0001491778-15-000118.txt : 20150722 0001491778-15-000118.hdr.sgml : 20150722 20150722070352 ACCESSION NUMBER: 0001491778-15-000118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20150722 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20150722 DATE AS OF CHANGE: 20150722 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Angie's List, Inc. CENTRAL INDEX KEY: 0001491778 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-ADVERTISING [7310] IRS NUMBER: 272440197 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-35339 FILM NUMBER: 15999019 BUSINESS ADDRESS: STREET 1: 1030 EAST WASHINGTON STREET STREET 2: SUITE 100 CITY: INDIANAPOLIS STATE: IN ZIP: 46202 BUSINESS PHONE: 317-803-3973 MAIL ADDRESS: STREET 1: 1030 EAST WASHINGTON STREET STREET 2: SUITE 100 CITY: INDIANAPOLIS STATE: IN ZIP: 46202 8-K 1 angi2015630-earningsrelease.htm FORM 8-K ANGI 2015.6.30 - Earnings Release



 
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): July 22, 2015
 
 
Angie’s List, Inc.
(Exact name of registrant as specified in its charter)
 
 
 
Delaware
 
 
001-35339
 
 
27-2440197
(State or other jurisdiction of incorporation)
 
 
(Commission File Number)
 
 
(IRS Employer Identification No.)
 
 
1030 E. Washington Street
Indianapolis, IN 46202
 
 
 
 
(Address of principal executive offices, including zip code)
 
 
 
(888) 888-5478
 
 
(Registrant’s telephone number, including area code)
 
 
Not Applicable
 
 
(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 July 22, 2015, Angie's List, Inc. issued a press release announcing its financial results for the fiscal quarter ended June 30, 2015. A copy of the press release is furnished as Exhibit 99.1 to this current report and is incorporated herein by reference.

The information furnished on this Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into 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.

Item 9.01.    Financial Statements and Exhibits

(d) Exhibits.

Exhibit No.

Exhibit Description
99.1

Press Release dated July 22, 2015



SIGNATURE

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.

Dated: July 22, 2015

ANGIE'S LIST, INC.
 
 
/s/ SHANNON M. SHAW
 
 
By: Shannon M. Shaw
 
 
Its: Chief Legal Officer & Corporate Secretary
 
 



EXHIBIT INDEX

Exhibit No.
 
Exhibit Description
99.1
 
Press Release dated July 22, 2015

 EX-99.1 2 angi2015630-8kexhibit991.htm EXHIBIT 99.1 ANGI 2015.6.30 - 8K Exhibit 99.1


Exhibit 99.1

www.angieslist.com

Angie's List Reports Second Quarter 2015 Results


•
Revenue of $87.3 million, representing 11% growth year over year

•
Net loss per share of $(0.14), a 55% improvement from the prior year quarter

•
Adjusted EBITDA loss of $3.5 million, a 77% improvement over the year ago quarter
 
•
Gross member additions of 289,866 with an average cost per acquisition of $88

INDIANAPOLIS — July 22, 2015 — Angie’s List, Inc. (NASDAQ: ANGI) today announced financial results for the quarter ended June 30, 2015.
“We continued to execute on our strategy to grow revenue, increase margins and invest for growth," said Angie's List Interim CEO Mark Howell. "Our efforts manifested in the proliferation of e-commerce, operating efficiency and the continued development of our technology platform and product roadmap."


