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LendingTree Reports Fourth Quarter 2020 Results | News

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CHARLOTTE, N.C., Feb. 25, 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 December 31, 2020. 

The Company has posted a letter to shareholders on its investor relations website at investors.lendingtree.com.

“We navigated the headwinds of the past year incredibly well, and I’m proud of our team’s resilience and dedication,” said Doug Lebda, chairman and CEO.  “Despite the prior year’s challenges, we were fortunate to maintain a healthy and productive workforce, a strong balance sheet and sustained positive cash flows, all of which enabled us to remain acutely focused on executing for our customers, our partners and our shareholders.  The fourth quarter’s results are evidence of the progress we continue to make in expanding our leading market position.”

J.D. Moriarty, CFO, added, “We are pleased to be able to report better-than-expected fourth quarter results, and even more encouraging is the positive momentum we see across each of our segments.  Our diversified portfolio of businesses continues to strengthen our competitive advantage as our leading presence in Home and Insurance bolster our recovering Consumer segment.” 

Fourth Quarter 2020 Business Highlights  

  • Insurance segment revenue of $85.6 million grew 21% over fourth quarter 2019 and translated into segment profit of $33.4 million, up 19% over the same period.
  • Home segment revenue of $88.8 million grew 36% over fourth quarter 2019 and produced segment profit of $32.3 million, up 20% over the same period.
    • Within Home, record mortgage products revenue of $81.5 million grew 51% over the prior year period.
  • Consumer segment revenue of $47.8 million showed improving trends despite typical seasonal headwinds.
    • Within Consumer, credit card revenue of $11.9 million improved substantially from $6.7 million in third quarter 2020.
    • Personal loans revenue of $13.7 million improved from $12.5 million in third quarter 2020.
    • Revenue from our small business offering grew 129% sequentially from the third quarter 2020.
  • Through December 31, 2020, 16.6 million consumers have signed up for My LendingTree.

 

LendingTree Summary Financial Metrics

(In millions, except per share amounts)

Three Months Ended

December 31,

Y/Y

Three Months Ended

September 30,

Q/Q

2020

2019

% Change

2020

% Change

Total revenue

$

222.3

$

255.2

(13)

%

$

220.3

1

%

(Loss) income before income taxes

$

(13.2)

$

4.5

(393)

%

(32.7)

(60)

%

Income tax benefit (expense)

5.1

(3.1)

(265)

%

7.9

(35)

%

Net (loss) income from continuing

operations

$

(8.1)

$

1.5

(640)

%

$

(24.8)

(67)

%

Net (loss) income from continuing

operations % of revenue

(4)

%

1

%

(11)

%

(Loss) income per share from continuing

operations

Basic

$

(0.62)

$

0.11

(664)

%

$

(1.90)

(67)

%

Diluted

$

(0.62)

$

0.10

(720)

%

$

(1.90)

(67)

%

Variable marketing margin

Total revenue

$

222.3

$

255.2

(13)

%

$

220.3

1

%

Variable marketing expense (1) (2)

$

(140.0)

$

(161.4)

(13)

%

$

(142.2)

(2)

%

Variable marketing margin (2)

$

82.3

$

93.8

(12)

%

$

78.1

5

%

Variable marketing margin % of revenue (2)

37

%

37

%

35

%

Adjusted EBITDA (2)

$

26.3

$

45.9

(43)

%

$

21.7

21

%

Adjusted EBITDA % of revenue (2)

12

%

18

%

10

%

Adjusted net income (loss) (2)

$

1.8

$

16.3

(89)

%

$

(3.4)

153

%

Adjusted net income (loss) per share (2)

$

0.13

$

1.12

(88)

%

$

(0.26)

150

%

(1)

Represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related

expenses. Also includes the portion of cost of revenue attributable to costs paid for advertising re-sold to third parties. 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

December 31,

Y/Y

Three Months Ended

September 30,

Q/Q

2020

2019

% Change

2020

% Change

Home (1)

Revenue

$

88.8

$

65.5

36

%

$

78.9

13

%

Segment profit

$

32.3

$

26.9

20

%

$

25.2

28

%

Segment profit % of revenue

36

%

41

%

32

%

Consumer (2)

