EXHIBIT 99.1
LendingTree Exceeds Profit Expectations and Raises 2003 EPS Guidance 40% to $0.70
| • | | First quarter revenue of $39.2 million represents growth of 13% from previous quarter and 84% over same quarter of 2002. |
| • | | First quarter EPS of $0.18 per share is $0.04 above previously increased guidance and $0.33 favorable to the first quarter of 2002. |
| • | | Net income available to common shareholders is $5.1 million in first quarter, favorable to the same quarter in 2002 by $8.0 million. |
| • | | Value of closed loans facilitated by LendingTree exchange during the quarter reaches a record $8.3 billion, an increase of 110% over first quarter 2002. |
| • | | Company raises 2003 EPS guidance from $0.50 to $0.70 per share. |
CHARLOTTE, N.C., April 21, 2003 —LendingTree, Inc. (NASDAQ: TREE), the leading online lending exchange, today announced financial results for its first quarter ended March 31, 2003, reporting its third consecutive quarter of positive diluted earnings per share (EPS) and posting its thirteenth quarter of sequential revenue growth. During the quarter, the Company earned $5.1 million, or $0.18 per diluted share, in accordance with generally accepted accounting principles (GAAP), exceeding the Company’s previously improved guidance by $0.04 per share and was $0.33 per share above the same quarter of last year. LendingTree posted record first quarter revenue of $39.2 million, which is $4.4 million, or 13%, greater than the fourth quarter of 2002 and $17.9 million, or 84%, greater than the revenue for the first quarter of 2002.
During the first quarter, transmitted loan requests for the Company’s lending exchange grew to 661,000 transmits, an increase of 22% over the previous quarter and 73% over the first quarter of 2002. The first quarter’s transmitted loan requests grew over the previous quarter in all loan product categories: 51% for purchase mortgages, 34% for home equity, 23% for auto, credit cards, and personal loans, and 10% for refinance mortgages. Closed loans facilitated by the lending exchange increased to $8.3 billion, which represents growth of 6% over the fourth quarter and 110% over the same quarter last year.
“Our first quarter financial results demonstrate the ability of our Company to generate significant profitability while investing for growth in both our consumer lending and real estate businesses,” said Doug Lebda, founder and CEO. “Consumer demand for our services remains high, and our scaleable business model continues to flourish, as a result of our expanded marketing initiatives that promote our telephone channel and emphasize our home equity, purchase mortgage, and real estate products. In addition, we continue to benefit from our efforts to expand the capacity of our exchanges, enabling us to facilitate a greater number of loan and REALTOR® requests. This is evident in our first quarter transmit rate, which averaged 66% across all loan products. This transmit rate was a record for the Company and is an important indicator of exchange capacity, especially given the record volume of loan requests.”
Lebda continued, “During the first quarter, we began to promote our telephone channel and our ‘Find a REALTOR®’ product with new television and radio advertising. The positive consumer response to the new marketing is important as it drives both real estate and loan demand. While we are implementing several initiatives to maintain cost efficiency, we are also investing in enterprise-wide relationships with key strategic partners, such as MSN and AutoTrader.com. As a result of these and other investments, our
variable marketing expense in the quarter was $1.6 million more than our guidance, or roughly $0.05 per share. To date, these initiatives have been successful at driving high value transactions, such as purchase mortgage, home equity, auto, and real estate requests, and we believe they will be significant catalysts to our future success and growth.”
Keith Hall, senior vice president and CFO, stated, “As we have stated previously, we anticipate continued growth in market share as one of the significant dynamics that will offset the projected decline in the mortgage refinancing market. The number of transmitted loan requests for purchase mortgages on the LendingTree exchange in the first quarter grew by 51% over the previous quarter. By contrast, the quarterly increase in purchase mortgage applications for the industry was only 10% over the fourth quarter. Furthermore, demand across all other loan products on our exchange in the first quarter increased more than 23% over the fourth quarter. The high growth rate for all of our loan products, particularly purchase mortgages, demonstrates how our brand awareness and product offering continue to attract consumers and help us grow market share.”
