CHARLOTTE, N.C., Feb. 25, 2015 /PRNewswire/ --
- Record Revenue of $43.9 million;
up 21% over fourth quarter 2013
- Record Variable Marketing Margin of $17.5 million; up 7% over fourth quarter
2013
- Net Income from Continuing Operations of $2.1 million
- Record Adjusted EBITDA of $6.0
million
- Net Income per Diluted Share from Continuing Operations of
$0.18; Adjusted Net Income per
Share of $0.47
- Personal loan marketplace continues significant growth,
exceeding $2.3 million of revenue in
January
- Increased Working Capital by $17.6
million, or $1.46 per diluted
share, versus third quarter 2014
- Increasing full-year 2015 guidance
LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com,
the nation's leading online loan marketplace, today announced
results for the quarter and full year ended December 31, 2014.
"Our fourth quarter results capped off a fantastic year for
LendingTree," said Doug Lebda,
Chairman and CEO. "We consistently exceeded our financial targets,
launched several new products and diversified our revenue. These
trends have continued into 2015, which gives us confidence to
improve our outlook for the year. In addition to outpacing the
overall mortgage industry for the ninth consecutive quarter, we
delivered record revenue, variable marketing margin and adjusted
EBITDA. Revenue growth in our non-mortgage products accelerated,
achieving the highest growth rate to date led by personal loans
revenue up nearly ten-fold from a year ago, and supported by solid
growth from all of our other non-mortgage revenue streams."
Fourth Quarter 2014 Business Highlights
- Continued the trend of outpacing the overall mortgage market,
as revenue from mortgage products increased 5% in the fourth
quarter over the same period last year, while total mortgage
originations fell 18%, according to industry estimates. This
is the ninth consecutive quarter of outpacing the overall mortgage
market.
- Record revenue from non-mortgage products of $10.7 million in the fourth quarter reflects an
increase of 128% over the fourth quarter 2013 and now represents
24% of total revenue.
- LendingTree's personal loan offering continued to scale,
growing revenue nearly ten-fold vs. the same period last year and
56% sequentially over the third quarter.
- More than 600 thousand consumers have enrolled in My
LendingTree, up from just 200 thousand in early November.
User growth accelerated as each additional 100 thousand users was
achieved more quickly than the previous.
|
LendingTree
Selected Financial Metrics
|
|
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q/Q
|
|
|
|
|
|
Y/Y
|
|
|
Q4
2014
|
|
Q3
2014
|
|
%
Change
|
|
|
Q4
2013
|
|
%
Change
|
|
|
Revenue by
Product
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgage Products
(1)
|
$
|
33.2
|
|
|
$
|
32.0
|
|
|
4
|
%
|
|
|
$
|
31.7
|
|
|
5
|
%
|
|
|
Non-Mortgage Products
(2)
|
10.7
|
|
|
9.3
|
|
|
15
|
%
|
|
|
4.7
|
|
|
128
|
%
|
|
|
Total
Revenue
|
$
|
43.9
|
|
|
$
|
41.3
|
|
|
6
|
%
|
|
|
$
|
36.4
|
|
|
21
|
%
|
|
|
Non-Mortgage % of
Total
|
24
|
%
|
|
23
|
%
|
|
|
|
|
|
13
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
Marketing Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exchanges Marketing
Expense (3)
|
$
|
26.4
|
|
|
$
|
24.6
|
|
|
7
|
%
|
|
|
$
|
20.1
|
|
|
31
|
%
|
|
|
Other
Marketing
|
2.8
|
|
|
2.6
|
|
|
8
|
%
|
|
|
2.5
|
|
|
12
|
%
|
|
|
Selling and
Marketing Expense
|
$
|
29.1
|
|
|
$
|
27.2
|
|
|
7
|
%
|
|
|
$
|
22.6
|
|
|
29
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable Marketing
Margin (4)
|
$
|
17.5
|
|
|
$
|
16.7
|
|
|
5
|
%
|
|
|
$
|
16.3
|
|
|
7
|
%
|
|
|
Variable Marketing
Margin % of Revenue
|
40
|
%
|
|
40
|
%
|
|
|
|
|
|
45
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
from Continuing Operations
|
$
|
2.1
|
|
|
$
|
0.6
|
|
|
250
|
%
|
|
|
$
|
1.3
|
|
|
62
|
%
|
|
|
Net Income (Loss)
from Cont. Ops. % of Revenue
|
5
|
%
|
|
1
|
%
|
|
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (Loss)
per Share from Cont. Ops.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.19
|
|
|
$
|
0.05
|
|
|
280
|
%
|
|
|
$
|
0.12
|
|
|
58
|
%
|
|
|
Diluted
|
$
|
0.18
|
|
|
$
|
0.05
|
|
|
260
|
%
|
|
|
$
|
0.11
|
|
|
64
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(5)
|
$
|
6.0
|
|
|
$
|
5.8
|
|
|
3
|
%
|
|
|
$
|
5.9
|
|
|
2
|
%
|
|
|
Adjusted EBITDA %
of Revenue (5)
|
14
|
%
|
|
14
|
%
|
|
|
|
|
|
16
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income (5)
|
$
|
5.7
|
|
|
$
|
4.9
|
|
|
16
|
%
|
|
|
$
|
5.4
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted Net
Income per Share (5)
|
$
|
0.47
|
|
|
$
|
0.41
|
|
|
15
|
%
|
|
|
$
|
0.45
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes the purchase mortgage,
refinance mortgage and rate table products.