Revenue

$

47.8

$

113.4

(58)

%

$

48.4

(1)

%

Segment profit

$

22.7

$

43.3

(48)

%

$

21.6

5

%

Segment profit % of revenue

47

%

38

%

45

%

Insurance (3)

Revenue

$

85.6

$

70.9

21

%

$

92.5

(7)

%

Segment profit

$

33.4

$

28.0

19

%

$

37.0

(10)

%

Segment profit % of revenue

39

%

39

%

40

%

Other (4)

Revenue

$

0.1

$

5.4

(98)

%

$

0.5

(80)

%

Loss

$

(0.4)

$

(0.1)

300

%

$

%

Total revenue

$

222.3

$

255.2

(13)

%

$

220.3

1

%

Total segment profit

$

88.0

$

98.1

(10)

%

$

83.8

5

%

     Brand marketing expense (5)

$

(5.7)

$

(4.2)

36

%

$

(5.7)

%

Variable marketing margin

$

82.3

$

93.8

(12)

%

$

78.1

5

%

Variable marketing margin % of revenue

37

%

37

%

35

%

(1)

The Home segment includes the following products: purchase mortgage, refinance mortgage, home equity loans and lines of credit,

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 includes revenue from the resale of online advertising space to third parties and revenue from home improvement

referrals, and the related variable marketing and advertising expenses.

(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.

Business Outlook – 2021

Today, the company is providing revenue, variable marketing margin and adjusted EBITDA guidance for the first quarter of 2021, as follows:

For first quarter 2021:

  • Revenue: $260$270 million
  • Variable Marketing Margin: $80$85 million
  • Adjusted EBITDA: $20$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 fourth quarter 2020 financial results will be webcast live today, February 25, 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, March 05, 2021. To listen to the telephone replay, call toll-free (855) 859-2056 with passcode #4562248. Callers outside the United States and Canada may dial (404) 537-3406 with passcode #4562248.

LENDINGTREE, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Unaudited)

Three Months Ended 

 December 31,

Twelve Months Ended 

 December 31,

2020

2019

2020

2019

(in thousands, except per share amounts)

Revenue

$

222,329

$

255,187

$

909,990

$

1,106,603

Costs and expenses:

Cost of revenue (exclusive of depreciation and amortization shown

separately below) (1)

13,558

16,728

54,494

68,379

Selling and marketing expense (1)

153,275

167,842

617,404

735,180

General and administrative expense (1)

34,825

27,456

129,101

116,847

Product development (1)

10,384

9,412

43,636

39,953

Depreciation

3,738

3,261

14,201

10,998

Amortization of intangibles

12,475

13,756

53,078

55,241

Change in fair value of contingent consideration

(2,384)

7,181

5,327

28,402

Severance

105

390

295

1,026

Litigation settlements and contingencies

40

140

(943)

(151)

Total costs and expenses

226,016

246,166

916,593

1,055,875

Operating (loss) income

(3,687)

9,021

(6,603)

50,728

Other (expense) income, net:

Interest expense, net

(9,894)

(4,863)

(36,300)

(20,271)

Other income

369

381

376

524

(Loss) income before income taxes

(13,212)

4,539

(42,527)

30,981

Income tax benefit (expense)

5,095

(3,073)

19,961

8,479

Net (loss) income from continuing operations

(8,117)

1,466

(22,566)

39,460

(Loss) income from discontinued operations, net of tax

(139)

392

(25,689)

(21,632)

Net (loss) income and comprehensive (loss) income

$

(8,256)

$

1,858

$

(48,255)

$

17,828

Weighted average shares outstanding:

Basic

13,051

12,921

13,007

12,834

Diluted

13,051

14,580

13,007

14,619

(Loss) income per share from continuing operations:

Basic

$

(0.62)

$

0.11

$

(1.73)

$

3.07

Diluted

$

(0.62)

$

0.10

$

(1.73)

$

2.70

(Loss) income per share from discontinued operations:

Basic

$

(0.01)

$

0.03

$

(1.98)

$

(1.69)

Diluted

$

(0.01)

$

0.03

$

(1.98)

