0001409970-17-000195.txt : 20170214 0001409970-17-000195.hdr.sgml : 20170214 20170214161411 ACCESSION NUMBER: 0001409970-17-000195 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20170214 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20170214 DATE AS OF CHANGE: 20170214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LendingClub Corp CENTRAL INDEX KEY: 0001409970 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-36771 FILM NUMBER: 17608957 BUSINESS ADDRESS: STREET 1: 71 STEVENSON ST. STREET 2: 3RD FL. CITY: SAN FRANCISCO STATE: CA ZIP: 94115 BUSINESS PHONE: 415-632-5666 MAIL ADDRESS: STREET 1: 71 STEVENSON ST. STREET 2: 3RD FL. CITY: SAN FRANCISCO STATE: CA ZIP: 94115 8-K 1 q416form8-ker.htm 8-K Document



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): February 14, 2017
 
LendingClub Corporation
(Exact name of registrant as specified in its charter)

Commission File Number: 001-36771
 
 
Delaware
51-0605731
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
 
 
71 Stevenson St., Suite 300, San Francisco, CA 94105
(Address of principal executive offices and zip code)
(415) 632-5600
(Registrant's telephone number, including area code)
N/A
(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:
¨
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))






Item 2.02
 
Results of Operations and Financial Condition

On February 14, 2017, LendingClub Corporation (“Lending Club,” or the “Company”) issued a press release (the “Earnings Press Release”) and will hold a conference call regarding its financial results for the quarter ended December 31, 2016. A copy of the Earnings Press Release is furnished as Exhibit 99.1 to this Form 8-K.

The information set forth in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

Lending Club is making reference to non-GAAP financial information in both the Earnings Press Release and the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the Earnings Press Release.

Item 9.01
 
Financial Statements and Exhibits
(d)
 
Exhibits

Exhibit
Number

 
Exhibit Title or Description
99.1

 
Press Release dated February 14, 2017
 
 
 






SIGNATURE(S)

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.

 
 
LendingClub Corporation
Date:
February 14, 2017
By:
/s/ Thomas W. Casey
 
 
 
Thomas W. Casey
 
 
 
Chief Financial Officer
 
 
 
(duly authorized officer)



 EX-99.1 2 q416exhibit991er.htm EXHIBIT 99.1 Exhibit

EXHIBIT 99.1
Lending Club Reports Fourth Quarter and Full Year 2016 Results
Net Operating Revenue Up 15% Quarter-Over-Quarter, Bank Funding at 31%


SAN FRANCISCO – February 14, 2017 – Lending Club (NYSE: LC), the world’s largest online marketplace connecting borrowers and investors, today announced financial results for the fourth quarter and full year ended December 31, 2016 and provided guidance for the first quarter and full year 2017.
 
Three Months Ended
 
Year Ended 
 December 31,
($ in millions)
December 31, 
 2016
 
September 30,
2016
 
December 31,  
 2015
 
2016
 
2015
Originations
$
1,987.3

 
$
1,972.0

 
$
2,579.2

 
$
8,664.7

 
$
8,361.7

Net Operating Revenue
$
129.2

 
$
112.6

 
$
134.5

 
$
495.5

 
$
426.7

Net Income / (Loss) (1)
$
(32.3
)
 
$
(36.5
)
 
$
4.6

 
$
(146.0
)
 
$
(5.0
)
Adjusted EBITDA (2)
$
(2.2
)
 
$
(11.1
)
 
$
24.6

 
$
(18.2
)
 
$
69.8

(1) 
Includes $1.7 million of goodwill impairment in the quarter ended September 30, 2016 and $37.1 million for the year ended December 31, 2016.
(2) 
Adjusted EBITDA is a non-GAAP financial measure. Please see the discussion below under the heading “Non-GAAP Measures” and the reconciliation at the end of this release.

“Last quarter we accomplished the foundational work required to prepare Lending Club for the growth to come,” said CEO Scott Sanborn. “With a diverse, stable and scalable mix of investors, and an enhanced control environment, we are entering 2017 in a stronger position than ever to serve the needs of our customers.”

