"
Fourth Quarter 2015 Business Highlights
LendingTree Selected Financial Metrics | |||||||||||||||||||
(In millions, except per share amounts) | |||||||||||||||||||
Q/Q |
Y/Y |
||||||||||||||||||
Q4 2015 |
Q3 2015 |
%Change |
Q4 2014 |
% Change |
|||||||||||||||
Revenue by Product |
|||||||||||||||||||
Mortgage Products (1) |
$ |
46.9 |
$ |
44.2 |
6 |
% |
$ |
33.2 |
41 |
% |
|||||||||
Non-Mortgage Products (2) |
31.4 |
25.6 |
23 |
% |
10.7 |
193 |
% |
||||||||||||
Total Revenue |
$ |
78.3 |
$ |
69.8 |
12 |
% |
$ |
43.9 |
78 |
% |
|||||||||
Non-Mortgage % of Total |
40 |
% |
37 |
% |
24 |
% |
|||||||||||||
Selling and Marketing Expense |
|||||||||||||||||||
Exchanges Marketing Expense (3) |
$ |
50.3 |
$ |
45.5 |
11 |
% |
$ |
26.4 |
91 |
% |
|||||||||
Other Selling & Marketing |
3.9 |
3.4 |
15 |
% |
2.8 |
39 |
% |
||||||||||||
Selling and Marketing Expense |
$ |
54.2 |
$ |
48.9 |
11 |
% |
$ |
29.1 |
86 |
% |
|||||||||
Variable Marketing Margin (4) |
$ |
28.0 |
$ |
24.3 |
15 |
% |
$ |
17.5 |
60 |
% |
|||||||||
Variable Marketing Margin % of Revenue |
36 |
% |
35 |
% |
40 |
% |
|||||||||||||
Net Income from Continuing Operations |
$ |
32.1 |
$ |
7.4 |
334 |
% |
$ |
2.1 |
1429 |
% |
|||||||||
Net Income from Cont. Ops. % of Revenue |
41 |
% |
11 |
% |
5 |
% |
|||||||||||||
Net Income per Share from Cont. Ops. |
|||||||||||||||||||
Basic |
$ |
2.69 |
$ |
0.65 |
314 |
% |
$ |
0.19 |
1316 |
% |
|||||||||
Diluted |
$ |
2.47 |
$ |
0.59 |
319 |
% |
$ |
0.18 |
1272 |
% |
|||||||||
Adjusted EBITDA (5) |
$ |
12.0 |
$ |
11.0 |
9 |
% |
$ |
6.0 |
100 |
% |
|||||||||
Adjusted EBITDA % of Revenue (5) |
15 |
% |
16 |
% |
14 |
% |
|||||||||||||
Adjusted Net Income (5) |
$ |
34.9 |
$ |
9.8 |
256 |
% |
$ |
5.7 |
512 |
% |
|||||||||
Adjusted Net Income per Share (5) |
$ |
2.69 |
$ |
0.79 |
241 |
% |
$ |
0.47 |
472 |
% |
|||||||||
(1) |
Includes the purchase mortgage, refinance mortgage and rate table products. |
(2) |
Includes the home equity, reverse mortgage, personal loan, credit card, small business loan, student loan, auto loan, home services, insurance 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) |
Defined as revenue minus Exchanges marketing expense and is considered an operating metric. |
(5) |
Adjusted EBITDA, adjusted EBITDA % of revenue, adjusted net income and adjusted net income per share are non-GAAP measures. Please see " |
Fourth Quarter 2015 Financial Highlights
Full-Year 2015 Financial Highlights
Business Outlook - 2016
For first quarter 2016:
For full-year 2016:
Stock Repurchase
The company previously announced on
Share repurchases will be implemented through purchases made from time to time in either the open market or private transactions in compliance with applicable securities laws. The timing and extent of the repurchases will depend upon market conditions and other corporate considerations, as determined by the Company in its sole discretion. The Company has sufficient cash on its balance sheet to fund this newly authorized stock repurchase in addition to its expected ordinary course business operations.