(2) Includes the home equity, reverse mortgage, personal
loan, small business loan, student loan, auto, education, 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 "LendingTree's Reconciliation of
Non-GAAP Measures to GAAP" and "LendingTree's Principles of
Financial Reporting" below for more information.
|
Fourth Quarter 2014 Financial and Operating
Highlights
- Record revenue in the fourth quarter 2014 of $43.9 million represents an increase of
$7.5 million, or 21%, over revenue in
the fourth quarter 2013.
- Variable Marketing Margin of $17.5
million is a record and represents an increase of
$1.2 million, or 7%, over fourth
quarter 2013.
- Adjusted EBITDA of $6.0 million,
also a record, increased slightly over fourth quarter 2013.
- Adjusted Net Income per Share of $0.47 represents an increase of $0.02, or 4%, over fourth quarter 2013.
- Working capital of $81.0 million
at December 31, 2014 increased by
$17.6 million, or $1.46 per diluted share, from $63.4 million at September
30, 2014. During the fourth quarter, our Home Loan
Center, Inc. subsidiary completed a global settlement with the
largest investor to which it had previously sold loans. This
settlement resulted in a reduction to the loan loss reserve of
$19.6 million. Working capital
is calculated as current assets (including unrestricted and
restricted cash) minus current liabilities (including loan loss
reserves).
- During the quarter, the Company purchased a total of 1,500
shares of its stock for approximately $0.1
million.
Full Year 2014 Financial and Operating Highlights
- Full-year 2014 revenue of $167.4
million exceeded prior guidance and represents
year-over-year growth of 20%. Included in this result is
$134.1 million of mortgage products
revenue which, increased 9% year-over-year, while total mortgage
originations industry-wide fell 38% in the same period.
Revenue from non-mortgage products grew to $33.2 million, more than doubling the prior
year's result at a growth rate of 114%.
- Full-year 2014 Variable Marketing Margin of $65.2 million, or 39% of revenue, increased 11%
compared to full-year 2013.
- Net loss from continuing operations of $0.5 million.
- Adjusted EBITDA of $21.8 million
exceeded prior guidance and represents year-over-year growth of
17%.
- Net loss per diluted share from continuing operations of
$0.04; Adjusted Net Income per Share
of $1.59 represents an increase of
$0.27, or 20%, over full-year
2013.
Business Outlook - 2015
LendingTree is providing revenue, Variable Marketing Margin and
Adjusted EBITDA guidance for first quarter 2015 and increasing its
full-year 2015 outlook, as follows:
For first quarter 2015:
- LendingTree anticipates revenue to be in the range of
$46.0 - $48.0 million, a 15% - 20%
increase over first quarter 2014.
- Variable Marketing Margin is anticipated to be $19.0 - $20.0 million, an increase of 25% - 31%
over first quarter 2014.
- Adjusted EBITDA is anticipated to be in the range of
$6.0 - $7.0 million, up 34% - 56%
over first quarter 2014
For full year 2015:
- Revenue is now anticipated to be $192.5
- $200.8, or 15% - 20% over full-year 2014, an increase from
previous guidance of 12% - 15% growth.
