Cars.com Inc. (CARS) Earnings Call Transcript & Summary

Hello, and welcome to the Annual Meeting of Shareholders for Cars.com. Please note that today's meeting is being recorded. It is now my pleasure to turn today's meeting over to Scott Forbes, Chairman of the Board. Mr. Forbes, the floor is yours.

Thank you. Good morning, ladies and gentlemen. It is now 9:00 a.m. Central Time, and I would like to call the meeting to order. I am Scott Forbes, the Chairman of the Board of Directors of Cars.com, Inc. and Chairman of the Compensation Committee. It is my privilege to welcome you to our 2020 annual meeting of stockholders. I hope you all are feeling healthy and enduring the pandemic isolation period. This meeting is held pursuant to the company's bylaws and notice was sent to all stockholders of record as of March 16, 2020. Because of the coronavirus pandemic, we are conducting this year's annual meeting online. Upon joining the meeting, an agenda should have become available on your screen. A link to the rules of conduct for this meeting is available on the left side of your screen. Stockholders who have control numbers are able to vote during the meeting, irrespective of whether they have previously voted and are able to ask questions on germane topics by typing in their question using the ask a question icon found on the web portal. If you are a beneficial holder with a control number, you will also need to attach and send your legal proxy with your vote. We will address questions relating to the proposals later while the polls are open and address general questions later after the polls close. Although, you may vote or submit questions at any time before the polls close, we suggest that if you want to cast a vote or pose a question that you do so now to ensure that your vote or question is received in a timely fashion. With that, I would like to continue the meeting. First, I would like to acknowledge the other members of our Board that are present on our call today, including our committee chairs Don McGovern and Jill Greenthal, who chair our Audit and Nominations and Governance Committees, respectively; as well as Alex Vetter, our President and Chief Executive Officer. Next, let me also name our officials for today's meeting: Jim Rogers, our Chief Legal Officer; and Jandy Tomy, our Interim Chief Financial Officer, will act as proxies, and Jim will also serve as Secretary. If you have returned your proxy card, Jandy and Jim will vote your shares as you indicated on the proxy card. James Pyle or JP, will serve as the inspector of elections. JP has previously taken his oath as the inspector of elections. Representatives from Ernst & Young, our independent auditors, are also attending. Jim, please confirm the proof of mailing of the notice of annual meeting, the proxy statement, the proxy card and the annual report for the fiscal year 2019.

Thank you, Scott. I have before me the proof that the notice of annual meeting, the proxy statement, the proxy card and the annual report for fiscal year 2019 were mailed to stockholders commencing on April 3, 2020. Copies of the annual report are also available by e-mailing a request to [email protected]. The Board established March 16, 2020, as the record date for entitlements received notice of and vote at this meeting. As of the record date, there were 66,960,595 shares of common stock issued and outstanding. The list of registered holders of our common stock has been available for inspection at the offices of the company and is also available now for inspection upon request by any stockholder wishing to do so by e-mailing that request to [email protected]. All holders of our common stock are entitled to one vote per share on all matters submitted to a vote. Under our bylaws, a quorum is present when at least a majority of the voting power of the issued and outstanding shares entitled to vote at the meeting is present or represented by proxy. The inspector of elections has been sworn in, and we have his oath of office. The inspector has informed me that a quorum is, in fact, present. Therefore, I hereby declare this meeting to be duly constituted for the transaction for business.