Key accomplishments in the fourth quarter across the Lending Club platform include:

Investors
•
Banks returned to purchasing at scale, funding 31% of total originations for the quarter, up from 13% in the third quarter - a clear testament to the strength of Lending Club’s control environment, and the attractiveness of the asset in helping banks efficiently deploy their capital and gain access to consumer credit
•
Lending Club supported the first rated securitization of Lending Club loans

Borrowers
•
Achieved targeted originations of nearly $2 billion, up 1% compared to third quarter 2016
•
Continued the company’s lead as the largest personal loan provider in the U.S. with a borrower base of over 1.8 million individuals
•
Lending Club has now facilitated nearly $25 billion in loans since inception

Other developments
•
Ended the year with a servicing portfolio of $11.1 billion, up 24% from the same period last year and delivering $1.8 billion of principal and interest payments to investors throughout the quarter
•
Completed planned remediation steps related to historical material weakness
•
Ended 2016 with cash, cash equivalents and securities available for sale totaling $803 million, with no outstanding debt




Fourth Quarter 2016 Financial Highlights

“2016 was a year of investment in the company. We developed better internal processes, stronger controls, and a diversified investor base that will help us compete in the future,” said Tom Casey, CFO. “Going forward, we are beginning to redeploy resources into areas of the business that will drive long-term growth and value creation.”

Originations – Loan originations in the fourth quarter of 2016 were $1.99 billion, up 1% compared to the $1.97 billion we reported in the third quarter of 2016 and down 23% compared to $2.58 billion in the same quarter last year.

Net Operating Revenue – Net operating revenue in the fourth quarter of 2016 was $129.2 million, up 15% quarter over quarter and down 4% compared to the same period last year. Net operating revenue as a percent of originations, or revenue yield, was 6.50% in the fourth quarter, up 79 basis points sequentially, driven primarily by a $4.3 million favorable adjustment to the servicing asset valuation and the elimination of $10.7 million in incentives recognized in the third quarter of 2016.

Net Loss – GAAP net loss was $(32.3) million for the fourth quarter of 2016, improving by $4.2 million compared to third quarter of 2016 and down compared to net income of $4.6 million in the same quarter last year. The fourth quarter net loss benefited sequentially from higher revenue but was offset by higher marketing expenses and the quarterly impact of the previously disclosed acceleration of the first quarter of 2017 stock grant. The results for the fourth quarter include approximately $16 million of expenses from events related to our board review disclosure earlier in 2016, including employee retention, legal, audit, and other professional service fees.

Adjusted EBITDA (3) – Adjusted EBITDA was $(2.2) million in the fourth quarter of 2016, compared to $(11.1) million in the third quarter of 2016, and $24.6 million in the same quarter last year. As a percent of net operating revenue, Adjusted EBITDA margin increased to (1.7)% in the fourth quarter of 2016, up 8.2% from the third quarter and down from 18.3% in the same quarter last year. The results for the fourth quarter include approximately $13 million of expenses from events related to our board review disclosure earlier in 2016, including employee retention, legal, audit, and other professional service fees.

Earnings Per Share (EPS) – Basic and diluted EPS was $(0.08) for the fourth quarter of 2016, compared to basic and diluted EPS of $(0.09) in the third quarter of 2016 and $0.01 in the same quarter last year.

Adjusted EPS (3) – Adjusted EPS was $(0.02) for the fourth quarter of 2016, compared to adjusted EPS of $(0.04) in the third quarter of 2016 and $0.05 in the same quarter last year.

Cash, Cash Equivalents and Securities Available for Sale – As of December 31, 2016, cash, cash equivalents and securities available for sale totaled $803 million, with no outstanding debt.

Outlook
Based on the information available as of February 14, 2017, Lending Club provides the following outlook for the full year and first quarter 2017:

Full Year 2017
Total Net Revenue in the range of $565 million to $595 million.
Net Income / (Loss) in the range of $(84) million to $(69) million.
Adjusted EBITDA(3)(4) in the range of $40 million to $55 million.
Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock based compensation of approximately $91 million, depreciation and amortization and other net adjustments of approximately $33 million.




First Quarter 2017
Total Net Revenue in the range of $117 million to $122 million.
Net Income / (Loss) in the range of $(43) million to $(38) million.
Adjusted EBITDA(3)(4) in the range of $(10) million to $(5) million.
Reconciling Items between net loss and non-GAAP adjusted EBITDA consisting of stock based compensation of approximately $25 million, depreciation and amortization and other net adjustments of approximately $8 million.
(3) 
Adjusted EBITDA and Adjusted EPS are non-GAAP financial measures. Please see discussion below under the heading “Non-GAAP Measures” and the reconciliations at the end of this release.
(4) 
Commencing in the first quarter of 2017, Adjusted EBITDA will include “Net interest income and fair value adjustments” from the company's Statements of Operations.

