CDK Global : Fourth Quarter 2021 Earnings Release

CDK GLOBAL, INC. REPORTS FOURTH QUARTER AND FISCAL YEAR 2021 RESULTS

10th Consecutive Quarter of Auto Site Growth; Initiates Fiscal 2022 Guidance with Accelerating Revenue Growth

HOFFMAN ESTATES, IL, August 17, 2021 - CDK Global, Inc. (NASDAQ: CDK) today announced financial results for its fiscal 2021 fourth quarter and year ended June 30, 2021.

"CDK closed out the year strong, with a tenth consecutive quarter of year-over-year growth in auto sites," said Brian Krzanich, CDK chief executive officer." The investments we have made in our product and service offerings are resonating with our customers, and we are excited to have added Roadster to the CDK family in the fourth quarter as we continue to enhance the product offerings we have to help drive customer success."

"We saw a continued strength in our core business metrics and financial results in the quarter," said Eric Guerin, CDK chief financial officer." We had solid growth in both revenue and earnings in the quarter. Given the momentum in the business, we are well positioned for the coming year and are initiating fiscal 2022 guidance which shows accelerating revenue growth."

Fourth Quarter and Fiscal 2021 Results

			Change
	CDK Global, Inc.	Q4 2021	FY2021	Change from
	($ in million except per share)	from Q4	FY2020
		2020
	Revenue	$ 420.1	+12%	$ 1,673.2	+2%
	GAAP Earnings before income taxes	57.0	-25%	284.7	-24%
	Non-GAAP Adjusted earnings before income taxes	113.9	+19%	439.2	-4%
	GAAP Diluted earnings attributable to CDK per share	0.40	+8%	8.44	+396%
	Non-GAAP Adjusted diluted earnings attributable to CDK per share	0.66	+12%	2.57	-7%
	GAAP effective tax rate	36.3 %	1,880 bps	33.2 %	410 bps
	Non-GAAP effective tax rate	26.1 %	260 bps	26.1 %	160 bps
	GAAP Net earnings attributable to CDK	49.4	+8%	1,034.3	+398%
	GAAP Net earnings attributable to CDK margin	11.8 %	-30 bps	61.8 %	4,910 bps
	Non-GAAP Adjusted EBITDA	161.0	+5%	650.3	-4%
	Non-GAAP Adjusted EBITDA margin	38.3 %	-240 bps	38.9 %	-240 bps

The non-GAAP results and guidance presented in this press release represent non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP measures are provided in the tables at the end of this press release.

Fiscal 2022 Annual Guidance

The fiscal 2022 guidance is provided on both a GAAP and Non-GAAP basis.

	CDK Global, Inc. - GAAP BASIS	FY 2022 GAAP
	($ in million except per share)	GUIDANCE
	Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$1,780	- $1,820
	GAAP Diluted earnings attributable to CDK per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$1.95	- $2.15
	GAAP Net earnings attributable to CDK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$235	- $265
	GAAP Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	27.5%	- 28.5%
	CDK Global, Inc. - Non-GAAP BASIS	FY 2022 ADJ.
	($ in million except per share)	GUIDANCE
	Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$1,780	- $1,820
	Non-GAAP Adjusted diluted earnings attributable to CDK per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$2.70	- $2.90
	Non-GAAPAdjusted EBITDA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	$655	- $685
	Non-GAAPAdjusted effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	25.5%	- 26.5%

Website Schedules

Other financial information, including financial statements and supplementary schedules presented on a GAAP and adjusted basis, and the schedule of quarterly revenue have been updated for the fourth quarter ended June 30, 2021 and will be posted to the CDK Investor Relations website, https://investors.cdkglobal.com in the "Financial Information" section.

Webcast and Conference Call

An analyst conference call will be held today, Tuesday, August 17, 2021 at 4:00 p.m. CT. A live webcast of the call will be available on a listen-only basis. To listen to the webcast, go to the CDK Investor Relations website, https://investors.cdkglobal.com and click on the webcast icon. A supplemental slide presentation will be available to download and print about 30 minutes before the webcast at the CDK Investor Relations website at https://investors.cdkglobal.com. CDK financial news releases, current financial information, SEC filings and Investor Relations presentations are accessible at the same website.