$

(1.48)

 Net (loss) income per share:

Basic

$

(0.63)

$

0.14

$

(3.71)

$

1.39

Diluted

$

(0.63)

$

0.13

$

(3.71)

$

1.22

(1) Amounts include non-cash compensation, as follows:

Cost of revenue

$

372

$

197

$

1,319

$

755

Selling and marketing expense

1,809

918

6,240

5,785

General and administrative expense

10,442

8,643

39,650

39,177

Product development

1,874

1,577

6,524

6,450

 

LENDINGTREE, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

December 31,

2020

December 31,

2019

(in thousands, except par value

and share amounts)

ASSETS:

Cash and cash equivalents

$

169,932

$

60,243

Restricted cash and cash equivalents

117

96

Accounts receivable, net

89,841

113,487

Prepaid and other current assets

27,949

15,516

Current assets of discontinued operations

8,570

84

Total current assets

296,409

189,426

Property and equipment, net

62,381

31,363

Operating lease right-of-use assets

84,109

25,519

Goodwill

420,139

420,139

Intangible assets, net

128,502

181,580

Deferred income tax assets

96,224

87,664

Equity investment

80,000

Other non-current assets

5,334

4,330

Non-current assets of discontinued operations

15,892

7,948

Total assets

$

1,188,990

$

947,969

LIABILITIES:

Revolving credit facility

$

$

75,000

Accounts payable, trade

10,111

2,873

Accrued expenses and other current liabilities

101,196

112,755

Current contingent consideration

9,028

Current liabilities of discontinued operations

536

31,050

Total current liabilities

111,843

230,706

Long-term debt

611,412

264,391

Operating lease liabilities

92,363

21,358

Non-current contingent consideration

8,249

24,436

Other non-current liabilities

362

4,752

Total liabilities

824,229

545,643

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; 15,766,193 and 15,676,819 shares

issued, respectively, and 13,124,875 and 13,035,501 shares outstanding, respectively

158

157

Additional paid-in capital

1,188,673

1,177,984

Accumulated deficit

(640,909)

(592,654)

Treasury stock; 2,641,318 shares

(183,161)

(183,161)

Total shareholders’ equity

364,761

402,326

Total liabilities and shareholders’ equity

$

1,188,990

$

947,969

 

LENDINGTREE, INC. AND SUBSIDIARIES

 CONSOLIDATED STATEMENTS OF CASH FLOWS

 (Unaudited)

Year Ended December 31,

2020

2019

2018

(in thousands)

Cash flows from operating activities attributable to continuing operations:

Net (loss) income and comprehensive (loss) income

$

(48,255)

$

17,828

$

96,499

Less: Loss from discontinued operations, net of tax

25,689

21,632

12,820

(Loss) income from continuing operations

(22,566)

39,460

109,319

Adjustments to reconcile income from continuing operations to net cash provided by operating activities

attributable to continuing operations:

Loss (gain) on impairments and disposal of assets

1,160

(695)

2,210

Amortization of intangibles

53,078

55,241

23,468

Depreciation

14,201

10,998

7,385

Rental amortization of intangibles and depreciation

630

Non-cash compensation expense

53,733

52,167

44,365

Deferred income taxes

(9,628)

(8,555)

(63,901)

Change in fair value of contingent consideration

5,327

28,402

10,788

Bad debt expense

1,785

1,697

880

Amortization of debt issuance costs

3,474

1,974

1,776

Write-off of previously-capitalized debt issuance costs

333

Amortization of convertible debt discount

19,570

12,016

11,397

Loss on extinguishment of debt

7,768

Reduction in carrying amount of ROU asset, offset by change in operating lease liabilities

8,888

213

Changes in current assets and liabilities:

Accounts receivable

21,861

(22,457)

(16,820)

Prepaid and other current assets

(952)

(3,258)

(2,985)

Accounts payable, accrued expenses and other current liabilities

(8,013)

(2,322)

14,270

Current contingent consideration

(25,787)

(12,500)

(21,912)

Income taxes receivable

(10,598)

4,548

3,669

Other, net

(2,002)

(88)

(591)