- Variable Marketing Margin is now anticipated to be in the range
of $76.0 - $80.0 million, an increase
of 17% - 23% over full-year 2014 and up from previous guidance of
$73.0 - $77.0 million.
- Adjusted EBITDA is now anticipated to be in the range of
$27.0 - $29.0 million, implying
year-over-year growth of 24% - 33%, an increase from previous
guidance of $25.5 - $26.5
million.
Quarterly Conference Call
A conference call to discuss LendingTree's fourth quarter and
full-year 2014 financial results will be webcast live today,
February 25, 2015 at 4:30 PM Eastern Time (ET). The live audiocast is
open to the public and will be available on LendingTree's investor
relations website at http://investors.lendingtree.com/. The call
may also be accessed toll-free via phone at (877) 606-1416. Callers
outside the United States and
Canada may dial (707) 287-9313.
Following completion of the call, a recorded replay of the webcast
will be available on LendingTree's investor relations website until
11:59 PM ET on Monday, March 2, 2015. To listen to the telephone
replay, call toll-free (855) 859-2056 with passcode #87058149.
Callers outside the United States
and Canada may dial (404)
537-3406 with passcode #87058149.
|
LENDINGTREE, INC.
AND SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
|
|
|
Three Months Ended
December 31,
|
|
|
Twelve Months
Ended December 31,
|
|
2014
|
|
2013
|
|
|
2014
|
|
2013
|
|
(In thousands, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
43,864
|
|
|
$
|
36,411
|
|
|
$
|
167,350
|
|
|
$
|
139,240
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation) (1)
|
2,233
|
|
|
1,503
|
|
|
7,903
|
|
|
6,542
|
|
Selling and marketing
expense (1)
|
29,123
|
|
|
22,648
|
|
|
112,704
|
|
|
91,121
|
|
General and
administrative expense (1)
|
7,682
|
|
|
6,841
|
|
|
25,883
|
|
|
24,658
|
|
Product development
(1)
|
2,041
|
|
|
1,350
|
|
|
7,457
|
|
|
5,264
|
|
Depreciation
|
704
|
|
|
853
|
|
|
3,245
|
|
|
3,501
|
|
Amortization of
intangibles
|
40
|
|
|
28
|
|
|
136
|
|
|
147
|
|
Restructuring and
severance
|
141
|
|
|
83
|
|
|
373
|
|
|
159
|
|
Litigation
settlements and contingencies
|
188
|
|
|
2,143
|
|
|
10,618
|
|
|
8,955
|
|
Total costs and
expenses
|
42,152
|
|
|
35,449
|
|
|
168,319
|
|
|
140,347
|
|
Operating income
(loss)
|
1,712
|
|
|
962
|
|
|
(969)
|
|
|
(1,107)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
(1)
|
|
|
(1)
|
|
|
(2)
|
|
|
(19)
|
|
Income (loss)
before income taxes
|
1,711
|
|
|
961
|
|
|
(971)
|
|
|
(1,126)
|
|
Income tax
benefit
|
398
|
|
|
356
|
|
|
484
|
|
|
453
|
|
Net income (loss)
from continuing operations
|
2,109
|
|
|
1,317
|
|
|
(487)
|
|
|
(673)
|
|
Discontinued
operations:
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) from sale
of discontinued operations, net of tax
|
—
|
|
|
(540)
|
|
|
—
|
|
|
9,561
|
|
Income (loss) from
operations of discontinued operations, net of tax
|
13,528
|
|
|
(979)
|
|
|
9,849
|
|
|
(4,941)
|
|
Income (loss) from
discontinued operations
|
13,528
|
|
|
(1,519)
|
|
|
9,849
|
|
|
4,620
|
|
Net income
(loss)
|
$
|
15,637
|
|
|
$
|
(202)
|
|
|
$
|
9,362
|
|
|
$
|
3,947
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
11,212
|
|
|
11,025
|
|
|
11,188
|
|
|
11,035
|
|
Diluted
|
12,031
|
|
|
11,839
|
|
|
11,188
|
|
|
11,035
|
|
Income (loss) per
share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.19
|
|
|
$
|
0.12
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.06)
|
|
Diluted
|
$
|
0.18
|
|
|
$
|
0.11
|
|
|
$
|
(0.04)
|
|
|
$
|
(0.06)
|
|
Income (loss) per
share from discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.21
|
|
|
$
|
(0.14)
|
|
|
$
|
0.88
|
|
|
$
|
0.42
|
|
Diluted
|
$
|
1.12
|
|
|
$
|
(0.13)
|
|
|
$
|
0.88
|
|
|
$
|
0.42
|
|
Net income (loss)
per share:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.39
|
|
|
$
|
(0.02)
|
|
|
$
|
0.84
|
|
|
$
|
0.36
|
|
Diluted
|
$
|
1.30
|
|
|
$
|
(0.02)
|
|
|
$
|
0.84
|
|
|
$
|
0.36
|
|
(1) Amounts
include non-cash compensation, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenue
|
$
|
8
|
|
|
$
|
4
|
|
|
$
|
32
|
|
|
$
|
13
|
|
Selling and marketing
expense
|
237
|
|
|
166
|
|
|
901
|
|
|
931
|
|
General and
administrative expense
|
1,867
|
|
|
956
|
|
|
5,148
|
|
|
3,841
|
|
Product
development
|
342
|
|
|
223
|
|
|
1,196
|
|
|
842
|
|
LENDINGTREE, INC.
