Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | Apr. 29, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-34063 | |
Entity Registrant Name | LendingTree, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-2414818 | |
Entity Address, Address Line One | 11115 Rushmore Drive | |
Entity Address, City or Town | Charlotte | |
Entity Address, State or Province | NC | |
Entity Address, Postal Zip Code | 28277 | |
City Area Code | 704 | |
Local Phone Number | 541-5351 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Shell Company | false | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001434621 | |
Current Fiscal Year End Date | --12-31 | |
Title of 12(b) Security | Common Stock, $0.01 par value per share | |
Trading Symbol | TREE | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 13,063,927 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Revenue | $ 283,084 | $ 262,390 |
Costs and expenses: | ||
Cost of revenue (exclusive of depreciation and amortization shown separately below) | 14,252 | 17,670 |
Selling and marketing expense | 195,538 | 174,891 |
General and administrative expense | 32,082 | 31,117 |
Product development | 10,963 | 10,166 |
Depreciation | 3,378 | 2,482 |
Amortization of intangibles | 13,757 | 13,427 |
Change in fair value of contingent consideration | (8,122) | 14,592 |
Severance | 158 | 54 |
Litigation settlements and contingencies | 329 | (207) |
Total costs and expenses | 262,335 | 264,192 |
Operating income (loss) | 20,749 | (1,802) |
Other (expense) income, net: | ||
Interest expense, net | (4,834) | (5,468) |
Other income | 0 | 68 |
Income (loss) before income taxes | 15,915 | (7,202) |
Income tax benefit | 3,061 | 7,752 |
Net income from continuing operations | 18,976 | 550 |
Loss from discontinued operations, net of tax | (4,575) | (1,062) |
Net income (loss) and comprehensive income (loss) | $ 14,401 | $ (512) |
Weighted average shares outstanding: | ||
Basic | 12,957 | 12,718 |
Diluted | 14,158 | 14,186 |
Income per share from continuing operations: | ||
Basic (in dollars per share) | $ 1.46 | $ 0.04 |
Diluted (in dollars per share) | 1.34 | 0.04 |
Loss per share from discontinued operations: | ||
Basic (in dollars per share) | (0.35) | (0.08) |
Diluted (in dollars per share) | (0.32) | (0.07) |
Net income (loss) per share: | ||
Basic (in dollars per share) | 1.11 | (0.04) |
Diluted (in dollars per share) | $ 1.02 | $ (0.04) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
ASSETS: | ||
Cash and cash equivalents | $ 51,208,000 | $ 60,243,000 |
Restricted cash and cash equivalents | 93,000 | 96,000 |
Accounts receivable (net of allowance of $2,021 and $1,466, respectively) | 119,559,000 | 113,487,000 |
Prepaid and other current assets | 17,375,000 | 15,516,000 |
Current assets of discontinued operations | 84,000 | 84,000 |
Total current assets | 188,319,000 | 189,426,000 |
Property and equipment (net of accumulated depreciation of $19,294 and $17,979, respectively) | 31,473,000 | 31,363,000 |
Goodwill | 420,139,000 | 420,139,000 |
Intangible assets, net | 167,823,000 | 181,580,000 |
Deferred income tax assets | 90,725,000 | 87,664,000 |
Equity investment (Note 7) | 80,000,000 | 0 |
Other non-current assets | 28,665,000 | 29,849,000 |
Non-current assets of discontinued operations | 9,476,000 | 7,948,000 |
Total assets | 1,016,620,000 | 947,969,000 |
LIABILITIES: | ||
Revolving credit facility | 130,000,000 | 75,000,000 |
Accounts payable, trade | 6,056,000 | 2,873,000 |
Accrued expenses and other current liabilities | 105,647,000 | 112,755,000 |
Current contingent consideration | 14,183,000 | 9,028,000 |
Current liabilities of discontinued operations | 36,400,000 | 31,050,000 |
Total current liabilities | 292,286,000 | 230,706,000 |
Long-term debt | 267,870,000 | 264,391,000 |
Non-current contingent consideration | 8,159,000 | 24,436,000 |
Other non-current liabilities | 24,748,000 | 26,110,000 |
Total liabilities | 593,063,000 | 545,643,000 |
Commitments and contingencies | ||
SHAREHOLDERS' EQUITY: | ||
Preferred stock $.01 par value; 5,000,000 shares authorized; none issued or outstanding | 0 | 0 |
Common stock $.01 par value; 50,000,000 shares authorized; 15,704,064 and 15,676,819 shares issued, respectively, and 13,062,746 and 13,035,501 shares outstanding, respectively | 157,000 | 157,000 |
Additional paid-in capital | 1,184,813,000 | 1,177,984,000 |
Accumulated deficit | (578,252,000) | (592,654,000) |
Treasury stock; 2,641,318 shares | (183,161,000) | (183,161,000) |
Total shareholders' equity | 423,557,000 | 402,326,000 |
Total liabilities and shareholders' equity | 1,016,620,000 | 947,969,000 |
Common Stock | ||
SHAREHOLDERS' EQUITY: | ||
Total shareholders' equity | 157,000 | 157,000 |
Additional Paid-in Capital | ||
SHAREHOLDERS' EQUITY: | ||
Total shareholders' equity | 1,184,813,000 | 1,177,984,000 |
Accumulated Deficit | ||
SHAREHOLDERS' EQUITY: | ||
Total shareholders' equity | (578,252,000) | (592,654,000) |
Treasury Stock | ||
SHAREHOLDERS' EQUITY: | ||
Total shareholders' equity | $ (183,161,000) | $ (183,161,000) |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance (in dollars) | $ 2,021 | $ 1,466 |
Accumulated depreciation of property and equipment | $ 19,294 | $ 17,979 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 50,000,000 | 50,000,000 |
Common stock, issued shares | 15,704,064 | 15,676,819 |
Common stock, outstanding shares | 13,062,746 | 13,035,501 |
Treasury stock, shares | 2,641,318 | 2,641,318 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Treasury Stock | Comprehensive Income (Loss) |
Balance at Dec. 31, 2018 | $ 346,208 | $ 154 | $ 1,134,227 | $ (610,482) | $ (177,691) | |
Balance (in shares) at Dec. 31, 2018 | 15,428,000 | 2,618,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income and comprehensive (loss) income | (512) | (512) | $ (512) | |||
Non-cash compensation | 14,053 | 14,053 | ||||
Purchase of treasury stock | $ (3,976) | $ (3,976) | ||||
Purchase of treasury stock (in shares) | 17,501 | 18,000 | ||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes | $ (3,585) | $ 1 | (3,586) | |||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes (in shares) | 87,000 | |||||
Balance at Mar. 31, 2019 | 352,188 | $ 155 | 1,144,694 | (610,994) | $ (181,667) | |
Balance (in shares) at Mar. 31, 2019 | 15,515,000 | 2,636,000 | ||||
Balance at Dec. 31, 2019 | 402,326 | $ 157 | 1,177,984 | (592,654) | $ (183,161) | |
Balance (in shares) at Dec. 31, 2019 | 15,677,000 | 2,641,000 | ||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net (loss) income and comprehensive (loss) income | 14,401 | 14,401 | $ 14,401 | |||
Non-cash compensation | 11,917 | 11,917 | ||||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes | (5,087) | (5,087) | ||||
Stockholders' Equity, Other | 0 | (1) | 1 | |||
Issuance of common stock for stock options, restricted stock awards and restricted stock units, net of withholding taxes (in shares) | 27,000 | |||||
Balance at Mar. 31, 2020 | $ 423,557 | $ 157 | $ 1,184,813 | $ (578,252) | $ (183,161) | |
Balance (in shares) at Mar. 31, 2020 | 15,704,000 | 2,641,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash flows from operating activities attributable to continuing operations: | ||
Net income (loss) and comprehensive income (loss) | $ 14,401 | $ (512) |
Less: Loss from discontinued operations, net of tax | 4,575 | 1,062 |
Net income from continuing operations | 18,976 | 550 |
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations: | ||
Loss on impairments and disposal of assets | 530 | 468 |
Amortization of intangibles | 13,757 | 13,427 |
Depreciation | 3,378 | 2,482 |
Non-cash compensation expense | 11,917 | 14,053 |
Deferred income taxes | (3,061) | (7,752) |
Change in fair value of contingent consideration | (8,122) | 14,592 |
Bad debt expense | 880 | 510 |
Amortization of debt issuance costs | 582 | 483 |
Amortization of convertible debt discount | 3,111 | 2,951 |
ROU asset amortization, offset by change in lease liabilities | (196) | 35 |
Changes in current assets and liabilities: | ||
Accounts receivable | (6,952) | (27,534) |
Prepaid and other current assets | (1,430) | (207) |
Accounts payable, accrued expenses and other current liabilities | (3,271) | 5,653 |
Current contingent consideration | 0 | (1,000) |
Income taxes receivable | 65 | 4,288 |
Other, net | (862) | 270 |
Net cash provided by operating activities attributable to continuing operations | 29,302 | 23,269 |
Cash flows from investing activities attributable to continuing operations: | ||
Capital expenditures | (4,189) | (4,960) |
Equity investment | (80,000) | 0 |
Net cash used in investing activities attributable to continuing operations | (84,189) | (110,405) |
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 | (5,087) | (3,585) |
Contingent consideration payments | (3,000) | (3,000) |
Net proceeds from revolving credit facility | 55,000 | 60,000 |
Payment of debt issuance costs | (306) | (31) |
Purchase of treasury stock | 0 | (3,976) |
Other financing activities | (6) | 0 |
Net Cash Provided by (Used in) Financing Activities | 46,601 | 49,408 |
Total cash used in continuing operations | (8,286) | (37,728) |
Net cash used in operating activities attributable to discontinued operations | (752) | (2,827) |
Total cash used in discontinued operations | (752) | (2,827) |
Net decrease in cash, cash equivalents, restricted cash and restricted cash equivalents | (9,038) | (40,555) |
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | 60,339 | 105,158 |
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period | 51,301 | 64,603 |
Non-cash investing activities: | ||
Capital additions from tenant improvement allowance | 0 | 852 |
ValuePenguin | ||
Cash flows from investing activities attributable to continuing operations: | ||
Acquisition of businesses, net of cash acquired | 0 | (105,445) |
QuoteWizard | ||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations: | ||
Change in fair value of contingent consideration | (8,262) | 14,359 |
Ovation | ||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations: | ||
Change in fair value of contingent consideration | 141 | (648) |
SnapCap | ||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities attributable to continuing operations: | ||
Change in fair value of contingent consideration | $ (1) | $ 1,592 |
ORGANIZATION
ORGANIZATION | 3 Months Ended |
Mar. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION | ORGANIZATION Company Overview LendingTree, Inc. is currently 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. The consolidated financial statements include the accounts of LendingTree and all its wholly-owned entities, except Home Loan Center, Inc. ("HLC") subsequent to its bankruptcy filing on July 21, 2019 which resulted in the Company's loss of a controlling interest in HLC under applicable accounting standards. Intercompany transactions and accounts have been eliminated. Discontinued Operations The LendingTree Loans business, which consisted of originating various consumer mortgage loans through HLC (the "LendingTree Loans Business"), is presented as discontinued operations in the accompanying consolidated balance sheets, consolidated statements of operations and comprehensive income and consolidated cash flows for all periods presented. The notes accompanying these consolidated financial statements reflect the Company's continuing operations and, unless otherwise noted, exclude information related to the discontinued operations. See Note 17 — Discontinued Operations for additional information. Basis of Presentation The accompanying unaudited interim consolidated financial statements as of March 31, 2020 and for the three months ended March 31, 2020 and 2019 , respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair statement of the Company's financial position for the periods presented. The results for the three months ended March 31, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 , or any other period. The accompanying consolidated balance sheet as of December 31, 2019 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2019 (the " 2019 Annual Report"). The accompanying consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in the 2019 |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | SIGNIFICANT ACCOUNTING POLICIES Accounting Estimates Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include: loan loss obligations; the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; fair value of assets acquired in a business combination; contingent consideration related to business combinations; litigation accruals; HLC ownership related claims; contract assets; various other allowances, reserves and accruals; and assumptions related to the determination of stock-based compensation. The Company considered the impact of COVID-19 on the assumptions and estimates used when preparing its quarterly financial statements including, but not limited to, our allowance for doubtful accounts, valuation allowances, contract asset and contingent consideration. These assumptions and estimates may change as new events occur and additional information is obtained. If economic conditions caused by COVID-19 do not recover as currently estimated by management, such future changes may have an adverse impact on the Company's results of operations, financial position and liquidity. Certain Risks and Concentrations LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk at March 31, 2020 , consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit. The Company requires certain Network Partners to maintain security deposits with the Company, which in the event of non-payment, would be applied against any accounts receivable outstanding. Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the Company's marketplace. Lenders and lead purchasers participating on the Company's marketplace can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders and lead purchasers can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans and other products from Network Partners without utilizing the Company's services, the Company's ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the Network Partners whose loans and other financial products are offered on its online marketplace, consumers may obtain offers from these Network Partners without using its services. Other than a support services office in India, the Company's operations are geographically limited to and dependent upon the economic condition of the United States. Litigation Settlements and Contingencies Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements. Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted ASU 2018-15 in the first quarter of 2020 using the prospective approach. Subsequent to the adoption of this ASU, capitalizable implementation costs incurred in a hosting arrangement that is a service contract are recorded within prepaid and other current assets and other non-current assets on the consolidated balance sheet. The expense related to these capitalized implementation costs are included within general and administrative expense on the consolidated statement of operations and comprehensive income. The adoption of ASU 2018-15 did not have a material impact on the consolidated financial statements as of March 31, 2020 and for the three months ended March 31, 2020. In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds certain disclosure requirements in Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Certain amendments must be applied prospectively while others are to be applied on a retrospective basis to all periods presented. The Company adopted ASU 2018-13 in the first quarter of 2020. See Note 15 —Fair Value Measurements. In January 2017, the FASB issued ASU 2017-04, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2 of the goodwill impairment test). Instead, an impairment charge will be based on the excess of the carrying amount over the fair value. This ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. The Company adopted ASU 2017-04 in the first quarter of 2020. In June 2016, the FASB issued ASU 2016-13, which requires entities to measure expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU introduces ASC Topic 326, Financial Instruments—Credit Losses, which replaces the existing incurred loss model and is applicable to financial assets measured at amortized cost, including trade receivables and certain other financial assets that have the contractual right to receive cash. ASC Topic 326 is effective for annual and interim reporting periods beginning after December 15, 2019. The guidance must be adopted using a modified retrospective transition. The Company adopted ASC Topic 326 as of January 1, 2020, which did not result in any cumulative effect adjustment to the opening balance of accumulated deficit in the period of adoption. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes, and clarifies certain aspects of the current guidance to improve consistency among reporting entities. This ASU is effective for annual and interim reporting periods beginning after December 15, 2020. Early adoption is permitted, including adoption in interim periods. Entities electing early adoption must adopt all amendments in the same period. Most amendments must be applied prospectively while others are to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | REVENUE Revenue is as follows (in thousands) : Three Months Ended 2020 2019 Home $ 79,174 $ 63,437 Credit cards 51,586 54,506 Personal loans 31,509 32,531 Other Consumer 36,829 33,692 Total Consumer 119,924 120,729 Insurance 82,737 67,092 Other 1,249 11,132 Total revenue $ 283,084 $ 262,390 The Company derives its revenue primarily from match fees and closing fees. Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied and promised services have transferred to the customer. The Company's services are generally transferred to the customer at a point in time. Revenue from Home products is primarily generated from upfront match fees paid by mortgage Network Partners that receive a loan request, and in some cases upfront fees for clicks or call transfers. Match fees and upfront fees for clicks and call transfers are earned through the delivery of loan requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a loan request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a loan request to the customer. Revenue from Consumer products is generated by match and other upfront fees for clicks or call transfers, as well as from closing fees, approval fees and upfront service and subscription fees. Closing fees are derived from lenders on certain auto loans, business loans, personal loans and student loans when the lender funds a loan with the consumer. Approval fees are derived from credit card issuers when the credit card consumer receives card approval from the credit card issuer. Upfront service fees and subscription fees are derived from consumers in the Company's credit services product. Upfront fees paid by consumers are recognized as revenue over the estimated time the consumer will remain a customer and receive services. Subscription fees are recognized over the period a consumer is receiving services. The Company recognizes revenue on closing fees and approval fees at the point when a loan request or a credit card consumer is delivered to the customer. The Company's contractual right to closing fees and approval fees is not contemporaneous with the satisfaction of the performance obligation to deliver a loan request or a credit card consumer to the customer. As such, the Company records a contract asset at each reporting period-end related to the estimated variable consideration on closing fees and approval fees for which the Company has satisfied the related performance obligation, but are still pending the loan closing or credit card approval before the Company has a contractual right to payment. This estimate is based on the Company's historical closing rates and historical time between when a consumer request for a loan or credit card is delivered to the lender or card issuer and when the loan is closed by the lender or approved by the card issuer. Revenue from the Company's Insurance products is primarily generated from upfront match fees, and upfront fees for website clicks or fees for calls. Match fees and upfront fees for clicks and call transfers are earned through the delivery of consumer requests that originated through the Company's websites or affiliates. The Company recognizes revenue at the time a consumer request is delivered to the customer, provided that no significant obligations remain. The Company's contractual right to the match fee consideration is contemporaneous with the satisfaction of the performance obligation to deliver a consumer request to the customer. The contract asset recorded within prepaid and other current assets on the consolidated balance sheets related to estimated variable consideration was $6.8 million and $6.5 million on March 31, 2020 and December 31, 2019 , respectively. The contract liability recorded within accrued expenses and other current liabilities on the consolidated balance sheets related to upfront fees paid by consumers in the Company's Consumer business was $0.7 million and $0.6 million at March 31, 2020 and December 31, 2019 , respectively. During the first quarter of 2020 , the Company recognized revenue of $0.5 million that was included in the contract liability balance at December 31, 2019 . During the first quarter of 2019 , the Company recognized revenue of $0.3 million that was included in the contract liability balance at December 31, 2018 . Revenue recognized in any reporting period includes estimated variable consideration for which the Company has satisfied the related performance obligations, but are still pending the occurrence or non-occurrence of a future event outside the Company's control (such as lenders providing loans to consumers or credit card approvals of consumers) before the Company has a contractual right to payment. The Company recognized increases to such revenue from prior periods of $0.1 million and $0.9 million , respectively, in the first quarters of 2020 and 2019 . |
CASH AND RESTRICTED CASH
CASH AND RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
CASH AND RESTRICTED CASH | CASH AND RESTRICTED CASH Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands) : March 31, December 31, Cash and cash equivalents $ 51,208 $ 60,243 Restricted cash and cash equivalents 93 96 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 51,301 $ 60,339 |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. The Company determines its allowance for doubtful accounts by considering a number of factors, including the length of time accounts receivable are past due, previous loss history, current and expected economic conditions and the specific customer's current and expected ability to pay its obligation. Accounts receivable are considered past due when they are outstanding longer than the contractual payment terms. Accounts receivable are written off when management deems them uncollectible. A reconciliation of the beginning and ending balances of the allowance for doubtful accounts is as follows (in thousands) : Three Months Ended 2020 2019 Balance, beginning of the period $ 1,466 $ 1,143 Charges to earnings 880 510 Write-off of uncollectible accounts receivable (332 ) (288 ) Recoveries collected 7 5 Balance, end of the period $ 2,021 $ 1,370 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND INTANGIBLE ASSETS | GOODWILL AND INTANGIBLE ASSETS The balance of goodwill and intangible assets, net is as follows (in thousands) : March 31, December 31, Goodwill $ 903,227 $ 903,227 Accumulated impairment losses (483,088 ) (483,088 ) Net goodwill $ 420,139 $ 420,139 Intangible assets with indefinite lives $ 10,142 $ 10,142 Intangible assets with definite lives, net 157,681 171,438 Total intangible assets, net $ 167,823 $ 181,580 Goodwill and Indefinite-Lived Intangible Assets The Company's goodwill at each of March 31, 2020 and December 31, 2019 consists of $59.3 million associated with the Home segment, $166.1 million associated with the Consumer segment, and $194.7 million associated with the Insurance segment. Intangible assets with indefinite lives relate to the Company's trademarks. Intangible Assets with Definite Lives Intangible assets with definite lives relate to the following (in thousands) : Cost Accumulated Amortization Net Technology $ 116,200 $ (56,032 ) $ 60,168 Customer lists 77,300 (13,979 ) 63,321 Trademarks and tradenames 17,200 (7,292 ) 9,908 Website content 51,000 (26,717 ) 24,283 Other 5 (4 ) 1 Balance at March 31, 2020 $ 261,705 $ (104,024 ) $ 157,681 Cost Accumulated Amortization Net Technology $ 116,200 $ (48,938 ) $ 67,262 Customer lists 77,300 (12,452 ) 64,848 Trademarks and tradenames 17,200 (6,407 ) 10,793 Website content 51,000 (22,467 ) 28,533 Other 5 (3 ) 2 Balance at December 31, 2019 $ 261,705 $ (90,267 ) $ 171,438 Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of March 31, 2020 , future amortization is estimated to be as follows (in thousands) : Amortization Expense Remainder of current year $ 39,322 Year ending December 31, 2021 42,738 Year ending December 31, 2022 25,256 Year ending December 31, 2023 8,602 Year ending December 31, 2024 6,747 Thereafter 35,016 Total intangible assets with definite lives, net $ 157,681 |
EQUITY INVESTMENTS
EQUITY INVESTMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
EQUITY INVESTMENT | EQUITY INVESTMENT On February 28, 2020 , the Company acquired an equity interest in Stash Financial, Inc. (“Stash”) for $80.0 million . Stash is a consumer investing and banking platform. Stash brings together banking, investing, and education into one seamless experience offering a full-suite of personal investment accounts, Traditional and Roth IRAs, custodial investment accounts, and banking services, including checking accounts and debit cards with a Stock-Back ® rewards program. The Stash equity securities do not have a readily determinable fair value and, upon acquisition, the Company elected the measurement alternative to value its securities. The Stash equity securities will be carried at cost and subsequently marked to market upon observable market events with any gains or losses recorded in operating income in the consolidated statement of operations. As of March 31, 2020 , there have been no observable market events that would result in upward or downward adjustments in the fair value and there have been no impairments to the original cost of $80.0 million . |
