Intersections Inc. Reports Fourth Quarter 2016 Results And Announces Year-End Business Update Call
-
Largest independent operator in the Identity Theft Monitoring space in
the U.S. and Canada - Strategic refocus only on identity and privacy protection services
-
Identity Guard® subscriber base increased to 380 thousand
subscribers - Voyce primary operations were ceased in December 2016
- Captira and Habits at Work to be sold off in first half of 2017
CHANTILLY, Va.–(BUSINESS WIRE)–Intersections Inc. (NASDAQ: INTX) today announced financial results for
the quarter ended December 31, 2016.
“We made significant advances in our Identity Guard® product
portfolio in 2016, initially with the release of a beta version of our
new flagship product at the IBM World of Watson Conference on October
24, 2016 and thereafter with further development and testing,” said
Johan Roets, Chief Executive Officer. “These actions help to ensure that
by the summer of 2017, the product will be best-in-class to address
three strategic objectives: 1) knowing that a consumer has an identity
theft problem earlier is better than knowing later; 2) taking
preventative measures to limit one’s risk profile and digital footprint
can and will reduce the risk of identity theft; and 3) that everyone’s
risk profile is unique and therefore must receive customized advice and
tools on how to protect themselves. Our innovation on the IBM Watson™
technology platform will allow us to address the 88% of data in the
world that is stored in unstructured format, but which could contain
valuable information about our subscribers’ and their families’ personal
information and risks thereto. No one else in the Identity Theft
Monitoring space currently has this capability. We have also made
significant investments in business development resources in the U.S. in
order to avail ourselves of new market opportunities. In Canada, our new
distribution partner, Sigma Loyalty Group, is solely dedicated to
helping us grow the Canadian market in new segments and win back
business lost in existing segments.
“We are very pleased to be entering 2017 with a complete focus on
personal information security for consumers and families, as threats
have never been greater,” Mr. Roets continued. “The decision to wind
down Voyce operations and exit other non-core businesses not only allows
us to focus our resources and leverage our core competencies in identity
and personal information security, but also to provide an opportunity to
significantly improve our future financial results compared to 2016. The
competitive landscape in our industry in the U.S. and Canada has seen
very telling changes in 2016. Experian acquired CS Identity (which had
approximately $120 million of revenue in 2016) in April 2016 for $360
million. Further, Symantec acquired LifeLock (which had approximately
$660 million of revenue in 2016) in September 2016 for $2.3 billion. Not
only do these acquisitions change the competitive landscape for us, they
also demonstrate the potential value that Intersections Inc. can create
with a focused growth business in the Identity Theft Monitoring space.
The two acquisitions leave Intersections Inc. as the largest independent
identity theft monitoring provider in the U.S., with personal
information services revenue in 2016 of $164 million and a market
capitalization of approximately $93 million (as of March 24, 2017).”
Consolidated revenue for the quarter ended December 31, 2016 was $42.2
million, compared to $47.4 million for the quarter ended December 31,
2015. Loss before income taxes for the quarter ended December 31, 2016
was $(12.6) million, compared to $(18.9) million for the quarter ended
December 31, 2015. Consolidated adjusted EBITDA (loss) before share
related compensation and non-cash impairment charges (“Adjusted EBITDA”)
for the quarter ended December 31, 2016 was $(1.8) million, compared to
$(5.7) million for the quarter ended December 31, 2015. Diluted loss per
share for the quarter ended December 31, 2016 was $(0.54), compared to
$(0.68) for the quarter ended December 31, 2015. Consolidated revenue
for the year ended December 31, 2016 was $175.7 million, compared to
$203.8 million for the year ended December 31, 2015. Loss before income
taxes for the year ended December 31, 2016 was $(30.5) million, compared
to $(38.4) million for the year ended December 31, 2015. Consolidated
Adjusted EBITDA (loss) for the year ended December 31, 2016 was $(6.6)
million, compared to $(8.2) million for the year ended December 31,
2015. Diluted loss per share for the year ended December 31, 2016 was
$(1.31), compared to $(2.26) for the year ended December 31, 2015.
In late 2016, the Board of Directors approved the closure of the
Company’s Pet Health Monitoring business, also known as Voyce, which
generated a loss before income taxes of $(29.4) million for the year
ended December 31, 2016. The discontinuation of Voyce commercial
operations will enable the Company’s growth strategy and capital to be
directed to the Identity Guard® business. To further the
Company’s strategic focus, it also sold the business comprising the Bail
Bonds Industry Solutions segment in early 2017.
