CHARLOTTE, N.C., Oct. 28, 2021 /PRNewswire/ -- LendingTree,
Inc. (NASDAQ: TREE), operator of LendingTree.com, the nation's
leading online financial services marketplace, today announced
results for the quarter ended September 30, 2021. The company
has posted a letter to shareholders on the company's website at
investors.lendingtree.com.
"We are pleased to report another strong quarter as our business
continues to rebound toward pre-pandemic revenue levels," said
Doug Lebda, Chairman and CEO.
"Our Home segment produced record results in the quarter, and we
remain encouraged with the ongoing recovery in our Consumer
segment. Despite industry headwinds impacting our insurance
partners, we are operating that business from a position of
strength, and are well positioned to grow market share as the
industry rebounds."
Trent Ziegler, CFO, added, "The
benefit of our diversification was apparent this quarter as strong
results in our Home and Consumer segments helped offset headwinds
in our Insurance business resulting from reduced partner spend. We
view this insurance cycle as transitory and remain optimistic
trends will normalize in the first half of next year. Our
balance sheet is as strong as ever, providing us flexibility to
execute on our capital allocation strategy over the coming
quarters."
Third Quarter 2021 Business Highlights
- Home segment revenue of $112.4
million grew 42% over third quarter 2020 and produced
segment profit of $41.5 million, up
65% over the same period.
-
- Within Home, mortgage products revenue of $92.6 million grew 31% over the prior year
period.
- Consumer segment revenue of $100.0
million grew 107% over third quarter 2020 as trends
continued to improve in credit card, personal loans and small
business. Segment profit improved to $44.7
million, up 107% year-over-year.
-
- Within Consumer, personal loans revenue of $33.8 million increased 34% over second quarter
2021.
- Credit card revenue of $26.9
million grew 20% over second quarter 2021.
- Small business revenue of $14.8
million increased 53% over second quarter 2021.
- Insurance segment revenue of $84.8
million declined 8% over third quarter 2020 and translated
into Insurance segment profit of $26.6
million, down 28% over the same period.
- Through September 30, 2021, 20.0
million consumers have signed up for My LendingTree.
LendingTree
Summary Financial Metrics
|
(In millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Y/Y
|
|
|
Three Months
Ended
June 30,
|
|
Q/Q
|
|
|
2021
|
|
2020
|
|
%
Change
|
|
|
2021
|
|
%
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
|
297.4
|
|
|
$
|
220.3
|
|
|
35
|
%
|
|
|
$
|
270.0
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income before
income taxes
|
$
|
(4.4)
|
|
|
$
|
(32.7)
|
|
|
(87)
|
%
|
|
|
$
|
0.7
|
|
|
(729)
|
%
|
|
Income tax
benefit
|
$
|
—
|
|
|
$
|
7.9
|
|
|
(100)
|
%
|
|
|
$
|
9.1
|
|
|
(100)
|
%
|
|
Net (loss) income
from continuing
operations
|
$
|
(4.4)
|
|
|
$
|
(24.8)
|
|
|
(82)
|
%
|
|
|
$
|
9.8
|
|
|
(145)
|
%
|
|
Net (loss) income
from continuing
operations % of revenue
|
(1)
|
%
|
|
(11)
|
%
|
|
|
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) income per
share from continuing
operations
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.33)
|
|
|
$
|
(1.90)
|
|
|
(83)
|
%
|
|
|
$
|
0.74
|
|
|
(145)
|
%
|
|
Diluted
|
$
|
(0.33)
|
|
|
$
|
(1.90)
|
|
|
(83)
|
%
|
|
|
$
|
0.71
|
|
|
(146)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Variable marketing
margin
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
|
297.4
|
|
|
$
|
220.3
|
|
|
35
|
%
|
|
|
$
|
270.0
|
|
|
10
|
%
|
|
Variable marketing
expense (1) (2)
|
$
|
(191.5)
|
|
|
$
|
(142.2)
|
|
|
35
|
%
|
|
|
$
|
(171.6)
|
|
|
12
|
%
|
|
Variable marketing
margin (2)
|
$
|
105.9
|
|
|
$
|
78.1
|
|
|
36
|
%
|
|
|
$
|
98.4
|
|
|
8
|
%
|
|
Variable marketing
margin % of revenue (2)
|
36
|
%
|
|
35
|
%
|
|
|
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
|
41.0
|
|
|
$
|
21.7
|
|
|
89
|
%
|
|
|
$
|
38.2
|
|
|
7
|
%
|
|
Adjusted EBITDA %
of revenue (2)
|
14
|
%
|
|
10
|
%
|
|
|
|
|
14
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) (2)
|
$
|
10.3
|
|
|
$
|
(3.4)
|
|
|
403
|
%
|
|
|
$
|
10.4
|
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net
income (loss) per share (2)
|
$
|
0.75
|
|
|
$
|
(0.26)
|
|
|
388
|
%
|
|
|
$
|
0.76
|
|
|
(1)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Represents the
portion of selling and marketing expense attributable to variable
costs paid for advertising, direct marketing and related expenses.