BUSINESS ACQUISITION
BUSINESS ACQUISITION | 3 Months Ended |
Mar. 31, 2020 | |
Business Combinations [Abstract] | |
BUSINESS ACQUISITION | BUSINESS ACQUISITIONS Changes in Contingent Consideration In 2018, the Company acquired all of the outstanding equity interests of QuoteWizard.com, LLC (“QuoteWizard”) and Ovation Credit Services, Inc. (“Ovation”). In 2017, the Company acquired certain assets of Snap Capital LLC, which does business under the name SnapCap (“SnapCap”) and all of the assets of Deposits Online, LLC, which does business under the name DepositAccounts.com (“DepositAccounts”). The Company will make an earnout payment ranging from zero to $1.0 million based on the achievement of defined milestone targets for DepositAccounts, a payment of $3.0 million based on the achievement of certain defined earnings targets for SnapCap, payments ranging from zero to $4.4 million based on the achievement of certain defined operating metrics for Ovation, and payments ranging from zero to $46.8 million based on the achievement of certain defined performance targets for QuoteWizard. Changes in the fair value of contingent consideration is summarized as follows ( in thousands) : Three Months Ended 2020 2019 QuoteWizard $ (8,262 ) $ 14,359 Ovation 141 (648 ) SnapCap (1 ) 1,592 DepositAccounts — (711 ) Total changes in fair value of contingent consideration $ (8,122 ) $ 14,592 As of March 31, 2020 , the estimated fair value of the contingent consideration for the QuoteWizard acquisition totaled $16.2 million , of which $8.0 million is included in current contingent consideration and $8.2 million is included in non-current contingent consideration in the accompanying consolidated balance sheet. The estimated fair value of the contingent consideration payments is determined using an option pricing model. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable. As of March 31, 2020 , the estimated fair value of the contingent consideration for the Ovation acquisition totaled $3.2 million , which is included in current contingent consideration in the accompanying consolidated balance sheet. The estimated fair value of the contingent consideration payments is determined using an option pricing model. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable. As of March 31, 2020 , the estimated fair value of the contingent consideration for the SnapCap acquisition totaled $2.9 million , which is included in current contingent consideration in the accompanying consolidated balance sheet. The estimated fair value of the contingent consideration payments is based on the $3.0 million achieved target discounted from the payment due date to March 31, 2020. As of March 31, 2020 , no liability has been recorded for the DepositAccounts acquisition in the accompanying consolidated balance sheet for the remaining contingent consideration payment based on Federal Funds interest rates. The estimated fair value of the portion of the contingent consideration payments based on increases in interest rates is determined using a scenario approach based on the interest rate forecasts of Federal Open Market Committee participants. The estimated value of the contingent consideration is based upon available information and certain assumptions, known at the time of this report, which management believes are reasonable. Any differences in the actual contingent consideration payments will be recorded in operating income in the consolidated statements of operations and comprehensive income. |
ACCRUED EXPENSES AND OTHER CURR
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES | ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consist of the following (in thousands) : March 31, December 31, Accrued advertising expense $ 58,165 $ 65,836 Accrued compensation and benefits 9,265 10,540 Accrued professional fees 3,315 1,560 Customer deposits and escrows 9,616 6,920 Contribution to LendingTree Foundation 3,333 3,333 Current lease liabilities 6,470 6,885 Other 15,483 17,681 Total accrued expenses and other current liabilities $ 105,647 $ 112,755 |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Basic and diluted income per share was determined based on the following share data (in thousands) : Three Months Ended 2020 2019 Weighted average basic common shares 12,957 12,718 Effect of stock options 628 686 Effect of dilutive share awards 104 161 Effect of Convertible Senior Notes and warrants 469 621 Weighted average diluted common shares 14,158 14,186 For the first quarter of 2020 , the weighted average shares that were anti-dilutive, and therefore excluded from the calculation of diluted income per share, included options to purchase 0.1 million shares of common stock. For the first quarter of 2019 , the weighted average shares that were anti-dilutive included options to purchase 0.4 million shares of common stock. The 0.625% Convertible Senior Notes due June 1, 2022 and the warrants issued by the Company in 2017 could be converted into the Company’s common stock, subject to certain contingencies. See Note 13 —Debt for additional information. Common Stock Repurchases In each of February 2018 and February 2019, the board of directors authorized and the Company announced the repurchase of up to $100.0 million and $150.0 million , respectively, of LendingTree's common stock. During the first quarter of 2019 , the Company purchased 17,501 shares of its common stock for aggregate consideration of $4.0 million . At March 31, 2020 , approximately $179.7 million of the previous authorizations to repurchase common stock remain available. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 3 Months Ended |
Mar. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATION Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands) : Three Months Ended 2020 2019 Cost of revenue $ 242 $ 153 Selling and marketing expense 1,156 1,749 General and administrative expense 9,123 10,221 Product development 1,396 1,930 Total non-cash compensation $ 11,917 $ 14,053 Stock Options A summary of changes in outstanding stock options is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (a) (per option) (in years) (in thousands) Options outstanding at January 1, 2020 777,871 $ 69.87 Granted (b) 69,319 275.82 Exercised (2,462 ) 67.05 Forfeited (193 ) 332.65 Expired (1,974 ) 352.10 Options outstanding at March 31, 2020 842,561 86.11 4.54 $ 99,017 Options exercisable at March 31, 2020 677,829 $ 43.56 3.49 $ 98,896 (a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $183.39 on the last trading day of the quarter ended March 31, 2020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on March 31, 2020 . The intrinsic value changes based on the market value of the Company's common stock. (b) During the three months ended March 31, 2020 , the Company granted stock options to certain employees with a weighted average grant date fair value per share of $138.29 , calculated using the Black-Scholes option pricing model, which vesting periods include (a) three years from grant date and (b) four years from grant date. For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows: Expected term (1) 6.00 - 6.25 years Expected dividend (2) — Expected volatility (3) 52 - 53% Risk-free interest rate (4) 0.96% (1) The expected term of stock options granted was calculated using the "Simplified Method," which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees. (2) For all stock options granted in 2020 , no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate. (3) The expected volatility rate is based on the historical volatility of the Company's common stock. (4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date. Stock Options with Market Conditions A summary of changes in outstanding stock options with market conditions at target is as follows: Number of Options with Market Conditions Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (a) (per option) (in years) (in thousands) Options outstanding at January 1, 2020 463,440 $ 204.31 Granted (b) 19,126 275.82 Exercised — — Forfeited — — Expired — — Options outstanding at March 31, 2020 482,566 207.14 7.52 $ — Options exercisable at March 31, 2020 — $ — 0.00 $ — (a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $183.39 on the last trading day of the quarter ended March 31, 2020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on March 31, 2020 . The intrinsic value changes based on the market value of the Company's common stock. (b) During the three months ended March 31, 2020 , the Company granted stock options with a grant date fair value per share of $196.07 , calculated using the Monte Carlo simulation model, which has a vesting date of March 31, 2024 . For purposes of determining stock-based compensation expense, the grant date fair value per share of the stock options was estimated using the Monte Carlo simulation model, which requires the use of various key assumptions. The assumptions used are as follows: Expected term (1) 7.00 years Expected dividend (2) — Expected volatility (3) 51% Risk-free interest rate (4) 1.03% (1) The expected term of stock options with a market condition granted was calculated using the midpoint between the time of vesting and the end of the contractual term. (2) For all stock options with a market condition granted in 2020 , no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate. (3) The expected volatility rate is based on the historical volatility of the Company's common stock. (4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date. A maximum of 805,885 shares may be earned for achieving superior performance up to 167% of the target number of shares. As of March 31, 2020 , performance-based nonqualified stock options with a market condition of 481,669 had been earned, which have a vest date of September 30, 2022 . Restricted Stock Units A summary of changes in outstanding nonvested restricted stock units ("RSUs") is as follows: RSUs Number of Units Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 144,939 $ 267.85 Granted 97,375 276.84 Vested (40,676 ) 243.25 Forfeited (4,181 ) 265.80 Nonvested at March 31, 2020 197,457 $ 277.42 Restricted Stock Units with Performance Conditions A summary of changes in outstanding nonvested RSUs with performance conditions is as follows: RSUs with Performance Conditions Number of Units Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 14,647 $ 210.55 Granted — — Vested — — Forfeited — — Nonvested at March 31, 2020 14,647 $ 210.55 Restricted Stock Awards with Performance Conditions A summary of changes in outstanding nonvested restricted stock awards ("RSAs") with performance conditions is as follows: RSAs with Performance Conditions Number of Awards Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 47,608 $ 340.25 Granted — — Vested (5,951 ) 340.25 Forfeited — — Nonvested at March 31, 2020 41,657 $ 340.25 Restricted Stock Awards with Market Conditions A summary of changes in outstanding nonvested RSAs with market conditions at target is as follows: RSAs with Market Conditions Number of Awards Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 26,674 $ 340.25 Granted — — Vested — — Forfeited — — Nonvested at March 31, 2020 26,674 $ 340.25 A maximum of 44,545 shares may be earned for achieving superior performance up to 167% of the target number of shares. As of March 31, 2020 , performance-based restricted stock awards with a market condition of 29,601 had been earned, which have a vest date of September 30, 2022 . |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Three Months Ended 2020 2019 (in thousands, except percentages) Income tax benefit $ 3,061 $ 7,752 Effective tax rate (19.2 )% 107.6 % For the first quarter of 2020 , the effective tax rate varied from the federal statutory rate of 21% in part due to a tax benefit of $1.1 million recognized for excess tax benefits resulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes, as well as a tax benefit of $6.1 million for the impact of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act, as described below. On March 27, 2020, President Trump signed into law the CARES Act. This legislation is an economic relief package in response to the public health and economic impacts of COVID-19 and includes various provisions that impact the Company, including, but not limited to, modifications for net operating losses, accelerated timeframe for refunds associated with prior minimum taxes and modifications of the limitation on business interest. The Company revalued deferred tax assets related to net operating losses in light of the changes in the CARES Act, and recorded a net tax benefit of $6.1 million during the first quarter of 2020. These deferred tax assets are being revalued, as they will be carried back to 2016 and 2017, which are tax periods prior to the Tax Cuts and Jobs Act ("TCJA") when the federal statutory tax rate was 35% versus the 21% federal statutory tax rate in effect after the enactment of the TCJA. For the first quarter of 2019 , the effective tax rate varied from the federal statutory rate of 21% primarily due to a tax benefit of $6.0 million recognized for excess tax benefits resulting from employee exercises of stock options and vesting of restricted stock in accordance with ASU 2016-09 and the effect of state taxes. Three Months Ended 2020 2019 (in thousands) Income tax (expense) benefit - excluding excess tax benefit on stock compensation and CARES Act $ (4,097 ) $ 1,749 Excess tax benefit on stock compensation 1,054 6,003 Income tax benefit from CARES Act 6,104 — Income tax benefit $ 3,061 $ 7,752 |