Hall continued, “During the quarter, we transmitted a record of 35,000 consumers to our REALTOR® partners to buy or sell their homes. The consumer demand for our ‘Find a REALTOR®’ product is nearly three times the number of requests in the previous quarter and more than 80% above the same quarter last year. Due to the promising early results of the television and radio promotion of our realty services product, we remain confident in the growth trajectory of our real estate business for the remainder of 2003.”
Hall added, “At the end of the first quarter, LendingTree had $26.9 million in total cash, and we did not have any balances outstanding under our available credit facilities. In March, we allowed our line of common equity financing to expire, with no amounts drawn on it since the line was established two years ago.”
Business Outlook
Lebda stated, “Our mortgage product is thriving due to strong volume and added lender capacity, and our business model continues to perform as anticipated. A low interest rate environment shifts our loan mix toward mortgage refinance requests and away from the home equity product, where we earn higher revenue per customer. As interest rates rise, we believe that our continued growth will be based on mortgage lenders re-focusing on the purchase mortgage product, improvements in our home equity mix and conversion metrics, expansion into new marketing channels, and increasing our penetration in other products, like realty services.”
Hall concluded, “Due to the encouraging response of our new real estate and telephone advertising and the growth in purchase mortgage demand, we are significantly raising our 2003 guidance, despite our anticipation that the mix of mortgage refinance activity will decline to 58%, 46% and 33% for the remaining quarters in 2003, respectively. Our guidance for 2003 revenue has improved by $17.1 million, or 12%, to $155.8 million, and we are raising our outlook for net income available to common shareholders by $6.4 million, or 44%, to $21.1 million, which would represent an improvement of 340% over 2002. These improvements add $0.20 per share to full year earnings over our previous guidance, as we now expect 2003 EPS to be $0.70 per diluted share.”
(all figures in millions, except %, per share and per transmit data)
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| 2003 Guidance | | Actual | | | | | | Guidance | | | | |
| P&L Data | | Q1 | | Q2 | | Q3 | | Q4 | | Full Year |
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| Revenue | |
| | Loan Exchange | | $ | 36.0 | | | $ | 36.0 | | | $ | 35.0 | | | $ | 32.0 | | | $ | 139.0 | |
| | Realty Exchange | | $ | 2.4 | | | $ | 3.0 | | | $ | 4.3 | | | $ | 4.2 | | | $ | 13.9 | |
| | Other | | $ | 0.7 | | | $ | 0.7 | | | $ | 0.7 | | | $ | 0.7 | | | $ | 2.8 | |
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| Total Revenue | | $ | 39.2 | | | $ | 39.7 | | | $ | 40.0 | | | $ | 36.9 | | | $ | 155.8 | |
| Gross Margin | | $ | 32.6 | | | $ | 33.1 | | | $ | 33.1 | | | $ | 30.6 | | | $ | 129.4 | |
| Gross Margin % | | | 83.3 | % | | | 83.4 | % | | | 82.8 | % | | | 82.9 | % | | | 83.1 | % |
Variable Marketing Expense[1] | | $ | 15.1 | | | $ | 15.2 | | | $ | 14.9 | | | $ | 13.4 | | | $ | 58.6 | |
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Contribution Margin[2] | | $ | 17.5 | | | $ | 17.9 | | | $ | 18.2 | | | $ | 17.2 | | | $ | 70.9 | |
Contribution Margin %[2] | | | 44.8 | % | | | 45.1 | % | | | 45.5 | % | | | 46.6 | % | | | 45.5 | % |
Other Operating Exp.[3] | | $ | 11.8 | | | $ | 12.0 | | | $ | 12.1 | | | $ | 11.7 | | | $ | 47.6 | |
| Interest Income | | $ | 0.1 | | | $ | 0.1 | | | $ | 0.1 | | | $ | 0.1 | | | $ | 0.4 | |
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| Net Income | | $ | 5.8 | | | $ | 6.0 | | | $ | 6.2 | | | $ | 5.6 | | | $ | 23.6 | |
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| Dividends and Accretion on Preferred Stock | | $ | 0.6 | | | $ | 0.6 | | | $ | 0.6 | | | $ | 0.6 | | | $ | 2.5 | |
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| Net Income Available to Common Shareholders | | $ | 5.1 | | | $ | 5.4 | | | $ | 5.6 | | | $ | 5.0 | | | $ | 21.1 | |
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| EPS — Diluted | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.16 | | | $ | 0.70 | |
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Pro Forma After-Tax EPS[4] | | $ | 0.11 | | | $ | 0.11 | | | $ | 0.11 | | | $ | 0.10 | | | $ | 0.43 | |
