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Angie’s: Service Provider Revenue/Paid Member

The following excerpt is from the company's SEC filing.

105.59

110.87

100.92

103.33

Total Revenue/Paid Member

130.01

141.76

123.63

131.16

107.38

113.65

Total Paid Memberships

640,384

592,037

1,815,927

1,694,950

852,855

816,380

3,309,166

3,103,367

Estimated Penetration Rate*

Annual Membership Growth Rate

Cohort table presents financial and operational data for the twelve months ended

March 31, 2016

* Demographic information used in penetration rate calculations is based on third-party studies we commissi oned in December 2015 and March 2015, respectively. According to these studies, the number of U.S. households in our target demographic was

27 million

for each of the periods ended December 31, 2015 and March 31, 2015.

First Quarter

Results

Total revenue for the

quarter of

$83.9 million

compared to

$83.5 million

in the year-ago period, driven by higher service provider revenue, which increased

$67.5 million

, offset by a decline in membership revenue of

$16.3 million

from a year ago.

The growth in service provider revenue, which includes both advertising and e-commerce revenue, quarter over quarter was largely the result of higher service provider revenue per average participating service provider and service provider contract value. These gains were partially offset by the impact of near-term reductions in average e-commerce take rates in previous periods as well as revenue losses attributable to the ongoing migration to our new technology platform.

The decline in membership revenue quarter over quarter is primarily the result of a

decrease

in membership revenue per average paid member attributable to tiered pricing, which has reduced average membership fees. The Company added

188,242

gross paid memberships in the period, a decline from gross paid member additions of

229,987

in the year-ago quarter.

Operating Expenses

Operations and support expense was

$12.2 million

, a decrease from

$14.0 million

in the year-ago quarter, attributable to quarter over quarter reductions in compensation and personnel-related costs and credit card processing fees.

Selling expense was

$27.8 million

, down from

$28.3 million

in the year-ago quarter, due primarily to lower headcount. The total number of employees in the sales organization declined 7% year over year, resulting in reduced selling compensation and personnel-related costs.

Marketing expense, which now includes the marketing costs that were previously classified in general and administrative expense, was

$19.1 million

, an increase from

$18.8 million

in the year-ago quarter, attributable to increases in marketing outsourced services expenditures and compensation and personnel-related costs quarter over quarter, partially offset by a decrease in advertising spend over the same time period.

Product and technology expense was

$10.0 million

$8.4 million

in the year-ago period, largely attributable to headcount increases.

General and administrative expense was

$18.0 million

$8.7 million

in the year-ago period, driven by period over period increases in outsourced services expenditures and compensation and personnel-related costs as well as a $3.5 million one-time contingent liability recorded during the quarter related to pending litigation.

Net Income (Loss)

Net loss for the quarter was

$4.0 million

compared to net income of

$4.4 million

in the year-ago quarter, attributable to higher operating expenses, including the aforementioned contingent legal liability recorded in general and administrative expense.

Adjusted EBITDA

$4.8 million

for the period, down from adjusted EBITDA

$8.6 million

in the year-ago period.

provided by

operations for the

$9.2 million

, the balance of cash, cash equivalents and investments was

$59.1 million

Business Outlook

The Company reiterated its full year guidance for revenue of $345 million to $355 million and adjusted EBITDA

of $31 million to $35 million.

Adjusted EBITDA is a non-GAAP financial measure.

Angie’s List, Inc.

Condensed Consolidated Balance Sheets

(in thousands)

(Unaudited)

Assets

Cash and cash equivalents

35,352

32,599

Short-term investments

23,718

23,976

Accounts receivable, net

16,212

17,019

Prepaid expenses and other current assets

22,106

19,026

Total current assets

97,388

92,620

Property, equipment and software, net

81,970

77,635

Goodwill

Amortizable intangible assets, net

Total assets

182,360

173,411

Liabilities and stockholders’ deficit

Accounts payable

10,525

Accrued liabilities

34,926

20,287

Deferred membership revenue

29,965

32,702

Deferred advertising revenue

48,480

48,930

Current maturities of long-term debt

Total current liabilities

125,177

113,944

Long-term debt, net

55,542

56,134

Deferred membership revenue, noncurrent

Deferred advertising revenue, noncurrent

Other liabilities, noncurrent

Total liabilities

185,843

175,792

Stockholders’ deficit:

Common stock

Additional paid-in-capital

278,347

275,445

Treasury stock

(23,719

Accumulated deficit

(258,178

(254,174

Total stockholders’ deficit

(3,483

(2,381

Total liabilities and stockholders’ deficit

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

Three Months Ended

March 31,

16,334

17,339

Service provider

67,522

66,204

83,856

83,543

Operating expenses

12,209

13,998

27,832

28,292

19,115

18,829

10,034

18,047

Total operating expenses

87,237

78,261

Operating income (loss)

(3,381

Interest expense, net

Income (loss) before income taxes

(3,997

Income tax expense

Net income (loss)