Excludes overhead, fixed costs and personnel-related
expenses.
|
(2)
|
Variable marketing
expense, variable marketing margin, variable marketing margin % of
revenue, 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.
|
LendingTree
Segment Results
|
(In
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
September 30,
|
|
Y/Y
|
|
|
Three Months
Ended
June 30,
|
|
Q/Q
|
|
|
2021
|
|
2020
|
|
%
Change
|
|
|
2021
|
|
%
Change
|
|
Home (1)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
112.4
|
|
|
$
|
78.9
|
|
|
42
|
%
|
|
|
$
|
104.9
|
|
|
7
|
%
|
|
Segment
profit
|
$
|
41.5
|
|
|
$
|
25.2
|
|
|
65
|
%
|
|
|
$
|
39.0
|
|
|
6
|
%
|
|
Segment profit % of
revenue
|
37
|
%
|
|
32
|
%
|
|
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consumer (2)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
100.0
|
|
|
$
|
48.4
|
|
|
107
|
%
|
|
|
$
|
75.7
|
|
|
32
|
%
|
|
Segment
profit
|
$
|
44.7
|
|
|
$
|
21.6
|
|
|
107
|
%
|
|
|
$
|
33.4
|
|
|
34
|
%
|
|
Segment profit % of
revenue
|
45
|
%
|
|
45
|
%
|
|
|
|
|
44
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Insurance (3)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
84.8
|
|
|
$
|
92.5
|
|
|
(8)
|
%
|
|
|
$
|
89.3
|
|
|
(5)
|
%
|
|
Segment
profit
|
$
|
26.6
|
|
|
$
|
37.0
|
|
|
(28)
|
%
|
|
|
$
|
33.2
|
|
|
(20)
|
%
|
|
Segment profit % of
revenue
|
31
|
%
|
|
40
|
%
|
|
|
|
|
37
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (4)
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
0.2
|
|
|
$
|
0.5
|
|
|
(60)
|
%
|
|
|
$
|
0.2
|
|
|
—
|
%
|
|
Profit
|
$
|
0.1
|
|
|
$
|
—
|
|
|
100
|
%
|
|
|
$
|
—
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
$
|
297.4
|
|
|
$
|
220.3
|
|
|
35
|
%
|
|
|
$
|
270.0
|
|
|
10
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total segment
profit
|
$
|
112.9
|
|
|
$
|
83.8
|
|
|
35
|
%
|
|
|
$
|
105.6
|
|
|
7
|
%
|
|
Brand marketing expense
(5)
|
$
|
(7.0)
|
|
|
$
|
(5.7)
|
|
|
23
|
%
|
|
|
$
|
(7.2)
|
|
|
(3)
|
%
|
|
Variable marketing
margin
|
$
|
105.9
|
|
|
$
|
78.1
|
|
|
36
|
%
|
|
|
$
|
98.4
|
|
|
8
|
%
|
|
Variable marketing
margin % of revenue
|
36
|
%
|
|
35
|
%
|
|
|
|
|
36
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The Home segment
includes the following products: purchase mortgage, refinance
mortgage, home equity loans, reverse mortgage loans, and real
estate.
|
(2)
|
The Consumer segment
includes the following products: credit cards, personal loans,
small business loans, student loans, auto loans, deposit accounts,
and other credit products such as credit repair and debt
settlement.
|
(3)
|
The Insurance segment
consists of insurance quote products.
|
(4)
|
The Other category
primarily includes marketing revenue and related expenses not
allocated to a specific segment.
|
(5)
|
Brand marketing
expense represents the portion of selling and marketing expense
attributable to variable costs paid for advertising, direct
marketing and related expenses that are not assignable to the
segments' products. This measure excludes overhead, fixed costs and
personnel-related expenses.
|
Financial Outlook
Today we're issuing an outlook for the fourth quarter
2021. Our assumptions reflect current trends and little
change to the macroeconomic drivers we are currently
experiencing.
