TrueCar, Inc. (TRUE) Earnings Call Transcript & Summary

Good day and welcome to the 2020 TrueCar Annual Meeting of Stockholders. I would now like to turn the conference over to Mike Darrow. Please go ahead.

Good morning, ladies and gentlemen. I'm Mike Darrow, President and Chief Executive Officer of TrueCar, and it's a pleasure to welcome you to our 2020 Annual Meeting of Stockholders. Thank you for joining us live via our Internet webcast. This is the fifth year we're holding a virtual Annual Stockholder Meeting. We have long believed that holding a virtual meeting is consistent with the general commitment of our business to accessibility and progressive online platforms. And we are pleased that each of our stockholders, no matter where they're located in the world today, can fully and equally interact with us and participate in the meeting. Holding virtual meetings also offers both us and our stockholders significant time and cost savings. And of course, the importance of keeping all participants safe during the coronavirus pandemic tips the scale even further in favor of a virtual meeting this year, and we will continue to view the virtual meeting as a win-win endeavor for us and our investors. I will act as Chairperson of this meeting. I have asked Scott Watkins, our Deputy General Counsel and Assistant Secretary, to record the minutes of the meeting. Before proceeding to the formal business of the meeting, let me introduce our directors and director nominees who are joining today: Christopher Claus, our Chairman; Robert Buce; Erin Lantz; Philip McKoy; John Mendel; Wesley Nichols; and Ion Yadigaroglu. I would also like to introduce the corporate officers who are joining us: Noel Watson, our Chief Financial Officer and Chief Accounting Officer; Simon Smith, our EVP of Dealer Sales and Service; Jeff Swart, our General Counsel; John Foster, our Chief Human Resources Officer. Also joining us today is Greg Hollingsworth, partner at PricewaterhouseCoopers LLP, our independent registered public accounting firm. Lastly, we have with us Louis Larsen, representing Broadridge Financial Solutions, as our inspector of elections. Mr. Larsen has signed an oath of inspector, which will be filed with the minutes of this meeting. I will now turn the meeting over to Scott Watkinson, our Deputy General Counsel and Assistant Secretary, who will conduct the formal part of the meeting. Scott?

Thank you. This Annual Meeting is being held in accordance with our bylaws and Delaware law. During the formal meeting, we will address the matters described in our proxy statement dated April 8, 2020. We will complete the balloting and announce the preliminary results, and then the formal meeting will be adjourned. During the formal meeting, we will only respond to questions regarding the procedures for the meeting and the proposals under consideration. After we complete the formal meeting, there will be an opportunity for stockholders to ask questions. All stockholders can submit questions while the meeting is in progress. Please stay online after the formal meeting has been adjourned to participate in the question-and-answer session. I have proof by affidavit that notice of this meeting has been duly given and that the notice of Annual Meeting of Stockholders, proxy statement and proxy were mailed on or about April 8, 2020, to all stockholders of record at the close of business on March 26, 2020, the record date for the meeting. The affidavit, together with copies of the notice, proxy statement and proxy, will be filed with the minutes of the meeting. The inspector of election has advised me that we have present, online or by proxy, a sufficient number of shares to constitute a quorum. Therefore, the meeting is duly constituted and we may proceed with business. Let me briefly describe the voting procedures. We will vote by proxy and by online ballot. Each holder of common stock is entitled to 1 vote for each share of common stock held of record at the close of business on the record date. Stockholders attending the meeting virtually may vote their shares in real-time until the polls are closed. If you have already submitted a proxy to vote your shares, you do not need to submit an online ballot unless you want to change your vote. The polls to vote online are currently open. Upon receipt of all proxies and online ballots, the polls will officially be closed. The votes cast today will be counted in the final tally along with the proxies previously received. The inspector of elections will provide the preliminary results of voting at the end of the meeting. Does anyone have any questions regarding voting procedures? It is now 8:34 on May 21, 2020, and the polls for each matter to be voted on at this meeting are now open. [Voting]