DEBT
DEBT | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
DEBT | DEBT Convertible Senior Notes On May 31, 2017, the Company issued $300.0 million aggregate principal amount of its 0.625% Convertible Senior Notes due June 1, 2022 (the “Notes”) in a private placement. The Notes bear interest at a rate of 0.625% per year, payable semi-annually on June 1 and December 1 of each year, beginning on December 1, 2017. The Notes will mature on June 1, 2022, unless earlier repurchased or converted. The initial conversion rate of the Notes is 4.8163 shares of Common Stock per $1,000 principal amount of Notes (which is equivalent to an initial conversion price of approximately $207.63 per share). The conversion rate will be subject to adjustment upon the occurrence of certain specified events but will not be adjusted for accrued and unpaid interest. In addition, upon the occurrence of a fundamental change prior to the maturity of the Notes, the Company will, in certain circumstances, increase the conversion rate by a specified number of additional shares for a holder that elects to convert the Notes in connection with such fundamental change. Upon conversion, the Notes will settle for cash, shares of the Company’s stock, or a combination thereof, at the Company’s option. It is the intent of the Company to settle the principal amount of the Notes in cash and any conversion premium in shares of its common stock. The Notes are the Company’s senior unsecured obligations and will rank senior in right of payment to any of the Company’s indebtedness that is expressly subordinated in right of payment to the Notes; equal in right of payment to any of the Company’s unsecured indebtedness that is not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness, including borrowings under the senior secured revolving credit facility, described below, to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. Prior to the close of business on the business day immediately preceding February 1, 2022, the Notes will be convertible at the option of the holders thereof only under the following circumstances: • during any calendar quarter commencing after the calendar quarter ending on September 30, 2017 (and only during such calendar quarter), if the last reported sale price of the common stock for at least 20 trading days (whether or not consecutive) during the 30 consecutive trading day period ending on, and including the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price on each applicable trading day; • during the five business day period after any five consecutive trading day period in which, for each trading day of that period, the trading price (as defined in the Notes) per $1,000 principal amount of Notes for such trading day was less than 98% of the product of the last reported sale price of the Common Stock and the conversion rate on each such trading day; or • upon the occurrence of specified corporate events including but not limited to a fundamental change. Holders of the Notes were entitled to convert the Notes during the calendar quarter ended March 31, 2020, based on the last reported sales price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on December 31, 2019, being greater than or equal to 130% of the conversion price of the Notes on each applicable trading day. Holders of the Notes are not entitled to convert the Notes during the calendar quarter ended June 30, 2020 as the last reported sales price of the Company's common stock, for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on March 31, 2020, was not greater than or equal to 130% of the conversion price of the Notes on each applicable trading day. On or after February 1, 2022, until the close of business on the second scheduled trading day immediately preceding the maturity date of the Notes, holders of the Notes may convert all or a portion of their Notes regardless of the foregoing conditions. The Company may not redeem the Notes prior to the maturity date and no sinking fund is provided for the Notes. Upon the occurrence of a fundamental change prior to the maturity date of the Notes, holders of the Notes may require the Company to repurchase all or a portion of the Notes for cash at a price equal to 100% of the principal amount of the Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. If the market price per share of the Common Stock, as measured under the terms of the Notes, exceeds the conversion price of the Notes, the Notes could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the principal amount of the Notes and any conversion premium in cash. The initial measurement of convertible debt instruments that may be settled in cash is separated into a debt and an equity component whereby the debt component is based on the fair value of a similar instrument that does not contain an equity conversion option. The separate components of debt and equity of the Company’s Notes were determined using an interest rate of 5.36% , which reflects the nonconvertible debt borrowing rate of the Company at the date of issuance. As a result, the initial components of debt and equity were $238.4 million and $61.6 million , respectively. Financing costs related to the issuance of the Notes were approximately $9.3 million of which $7.4 million were allocated to the liability component and are being amortized to interest expense over the term of the debt and $1.9 million were allocated to the equity component. In the first three months of 2020 , the Company recorded interest expense on the Notes of $4.0 million which consisted of $0.5 million associated with the 0.625% coupon rate, $3.1 million associated with the accretion of the debt discount, and $0.4 million associated with the amortization of the debt issuance costs. In the first three months of 2019 , the Company recorded interest expense on the Notes of $3.8 million which consisted of $0.5 million associated with the 0.625% coupon rate, $3.0 million associated with the accretion of the debt discount, and $0.3 million associated with the amortization of the debt issuance costs. The debt discount is being amortized over the term of the debt. As of March 31, 2020 , the fair value of the Notes is estimated to be approximately $337.1 million using the Level 1 observable input of the last quoted market price on March 31, 2020 . A summary of the gross carrying amount, unamortized debt cost, debt issuance costs and net carrying value of the liability component of the Notes are as follows (in thousands) : March 31, December 31, Gross carrying amount $ 299,985 $ 299,991 Unamortized debt discount 28,677 31,789 Debt issuance costs 3,438 3,811 Net carrying amount $ 267,870 $ 264,391 Convertible Note Hedge and Warrant Transactions On May 31, 2017, in connection with the issuance of the Notes, the Company entered into Convertible Note Hedge (the “Hedge”) and Warrant transactions with respect to the Company’s common stock. The Company used approximately $18.1 million of the net proceeds from the Notes to pay for the cost of the Hedge, after such cost was partially offset by the proceeds from the Warrant transactions. On May 31, 2017, the Company paid $61.5 million to the counterparties for the Hedge transactions. The Hedge transactions cover approximately 1.4 million shares of the Company’s common stock, the same number of shares initially underlying the Notes, and are exercisable upon any conversion of the Notes. The Hedge Transactions are expected generally to reduce the potential dilution to the Common Stock upon conversion of the Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of the converted Notes, as the case may be, in the event that the market price per share of Common Stock, as measured under the terms of the Hedge transactions, is greater than the strike price of the Hedge transactions, which initially corresponds to the initial conversion price of the Notes, or approximately $207.63 per share of Common Stock. The Hedge transactions will expire upon the maturity of the Notes. On May 31, 2017, the Company sold to the counterparties, warrants (the "Warrants") to acquire 1.4 million shares of Common Stock at an initial strike price of $266.39 per share, which represents a premium of 70% over the reported sale price of the Common Stock of $156.70 on May 24, 2017. On May 31, 2017, the Company received aggregate proceeds of approximately $43.4 million from the sale of the Warrants. If the market price per share of the Common Stock, as measured under the terms of the Warrants, exceeds the strike price of the Warrants, the Warrants could have a dilutive effect, unless the Company elects, subject to certain conditions, to settle the Warrants in cash. The Hedge and Warrant transactions are indexed to, and potentially settled in, the Company's common stock and the net cost of $18.1 million has been recorded as a reduction to additional paid-in capital in the consolidated statement of shareholders’ equity. Senior Secured Revolving Credit Facility On December 10, 2019, the Company's wholly-owned subsidiary, LendingTree, LLC, entered into an amended and restated $500.0 million five -year senior secured revolving credit facility (the "Amended Revolving Credit Facility") which amended and restated the Company's previous $350.0 million five -year senior secured revolving credit facility (the “2017 Revolving Credit Facility”). The Amended Revolving Credit Facility matures on December 10, 2024. Borrowings under the Amended Revolving Credit Facility can be used to finance working capital needs, capital expenditures and general corporate purposes, including to finance permitted acquisitions. As of March 31, 2020 , the Company had a $130.0 million , 28 -day borrowing outstanding under the Amended Revolving Credit Facility bearing interest at the LIBO rate option of 2.21% . As of December 31, 2019 , the Company had $75.0 million in borrowings outstanding under the Amended Revolving Credit Facility at the LIBO rate option with a weighted average interest rate of 3.01% , consisting of a $50.0 million 31 -day borrowing and a $25.0 million 31 -day borrowing. Up to $10.0 million of the Amended Revolving Credit Facility will be available for short-term loans, referred to as swingline loans. Under certain conditions, the Company will be permitted to add one or more term loans and/or increase revolving commitments under the Amended Revolving Credit Facility by an additional amount equal to the greater of $185.0 million or 100% of Consolidated EBITDA as defined, or a greater amount provided that a total consolidated senior secured debt to EBITDA ratio does not exceed 2.50 to 1.00. Additionally, up to $10.0 million of the Amended Revolving Credit Facility will be available for the issuance of letters of credit. At each of March 31, 2020 and December 31, 2019 , the Company had outstanding one letter of credit issued in the amount of $0.2 million . The Company’s borrowings under the Amended Revolving Credit Facility bear interest at annual rates that, at the Company’s option, will be either: • a base rate generally defined as the sum of (i) the greater of (a) the prime rate of Truist Bank , (b) the federal funds effective rate plus 0.5% and (c) the LIBO rate (defined below) on a daily basis applicable for an interest period of one month plus 1.0% and (ii) an applicable percentage of 0.25% to 1.0% based on a total consolidated debt to EBITDA ratio; or • a LIBO rate generally defined as the sum of (i) the rate for Eurodollar deposits in the applicable currency and (ii) an applicable percentage of 1.25% to 2.0% based on a total consolidated debt to EBITDA ratio. All swingline loans bear interest at the base rate defined above. Interest on the Company’s borrowings are payable quarterly in arrears for base rate loans and on the last day of each interest rate period (but not less often than three months) for LIBO rate loans. The Amended Revolving Credit Facility contains a restrictive financial covenant, which initially limits the total consolidated debt to EBITDA ratio to 4.5 , with step downs to 4.0 over time, except that this may increase by 0.5 for the four fiscal quarters following a material acquisition. In addition, the Amended Revolving Credit Facility contains customary affirmative and negative covenants in addition to events of default for a transaction of this type that, among other things, restrict additional indebtedness, liens, mergers or certain fundamental changes, asset dispositions, dividends, stock repurchases and other restricted payments, transactions with affiliates, sale-leaseback transactions, hedging transactions, loans and investments and other matters customarily restricted in such agreements. The Company was in compliance with all covenants at March 31, 2020 . The Amended Revolving Credit Facility requires LendingTree, LLC to pledge as collateral, subject to certain customary exclusions, substantially all of its assets, including 100% of its equity in all of its domestic subsidiaries and 66% of the voting equity, and 100% of the