About CDK Global

CDK Global (NASDAQ: CDK) is a leading provider of integrated data and technology solutions to the automotive, heavy truck, recreation and heavy equipment industries. Focused on enabling end-to-end, omnichannel retail commerce through open, agnostic technology, CDK Global provides solutions to dealers and original equipment manufacturers, serving approximately 15,000 retail locations in North America. CDK's solutions connect people with technology by automating and integrating all parts of the dealership and buying process, including the acquisition, sale, financing, insuring, parts supply, repair and maintenance of vehicles. Visit cdkglobal.com.

Safe Harbor for Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Security Litigation Reform Act of 1995. All statements regarding the Company's business outlook, including the Company's GAAP and adjusted fiscal 2022 guidance; other plans; objectives; forecasts; goals; beliefs; business strategies; future events; business conditions; results of operations; financial position and business outlook and trends; and other information, may be forward-looking statements. Words such as "might," "will," "may," "could," "should," "estimates," "expects," "continues," "contemplates," "anticipates," "projects," "plans," "potential," "predicts," "intends," "believes," "forecasts," "future," "assumes," and variations of such words or similar expressions are intended to identify forward-looking statements. These statements are based on management's expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed, or implied by, these forward-looking statements.

Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include: the Company's expectations regarding the continuing impacts on the Company's business of the outbreak of the COVID-19 pandemic; the Company's success in obtaining, retaining and selling additional services to customers; the pricing of the Company's products and services; overall market and economic conditions, including interest rate and foreign currency trends, and technology trends; adverse global economic conditions and credit markets and volatility in the countries in which we do business; auto sales and related industry changes; competitive conditions; changes in regulation; changes in technology, security breaches, interruptions, failures and other errors involving the Company's systems; availability of skilled technical employees/labor/personnel; the impact of new acquisitions and divestitures; employment and wage levels; availability of capital for the payment of debt service obligations or dividends or the repurchase of shares; any changes to the Company's credit ratings and the impact of such changes on financing costs, rates, terms, debt service obligations, access to capital market and working capital needs; the impact of the Company's indebtedness, access to cash and financing, and ability to secure financing, or financing at attractive rates; the onset of or developments in litigation involving contract, intellectual property, competition, shareholder, and other matters, and governmental investigations; and the ability of the Company's significant stockholders and their affiliates to significantly influence the Company's decisions or cause it to incur significant costs.

There may be other factors that may cause the Company's actual results, performance or achievements to differ materially from those expressed in, or implied by, the forward-looking statements. The Company gives no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on its results of operations and financial condition. You should carefully read the factors described in the Company's reports filed with the Securities and Exchange Commission ("SEC"), including those discussed under "Part I, Item 1A. Risk Factors" in its Annual Report on Form 10-K for a description of certain risks that could, among other things, cause the Company's actual results to differ from any forward-looking statements contained herein. These filings can be found on the Company's website at https://investors.cdkglobal.com and the SEC's website at www.sec.gov.

All forward-looking statements speak only as of the date of this press release even if subsequently made available by the Company on its website or otherwise. The Company disclaims any obligation to update or revise any forward-looking statements that may be made to reflect new information or future events or circumstances that arise after the date made or to reflect the occurrence of unanticipated events, other than as required by law.

Investor Relations Contact:	Media Contact:
Taze Rowe	Tony Macrito
847.485.4012	630.805.0782
[e-mail]	[e-mail]

CDK Global, Inc.