AND SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
|
|
December 31,
2014
|
|
December 31,
2013
|
|
(in thousands,
except par value and share amounts)
|
|
ASSETS:
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
86,212
|
|
|
$
|
91,667
|
|
Restricted cash and
cash equivalents
|
18,716
|
|
|
26,017
|
|
Accounts receivable,
net of allowance of $349 and $408, respectively
|
13,611
|
|
|
12,850
|
|
Prepaid and other
current assets
|
931
|
|
|
1,689
|
|
Current assets of
discontinued operations
|
189
|
|
|
521
|
|
Total current
assets
|
119,659
|
|
|
132,744
|
|
Property and
equipment
|
5,257
|
|
|
5,344
|
|
Goodwill
|
3,632
|
|
|
3,632
|
|
Intangible assets,
net
|
11,141
|
|
|
10,684
|
|
Other non-current
assets
|
102
|
|
|
111
|
|
Non-current assets of
discontinued operations
|
100
|
|
|
129
|
|
Total
assets
|
$
|
139,891
|
|
|
$
|
152,644
|
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
|
|
Accounts payable,
trade
|
$
|
1,060
|
|
|
$
|
4,881
|
|
Accrued expenses and
other current liabilities
|
25,521
|
|
|
23,314
|
|
Current liabilities
of discontinued operations
|
12,055
|
|
|
32,004
|
|
Total current
liabilities
|
38,636
|
|
|
60,199
|
|
Other non-current
liabilities
|
—
|
|
|
334
|
|
Deferred income
taxes
|
4,738
|
|
|
4,849
|
|
Non-current
liabilities of discontinued operations
|
151
|
|
|
254
|
|
Total
liabilities
|
43,525
|
|
|
65,636
|
|
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; 12,854,517 and 12,619,835
shares issued, respectively, and 11,386,240 and 11,250,903 shares
outstanding, respectively
|
129
|
|
|
126
|
|
Additional paid-in
capital
|
909,751
|
|
|
907,148
|
|
Accumulated
deficit
|
(798,171)
|
|
|
(807,533)
|
|
Treasury stock
1,468,277 and 1,368,932 shares, respectively
|
(15,343)
|
|
|
(12,733)
|
|
Total
shareholders' equity
|
96,366
|
|
|
87,008
|
|
Total liabilities
and shareholders' equity
|
$
|
139,891
|
|
|
$
|
152,644
|
|
LENDINGTREE'S
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
|
|
|
Below is a
reconciliation of adjusted EBITDA and adjusted net income to net
income from continuing operations, adjusted EBITDA % of revenue to
net income from continuing operations % of revenue and adjusted net
income per share to net income per diluted share from continuing
operations. See "LendingTree's Principles of Financial Reporting"
for further discussion of the Company's use of these non-GAAP
measures.