Fourth Quarter Results:
-
Revenue from the Company’s Identity Guard® subscriber base
was $13.4 million for the quarter ended December 31, 2016 with a base
of 380 thousand subscribers as of December 31, 2016, 1.6% higher than
as of December 31, 2015. -
Revenue from the Company’s U.S. financial institution clients was
$22.8 million for the quarter ended December 31, 2016 with a base of
705 thousand subscribers as of December 31, 2016. The subscriber base
decreased by 1.2% per month during the fourth quarter, which the
Company believes is representative of normal attrition given the
discontinuation of marketing and retention efforts for this population. -
Core Business (the aggregate of all businesses of Intersections Inc.
except for its Pet Health Monitoring, or Voyce, business) income
(loss) before income taxes for the quarter ended December 31, 2016 was
$190 thousand compared to $(13.8) million for the quarter ended
December 31, 2015. Core Business Adjusted EBITDA (loss) for the
quarter ended December 31, 2016 was $3.6 million compared to $(973)
thousand for the quarter ended December 31, 2015. As a result of the
decision to exit the Bail Bonds Industry Solutions segment and the
Habits at Work consulting business, we recorded non-cash asset
impairments totaling $1.4 million in the fourth quarter of 2016. -
Voyce loss before income taxes for the quarter ended December 31, 2016
was $(12.8) million compared to $(5.1) million for the quarter ended
December 31, 2015. Voyce Adjusted EBITDA (loss) for the quarter ended
December 31, 2016 was $(5.4) million compared to $(4.7) million for
the quarter ended December 31, 2015. As a result of the ceased
operations, we recorded non-cash asset impairments totaling $7.0
million in the fourth quarter of 2016. -
As of December 31, 2016, the Company had a cash balance of $10.9
million, and an outstanding principal balance of $13.4 million under
its term loan with Crystal Financial SPV LLC. For additional
information, Please see “Item 7. Management’s Discussion and Analysis
of Financial Condition and Results of Operations—Liquidity and Capital
Resources” in our most recent Form 10-K.
Year-End Results:
-
Revenue from the Company’s Identity Guard® subscriber base
for the year ended December 31, 2016 was $54.5 million compared to
$55.6 million for the prior year. Revenue and subscriber growth during
the year was negatively impacted by reduced marketing on a year to
date basis compared to the prior year, as the Company prepared for the
launch of its new product utilizing the IBM Watson™
platform in the fourth quarter of 2016. -
Revenue from the Company’s U.S. financial institution clients for the
year ended December 31, 2016 was $96.2 million. -
Core Business (loss) before income taxes for the year ended December
31, 2016 was $(1.1) million compared to $(19.0) million for the year
ended December 31, 2015. Core Business Adjusted EBITDA for the year
ended December 31, 2016 was $13.2 million compared to $9.9 million for
the year ended December 31, 2015. -
Voyce loss before income taxes for the year ended December 31, 2016
was $(29.4) million compared to $(19.4) million for the year ended
December 31, 2015. Voyce Adjusted EBITDA (loss) for the year ended
December 31, 2016 was $(19.8) million compared to $(18.1) million for
the year ended December 31, 2015.
Year-End 2016 Business Update Conference Call:
The Company also announced today that it will hold a conference call to
provide a year-end 2016 business update on Monday, April 3, 2017 at 4:00
p.m. Eastern Time.
You may access the live webcast on the Investor’s page at Intersections
Inc.’s website www.intersections.com.
You can also access the call by dialing the toll free numbers below. If
you wish to participate in the Q&A session, you must dial in.
| WHAT: | Q4 2016 Intersections Inc. Earnings Conference Call | ||
| WHEN: | April 3, 2017 | ||
| 4:00 p.m. Eastern Time | |||
| HOW: |
To register for the conference, please |
||
|
You will receive an email confirmation that will include the dial-in number, passcode, and PIN to be used when joining your event. |
|||
The replay of the webcast will be available on this website for four
business days after the live call. The dial-in for the replay is either
888.843.7419 or 630.652.3042 with the replay access code of 5795601#.