Net cash provided by operating activities attributable to continuing operations

111,299

157,174

123,948

Cash flows from investing activities attributable to continuing operations:

Capital expenditures

(42,149)

(20,041)

(14,907)

Proceeds from the sale of fixed assets

24,077

Equity investment

(80,000)

Acquisition of ValuePenguin, net of cash acquired

(105,578)

Acquisition of QuoteWizard, net of cash acquired

482

(297,072)

Acquisition of Student Loan Hero, net of cash acquired

(59,483)

Acquisition of Ovation, net of cash acquired

(11,566)

Acquisition of SnapCap

(10)

Net cash used in investing activities attributable to continuing operations

(122,149)

(101,060)

(383,038)

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

(3,910)

(8,406)

2,217

Proceeds from the issuance of 0.50% Convertible Senior Notes

575,000

Repurchase of 0.625% Convertible Senior Notes

(233,862)

Payment of 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) proceeds from revolving credit facility

(75,000)

(50,000)

125,000

Payment of debt issuance costs

(16,568)

(2,518)

(583)

Contingent consideration payments

(4,755)

(21,275)

(27,588)

Purchase of treasury stock

(5,470)

(93,704)

Acquisition of noncontrolling interest

(499)

Other financing activities

(184)

(9)

Net cash provided by (used in) financing activities attributable to continuing operations

193,290

(87,678)

4,843

Total cash provided by (used in) continuing operations

182,440

(31,564)

(254,247)

Discontinued operations:

Net cash used in operating activities attributable to discontinued operations

(72,730)

(13,255)

(13,236)

Total cash used in discontinued operations

(72,730)

(13,255)

(13,236)

Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents

109,710

(44,819)

(267,483)

Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period

60,339

105,158

372,641

Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period

$

170,049

$

60,339

$

105,158

Non-cash investing activities:

Increase (decrease) in capital expenditures included in accounts payable and accrued expenses

$

4,196

$

(946)

$

2,246

Capital additions from tenant improvement allowance

1,111

Supplemental cash flow information:

Interest paid

$

4,741

$

7,005

$

3,593

Income tax payments

561

25

541

Income tax refunds

60

4,743

5,678

 

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 “Lending Tree’s Principles of

Financial Reporting” for further discussion of the Company’s use of this non-GAAP measure.

Three Months Ended

Twelve Months Ended

December 31,

2020

September 30,

2020

December 31,

2019

December 31,

2020

December 31,

2019

(in thousands)

Selling and marketing expense

$

153,275

$

154,670

$

167,842

$

617,404

$

735,180

Non-variable selling and marketing expense (1)

(13,248)

(12,541)

(11,036)

(49,652)

(47,000)

Cost of advertising re-sold to third parties (2)

4,557

1,086

22,755

Variable marketing expense

$

140,027

$

142,129

$

161,363

$

568,838

$

710,935

(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.

(2)

Represents the portion of cost of revenue attributable to costs paid for advertising re-sold to third parties. Excludes 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

Twelve Months Ended

December 31,

2020

September 30,

2020

December 31,

2019

December 31,

2020

December 31,

2019

(in thousands, except percentages)

Net (loss) income from continuing operations

$

(8,117)

$

(24,809)

$

1,466

$

(22,566)

$

39,460

Net (loss) income from continuing operations %

of revenue

(4)

%

(11)

%

1

%

(2)

%

4

%

Adjustments to reconcile to variable marketing margin:

Cost of revenue

13,558

13,220

16,728

54,494

68,379

Cost of advertising re-sold to third parties (1)

(4,557)

(1,086)

(22,755)

Non-variable selling and marketing expense (2)

13,248

12,541

11,036

49,652

47,000

General and administrative expense

34,825

33,705

27,456

129,101

116,847

Product development

10,384

11,477

9,412

43,636

39,953

Depreciation

3,738

3,535

3,261

14,201

10,998

Amortization of intangibles

12,475

13,090

13,756

53,078

55,241

Change in fair value of contingent consideration

(2,384)

6,658

7,181

5,327

28,402

Severance

105

390

295

1,026

Litigation settlements and contingencies

40

13

140

(943)

(151)

Interest expense, net

9,894

16,617

4,863

36,300

20,271

Other income

(369)

(381)

(376)

(524)

Income tax (benefit) expense

(5,095)

(7,925)

3,073

(19,961)

(8,479)

Variable marketing margin

$

82,302

$

78,122

$

93,824

$

341,152

$

395,668

Variable marketing margin % of revenue

37

%

35

%

37

%

37

%

36

%

(1)

Represents the portion of cost of revenue attributable to costs paid for advertising re-sold to third parties. Excludes overhead, fixed costs,

and personnel-related expenses.