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Weighted Average Common Shares — Diluted[5] | | | 32.3 | | | | 33.4 | | | | 34.1 | | | | 35.0 | | | | 33.7 | |
| | | [1] Variable Marketing Expense is a component of Marketing and Advertising Expense, which was $18.1 million in the first quarter, as disclosed in the Company’s Consolidated Statement of Operations. Variable Marketing Expense is comprised of all media advertising, affiliate network costs, and strategic partner costs, which totaled $15.1 million in the first quarter. The remaining $3.0 million is other marketing and advertising expense that is part of Other Operating Expense and is considered by Management to be less correlated to producing incremental revenue as Variable Marketing Expense, since Variable Marketing Expense is directly associated with the cost of attracting consumers to our Web site, telephone channel, or partner Web sites. |
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| | | [2] Contribution Margin is calculated as Gross Margin less Variable Marketing Expense (see footnote[1]), and Contribution Margin % is Contribution Margin divided by Total Revenue. |
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| | | [3] Other Operating Expense is Total Operating Expense, which was $26.9 million in the first quarter, as disclosed in the Company’s Consolidated Statement of Operations, less Variable Marketing Expense (see footnote[1]). Other Operating |
| | | Expense in 2003 also includes Product Development Expense, Marketing and Advertising Expense less Variable Marketing Expense (see footnote[1]), and SG&A Expense. Other Operating Expense includes actual and projected depreciation and amortization expense, as well as non-cash stock based compensation charges, totaling $5.4 million, incurred and projected quarterly as follows: Q1 $1.2 million, Q2 $1.5 million, Q3 $1.4 million, and Q4 $1.3 million. |
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| | | [4] Pro Forma After-Tax EPS is calculated by applying a hypothetical 38% tax rate to Net Income Per Diluted Common Share, as disclosed in the Company’s Consolidated Statement of Operations. Due to its ability to carry forward historical Net Operating Losses, the Company does not expect to pay taxes until late 2004. Management believes that it is useful to provide Pro Forma After-Tax EPS until the Company pays taxes so that an investor can analyze earnings comparable to other companies currently paying taxes and consistent with future after-tax earnings of the Company. The actual tax rate in future periods may vary from the estimated tax rate used above. |
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| | | [5] For the quarter ended March 31, 2003, diluted weighted average common shares outstanding include 22.7 million basic common shares and 9.6 million weighted average potential common shares. Potential common shares consist of: 1) 6.5 million shares issuable upon the assumed conversion of the 6.0 million shares of outstanding convertible preferred stock, and 2) 3.1 million net shares issuable under the treasury stock method from the 6.5 million options and warrants outstanding. As of March 31, 2003, the Company has 22.8 million common shares issued and outstanding. |
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| 2003 Guidance | | Actual | | | | | | Guidance | | | | | | | | |
| Key Metrics | | Q1 | | Q2 | | Q3 | | Q4 | | Full Year |
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| Transmitted Loan and | | | 696 | | | | 640 | | | | 587 | | | | 540 | | | | 2,463 | |
| Realty Requests (000’s) | | | | | | | | | | | | | | | | | | | | |
| Per Transmit Metrics: | | | | | | | | | | | | | | | | | | | | |
| Revenue | | $ | 55.18 | | | $ | 60.94 | | | $ | 66.95 | | | $ | 67.04 | | | $ | 62.08 | |
| Variable Marketing Exp | | $ | 21.64 | | | $ | 23.75 | | | $ | 25.38 | | | $ | 24.81 | | | $ | 23.78 | |
| Cost of Revenue | | $ | 8.83 | | | $ | 9.75 | | | $ | 10.71 | | | $ | 10.73 | | | $ | 9.93 | |
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| Total Contribution Margin | | $ | 24.71 | | | $ | 27.44 | | | $ | 30.86 | | | $ | 31.50 | | | $ | 28.37 | |
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The above information is based on current expectations. Actual results may differ materially. These statements are forward-looking and do not reflect the potential impact of events that may occur after the date of this release, including the risks described below under the caption “Disclosure Regarding Forward-Looking Statements.”