|
|
|
Three months
ended
|
|
|
Twelve months
ended
|
|
December 31,
2014
|
September 30,
2014
|
December 31,
2013
|
|
|
December 31,
2014
|
December 31,
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
$
|
6,035
|
|
$
|
5,791
|
|
$
|
5,908
|
|
|
|
$
|
21,827
|
|
$
|
18,717
|
|
|
Adjusted EBITDA %
of revenue
|
14
|
%
|
14
|
%
|
16
|
%
|
|
|
13
|
%
|
13
|
%
|
|
Adjustments to
reconcile to net income from
continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
(704)
|
|
(840)
|
|
(853)
|
|
|
|
(3,245)
|
|
(3,501)
|
|
|
Amortization of
intangibles
|
(40)
|
|
(41)
|
|
(28)
|
|
|
|
(136)
|
|
(147)
|
|
|
Interest
expense
|
(1)
|
|
(1)
|
|
(1)
|
|
|
|
(2)
|
|
(19)
|
|
|
Income tax
benefit
|
398
|
|
2
|
|
356
|
|
|
|
484
|
|
453
|
|
|
Adjusted net
income
|
5,688
|
|
4,911
|
|
5,382
|
|
|
|
18,928
|
|
15,503
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
compensation
|
(2,454)
|
|
(1,786)
|
|
(1,349)
|
|
|
|
(7,277)
|
|
(5,627)
|
|
|
Loss on disposal of
assets
|
(45)
|
|
(185)
|
|
(140)
|
|
|
|
(282)
|
|
(165)
|
|
|
Impairment of
assets
|
(805)
|
|
—
|
|
—
|
|
|
|
(805)
|
|
—
|
|
|
Acquisition
expense
|
54
|
|
(40)
|
|
—
|
|
|
|
(60)
|
|
—
|
|
|
Discretionary cash
bonus
|
—
|
|
—
|
|
—
|
|
|
|
—
|
|
(920)
|
|
|
Trust
contribution
|
—
|
|
—
|
|
(350)
|
|
|
|
—
|
|
(350)
|
|
|
Restructuring and
severance
|
(141)
|
|
(7)
|
|
(83)
|
|
|
|
(373)
|
|
(159)
|
|
|
Litigation
settlements and contingencies (1)
|
(188)
|
|
(2,338)
|
|
(2,143)
|
|
|
|
(10,618)
|
|
(8,955)
|
|
|
Net income (loss)
from continuing operations
|
$
|
2,109
|
|
$
|
555
|
|
$
|
1,317
|
|
|
|
$
|
(487)
|
|
$
|
(673)
|
|
|
Net income from
continuing operations % of revenue
|
5
|
%
|
1
|
%
|
4
|
%
|
|
|
—
|
%
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income per share
|
$
|
0.47
|
|
$
|
0.41
|
|
$
|
0.45
|
|
|
|
$
|
1.59
|
|
$
|
1.32
|
|
|
Adjustments to
reconcile adjusted net income to net income (loss) from continuing
operations
|
$
|
(0.29)
|
|
$
|
(0.36)
|
|
$
|
(0.34)
|
|
|
|
$
|
(1.74)
|
|
$
|
(1.47)
|
|
|
Adjustments to
reconcile effect of dilutive securities
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
|
|
$
|
0.11
|
|
$
|
0.09
|
|
|
Net income (loss)
per diluted share from continuing operations
|
$
|
0.18
|
|
$
|
0.05
|
|
$
|
0.11
|
|
|
|
$
|
(0.04)
|
|
$
|
(0.06)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted weighted
average diluted shares outstanding
|
12,031
|
|
11,836
|
|
11,839
|
|
|
|
11,886
|
|
11,765
|
|
|
Effect of dilutive
securities
|
—
|
|
—
|
|
—
|
|
|
|
698
|
|
730
|
|
|
Weighted average
diluted shares outstanding
|
12,031
|
|
11,836
|
|
11,839
|
|
|
|
11,188
|
|
11,035
|
|
|
Effect of dilutive
securities
|
819
|
|
654
|
|
814
|
|
|
|
—
|
|
—
|
|
|
Weighted average
basic shares outstanding
|
11,212
|
|
11,182
|
|
11,025
|
|
|
|
11,188
|
|
11,035
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes legal
fees for certain patent litigation.
|
LENDINGTREE'S PRINCIPLES OF FINANCIAL REPORTING
LendingTree reports Earnings Before Interest, Taxes,
Depreciation and Amortization, as adjusted for certain items
discussed below ("Adjusted EBITDA"), Adjusted EBITDA % of revenue,
adjusted net income and adjusted net income per share as
supplemental measures to GAAP.
