Revenue and VMM Growth
Continued Despite Ongoing Macro Headwinds
- Consolidated revenue of $283.2
million
- GAAP net loss from continuing operations of $10.8 million or $(0.84) per diluted share
- Variable marketing margin of $94.1
million
- Adjusted EBITDA of $29.4
million
- Adjusted net income per share of $0.46
CHARLOTTE, N.C., May 5, 2022 /PRNewswire/ -- LendingTree, Inc.
(NASDAQ: TREE), operator of LendingTree.com, the nation's leading
online financial services marketplace, today announced results for
the quarter ended March 31, 2022.
The company has posted a letter
to shareholders on the company's website
at investors.lendingtree.com.
"The diversity of our business continues to benefit shareholders
as we grew revenue and VMM this quarter despite rapidly increasing
interest rates and persistent inflationary headwinds," said
Doug Lebda, Chairman and
CEO. "We performed in line with our guidance across all
metrics while continuing to invest in our strategic growth
initiatives. The Home segment performed well, with improving volume
and unit economics in home equity and purchase mortgage helping to
offset the dramatic decline in refinance volume. Coupled with
strong growth in the Consumer business, highlighted by fantastic
results from personal loans and small business, our combined lender
marketplace generated 9% and 23% YoY growth in revenue and VMM,
respectively. The Insurance segment had improving results over
the previous quarter, as our partners have been growing their
budgets with us. We made the conscious decision to focus
intently on consumer quality at the beginning of the industry's
cyclical downturn last year, and we believe those efforts will
continue to drive increased revenue and profitability for the
business throughout 2022."
Trent Ziegler, CFO, added, "We
remain in a position of strength to invest in our business,
creating the premier customer financial shopping experience, while
much of our competition struggle with profitability. We are
leaning into this strength, maintaining the investment in our
strategic priorities and the strength of our brand despite numerous
macro headwinds. However, the persistency of inflation and its
impact on our insurance partners, along with a significant jump in
mortgage rates has to be acknowledged and reflected in our
forecast. As a result, we are revising our financial outlook
for 2022."
First Quarter 2022 Business Highlights
- Home segment revenue of $101.9
million decreased 20% over first quarter 2021 and produced
segment profit of $35.9, down 8% over
the same period.
-
- Within Home, mortgage products revenue of $78.0 million declined 33% over prior year.
- Consumer segment revenue of $101.1
million grew 75% over first quarter 2021 as trends continued
to improve.
-
- Within Consumer, credit card revenue of $29.8 million was up 69% over prior year.
- Personal loans revenue of $35.2
million grew 137% over prior year.
- Revenue from our small business offering grew 138% over prior
year.
- Insurance segment revenue of $80.0
million decreased 8% over first quarter 2021 and translated
into Insurance segment profit of $21.1, down 36% over the same period.
- Through March 31, 2021, 22.1
million consumers have signed up for MyLendingTree.
LendingTree
Summary Financial Metrics (In millions, except per share
amounts)
|
|
|
Three Months
Ended
March 31,
|
|
Three Months
Ended
December 31,
|
|
|
2022
|
2021
|
Y/Y %
Change
|
2021
|
QQ
% Change
|
Total
revenue
|
$
|
283.2
|
$
|
272.8
|
4 %
|
|
$
|
258.3
|
10
%
|
|
|
|
|
|
|
|
|
|
(Loss) income before income taxes
|
$
|
(10.4)
|
$
|
28.0
|
(137) %
|
|
$
|
60.2
|
(117) %
|
Income tax
expense
|
$
|
(0.4)
|
$
|
(8.7)
|
(95) %
|
|
$
|
(11.8)
|
(97) %
|
Net (loss)
income from continuing operations
|
$
|
(10.8)
|
$
|
19.3
|
