LENDINGTREE, INC. CHARLOTTE, N.C., May 4, 2016 /PRNewswire/ --
-- Record Revenue of $94.7 million; up 86% over first quarter 2015
-- Record Variable Marketing Margin of $34.1 million; up 61% over first
quarter 2015
-- Net Income from Continuing Operations of $6.9 million
-- Record Adjusted EBITDA of $15.8 million; up 78% over first quarter 2015
-- Income per Diluted Share from Continuing Operations of $0.54; Adjusted
Net Income per Share of $0.76
-- Record revenue from mortgage products of $55.0 million, up 49% over
first quarter 2015
-- Record revenue from non-mortgage products of $39.7 million, up 186% over
first quarter 2015
-- Increasing full-year 2016 Revenue & Variable Marketing Margin guidance
LendingTree, Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation's leading online loan marketplace, today announced results for the quarter ended March 31, 2016.
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"We had an outstanding start to the year," said Doug Lebda, Chairman and CEO. "Every lending category experienced both quarter-over-quarter and year-over-year growth, exceeding our guidance across the board. Mortgage performed exceptionally well with purchase and refinance each experiencing impressive growth, once again outpacing the overall mortgage market. In non-mortgage, the growth trajectory continued across all categories. Personal loans, home equity and reverse mortgage each experienced triple-digit year over year growth and revenue from credit cards increased almost 40 times over the same quarter last year. We are thrilled with this quarter's results, and we are particularly excited about the long-term growth opportunities ahead."
Gabe Dalporto, Chief Financial Officer added, "Once again, we delivered record revenue, Variable Marketing Margin and Adjusted EBITDA. Our first quarter results clearly demonstrate the type of top and bottom-line growth this business is capable of. We are committed to delivering both near-term profits and long-term growth to our shareholders. Given our relative outperformance in the first quarter, we're choosing to accelerate investment in several key initiatives throughout the second quarter that are expected to yield gains in the second half of the year and beyond. With that in mind, we're increasing our revenue outlook for the full year and maintaining our Adjusted EBITDA guidance of $62 to $65 million which, at the mid-point, reflects year-over-year growth of 56 percent."
First Quarter 2016 Business Highlights
-- Revenue from mortgage products of $55.0 million represents an increase
of 49% over first quarter 2015 and sequential growth of 17% compared to
fourth quarter 2015. These results reflect substantial growth in both
new purchase and refinance and further demonstrate our ability to grow
market share. Mortgage originations nationwide increased 4% year over
year and declined 14% sequentially, according to Mortgage Bankers
Association.
-- Revenue from non-mortgage products of $39.7 million in the first quarter
represents an increase of 186% over the first quarter 2015 and now
comprises 42% of total revenue.
-- Notably, revenue from all of our lending categories grew compared to
both the prior year and prior quarter periods.
-- Enrollment growth in My LendingTree continued, as more than 3 million
consumers have now joined the My LendingTree personalization platform.
LendingTree Selected Financial Metrics
(In millions, except per share amounts)
--------------------------------------
Q/Q Y/Y
Q1 2016 Q4 2015 % Change Q1 2015 % Change
------- ------- -------- ------- --------
Revenue by Product
Mortgage Products (1) $55.0 $46.9 17% $37.0 49%
Non-Mortgage Products (2) 39.7 31.4 26% 13.9 186%
Total Revenue $94.7 $78.3 21% $50.9 86%
Non-Mortgage % of Total 42% 40% 27%
Selling and Marketing Expense
Exchanges Marketing Expense (3) $60.6 $50.3 20% $29.7 104%
Other Selling & Marketing 4.5 3.9 15% 3.1 45%
--- --- ---
Selling and Marketing Expense $65.1 $54.2 20% $32.8 98%
Variable Marketing Margin (4) $34.1 $28.0 22% $21.2 61%
Variable Marketing Margin % of Revenue 36% 36% 42%
Income Before Income Taxes $11.7 $8.1 44% $5.7 105%
Income Tax (Expense) / Benefit $(4.8) $23.9 N/A $(0.3) N/A
----- ----- -----
Net Income from Continuing Operations $6.9 $32.1 (79)% $5.4 28%
Net Income from Cont. Ops. % of Revenue 7% 41% 11%
Net Income per Share from Cont. Ops.
Basic $0.58 $2.69 (78)% $0.48 21%
Diluted $0.54 $2.47 (78)% $0.44 23%
Adjusted EBITDA (5) $15.8 $12.0 32% $8.9 78%
Adjusted EBITDA % of Revenue (5) 17% 15% 18%
Adjusted Net Income (5) $9.8 $34.9 (72)% $7.9 24%
Adjusted Net Income per Share (5) $0.76 $2.69 (72)% $0.65 17%
(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
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.