Our guidance for Q4 2021 assumes the following:
- As in prior years, we expect a seasonal slowdown across most of
our businesses as consumers focus less on finances and media
becomes more expensive around the holidays.
- We expect Home to remain resilient, showing modest sequential
declines, largely driven by seasonal factors.
- In Consumer, we expect typical seasonal headwinds as
fundamentals continue to strengthen.
- In Insurance, well-publicized industry-wide challenges are
expected to negatively impact our results.
- Non-variable expenses are expected to remain stable compared to
the preceding quarter.
Q4 2021 Outlook:
- Revenue: $255 - $270 million
- Variable Marketing Margin: $81 -
$91 million
- Adjusted EBITDA: $18 -
$25 million
LendingTree is not able to provide a reconciliation of projected
variable marketing margin or adjusted EBITDA to the most directly
comparable expected GAAP results due to the unknown effect, timing
and potential significance of the effects of legal matters, tax
considerations, and income and expense from changes in fair value
of contingent consideration from acquisitions. Expenses associated
with legal matters, tax consequences, and income and expense from
changes in fair value of contingent consideration from acquisitions
have in the past, and may in the future, significantly affect GAAP
results in a particular period.
Quarterly Conference Call
A conference call to discuss LendingTree's third quarter 2021
financial results will be webcast live today, October 28, 2021 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 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 Friday, November 5, 2021. To
listen to the telephone replay, call toll-free (855) 859-2056 with
passcode #5046948. Callers outside the
United States and Canada
may dial (404) 537-3406 with passcode #5046948.
LENDINGTREE, INC. AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
|
|
|
Three Months
Ended
September
30,
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
2021
|
|
2020
|
|
(in thousands, except per share
amounts)
|
Revenue
|
$
|
297,450
|
|
|
$
|
220,251
|
|
|
$
|
840,214
|
|
|
$
|
687,661
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
Cost of revenue
(exclusive of depreciation and amortization shown
separately below) (1)
|
15,020
|
|
|
13,220
|
|
|
42,849
|
|
|
40,936
|
|
Selling and marketing
expense (1)
|
206,475
|
|
|
154,670
|
|
|
589,143
|
|
|
464,129
|
|
General and
administrative expense (1)
|
40,126
|
|
|
33,705
|
|
|
114,926
|
|
|
94,276
|
|
Product development
(1)
|
13,384
|
|
|
11,477
|
|
|
39,142
|
|
|
33,252
|
|
Depreciation
|
4,808
|
|
|
3,535
|
|
|
12,969
|
|
|
10,463
|
|
Amortization of
intangibles
|
10,345
|
|
|
13,090
|
|
|
32,967
|
|
|
40,603
|
|
Change in fair value
of contingent consideration
|
(196)
|
|
|
6,658
|
|
|
(8,249)
|
|
|
7,711
|
|
Severance
|
47
|
|
|
—
|
|
|
47
|
|
|
190
|
|
Litigation settlements
and contingencies
|
22
|
|
|
13
|
|
|
360
|
|
|
(983)
|
|
Total costs and
expenses
|
290,031
|
|
|
236,368
|
|
|
824,154
|
|
|
690,577
|
|
Operating income
(loss)
|
7,419
|
|
|
(16,117)
|
|
|
16,060
|
|
|
(2,916)
|
|
Other (expense)
income, net:
|
|
|
|
|
|
|
|
Interest expense,
net
|
(11,826)
|
|
|
(16,617)
|
|
|
(31,881)
|
|
|
(26,406)
|
|
Other
income
|
—
|
|
|
—
|
|
|
40,072
|
|
|
7
|
|
(Loss) income
before income taxes
|
(4,407)
|
|
|
(32,734)
|
|
|
24,251
|
|
|
(29,315)
|
|
Income tax
benefit
|
1
|
|
|
7,925
|
|
|
455
|
|
|
14,866
|
|
Net (loss) income
from continuing operations
|
(4,406)
|
|
|
(24,809)
|
|
|
24,706
|
|
|
(14,449)
|
|
(Loss) income from
discontinued operations, net of tax
|
(54)
|
|
|
166
|
|
|
(3,516)
|
|
|
(25,550)
|
|
Net (loss) income
and comprehensive (loss) income
|
$
|
(4,460)
|
|
|
$
|
(24,643)
|
|
|
$
|
21,190
|
|
|
$
|
(39,999)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