(156)%
|
|
$
|
48.4
|
(122)%
|
Net (loss) income
from continuing operations % of revenue
|
|
(4)%
|
7 %
|
|
|
19
%
|
|
|
|
|
|
|
|
|
(Loss) income per
share from continuing operations
|
|
|
|
|
|
|
Basic
|
$
|
(0.84)
|
$
|
1.48
|
(157) %
|
|
$
|
3.67
|
(123) %
|
Diluted
|
$
|
(0.84)
|
$
|
1.37
|
(161) %
|
|
$
|
3.57
|
(124) %
|
|
|
|
|
|
|
|
|
|
|
Variable marketing
margin
|
|
|
|
|
|
|
Total
revenue
|
$
|
283.2
|
$
|
272.8
|
4 %
|
|
$
|
258.3
|
10 %
|
Variable marketing
expense (1) (2)
|
$
|
(189.1)
|
$
|
(183.8)
|
3 %
|
|
$
|
(169.8)
|
11 %
|
Variable marketing
margin (2)
|
$
|
94.1
|
$
|
89.0
|
6%
|
|
$
|
88.5
|
6%
|
Variable marketing
margin % of revenue (2)
|
33%
|
33%
|
|
|
34%
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(2)
|
$
|
29.4
|
$
|
30.7
|
(4)%
|
|
$
|
24.7
|
19%
|
Adjusted EBITDA %
of revenue (2)
|
10%
|
11%
|
|
|
10%
|
|
Adjusted net income
(loss) (2)
|
$
|
6.1
|
$
|
2.5
|
144%
|
|
$
|
(4.1)
|
249%
|
Adjusted net
income (loss) per share (2)
|
$
|
0.46
|
$
|
0.18
|
156%
|
|
$
|
(0.31)
|
248%
|
|
|
|
(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
March 31
|
Y/Y
% Change
|
Three Months
Ended
December 31
|
QQ
% Change
|
|
2022
|
2021
|
|
2021
|
|
Home
(1)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
101.9
|
$
|
128.1
|
|
(20)%
|
$
|
96.3
|
6%
|
Segment
Profit
|
$
|
35.9
|
$
|
39.0
|
|
(8)%
|
$
|
33.8
|
6%
|
Segment
profit % of revenue
|
|
35%
|
|
30%
|
|
|
|
35%
|
|
|
|
|
|
|
|
|
|
|
|
Consumer
(2)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
101.1
|
$
|
57.9
|
|
75%
|
$
|
96.4
|
5%
|
Segment
profit
|
$
|
42.5
|
$
|
24.6
|
|
73%
|
$
|
40.8
|
4%
|
Segment
profit % of revenue
|
|
42%
|
|
42%
|
|
|
|
42%
|
|
|
|
|
|
|
|
|
|
|
|
Insurance
(3)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
80.0
|
$
|
86.6
|
|
(8)%
|
$
|
65.4
|
22%
|
Segment
profit
|
$
|
21.1
|
$
|
32.8
|
|
(36)%
|
$
|
20.8
|
1%
|
Segment
profit % of revenue
|
|
26%
|
|
38%
|
|
|
|
32%
|
|
|
|
|
|
|
|
|
|
|
|
Other
(4)
|
|
|
|
|
|
|
|
|
|
Revenue
|
$
|
0.1
|
$
|
0.1
|
|
-%
|
$
|
0.2
|
(50)%
|
(Loss)
profit
|
$
|
(0.1)
|
$
|
(0.1)
|
|
-%
|
$
|
0.1
|
(200)%
|
|
|
|
|
|
|
|
|
|
|
Total
Revenue
|
$
|
283.2
|
$
|
272.8
|
|
4%
|
$
|
258.3
|
10%
|
|
|
|
|
|
|
|
|
|
|
Total Segment
profit
|
$
|
99.5
|
$
|
96.3
|
|
3%
|
$
|
95.5
|
4%
|
Brand
marketing expense (5)
|
$
|
(5.4)
|
$
|
(7.3)
|
|
(26)%
|
$
|
(7.0)
|
(23)%
|
Variable marketing
margin
|
$
|
94.1
|
$
|
89.0
|
|
6%
|
$
|
88.5
|
6%
|
Variable
marketing margin % of revenue
|
|
33%
|
|
33%
|
|
|
|
34%
|
|
|
|
|
(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, the Company is providing revenue, variable marketing
margin and adjusted EBITDA guidance for the second quarter of 2022
and revising our previous guidance for full-year 2022, as
follows:
Second-quarter 2022:
- Revenue: $283 - $293 million
- Variable Marketing Margin: $100 -
$106 million
- Adjusted EBITDA: $35 -
$40 million
Full-year 2022:
- Revenue is now anticipated to be in the range of $1,150 - $1,190
million, representing growth of 5% - 8% over full-year 2021
results.
- Variable Marketing Margin is now expected to be in the range of
$390 - $415
million.
- Adjusted EBITDA is now anticipated to be in the range of
$140 - $150
million, up 4% - 11% over full-year 2021 results.
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 and
tax considerations. Expenses associated with legal matters and tax
considerations 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 first quarter 2022
financial results will be webcast live today, May 05,
2022 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, May 13, 2022. To listen to
the telephone replay, call toll-free (855) 859-2056 with passcode
#3228754. Callers outside the United
States and Canada may dial
(404) 537-3406 with passcode #3228754.