non-voting equity, in all of its material foreign subsidiaries (of which there are currently none). The obligations under this facility are unconditionally guaranteed on a senior basis by LendingTree, Inc. and material domestic subsidiaries of LendingTree, LLC, which guaranties are secured by a pledge as collateral, subject to certain customary exclusions, of 100% of each such guarantor's assets, including 100% of each such guarantor’s equity in all of its domestic subsidiaries and 66% of the voting equity, and 100% of the non-voting equity, in all of its material foreign subsidiaries (of which there are currently none). The Company is required to pay an unused commitment fee quarterly in arrears on the difference between committed amounts and amounts actually borrowed under the Amended Revolving Credit Facility equal to an applicable percentage of 0.25% to 0.45% per annum based on a total consolidated debt to EBITDA ratio. The Company is required to pay a letter of credit participation fee and a letter of credit fronting fee quarterly in arrears. The letter of credit participation fee is based upon the aggregate face amount of outstanding letters of credit at an applicable percentage of 1.25% to 2.0% based on a total consolidated debt to EBITDA ratio. The letter of credit fronting fee is 0.125% per annum on the face amount of each letter of credit. In addition to the remaining unamortized debt issuance costs associated with the original revolving credit facility and the Revolving Credit Facility, debt issuance costs of $2.8 million related to the Amended Revolving Credit Facility entered into on December 10, 2019 are being amortized to interest expense over the life of the Amended Revolving Credit Facility, and are included in prepaid and other current assets and other non-current assets in the Company's consolidated balance sheet. In the first three months of 2020 , the Company recorded interest expense related to the Amended Revolving Credit Facility of $1.1 million which consisted of $0.6 million associated with borrowings bearing interest at the LIBO rate, $0.3 million in unused commitment fees, and $0.2 million associated with the amortization of the debt issuance costs. In the first three months of 2019 , the Company recorded interest expense related to the revolving credit facility of $2.1 million which consisted of $1.9 million associated with borrowing bearing interest at the LIBO rate, $0.1 million in unused commitment fees, and $0.1 million associated with the amortization of the debt issuance costs. |
CONTINGENCIES
CONTINGENCIES | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CONTINGENCIES | CONTINGENCIES Overview LendingTree is involved in legal proceedings on an ongoing basis. In assessing the materiality of a legal proceeding, the Company evaluates, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require it to change its business practices in a manner that could have a material and adverse impact on the Company's business. With respect to the matters disclosed in this Note 14 , unless otherwise indicated, the Company is unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies. As of March 31, 2020 , the Company had litigation settlement accruals of $0.6 million and $36.0 million in continuing operations and discontinued operations, respectively. As of December 31, 2019 , the Company had litigation settlement accruals of $0.2 million and $31.0 million in continuing operations and discontinued operations, respectively. The litigation settlement accruals relate to litigation matters that were either settled or a firm offer for settlement was extended, thereby establishing an accrual amount that is both probable and reasonably estimable. See Note 17 —Discontinued Operations for additional information. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Other than the 0.625% Convertible Senior Notes and the Warrants, as well as the equity interest in Stash, the carrying amounts of the Company's financial instruments are equal to fair value at March 31, 2020 . See Note 13 —Debt for additional information on the 0.625% Convertible Senior Notes and the Warrants, and see Note 7 —Equity Investment for additional information on the equity interest in Stash. Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs. The changes in the fair value of the Company's Level 3 liabilities during the first quarters of 2020 and 2019 are as follows (in thousands) : Three Months Ended 2020 2019 Contingent consideration, beginning of period $ 33,464 $ 38,837 Transfers into Level 3 — — Transfers out of Level 3 — — Total net losses (gains) included in earnings (realized and unrealized) (8,122 ) 14,592 Purchases, sales and settlements: Additions — — Payments (3,000 ) (4,000 ) Contingent consideration, end of period $ 22,342 $ 49,429 The contingent consideration liability at March 31, 2020 is the estimated fair value of the earnout payments of the DepositAccounts, SnapCap, Ovation and QuoteWizard acquisitions. The Company will make earnout payments ranging from zero to $1.0 million based on the achievement of defined milestone targets for DepositAccounts, a payment of $3.0 million based on the achievement of certain defined earnings targets for SnapCap, payments ranging from zero to $4.4 million based on the achievement of certain defined operating metrics for Ovation, and payments ranging from zero to $46.8 million based on the achievement of certain defined performance targets for QuoteWizard. See Note 8 —Business Acquisitions for additional information on the contingent consideration for each of these respective acquisitions. The significant unobservable inputs used to calculate the fair value of the contingent consideration are estimated future cash flows for the acquisitions, estimated customer growth rates, estimated date and likelihood of an increase in interest rates and the discount rate. Actual results will differ from the projected results and could have a significant impact on the estimated fair value of the contingent considerations. Additionally, as the liability is stated at present value, the passage of time alone will increase the estimated fair value of the liability each reporting period. Any changes in fair value will be recorded in operating income in the consolidated statements of operations and comprehensive income. The following table provides quantitative information about Level 3 fair value measurements. Fair Value at March 31, 2020 Valuation Technique(s) Unobservable Input Range (Weighted Average) (a) (in thousands) Contingent consideration $ 22,342 Option pricing model Operating results growth rate 8.7% - 37.1% (22.9%) Customer growth rate 0.7 % Discount rate 10.3% - 10.5% (10.4%) Scenario approach based on interest rate forecasts (b) Date and likelihood of an increase in interest rates — Discount rate — % (a) Discount rates were weighted by the relative undiscounted value of expected earnout payments. Other unobservable inputs were weighted by the relative maximum potential earnout payments. (b) See discussion over DepositAccounts within Note 8 —Business Acquisitions—Changes in Contingent Consideration. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION The Company manages its business and reports its financial results through the following three operating and reportable segments: Home, Consumer and Insurance. Characteristics which were relied upon in making the determination of the reportable segments include the nature of the products, the organization's internal structure, and the information that is regularly reviewed by the chief operating decision maker for the purpose of assessing performance and allocating resources. The Company changed its reportable segments in the fourth quarter of 2019 and previously reported segment results have been revised to conform to the Company's reportable segments at March 31, 2020 . The Home segment includes the following products: purchase mortgage, refinance mortgage, home equity loans and lines of credit, reverse mortgage loans, and real estate. 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. The Insurance segment consists of insurance quote products. 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, are included within the Other category. The following tables are a reconciliation of segment profit, which is the Company's primary segment profitability measure, to income before income taxes and discontinued operations. Segment cost of revenue and marketing expense represents the portion of selling and marketing expense attributable to variable costs paid for advertising, direct marketing and related expenses, that are directly attributable to the segments' products. This measure excludes overhead, fixed costs and personnel-related expenses. For the Other category, segment cost of revenue and marketing expense also includes the portion of cost of revenue attributable to costs paid for advertising re-sold to third parties. Three Months Ended March 31, 2020 Home Consumer Insurance Other Total (in thousands) Revenue $ 79,174 $ 119,924 $ 82,737 $ 1,249 $ 283,084 Segment cost of revenue and marketing expense 43,263 76,825 52,204 1,577 173,869 Segment profit 35,911 43,099 30,533 (328 ) 109,215 Cost of revenue (exclusive of cost of advertising re-sold to third parties included above) 13,166 Brand and other marketing expense 22,755 General and administrative expense 32,082 Product development 10,963 Depreciation 3,378 Amortization of intangibles 13,757 Change in fair value of contingent consideration (8,122 ) Severance 158 Litigation settlements and contingencies 329 Operating income 20,749 Interest expense, net (4,834 ) Other income — Income before income taxes and discontinued operations $ 15,915 Three Months Ended March 31, 2019 Home Consumer Insurance Other Total (in thousands) Revenue $ 63,437 $ 120,729 $ 67,092 $ 11,132 $ 262,390 Segment cost of revenue and marketing expense 39,516 66,755 39,228 10,373 155,872 Segment profit 23,921 53,974 27,864 759 106,518 Cost of revenue (exclusive of cost of advertising re-sold to third parties included above) 10,334 Brand and other marketing expense 26,355 General and administrative expense 31,117 Product development 10,166 Depreciation 2,482 Amortization of intangibles 13,427 Change in fair value of contingent consideration 14,592 Severance 54 Litigation settlements and contingencies (207 ) Operating loss (1,802 ) Interest expense, net (5,468 ) Other income 68 Loss before income taxes and discontinued operations $ (7,202 ) |
DISCONTINUED OPERATIONS
DISCONTINUED OPERATIONS | 3 Months Ended |
Mar. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS The LendingTree Loans Business is presented as discontinued operations in the accompanying financial statements. The LendingTree Loans Business originated various consumer mortgage loans through HLC. On June 6, 2012, the Company sold substantially all of the operating assets of HLC, including the LendingTree Loans Business, for $55.9 million in cash to a wholly-owned subsidiary of Discover Financial Services ("Discover"). Discover generally did not assume liabilities of HLC that arose before the closing date, except for certain liabilities directly related to assets Discover acquired. Of the purchase price received, a portion was deposited in escrow in accordance with the purchase agreement with Discover for certain loan loss obligations that remained with HLC following the sale. During 2018, the remaining funds in escrow were released to HLC in accordance with the terms of the purchase agreement with Discover. Upon closing of the sale of substantially all of the operating assets of HLC on June 6, 2012, HLC ceased to originate consumer loans. Certain liability for losses on previously sold loans remains with HLC. Litigation settlements and contingencies and legal fees associated with ongoing related bankruptcy and legal proceedings against the Company are included in discontinued operations in the accompanying financial statements. Home Loan Center, Inc. Bankruptcy Filing On June 21, 2019, the U.S. District Court of Minnesota entered judgment in ResCap Liquidating Trust v. Home Loan Center, Inc. , against HLC for $68.5 million , see Litigation Related to Discontinued Operations below. The judgment against HLC exceeded the assets of HLC, which were $11.2 million at July 21, 2019, including cash of $5.9 million . On July 19, 2019, HLC appealed the judgment to the United States Court of Appeals for the Eighth Circuit. On July 21, 2019, at the direction of the sole independent director of HLC, HLC voluntarily filed a petition under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) with the U.S. Bankruptcy Court in the Northern District of California in San Jose, California (the “Bankruptcy Court”) in order to preserve assets for the benefit of all creditors of HLC. On September 16, 2019, the Bankruptcy Court converted the bankruptcy to Chapter 7 of the Bankruptcy Code and appointed a Trustee to liquidate HLC's assets. HLC’s filing under the Bankruptcy Code creates an automatic stay of enforcement of the judgment entered against HLC by the Minnesota court in ResCap Liquidating Trust v. Home Loan Center, Inc. described above and in Litigation Related to Discontinued Operations below. As a result of the voluntary petition, LendingTree, LLC was, as