13,268
|
|
|
13,033
|
|
|
13,194
|
|
|
12,992
|
|
Diluted
|
13,268
|
|
|
13,033
|
|
|
13,797
|
|
|
12,992
|
|
(Loss) income per
share from continuing operations:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.33)
|
|
|
$
|
(1.90)
|
|
|
$
|
1.87
|
|
|
$
|
(1.11)
|
|
Diluted
|
$
|
(0.33)
|
|
|
$
|
(1.90)
|
|
|
$
|
1.79
|
|
|
$
|
(1.11)
|
|
(Loss) income per
share from discontinued operations:
|
|
|
|
|
|
|
|
Basic
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
(0.27)
|
|
|
$
|
(1.97)
|
|
Diluted
|
$
|
—
|
|
|
$
|
0.01
|
|
|
$
|
(0.25)
|
|
|
$
|
(1.97)
|
|
Net (loss) income
per share:
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.34)
|
|
|
$
|
(1.89)
|
|
|
$
|
1.61
|
|
|
$
|
(3.08)
|
|
Diluted
|
$
|
(0.34)
|
|
|
$
|
(1.89)
|
|
|
$
|
1.54
|
|
|
$
|
(3.08)
|
|
|
|
|
|
|
|
|
|
(1) Amounts include non-cash
compensation, as follows:
|
|
|
|
|
|
|
|
Cost of
revenue
|
$
|
371
|
|
|
$
|
372
|
|
|
$
|
1,231
|
|
|
$
|
947
|
|
Selling and marketing
expense
|
1,805
|
|
|
1,678
|
|
|
5,583
|
|
|
4,431
|
|
General and
administrative expense
|
13,233
|
|
|
10,356
|
|
|
38,658
|
|
|
29,208
|
|
Product
development
|
1,665
|
|
|
1,755
|
|
|
6,332
|
|
|
4,650
|
|
LENDINGTREE, INC. AND
SUBSIDIARIES
CONSOLIDATED
BALANCE SHEETS
(Unaudited)
|
|
|
September
30,
2021
|
|
December 31,
2020
|
|
(in thousands, except par value
and share amounts)
|
ASSETS:
|
|
|
|
Cash and cash
equivalents
|
$
|
215,277
|
|
|
$
|
169,932
|
|
Restricted cash and
cash equivalents
|
108
|
|
|
117
|
|
Accounts receivable,
net
|
131,705
|
|
|
89,841
|
|
Prepaid and other
current assets
|
25,348
|
|
|
27,949
|
|
Current assets of
discontinued operations
|
—
|
|
|
8,570
|
|
Total current
assets
|
372,438
|
|
|
296,409
|
|
Property and
equipment, net
|
74,929
|
|
|
62,381
|
|
Operating lease
right-of-use assets
|
79,355
|
|
|
84,109
|
|
Goodwill
|
420,139
|
|
|
420,139
|
|
Intangible assets,
net
|
95,534
|
|
|
128,502
|
|
Deferred income tax
assets
|
96,679
|
|
|
96,224
|
|
Equity
investment
|
121,253
|
|
|
80,000
|
|
Other non-current
assets
|
7,109
|
|
|
5,334
|
|
Non-current assets of
discontinued operations
|
17,093
|
|
|
15,892
|
|
Total
assets
|
$
|
1,284,529
|
|
|
$
|
1,188,990
|
|
|
|
|
|
LIABILITIES:
|
|
|
|
Current portion of
long-term debt
|
$
|
163,856
|
|
|
$
|
—
|
|
Accounts payable,
trade
|
4,198
|
|
|
10,111
|
|
Accrued expenses and
other current liabilities
|
114,664
|
|
|
101,196
|
|
Current liabilities of
discontinued operations
|
13
|
|
|
536
|
|
Total current
liabilities
|
282,731
|
|
|
111,843
|
|
Long-term
debt
|
471,991
|
|
|
611,412
|
|
Operating lease
liabilities
|
98,314
|
|
|
92,363
|
|
Non-current
contingent consideration
|
—
|
|
|
8,249
|
|
Other non-current
liabilities
|
411
|
|
|
362
|
|
Total
liabilities
|
853,447
|
|
|
824,229
|
|
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; 15,969,376 and
15,766,193 shares issued, respectively, and 13,328,058 and
13,124,875 shares outstanding, respectively
|
160
|
|
|
158
|
|
Additional paid-in
capital
|
1,233,802
|
|
|
1,188,673
|
|
Accumulated
deficit
|
(619,719)
|
|
|
(640,909)
|
|
Treasury stock;
2,641,318 shares
|
(183,161)
|
|
|
(183,161)
|
|
Total
shareholders' equity
|
431,082
|
|
|
364,761
|
|
Total liabilities
and shareholders' equity
|
$
|
1,284,529
|
|
|
$
|
1,188,990
|
|
LENDINGTREE, INC. AND
SUBSIDIARIES
CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
Nine Months
Ended
September
30,
|
|
2021
|
|
2020
|
|
(in thousands)
|
Cash flows from
operating activities attributable to continuing
operations:
|
|
|
|
Net income (loss)
and comprehensive income (loss)
|
$
|
21,190
|
|
|
$
|
(39,999)
|
|
Less: Loss from
discontinued operations, net of tax
|
3,516
|
|
|
25,550
|
|
Income (loss) from
continuing operations
|
24,706
|
|
|
(14,449)
|
|
Adjustments to
reconcile income (loss) from continuing operations to net cash
