Delaware | 001-34063 | 26-2414818 | ||
(State or other jurisdiction | (Commission | (IRS Employer | ||
of incorporation) | File Number) | Identification No.) |
11115 Rushmore Drive, Charlotte, NC | 28277 | |
(Address of principal executive offices) | (Zip Code) |
Exhibit No. | Exhibit Description | |
99.1 |
Date: February 22, 2018 | ||
LENDINGTREE, INC. | ||
By: | /s/ J.D. Moriarty | |
J.D. Moriarty | ||
Chief Financial Officer |
• | 4Q Revenue of $161 million, up 60% over 4Q 2016 |
• | 4Q GAAP Net Loss from Continuing Operations of $6.5 million, or $0.54 per share, largely driven by a $9.1 million charge related to the revaluation of deferred tax assets and a $10 million commitment to establish a charitable foundation |
• | 4Q Variable Marketing Margin of $56.1 million, up 52% over 4Q 2016 |
• | 4Q Adjusted EBITDA of $29.6 million, up 57% over 4Q 2016 |
• | 4Q Adjusted Net Income per share of $0.84, up 9% over 4Q 2016 |
• | Revenue from mortgage products of $67.7 million represents an increase of 22% over fourth quarter 2016. |
• | Revenue from non-mortgage products of $93.3 million in the fourth quarter represents an increase of 106% over the fourth quarter 2016 and comprised 58% of total revenue. |
• | Credit card revenue of $36.9 million. On a proforma basis, giving effect to the CompareCards and MagnifyMoney acquisitions as if they had occurred on January 1, 2016, credit cards revenue grew 35% over fourth quarter 2016. |
• | Personal loan revenue of $25.3 million represents accelerated growth of 74% over fourth quarter 2016. |
• | Home equity revenue continued its strong momentum, increasing 138% over fourth quarter 2016, and marking the ninth consecutive quarter of year-over-year growth exceeding 100%. |
• | More than 7.4 million consumers have now signed up for free credit scores and savings alerts through My LendingTree, and the revenue contribution from My LendingTree grew 109% in the fourth quarter compared to the prior year period. |
LendingTree Selected Financial Metrics | |||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||
Q/Q | Y/Y | ||||||||||||||||||
4Q 2017 | 3Q 2017 | % Change | 4Q 2016 | % Change | |||||||||||||||
Revenue by Product | |||||||||||||||||||
Mortgage Products (1) | $ | 67.7 | $ | 73.8 | (8 | )% | $ | 55.4 | 22 | % | |||||||||
Non-Mortgage Products (2) | 93.3 | 97.7 | (5 | )% | 45.4 | 106 | % | ||||||||||||
Total Revenue | $ | 161.0 | $ | 171.5 | (6 | )% | $ | 100.8 | 60 | % | |||||||||
Non-Mortgage % of Total | 58 | % | 57 | % | 45 | % | |||||||||||||
Income (Loss) Before Income Taxes | $ | (3.3 | ) | $ | 14.4 | N/A | $ | 13.3 | N/A | ||||||||||
Income Tax Expense | $ | (3.2 | ) | $ | (4.3 | ) | $ | (5.3 | ) | ||||||||||
Net Income (Loss) from Continuing Operations | $ | (6.5 | ) | $ | 10.1 | N/A | $ | 8.0 | N/A | ||||||||||
Net Income (Loss) from Cont. Ops. % of Revenue | (4 | )% | 6 | % | 8 | % | |||||||||||||
Net Income (Loss) per Share from Cont. Ops. | |||||||||||||||||||
Basic | $ | (0.54 | ) | $ | 0.84 | N/A | $ | 0.68 | N/A | ||||||||||
Diluted | $ | (0.54 | ) | $ | 0.74 | N/A | $ | 0.63 | N/A | ||||||||||
Selling and Marketing Expense | |||||||||||||||||||
Variable Selling & Marketing Expense (3) | $ | 104.9 | $ | 112.4 | (7 | )% | $ | 64.1 | 64 | % | |||||||||
Non-variable Selling & Marketing | 7.0 | 6.1 | 15 | % | 4.6 | 52 | % | ||||||||||||
Selling and Marketing Expense | $ | 111.9 | $ | 118.5 | (6 | )% | $ | 68.7 | 63 | % | |||||||||
Variable Marketing Margin (4) | $ | 56.1 | $ | 59.1 | (5 | )% | $ | 36.8 | 52 | % | |||||||||
Variable Marketing Margin % of Revenue | 35 | % | 34 | % | 37 | % | |||||||||||||
Adjusted EBITDA (4) | $ | 29.6 | $ | 34.7 | (15 | )% | $ | 18.9 | 57 | % | |||||||||