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
|
|
Three Months
Ended
March 31,
|
|
2022
|
2021
|
|
(in thousands, except
per share
amounts)
|
Revenue
|
$
283,178
|
$
272,750
|
Costs and
expenses:
|
|
|
Cost of revenue (exclusive of depreciation and amortization shown
separately below) (1)
|
15,561
|
13,895
|
Selling and marketing expense (1)
|
204,157
|
197,462
|
General and
administrative expense (1)
|
35,973
|
34,989
|
Product development (1)
|
14,052
|
12,468
|
Depreciation
|
4,854
|
3,718
|
Amortization of intangibles
|
7,917
|
11,312
|
Change in fair value
of contingent consideration
|
—
|
797
|
Restructuring and severance (1)
|
3,625
|
—
|
Litigation settlements and contingencies
|
(27)
|
16
|
Total costs and expenses
|
286,112
|
274,657
|
Operating loss
|
(2,934)
|
(1,907)
|
Other (expense) income, net:
|
|
|
Interest expense, net
|
(7,505)
|
(10,215)
|
Other (expense) income
|
(1)
|
40,072
|
(Loss) income before
income taxes
|
(10,440)
|
27,950
|
Income tax
expense
|
(383)
|
(8,638)
|
Net (loss) income
from continuing operations
|
(10,823)
|
19,312
|
Loss from
discontinued operations, net of tax
|
(3)
|
(263)
|
Net (loss) income
and comprehensive (loss) income
|
$
(10,826)
|
$
19,049
|
|
|
|
Weighted average shares outstanding:
|
|
|
Basic
|
12,901
|
13,070
|
Diluted
|
12,901
|
14,119
|
(Loss) income
per share from continuing operations:
|
|
|
Basic
|
$
(0.84)
|
$
1.48
|
Diluted
|
$
(0.84)
|
$
1.37
|
Loss per share from
discontinued operations:
|
Basic
|
$ —
|
$
(0.02)
|
Diluted
|
$ —
|
$
(0.02)
|
Net (loss) income per share:
|
|
|
Basic
|
$
(0.84)
|
$
1.46
|
Diluted
|
$
(0.84)
|
$
1.35
|
|
|
|
(1)Amounts include non-cash compensation, as follows:
|
|
|
Cost of revenue
|
$
393
|
$
397
|
Selling and marketing expense
|
2,039
|
1,802
|
General and administrative expense
|
9,600
|
12,171
|
Product development
|
1,965
|
2,066
|
Restructuring and severance
|
1,083
|
—
|
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
|
|
March 31,
2022
|
December 31,
2021
|
|
(in thousands, except
par value
and share amounts)
|
ASSETS:
|
Cash and cash equivalents
|
$
196,658
|
$
251,231
|
Restricted cash and cash
equivalents
|
120
|
111
|
Accounts receivable, net
|
114,294
|
97,658
|
Prepaid and other current
assets
|
26,995
|
25,379
|
Total current assets
|
338,067
|
374,379
|
Property and
equipment
|
70,680
|
72,477
|
Operating lease
right-of-use assets
|
74,807
|
77,346
|
Goodwill
|
420,139
|
420,139
|
Intangible assets,
net
|
77,847
|
85,763
|
Deferred income
tax assets
|
127,823
|
87,581
|
Equity investment
|
173,140
|
158,140
|
Other non-current assets
|
6,969
|
6,942
|
Non-current assets
of discontinued operations
|
—
|
16,589
|
Total assets
|
$
1,289,472
|
$
1,299,356
|
|
|
|
LIABILITIES:
|
|
|
Current portion of long-term debt
|
$
169,484
|
$
166,008
|
Accounts payable, trade
|
9,909
|
1,692
|
Accrued expenses and other current liabilities
|
107,881
|
106,731
|
Current liabilities of discontinued operations
|
4
|
1
|
Total current liabilities
|
287,278
|
274,432
|
Long-term debt
|
564,981
|
478,151
|
Operating lease
liabilities
|
93,759
|
96,165
|
Deferred income
tax liabilities
|
2,265
|
2,265
|
Other non-current liabilities
|
341
|
351
|
Total liabilities
|
948,624
|
851,364
|
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; 16,119,648 and 16,070,720 shares
|
—
|
—
|
issued, respectively, and
12,764,182 and 13,095,149 shares outstanding, respectively
|
161
|
161
|
Additional paid-in capital
|
1,145,038
|
1,242,794
|
Accumulated deficit
|
(538,173)
|
(571,794)
|
Treasury stock;
3,355,466 shares and 2,975,571, shares
respectively
|
(266,178)
|
(223,169)
|
Total shareholders' equity
|
340,848
|
447,992
|
Total liabilities and shareholders' equity
|
$
1,289,472
|
$
1,299,356
|