Adjusted EBITDA and Adjusted EBITDA % of revenue are primary
metrics by which LendingTree evaluates the operating performance of
its businesses, on which its marketing expenditures and internal
budgets are based and, in the case of adjusted EBITDA, by which
management and many employees are compensated. LendingTree believes
that investors should have access to the same set of tools that it
uses in analyzing its results. LendingTree believes that adjusted
net income and adjusted net income per share are useful financial
indicators that provide a different view of the financial
performance of the Company than adjusted EBITDA (the primary metric
by which LendingTree evaluates the operating performance of its
businesses) and the GAAP measures of net income (loss) from
continuing operations and GAAP income (loss) per diluted share.
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, loss on disposal of assets,
acquisition expense, restructuring and severance, and litigation
settlements and contingencies, 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.
LendingTree provides and encourages investors to examine the
reconciling adjustments between the GAAP and non-GAAP measures set
forth above. LendingTree is not able to provide a reconciliation of
projected adjusted EBITDA to expected reported results due to the
unknown effect, timing and potential significance of the effects of
the wind-down of discontinued operations and tax
considerations.
Definition of LendingTree's Non-GAAP Measures
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.
LendingTree endeavors to compensate for the limitations of these
non-GAAP measures by also providing the comparable GAAP measures
with equal or greater prominence and descriptions of the
reconciling items, including quantifying such items, to derive the
non-GAAP measures. These non-GAAP measures may not be
comparable to similarly titled measures used by other
companies.
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 SEC rules. For the periods
presented in this report, there are no adjustments for one-time
items, except for a compensation charge of $0.9 million related to a discretionary cash
bonus payment to employee stock option holders in Q1 2013 and a
$0.4 million contribution to a trust
in Q4 2013.
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
LendingTree includes the related shares in its calculations of
fully diluted shares outstanding. Upon settlement of restricted
stock units, exercise of certain stock options or vesting of
restricted stock awards, the awards may be settled on a net basis,
with LendingTree remitting the required tax withholding amounts
from its current funds.
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 LendingTree and members of
our management team. Factors currently known to management that
could cause actual results to differ materially from those in
forward-looking statements include the following: adverse
conditions in the primary and secondary mortgage markets and in the
economy, particularly interest rates; seasonality of results;
potential liabilities to secondary market purchasers; changes in
the Company's relationships with network lenders; breaches of
network security or the misappropriation or misuse of personal
consumer information; failure to provide competitive service;
failure to maintain brand recognition; ability to attract and
retain customers in a cost-effective manner; ability to develop new
products and services and enhance existing ones; competition;
allegations of failure to comply with existing or changing laws,
rules or regulations, or to obtain and maintain required licenses;
failure of network lenders or other affiliated parties to comply
with regulatory requirements; failure to maintain the integrity of
systems and infrastructure; liabilities as a result of privacy
regulations; failure to adequately protect intellectual property
rights or allegations of infringement of intellectual property
rights; and changes in management. These and additional factors to
be considered are set forth under "Risk Factors" in our Annual
Report on Form 10-K for the period ended December 31, 2013 and our Quarterly Report on
Form 10-Q for the period ended September 30,
2014, and in our other filings with the Securities and
Exchange Commission. We undertake no obligation to update or revise
forward-looking statements to reflect changed assumptions, the
occurrence of unanticipated events or changes to future operating
results or expectations.
About LendingTree, Inc.
LendingTree, Inc. (NASDAQ: TREE) operates the nation's leading
online loan marketplace and provides consumers with an array of
online tools and information to help them find the best loans for
their needs. LendingTree's online marketplace connects
consumers with multiple lenders that compete for their business,
empowering consumers as they comparison-shop across a full suite of
loans and credit-based offerings. Since inception,
LendingTree has facilitated more than 35 million loan
requests. LendingTree provides access to lenders offering
home loans, home equity loans/lines of credit, personal loans, auto
loans, student loans and more.
LendingTree, Inc. is headquartered in Charlotte, NC and maintains operations solely
in the United States. For more
information, please visit www.lendingtree.com.
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SOURCE LendingTree, Inc.