First Quarter 2016 Financial Highlights
-- Record consolidated revenue of $94.7 million represents an increase of
$43.8 million, or 86%, over revenue in the first quarter 2015.
-- Record Variable Marketing Margin of $34.1 million represents an increase
of $12.9 million, or 61%, over first quarter 2015. At 36% of revenue,
Variable Marketing Margin percentage was consistent with the prior
quarter.
-- Record Adjusted EBITDA of $15.8 million increased $6.9 million, or 78%,
over first quarter 2015. Adjusted EBITDA as percent of revenue improved
to 17%, up from 15% in fourth quarter 2015.
-- Income per diluted share from continuing operations of $0.54. Adjusted
Net Income per share of $0.76 representing growth of 17% over first
quarter 2015. Both GAAP and Adjusted Net Income per share reflect the
full $4.8 million income tax expense recorded in accordance with GAAP.
-- During the first quarter 2015, the company repurchased 580 thousand
shares of its stock at a weighted-average price per share of $69.97 for
aggregate consideration of $40.6 million. As of March 31, 2015, the
company has $56.7 million in repurchase authorization remaining.
Business Outlook - 2016
LendingTree is providing Revenue, Variable Marketing Margin and Adjusted EBITDA guidance for second quarter 2016 and updating full-year 2016 guidance, as follows:
For second quarter 2016:
-- Revenue is anticipated to be $95.0 - $97.0 million, or 72% - 76% over
second quarter 2015.
-- Variable Marketing Margin is anticipated to be in the range of $32.0 -
$33.5 million.
-- Adjusted EBITDA is anticipated to be in the range of $13.5 - $15.0
million, implying year-over-year growth of 52% - 69%.
For full-year 2016:
-- Revenue is now anticipated to be in the range of $380 - $390 million, or
49% - 53% over full-year 2015, an increase from prior guidance of $370 -
$380 million.
-- Variable Marketing Margin is now anticipated to be $134 - $137 million,
or 41% - 44% over full-year 2015, an increase from prior guidance of
$129 - $134 million.
-- Adjusted EBITDA is anticipated to remain in the range of $62 - $65
million, or 52% - 59% compared to full-year 2015.
Quarterly Conference Call
A conference call to discuss LendingTree's first quarter 2016 financial results will be webcast live today, May 4, 2016 at 9:00 AM 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 12:00 PM ET on Wednesday, May 11, 2016. To listen to the telephone replay, call toll-free (855) 859-2056 with passcode #94919674. Callers outside the United States and Canada may dial (404) 537-3406 with passcode #94919674.
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
March 31,
---------
2016 2015
---- ----
(in thousands, except per share
amounts)
Revenue $94,713 $50,935
Costs and expenses:
Cost of
revenue
(exclusive of
depreciation
shown
separately
below) 3,473 1,975
Selling and
marketing
expense 65,059 32,837
General and
administrative
expense 9,259 7,228
Product
development 3,885 2,173
Depreciation 998 654
Amortization
of
intangibles 25 62
Restructuring
and severance - 6
Litigation
settlements
and
contingencies 169 282
Total costs
and expenses 82,868 45,217
------------- ------ ------
Operating
income 11,845 5,718
Other income (expense), net:
Interest
(expense)
income (142) 2
---------- ---- ---
Income before
income taxes 11,703 5,720
Income tax
expense (4,798) (307)
---------- ------ ----
Net income
from
continuing
operations 6,905 5,413
Loss from
discontinued
operations (1,203) (226)
------------- ------ ----
Net income and
comprehensive
income $5,702 $5,187
-------------- ------ ------
Weighted average shares
outstanding:
Basic 11,931 11,304
Diluted 12,873 12,165
Income per share from continuing
operations:
Basic $0.58 $0.48
Diluted $0.54 $0.44
Loss per share from discontinued
operations:
Basic $(0.10) $(0.02)
Diluted $(0.09) $(0.02)
Net income per share:
Basic $0.48 $0.46
Diluted $0.44 $0.43
------- ----- -----
(1) Amounts include non-cash
compensation, as follows:
Cost of
revenue $41 $20
Selling and
marketing
expense 726 270
General and
administrative
expense 1,310 1,606
Product
development 556 440
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31, December 31,
2016 2015
---- ----
(in thousands, except par value and share
amounts)
ASSETS:
Cash and cash equivalents $174,226 $206,975
Restricted cash and cash
equivalents 4,084 6,541
Accounts receivable, net 36,767 29,873
Prepaid and other current assets 3,237 2,085
Current assets of discontinued
operations 64 110
------------------------------ --- ---
Total current assets 218,378 245,584
Property and equipment, net 10,172 9,415
Goodwill 3,632 3,632
Intangible assets, net 10,967 10,992