Quarterly Conference Call
A conference call to discuss
LENDINGTREE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||
Three Months Ended |
Twelve Months Ended | ||||||||||||||
2015 |
2014 |
2015 |
2014 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Revenue |
$ |
78,341 |
$ |
43,864 |
$ |
254,216 |
$ |
167,350 |
|||||||
Costs and expenses: |
|||||||||||||||
Cost of revenue (exclusive of depreciation) (1) |
2,968 |
2,233 |
9,370 |
7,903 |
|||||||||||
Selling and marketing expense (1) |
54,234 |
29,123 |
172,849 |
112,704 |
|||||||||||
General and administrative expense (1) |
8,694 |
7,682 |
30,030 |
25,883 |
|||||||||||
Product development (1) |
3,247 |
2,041 |
10,485 |
7,457 |
|||||||||||
Depreciation |
873 |
704 |
3,008 |
3,245 |
|||||||||||
Amortization of intangibles |
25 |
40 |
149 |
136 |
|||||||||||
Restructuring and severance |
— |
141 |
422 |
373 |
|||||||||||
Litigation settlements and contingencies |
52 |
188 |
(611) |
10,618 |
|||||||||||
Total costs and expenses |
70,093 |
42,152 |
225,702 |
168,319 |
|||||||||||
Operating income (loss) |
8,248 |
1,712 |
28,514 |
(969) |
|||||||||||
Other income (expense), net: |
|||||||||||||||
Interest expense |
(108) |
(1) |
(171) |
(2) |
|||||||||||
Income (loss) before income taxes |
8,140 |
1,711 |
28,343 |
(971) |
|||||||||||
Income tax benefit |
23,941 |
398 |
22,973 |
484 |
|||||||||||
Net income (loss) from continuing operations |
32,081 |
2,109 |
51,316 |
(487) |
|||||||||||
(Loss) income from discontinued operations |
(31) |
13,528 |
(3,269) |
9,849 |
|||||||||||
Net income and comprehensive income |
$ |
32,050 |
$ |
15,637 |
$ |
48,047 |
$ |
9,362 |
|||||||
Weighted average shares outstanding: |
|||||||||||||||
Basic |
11,926 |
11,212 |
11,516 |
11,188 |
|||||||||||
Diluted |
12,972 |
12,031 |
12,541 |
11,188 |
|||||||||||
Income (loss) per share from continuing operations: |
|||||||||||||||
Basic |
$ |
2.69 |
$ |
0.19 |
$ |
4.46 |
$ |
(0.04) |
|||||||
Diluted |
$ |
2.47 |
$ |
0.18 |
$ |
4.09 |
$ |
(0.04) |
|||||||
Income (loss) per share from discontinued operations: |
|||||||||||||||
Basic |
$ |
— |
$ |
1.21 |
$ |
(0.28) |
$ |
0.88 |
|||||||
Diluted |
$ |
— |
$ |
1.12 |
$ |
(0.26) |
$ |
0.88 |
|||||||
Net income per share: |
|||||||||||||||
Basic |
$ |
2.69 |
$ |
1.39 |
$ |
4.17 |
$ |
0.84 |
|||||||
Diluted |
$ |
2.47 |
$ |
1.30 |
$ |
3.83 |
$ |
0.84 |
|||||||
(1) Amounts include non-cash compensation, as follows: |
|||||||||||||||
Cost of revenue |
$ |
27 |
$ |
8 |
$ |
95 |
$ |
32 |
|||||||
Selling and marketing expense |
517 |
237 |
1,597 |
901 |
|||||||||||
General and administrative expense |
1,211 |
1,867 |
5,120 |
5,148 |
|||||||||||
Product development |
382 |
342 |
1,558 |
1,196 |
LENDINGTREE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) | |||||||
|
| ||||||
(in thousands, except par value and share amounts) | |||||||
ASSETS: |
|||||||
Cash and cash equivalents |
$ |
206,975 |
$ |
86,212 |
|||
Restricted cash and cash equivalents |
6,541 |
18,716 |
|||||
Accounts receivable, net |
29,873 |
13,611 |
|||||
Prepaid and other current assets |
2,085 |
931 |
|||||
Current assets of discontinued operations |
110 |
189 |
|||||
Total current assets |
245,584 |
119,659 |
|||||
Property and equipment, net |
9,415 |
5,257 |
|||||
|
3,632 |
3,632 |
|||||
Intangible assets, net |
10,992 |
11,141 |
|||||
Deferred income tax assets |
20,977 |
— |
|||||
Other non-current assets |
1,039 |
102 |
|||||
Non-current assets of discontinued operations |
4,142 |
100 |
|||||
Total assets |
$ |
295,781 |
$ |
139,891 |
|||
LIABILITIES: |
|||||||
Accounts payable, trade |
$ |
5,741 |
$ |
1,060 |
|||
Accrued expenses and other current liabilities |
34,885 |
25,521 |
|||||