LENDINGTREE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
Three Months
Ended
March 31,
|
|
2022
|
2021
|
|
(in thousands)
|
Cash flows
from operating activities attributable to continuing operations:
|
Net (loss)
income and comprehensive (loss) income
|
$
(10,826)
|
$
19,049
|
Less: Loss
from discontinued operations, net of tax
|
3
|
263
|
Net (loss) income
from continuing operations
|
(10,823)
|
19,312
|
Adjustments to reconcile net (loss) income
from continuing operations to net cash
provided by operating activities attributable to continuing
operations:
|
|
|
Loss on impairments and
disposal of assets
|
431
|
348
|
Amortization of intangibles
|
7,917
|
11,312
|
Depreciation
|
4,854
|
3,718
|
Non-cash compensation expense
|
15,080
|
16,436
|
Deferred income
taxes
|
326
|
8,638
|
Change in fair value
of contingent consideration
|
—
|
797
|
Gain on investments
|
—
|
(40,072)
|
Bad
debt expense
|
850
|
516
|
Amortization of debt issuance costs
|
2,467
|
1,275
|
Amortization of debt discount
|
879
|
7,346
|
Reduction in carrying amount
of ROU asset, offset by change
in operating lease liabilities
|
(49)
|
7,132
|
Changes in current assets and
liabilities:
|
|
|
Accounts receivable
|
(17,488)
|
(33,743)
|
Prepaid and
other current assets
|
(3,666)
|
(915)
|
Accounts payable, accrued expenses and
other current liabilities
|
9,320
|
7,154
|
Income taxes
receivable
|
48
|
(89)
|
Other, net
|
(146)
|
(240)
|
Net cash provided by operating activities attributable to continuing operations
|
10,000
|
8,925
|
Cash flows from
investing activities attributable to continuing operations:
|
|
|
Capital expenditures
|
(3,465)
|
(10,553)
|
Equity investment
|
(15,000)
|
(1,180)
|
Net cash used
in investing activities attributable to continuing operations
|
(18,465)
|
(11,733)
|
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
|
(3,085)
|
(4,801)
|
Purchase of treasury stock
|
(43,009)
|
—
|
Payment of debt issuance costs
|
(4)
|
(168)
|
Other financing activities
|
—
|
(31)
|
Net cash used
in financing activities attributable to continuing operations
|
(46,098)
|
(5,000)
|
Total cash used
in continuing operations
|
(54,563)
|
(7,808)
|
Discontinued operations:
|
|
|
Net cash used in operating activities attributable to discontinued operations
|
(1)
|
(71)
|
Total cash used
in discontinued operations
|
(1)
|
(71)
|
Net decrease in cash, cash
equivalents, restricted cash
and restricted cash equivalents
|
(54,564)
|
(7,879)
|
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period
|
251,342
|
170,049
|
Cash, cash equivalents, restricted cash and
restricted cash equivalents at end of period
|
$
196,778
|
$
162,170
|
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
|
|
March 31,
2022
|
December
31,
2021
|
March 31,
2021
|
|
(in thousands)
|
Selling and marketing expense
|
$
204,157
|
$
184,847
|
$
197,462
|
Non-variable selling and marketing expense
(1)
|
(15,081)
|
(15,053)
|
(13,760)
|
Variable marketing expense
|
$
189,076
|
$
169,794
|
$
183,702
|
|
|
(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
|
|
March 31,
2022
|
December
31,
2021
|
March 31,
2021
|
|
(in thousands, except
percentages)
|
Net (loss) income
from continuing operations
|
$
(10,823)
|
$
48,432
|
$
19,312
|
Net (loss)
income from continuing operations % of revenue
|
(4)%
|
19%
|
7%
|
|
|
|
|
Adjustments to reconcile to variable marketing margin:
|
|
|
|
Cost of revenue
|
15,561
|
14,448
|
13,895
|
Non-variable selling and marketing expense
(1)
|
15,081
|
15,053
|
13,760
|
General and administrative expense
|
35,973
|
38,546
|
34,989
|
Product development
|
14,052
|
13,723
|
12,468
|
Depreciation
|
4,854
|
4,941
|
3,718
|
Amortization of intangibles
|
7,917
|
9,771
|
11,312
|
Change in fair value
of contingent consideration
|
—
|
—
|
797
|
Restructuring and severance