Conference Call Information: LendingTree has scheduled a conference call to discuss the Company’s financial results for the first quarter of 2003 on Monday, April 21st at 4:30 p.m. EST. To listen to the conference call, please dial(888) 799-0558. A replay of the call will be available starting two hours after the completion of the call until April 24, 2003. The dial-in number for the replay will be800-642-1687, Conference ID#9685973. The conference call will also be available via Webcast at www.lendingtree.com.
About LendingTree, Inc.
Founded in 1996, LendingTree (NASDAQ: TREE) is the leading online lending Exchange that connects consumers, Lenders, REALTORS®, and related service providers. The LendingTree Exchange is made up of more than 190 banks, lenders, and brokers (Lenders) and has facilitated nearly $40 billion in closed loans since inception. More than 8 million consumers have accessed the LendingTree Exchange through
the Company’s site at www.lendingtree.com and through online and offline partners. Loans available via the LendingTree Exchange include home mortgage, home equity, automobile, personal, debt consolidation, and credit cards. LendingTree is the No. 1 brand in the online lending market for consumers, with 67 percent national awareness. The LendingTree Lend-X technology has been cited as ‘the platform of choice’(a) for online lending and has been adopted by industry leaders to power their online lending initiatives. The LendingTree Realty Services offering connects consumers to a nationwide network of approximately 9,000 REALTORS®. The Company’s services and products are specifically designed to empower consumers, Lenders, and related service providers throughout the lending process, delivering convenience, choice, and excellent value.
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| | | (a) Resuscitating Mortgage Lending. Forrester Research, March 2001 |
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| | | REALTOR® — A registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics |
Disclosure Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements and information regarding: our guidance related to our projected financial and operating results through the end of 2003; our belief that our marketing initiatives will be significant catalysts to our future success and growth; our belief that continued growth in market share is one of the dynamics that will offset the projected decline in the mortgage refinance market; our belief that our future growth will be based on improvements in home equity mix and metrics, expansion into new marketing channels, and increasing our penetration in other products such as realty services; and our guidance being improved by the response of our new real estate and telephone advertising and the growth in purchase mortgage demand. These statements are based on management’s current expectations or beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those set forth in the forward looking statements. The Company’s actual results might differ materially from those stated or implied by such forward-looking statements due to risks and uncertainties associated with the Company’s business, which include, but are not limited to: variations in consumer demand or acceptance of our services; the willingness of lending institutions to offer their products over the Internet; further changes in the Company’s relationships with existing lenders, companies, and/or strategic partners; the Company’s ability to attract and integrate new lending companies and strategic partners; implementation of competing Internet strategies by existing and potential lending participants; implementation and acceptance of new product or service offerings; consumer lending industry regulation; competition in all aspects of the Company’s business; fluctuations in operating results; or other unforeseen factors. The forward-looking statements should be considered in the context of these and other risk factors disclosed in the Company’s filings with the Securities and Exchange Commission.