(4,004

Net income (loss) per common share — basic and diluted

Weighted-average number of common shares outstanding — basic and diluted

58,614

58,517

Non-cash stock-based compensation expense

Total non-cash stock-based compensation expense

Reconciliation of net income (loss) to Adjusted EBITDA

Depreciation and amortization

Contingent liabilities and adjustments

Condensed Consolidated Statements of Cash Flows

Operating activities

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Amortization of debt discount, deferred financing fees and bond premium

Non-cash loss on disposal of long-lived assets

Changes in certain assets:

(3,080

(4,117

Changes in certain liabilities:

14,609

10,732

(3,055

(2,112

Net cash provided by operating activities

21,246

Investing activities

Purchases of investments

(4,071

(3,120

Sales of investments

(1,116

Capitalized website and software development costs

(5,489

(6,754

Intangible assets

Net cash (used in) investing activities

(6,266

(8,248

Financing activities

Proceeds from exercise of stock options

Taxes paid on behalf of employees related to net share settlement

Payments on capital lease obligation

Net cash (used in) financing activities

Net increase in cash and cash equivalents

12,944

Cash and cash equivalents, beginning of period

39,991

Cash and cash equivalents, end of period

52,935

Conference Call Information

The Company will host a conference call today,

April 20, 2016

, at approximately 8:30 AM (ET) to discuss the quarterly financial results with the investment community. A live audio webcast of the event will be available on the Angie’s List Investor Relations website at

http://investor.angieslist.com/

A live domestic dial-in is available at (877) 380-5664 or (253) 237-1143 internationally. An audio replay will be available at (855) 859-2056 domestically or (404) 537-3406 internationally, using passcode 85488464 through April 25, 2016.

About Angie’s List

Angie’s List helps facilitate happy transactions between more than three million consumers nationwide and its collection of highly-rated service providers in 720 categories of service, ranging from home improvement to health care. Built on a foundation of 10 million verified reviews of local service, Angie's List connects consumers directly to its online marketplace of services from member-reviewed providers and offers unique tools and support designed to improve the local service experience for both consumers and service professionals.

Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted accounting principles in the United States ("GAAP"), we disclose in this press release financial information that was not prepared in accordance with GAAP. This information includes non-GAAP Adjusted EBITDA, which we define as earnings before interest, income taxes, depreciation, amortization, non-cash stock-based compensation expense, contingent liabilities and adjustments and non-cash long-lived asset impairment charges, as applicable. We use Adjusted EBITDA internally in analyzing our financial results and determined to disclose this measure to investors as we believe it will be useful to them, as a supplement to GAAP measures, in evaluating our operating performance relative to our industry sector and competitors. We believe that the use of Adjusted EBITDA provides additional insight for investors to use in evaluation of ongoing operating results and trends. However, non-GAAP financial measures such as Adjusted EBITDA should not be considered in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. We have significant uses of cash flows, including capital expenditures and other contractual commitments, interest payments and income taxes that are not reflected in Adjusted EBITDA. Adjusted EBITDA does not consider the potentially dilutive impact of issuing non-cash stock-based compensation to our management and other employees. It should also be noted that other companies, including companies in the same industry, may calculate Adjusted EBITDA in a different manner than we do. We have provided a reconciliation of the Adjusted EBITDA measure to the most directly comparable GAAP financial measure herein.

Forward-Looking and Cautionary Statements

This press release contains statements that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. All statements other than statements of historical fact, including statements regarding market and industry prospects and future results of operations or financial position, made in this press release are forward-looking. In many cases, you can identify forward-looking statements by terminology, such as “may”, “should”, "will", “expects”, “intends”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. The forward-looking information may include, among other information, statements concerning our estimated and projected earnings, revenues, costs, expenditures, cash flows, growth rates, financial results, our plans and objectives for future operations, changes to our business model, growth initiatives or strategies (including, but not limited to, merger and acquisition activity), profitability plans or the expected outcome or impact of pending or threatened litigation. There may also be other statements of expectations, beliefs, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Risks and uncertainties may affect the accuracy of forward-looking statements.

For a discussion of these factors and other risks and uncertainties that may affect our business or cause actual results to differ materially from those contained in our forward-looking statements, please refer to the filings we make with the Securities and Exchange Commission from time to time, including our Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

These documents are or will be available online from the SEC or on the SEC Filings section of the Investor Relations section of our website at

. Information on our website is not part of this release. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements, whether as a result of new information, future events or otherwise.

Contact:

Investor Relations:

Public Relations:

Leslie Arena

Cheryl Reed

317-808-4527

317-396-9134

lesliea@angieslist.com

cherylr@angieslist.com

The above information was disclosed in a filing to the SEC. To see the filing, click here.

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Other recent filings from the company include the following:

Angie's List director was just granted 21,150 options and restricted shares
Angie's List director just declared 0 ownership of the company. - March 29, 2016