provided by operating activities attributable to continuing
operations:
|
|
|
|
Loss on
impairments and disposal of assets
|
2,651
|
|
|
686
|
|
Amortization of intangibles
|
32,967
|
|
|
40,603
|
|
Depreciation
|
12,969
|
|
|
10,463
|
|
Non-cash
compensation expense
|
51,804
|
|
|
39,236
|
|
Deferred
income taxes
|
(455)
|
|
|
(15,489)
|
|
Change in
fair value of contingent consideration
|
(8,249)
|
|
|
7,711
|
|
Unrealized gain on investments
|
(40,072)
|
|
|
—
|
|
Bad debt
expense
|
1,823
|
|
|
1,314
|
|
Amortization of debt issuance costs
|
3,756
|
|
|
2,241
|
|
Write-off
of previously-capitalized debt issuance costs
|
1,066
|
|
|
—
|
|
Amortization of debt discount
|
22,297
|
|
|
12,429
|
|
Loss on
extinguishment of debt
|
—
|
|
|
7,768
|
|
Reduction
in carrying amount of ROU asset, offset by change in operating
lease liabilities
|
13,015
|
|
|
2,490
|
|
Changes in current
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(43,688)
|
|
|
15,541
|
|
Prepaid
and other current assets
|
(2,762)
|
|
|
(335)
|
|
Accounts
payable, accrued expenses and other current liabilities
|
7,537
|
|
|
(9,733)
|
|
Current
contingent consideration
|
—
|
|
|
(2,670)
|
|
Income
taxes receivable
|
10,322
|
|
|
65
|
|
Other, net
|
(794)
|
|
|
(1,655)
|
|
Net cash provided
by operating activities attributable to continuing
operations
|
88,893
|
|
|
96,216
|
|
Cash flows from
investing activities attributable to continuing
operations:
|
|
|
|
Capital
expenditures
|
(30,515)
|
|
|
(20,386)
|
|
Equity
investment
|
(1,180)
|
|
|
(80,000)
|
|
Net cash used in
investing activities attributable to continuing
operations
|
(31,695)
|
|
|
(100,386)
|
|
Cash flows from
financing activities attributable to continuing
operations:
|
|
|
|
Payments related to
net-share settlement of stock-based compensation, net of proceeds
from exercise of stock options
|
(6,666)
|
|
|
(1,421)
|
|
Proceeds from the
issuance of 0.50% Convertible Senior Notes
|
—
|
|
|
575,000
|
|
Repurchase of 0.625%
Convertible Senior Notes
|
—
|
|
|
(233,862)
|
|
Payment for
convertible note hedge on the 0.50% Convertible Senior
Notes
|
—
|
|
|
(124,200)
|
|
Termination of
convertible note hedge on the 0.625% Convertible Senior
Notes
|
—
|
|
|
109,881
|
|
Proceeds from the sale
of warrants related to the 0.50% Convertible Senior
Notes
|
—
|
|
|
61,180
|
|
Termination of
warrants related to the 0.625% Convertible Senior Notes
|
—
|
|
|
(94,292)
|
|
Net repayment of
revolving credit facility
|
—
|
|
|
(75,000)
|
|
Payment of debt
issuance costs
|
(5,995)
|
|
|
(16,398)
|
|
Payment of original
issue discount on undrawn term loan
|
(2,500)
|
|
|
—
|
|
Contingent
consideration payments
|
—
|
|
|
(3,330)
|
|
Other financing
activities
|
(31)
|
|
|
(183)
|
|
Net cash (used in)
provided by financing activities attributable to continuing
operations
|
(15,192)
|
|
|
197,375
|
|
Total cash
provided by continuing operations
|
42,006
|
|
|
193,205
|
|
Discontinued
operations:
|
|
|
|
Net cash provided by
(used in) operating activities attributable to discontinued
operations
|
3,330
|
|
|
(66,171)
|
|
Total cash
provided by (used in) discontinued operations
|
3,330
|
|
|
(66,171)
|
|
Net increase in
cash, cash equivalents, restricted cash and restricted cash
equivalents
|
45,336
|
|
|
127,034
|
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents at
beginning of period
|
170,049
|
|
|
60,339
|
|
Cash, cash
equivalents, restricted cash and restricted cash equivalents at end
of period
|
$
|
215,385
|
|
|
$
|
187,373
|
|
LENDINGTREE'S
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
|
|
Variable Marketing
Expense
|
|
Below is a
reconciliation of selling and marketing expense to variable
marketing expense. See "LendingTree's Principles of Financial
Reporting" for further discussion of the Company's use of this
non-GAAP measure.