About Lending Club

Lending Club's mission is to transform the banking system to make credit more affordable and investing more rewarding. The company's technology platform enables it to deliver innovative solutions to borrowers and investors. We operate at a lower cost than traditional bank lending programs, so we're able to pass the savings on to borrowers in the form of lower rates and to investors in the form of solid returns. Lending Club is based in San Francisco, California. More information is available at https://www.lendingclub.com. Currently only residents of the following states may invest in Lending Club notes: AL, AR, AZ, CA, CO, CT, DC, DE, FL, GA, HI, IA, ID, IL, IN, KS, KY, LA, MA, ME, MD, MI, MN, MO, MS, MT, ND, NE, NH, NJ, NV, NY, OK, OR, RI, SC, SD, TN, TX, UT, VA, VT, WA, WI, WV, or WY. All loans are made by federally regulated issuing bank partners.

Conference Call and Webcast Information

The Lending Club fourth quarter 2016 webcast and teleconference is scheduled to begin at 2:00 p.m. Pacific Time on Tuesday, February 14, 2017. A live webcast of the call will be available at http://ir.lendingclub.com under the Events & Presentations menu. To access the call, please dial +1 (888) 371-6003, or outside the U.S. +1 (412) 317-6061, with conference ID 2560900, ten minutes prior to 2:00 p.m. Pacific Time (or 5:00 p.m. Eastern Time). An audio archive of the call will be available at http://ir.lendingclub.com. An audio replay will also be available on February 14, 2017, until February 21, 2017, by calling +1 (877) 344-7529 or +1 (412) 317-0088, with Conference ID 10094646. Lending Club has used, and intends to use, its investor relations website, Blog (http://blog.lendingclub.com), Twitter handle (@LendingClub) and Facebook page (https://www.facebook.com/LendingClubTeam) as a means of disclosing material non-public information and to comply with its disclosure obligations under Regulation FD.

Contacts

For Investors:
IR@lendingclub.com

Media Contact:
PR@lendingclub.com




Non-GAAP Measures

To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures: contribution, contribution margin, adjusted EBITDA, adjusted EBITDA margin, and adjusted EPS. Our non-GAAP measures do have limitations as analytical tools and you should not consider them in isolation or as a substitute for an analysis of our results under GAAP.

We believe these non-GAAP measures provide management and investors with useful supplemental information about the financial performance of our business, enable comparison of financial results between periods where certain items may vary independent of business performance, and enable comparison of our financial results with other public companies, many of which present similar non-GAAP financial measures.

In particular, we believe contribution and contribution margin are useful measures of direct product profitability because the measures illustrate the relationship between the costs most directly associated with revenue generating activities and the related revenue, and the effectiveness of the direct costs in obtaining new revenue. We believe that adjusted EBITDA and adjusted EBITDA margin are important measures of operating performance because it allows for the comparison of our core operating results, including our return on capital and operating efficiencies, from period to period by removing the impact of depreciation and amortization in our asset base, other non-operating, and share-based compensation, tax consequences, and our capital structure (interest expense from any outstanding debt). We believe adjusted EPS is a useful measure used by investors and analysts in our sector because the exclusion of non-cash items like stock based compensation and amortization of intangibles is a customary adjustment, and such expenses can vary significant due to many factors unrelated to the business. We believe servicing and management fee revenue associated with the servicing portfolio, excluding fair market value accounting adjustments is a useful because it reflects the amount of fees actually collected and represents the true economic benefit of our servicing arrangements. We believe that the fair value adjustments to the servicing assets and liabilities is less useful in particular because the Company does not trade or transfer such servicing assets or liabilities.

There are a number of limitations related to the use of these non-GAAP financial measures versus their nearest GAAP equivalents. In particular, many of the adjustments to our GAAP financial measures reflect the exclusion of items, specifically stock-based compensation expense, amortization of intangible assets, and the related income tax effects of the aforementioned exclusions that are recurring and will be reflected in our financial results for the foreseeable future. Other companies, including companies in our industry, may calculate these measures differently, which may reduce their usefulness as a comparative measure.

For more information on our non-GAAP financial measures and a reconciliation of such measures to the nearest GAAP measure, please see the “Reconciliation of GAAP to Non-GAAP Measures” tables at the end of this release.