# # #
LendingTree, Inc.
Operating Statistics by Product
For the Quarter Ended March 31, 2003
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| | | | LendingTree Exchange |
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| | | | | | | | Home | | | | | | Credit | | | | | | Exchange | | Realty | | | | |
| | | | Mortgage | | Equity | | Auto | | Card | | Personal | | Sub-Total | | Services | | Total |
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Volume | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Loan/Real Estate Requests Transmitted: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number | | | 351,652 | | | | 99,943 | | | | 121,173 | | | | 62,925 | | | | 25,273 | | | | 660,966 | | | | 35,156 | | | | 696,122 | |
| | Volume of Requests (in $ millions) | | $ | 56,927 | | | $ | 4,840 | | | $ | 1,984 | | | $ | 315 | | | $ | 239 | | | $ | 64,305 | | | $ | 8,293 | | | $ | 72,598 | |
Transactions Closed in Q1 2003 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number | | | 32,730 | | | | 16,084 | | | | 11,978 | | | | 7,849 | (1) | | | 4,503 | | | | 73,144 | | | | 1,088 | | | | 74,232 | |
| | Volume of Transactions Closed (in $ millions) | | $ | 6,916 | | | $ | 1,068 | | | $ | 225 | | | $ | 39 | (1) | | $ | 60 | | | $ | 8,308 | | | $ | 257 | | | $ | 8,564 | |
Conversion Rates | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Transmit Rate | | | 78.9 | % | | | 84.1 | % | | | 68.7 | % | | | 87.8 | % | | | 29.3 | % | | | 64.7 | % | | | | | | | 64.7 | % |
Static Pool Close Rate (Quarterly Average)(2) | | | 10.3 | % | | | 19.7 | % | | | 18.5 | % | | | 8.8 | %(3) | | | 43.9 | % | | | 12.9 | % | | | 7.3 | %(6) | | | 12.7 | % |
Revenue (in $000’s) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Exchange Revenue | | $ | 25,504 | | | $ | 7,470 | | | $ | 1,390 | | | $ | 313 | (1) | | $ | 500 | | | $ | 36,011 | (4) | | $ | 808 | | | $ | 36,819 | |
Affinity Partner Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | 1,593 | | | $ | 1,593 | |
Other Revenue | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 745 | |
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Total Revenue | | $ | 25,504 | | | $ | 7,470 | | | $ | 1,390 | | | $ | 313 | | | $ | 500 | | | $ | 36,011 | | | $ | 2,401 | | | $ | 39,157 | |
Average Revenue per Transmit | | $ | 72.53 | | | $ | 74.74 | | | $ | 11.47 | | | $ | 4.97 | | | $ | 19.80 | | | $ | 54.48 | | | $ | 68.30 | | | $ | 55.18 | |
Other Data | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Number of Lenders/Realty Agencies | | | 160 | | | | 69 | | | | 14 | | | | 5 | | | | 3 | | | | 206 | (5) | | | 665 | | | | | |
| | | (1) Includes credit card cross-sell activity. |
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| | | (2) The static pool close rate incorporates the average time lag between the submission of a loan request (a “QF”) and the closure of a loan. It represents the closure rate of approved QFs from a static pool of requests submitted in the most recent month with a complete closure cycle. A static pool is considered to have a complete closure cycle after 120 days from the month in which a mortgage QF was submitted, 90 days after a home equity QF was submitted, 60 days after an auto or personal QF was submitted, and less than 30 days after a credit card QF was submitted. |
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| | | (3) The close rate for credit cards represents the percentage of cards transmitted via the Network that resulted in card issuances in the first quarter (excluding credit card cross-sell activity). |
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| | | (4) Total Lending Exchange Revenue does not add across as the total includes Set-Up Fees, and Adaptive Marketing Fees. |
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| | | (5) Number of Lenders does not add across because a lender can offer multiple loan products. The total lender number is the discrete number of LendingTree Exchange participants. |
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| | | (6) The static pool closing cycle for a real estate referral is 180 days from the month in which a real estate referral was submitted. |
LendingTree, Inc.