Adjusted EBITDA % of Revenue (4) | 18 | % | 20 | % | 19 | % | |||||||||||||
Adjusted Net Income (4) | $ | 11.9 | $ | 16.1 | (26 | )% | $ | 9.8 | 21 | % | |||||||||
Adjusted Net Income per Share (4) | $ | 0.84 | $ | 1.17 | (28 | )% | $ | 0.77 | 9 | % | |||||||||
(1) | Includes the purchase mortgage and refinance mortgage products. |
(2) | Includes the home equity, reverse mortgage, personal loan, credit card, small business loan, student loan, auto loan, home services, insurance, deposit and personal credit products. |
(3) | Defined as the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses, which excludes overhead, fixed costs and personnel-related expenses. |
(4) | Variable Marketing Margin, Variable Marketing Margin % of Revenue, Adjusted EBITDA, Adjusted EBITDA % of revenue, Adjusted Net Income and Adjusted Net Income per Share are non-GAAP measures. Please see "LendingTree's Reconciliation of Non-GAAP Measures to GAAP" and "LendingTree's Principles of Financial Reporting" below for more information. |
• | Consolidated revenue of $161.0 million represents an increase of $60.2 million, or 60%, over revenue in the fourth quarter 2016. |
• | GAAP Net Loss from Continuing Operations of $6.5 million, or $0.54 per share, was impacted by a $9.1 million charge related to the revaluation of deferred tax assets as a result of U.S. tax law changes and a one-time $10 million commitment to establish a charitable foundation. |
• | Variable Marketing Margin of $56.1 million represents an increase of $19.3 million, or 52%, over fourth quarter 2016. |
• | Adjusted EBITDA of $29.6 million increased $10.7 million, or 57%, over fourth quarter 2016. |
• | Adjusted Net Income per share of $0.84 represents an increase of $0.07, or 9%, over fourth quarter 2016. |
• | On November 21, 2017, our wholly-owned subsidiary LendingTree, LLC entered into an amended and restated $250.0 million five-year senior secured revolving credit facility which matures on November 21, 2022. Borrowings under the revolving credit facility can be used to finance working capital needs, capital expenditures, and general corporate purposes, including permitted acquisitions. We do not currently have any borrowings outstanding under the revolving credit facility. |
• | During fourth quarter 2017, the company repurchased 33 thousand shares of its stock at a weighted-average price per share of $331 for aggregate consideration of $11.0 million. In the first quarter 2018 to-date, the company has repurchased 30 thousand shares at a weighted-average price per share of $362 for aggregate consideration of $11.0 million. |
• | On February 21, 2018, the Company's Board of Directors approved an additional $100 million in share repurchase authorization. As of that date, $116.7 million in share repurchase authorization remained available. |
• | Record consolidated revenue of $617.7 million, an increase of $233.3 million or 61%, over revenue in full-year 2016. |
• | Net Income from Continuing Operations of $19.4 million, or $1.42 per diluted share. |
• | Record Variable Marketing Margin of $207 million, an increase of $65.8 million or 47%, over full-year 2016. |
• | Record Adjusted EBITDA of $115.1 million, an increase of $45.3 million or 65%, over full-year 2016. |
• | Adjusted Net Income per share of $3.78 increased $0.80, or 27%, over full-year 2016. |
• | Revenue is anticipated to be $170 - $175 million, or 28% - 32% over first quarter 2017. |
• | Variable Marketing Margin is anticipated to be in the range of $59 - $62 million. |
• | Adjusted EBITDA is anticipated to be in the range of $30.5 - $32.5 million, implying year-over-year growth of 28% - 36%. First quarter Adjusted EBITDA guidance reflects an estimated $1.5 - $2.5 million of unusually high expenses primarily related to payroll taxes owed upon the exercise of employee stock options. |