Safe Harbor Statement

Some of the statements above, including statements regarding investor demand and anticipated future financial results are “forward-looking statements.” The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “outlook,” “plan,” “predict,” “project,” “will,” “would” and similar expressions may identify forward-looking statements, although not all forward-looking statements contain these identifying words. Factors that could cause actual results to differ materially from those contemplated by these forward statements include: the outcomes of pending governmental investigations and pending or threatened litigation, which are inherently uncertain; the impact of management changes and the ability to continue to retain key personnel; ability to achieve cost savings from recent restructurings; the Company’s ability to continue to attract and retain new and existing retail and institutional investors; competition; overall economic conditions; demand for the types of loans facilitated by the Company; default rates and those factors set forth in the section titled “Risk Factors” in the Company’s most recent Quarterly Report on Form 10-Q and Annual Report on Form 10-K, each filed with the SEC. The Company may not actually achieve the plans, intentions or expectations disclosed in forward-looking statements, and you should not place undue reliance on forward-looking statements. Actual results or events could differ materially from the plans,



intentions and expectations disclosed in forward-looking statements. The Company does not assume any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Information in this press release is not an offer to sell securities or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Additional information about Lending Club is available in the prospectus for Lending Club’s notes, which can be obtained on Lending Club’s website at https://www.lendingclub.com/info/prospectus.action.







LENDINGCLUB CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
 
Three Months Ended  
 December 31,
 
Year Ended 
 December 31,
 
2016
 
2015
 
2016
 
2015
Net operating revenue:
 
 
 
 
 
 
 
Transaction fees
$
101,568

 
$
114,955

 
$
423,494

 
$
373,508

Servicing fees
22,951

 
11,941

 
68,009

 
32,811

Management fees
3,076

 
3,313

 
11,638

 
10,976

Other revenue (expense)
1,607

 
4,262

 
(7,674
)
 
9,402

Total net operating revenue
129,202

 
134,471

 
495,467

 
426,697

Net interest income and fair value adjustments
1,320

 
1,047

 
5,345

 
3,246

Total net revenue
130,522

 
135,518

 
500,812

 
429,943

Operating expenses: (1)
 
 
 
 
 
 
 
Sales and marketing
55,457

 
53,537

 
216,670

 
171,526

Origination and servicing
18,296

 
17,696

 
74,760

 
61,335

Engineering and product development
32,522

 
23,887

 
115,357

 
77,062

Other general and administrative
56,740

 
35,245

 
207,172

 
122,182

Goodwill impairment
—

 
—

 
37,050

 
—

Total operating expenses
163,015

 
130,365

 
651,009

 
432,105

Income (loss) before income tax expense
(32,493
)
 
5,153

 
(150,197
)
 
(2,162
)
Income tax (benefit) expense
(224
)
 
584

 
(4,228
)
 
2,833

Net income (loss)
$
(32,269
)
 
$
4,569

 
$
(145,969
)
 
$
(4,995
)
Net income (loss) per share:
 
 
 
 
 
 
 
Basic
$
(0.08
)
 
$
0.01

 
$
(0.38
)
 
$
(0.01
)
Diluted
$
(0.08
)
 
$
0.01

 
$
(0.38
)
 
$
(0.01
)
Weighted-average common shares – Basic
395,877,053

 
378,631,340

 
387,762,072

 
374,872,118

Weighted-average common shares – Diluted
395,877,053

 
402,634,010

 
387,762,072

 
374,872,118

(1) 
Includes stock-based compensation expense as follows:
 
Three Months Ended  
 December 31,
 
Year Ended 
 December 31,
 
2016
 
2015
 
2016
 
2015
Sales and marketing
$
2,530

 
$
1,746

 
$
7,546

 
$
7,250

Origination and servicing
1,437

 
748

 
4,159

 
2,735

Engineering and product development
6,724

 
3,449

 
19,858

 
11,335

Other general and administrative
12,120

 
7,721

 
37,638

 
29,902

Total stock-based compensation expense
$
22,811

 
$
13,664


$
69,201


$
51,222








LENDINGCLUB CORPORATION
OPERATING HIGHLIGHTS
(In thousands, except percentages and number of employees, or as noted)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
December 31, 
 2016
 