Non-GAAP Financial Measures:
Intersections’ Consolidated Financial Statements, “Other Data” and
reconciliations of these non-GAAP financial measures to the most
directly comparable GAAP financial measures and related notes can be
found in the accompanying tables and footnotes to this release and in
the “GAAP and Non-GAAP Measures” link under the “Investor & Media” page
on our website at www.intersections.com.
Forward-Looking Statements:
Statements in this release relating to future plans, results,
performance, expectations, achievements and the like are considered
“forward-looking statements” under the Private Securities
Litigation Reform Act of 1995. You can identify forward-looking
statements by the fact that they do not relate strictly to historical or
current facts. These statements may include words such as “anticipate,”
“estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,”
“should,” “can have,” “likely” and other words and terms of similar
meaning in connection with any discussion of the timing or nature of
future operating or financial performance or other events. Those
forward-looking statements involve known and unknown risks and
uncertainties and are subject to change based on various factors and
uncertainties that may cause actual results to differ materially from
those expressed or implied by those statements, including the timing and
success of new product launches, including our Identity Guard®
platform and other growth initiatives; the continuing impact of the
regulatory environment on our business; the continued dependence on a
small number of financial institutions for a majority of our
revenue and to service our U.S. financial institution customer base; our
ability to execute our strategy and previously announced transformation
plan; our incurring additional restructuring charges; our incurring
impairment charges on goodwill and/or assets, including assets related
to our Voyce® business; our ability to control
costs; and our needs for additional capital to grow our business,
including our ability to maintain compliance with the covenants under
our term loan or seek additional sources of debt and/or equity
financing. Factors and uncertainties that may cause actual results to
differ include but are not limited to the risks disclosed under
“Forward-Looking Statements,” “Item 1. Business—Government Regulation”
and “Item 1A. Risk Factors” in the Company’s most recent Annual Report
on Form 10-K and Quarterly Reports on Form 10-Q and in its recent other
filings with the U.S. Securities and Exchange Commission. The Company
undertakes no obligation to revise or update any forward-looking
statements unless required by applicable law.
About Intersections:
Intersections Inc. (Nasdaq: INTX) provides innovative, information based
solutions that help consumers manage risks and make better informed life
decisions. Under its Identity Guard® brand and other brands,
the company helps consumers monitor, manage and protect against the
risks associated with their identities and personal information.
Headquartered in Chantilly, Virginia, the company was founded in 1996.
To learn more, visit www.intersections.com.
| INTERSECTIONS INC. | ||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||||
| NET REVENUE | $ | 42,201 | $ | 47,408 | $ | 175,662 | $ | 203,827 | ||||||||
| OPERATING EXPENSES: | ||||||||||||||||
| Marketing | 3,022 | 4,243 | 14,707 | 20,568 | ||||||||||||
| Commission | 10,140 | 11,611 | 42,776 | 50,837 | ||||||||||||
| Cost of services revenue | 12,442 | 15,949 | 53,837 | 64,932 | ||||||||||||
| Cost of hardware revenue | 104 | 217 | 1,381 | 608 | ||||||||||||
| General and administrative | 18,331 | 22,388 | 75,274 | 80,799 | ||||||||||||
| Impairment of goodwill | — | 10,318 | — | 10,318 | ||||||||||||
| Impairment of intangibles and other assets | 8,471 | — | 8,471 | 7,355 | ||||||||||||
| Depreciation | 1,507 | 1,579 | 6,238 | 5,977 | ||||||||||||
| Amortization | 93 | 206 | 577 | 687 | ||||||||||||
| Total operating expenses | 54,110 | 66,511 | 203,261 | 242,081 | ||||||||||||
| LOSS FROM OPERATIONS | (11,909 | ) | (19,103 | ) | (27,599 | ) | (38,254 | ) | ||||||||