of the initial July 21, 2019 bankruptcy petition filing date, no longer deemed to have a controlling interest in HLC under applicable accounting standards. As a result, HLC and its consolidated subsidiary were deconsolidated from the Company’s consolidated financial statements as of July 21, 2019. The effect of such deconsolidation was the elimination of the consolidated assets and liabilities of HLC (and its consolidated subsidiary) from the Company’s consolidated balance sheets. Upon deconsolidation, in the third quarter of 2019 the Company recognized a loss of $5.5 million which includes a net gain of $4.5 million related to the removal of HLC's (and its consolidated subsidiary's) assets and liabilities and the recognition of a liability of $10.0 million related to LendingTree LLC's ownership in HLC. No consideration was received by the Company as a result of the deconsolidation. HLC has indicated that it believes that it has claims against HLC’s sole shareholder, LendingTree, LLC, and certain of its officers and directors, relating to the declaration of a dividend by HLC in January 2016 of $40.0 million . The Company is obligated to advance any expenses to the officers and directors related to these claims and to indemnify them to the maximum extent permitted by law. LendingTree, LLC believes the declaration of the dividend was proper, that the amounts paid to LendingTree, LLC following such declaration are not subject to recovery by HLC and that any claims by HLC relating to such dividend declaration are without merit. During the second quarter of 2020, LendingTree, LLC and HLC reached a verbal settlement agreement in the amount of $36.0 million for the release of any and all claims against the Company defendants by HLC, including the dividend claim. LendingTree estimates the range of potential losses related to the dividend matter to be $0.0 million to $40.0 million plus a potential award of prejudgment interest. An estimated liability of $36.0 million is included in the accompanying consolidated balance sheet as of March 31, 2020 related to LendingTree LLC's ownership in HLC. HLC’s voluntary petition under the Bankruptcy Code does not represent an event of default under LendingTree, LLC’s Second Amended and Restated Credit Agreement dated as of December 10, 2019 or the Company’s indenture dated May 31, 2017 with respect to the Company’s 0.625% Convertible Senior Notes due 2022. Litigation Related to Discontinued Operations Residential Funding Company ResCap Liquidating Trust v. Home Loan Center, Inc., Case No. 14-cv-1716 (U.S. Dist. Ct., Minn.), successor to Residential Funding Company, LLC v Home Loan Center, Inc., No. 13-cv-3451 (U.S. Dist. Ct., Minn.). On or about December 16, 2013, Home Loan Center, Inc. was served in the original captioned matter, which involves claims of Residential Funding Company, LLC ("RFC") for damages for breach of contract and indemnification for certain residential mortgage loans as well as residential mortgage-backed securitizations ("RMBS") containing mortgage loans. RFC asserted that, beginning in 2008, RFC faced massive repurchase demands and lawsuits from purchasers or insurers of the loans and RMBS that RFC had sold. RFC filed for bankruptcy protection in May 2012. Plaintiff alleged that, after RFC filed for Chapter 11 protection, hundreds of proofs of claim were filed, many of which mirrored the litigation filed against RFC prior to its bankruptcy. In December 2013, the United States Bankruptcy Court for the Southern District of New York entered an Order confirming the Second Amended Joint Chapter 11 Plan Proposed by Residential Capital, LLC et al. and the Official Committee of Unsecured Creditors. Plaintiff then began filing substantially similar complaints against approximately 80 of the loan originators from whom RFC had purchased loans, including HLC, in federal and state courts in Minnesota and New York. In each case, plaintiff claimed that the defendant is liable for a portion of the global settlement in RFC’s bankruptcy. Plaintiff asserted two claims against HLC: (1) breach of contract based on HLC’s alleged breach of representations and warranties concerning the quality and characteristics of the mortgage loans it sold to RFC; and (2) contractual indemnification for alleged liabilities, losses, and damages incurred by RFC arising out of purported defects in loans that RFC purchased from HLC and sold to third parties. Plaintiff alleged that the “types of defects” contained in the loans it purchased from HLC included “income misrepresentation, employment misrepresentation, appraisal misrepresentations or inaccuracies, undisclosed debt, and missing or inaccurate documents.” Plaintiff sought damages of up to $61.0 million plus attorney's fees and prejudgment interest. HLC denied the material allegations of the complaint and asserted numerous defenses thereto. The matter went to trial in the fourth quarter of 2018 and the jury returned a verdict of $28.7 million in favor of plaintiff. On June 21, 2019, the U.S. District Court in Minnesota entered judgment against HLC for $68.5 million . The judgment is comprised of: (i) $28.7 million in damages awarded by the jury; (ii) $14.1 million in pre-verdict interest; (iii) $23.1 million in attorneys' fees and costs, and (iv) $2.6 million in post-verdict, prejudgment interest. HLC’s filing under the Bankruptcy Code discussed above in Home Loan Center, Inc. Bankruptcy Filing creates an automatic stay of enforcement of the judgment entered against HLC by the U.S. District Court in Minnesota. On August 27, 2019, plaintiff filed a lawsuit captioned ResCap Liquidating Trust v. LendingTree, LCC, et al., Case No. 19-cv-2360 (U.S. Dist. Ct., Minn.) , seeking to hold the Company liable for the judgment against HLC, under assumption of liability, agency and alter ego theories. The Company believes that these claims lack merit and intends to defend this action vigorously. On October 17, 2019, the Company filed a motion to dismiss the liability and agency claims, and oral arguments with respect to such motion were held on January 10, 2020. On March 20, 2020, the court denied the Company's motion to dismiss, or in the alternative, to compel arbitration, and on April 3, 2020, the Company appealed the court's findings with respect to the Company's request to compel arbitration of the first count of the lawsuit. Lehman Brothers Holdings, Inc. Lehman Brothers Holdings Inc. v. 1st Advantage Mortgage, LLC et al., Case No. 08-13555 (SCC), Adversary Proceeding No. 16-01342 (SCC) (Bankr. S.D.N.Y.). In February 2016, Lehman Brothers Holdings, Inc. (“LBHI”) filed an Adversary Complaint against HLC and approximately 149 other defendants (the "Complaint"). In December 2018, LBHI amended its complaint against HLC. The amended complaint references approximately 370 allegedly defective mortgage loans sold by HLC with purported "Claim Amounts" totaling $40.2 million . LBHI alleges it settled all such claims and is seeking indemnification from HLC for LBHI’s purported losses and liabilities associated with such settlements, plus prejudgment interest, attorneys’ fees, litigation costs and other expenses. The amended complaint does not specify the amount of LBHI’s purported damages. On December 4, 2019, LBHI filed a $44.7 million proof of claim in HLC’s bankruptcy seeking recovery for the claims asserted in the lawsuit. The Company believes that these claims lack merit and understands that HLC intends to defend this action vigorously. HLC’s filing under the Bankruptcy Code discussed above in Home Loan Center, Inc. Bankruptcy Filing creates an automatic stay of this proceeding. Financial Information of Discontinued Operations The components of net loss reported as discontinued operations in the accompanying consolidated statements of operations and comprehensive income are as follows (in thousands) : Three Months Ended 2020 2019 Revenue $ — $ — Loss before income taxes (6,102 ) (1,344 ) Income tax benefit 1,527 282 Net loss $ (4,575 ) $ (1,062 ) Losses from discontinued operations included all activity of HLC prior to bankruptcy, including litigation settlements, contingencies and legal fees associated with legal proceedings. The results of discontinued operations also include litigation settlements and contingencies and legal fees associated with ongoing legal proceedings against LendingTree Inc. or LendingTree LLC that arose due to the LendingTree Loans Business or the HLC bankruptcy filing. |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Accounting Estimates | Accounting Estimates Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include: loan loss obligations; the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; fair value of assets acquired in a business |
Certain Risks and Concentrations | Certain Risks and Concentrations LendingTree's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk at March 31, 2020 , consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit. The Company requires certain Network Partners to maintain security deposits with the Company, which in the event of non-payment, would be applied against any accounts receivable outstanding. Due to the nature of the mortgage lending industry, interest rate fluctuations may negatively impact future revenue from the Company's marketplace. Lenders and lead purchasers participating on the Company's marketplace can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders and lead purchasers can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans and other products from Network Partners without utilizing the Company's services, the Company's ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the Network Partners whose loans and other financial products are offered on its online marketplace, consumers may obtain offers from these Network Partners without using its services. Other than a support services office in India, the Company's operations are geographically limited to and dependent upon the economic condition of the United States. |
Litigation Settlements and Contingencies | Litigation Settlements and Contingencies Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2018-15, which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. The amendments should be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company adopted ASU 2018-15 in the first quarter of 2020 using the prospective approach. Subsequent to the adoption of this ASU, capitalizable implementation costs incurred in a hosting arrangement that is a service contract are recorded within prepaid and other current assets and other non-current assets on the consolidated balance sheet. The expense related to these capitalized implementation costs are included within general and administrative expense on the consolidated statement of operations and comprehensive income. The adoption of ASU 2018-15 did not have a material impact on the consolidated financial statements as of March 31, 2020 and for the three months ended March 31, 2020. In August 2018, the FASB issued ASU 2018-13, which removes, modifies and adds certain disclosure requirements in Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurement. This ASU is effective for annual and interim reporting periods beginning after December 15, 2019. Certain amendments must be applied prospectively while others are to be applied on a retrospective basis to all periods presented. The Company adopted ASU 2018-13 in the first quarter of 2020. See Note 15 —Fair Value Measurements. In January 2017, the FASB issued ASU 2017-04, which eliminates the requirement to calculate the implied fair value of goodwill to measure a goodwill impairment charge (Step 2 of the goodwill impairment test). Instead, an impairment charge will be based on the excess of the carrying amount over the fair value. This ASU is effective for annual and interim impairment tests performed in periods beginning after December 15, 2019. The Company adopted ASU 2017-04 in the first quarter of 2020. In June 2016, the FASB issued ASU 2016-13, which requires entities to measure expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This ASU introduces ASC Topic 326, Financial Instruments—Credit Losses, which replaces the existing incurred loss model and is applicable to financial assets measured at amortized cost, including trade receivables and certain other financial assets that have the contractual right to receive cash. ASC Topic 326 is effective for annual and interim reporting periods beginning after December 15, 2019. The guidance must be adopted using a modified retrospective transition. The Company adopted ASC Topic 326 as of January 1, 2020, which did not result in any cumulative effect adjustment to the opening balance of accumulated deficit in the period of adoption. Recently Issued Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes, and clarifies certain aspects of the current guidance to improve consistency among reporting entities. This ASU is effective for annual and interim reporting periods beginning after December 15, 2020. Early adoption is permitted, including adoption in interim periods. Entities electing early adoption must adopt all amendments in the same period. Most amendments must be applied prospectively while others are to be applied on a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The Company is evaluating the impact this ASU will have on its consolidated financial statements and whether to early adopt. |