Three Months Ended
 
% Change
 
December 31,
2015
 
March 31, 
 2016
 
June 30, 
 2016
 
September 30,
2016
 
December 31,
2016
 
Q/Q
 
Y/Y
Operating Highlights:
Loan originations (in millions)
$
2,579

 
$
2,750

 
$
1,955

 
$
1,972

 
$
1,987

 
1
 %
 
(23
)%
Net operating revenue
$
134,471

 
$
151,265

 
$
102,391

 
$
112,609

 
$
129,202

 
15
 %
 
(4
)%
Net income (loss)
$
4,569

 
$
4,137

 
$
(81,351
)
 
$
(36,486
)
 
$
(32,269
)
 
12
 %
 
N/M

Contribution (1)
$
65,732

 
$
68,142

 
$
34,096

 
$
54,088

 
$
59,416

 
10
 %
 
(10
)%
Contribution margin (1)
48.9
%
 
45.0
%
 
33.3
 %
 
48.0
 %
 
46.0
 %
 
N/M

 
N/M

Adjusted EBITDA (1)
$
24,556

 
$
25,228

 
$
(30,116
)
 
$
(11,147
)
 
$
(2,200
)
 
(80
)%
 
N/M

Adjusted EBITDA margin (1)
18.3
%
 
16.7
%
 
(29.4
)%
 
(9.9
)%
 
(1.7
)%
 
N/M

 
N/M

EPS - diluted
$
0.01

 
$
0.01

 
$
(0.21
)
 
$
(0.09
)
 
$
(0.08
)
 
11
 %
 
N/M

Adjusted EPS - diluted (1)
$
0.05

 
$
0.05

 
$
(0.09
)
 
$
(0.04
)
 
$
(0.02
)
 
50
 %
 
N/M

Originations by Investor Type: (2)
Managed accounts
38
%
 
30
%
 
35
 %
 
55
 %
 
43
 %
 
 
 
 
Self-managed, individuals
13
%
 
15
%
 
17
 %
 
14
 %
 
13
 %
 
 
 
 
Banks
23
%
 
34
%
 
28
 %
 
13
 %
 
31
 %
 
 
 
 
Other institutional investors
26
%
 
21
%
 
20
 %
 
18
 %
 
13
 %
 
 
 
 
Total
100
%
 
100
%
 
100
 %
 
100
 %
 
100
 %
 
 
 
 
Originations by Program:
 
 
 
 
 
 
 
 
 
 
 
 
 
Personal loans - standard program
77
%
 
76
%
 
74
 %
 
71
 %
 
74
 %
 
 
 
 
Personal loans - custom program
16
%
 
17
%
 
15
 %
 
18
 %
 
16
 %
 
 
 
 
Other - custom program (3)
7
%
 
7
%
 
11
 %
 
11
 %
 
10
 %
 
 
 
 
Total
100
%
 
100
%
 
100
 %
 
100
 %
 
100
 %
 
 
 
 
Servicing Portfolio by Method Financed (in millions, at end of period):
Notes
$
1,573

 
$
1,732

 
$
1,816

 
$
1,818

 
$
1,795

 
(1
)%
 
14
 %
Certificates
3,105

 
3,177

 
2,914

 
2,840

 
2,752

 
(3
)%
 
(11
)%
Whole loans sold
4,289

 
5,269

 
5,981

 
6,242

 
6,542

 
5
 %
 
53
 %
Other (4)
3

 
24

 
36

 
34

 
28

 
(18
)%
 
N/M

Total
$
8,970

 
$
10,202

 
$
10,747

 
$
10,934

 
$
11,117

 
2
 %
 
24
 %
Employees and contractors (5)
1,382

 
1,545

 
1,499

 
1,464

 
1,530

 
 
 
 
Notes:
N/M Not meaningful.
(1)
Represents a Non-GAAP measure. See Reconciliation of GAAP to Non-GAAP measures.
(2)  
Beginning in the second quarter of 2016, percentages incorporate total originations originated on the platform, whereas, prior period disclosures included only standard program loan originations. Prior period percentages have been reclassified to conform to the current period presentation.
(3) 
Comprised of education and patient finance loans, small business loans, and small business lines of credit which are less than 10% of the volumes presented individually.
(4) 
Includes loans invested in by the Company for which there were no associated notes or certificates.
(5)     As of the end of each respective period.