• | Revenue is anticipated to be in the range of $770 - $790 million, or 25% - 28% over full-year 2017. |
• | Variable Marketing Margin is anticipated to be $270 - $280 million, or 30% - 35% over full-year 2017. |
• | Adjusted EBITDA is anticipated to be in the range of $145 - $150 million, or 26% - 30% compared to full-year 2017. |
Three Months Ended December 31, | Twelve Months Ended December 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Revenue | $ | 160,954 | $ | 100,841 | $ | 617,736 | $ | 384,402 | |||||||
Costs and expenses: | |||||||||||||||
Cost of revenue (exclusive of depreciation and amortization) (1) | 5,080 | 3,435 | 17,223 | 13,764 | |||||||||||
Selling and marketing expense (1) | 111,854 | 68,684 | 432,784 | 261,100 | |||||||||||
General and administrative expense (1) | 29,980 | 10,407 | 71,541 | 37,227 | |||||||||||
Product development (1) | 5,433 | 2,377 | 17,925 | 13,761 | |||||||||||
Depreciation | 1,776 | 1,486 | 7,085 | 4,944 | |||||||||||
Amortization of intangibles | 3,958 | 980 | 12,992 | 1,243 | |||||||||||
Change in fair value of contingent consideration | 3,291 | — | 23,931 | — | |||||||||||
Restructuring and severance | — | 50 | 404 | 122 | |||||||||||
Litigation settlements and contingencies | (243 | ) | 20 | 718 | 129 | ||||||||||
Total costs and expenses | 161,129 | 87,439 | 584,603 | 332,290 | |||||||||||
Operating (loss) income | (175 | ) | 13,402 | 33,133 | 52,112 | ||||||||||
Other income (expense), net: | |||||||||||||||
Interest expense, net | (2,980 | ) | (137 | ) | (7,028 | ) | (561 | ) | |||||||
Other income (expense) | (181 | ) | 23 | (396 | ) | 23 | |||||||||
Income (loss) before income taxes | (3,336 | ) | 13,288 | 25,709 | 51,574 | ||||||||||
Income tax expense | (3,182 | ) | (5,267 | ) | (6,291 | ) | (20,366 | ) | |||||||
Net income (loss) from continuing operations | (6,518 | ) | 8,021 | 19,418 | 31,208 | ||||||||||
Loss from discontinued operations | (1,208 | ) | (697 | ) | (3,840 | ) | (3,714 | ) | |||||||
Net income (loss) and comprehensive income (loss) | $ | (7,726 | ) | $ | 7,324 | $ | 15,578 | $ | 27,494 | ||||||
Weighted average shares outstanding: | |||||||||||||||
Basic | 11,986 | 11,767 | 11,945 | 11,812 | |||||||||||
Diluted | 11,986 | 12,749 | 13,682 | 12,773 | |||||||||||
Income (loss) per share from continuing operations: | |||||||||||||||
Basic | $ | (0.54 | ) | $ | 0.68 | $ | 1.63 | $ | 2.64 | ||||||
Diluted | $ | (0.54 | ) | $ | 0.63 | $ | 1.42 | $ | 2.44 | ||||||
Loss per share from discontinued operations: | |||||||||||||||
Basic | $ | (0.10 | ) | $ | (0.06 | ) | $ | (0.32 | ) | $ | (0.31 | ) | |||
Diluted | $ | (0.10 | ) | $ | (0.05 | ) | $ | (0.28 | ) | $ | (0.29 | ) | |||
Net income (loss) per share: | |||||||||||||||
Basic | $ | (0.64 | ) | $ | 0.62 | $ | 1.30 | $ | 2.33 | ||||||
Diluted | $ | (0.64 | ) | $ | 0.57 | $ | 1.14 | $ | 2.15 | ||||||
(1) Amounts include non-cash compensation, as follows: | |||||||||||||||
Cost of revenue | $ | 46 | $ | 30 | $ | 175 | $ | 129 | |||||||
Selling and marketing expense | 1,430 | 604 | 3,973 | 2,722 | |||||||||||
General and administrative expense | 8,190 | 1,188 | 16,874 | 4,699 | |||||||||||
Product development | 627 | 415 | 2,339 | 2,097 |
December 31, 2017 | December 31, 2016 | ||||||
(in thousands, except par value and share amounts) | |||||||
ASSETS: | |||||||
Cash and cash equivalents | $ | 368,550 | $ | 91,131 | |||
Restricted cash and cash equivalents | 4,091 | 4,089 | |||||
Accounts receivable, net | 53,444 | 41,382 | |||||
Prepaid and other current assets | 11,881 | 4,021 | |||||
Current assets of discontinued operations | 75 | — | |||||
Total current assets | 438,041 | 140,623 | |||||