REVENUE (Tables)
REVENUE (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Revenue is as follows (in thousands) : Three Months Ended 2020 2019 Home $ 79,174 $ 63,437 Credit cards 51,586 54,506 Personal loans 31,509 32,531 Other Consumer 36,829 33,692 Total Consumer 119,924 120,729 Insurance 82,737 67,092 Other 1,249 11,132 Total revenue $ 283,084 $ 262,390 |
CASH AND RESTRICTED CASH (Table
CASH AND RESTRICTED CASH (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Restricted Cash and Cash Equivalents | Total cash, cash equivalents, restricted cash and restricted cash equivalents consist of the following (in thousands) : March 31, December 31, Cash and cash equivalents $ 51,208 $ 60,243 Restricted cash and cash equivalents 93 96 Total cash, cash equivalents, restricted cash and restricted cash equivalents $ 51,301 $ 60,339 |
ALLOWANCE FOR DOUBTFUL ACCOUN_2
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Credit Loss [Abstract] | |
Reconciliation of allowance for doubtful accounts | A reconciliation of the beginning and ending balances of the allowance for doubtful accounts is as follows (in thousands) : Three Months Ended 2020 2019 Balance, beginning of the period $ 1,466 $ 1,143 Charges to earnings 880 510 Write-off of uncollectible accounts receivable (332 ) (288 ) Recoveries collected 7 5 Balance, end of the period $ 2,021 $ 1,370 |
GOODWILL AND INTANGIBLE ASSETS
GOODWILL AND INTANGIBLE ASSETS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of balance of intangible assets, net | The balance of goodwill and intangible assets, net is as follows (in thousands) : March 31, December 31, Goodwill $ 903,227 $ 903,227 Accumulated impairment losses (483,088 ) (483,088 ) Net goodwill $ 420,139 $ 420,139 Intangible assets with indefinite lives $ 10,142 $ 10,142 Intangible assets with definite lives, net 157,681 171,438 Total intangible assets, net $ 167,823 $ 181,580 |
Schedule of intangible assets with definite lives | Intangible assets with definite lives relate to the following (in thousands) : Cost Accumulated Amortization Net Technology $ 116,200 $ (56,032 ) $ 60,168 Customer lists 77,300 (13,979 ) 63,321 Trademarks and tradenames 17,200 (7,292 ) 9,908 Website content 51,000 (26,717 ) 24,283 Other 5 (4 ) 1 Balance at March 31, 2020 $ 261,705 $ (104,024 ) $ 157,681 Cost Accumulated Amortization Net Technology $ 116,200 $ (48,938 ) $ 67,262 Customer lists 77,300 (12,452 ) 64,848 Trademarks and tradenames 17,200 (6,407 ) 10,793 Website content 51,000 (22,467 ) 28,533 Other 5 (3 ) 2 Balance at December 31, 2019 $ 261,705 $ (90,267 ) $ 171,438 |
Schedule of amortization of intangible assets with definite lives for the next five years | Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of March 31, 2020 , future amortization is estimated to be as follows (in thousands) : Amortization Expense Remainder of current year $ 39,322 Year ending December 31, 2021 42,738 Year ending December 31, 2022 25,256 Year ending December 31, 2023 8,602 Year ending December 31, 2024 6,747 Thereafter 35,016 Total intangible assets with definite lives, net $ 157,681 |
BUSINESS ACQUISITION (Tables)
BUSINESS ACQUISITION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Business Acquisition, Contingent Consideration [Line Items] | |
Schedule of Business Acquisitions by Acquisition, Contingent Consideration [Table Text Block] | Changes in the fair value of contingent consideration is summarized as follows ( in thousands) : Three Months Ended 2020 2019 QuoteWizard $ (8,262 ) $ 14,359 Ovation 141 (648 ) SnapCap (1 ) 1,592 DepositAccounts — (711 ) Total changes in fair value of contingent consideration $ (8,122 ) $ 14,592 |
ACCRUED EXPENSES AND OTHER CU_2
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands) : March 31, December 31, Accrued advertising expense $ 58,165 $ 65,836 Accrued compensation and benefits 9,265 10,540 Accrued professional fees 3,315 1,560 Customer deposits and escrows 9,616 6,920 Contribution to LendingTree Foundation 3,333 3,333 Current lease liabilities 6,470 6,885 Other 15,483 17,681 Total accrued expenses and other current liabilities $ 105,647 $ 112,755 |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average basic and diluted common shares | Basic and diluted income per share was determined based on the following share data (in thousands) : Three Months Ended 2020 2019 Weighted average basic common shares 12,957 12,718 Effect of stock options 628 686 Effect of dilutive share awards 104 161 Effect of Convertible Senior Notes and warrants 469 621 Weighted average diluted common shares 14,158 14,186 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
STOCK-BASED COMPENSATION | |
Schedule of non-cash compensation expense related to equity awards | Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations and comprehensive income (in thousands) : Three Months Ended 2020 2019 Cost of revenue $ 242 $ 153 Selling and marketing expense 1,156 1,749 General and administrative expense 9,123 10,221 Product development 1,396 1,930 Total non-cash compensation $ 11,917 $ 14,053 |
Summary of changes in outstanding stock options | A summary of changes in outstanding stock options is as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (a) (per option) (in years) (in thousands) Options outstanding at January 1, 2020 777,871 $ 69.87 Granted (b) 69,319 275.82 Exercised (2,462 ) 67.05 Forfeited (193 ) 332.65 Expired (1,974 ) 352.10 Options outstanding at March 31, 2020 842,561 86.11 4.54 $ 99,017 Options exercisable at March 31, 2020 677,829 $ 43.56 3.49 $ 98,896 (a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $183.39 on the last trading day of the quarter ended March 31, 2020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on March 31, 2020 . The intrinsic value changes based on the market value of the Company's common stock. (b) During the three months ended March 31, 2020 , the Company granted stock options to certain employees with a weighted average grant date fair value per share of $138.29 , calculated using the Black-Scholes option pricing model, which vesting periods include (a) three years from grant date and (b) four years |
Schedule of stock option valuation assumptions | For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows: Expected term (1) 6.00 - 6.25 years Expected dividend (2) — Expected volatility (3) 52 - 53% Risk-free interest rate (4) 0.96% (1) The expected term of stock options granted was calculated using the "Simplified Method," which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees. (2) For all stock options granted in 2020 , no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate. (3) The expected volatility rate is based on the historical volatility of the Company's common stock. (4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date. For purposes of determining stock-based compensation expense, the grant date fair value per share of the stock options was estimated using the Monte Carlo simulation model, which requires the use of various key assumptions. The assumptions used are as follows: Expected term (1) 7.00 years Expected dividend (2) — Expected volatility (3) 51% Risk-free interest rate (4) 1.03% (1) The expected term of stock options with a market condition granted was calculated using the midpoint between the time of vesting and the end of the contractual term. (2) For all stock options with a market condition granted in 2020 , no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate. (3) The expected volatility rate is based on the historical volatility of the Company's common stock. (4) The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date. |
Schedule of changes in outstanding stock options with market conditions | A summary of changes in outstanding stock options with market conditions at target is as follows: Number of Options with Market Conditions Weighted Average Exercise Price Weighted Average Remaining Contractual Term Aggregate Intrinsic Value (a) (per option) (in years) (in thousands) Options outstanding at January 1, 2020 463,440 $ 204.31 Granted (b) 19,126 275.82 Exercised — — Forfeited — — Expired — — Options outstanding at March 31, 2020 482,566 207.14 7.52 $ — Options exercisable at March 31, 2020 — $ — 0.00 $ — (a) The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $183.39 on the last trading day of the quarter ended March 31, 2020 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holder had the option holder exercised these options on March 31, 2020 . The intrinsic value changes based on the market value of the Company's common stock. (b) During the three months ended March 31, 2020 , the Company granted stock options with a grant date fair value per share of $196.07 , calculated using the Monte Carlo simulation model, which has a vesting date of March 31, 2024 . |
Schedule of changes in outstanding non-vested RSUs and restricted stock | A summary of changes in outstanding nonvested restricted stock units ("RSUs") is as follows: RSUs Number of Units Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 144,939 $ 267.85 Granted 97,375 276.84 Vested (40,676 ) 243.25 Forfeited (4,181 ) 265.80 Nonvested at March 31, 2020 197,457 $ 277.42 |
Schedule of changes in outstanding nonvested RSUs and restricted stock with performance and market conditions | A summary of changes in outstanding nonvested RSUs with performance conditions is as follows: RSUs with Performance Conditions Number of Units Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 14,647 $ 210.55 Granted — — Vested — — Forfeited — — Nonvested at March 31, 2020 14,647 $ 210.55 A summary of changes in outstanding nonvested RSAs with market conditions at target is as follows: RSAs with Market Conditions Number of Awards Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 26,674 $ 340.25 Granted — — Vested — — Forfeited — — Nonvested at March 31, 2020 26,674 $ 340.25 A summary of changes in outstanding nonvested restricted stock awards ("RSAs") with performance conditions is as follows: RSAs with Performance Conditions Number of Awards Weighted Average Grant Date Fair Value (per unit) Nonvested at January 1, 2020 47,608 $ 340.25 Granted — — Vested (5,951 ) 340.25 Forfeited — — Nonvested at March 31, 2020 41,657 $ 340.25 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of income tax (expense) benefit | Three Months Ended 2020 2019 (in thousands, except percentages) Income tax benefit $ 3,061 $ 7,752 Effective tax rate (19.2 )% 107.6 % |
Reconciliation of income tax (expense) benefit | Three Months Ended 2020 2019 (in thousands) Income tax (expense) benefit - excluding excess tax benefit on stock compensation and CARES Act $ (4,097 ) $ 1,749 Excess tax benefit on stock compensation 1,054 6,003 Income tax benefit from CARES Act 6,104 — Income tax benefit $ 3,061 $ 7,752 |
DEBT (Table)
DEBT (Table) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of the gross carrying amount, unamortized debt cost and net carrying value of the liability component of the Notes | A summary of the gross carrying amount, unamortized debt cost, debt issuance costs and net carrying value of the liability component of the Notes are as follows (in thousands) : March 31, December 31, Gross carrying amount $ 299,985 $ 299,991 Unamortized debt discount 28,677 31,789 Debt issuance costs 3,438 3,811 Net carrying amount $ 267,870 $ 264,391 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of changes in assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs | The changes in the fair value of the Company's Level 3 liabilities during the first quarters of 2020 and 2019 are as follows (in thousands) : Three Months Ended 2020 2019 Contingent consideration, beginning of period $ 33,464 $ 38,837 Transfers into Level 3 — — Transfers out of Level 3 — — Total net losses (gains) included in earnings (realized and unrealized) (8,122 ) 14,592 Purchases, sales and settlements: Additions — — Payments (3,000 ) (4,000 ) Contingent consideration, end of period $ 22,342 $ 49,429 |
Schedule of fair value measurement valuation | The following table provides quantitative information about Level 3 fair value measurements. Fair Value at March 31, 2020 Valuation Technique(s) Unobservable Input Range (Weighted Average) (a) (in thousands) Contingent consideration $ 22,342 Option pricing model Operating results growth rate 8.7% - 37.1% (22.9%) Customer growth rate 0.7 % Discount rate 10.3% - 10.5% (10.4%) Scenario approach based on interest rate forecasts (b) Date and likelihood of an increase in interest rates — Discount rate — % (a) Discount rates were weighted by the relative undiscounted value of expected earnout payments. Other unobservable inputs were weighted by the relative maximum potential earnout payments. (b) See discussion over DepositAccounts within Note 8 —Business Acquisitions—Changes in Contingent Consideration. |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Information | ||