|
|
|
Three Months
Ended
|
|
September
30,
2021
|
June 30,
2021
|
September
30,
2020
|
|
(in
thousands)
|
Selling and
marketing expense
|
$
|
206,475
|
$
|
185,206
|
$
|
154,670
|
Non-variable selling
and marketing expense (1)
|
(14,928)
|
(13,610)
|
(12,541)
|
Variable marketing
expense
|
$
|
191,547
|
$
|
171,596
|
$
|
142,129
|
|
|
(1)
|
Represents the
portion of selling and marketing expense not attributable to
variable costs paid for advertising, direct marketing and related
expenses. Includes overhead, fixed costs and personnel-related
expenses.
|
LENDINGTREE'S
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
|
|
Variable Marketing
Margin
|
|
Below is a
reconciliation of net (loss) income from continuing operations to
variable marketing margin and net (loss) income from continuing
operations % of revenue to variable marketing margin % of revenue.
See "LendingTree's Principles of Financial Reporting" for further
discussion of the Company's use of these non-GAAP
measures.
|
|
|
Three Months
Ended
|
|
September
30,
2021
|
June 30,
2021
|
September
30,
2020
|
|
(in thousands,
except percentages)
|
Net (loss) income
from continuing operations
|
$
|
(4,406)
|
$
|
9,800
|
$
|
(24,809)
|
Net (loss) income
from continuing operations % of revenue
|
(1)%
|
4%
|
(11)%
|
|
|
|
|
Adjustments to
reconcile to variable marketing margin:
|
|
|
|
Cost of
revenue
|
15,020
|
13,934
|
13,220
|
Non-variable selling
and marketing expense (1)
|
14,928
|
13,610
|
12,541
|
General and
administrative expense
|
40,126
|
39,811
|
33,705
|
Product
development
|
13,384
|
13,290
|
11,477
|
Depreciation
|
4,808
|
4,443
|
3,535
|
Amortization of
intangibles
|
10,345
|
11,310
|
13,090
|
Change in fair value
of contingent consideration
|
(196)
|
(8,850)
|
6,658
|
Severance
|
47
|
—
|
—
|
Litigation settlements
and contingencies
|
22
|
322
|
13
|
Interest expense,
net
|
11,826
|
9,840
|
16,617
|
Income tax
benefit
|
(1)
|
(9,092)
|
(7,925)
|
Variable marketing
margin
|
$
|
105,903
|
$
|
98,418
|
$
|
78,122
|
Variable marketing
margin % of revenue
|
36%
|
36%
|
35%
|
|
|
(1)
|
Represents the
portion of selling and marketing expense not attributable to
variable costs paid for advertising, direct marketing and related
expenses. Includes overhead, fixed costs and personnel-related
expenses.
|
LENDINGTREE'S
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
|
|
Adjusted
EBITDA
|
|
Below is a
reconciliation of net (loss) income from continuing operations to
adjusted EBITDA and net (loss) income from continuing operations %
of revenue to adjusted EBITDA % of revenue. See "LendingTree's
Principles of Financial Reporting" for further discussion of the
Company's use of these non-GAAP measures.