Exchange Operating Statistics by Marketing Channel
For the Quarter Ended March 31, 2003
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| | | LT.com | | Partners | | Affiliates | | Other | | Total |
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Revenue (in $000’s) | | | | | | | | | | | | | | | | | | | | |
Lending Exchange Revenue | | $ | 26,861 | | | $ | 4,599 | | | $ | 3,617 | | | $ | 933 | (1) | | $ | 36,011 | |
Realty Exchange Revenue | | | 728 | | | | 1,593 | | | | 34 | | | | 46 | | | | 2,401 | |
Other Revenue | | | | | | | 745 | | | | | | | | | | | | 745 | |
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Total Revenue | | $ | 27,589 | | | $ | 6,938 | | | $ | 3,651 | | | $ | 979 | | | $ | 39,157 | |
Exchange Marketing & Advertising (3) | | | | | | | | | | | | | | | | | | | | |
Variable Marketing & Advertising Costs (in $000s) (2) | | $ | 9,825 | | | $ | 2,931 | | | $ | 2,163 | | | $ | 145 | | | $ | 15,064 | |
Volume | | | | | | | | | | | | | | | | | | | | |
Loan Requests Transmitted (3) | | | 456,733 | | | | 116,201 | | | | 109,955 | | | | 13,233 | | | | 696,122 | |
Exchange Per Transmit Metrics (3) | | | | | | | | | | | | | | | | | | | | |
Revenue | | $ | 60.40 | | | $ | 59.70 | | | $ | 33.21 | | | $ | 74.01 | | | $ | 55.18 | |
Variable Marketing & Advertising Costs | | | 21.51 | | | | 25.23 | | | | 19.67 | | | | 10.95 | | | | 21.64 | |
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Variable Marketing Contribution Margin | | $ | 38.89 | | | $ | 34.48 | | | $ | 13.53 | | | $ | 63.07 | | | $ | 33.54 | |
| (1) | | Includes Credit Card Cross-sell Fees, Set-up Fees, and Adaptive Marketing Fees. |
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| (2) | | Variable Marketing & Advertising includes working media advertising, affiliate network costs and Lend-X network costs. |
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| (3) | | Variable marketing costs, loan requests transmitted and average exchange revenue per transmit excludes Lend-X revenue. |
LendingTree, Inc.
Consolidated Statements of Operations
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| | | | | | For the Quarter Ended March 31, |
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| Revenue: | | | | | | | | |
| | | Exchange | | $ | 38,412 | | | $ | 19,628 | |
| | | Other | | | 745 | | | | 1,640 | |
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| | | | Total revenue | | | 39,157 | | | | 21,268 | |
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| Cost of revenue: | | | | | | | | |
| | | Exchange | | | 6,181 | | | | 3,249 | |
| | | Other | | | 385 | | | | 320 | |
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| | | | Total cost of revenue | | | 6,566 | | | | 3,569 | |
| Gross profit: | | | | | | | | |
| | | Exchange | | | 32,231 | | | | 16,379 | |
| | | Other | | | 360 | | | | 1,320 | |
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| | | | Total gross profit | | | 32,591 | | | | 17,699 | |
| Operating expenses: | | | | | | | | |
| | Product development | | | 1,018 | | | | 878 | |
| | Marketing and advertising | | | 18,071 | | | | 10,681 | |
| | Sales, general and administrative | | | 7,802 | | | | 6,859 | |
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| | | | Total operating expenses | | | 26,891 | | | | 18,418 | |
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| Income (loss) from operations | | | 5,700 | | | | (719 | ) |
| Interest income | | | 123 | | | | 122 | |
| Interest expense, financing and other charges | | | (66 | ) | | | (115 | ) |
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| Income (loss) from operations before income taxes | | | 5,757 | | | | (712 | ) |
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| Provision (benefit) for income taxes | | | — | | | | — | |
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Net income (loss) from operations | | | 5,757 | | | | (712 | ) |
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| Accretion of mandatorily redeemable preferred stock | | | (170 | ) | | | (169 | ) |
| Dividends on preferred stock | | | (455 | ) | | | (1,960 | ) |
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Net income (loss) available to common shareholders | | $ | 5,132 | | | $ | (2,841 | ) |
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| Net income (loss) per common share — basic | | $ | 0.23 | | | $ | (0.15 | ) |
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| Net income (loss) per common share — diluted | | $ | 0.18 | | | $ | (0.15 | ) |
| | | | | |
| | | |
| |
| Weighted average shares used in basic net income (loss) per common share calculation | | | 22,662 | | | | 19,372 | |
| | | | | |
| | | |
| |
| Weighted average shares used in diluted net income (loss) per common share calculation | | | 32,292 | | | | 19,372 | |
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LendingTree, Inc.
