• North America Revenues up 4 Percent; Supports Customers during Crisis

MUMBAI, 11 MAY, 2020 (GPN):   HOFFMAN ESTATES CDK Global, Inc. (NASDAQ:CDK) announced financial results for its fiscal 2020 third quarter ended March 31, 2020.

financial results for third quarter ended March 31, 2020

1. Third Quarter Fiscal 2020 Results :The non-GAAP (adjusted) results and guidance presented in this press release represent non-GAAP financial measures.
2. Impacts to the Third Quarter Fiscal 2020:Foreign exchange rates: Growth in revenues was negatively impacted by 1 percentage point by foreign exchange rates for the quarter, and the percentage growth in adjusted earnings before income taxes remained unchanged by foreign exchange rates.

Tax rate: The GAAP effective tax rate for the quarter was 28.7%, compared to 26.0% in last year’s third quarter. The adjusted effective tax rate for the quarter was 22.2%, compared to 25.7% in last year’s third quarter.

3. Fourth Quarter Events:In an effort to improve the operating efficiency and profitability of their International business, a restructuring plan was recently approved. The company expect this to successfully reduce costs and improve margins within the CDKI segment beginning in fiscal year 2021. Restructuring expenses related to this program will be included as an adjustment to non-GAAP financial measures and have been considered in CDK’s fiscal 2020 guidance.
4. 4. Non-GAAP Financial Measures:We use adjusted earnings before income taxes, adjusted provision for income taxes, adjusted net earnings attributable to CDK, adjusted diluted earnings attributable to CDK per share, adjusted EBITDA and adjusted EBITDA margin internally to evaluate our performance on a consistent basis, because those measures adjust for the impact of certain items that we believe do not directly reflect our underlying operations. By adjusting for these items we believe we have more precise inputs for use as factors in

(i) Company’s budgeting process

(ii) Making financial and operational decisions

(iii) Evaluating ongoing segment and overall operating performance on a consistent period-to-period basis and relative to our competitors

(iv) Target leverage calculations

(v) Debt covenant calculations, and

(vi) Determining incentive-based compensation

5. COVID-19 Pandemic Response :Immediately implemented our internal COVID-19 Task Force and closed virtually all offices and support call centers worldwide while transitioning employees to remote work and developed innovative ways to continuously deliver our solutions and support, through remote installs and virtual training.

“CDK remains focused on helping our customers adapt to the current challenges of the COVID-19 pandemic, while we continue to enable them to complete their mission-critical operations,” said Brian Krzanich, CDK chief executive officer. “We’ve stepped up during this crisis and taken actions to support our dealers, many of whom are small to medium-sized businesses, with discounts and free offers on our products and solutions. Our Saas-based business model provides us the resilience to be there for them while we continue to strategically invest for the future. Virtually all of our employees are successfully working from home and we are proud of what the CDK team has accomplished to move the business forward. We continue to perform at a high level on virtual installations, sales and software improvements, as well as future developments of our Saas offerings, which will allow us to emerge technically and operationally stronger from this crisis.”

“Our recurring revenue stream, strong free cash flow and liquidity position remain stabilizing elements in this unprecedented business environment,” said Joe Tautges, CDK chief financial officer. “Based on industry trends and our stress test scenarios, the leadership team has taken appropriate actions to ensure that the strength and consistency of our business continues into the future.”

Third Quarter Fiscal 2020 Results

	CDK Global, Inc.		Q3 2020			Change from Q3 2019
	($ million except per share)
	GAAP Revenues		516.3			+3	%
	GAAP Earnings before income taxes		132.4			+10	%
	Non-GAAP Adjusted earnings before income taxes		146.6			-1	%
	GAAP Diluted earnings attributable to CDK per share		0.47			-41	%
	Non-GAAP Adjusted diluted earnings attributable to CDK per share		0.92			+6	%
	GAAP Net earnings attributable to CDK		57.6			-42	%
	GAAP Net earnings attributable to CDK margin		11.2	%		-870 bps
	Non-GAAP Adjusted EBITDA		202.1			—	%
	Non-GAAP Adjusted EBITDA margin		39.1	%		-130 bps

The non-GAAP (adjusted) results and guidance presented here represent non-GAAP financial measures. ENDS