(2)

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

Twelve Months Ended

December 31,

2020

September 30,

2020

December 31,

2019

December 31,

2020

December 31,

2019

(in thousands, except percentages)

Net (loss) income from continuing operations

$

(8,117)

$

(24,809)

$

1,466

$

(22,566)

$

39,460

Net (loss) income from continuing operations %

of revenue

(4)

%

(11)

%

1

%

(2)

%

4

%

Adjustments to reconcile to adjusted EBITDA:

Amortization of intangibles

12,475

13,090

13,756

53,078

55,241

Depreciation

3,738

3,535

3,261

14,201

10,998

Severance

105

390

295

1,026

Loss (gain) on impairments and disposal of assets

474

134

424

1,160

(945)

Non-cash compensation expense

14,497

14,161

11,335

53,733

52,167

Costs of secondary public offering

863

863

Change in fair value of contingent consideration

(2,384)

6,658

7,181

5,327

28,402

Acquisition expense

(188)

205

14

2,217

211

Litigation settlements and contingencies

40

13

140

(943)

(151)

Interest expense, net

9,894

16,617

4,863

36,300

20,271

Income tax (benefit) expense

(5,095)

(7,925)

3,073

(19,961)

(8,479)

Adjusted EBITDA

$

26,302

$

21,679

$

45,903

$

123,704

$

198,201

Adjusted EBITDA % of revenue

12

%

10

%

18

%

14

%

18

%

 

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

Twelve Months Ended

December 31,

2020

September 30,

2020

December 31,

2019

December 31,

2020

December 31,

2019

(in thousands, except per share amounts)

Net (loss) income from continuing operations

$

(8,117)

$

(24,809)

$

1,466

$

(22,566)

$

39,460

Adjustments to reconcile to adjusted net (loss) income:

Severance

105

390

295

1,026

Loss (gain) on impairments and disposal of assets

474

134

424

1,160

(945)

Non-cash compensation

14,497

14,161

11,335

53,733

52,167

Costs of secondary public offering

863

863

Change in fair value of contingent consideration

(2,384)

6,658

7,181

5,327

28,402

Acquisition expense

(188)

205

14

2,217

211

Litigation settlements and contingencies

40

13

140

(943)

(151)

Loss on extinguishment of debt

7,768

7,768

Income tax benefit from adjusted items

(3,402)

(7,361)

(4,087)

(17,880)

(20,694)

Excess tax benefit from stock-based compensation

(51)

(175)

(516)

(2,033)

(17,058)

Income tax benefit from CARES Act

(6,104)

Adjusted net income (loss)

$

1,837

$

(3,406)

$

16,347

$

21,837

$

82,418

Net (loss) income per diluted share from continuing

operations

$

(0.62)

$

(1.90)

$

0.10

$

(1.73)

$

2.70

Adjustments to reconcile net (loss) income from

continuing operations to adjusted net income (loss)

0.76

1.64

1.02

3.41

2.94

Adjustments to reconcile effect of dilutive securities

(0.01)

(0.14)

Adjusted net income (loss) per share

$

0.13

$

(0.26)

$

1.12

$

1.54

$

5.64

Adjusted weighted average diluted shares outstanding

14,163

13,033

14,580

14,150

14,619

Effect of dilutive securities

1,112

1,143

Weighted average diluted shares outstanding

13,051

13,033

14,580

13,007

14,619

Effect of dilutive securities

1,659

1,785

Weighted average basic shares outstanding

13,051

13,033

12,921

13,007

12,834

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, severance, litigation settlements and contingencies, acquisition and disposition income or expenses including with respect to changes in fair value of contingent consideration, 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, including the portion of cost of revenue attributable to costs paid for advertising re-sold to third parties, 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. When advertising inventory is re-sold to third parties, the proceeds of such transactions are included in revenue for the purposes of calculating variable marketing margin, and the costs of such re-sold advertising are included in cost of revenue in the company’s consolidated statements of operations and consolidated income and are included in variable marketing expense for purposes of calculating variable marketing margin.