Key Operating Metrics
Three months ended
 
June 30,
2015
 
June 30,
2014
 
Change
Total paid memberships (end of period)
 
3,172,066

 
2,838,863

 
12
 %
Gross paid memberships added (in period)
 
289,866

 
398,812

 
(27
)%
Marketing cost per paid membership acquisition (in period)
 
$
88

 
$
90

 
(2
)%
First-year membership renewal rate (in period)
 
75
%
 
74
%
 
1 pt
Average membership renewal rate (in period)
 
78
%
 
77
%
 
1 pt
Participating service providers (end of period)*
 
53,514

 
53,374

 
—
 %
Total service provider contract value (end of period, in thousands)
 
$
266,131

 
$
224,171

 
19
 %
Six months ended
 
June 30,
2015
 
June 30,
2014
 
Change
Gross paid memberships added (in period)
 
519,853

 
685,438

 
(24
)%
Marketing cost per paid membership acquisition (in period)
 
$
80

 
$
87

 
(8
)%
First-year membership renewal rate (in period)
 
73
%
 
73
%
 
—
 %
Average membership renewal rate (in period)
 
77
%
 
77
%
 
—
 %

* We include in participating service providers the total number of service providers under contract for advertising, e-commerce or both at the end of the period.


1


Market Cohort Analysis
"We continue to attract new members and consumers to our Search, Shop and SnapFix products, contributing to the long-term profitability of our model," continued Howell. "Aided by improvements in mobile capabilities and technology, we expect to continue to enhance our customers' experience with Angie's List, enabling more and better interactions between consumers and service providers."
 
Pre-2003
2003-2007
Post-2007
Total
 
June 30,
June 30,
June 30,
June 30,
 
2015
2014
2015
2014
2015
2014
2015
2014
Number of Markets
10

10

35

35

208

208

253

253

Average Revenue/Market
$
7,856,862

$
6,990,903

$
6,003,238

$
5,129,500

$
218,547

$
173,956

$
1,320,711

$
1,128,950

Average Marketing Expense/Market
$
1,056,433

$
1,500,899

$
1,110,494

$
1,580,604

$
97,824

$
138,817

$
275,806

$
392,111

 
 
 
 
 
 
 
 
 
Membership Revenue/Paid Member
$
28.38

$
36.23

$
25.83

$
32.08

$
15.09

$
16.11

$
23.47

$
28.62

Service Provider Revenue/Paid Member
$
108.97

$
110.60

$
102.40

$
100.02

$
42.10

$
38.25

$
87.70

$
85.59

Total Revenue/Paid Member
$
137.35

$
146.83

$
128.23

$
132.10

$
57.19

$
54.36

$
111.17

$
114.21

 
 
 
 
 
 
 
 
 
Total Paid Memberships
609,644

534,416

1,735,024

1,542,153

827,398

762,294

3,172,066

2,838,863

Estimated Penetration Rate*
17
%
14
%
13
%
11
%
12
%
10
%
13
%
11
%
Annual Membership Growth Rate
14
%
28
%
13
%
31
%
9
%
34
%
12
%
31
%
Cohort table presents financial and operational data for the twelve months ended June 30, 2015 and 2014.

* Demographic information used in penetration rate calculations is based on third-party studies we commissioned in June 2015 and June 2014, respectively. According to these studies, the number of U.S. households in our target demographic was 27 million for the period ended June 30, 2015 and 29 million for the period ended June 30, 2014.


Second Quarter Results
Total revenue for the second quarter of 2015 was $87.3 million, an increase of 11 percent compared to the prior year period. Membership revenue in the second quarter of 2015 was $16.9 million, a decrease of 9 percent compared to the prior year period. Service provider revenue was $70.4 million for the second quarter, representing a 17 percent growth rate year over year.
Marketing expense decreased 29 percent, or $10.4 million, compared to the year-ago period. Net loss for the second quarter was $8.3 million, with selling expense of $31.8 million and marketing expense of $25.5 million, compared to a net loss of $18.4 million, with selling expense of $30.3 million and marketing expense of $35.9 million, in the year-ago period. Adjusted EBITDA loss, a non-GAAP financial measure, was $3.5 million for the period as compared to a loss of $14.9 million in the year-ago period.
Cash provided by operations for the second quarter was approximately $2.0 million. At June 30, 2015, the balance of cash, cash equivalents and investments was $69.8 million.