|
|
|
Three Months
Ended
|
|
September
30,
2021
|
June 30,
2021
|
September
30,
2020
|
|
(in thousands,
except percentages)
|
Net (loss) income
from continuing operations
|
$
|
(4,406)
|
$
|
9,800
|
$
|
(24,809)
|
Net (loss) income
from continuing operations % of revenue
|
(1)%
|
4%
|
(11)%
|
Adjustments to
reconcile to adjusted EBITDA:
|
|
|
|
Amortization of
intangibles
|
10,345
|
11,310
|
13,090
|
Depreciation
|
4,808
|
4,443
|
3,535
|
Severance
|
47
|
—
|
—
|
Loss on impairments
and disposal of assets
|
1,251
|
1,052
|
134
|
Non-cash
compensation
|
17,074
|
18,294
|
14,161
|
Change in fair value
of contingent consideration
|
(196)
|
(8,850)
|
6,658
|
Acquisition
expense
|
227
|
1,110
|
205
|
Litigation settlements
and contingencies
|
22
|
322
|
13
|
Interest expense,
net
|
11,826
|
9,840
|
16,617
|
Income tax
benefit
|
(1)
|
(9,092)
|
(7,925)
|
Adjusted
EBITDA
|
$
|
40,997
|
$
|
38,229
|
$
|
21,679
|
Adjusted EBITDA %
of revenue
|
14%
|
14%
|
10%
|
LENDINGTREE'S
RECONCILIATION OF NON-GAAP MEASURES TO GAAP
|
|
Adjusted Net
Income
|
|
Below is a
reconciliation of net (loss) income from continuing operations to
adjusted net income (loss) and net (loss) income per diluted share
from continuing operations to adjusted net income (loss) per share.
See "LendingTree's Principles of Financial Reporting" for further
discussion of the Company's use of these non-GAAP
measures.
|
|
|
Three Months
Ended
|
|
September
30,
2021
|
June 30,
2021
|
September
30,
2020
|
|
(in thousands,
except per share amounts)
|
Net (loss) income
from continuing operations
|
$
|
(4,406)
|
$
|
9,800
|
$
|
(24,809)
|
Adjustments to
reconcile to adjusted net income (loss):
|
|
|
|
Severance
|
47
|
—
|
—
|
Loss on impairments
and disposal of assets
|
1,251
|
1,052
|
134
|
Non-cash
compensation
|
17,074
|
18,294
|
14,161
|
Change in fair value
of contingent consideration
|
(196)
|
(8,850)
|
6,658
|
Acquisition
expense
|
227
|
1,110
|
205
|
Litigation settlements
and contingencies
|
22
|
322
|
13
|
Loss on extinguishment
of debt
|
—
|
—
|
7,768
|
Income tax benefit
from adjusted items
|
(4,687)
|
(3,024)
|
(7,361)
|
Excess tax deficit
(benefit) on stock compensation
|
938
|
(8,261)
|
(175)
|
Adjusted net
income (loss)
|
$
|
10,270
|
$
|
10,443
|
$
|
(3,406)
|
|
|
|
|
Net (loss) income
per diluted share from continuing operations
|
$
|
(0.33)
|
$
|
0.71
|
$
|
(1.90)
|
Adjustments to
reconcile net (loss) income from continuing operations to
adjusted net income (loss)
|
1.10
|
0.05
|
1.64
|
Adjustments to
reconcile effect of dilutive securities
|
(0.02)
|
—
|
—
|
Adjusted net
income (loss) per share
|
$
|
0.75
|
$
|
0.76
|
$
|
(0.26)
|
|
|
|
|
Adjusted weighted
average diluted shares outstanding
|
13,707
|
13,719
|
13,033
|
Effect of dilutive
securities
|
439
|
—
|
—
|
Weighted average
diluted shares outstanding
|
13,268
|
13,719
|
13,033
|
Effect of dilutive
securities
|
—
|
476
|
—
|
Weighted average
basic shares outstanding
|
13,268
|
13,243
|
13,033
|
LENDINGTREE'S PRINCIPLES OF FINANCIAL REPORTING
LendingTree reports the following non-GAAP measures as
supplemental to GAAP:
- Variable marketing margin, including variable marketing
expense
- Variable marketing margin % of revenue
- Earnings Before Interest, Taxes, Depreciation and Amortization,
as adjusted for certain items discussed below ("Adjusted
EBITDA")
- Adjusted EBITDA % of revenue
- Adjusted net income
- Adjusted net income per share
Variable marketing margin is a measure of the efficiency of the
Company's operating model, measuring revenue after subtracting
variable marketing and advertising costs that directly influence
revenue. The Company's operating model is highly sensitive to the
amount and efficiency of variable marketing expenditures, and the
Company's proprietary systems are able to make rapidly changing
decisions concerning the deployment of variable marketing
expenditures (primarily but not exclusively online and mobile
advertising placement) based on proprietary and sophisticated
analytics. Variable marketing margin and variable marketing margin
% of revenue are primary metrics by which the Company measures the
effectiveness of its marketing efforts.
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 in most years.