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) restructuring and severance expenses, (5) litigation settlements and contingencies, (6) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), and (7) one-time items.

Adjusted net income is defined as net income (loss) from continuing operations excluding (1) non-cash compensation expense, (2) non-cash impairment charges, (3) gain/loss on disposal of assets, (4) restructuring and severance expenses, (5) litigation settlements and contingencies, (6) acquisitions and dispositions income or expense (including with respect to changes in fair value of contingent consideration), (7) gain/loss on extinguishment of debt, (8) one-time items, (9) the effects to income taxes of the aforementioned adjustments, and (10) 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, except for the $6.1 million income tax benefit from the CARES Act in Q1 2020 and the Q4 2020 expenses incurred in connection with a secondary public offering of our common stock by our largest shareholder, for which we did not receive any proceeds.

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, 2019, in our Form 10-Q for the period ended September  30, 2020, 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 lenders 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:

Trent Ziegler

trent.ziegler@lendingtree.com

704-943-8294                                                                         

Media Contact:

Megan Greuling

megan.greuling@lendingtree.com 

704-943-8208

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/lendingtree-reports-fourth-quarter-2020-results-301235411.html

SOURCE LendingTree, Inc.

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Are Sallie Mae Student Loans Federal or Private?

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When you hear the name Sallie Mae, you probably think of student loans. There’s a good reason for that; Sallie Mae has a long history, during which time it has provided both federal and private student loans.

However, as of 2014, all of Sallie Mae’s student loans are private, and its federal loans have been sold to another servicer. Here’s what to know if you have a Sallie Mae loan or are considering taking one out.

What is Sallie Mae?

Sallie Mae is a company that currently offers private student loans. But it has taken a few forms over the years.

In 1972, Congress first created the Student Loan Marketing Association (SLMA) as a private, for-profit corporation. Congress gave SLMA, commonly called “Sallie Mae,” the status of a government-sponsored enterprise (GSE) to support the company in its mission to provide stability and liquidity to the student loan market as a warehouse for student loans.

However, in 2004, the structure and purpose of the company began to change. SLMA dissolved in late December of that year, and the SLM Corporation, or “Sallie Mae,” was formed in its place as a fully private-sector company without GSE status.

In 2014, the company underwent another big adjustment when Sallie Mae split to form Navient and Sallie Mae. Navient is a federal student loan servicer that manages existing student loan accounts. Meanwhile, Sallie Mae continues to offer private student loans and other financial products to consumers. If you took out a student loan with Sallie Mae prior to 2014, there’s a chance that it was a federal student loan under the now-defunct Federal Family Education Loan Program (FFELP).

At present, Sallie Mae owns 1.4 percent of student loans in the United States. In addition to private student loans, the bank also offers credit cards, personal loans and savings accounts to its customers, many of whom are college students.

What is the difference between private and federal student loans?

When you’re seeking financing to pay for college, you’ll have a big choice to make: federal versus private student loans. Both types of loans offer some benefits and drawbacks.

Federal student loans are educational loans that come from the U.S. government. Under the William D. Ford Federal Direct Loan Program, there are four types of federal student loans available to qualified borrowers.

With federal student loans, you typically do not need a co-signer or even a credit check. The loans also come with numerous benefits, such as the ability to adjust your repayment plan based on your income. You may also be able to pause payments with a forbearance or deferment and perhaps even qualify for some level of student loan forgiveness.

On the negative side, most federal student loans feature borrowing limits, so you might need to find supplemental funding or scholarships if your educational costs exceed federal loan maximums.

Private student loans are educational loans you can access from private lenders, such as banks, credit unions and online lenders. On the plus side, private student loans often feature higher loan amounts than you can access through federal funding. And if you or your co-signer has excellent credit, you may be able to secure a competitive interest rate as well.