2


Angie’s List, Inc.
Condensed Consolidated Balance Sheets
(in thousands) 
 
 
June 30,
2015
 
December 31,
2014
 
 
 
 
 
 
 
(Unaudited)
Assets
 
 
 
 
Cash and cash equivalents
 
$
47,315

 
$
39,991

Short-term investments
 
22,436

 
24,268

Accounts receivable, net
 
15,308

 
15,141

Prepaid expenses and other current assets
 
21,377

 
18,120

Total current assets
 
106,436

 
97,520

Property, equipment and software, net
 
64,601

 
51,264

Goodwill
 
1,145

 
1,145

Amortizable intangible assets, net
 
2,269

 
2,755

Other assets, noncurrent
 
1,657

 
1,854

Total assets
 
$
176,108

 
$
154,538

 
 
 
 
 
Liabilities and stockholders’ deficit
 
 
 
 
Accounts payable
 
$
15,248

 
$
5,490

Accrued liabilities
 
32,743

 
23,189

Deferred membership revenue
 
33,878

 
33,767

Deferred advertising revenue
 
50,529

 
48,399

Total current liabilities
 
132,398

 
110,845

Long-term debt, net
 
58,975

 
58,854

Deferred membership revenue, noncurrent
 
4,326

 
4,744

Deferred advertising revenue, noncurrent
 
501

 
669

Other liabilities, noncurrent
 
1,548

 
1,600

Total liabilities
 
197,748

 
176,712

Stockholders’ deficit:
 
 
 
 
Common stock
 
67

 
67

Additional paid-in-capital
 
270,418

 
265,895

Treasury stock
 
(23,719
)
 
(23,719
)
Accumulated deficit
 
(268,406
)
 
(264,417
)
Total stockholders’ deficit
 
(21,640
)
 
(22,174
)
Total liabilities and stockholders’ deficit
 
$
176,108

 
$
154,538


3


Angie’s List, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data) 
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
(Unaudited)
Revenue
 
 
 
 
 
 
 
 
Membership
 
$
16,910

 
$
18,516

 
$
34,249

 
$
36,816

Service provider
 
70,425

 
60,380

 
136,629

 
114,737

Total revenue
 
87,335

 
78,896

 
170,878

 
151,553

Operating expenses
 
 
 
 
 
 
 
 
Operations and support
 
15,456

 
13,746

 
29,454

 
25,294

Selling
 
31,824

 
30,278

 
60,433

 
56,400

Marketing
 
25,519

 
35,920

 
41,795

 
59,401

Product and technology
 
9,571

 
8,090

 
17,987

 
15,547

General and administrative
 
12,521

 
9,085

 
23,483

 
16,441

Total operating expenses
 
94,891


97,119


173,152


173,083

Operating loss
 
(7,556
)
 
(18,223
)
 
(2,274
)
 
(21,530
)
Interest expense, net
 
784

 
118

 
1,696

 
579

Loss before income taxes
 
(8,340
)
 
(18,341
)
 
(3,970
)
 
(22,109
)
Income tax expense
 
9

 
15

 
19

 
30

Net loss
 
$
(8,349
)
 
$
(18,356
)
 
$
(3,989
)
 
$
(22,139
)
 
 
 
 
 
 
 
 
 
Net loss per common share — basic and diluted
 
$
(0.14
)
 
$
(0.31
)
 
$
(0.07
)
 
$
(0.38
)
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding — basic and diluted
 
58,517

 
58,515

 
58,517

 
58,503

 
 
 
 
 
 
 
 
 
Non-cash stock-based compensation
 
 
 
 
 
 
 
 
Operations and support
 
$
29

 
$
12

 
$
49

 
$
25

Selling
 
151

 
79

 
161

 
183

Product and technology
 
226

 
242

 
422

 
451

General and administrative
 
1,861

 
1,662

 
3,891

 
2,869

Total non-cash stock-based compensation
 
$
2,267

 
$
1,995

 
$
4,523

 
$
3,528

 
 
 
 
 
 
 
 