Property and equipment, net | 36,431 | 35,462 | |||||
Goodwill | 113,368 | 56,457 | |||||
Intangible assets, net | 81,125 | 71,684 | |||||
Deferred income tax assets | 20,156 | 14,610 | |||||
Other non-current assets | 1,910 | 810 | |||||
Non-current assets of discontinued operations | 2,428 | 3,781 | |||||
Total assets | $ | 693,459 | $ | 323,427 | |||
LIABILITIES: | |||||||
Accounts payable, trade | $ | 9,250 | $ | 5,593 | |||
Accrued expenses and other current liabilities | 77,183 | 49,403 | |||||
Current contingent consideration | 46,576 | — | |||||
Current liabilities of discontinued operations | 14,507 | 11,711 | |||||
Total current liabilities | 147,516 | 66,707 | |||||
Long-term debt | 238,199 | — | |||||
Non-current contingent consideration | 11,273 | 23,600 | |||||
Other non-current liabilities | 1,597 | 1,685 | |||||
Total liabilities | 398,585 | 91,992 | |||||
SHAREHOLDERS' EQUITY: | |||||||
Preferred stock $.01 par value; 5,000,000 shares authorized; none issued or outstanding | — | — | |||||
Common stock $.01 par value; 50,000,000 shares authorized; 14,218,572 and 13,955,378 shares issued, respectively, and 11,979,434 and 11,791,633 shares outstanding, respectively | 142 | 140 | |||||
Additional paid-in capital | 1,087,582 | 1,018,010 | |||||
Accumulated deficit | (708,354 | ) | (722,630 | ) | |||
Treasury stock; 2,239,138 and 2,163,745 shares, respectively | (85,085 | ) | (64,085 | ) | |||
Noncontrolling interest | 589 | — | |||||
Total shareholders' equity | 294,874 | 231,435 | |||||
Total liabilities and shareholders' equity | $ | 693,459 | $ | 323,427 |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | ||||||||||||
Net income (loss) from continuing operations | $ | (6,518 | ) | $ | 10,131 | $ | 8,021 | $ | 19,418 | $ | 31,208 | |||||
Net income (loss) from continuing operations % of revenue | (4 | )% | 6 | % | 8 | % | 3 | % | 8 | % | ||||||
Adjustments to reconcile to Variable Marketing Margin: | ||||||||||||||||
Cost of revenue | 5,080 | 4,388 | 3,435 | 17,223 | 13,764 | |||||||||||
Non-variable selling and marketing expense (1) | 6,953 | 6,118 | 4,593 | 22,001 | 17,879 | |||||||||||
General and administrative expense | 29,980 | 17,920 | 10,407 | 71,541 | 37,227 | |||||||||||
Product development | 5,433 | 4,805 | 2,377 | 17,925 | 13,761 | |||||||||||
Depreciation | 1,776 | 1,798 | 1,486 | 7,085 | 4,944 | |||||||||||
Amortization of intangibles | 3,958 | 3,817 | 980 | 12,992 | 1,243 | |||||||||||
Change in fair value of contingent consideration | 3,291 | 2,501 | — | 23,931 | — | |||||||||||
Severance | — | — | 50 | 404 | 122 | |||||||||||
Litigation settlements and contingencies (2) | (243 | ) | 272 | 20 | 718 | 129 | ||||||||||
Interest expense, net | 2,980 | 2,804 | 137 | 7,028 | 561 | |||||||||||
Other expense (income) | 181 | 228 | (23 | ) | 396 | (23 | ) | |||||||||
Income tax expense | 3,182 | 4,292 | 5,267 | 6,291 | 20,366 | |||||||||||
Variable Marketing Margin | $ | 56,053 | $ | 59,074 | $ | 36,750 | $ | 206,953 | $ | 141,181 | ||||||
Variable Marketing Margin % of revenue | 35 | % | 34 | % | 36 | % | 34 | % | 37 | % |
(1 | ) | Defined as the portion of selling and marketing expense not attributable to variable costs paid for advertising, direct marketing and related expenses. Includes overhead, fixed costs and personnel-related expenses. |
(2 | ) | Includes legal fees for certain patent litigation |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | ||||||||||||
Net income (loss) from continuing operations | $ | (6,518 | ) | $ | 10,131 | $ | 8,021 | $ | 19,418 | $ | 31,208 | |||||
Net income (loss) from continuing operations % of revenue | (4 | )% | 6 | % | 8 | % | 3 | % | 8 | % | ||||||