Consolidated Balance Sheets
| | | | | | | | | | | | | |
| | | | | | | March 31, | | December 31, |
| | | | | | | 2003 | | 2002 |
| | | | | | |
| |
|
| | | | | | | ($ in thousands) |
Assets | | | | | | | | |
| Current assets: | | | | | | | | |
| | Cash and cash equivalents | | $ | 20,645 | | | $ | 22,708 | |
| | Restricted cash | | | 6,232 | | | | 4,479 | |
| | | | |
| | | |
| |
| | | Total cash and cash equivalents and restricted cash | | | 26,877 | | | | 27,187 | |
| | Accounts receivable, net of allowance for doubtful accounts | | | 21,998 | | | | 16,892 | |
| | Prepaid expenses and other current assets | | | 1,581 | | | | 1,010 | |
| | | | |
| | | |
| |
| | | | Total current assets | | | 50,456 | | | | 45,089 | |
| Equipment, furniture and leasehold improvements, net | | | 3,240 | | | | 1,717 | |
| Projects in process | | | 774 | | | | 1,468 | |
| Software, net | | | 871 | | | | 965 | |
| Intangible assets, net | | | 743 | | | | 1,330 | |
| Other assets | | | 174 | | | | 118 | |
| | | | |
| | | |
| |
| | | | Total assets | | $ | 56,258 | | | $ | 50,687 | |
| | | | |
| | | |
| |
Liabilities and Shareholders’ Equity | | | | | | | | |
| Current liabilities: | | | | | | | | |
| | Accounts payable | | $ | 7,133 | | | $ | 6,952 | |
| | Deferred revenue | | | 365 | | | | 417 | |
| | Accrued incentive and other compensation | | | 2,465 | | | | 5,095 | |
| | Accrued professional services and other fees | | | 2,395 | | | | 284 | |
| | Accrued consumer promotional costs | | | 987 | | | | 1,324 | |
| | Accrued other expenses | | | 1,123 | | | | 1,422 | |
| | Current portion capital lease obligations | | | 754 | | | | 619 | |
| | | | |
| | | |
| |
| | | | | Total current liabilities | | | 15,222 | | | | 16,113 | |
| Long-term deferred revenue and other non-current liabilities | | | 1,078 | | | | 927 | |
| Capital lease obligations | | | 427 | | | | 311 | |
| Commitments and contingencies | | | | | | | | |
| Mandatorily redeemable securities | | | | | | | | |
| | Series A convertible preferred stock, $.01 par value, 8% cumulative, 6,885,715 shares authorized, 5,996,676 shares issued and outstanding at March 31, 2003 and December 31, 2002 | | | 21,861 | | | | 21,691 | |
| Shareholders’ equity: | | | | | | | | |
| | Common stock, $.01 par value, 100,000,000 shares authorized, 23,018,037 and 22,823,920 shares issued at March 31, 2003 and December 31, 2002, respectively | | | 230 | | | | 228 | |
| | Treasury stock (230,449 shares at March 31, 2003 and 237,673 shares at December 31, 2002, at cost) | | | (1,472 | ) | | | (1,518 | ) |
| | Additional paid-in-capital | | | 131,475 | | | | 131,357 | |
| | Accumulated deficit | | | (112,406 | ) | | | (118,163 | ) |
| | Deferred compensation | | | (157 | ) | | | (214 | ) |
| | Notes receivable from officers | | | — | | | | (45 | ) |
| | | | |
| | | |
| |
| | | | Total shareholders’ equity | | | 17,670 | | | | 11,645 | |
| | | | |
| | | |
| |
| | | | Total liabilities and shareholders’ equity | | $ | 56,258 | | | $ | 50,687 | |
| | | | |
| | | |
| |
LendingTree, Inc.