Adjusted net income and adjusted net income per share supplement
GAAP income from continuing operations and GAAP income per diluted
share from continuing operations 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, gain/loss on investments,
severance, litigation settlements and contingencies, acquisition
and disposition income or expenses including with respect to
changes in fair value of contingent consideration, gain/loss on
extinguishment of debt, one-time items 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, the effects to income taxes of the aforementioned
adjustments and any excess tax benefit or expense associated with
stock-based compensation recorded in net income in conjunction with
FASB pronouncement ASU 2016-09. 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 per diluted share from continuing
operations.
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.
Definition of LendingTree's Non-GAAP Measures
Variable marketing margin is defined as revenue less variable
marketing expense. Variable marketing expense is defined as the
expense attributable to variable costs paid for advertising, direct
marketing and related expenses, and excluding overhead, fixed costs
and personnel-related expenses. The majority of these variable
advertising costs are expressly intended to drive traffic to our
websites and these variable advertising costs are included in
selling and marketing expense on the Company's consolidated
statements of operations and consolidated income.
EBITDA is defined as net income from continuing operations
excluding interest, income taxes, amortization of intangibles and
depreciation.
Adjusted EBITDA is defined as EBITDA excluding (1) non-cash
compensation expense, (2) non-cash impairment charges, (3)
gain/loss on disposal of assets, (4) gain/loss on investments, (5)
restructuring and severance expenses, (6) litigation settlements
and contingencies, (7) acquisitions and dispositions income or
expense (including with respect to changes in fair value of
contingent consideration), and (8) one-time items.
Adjusted net income is defined as net income (loss) from
continuing operations excluding (1) non-cash compensation expense,
(2) non-cash impairment charges, (3) gain/loss on disposal of
assets, (4) gain/loss on investments, (5) restructuring and
severance expenses, (6) litigation settlements and contingencies,
(7) acquisitions and dispositions income or expense (including with
respect to changes in fair value of contingent consideration), (8)
gain/loss on extinguishment of debt, (9) one-time items, (10) the
effects to income taxes of the aforementioned adjustments, and (11)
any excess tax benefit or expense associated with stock-based
compensation recorded in net income in conjunction with FASB
pronouncement ASU 2016-09.
Adjusted net income per share is defined as adjusted net income
divided by the adjusted weighted average diluted shares
outstanding. For periods which the Company reports GAAP loss 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 periods where the Company reports
GAAP 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. Non-cash compensation expense also
includes expense associated with employee stock purchase plans.
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. Cash
expenditures for employer payroll taxes on non-cash compensation
are included within adjusted EBITDA and adjusted net income.
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: uncertainty
regarding the duration and scope of the coronavirus referred to as
COVID-19 pandemic; actions governments and businesses take in
response to the pandemic, including actions that could affect
levels of advertising activity; the impact of the pandemic and
actions taken in response to the pandemic on national and regional
economies and economic activity; the pace of recovery when the
COVID-19 pandemic subsides; 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, including dependence
on certain key 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 consumers in a
cost-effective manner; the effects of potential acquisitions of
other businesses, including the ability to integrate them
successfully with LendingTree's existing operations; accounting
rules related to contingent consideration and excess tax benefits
or expenses on stock-based compensation that could materially
affect earnings in future periods; 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, 2020, in our Quarterly Report on
Form 10-Q for the period ended June 30, 2021, and in our other
filings with the Securities and Exchange Commission. LendingTree
undertakes 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. is the parent of LendingTree, LLC
and several companies owned by LendingTree, LLC (collectively,
"LendingTree" or the "Company").
LendingTree operates what it believes to be the leading online
consumer platform that connects consumers with the choices they
need to be confident in their financial decisions. The Company
offers consumers tools and resources, including free credit scores,
that facilitate comparison-shopping for mortgage loans, home equity
loans, reverse mortgage loans, auto loans, credit cards, deposit
accounts, personal loans, student loans, small business loans,
insurance quotes and other related offerings. The Company primarily
seeks to match in-market consumers with multiple providers on its
marketplace who can provide them with competing quotes for loans,
deposit products, insurance or other related offerings they are
seeking. The Company also serves as a valued partner to partners
and other providers seeking an efficient, scalable and flexible
source of customer acquisition with directly measurable benefits,
by matching the consumer inquiries it generates with these
providers.
LendingTree, Inc. is headquartered in Charlotte, NC. For more information, please
visit www.lendingtree.com.
Investor
Relations:
investors@lendingtree.com
Media Relations:
press@lendingtree.com
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SOURCE LendingTree, Inc.