Adjustments to reconcile to Adjusted EBITDA: | ||||||||||||||||
Amortization of intangibles | 3,958 | 3,817 | 980 | 12,992 | 1,243 | |||||||||||
Depreciation | 1,776 | 1,798 | 1,486 | 7,085 | 4,944 | |||||||||||
Severance | — | — | 50 | 404 | 122 | |||||||||||
Loss on disposal of assets | 166 | 364 | 253 | 839 | 640 | |||||||||||
Non-cash compensation | 10,293 | 7,938 | 2,237 | 23,361 | 9,647 | |||||||||||
Contribution to LendingTree Foundation | 10,000 | — | — | 10,000 | — | |||||||||||
Change in fair value of contingent consideration | 3,291 | 2,501 | — | 23,931 | — | |||||||||||
Acquisition expense | 238 | 320 | 459 | 1,595 | 959 | |||||||||||
Litigation settlements and contingencies (1) | (243 | ) | 272 | 20 | 718 | 129 | ||||||||||
Interest expense, net | 2,980 | 2,804 | 137 | 7,028 | 561 | |||||||||||
Rental depreciation and amortization of intangibles | 464 | 486 | — | 1,475 | — | |||||||||||
Income tax expense | 3,182 | 4,292 | 5,267 | 6,291 | 20,366 | |||||||||||
Adjusted EBITDA | $ | 29,587 | $ | 34,723 | $ | 18,910 | $ | 115,137 | $ | 69,819 | ||||||
Adjusted EBITDA % of revenue | 18 | % | 20 | % | 19 | % | 19 | % | 18 | % |
(1) | Includes legal fees for certain patent litigation. |
Three Months Ended | Twelve Months Ended | |||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | ||||||||||||
Net income (loss) from continuing operations | $ | (6,518 | ) | $ | 10,131 | $ | 8,021 | $ | 19,418 | $ | 31,208 | |||||
Adjustments to reconcile to Adjusted Net Income: | ||||||||||||||||
Non-cash compensation | 10,293 | 7,938 | 2,237 | 23,361 | 9,647 | |||||||||||
Loss on disposal of assets | 166 | 364 | 253 | 839 | 640 | |||||||||||
Acquisition expense | 238 | 320 | 459 | 1,595 | 959 | |||||||||||
Change in fair value of contingent consideration | 3,291 | 2,501 | — | 23,931 | — | |||||||||||
Severance | — | — | 50 | 404 | 122 | |||||||||||
Litigation settlements and contingencies (1) | (243 | ) | 272 | 20 | 718 | 129 | ||||||||||
Contribution to LendingTree Foundation | 10,000 | — | — | 10,000 | — | |||||||||||
Income tax benefit from adjusted items | (9,836 | ) | (4,581 | ) | (1,216 | ) | (24,699 | ) | (4,597 | ) | ||||||
Impact of Tax Cuts and Jobs Act | 9,062 | — | — | 9,062 | — | |||||||||||
Excess tax benefit from stock-based compensation | (4,512 | ) | (811 | ) | — | (12,926 | ) | — | ||||||||
Adjusted net income | $ | 11,941 | $ | 16,134 | $ | 9,824 | $ | 51,703 | $ | 38,108 | ||||||
Net income (loss) per diluted share from continuing operations | $ | (0.54 | ) | $ | 0.74 | $ | 0.63 | $ | 1.42 | $ | 2.44 | |||||
Adjustments to reconcile net income (loss) from continuing operations to Adjusted Net Income | 1.54 | 0.43 | 0.14 | 2.36 | 0.54 | |||||||||||
Adjustments to reconcile effect of dilutive securities | (0.16 | ) | — | — | — | — | ||||||||||
Adjusted net income per share | $ | 0.84 | $ | 1.17 | $ | 0.77 | $ | 3.78 | $ | 2.98 | ||||||
Adjusted weighted average diluted shares outstanding | 14,282 | 13,774 | 12,749 | 13,682 | 12,773 | |||||||||||
Effect of dilutive securities | 2,296 | — | — | — | — | |||||||||||
Weighted average diluted shares outstanding | 11,986 | 13,774 | 12,749 | 13,682 | 12,773 | |||||||||||
Effect of dilutive securities | — | 1,775 | 982 | 1,737 | 961 | |||||||||||
Weighted average basic shares outstanding | 11,986 | 11,999 | 11,767 | 11,945 | 11,812 |
(1 | ) | Includes legal fees for certain patent litigation |
• | Variable Marketing Margin |
• | Variable Marketing Margin % of revenue |
• | Earnings Before Interest, Taxes, Depreciation and Amortization, as adjusted for certain items discussed below ("Adjusted EBITDA") |
• | Adjusted EBITDA % of revenue |
• | Adjusted Net Income |
• | Adjusted Net Income per share |
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