The Secretary will incorporate into the minutes, the proof of mailing, the list of stockholders and other documents presented. With the confirmation that a quorum is present, we will proceed with the business of the meeting. First, we will address the items being presented to the stockholders for a vote. Following the voting, I will recess the meeting while the votes -- the final votes are tabulated. During this recess, we will address any general questions submitted that are appropriate for this forum. I will reconvene the meeting to announce the results of the voting, and then the meeting will adjourn. We will now commence the voting. Many of you have already mailed or otherwise delivered your proxy card and therefore, intend to have your shares voted by the proxies. The polls are now open at 9:05 a.m., May 14, 2020. Any stockholder in possession of a control number who wishes to vote or to change a vote previously made by proxy and has not yet done so, please do so now by the following -- by following the voting instructions on your screen as the polls will close in just a few minutes. For those of you who are beneficial holders, you will need to attach your legal proxy to the e-mail submitting your vote. During this time, we are happy to respond to any questions regarding the 3 proposals via the Ask a Question icon. However, we will not be responding to questions on other topics at this time. We will address questions on other topics after the polls close. The first matter to come before the meeting is the nomination of candidates for election as directors. The Board has unanimously recommended that the stockholders vote for each of Scott Forbes, Jerri DeVard, Jill Greenthal, Tom Hale, Mike Kelly, Don McGovern, Greg Revelle, Bala Subramanian, Alex Vetter and Bryan Wiener as directors of Cars.com, to serve and hold office until the 2021 annual meeting of stockholders and until their respective successors have been duly elected and qualified. Next, we consider the proposal to ratify the appointment of Ernst & Young LLP as independent auditors of the company for the 2020 fiscal year. I would like to remind the stockholders that the Audit Committee has the exclusive right to appoint the company's independent auditors, and the appointment of E&Y is not contingent upon stockholder -- obtaining stockholder approval. However, the Board is giving stockholders the opportunity to express their opinions with regard to the appointment of E&Y as the company's auditors for fiscal year 2020. The vote is neither required or binding, but is being solicited by the Board in order to determine if our stockholders ratify the appointment of E&Y as the company's independent auditors. If this proposal does not receive the affirmative vote of a majority of the votes cast for this proposal at the meeting, the Audit Committee will take such vote into consideration in determining whether to continue to retain E&Y. Next, we consider the proposal on a nonbinding advisory vote on the compensation of our named executive officers. The Board is giving our stockholders the opportunity to express their opinion with regard to the compensation of our named executive officers. JP, are there any questions or comments specifically regarding any of the proposals?

There are not.

Okay. If you have provided your proxy card, your shares will be voted in accordance with your instructions. If you have not and you still wish to vote, this is your last chance to do so. [Voting]

Okay. JP, may I move to the next question with respect to the polls?

Yes.

Okay. Thank you. The polls are now closed. It's at 9:08 a.m., May 14, 2020, and the inspector will tabulate the votes. We will now recess the meeting and address appropriate questions on topics other than the proposals. JP, are there any questions or comments on topics other than the proposals?

There are no questions or comments.

Thank you. That concludes the question-and-answer period. We now have the results of the voting, and I would like to reconvene the meeting. The meeting is now called to order. Jim, would you please announce the results of the votes?

Thank you, Scott. Based upon the report of the inspector of elections, here are the results of the votes. With respect to the election of directors, each of the 10 nominees recommended by the Board has been reelected as a director to serve until our 2021 annual meeting. With respect to the proposal to ratify the appointment of Ernst & Young LLP as independent auditors of the company for the 2020 fiscal year, the proposal has been ratified. With respect to the proposal to approve on an advisory basis, the compensation of our named executive officers, the proposal has been approved.

Thank you, Jim. The report of the inspector will be affixed to the minutes of the meeting because so few votes remain to be counted, I can now announce the election of each of Scott Forbes, Jerri DeVard, Jill Greenthal, Tom Hale, Mike Kelly, Don McGovern, Greg Revelle, Bala Subramanian, Alex Vetter and Bryan Wiener as duly elected directors of the company to serve and hold office until the 2021 annual meeting of stockholders and until their respective successors have been duly elected and qualified. I announce the approval of the proposal to ratify the appointment of Ernst & Young as independent auditors of the company for the 2020 fiscal year. I also announce the approval of, on an advisory basis, the compensation of our named executive officers. The final tally of the votes will be published within 4 business days in our current report on Form 8-K to be filed with the Securities and Exchange Commission. That concludes the business to be brought before this meeting. The 2020 annual meeting of Cars.com is adjourned. I want to thank you for attending and for your interest in the affairs of Cars.com, Inc.

This concludes the meeting. You may now disconnect.