LENDINGCLUB CORPORATION
SELECT FINANCIAL HIGHLIGHTS
(In thousands, except percentages or as noted)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
December 31, 
 2016
 
Three Months Ended
 
% Change
 
December 31,
 2015
 
March 31, 
 2016
 
June 30, 
 2016
 
September 30,
2016
 
December 31,
 2016
 
Q/Q
 
Y/Y
Select Balance Sheet Information (in millions, at end of period):
Cash and cash equivalents
$
624

 
$
584

 
$
573

 
$
521

 
$
516

 
(1
)%
 
(17
)%
Securities available for sale
$
297

 
$
284

 
$
259

 
$
279

 
$
287

 
3
 %
 
(3
)%
Total
$
921

 
$
868

 
$
832

 
$
800

 
$
803

 
—
 %
 
(13
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans
$
4,556

 
$
4,716

 
$
4,408

 
$
4,412

 
$
4,312

 
(2
)%
 
(5
)%
Notes and certificates
$
4,572

 
$
4,713

 
$
4,416

 
$
4,420

 
$
4,321

 
(2
)%
 
(5
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total assets
$
5,794

 
$
5,948

 
$
5,622

 
$
5,608

 
$
5,563

 
(1
)%
 
(4
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total stockholders' equity
$
1,042

 
$
1,050

 
$
988

 
$
977

 
$
976

 
—
 %
 
(6
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Select Cash Flow Information:
Net cash flows from operating activities
$
21,391

 
$
9,941

 
$
(11,131
)
 
$
(6,556
)
 
$
5,114

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flow related to loans
(591,626
)
 
(325,475
)
 
103,063

 
(30,328
)
 
(15,434
)
 
 
 
 
Other
105,844

 
(30,522
)
 
(13,994
)
 
(43,638
)
 
(59,590
)
 
 
 
 
Net cash flows from investing activities
(485,782
)
 
(355,997
)
 
89,069

 
(73,966
)
 
(75,024
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash flow related to notes and certificates
580,602

 
322,212

 
(108,168
)
 
30,053

 
14,994

 
 
 
 
Other
(71,886
)
 
(15,845
)
 
19,314

 
(1,690
)
 
49,751

 
 
 
 
Net cash flows from financing activities
508,716

 
306,367

 
(88,854
)
 
28,363

 
64,745

 
 
 
 
Net change in cash and cash equivalents
$
44,325

 
$
(39,689
)
 
$
(10,916
)
 
$
(52,159
)
 
$
(5,165
)
 
 
 
 







LENDINGCLUB CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
(In thousands, except percentages and per share data)
(Unaudited)
 
Three Months Ended
 
Year Ended
 
December 31,
2015
 
March 31, 
 2016
 
June 30, 
 2016
 
September 30,
2016
 
December 31,
2016
 
December 31,
2015
 
December 31,
2016
Contribution reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
4,569

 
$
4,137

 
$
(81,351
)
 
$
(36,486
)
 
$
(32,269
)
 
$
(4,995
)
 
$
(145,969
)
Net interest income and fair value adjustments
(1,047
)
 
(1,029
)
 
(1,049
)
 
(1,947
)
 
(1,320
)
 
(3,246
)
 
(5,345
)
Engineering and product development expense
23,887

 
24,198

 
29,209

 
29,428

 
32,522

 
77,062

 
115,357

Other general and administrative expense
35,245

 
38,035

 
53,457

 
58,940

 
56,740

 
122,182

 
207,172

Goodwill impairment
—

 
—

 
35,400

 
1,650

 
—

 
—

 
37,050

Stock-based compensation expense
2,494

 
2,650

 
2,376

 
2,712

 
3,967

 
9,985

 
11,705

Income tax (benefit) expense
584

 
151

 
(3,946
)
 
(209
)
 
(224
)
 
2,833

 
(4,228
)
Contribution
$
65,732

 
$
68,142

 
$
34,096

 
$
54,088

 
$
59,416

 
$
203,821

 
$
215,742

Total net operating revenue
$
134,471

 
$
151,265

 
$
102,391

 
$
112,609

 
$
129,202

 
$
426,697

 
$
495,467

Contribution margin
48.9
%
 
45.0
%
 
33.3
 %
 
48.0
 %
 
46.0
 %
 
47.8
%
 
43.5
 %
Adjusted EBITDA reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
4,569

 
$
4,137

 
$
(81,351
)
 
$
(36,486
)
 
$
(32,269
)
 
$
(4,995
)
 
$
(145,969
)
Net interest income and fair value adjustments
(1,047
)
 
(1,029
)
 
(1,049
)
 
(1,947
)
 
(1,320
)
 
(3,246
)
 