Deferred income tax assets 20,017 20,977
Other non-current assets 978 1,039
Non-current assets of
discontinued operations 4,142 4,142
Total assets $268,286 $295,781
------------ -------- --------
LIABILITIES:
Accounts payable, trade $3,163 $5,741
Accrued expenses and other
current liabilities 40,854 34,885
Current liabilities of
discontinued operations 14,896 13,401
------------------------ ------ ------
Total current liabilities 58,913 54,027
Other non-current liabilities 758 586
Non-current liabilities of
discontinued operations 26 26
Total liabilities 59,697 54,639
----------------- ------ ------
Commitments and contingencies
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;
13,935,835 and 13,865,620 shares
issued, respectively, and
11,882,294 and 12,392,093 shares
outstanding, respectively 139 139
Additional paid-in capital 1,009,033 1,006,688
Accumulated deficit (744,422) (750,124)
Treasury stock 2,053,541 and
1,473,527 shares, respectively (56,161) (15,561)
------------------------------- ------- -------
Total shareholders' equity 208,589 241,142
-------------------------- ------- -------
Total liabilities and
shareholders' equity $268,286 $295,781
--------------------- -------- --------
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
------------------
March 31, December 31, March 31,
2016 2015 2015
---- ---- ----
Adjusted EBITDA $15,797 $11,981 $8,936
--------------- ------- ------- ------
Adjusted EBITDA % of
revenue 17% 15% 18%
Adjustments to reconcile
to net income from
continuing operations:
Depreciation (998) (873) (654)
Amortization of
intangibles (25) (25) (62)
Interest (expense) income (142) (108) 2
Income tax (expense)
benefit (4,798) 23,941 (307)
------ ------ ----
Adjusted net income 9,834 34,916 7,915
------------------- ----- ------ -----
Non-cash compensation (2,633) (2,137) (2,336)
Loss on disposal of assets (127) (646) (28)
Acquisition expense - - 150
Restructuring and
severance - - (6)
Litigation settlements and
contingencies (1) (169) (52) (282)
-------------------------- ---- --- ----
Net income from continuing
operations $6,905 $32,081 $5,413
-------------------------- ------ ------- ------
Net income from continuing
operations % of revenue 7% 41% 11%
Adjusted net income per
share $0.76 $2.69 $0.65
----------------------- ----- ----- -----
Adjustments to reconcile
adjusted net income to
net income from
continuing operations $(0.22) $(0.22) $(0.21)
Adjustments to reconcile
effect of dilutive
securities $ - $ - $ -
------------------------ --- --- --- --- --- ---
Net income per diluted
share from continuing
operations $0.54 $2.47 $0.44
---------------------- ----- ----- -----
Adjusted weighted average
diluted shares
outstanding 12,873 12,972 12,165
Effect of dilutive
securities - - -
Weighted average diluted
shares outstanding 12,873 12,972 12,165
Effect of dilutive
securities 942 1,046 861
Weighted average basic
shares outstanding 11,931 11,926 11,304
(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 from continuing operations and GAAP income (loss) per diluted share.
Adjusted net income and adjusted net income per share supplement GAAP income 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. 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) gain/loss on disposal of assets, (3) restructuring and severance expenses, (4) litigation settlements, contingencies and legal fees for certain patent litigation, (5) adjustments for acquisitions or dispositions, and (6) one-time items.
Adjusted net income is defined as net income (loss) from continuing operations excluding (1) non-cash compensation expense, (2) gain/loss on disposal of assets, (3) restructuring and severance expenses, (4) litigation settlements, contingencies and legal fees for certain patent litigation, (5) adjustments for acquisitions or dispositions, and (6) 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.
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; default rates on loans, particularly unsecured loans; demand by investors for unsecured personal loans; the effect of such demand on interest rates for personal loans and consumer demand for personal loans; 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, 2015 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 its inception, LendingTree has facilitated more than 55 million loan requests. LendingTree provides access to its network of over 350 lenders offering home loans, home equity loans/lines of credit, reverse mortgages, personal loans, auto loans, small business loans, credit cards, 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.