Consolidated Statements of Cash Flows
| | | | | | | | | | | | | |
| | | | | | | For the Quarters Ended March 31, |
| | | | | | |
|
| | | | | | | 2003 | | 2002 |
| | | | | | |
| |
|
| | | | | | | ($ in thousands) |
| Cash flows used in operating activities: | | | | | | | | |
| | Net income (loss) | | $ | 5,757 | | | $ | (712 | ) |
| | Adjustments to reconcile net income (loss) to net cash used in operating activities: | | | | | | | | |
| | | Depreciation and amortization | | | 1,187 | | | | 1,915 | |
| | | Provision for doubtful accounts | | | 80 | | | | 30 | |
| | | Non-cash equity based compensation charges | | | 66 | | | | 237 | |
| | | Changes in assets and liabilities: | | | | | | | | |
| | | | Advertising escrow | | | (1,832 | ) | | | (3,671 | ) |
| | | | Accounts receivable | | | (5,186 | ) | | | (649 | ) |
| | | | Prepaid expenses and other assets | | | (634 | ) | | | (246 | ) |
| | | | Accounts payable | | | 181 | | | | (526 | ) |
| | | | Deferred revenue | | | 130 | | | | (716 | ) |
| | | | Accrued expenses and other liabilities | | | (1,187 | ) | | | 419 | |
| | | | |
| | | |
| |
| | | | | Net cash used in operating activities | | | (1,438 | ) | | | (3,919 | ) |
| | | | |
| | | |
| |
| Cash flows used in investing activities: | | | | | | | | |
| | Deposits to restricted cash | | | (6 | ) | | | (100 | ) |
| | Release of restricted cash | | | 85 | | | | 298 | |
| | Investments in software | | | (301 | ) | | | (427 | ) |
| | Purchases of equipment, furniture, leasehold improvements | | | (556 | ) | | | (204 | ) |
| | | | |
| | | |
| |
| | | | Net cash used in investing activities | | | (778 | ) | | | (433 | ) |
| | | | |
| | | |
| |
| Cash flows provided by financing activities: | | | | | | | | |
| | Proceeds from sales of common stock and exercise of warrants and stock options | | | 726 | | | | 742 | |
| | Sale of treasury stock for employee stock purchase plan | | | 65 | | | | — | |
| | Payment of capital lease obligations | | | (228 | ) | | | (230 | ) |
| | Payment of dividends — Series A Convertible Preferred stock | | | (455 | ) | | | — | |
| | Net short-term borrowings | | | — | | | | 4,742 | |
| | Proceeds from repayment of officer note | | | 45 | | | | 23 | |
| | | | |
| | | |
| |
| | | | Net cash provided by financing activities | | | 153 | | | | 5,277 | |
| | | | |
| | | |
| |
| Net increase (decrease) in cash and cash equivalents | | | (2,063 | ) | | | 925 | |
| Cash and cash equivalents, beginning of period | | | 22,708 | | | | 3,400 | |
| | | | |
| | | |
| |
| Cash and cash equivalents, end of period | | $ | 20,645 | | | $ | 4,325 | |
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| |