|
3,625
|
6
|
—
|
Litigation settlements and contingencies
|
(27)
|
32
|
16
|
Interest expense, net
|
7,505
|
14,986
|
10,215
|
Other income
|
1
|
(83,200)
|
(40,072)
|
Income tax expense
|
383
|
11,753
|
8,638
|
Variable marketing margin
|
$
94,102
|
$
88,491
|
$
89,048
|
Variable marketing margin
% of revenue
|
33%
|
34%
|
33%
|
|
|
(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
|
|
March 31,
2022
|
December
31,
2021
|
March 31,
2021
|
|
(in thousands, except
percentages)
|
Net (loss) income
from continuing operations
|
$
(10,823)
|
$
48,432
|
$
19,312
|
Net (loss) income
from continuing operations % of revenue
|
(4)%
|
19%
|
7%
|
Adjustments to reconcile to adjusted EBITDA:
|
|
|
|
Amortization of intangibles
|
7,917
|
9,771
|
11,312
|
Depreciation
|
4,854
|
4,941
|
3,718
|
Restructuring and severance
|
3,625
|
6
|
—
|
Loss on impairments and
disposal of assets
|
431
|
814
|
348
|
Gain on investments
|
—
|
(83,200)
|
(40,072)
|
Non-cash compensation
|
13,997
|
16,751
|
16,436
|
Franchise tax
caused by equity investment gain
|
1,500
|
—
|
—
|
Change in fair value
of contingent consideration
|
—
|
—
|
797
|
Acquisition expense
|
9
|
430
|
29
|
Litigation settlements and contingencies
|
(27)
|
32
|
16
|
Interest expense, net
|
7,505
|
14,986
|
10,215
|
Income tax
expense
|
383
|
11,753
|
8,638
|
Adjusted EBITDA
|
$
29,371
|
$
24,716
|
$
30,749
|
Adjusted EBITDA % of revenue
|
10%
|
10%
|
11%
|
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
|
|
March 31,
2022
|
December
31,
2021
|
March
31,
2021
|
|
(in thousands, except
per share amounts)
|
Net (loss) income
from continuing operations
|
$
(10,823)
|
$
48,432
|
$
19,312
|
Adjustments to reconcile to adjusted net (loss) income:
|
|
|
|
Restructuring and severance
|
3,625
|
6
|
—
|
Loss on impairments and
disposal of assets
|
431
|
814
|
348
|
Gain on investments
|
—
|
(83,200)
|
(40,072)
|
Non-cash compensation
|
13,997
|
16,751
|
16,436
|
Franchise tax
caused by equity investment gain
|
1,500
|
—
|
—
|
Change in fair value
of contingent consideration
|
—
|
—
|
797
|
Acquisition expense
|
9
|
430
|
29
|
Litigation settlements and contingencies
|
(27)
|
32
|
16
|
Income tax (benefit) expense from adjusted items
|
(5,106)
|
16,980
|
5,699
|
Excess tax
expense (benefit) from
stock-based compensation
|
2,468
|
(4,336)
|
(32)
|
Adjusted net
income (loss)
|
$
6,074
|
$
(4,091)
|
$
2,533
|
|
|
|
|
Net (loss) income
per diluted share
from continuing operations
|
$
(0.84)
|
$
3.57
|
$
1.37
|
Adjustments to reconcile net (loss) income
from continuing operations to
|
adjusted net income (loss)
|
1.31
|
(3.87)
|
(1.19)
|
Adjustments to reconcile effect of dilutive securities
|
(0.01)
|
(0.01)
|
—
|
Adjusted net income
(loss) per share
|
$
0.46
|
$
(0.31)
|
$
0.18
|
|
|
|
|
Adjusted weighted average diluted shares
outstanding
|
13,167
|
13,212
|
14,119
|
Effect of dilutive securities
|
266
|
(346)
|
—
|
Weighted average diluted shares outstanding
|
12,901
|
13,558
|
14,119
|
Effect of dilutive securities
|
—
|
346
|
1,049
|
Weighted average basic
shares outstanding
|
12,901
|
13,212
|
13,070
|
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,
restructuring and 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 if their inclusion would be dilutive.
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 the
$1.5 million franchise tax caused by
the equity investment gain in Stash.
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. 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, 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 and lines of credit, 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 Contact:
investors@lendingtree.com
Media Contact:
press@lendingtree.com
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SOURCE LendingTree, Inc.