set forth below. We are unable to provide a reconciliation of forward-looking Adjusted EBITDA to GAAP net loss, the most comparable financial measure calculated and presented in accordance with GAAP, without unreasonable effort because of the uncertainty and potential variability in amount and timing of stock-based compensation, lease exit costs and impairment of right-of-use assets, which are reconciling items between GAAP net loss and Adjusted EBITDA and could significantly impact GAAP results.
Mr. Reigersman said, “I am honored to be named TrueCar’s CEO and I want to thank Mike for his partnership during our time together. I am grateful for the opportunity to lead this extraordinary organization into the future. I am confident that our strong balance sheet and talented colleagues position us well to execute effectively on our priorities and create significant shareholder value.”
About Jantoon Reigersman
Jantoon Reigersman recently served as TrueCar’s Chief Operating Officer since March 2022. From January 2021 to February 2023, he also served as our Chief Financial Officer. Before joining TrueCar, he served from December 2017 to May 2020 as the Chief Financial Officer of Leaf Group, Ltd., a diversified Internet, media and e-commerce company, and from January 2014 until joining Leaf, he served as Chief Financial officer of Ogin, Inc., a clean technology company. Before then, he was in the Special Situations Group at Goldman Sachs and in M&A investment banking at Morgan Stanley.
Mr. Reigersman holds an M.S. and a B.S. in International Business Administration from the Rotterdam School of Management at Erasmus University, a CEMS Masters in International Management from Rotterdam School of Management and the École des Hautes Études Commerciales de Paris and is a graduate of the General Management Program at the Harvard Business School.
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 the amount and timing of non-recurring expenses related to the restructuring, the annualized expense reductions we expect to realize from the restructuring and our expectations regarding our future cash balances and future financial performance. 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, 2022 filed with the Securities and Exchange Commission, or SEC, and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 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 Measure
This press release includes the non-GAAP financial measure we refer to as Adjusted EBITDA. We defined Adjusted EBITDA as net income (loss) adjusted to exclude interest income, depreciation and amortization, stock-based compensation, gain (loss) from equity method investment including impairment charges, changes in the fair value of contingent consideration liability, goodwill impairment charges, other income, lease exit costs, impairment of ROU assets, transaction costs and income taxes. Adjusted EBITDA should not be considered as an alternative to GAAP net loss or any other measure of financial performance calculated and presented in accordance with GAAP.
About TrueCar
TrueCar is a leading automotive digital marketplace that lets auto buyers and sellers connect to our nationwide network of Certified Dealers. With access to an expansive inventory provided by our Certified Dealers, we are building the industry’s most personalized and efficient auto shopping experience as we seek to bring more of the process online. Consumers who visit our marketplace will find a suite of vehicle discovery tools, price ratings and market context on new, used and Certified Pre-Owned vehicles. When they are ready, shoppers in TrueCar’s marketplace can connect with a Certified Dealer in our network, who shares our belief that truth, transparency and fairness are the foundation of a great auto shopping experience. As part of our marketplace, TrueCar powers auto-buying programs for over 250 leading brands, including AARP, Sam’s Club, Navy Federal Credit Union and American Express.
For more information, please visit www.truecar.com, and follow us on LinkedIn, Facebook or Twitter.
Source: TrueCar.com
Investor and Media Contact
investors@truecar.com
Marketing and Communications Contact
pr@truecar.com