Current liabilities of discontinued operations |
13,401 |
12,055 |
|||||
Total current liabilities |
54,027 |
38,636 |
|||||
Other non-current liabilities |
586 |
— |
|||||
Deferred income tax liabilities |
— |
4,738 |
|||||
Non-current liabilities of discontinued operations |
26 |
151 |
|||||
Total liabilities |
54,639 |
43,525 |
|||||
SHAREHOLDERS' EQUITY: |
|||||||
Preferred stock |
— |
— |
|||||
Common stock |
139 |
129 |
|||||
Additional paid-in capital |
1,006,688 |
909,751 |
|||||
Accumulated deficit |
(750,124) |
(798,171) |
|||||
|
(15,561) |
(15,343) |
|||||
Total shareholders' equity |
241,142 |
96,366 |
|||||
Total liabilities and shareholders' equity |
$ |
295,781 |
$ |
139,891 |
| ||||||||||||||||
Below is a reconciliation of adjusted EBITDA and adjusted net income to net income (loss) from continuing operations, adjusted EBITDA % of revenue to net income (loss) from continuing operations % of revenue and adjusted net income per share to net income per diluted share from continuing operations. See " | ||||||||||||||||
Three Months Ended |
Twelve Months Ended | |||||||||||||||
|
|
|
|
| ||||||||||||
Adjusted EBITDA |
$ |
11,981 |
$ |
10,999 |
$ |
6,035 |
$ |
40,818 |
$ |
21,827 |
||||||
Adjusted EBITDA % of revenue |
15 |
% |
16 |
% |
14 |
% |
16 |
% |
13 |
% | ||||||
Adjustments to reconcile to net income (loss) from |
||||||||||||||||
Depreciation |
(873) |
(764) |
(704) |
(3,008) |
(3,245) |
|||||||||||
Amortization of intangibles |
(25) |
(25) |
(40) |
(149) |
(136) |
|||||||||||
Interest expense |
(108) |
(1) |
(1) |
(171) |
(2) |
|||||||||||
Income tax benefit (expense) |
23,941 |
(389) |
398 |
22,973 |
484 |
|||||||||||
Adjusted net income |
34,916 |
9,820 |
5,688 |
60,463 |
18,928 |
|||||||||||
Non-cash compensation |
(2,137) |
(1,978) |
(2,454) |
(8,370) |
(7,277) |
|||||||||||
Loss on disposal of assets |
(646) |
(64) |
(45) |
(748) |
(282) |
|||||||||||
Impairment of long-lived assets |
— |
— |
(805) |
— |
(805) |
|||||||||||
Estimated settlement for unclaimed property |
— |
— |
— |
(134) |
— |
|||||||||||
Acquisition expense |
— |
(234) |
54 |
(84) |
(60) |
|||||||||||
Restructuring and severance |
— |
(28) |
(141) |
(422) |
(373) |
|||||||||||
Litigation settlements and contingencies (1) |
(52) |
(133) |
(188) |
611 |
(10,618) |
|||||||||||
Net income (loss) from continuing operations |
$ |
32,081 |
$ |
7,383 |
$ |
2,109 |
$ |
51,316 |
$ |
(487) |
||||||
Net income (loss) from continuing operations % of revenue |
41 |
% |
11 |
% |
5 |
% |
20 |
% |
— |
% | ||||||
Adjusted net income per share |
$ |
2.69 |
$ |
0.79 |
$ |
0.47 |
$ |
4.82 |
$ |
1.59 |
||||||
Adjustments to reconcile adjusted net income to net income (loss) from continuing operations |
$ |
(0.22) |
$ |
(0.20) |
$ |
(0.29) |
$ |
(0.73) |
$ |
(1.74) |
||||||
Adjustments to reconcile effect of dilutive securities |
$ |
— |
$ |
— |
$ |
— |
$ |
— |
$ |
0.11 |
||||||
Net income (loss) per diluted share from continuing operations |
$ |
2.47 |
$ |
0.59 |
$ |
0.18 |
$ |
4.09 |
$ |
(0.04) |
||||||
Adjusted weighted average diluted shares outstanding |
12,972 |
12,489 |
12,031 |
12,541 |
11,886 |
|||||||||||
Effect of dilutive securities |
— |
— |
— |
— |
698 |
|||||||||||
Weighted average diluted shares outstanding |
12,972 |
12,489 |
12,031 |
12,541 |
11,188 |
|||||||||||
Effect of dilutive securities |
1,046 |
1,044 |
819 |
1,025 |
— |
|||||||||||
Weighted average basic shares outstanding |
11,926 |
11,445 |
11,212 |
11,516 |
11,188 |
|||||||||||
(1) Includes legal fees for certain patent litigation. |
Adjusted EBITDA and Adjusted EBITDA % of revenue are primary metrics by which