| Interest expense | (666 | ) | (160 | ) | (2,369 | ) | (313 | ) | ||||||||
| Other (expense) income, net | (68 | ) | 319 | (482 | ) | 181 | ||||||||||
| LOSS BEFORE INCOME TAXES | (12,643 | ) | (18,944 | ) | (30,450 | ) | (38,386 | ) | ||||||||
| INCOME TAX BENEFIT (EXPENSE) | (145 | ) | 4,848 | (19 | ) | (6,102 | ) | |||||||||
| NET LOSS | $ | (12,788 | ) | $ | (14,096 | ) | $ | (30,469 | ) | $ | (44,488 | ) | ||||
| Basic and diluted loss per common share | $ | (0.54 | ) | $ | (0.68 | ) | $ | (1.31 | ) | $ | (2.26 | ) | ||||
| Weighted average shares outstanding, basic and diluted | 23,500 | 20,782 | 23,259 | 19,677 | ||||||||||||
| INTERSECTIONS INC. | ||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
| (in thousands, except par value) | ||||||||
| (unaudited) | ||||||||
| December 31, | ||||||||
| 2016 | 2015 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and cash equivalents | $ | 10,857 | $ | 11,471 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $15 (2016) and $115 (2015) |
7,972 | 8,163 | ||||||
| Prepaid expenses and other current assets | 3,864 | 7,524 | ||||||
| Inventory, net | 250 | 2,253 | ||||||
| Income tax receivable | 3,314 | 7,730 | ||||||
| Deferred subscription solicitation and commission costs | 5,050 | 6,961 | ||||||
| Assets held for sale | 104 | — | ||||||
| Total current assets | 31,411 | 44,102 | ||||||
| PROPERTY AND EQUIPMENT, net | 10,611 | 13,438 | ||||||
| GOODWILL | 9,763 | 9,763 | ||||||
| INTANGIBLE ASSETS, net | 210 | 1,693 | ||||||
| OTHER ASSETS | 862 | 1,034 | ||||||
| TOTAL ASSETS | $ | 52,857 | $ | 70,030 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 2,536 | $ | 3,207 | ||||
| Accrued expenses and other current liabilities | 11,068 | 15,845 | ||||||
| Accrued payroll and employee benefits | 4,256 | 7,091 | ||||||
| Commissions payable | 316 | 375 | ||||||
| Current portion of long-term debt, net | 2,146 | — | ||||||
| Capital leases, current portion | 471 | 631 | ||||||
| Deferred revenue | 8,295 | 2,380 | ||||||
| Liabilities held for sale | 104 | — | ||||||
| Total current liabilities | 29,192 | 29,529 | ||||||
| LONG-TERM DEBT, net | 10,092 | — | ||||||
| OBLIGATIONS UNDER CAPITAL LEASES, less current portion | 865 | 1,147 | ||||||
| OTHER LONG-TERM LIABILITIES | 3,436 | 3,971 | ||||||
| DEFERRED TAX LIABILITY, net | 1,905 | 1,905 | ||||||
| TOTAL LIABILITIES | 45,490 | 36,552 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS’ EQUITY: | ||||||||
|
Common stock at $0.01 par value, shares authorized 50,000; shares issued 27,303 (2016) and 26,730 (2015); shares outstanding 23,733 (2016) and 23,236 (2015) |
273 | 267 | ||||||
| Additional paid-in capital | 142,247 | 137,705 | ||||||
| Treasury stock, shares at cost; 3,570 (2016) and 3,494 (2015) | (33,822 | ) | (33,632 | ) | ||||
| Accumulated deficit | (101,331 | ) | (70,862 | ) | ||||
| TOTAL STOCKHOLDERS’ EQUITY | 7,367 | 33,478 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 52,857 | $ | 70,030 | ||||
| INTERSECTIONS INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (in thousands) | ||||||||
| (unaudited) | ||||||||
| 2016 | 2015 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | (30,469 | ) | $ | (44,488 | ) | ||
|
Adjustments to reconcile net loss to cash flows used in operating activities: |
||||||||
| Depreciation | 6,238 | 5,977 | ||||||
| Depreciation of other operating assets | 24 | — | ||||||
| Amortization | 577 | 687 | ||||||
| Deferred income tax, net | — | 13,356 | ||||||
| Amortization of debt issuance cost | 884 | 109 | ||||||
| Provision for doubtful accounts | (89 | ) | 100 | |||||
| Adjustment for surplus and obsolete inventories | 801 | — | ||||||
| Loss on disposal of fixed assets | 451 | 65 | ||||||
| Share based compensation | 4,882 | 5,441 | ||||||
|
Amortization of deferred subscription solicitation and commission costs |
12,656 | 17,538 | ||||||
| Impairment of goodwill, intangibles and other assets | 8,471 | 17,673 | ||||||
| Changes in assets and liabilities: | ||||||||
| Accounts receivable | 57 | 7,221 | ||||||
| Prepaid expenses and other current assets | 3,661 | 979 | ||||||
| Inventory, net | (2,585 | ) | (2,253 | ) | ||||