(5,345
)
Acquisition and related expense (1)
733

 
293

 
293

 
294

 
294

 
2,367

 
1,174

Depreciation expense:
 
 
 
 
 
 
 
 
 
 
 
 
 
Engineering and product development
4,007

 
4,493

 
4,917

 
5,362

 
6,134

 
13,820

 
20,906

Other general and administrative
790

 
906

 
993

 
1,104

 
1,213

 
2,426

 
4,216

Amortization of intangible assets
1,256

 
1,256

 
1,180

 
1,163

 
1,161

 
5,331

 
4,760

Goodwill impairment
—

 
—

 
35,400

 
1,650

 
—

 
—

 
37,050

Stock-based compensation expense
13,664

 
15,021

 
13,447

 
17,922

 
22,811

 
51,222

 
69,201

Income tax (benefit) expense
584

 
151

 
(3,946
)
 
(209
)
 
(224
)
 
2,833

 
(4,228
)
Adjusted EBITDA
$
24,556


$
25,228


$
(30,116
)
 
$
(11,147
)
 
$
(2,200
)
 
$
69,758

 
$
(18,235
)
Total net operating revenue
$
134,471

 
$
151,265

 
$
102,391

 
$
112,609

 
$
129,202

 
$
426,697

 
$
495,467

Adjusted EBITDA margin
18.3
%

16.7
%
 
(29.4
)%
 
(9.9
)%
 
(1.7
)%
 
16.3
%
 
(3.7
)%
Note:
(1) 
Represents amounts related to costs for due diligence related to past business acquisitions including those the Company reviewed and determined not to pursue a transaction, as well as incremental compensation expense required to be paid under the purchase agreement to retain key former shareholder employees of an acquired business.






LENDINGCLUB CORPORATION
RECONCILIATION OF GAAP TO NON-GAAP MEASURES (Continued)
(In thousands, except percentages and per share data)
(Unaudited)
 
Three Months Ended
 
Year Ended
 
December 31,
2015
 
March 31, 
 2016
 
June 30, 
 2016
 
September 30,
2016
 
December 31,
2016
 
December 31,
2015
 
December 31,
2016
Adjusted net income (loss) reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income (loss)
$
4,569

 
$
4,137

 
$
(81,351
)
 
$
(36,486
)
 
$
(32,269
)
 
$
(4,995
)
 
$
(145,969
)
Acquisition and related expense (1)
733

 
293

 
293

 
294

 
294

 
2,367

 
1,174

Stock-based compensation expense
13,664

 
15,021

 
13,447

 
17,922

 
22,811

 
51,222

 
69,201

Amortization of acquired intangible assets
1,256

 
1,256

 
1,180

 
1,163

 
1,161

 
5,331

 
4,760

Goodwill impairment
—

 
—

 
35,400

 
1,650

 
—

 
—

 
37,050

Income tax (benefit) expense
584

 
151

 
(3,946
)
 
(209
)
 
(114
)
 
2,833

 
(4,118
)
Adjusted net income (loss)
$
20,806

 
$
20,858

 
$
(34,977
)
 
$
(15,666
)
 
$
(8,117
)
 
$
56,758

 
$
(37,902
)
Adjusted EPS - diluted
$
0.05

 
$
0.05

 
$
(0.09
)
 
$
(0.04
)
 
$
(0.02
)
 
$
0.14

 
$
(0.10
)
Non-GAAP diluted shares reconciliation:
 
 
 
 
 
 
 
 
 
 
 
 
 
GAAP diluted shares (2)
402,634

 
392,398

 
382,893

 
391,453

 
395,877

 
374,872

 
387,762

Other dilutive equity awards (3)
—

 
—

 
—

 
—

 
—

 
26,717

 
—

Non-GAAP diluted shares
402,634

 
392,398

 
382,893

 
391,453

 
395,877

 
401,589

 
387,762

Notes:
(1)
Represents amounts related to costs for due diligence related to past business acquisitions including those the Company reviewed and determined not to pursue a transaction, as well as incremental compensation expense required to be paid under the purchase agreement to retain key former shareholder employees of an acquired business.
(2)
Equivalent to the basic and diluted shares reflected in the quarterly EPS calculations.
(3) 
Other dilutive equity awards include assumed exercises of unvested stock options, net of assumed repurchases computed under the treasury method, which were excluded from GAAP net income (loss) per share as their impact would have been anti-dilutive, but are included in adjusted net income (loss) per share as the impact was dilutive.