 
Reconciliation of net loss to Adjusted EBITDA (loss)
 
 
 
 
 
 
 
 
Net loss
 
$
(8,349
)
 
$
(18,356
)

$
(3,989
)

$
(22,139
)
Income tax expense
 
9

 
15


19


30

Interest expense, net
 
784

 
118


1,696


579

Depreciation and amortization
 
1,613

 
1,348

 
3,203

 
2,568

Non-cash stock-based compensation
 
2,267

 
1,995


4,523


3,528

Litigation settlement adjustment
 
(480
)
 
—

 
(960
)
 
—

Non-cash long-lived asset impairment charge
 
686

 
—

 
686

 
—

Adjusted EBITDA (loss)
 
$
(3,470
)

$
(14,880
)

$
5,178


$
(15,434
)

4


Angie’s List, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands) 
 
 
Three Months Ended 
 June 30,
 
Six Months Ended 
 June 30,
 
 
2015
 
2014
 
2015
 
2014
 
 
 
 
 
 
 
 
 
 
 
(Unaudited)
 
(Unaudited)
Operating activities
 
 
 
 
 
 
 
 
Net loss
 
$
(8,349
)
 
$
(18,356
)
 
$
(3,989
)
 
$
(22,139
)
Adjustments to reconcile net loss to net cash provided by operating activities:
 
 
 
 
 
 
 
 
Depreciation and amortization
 
1,613

 
1,348

 
3,203

 
2,568

Amortization of debt discount, deferred financing fees and bond premium
 
184

 
109

 
355

 
215

Non-cash stock-based compensation
 
2,267

 
1,995

 
4,523

 
3,528

Non-cash long-lived asset impairment charge
 
686

 
—

 
686

 
—

Non-cash loss on disposal of long-lived assets
 
279

 
—

 
279

 
—

Changes in certain assets:
 
 
 
 
 
 
 
 
Accounts receivable
 
533

 
328

 
(167
)
 
(725
)
Prepaid expenses and other current assets
 
860

 
(2,610
)
 
(3,257
)
 
(4,691
)
Changes in certain liabilities:
 
 
 
 
 
 
 
 
Accounts payable
 
3,843

 
9,984

 
9,918

 
12,185

Accrued liabilities
 
(730
)
 
5,023

 
10,002

 
19,866

Deferred advertising revenue
 
(1,029
)
 
2,443

 
1,962

 
5,918

Deferred membership revenue
 
1,805

 
2,310

 
(307
)
 
794

Net cash provided by operating activities
 
1,962

 
2,574

 
23,208

 
17,519

 
 
 
 
 
 
 
 
 
Investing activities
 
 
 
 
 
 
 
 
Purchases of investments
 
(6,080
)
 
(8,929
)
 
(9,200
)
 
(11,524
)
Sales of investments
 
8,160

 
8,440

 
10,995

 
11,080

Property, equipment and software
 
(2,400
)
 
(5,274
)
 
(3,516
)
 
(7,531
)
Capitalized website and software development costs
 
(7,095
)
 
(4,267
)
 
(13,849
)
 
(8,220
)
Intangible assets
 
(113
)
 
(355
)
 
(206
)
 
(745
)
Net cash (used in) investing activities
 
(7,528
)
 
(10,385
)
 
(15,776
)
 
(16,940
)
 
 
 
 
 
 
 
 
 
Financing activities
 
 
 
 
 
 
 
 
Proceeds from exercise of stock options
 
—

 
40

 
—

 
501

Payments on capital lease obligations
 
(54
)
 
(17
)
 
(108
)
 
(17
)
Net cash (used in) provided by financing activities
 
(54
)
 
23

 
(108
)
 
484

Net (decrease) increase in cash and cash equivalents
 
$
(5,620
)
 
$
(7,788
)
 