Adjusted net income and adjusted net income per share supplement GAAP income (loss) from continuing operations and GAAP income (loss) per diluted share by enabling investors to make period to period comparisons of those components of the nearest comparable GAAP measures that management believes better reflect the underlying financial performance of the Company's business operations during particular financial reporting periods. Adjusted net income and adjusted net income per share exclude certain amounts, such as non-cash compensation, non-cash asset impairment charges, gain/loss on disposal of assets, restructuring and severance, litigation settlements, contingencies and legal fees for certain patent litigation, and acquisition expenses, which are recognized and recorded under GAAP in particular periods but which might be viewed as not necessarily coinciding with the underlying business operations for the periods in which they are so recognized and recorded.
These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results.
Definition of
EBITDA is defined as operating income or loss (which excludes interest expense and taxes) excluding amortization of intangibles and depreciation.
Adjusted EBITDA is defined as EBITDA excluding (1) non-cash compensation expense, (2) non-cash asset impairment charges, (3) gain/loss on disposal of assets, (4) restructuring and severance expenses, (5) litigation settlements, contingencies and legal fees for certain patent litigation, (6) adjustments for acquisitions or dispositions, and (7) one-time items.
Adjusted net income is defined as net income (loss) from continuing operations excluding (1) non-cash compensation expense, (2) non-cash asset impairment charges, (3) gain/loss on disposal of assets, (4) restructuring and severance expenses, (5) litigation settlements, contingencies and legal fees for certain patent litigation, (6) adjustments for acquisitions or dispositions, and (7) one-time items.
Adjusted net income per share is defined as adjusted net income divided by the adjusted weighted average diluted shares outstanding. In cases where the Company reported GAAP losses from continuing operations, the effects of potentially dilutive securities are excluded from the calculation of net loss per diluted share from continuing operations because their inclusion would have been anti-dilutive. In such instances where the Company reports GAAP net loss from continuing operations but reports positive non-GAAP adjusted net income, the effects of potentially dilutive securities are included in the denominator for calculating adjusted net income per share.
One-Time Items
Adjusted EBITDA and adjusted net income are adjusted for one-time items, if applicable. Items are considered one-time in nature if they are non-recurring, infrequent or unusual, and have not occurred in the past two years or are not expected to recur in the next two years, in accordance with
Non-Cash Expenses That Are Excluded From LendingTree's Adjusted EBITDA and Adjusted Net Income
Non-cash compensation expense consists principally of expense associated with the grants of restricted stock, restricted stock units and stock options. These expenses are not paid in cash and
Amortization of intangibles are non-cash expenses relating primarily to acquisitions. At the time of an acquisition, the intangible assets of the acquired company, such as purchase agreements, technology and customer relationships, are valued and amortized over their estimated lives. Amortization of intangibles are only excluded from Adjusted EBITDA.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
The matters contained in the discussion above may be considered to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations or anticipations of
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