| Income tax, net | 4,415 | (1,036 | ) | |||||
| Deferred subscription solicitation and commission costs | (10,744 | ) | (17,578 | ) | ||||
| Other assets | 79 | 782 | ||||||
| Accounts payable | (845 | ) | (2,147 | ) | ||||
| Accrued expenses and other current liabilities | (4,895 | ) | (3,305 | ) | ||||
| Accrued payroll and employee benefits | (2,793 | ) | 1,810 | |||||
| Commissions payable | (59 | ) | (94 | ) | ||||
| Deferred revenue | 5,916 | (532 | ) | |||||
| Other long-term liabilities | (554 | ) | (574 | ) | ||||
| Cash flows used in operating activities | (3,921 | ) | (269 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Cash received for the liquidating distribution of White Sky, Inc. | 57 | — | ||||||
| Cash paid for acquisition of technology related intangible | — | (202 | ) | |||||
| Cash paid for the business acquisitions | — | (626 | ) | |||||
| Increase in restricted cash | (375 | ) | — | |||||
| Proceeds from sale of property and equipment | 394 | — | ||||||
| Acquisition of property and equipment | (6,685 | ) | (4,212 | ) | ||||
| Cash flows used in investing activities | (6,609 | ) | (5,040 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of debt | 20,000 | — | ||||||
| Repayments of debt | (6,568 | ) | — | |||||
| Cash paid for debt issuance costs | (1,990 | ) | — | |||||
| Stock issuance proceeds, net of stock issuance costs | — | 7,394 | ||||||
| Capital lease payments | (719 | ) | (696 | ) | ||||
|
Withholding tax payment on vesting of restricted stock units and stock option exercises |
(486 | ) | (1,243 | ) | ||||
| Cash flows provided by financing activities | 10,237 | 5,455 | ||||||
| (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (293 | ) | 146 | |||||
| CASH AND CASH EQUIVALENTS — Beginning of period | 11,471 | 11,325 | ||||||
| Less: cash reclassified to assets held for sale at end of period | (321 | ) | — | |||||
| CASH AND CASH EQUIVALENTS — End of period | $ | 10,857 | $ | 11,471 | ||||
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | 1,641 | $ | 179 | ||||
| Cash paid for taxes | $ | 28 | $ | 230 | ||||
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: |
||||||||
| Equipment obtained under capital lease, including acquisition costs | $ | 923 | $ | 926 | ||||
| Equipment additions accrued but not paid | $ | 423 | $ | 115 | ||||
|
Shares withheld in lieu of withholding taxes on vesting of restricted stock awards |
$ | 39 | $ | 141 | ||||
|
Shares issued in the business acquired from White Sky, Inc., net of liquidating distributions |
$ | — | $ | 576 | ||||
|
Shares issued in the business acquired from Health at Work Wellness Actuaries LLC |
$ | — | $ | 1,551 | ||||
| Transfer of land and building to held for sale | $ | — | $ | 214 | ||||
|
INTERSECTIONS INC. |
|
OTHER DATA |
|
(in thousands) |
|
(unaudited) |
|
Personal Information Services Segment Revenue |
|
The following tables provide details of our Personal Information Services segment revenue information for the three months and years ended December 31, 2016 and 2015: |
| Quarters Ended December 31, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||
| Bank of America | $ | 18,497 | $ | 21,247 | 46.7 | % | 48.4 | % | ||||||
| All other financial institution clients | 4,306 | 5,416 | 10.9 | % | 12.3 | % | ||||||||
| IDENTITY GUARD® | 13,355 | 14,179 | 33.7 | % | 32.3 | % | ||||||||
| Canadian business lines | 3,084 | 3,076 | 7.8 | % | 7.0 | % | ||||||||
| Other | 343 | — | 0.9 | % | 0.0 | % | ||||||||
| Total Personal Information Services revenue | $ | 39,585 | $ | 43,918 | 100.0 | % | 100.0 | % | ||||||
| Years Ended December 31, | ||||||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||||
| Bank of America | $ | 77,841 | $ | 89,932 | 47.6 | % | 47.7 | % | ||||||
| All other financial institution clients | 18,361 | 25,492 | 11.2 | % | 13.5 | % | ||||||||
| IDENTITY GUARD® | 54,545 | 55,594 | 33.3 | % | 29.5 | % | ||||||||
| Canadian business lines | 12,488 | 17,511 | 7.6 | % | 9.3 | % | ||||||||
| Other | 467 | — | 0.3 | % | 0.0 | % | ||||||||
| Total Personal Information Services revenue | $ | 163,702 | $ | 188,529 | 100.0 | % | 100.0 | % | ||||||
|
INTERSECTIONS INC. |
|