$
7,324

 
$
1,063

Cash and cash equivalents, beginning of period
 
52,935

 
43,654

 
39,991

 
34,803

Cash and cash equivalents, end of period
 
$
47,315

 
$
35,866

 
$
47,315

 
$
35,866


5


Conference Call Information
The Company will host a conference call on July 22, 2015 at approximately 8:30 AM (ET) / 5:30 AM (PT) to discuss the quarterly financial results with the investment community. A live audio webcast of the event will be available on the Angie’s List Investor Relations website at http://investor.angieslist.com/.
A live domestic dial-in is available at (877) 380-5664 or (253) 237-1143 internationally. An audio replay will be available at (855) 859-2056 domestically or (404) 537-3406 internationally, using Conference ID 76806729 through July 28, 2015.

About Angie’s List
Angie’s List helps facilitate happy transactions between more than three million consumers nationwide and its collection of highly-rated service providers in 720 categories of service, ranging from home improvement to health care. Built on a foundation of authentic reviews of local service, Angie's List connects consumers directly to its online marketplace of services from member-reviewed providers, and offers unique tools and support designed to improve the local service experience for both consumers and service professionals.

Non-GAAP Financial Measures
In addition to providing financial measurements based on generally accepted accounting principles in the United States (GAAP), we disclose in this press release financial information that was not prepared in accordance with GAAP. This information includes non-GAAP Adjusted EBITDA, which we define as earnings before interest, income taxes, depreciation, amortization, non-cash stock-based compensation, the litigation settlement adjustment and non-cash long-lived asset impairment charges. We use Adjusted EBITDA internally in analyzing our financial results and determined to disclose this measure to investors as we believe it will be useful to them, as a supplement to GAAP measures, in evaluating our operating performance relative to our industry sector and competitors. We believe that the use of Adjusted EBITDA provides additional insight for investors to use in evaluation of ongoing operating results and trends. However, non-GAAP financial measures such as Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We have significant uses of cash flows, including capital expenditures and other contractual commitments, interest payments and income taxes that are not reflected in Adjusted EBITDA. Adjusted EBITDA does not consider the potentially dilutive impact of issuing non-cash stock-based compensation to our management and other employees. It should also be noted that other companies, including companies in the same industry, may calculate Adjusted EBITDA in a different manner than we do. We have provided a reconciliation of the Adjusted EBITDA measure to the most directly comparable GAAP financial measure herein.

Forward-Looking and Cautionary Statements
This press release contains “forward-looking statements” made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended, including statements regarding expected revenue, increased margins, expansion of technology and mobile platforms, future products, attraction of new members, future marketing expense and growth opportunities. These forward-looking statements are based on our current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to accurately measure and predict revenue per paid membership, membership acquisition costs or costs associated with servicing our members; our ability to protect our brand and maintain our reputation among consumers and service providers; our ability to attract and retain service providers to advertise and sell e-commerce on our platforms; our ability to successfully monetize our memberships and service provider contracts as we grow our business; our success in converting consumers and service providers into paid memberships and participating service providers, respectively; our ability to renew memberships and participating service providers; our ability to predict and respond in a timely manner to changes in consumer demand; our ability to attract and retain key management and personnel; competitive factors; our ability to stay abreast of modified or new laws and regulations applying to our business, including those regarding sales or transaction taxes and privacy regulation; our ability to adequately protect our intellectual property; our ability to successfully implement our growth strategies or effectively manage our growing business; and general economic conditions and the corresponding impact on consumer confidence and spending.
For a discussion of these factors and other risks and uncertainties that may affect our business or cause actual results to differ materially from those contained in our forward-looking statements, please refer to the filings we make with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. These documents are or will be available online from the SEC or on the SEC Filings section of the Investor Relations section of our website at http://investor.angieslist.com. Information on our website is not part of this release. 
All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
Investor Relations:
Public Relations:
 
 
 
Leslie Arena
Debra DeCourcy, APR
 
 
 
317-808-4527
317-713-0479
 
 
 
lesliea@angieslist.com
debra.decourcy@angieslist.com
 
 
 

6
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