Consolidated Statements of Operations

(In millions, except per share amounts)

		Three Months Ended			Fiscal Year Ended
		June 30,				June 30,
		2021			2020			2021			2020
Revenue	$	420.1	$	376.7	$	1,673.2	$	1,639.0
Expenses:
Cost of revenue		221.3			201.7			875.0			800.6
Selling, general and administrative expenses		97.1			79.6			360.9			338.7
Litigation provision		-			-			12.0			-
Total expenses		318.4			281.3			1,247.9			1,139.3
Operating earnings		101.7			95.4			425.3			499.7
Interest expense		(23.4)			(35.0)			(124.6)			(144.1)
Loss on extinguishment of debt		(23.4)			-			(25.6)			-
Loss from equity method investment		(2.5)			(2.7)			(27.3)			(2.7)
Other income, net		4.6			18.4			36.9			21.1
Earnings before income taxes		57.0			76.1			284.7			374.0
Provision for income taxes		(20.7)			(13.3)			(94.5)			(108.8)
Net earnings from continuing operations		36.3			62.8			190.2			265.2
Net earnings (loss) from discontinued operations		15.7			(16.0)			852.8			(50.7)
Net earnings		52.0			46.8			1,043.0			214.5
Less: net earnings attributable to noncontrolling interest		2.6			1.2			8.7			7.0
Net earnings attributable to CDK	$	49.4	$	45.6	$	1,034.3	$	207.5
Net earnings (loss) attributable to CDK per share - basic:
Continuing operations	$	0.27	$	0.51	$	1.48	$	2.13
Discontinued operations		0.13			(0.13)			7.00			(0.42)
Total net earnings attributable to CDK per share - basic	$	0.40	$	0.38	$	8.48	$	1.71
Net earnings (loss) attributable to CDK per share - diluted:
Continuing operations	$	0.27	$	0.50	$	1.48	$	2.12
Discontinued operations		0.13			(0.13)			6.96			(0.42)
Total net earnings attributable to CDK per share - diluted	$	0.40	$	0.37	$	8.44	$	1.70
Weighted-average common shares outstanding:
Basic		122.0			121.6			121.9			121.6
Diluted		123.1			122.1			122.6			122.1

The International Business is presented as discontinued operations and prior year amounts associated with the International Business have been reclassified as such. For additional information refer to Form 10-K, Item 8 of Part II, "Financial Statements and Supplementary Data," Note 1 - Basis of Presentation and Note 4 - Discontinued Operations.

CDK Global, Inc.

Consolidated Balance Sheets

(In millions)

		June 30,
		2021			2020
Assets
Current assets:
Cash and cash equivalents	$	157.0	$	80.8
Accounts receivable, net		236.4			242.0
Other current assets		168.9			148.4
Assets held for sale		-			214.4
Total current assets		562.3			685.6
Property, plant and equipment, net		71.8			96.7
Other assets		448.7			418.3
Goodwill		1,297.1			999.5
Intangible assets, net		332.7			229.5
Long-term assets held for sale		-			424.5
Total assets	$	2,712.6		$	2,854.1
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current maturities of long-term debt and finance lease liabilities	$	7.1	$	20.7
Accounts payable		29.0			34.3
Accrued expenses and other current liabilities		188.1			188.3
Litigation liabilities		34.0			57.0
Accrued payroll and payroll-related expenses		81.5			52.5
Deferred revenue		28.6			44.6
Liabilities held for sale		-			129.4
Total current liabilities		368.3			526.8
Long-term liabilities:
Debt and finance lease liabilities		1,586.5			2,655.1
Deferred income taxes		111.4			76.4
Deferred revenue		40.4			39.4
Liabilities held for sale		-			40.6
Other liabilities		111.1			96.5
Total liabilities	$	2,217.7		$	3,434.8
Stockholders' Equity (Deficit):
Preferred stock		-			-
Common stock		1.6			1.6
Paid-in capital		715.1			687.9
Retained earnings		1,997.4			1,045.5
Treasury stock, at cost		(2,306.0)			(2,305.2)
Accumulated other comprehensive income (loss)		72.7			(25.9)
Total CDK stockholders' equity (deficit)		480.8			(596.1)
Noncontrolling interest		14.1			15.4
Total stockholders' equity (deficit)		494.9			(580.7)
Total liabilities and stockholders' equity (deficit)	$	2,712.6	$	2,854.1

The International Business is presented as discontinued operations and prior year amounts associated with the International Business have been reclassified as such. For additional information refer to Form 10-K, Item 8 of Part II, "Financial Statements and Supplementary Data," Note 1 - Basis of Presentation and Note 4 - Discontinued Operations.