As for drawbacks, private student loans don’t offer the valuable benefits that federal student borrowers can enjoy. You may also face higher interest rates or have a harder time qualifying for financing if you have bad credit.

Are Sallie Mae loans better than federal student loans?

In general, federal loans are the best first choice for student borrowers. Federal student loans offer numerous benefits that private loans do not. You’ll generally want to complete the Free Application for Federal Student Aid (FAFSA) and review federal funding options before applying for any type of private student loan — Sallie Mae loans included.

However, private student loans, like those offered by Sallie Mae, do have their place. In some cases, federal student aid, grants, scholarships, work-study programs and savings might not be enough to cover educational expenses. In these situations, private student loans may provide you with another way to pay for college.

If you do need to take out private student loans, Sallie Mae is a lender worth considering. It offers loans for a variety of needs, including undergrad, MBA school, medical school, dental school and law school. Its loans also feature 100 percent coverage, so you can find funding for all of your certified school expenses.

With that said, it’s always best to compare a few lenders before committing. All lenders evaluate income and credit score differently, so it’s possible that another lender could give you lower interest rates or more favorable terms.

The bottom line

Sallie Mae may be a good choice if you’re in the market for private student loans and other financial products. Just be sure to do your research upfront, as you should before you take out any form of financing. Comparing multiple offers always gives you the best chance of saving money.

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Tips to do some fall cleaning on your finances

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Wealth manager, Harry Abrahamsen, has five simple ways to stay on top of the big financial picture.

PORTLAND, Maine — Keeping track of our financial stability is something we can all do, whether we have IRAs or 401ks or just a checking account. Harry J. Abrahamsen is the Founder of Abrahamsen Financial Group. He works with clients to create and grow their own wealth. Abrahamsen shares five financial tips, starting with knowing what you have. 

1. Analyze Your Finances Quarterly or Biannually

You want to make sure that your long-term strategy is congruent with your short-term strategy. If the short-term is not working out, you may need to adjust what you are doing to make sure your outcome produces the desired results you are looking to accomplish. It is just like setting sail on a voyage across the Atlantic Ocean. You know where you want to go and plot your course, but there are many factors that need to be considered to actually get you across and across safely. Your finances behave the exact same way. Check your current situation and make sure you are taking into consideration all of the various wealth-eroding factors that can take you completely off course.

With interest rates very low, now might be a good time to consider refinancing student loans or mortgages, or consolidating credit card debt. However, do so only if you need to or if you can create a positive cash flow. To ensure that you are saving the most by doing so, you must look at current payments, excluding taxes and insurance costs. This way you can do an apples-to-apples comparison.

The most important things to look for when reviewing your credit report is accuracy. Make sure the reporting agencies are reporting things actuary. If it doesn’t appear to be reporting correct and accurate information, you should consult with a reputable credit repair company to help you fix the incorrect information.

4. Savings and Retirement Accounts

The most important thing to consider when reviewing your savings and retirement accounts is to make sure the strategies match your short-term and long-term investment objectives. All too often people end up making decisions one at a time, at different times in their lives, with different people, under different circumstances. Having a sound strategy in place will allow you to view your finances with a macro-economic lens vs a micro-economic view. Stay the course and adjust accordingly from a risk and tax standpoint.

RELATED: Financial lessons learned through the pandemic

A great tip for lowering utility bills or car insurance premiums: Simply ask! There may be things you are not aware of that could save you hundreds of dollars every month. You just need to call all of the companies that you do business with to find out about cost-cutting strategies. 

RELATED: Overcome your fear of finances

To learn more about Abrahamsen Financial, click here

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How to Get a Loan Even with Bad Credit

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Sana pwedeng mabura ang bad credit history as quickly and easily as paying off your utility bills, ‘no? Unfortunately, it takes time. And bago mo pa maayos ang bad credit mo, more often than not, kailangan mo na namang mag-avail ng panibagong loan. 

Good thing you can still get a loan even with bad credit, kahit na medyo limited ang options. How do you get a loan if you have bad credit? Alamin sa short guide na ito. 

For more finance tips, visit Moneymax.

 

 

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