OTHER DATA, continued |
|
(in thousands) |
|
(unaudited) |
|
Personal Information Services Segment Subscribers |
|
The following tables provide details of our Personal Information Services segment subscriber information for the three months and years ended December 31, 2016 and 2015: |
|
Three months ended: |
|
Financial |
IDENTITY |
Canadian |
Total | |||||||||||||
| Balance at September 30, 2016 | 732 | 375 | 161 | 1,268 | ||||||||||||
| Additions | 1 | 41 | 30 | 72 | ||||||||||||
| Cancellations | (28 | ) | (36 | ) | (29 | ) | (93 | ) | ||||||||
| Balance at December 31, 2016 | 705 | 380 | 162 | 1,247 | ||||||||||||
| Balance at September 30, 2015 | 861 | 389 | 164 | 1,414 | ||||||||||||
| Additions | 2 | 37 | 30 | 69 | ||||||||||||
| Cancellations | (34 | ) | (63 | ) | (29 | ) | (126 | ) | ||||||||
| Balance at December 31, 2015 | 829 | 363 | 165 | 1,357 | ||||||||||||
|
Years ended: |
||||||||||||||||
|
Financial |
IDENTITY |
Canadian |
Total | |||||||||||||
| Balance at December 31, 2014 | 1,421 | 342 | 296 | 2,059 | ||||||||||||
| Additions | 4 | 253 | 103 | 360 | ||||||||||||
| Cancellations | (596 | ) | (232 | ) | (234 | ) | (1,062 | ) | ||||||||
| Balance at December 31, 2015 | 829 | 363 | 165 | 1,357 | ||||||||||||
| Reclassification (1) | (11 | ) | 11 | — | — | |||||||||||
| Additions | 2 | 200 | 123 | 325 | ||||||||||||
| Cancellations | (115 | ) | (194 | ) | (126 | ) | (435 | ) | ||||||||
| Balance at December 31, 2016 | 705 | 380 | 162 | 1,247 | ||||||||||||
| ____________________________ | ||
| (1) |
We periodically refine the criteria used to calculate and report our subscriber data. In the year ended December 31, 2016, we reclassified certain subscribers that receive our breach response services, and the associated revenue, from the Financial Institution category to the Identity Guard® category. The reclassification is excluded from our calculations of decrease and increase in subscribers in our Financial Institution and Consumer Direct categories, respectively. |
INTERSECTIONS INC.
OTHER DATA, continued
(unaudited)
Intersections Inc.
Reconciliation of Non-GAAP Financial Measures
The table below includes financial information prepared in accordance
with accounting principles generally accepted in the United States, or
GAAP, as well as other financial measures referred to as non-GAAP
financial measures. Consolidated adjusted EBITDA before share related
compensation and non-cash impairment charges (“Adjusted EBITDA”) is
presented in a manner consistent with the way management evaluates
operating results and which management believes is useful to investors
and others. Share related compensation includes non-cash share based
compensation. An explanation regarding the company’s use of non-GAAP
financial measures and a reconciliation of non-GAAP financial measures
used by the company to GAAP measures is provided below. These non-GAAP
financial measures should be considered in addition to, but not as a
substitute for, net income (loss) and the other information prepared in
accordance with GAAP, and may not be comparable to similarly titled
measures reported by other companies. Management strongly encourages
shareholders to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial
measure.
Consolidated Adjusted EBITDA represents consolidated loss before income
taxes plus: share related compensation; non-cash impairment of goodwill,
intangibles and other long-lived assets; (gain) loss on disposal of
fixed assets; adjustment for surplus and obsolete inventories;
depreciation and amortization; and interest (income) expense. We believe
that the consolidated Adjusted EBITDA calculation provides useful
information to investors because they are indicators of our operating
performance, and we use these measures in communications with our board
of directors, creditors, investors and others concerning our financial
performance. Consolidated Adjusted EBITDA is commonly used as a basis
for investors and analysts to evaluate and compare the periodic and
future operating performance and value of companies within our industry.
Contacts
Intersections Inc.
Ron Barden, 703-488-6810
IR@intersections.com
