EX-99.2 3 a17-1288_1ex99d2.htm EX-99.2

Exhibit 99.2

 

SQUARETRADE

 

5-YEAR SUMMARY OF CERTAIN HISTORICAL FINANCIAL AND OTHER INFORMATION  (1)

 

($ in thousands)

 

 

(Unaudited)

 

 

For the year ended or as of December 31,

 

Operating results

 

 

2015

 

 

2014

 

 

2013

 

 

2012

 

 

2011

 

Revenue (2)

 

$

248,581

 

$

192,223

 

$

109,663

 

$

43,323

 

$

26,867

 

Cost of revenue (3)

 

 

(160,728)

 

 

(125,655)

 

 

(72,413)

 

 

(31,406)

 

 

(19,164)

 

Gross margin

 

 

87,853

 

 

66,568

 

 

37,250

 

 

11,917

 

 

7,703

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses, excluding amortization of intangibles (4)

 

 

(96,761)

 

 

(86,423)

 

 

(63,069)

 

 

(32,980)

 

 

(16,577)

 

Amortization of intangibles

 

 

(16,080)

 

 

(17,776)

 

 

(17,781)

 

 

(16,726)

 

 

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(24,988)

 

 

(37,631)

 

 

(43,600)

 

 

(37,789)

 

 

(8,874)

 

Interest, tax and other expense

 

 

(1,521)

 

 

270

 

 

13,074

 

 

12,118

 

 

(3,572)

 

Net loss

 

$

(26,509)

 

$

(37,361)

 

$

(30,526)

 

$

(25,671)

 

$

(12,446)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense (income)

 

 

1,928

 

 

1,625

 

 

1,293

 

 

(16)

 

 

109

 

Income tax (benefit) expense

 

 

(185)

 

 

(2,016)

 

 

(14,258)

 

 

(12,189)

 

 

2,191

 

Depreciation

 

 

4,223

 

 

3,721

 

 

2,702

 

 

1,292

 

 

692

 

Amortization of intangibles

 

 

16,080

 

 

17,776

 

 

17,781

 

 

16,726

 

 

-

 

Loss before interest, tax, depreciation and amortization *

 

$

(4,463)

 

$

(16,255)

 

$

(23,008)

 

$

(19,858)

 

$

(9,454)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Number of active warranties as of December 31 (in millions)

 

 

21.7

 

 

15.1

 

 

8.9

 

 

4.7

 

 

2.4

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial position

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current assets

 

$

268,487

 

$

235,604

 

$

184,632

 

$

118,956

 

$

59,287

 

Goodwill and intangibles, net

 

 

343,422

 

 

359,502

 

 

377,278

 

 

395,059

 

 

-

 

Total assets (5)

 

 

919,746

 

 

896,085

 

 

800,438

 

 

659,359

 

 

119,429

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current liabilities

 

 

298,704

 

 

284,926

 

 

221,050

 

 

114,342

 

 

65,717

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total liabilities (6)

 

 

661,231

 

 

615,907

 

 

486,419

 

 

317,404

 

 

143,931

 

Stockholder’s equity (deficit)

 

 

258,515

 

 

280,178

 

 

314,019

 

 

341,955

 

 

(24,502)

 

Total liabilities and stockholder’s equity

 

$

919,746

 

$

896,085

 

$

800,438

 

$

659,359

 

$

119,429

 

 

Notes:

 

 

(1)

The summary of certain historical financial and other information is unaudited and is provided for informational purposes only. Past performance is not indicative of future results.

 

 

(2)

Revenue is derived from the sale of warranties primarily covering consumer electronics, personal computers and mobile telephones. Revenue is recognized over the period warranty protection is provided, generally ranging from one to five years.

 

 

(3)

Cost of revenue relates to contractual amounts designated to support the payment of warranty claims, insurance costs paid to third-party insurers to underwrite the warranties, and other costs directly related to the sale of the warranties. Such costs are recognized ratably over the terms of the warranties.

 

 

(4)

Operating expenses consist primarily of sales and marketing and general and administrative costs that are recognized as incurred.

 

 

(5)

Assets, other than goodwill and intangibles, consist primarily of amounts held to support the payment of potential warranty claims, including restricted cash, deferred costs which represent the unrecognized portion of the costs of the Company’s warranty obligations and deferred fees and commissions recognized over the warranty term.

 

 

(6)

Liabilities consist primarily of deferred revenue associated with issued warranties that are recognized over the contractual warranty period and amounts held in trust for the payment of warranty claims.

 

 

*

Denotes a measure that is not based on generally accepted accounting principles (“non-GAAP”). We believe that investors’ understanding of SquareTrade’s performance is enhanced by our disclosure of loss before interest, tax, depreciation and amortization, a non-GAAP measure, which is reconciled above to the most directly comparable GAAP measure of net loss. Our method for calculating this measure may differ from that used by other companies and therefore comparability may be limited. We are presenting this non-GAAP financial measure as we believe it enables investors to evaluate period to period performance by excluding potential differences caused by changes in interest expense that are influenced by capital market conditions, variations in tax positions, variations in the age and depreciable lives of fixed assets and the amortization of intangibles related to acquisitions. Loss before interest, tax, depreciation and amortization is not a measure of our financial performance under GAAP and should not be considered as a substitute for net loss and does not reflect the overall profitability of our business.