Proposal #1, election of directors. The first item of business is the election of Class III directors. Our Board of Directors presently has 8 members and is divided into 3 classes, each with a 3-year term. There are 3 Class I directors, 2 Class II directors and 3 Class III directors. The Class III directors will be elected at today's meeting. Directors elected at today's meeting will hold office until the 2023 Annual Meeting of Stockholders or until their successors are duly elected and qualified. Stockholders do not have the right to cumulate their votes in the election of directors. As indicated in our proxy statement, our Board nominated the following 3 individuals to serve as Class III directors: Christopher Claus, Philip McKoy and John Mendel. Each is currently serving as a director of the company. Pursuant to the notice of this Annual Meeting and the proxy statement date, April 8, 2020, the proxies solicited by the Board will be voted in favors of these nominees. Are there any questions concerning director elections? You should mark your online ballot on proposal 1 to indicate how you are voting. Proxies submitted with no instructions will be voted in favor of our nominees. Proposal #2, ratification of appointment of independent registered public accountant. The next item of business is to ratify the appointment of PricewaterhouseCoopers LLP or PwC as our independent registered public accounting firm for the fiscal year ending December 31, 2020. The Audit Committee of the Board, which is comprised entirely of nonemployee directors, recommended that the Board appoint PwC as our independent auditors. As our independent auditors, PwC would audit our financial statements for the fiscal year ending December 31, 2020, and perform audit-related services and consultation in connection with various accounting and financial reporting matters. PwC may also perform certain nonaudit services for the company. The Board approved the selection of PwC as our independent auditors for the fiscal year ending December 31, 2020, and is asking stockholders for ratification of the selection. If stockholders did not approve the selection of PwC as our independent auditors, the Board and the Audit Committee will reconsider the appointment. The Board recommends the stockholders vote in favor of this proposal, and the proxies solicited by the Board will be voted in favor of this proposal. Greg Hollingsworth is President -- and I'm sorry, Greg Hollingsworth is present from PwC, and is available to answer any appropriate questions that you may have at this time. Are there any questions concerning this proposal? You should mark your online ballots on proposal 2 to indicate how you are voting. Proxies submitted with no instructions will be voted in favor of this proposal. Proposal #3, advisory vote to approve named executive officer compensation. The last item of business is an advisory vote to approve the 2019 compensation for our named executive officers as described in our proxy statement. Stockholders have been asked to vote on an advisory basis on the following resolution: "Resolved, that the stockholders of TrueCar, Inc. approve, on a nonbinding advisory basis, the compensation paid to the named executive officers, as disclosed in the proxy statement for the 2020 Annual Meeting, including the Compensation Discussion and Analysis, compensation tables and narrative discussion." The Compensation and Workforce Committee, which is comprised of directors who meet the requirements for independence under current NASDAQ stock market listing standards and SEC rules and regulations, recommended to the Board that the advisory vote on named executive officers compensation be submitted to our stockholders. The Board recommends that stockholders vote to approve our named executive officer compensation. Are there any questions concerning this proposal? You should mark your online ballots on proposal 3 to indicate how you are voting. Proxies submitted with no instructions will be voted in favor of this proposal. Collection of proxy cards and ballots. It is now 8:42 on May 21, 2020, and the polls for this matter to be voted on this meeting will be closed in 1 minute at 8:43. If you are voting today, please submit your votes now for them to be counted by the inspector of election. The inspector of elections will not accept ballots, proxies or votes or any changes or revocations submitted after the closing of the polls. The preliminary results will be reported shortly. [Voting]

It is now 8:43 on May 21, 2020, and the polls for each matter to be voted on at this meeting are now closed. No additional ballots, proxies or votes and no changes or revocations will be accepted. The inspector of elections will tabulate the proxies and ballots. At this time, the inspector of elections will provide us with the preliminary report on the voting results. Based upon preliminary information provided by the inspector of elections, I can report that with regard to proposal 1, the 3 Class III director nominees have each been reelected as a director of the company to hold office until the 2023 Annual Meeting of Stockholders or until a successor is duly elected and qualified. With regard to proposal 2, the appointment of PwC to act as our independent registered public accounting firm for the fiscal year ended December 31, 2020, has been ratified by a majority of the votes submitted virtually or by proxy. With regard to Proposal 3, the advisory vote to approve our 2019 named executive officer compensation, has been approved by a majority of the votes submitted virtually or by proxy. These are the preliminary results of voting. The final count may vary following final examination of the proxies and ballots. The final results of voting, including any ballots and proxies recorded during this meeting, will be set forth in the report of the inspector of elections and will be included in the minutes of this meeting. The final results will also be reported in our reports filed with the SEC.

This Annual Meeting of Stockholders is now adjourned. Thank you for your attendance. We will now proceed with the question-and-answer period.

Before we go any further, I would like to note that during the course of the question-and-answer period, representatives of the company may make forward-looking statements regarding future events or our future financial performance, which involves risks and uncertainties. Such statements are only predictions, and actual events or results could differ materially from those predictions due to a number of risks and uncertainties. I refer you to the documents we file from time to time with the SEC, specifically our annual report on Form 10-K for the year ended December 31, 2019, which was filed on February 28, 2020, and our quarterly report on Form 10-Q for the quarter ended March 31, 2020, which was filed on May 11, 2020. These documents contain and identify important factors that could cause actual results to differ materially from those contained in our forward-looking statements. We will now pause for 1 minute and review any questions submitted. If no questions are submitted, we will conclude the meeting at 8:45 a.m.

I want to thank all of you for attending today's meeting and for the interest you have shown in our business. We very much appreciate your attendance, and as always, thank you for your support.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.