Schedule of Segment Reporting Information, by Segment | Three Months Ended March 31, 2020 Home Consumer Insurance Other Total (in thousands) Revenue $ 79,174 $ 119,924 $ 82,737 $ 1,249 $ 283,084 Segment cost of revenue and marketing expense 43,263 76,825 52,204 1,577 173,869 Segment profit 35,911 43,099 30,533 (328 ) 109,215 Cost of revenue (exclusive of cost of advertising re-sold to third parties included above) 13,166 Brand and other marketing expense 22,755 General and administrative expense 32,082 Product development 10,963 Depreciation 3,378 Amortization of intangibles 13,757 Change in fair value of contingent consideration (8,122 ) Severance 158 Litigation settlements and contingencies 329 Operating income 20,749 Interest expense, net (4,834 ) Other income — Income before income taxes and discontinued operations $ 15,915 | Three Months Ended March 31, 2019 Home Consumer Insurance Other Total (in thousands) Revenue $ 63,437 $ 120,729 $ 67,092 $ 11,132 $ 262,390 Segment cost of revenue and marketing expense 39,516 66,755 39,228 10,373 155,872 Segment profit 23,921 53,974 27,864 759 106,518 Cost of revenue (exclusive of cost of advertising re-sold to third parties included above) 10,334 Brand and other marketing expense 26,355 General and administrative expense 31,117 Product development 10,166 Depreciation 2,482 Amortization of intangibles 13,427 Change in fair value of contingent consideration 14,592 Severance 54 Litigation settlements and contingencies (207 ) Operating loss (1,802 ) Interest expense, net (5,468 ) Other income 68 Loss before income taxes and discontinued operations $ (7,202 ) |
DISCONTINUED OPERATIONS (Tables
DISCONTINUED OPERATIONS (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
DISCONTINUED OPERATIONS | |
Schedule of revenue and net income (loss) of the discontinued operations | The components of net loss reported as discontinued operations in the accompanying consolidated statements of operations and comprehensive income are as follows (in thousands) : Three Months Ended 2020 2019 Revenue $ — $ — Loss before income taxes (6,102 ) (1,344 ) Income tax benefit 1,527 282 Net loss $ (4,575 ) $ (1,062 ) |
REVENUE - Disaggregation of Rev
REVENUE - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 283,084 | $ 262,390 |
Credit Cards | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 51,586 | 54,506 |
Personal Loans | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 31,509 | 32,531 |
Other Consumer | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 36,829 | 33,692 |
Other Products And Services | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 1,249 | 11,132 |
Home Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 79,174 | 63,437 |
Consumer Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 119,924 | 120,729 |
Insurance Segment [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 82,737 | $ 67,092 |
REVENUE - Narrative (Details)
REVENUE - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Contract asset | $ 6.8 | $ 6.5 | |
Contract liability | 0.7 | $ 0.6 | |
Revenue recognized from prior period | 0.5 | $ 0.3 | |
Estimated variable consideration, increase in revenue | $ 0.1 | $ 0.9 |
CASH AND RESTRICTED CASH (Detai
CASH AND RESTRICTED CASH (Details - Balance Sheet) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 51,208 | $ 60,243 | ||
Restricted cash and cash equivalents | 93 | 96 | ||
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period | $ 51,301 | $ 60,339 | $ 64,603 | $ 105,158 |
ALLOWANCE FOR DOUBTFUL ACCOUN_3
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of the period | $ 1,466 | $ 1,143 |
Bad debt expense | 880 | 510 |
Write-off of uncollectible accounts receivable | (332) | (288) |
Recoveries collected | 7 | 5 |
Balance, end of the period | $ 2,021 | $ 1,370 |
GOODWILL AND INTANGIBLE ASSET_2
GOODWILL AND INTANGIBLE ASSETS (Details - Balance Sheet) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Goodwill [Roll Forward] | ||
Goodwill | $ 903,227 | $ 903,227 |
Accumulated impairment losses | (483,088) | (483,088) |
Net goodwill | 420,139 | 420,139 |
Intangible Assets, Net (Including Goodwill) [Abstract] | ||
Intangible assets with indefinite lives | 10,142 | 10,142 |
Intangible assets with definite lives, net | 157,681 | 171,438 |
Total intangible assets, net | 167,823 | 181,580 |
Consumer Segment [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 166,100 | 166,100 |
Home Segment [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | 59,300 | 59,300 |
Insurance Segment [Member] | ||
Goodwill [Roll Forward] | ||
Goodwill | $ 194,700 | $ 194,700 |
GOODWILL AND INTANGIBLE ASSET_3
GOODWILL AND INTANGIBLE ASSETS (Details - Goodwill and Indefinite-Lived Intangibles) | 3 Months Ended |
Mar. 31, 2020segment | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of reportable segments | 3 |
GOODWILL AND INTANGIBLE ASSET_4
GOODWILL AND INTANGIBLE ASSETS (Details - Definite Lived Intangibles) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Intangible assets with definite lives | ||
Cost | $ 261,705 | $ 261,705 |
Accumulated Amortization | (104,024) | (90,267) |
Total intangible assets with definite lives, net | 157,681 | 171,438 |
Technology | ||
Intangible assets with definite lives | ||
Cost | 116,200 | 116,200 |
Accumulated Amortization | (56,032) | (48,938) |
Total intangible assets with definite lives, net | 60,168 | 67,262 |
Customer lists | ||
Intangible assets with definite lives | ||
Cost | 77,300 | 77,300 |
Accumulated Amortization | (13,979) | (12,452) |
Total intangible assets with definite lives, net | 63,321 | 64,848 |
Trademarks and tradenames | ||
Intangible assets with definite lives | ||
Cost | 17,200 | 17,200 |
Accumulated Amortization | (7,292) | (6,407) |
Total intangible assets with definite lives, net | 9,908 | 10,793 |
Website content | ||
Intangible assets with definite lives | ||
Cost | 51,000 | 51,000 |
Accumulated Amortization | (26,717) | (22,467) |
Total intangible assets with definite lives, net | 24,283 | 28,533 |
Other | ||
Intangible assets with definite lives | ||
Cost | 5 | 5 |
Accumulated Amortization | (4) | (3) |
Total intangible assets with definite lives, net | $ 1 | $ 2 |
GOODWILL AND INTANGIBLE ASSET_5
GOODWILL AND INTANGIBLE ASSETS (Details - 5yr Definite Lived Intangibles Amortization) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Amortization of intangible assets with definite lives computed on a straight-line basis | ||
Remainder of current year | $ 39,322 | |
2021 | 42,738 | |
2022 | 25,256 | |
2023 | 8,602 | |
2024 | 6,747 | |
Thereafter | 35,016 | |
Total intangible assets with definite lives, net | $ 157,681 | $ 171,438 |
EQUITY INVESTMENTS (Details)
EQUITY INVESTMENTS (Details) $ in Millions | Feb. 28, 2020USD ($) |
Stash | |
Schedule of Equity Method Investments [Line Items] | |
Equity investment, original cost | $ 80 |
BUSINESS ACQUISITION BUSINESS A
BUSINESS ACQUISITION BUSINESS ACQUISITION (Details - Changes in Contingent Consideration) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | Oct. 31, 2018 | Jun. 11, 2018 | Jun. 14, 2017 | |
Business Acquisition [Line Items] | ||||||
Contingent consideration payments | $ 3,000,000 | $ 3,000,000 | ||||
Current contingent consideration | 14,183,000 | $ 9,028,000 | ||||
Non-current contingent consideration | 8,159,000 | $ 24,436,000 | ||||
Change in fair value of contingent consideration | (8,122,000) | 14,592,000 | ||||
Ovation | ||||||
Business Acquisition [Line Items] | ||||||
Current contingent consideration | 3,200,000 | |||||
Change in fair value of contingent consideration | 141,000 | (648,000) | ||||
QuoteWizard | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration | 16,200,000 | |||||
Current contingent consideration | 8,000,000 | |||||
Non-current contingent consideration | 8,200,000 | |||||
Change in fair value of contingent consideration | (8,262,000) | 14,359,000 | ||||
DepositAccounts | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration | 0 | |||||
Change in fair value of contingent consideration | 0 | (711,000) | ||||
SnapCap | ||||||
Business Acquisition [Line Items] | ||||||
Current contingent consideration | 2,900,000 | |||||
Change in fair value of contingent consideration | $ (1,000) | $ 1,592,000 | ||||
Minimum | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration | $ 0 | $ 0 | $ 0 | |||
Maximum | ||||||
Business Acquisition [Line Items] | ||||||
Contingent consideration | $ 46,800,000 | $ 4,400,000 | $ 1,000,000 |
ACCRUED EXPENSES AND OTHER CU_3
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details - Balance Sheet) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued expenses and other current liabilities | ||
Accrued advertising expense | $ 58,165 | $ 65,836 |
Accrued compensation and benefits | 9,265 | 10,540 |
Accrued professional fees | 3,315 | 1,560 |
Customer deposits and escrows | 9,616 | 6,920 |
Contribution to LendingTree Foundation | 3,333 | 3,333 |
Current lease liabilities | 6,470 | 6,885 |
Other | 15,483 | 17,681 |
Total accrued expenses and other current liabilities | $ 105,647 | $ 112,755 |
SHAREHOLDERS' EQUITY (Details)
SHAREHOLDERS' EQUITY (Details) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2019 | Feb. 20, 2019 | Feb. 21, 2018 | May 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Annual interest rate on convertible senior notes | 0.625% | ||||
Calculation of weighted average common shares | |||||
Weighted average common shares, basic | 12,957,000 | 12,718,000 | |||
Effect of dilutive securities | |||||
Effect of stock options (in shares) | 628,000 | 686,000 | |||
Effect of dilutive share awards (in shares) | 104,000 | 161,000 | |||
Effect of Convertible Senior Notes (in shares) | 469,000 | 621,000 | |||
Weighted average common shares, diluted | 14,158,000 | 14,186,000 | |||
Common stock repurchases | |||||
Value of common stock authorized to be repurchased | $ 150,000 | $ 100,000 | |||
Purchase of treasury stock (in shares) | 17,501 | ||||
Treasury Stock, Value, Acquired, Cost Method | $ 3,976 | ||||
Remaining authorized repurchase amount | $ 179,700 | ||||
Share-based Payment Arrangement, Option [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 100,000 | 400,000 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details - P&L Impact) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Non-cash compensation expense related to equity awards | ||
Total non-cash compensation | $ 11,917 | $ 14,053 |
Cost of revenue | ||
Non-cash compensation expense related to equity awards | ||
Total non-cash compensation | 242 | 153 |
Selling and marketing expense | ||
Non-cash compensation expense related to equity awards | ||
Total non-cash compensation | 1,156 | 1,749 |
General and administrative expense | ||
Non-cash compensation expense related to equity awards | ||
Total non-cash compensation | 9,123 | 10,221 |
Product development | ||
Non-cash compensation expense related to equity awards | ||
Total non-cash compensation | $ 1,396 | $ 1,930 |
STOCK-BASED COMPENSATION (Det_2
STOCK-BASED COMPENSATION (Details - Stock Options Rollforward) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | May 24, 2017 | |
Stock options, Grant Date Fair Value Valuation | ||
Share price | $ 183.39 | $ 156.70 |
Grant date fair value | $ 138.29 | |
Aggregate stock options | ||
Stock options, Shares | ||
Outstanding at the beginning of the period (in shares) | 777,871 | |
Granted (in shares) | 69,319 | |
Exercised (in shares) | (2,462) | |
Forfeited (in shares) | (193) | |
Expired (in shares) | (1,974) | |
Outstanding at the end of the period (in shares) | 842,561 | |
Options exercisable at the end of the period (in shares) | 677,829 | |
Stock options, Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 69.87 | |
Granted (in dollars per share) | 275.82 | |
Exercised (in dollars per share) | 67.05 | |
Forfeited (in dollars per share) | 332.65 | |
Expired (in dollars per share) | 352.10 | |
Outstanding at the end of the period (in dollars per share) | 86.11 | |
Options exercisable at the end of the period (in dollars per share) | $ 43.56 | |
Stock options, Weighted Average Remaining Contractual Term | ||
Outstanding at the end of the period | 4 years 6 months 14 days | |
Options exercisable at the end of the period | 3 years 5 months 26 days | |
Stock options, Aggregate Intrinsic Value | ||
Outstanding at the end of the period | $ 99,017,000 | |
Options exercisable at the end of the period | $ 98,896,000 | |
Stock options, Grant Date Fair Value Valuation | ||
Expected dividend rate | 0.00% | |
Expected volatility, minimum | 52.00% | |
Expected volatility, maximum | 53.00% | |
Risk-free interest rate | 0.96% | |
Expected dividends | $ 0 | |
Market options | ||
Stock options, Shares | ||
Outstanding at the beginning of the period (in shares) | 463,440 | |
Granted (in shares) | 19,126 | |
Exercised (in shares) | 0 | |
Forfeited (in shares) | 0 | |
Expired (in shares) | 0 | |
Outstanding at the end of the period (in shares) | 482,566 | |
Options exercisable at the end of the period (in shares) | 0 | |
Stock options, Weighted Average Exercise Price | ||
Outstanding at the beginning of the period (in dollars per share) | $ 204.31 | |
Granted (in dollars per share) | 275.82 | |
Exercised (in dollars per share) | 0 | |
Forfeited (in dollars per share) | 0 | |
Expired (in dollars per share) | 0 | |
Outstanding at the end of the period (in dollars per share) | 207.14 | |
Options exercisable at the end of the period (in dollars per share) | $ 0 | |
Stock options, Weighted Average Remaining Contractual Term | ||
Outstanding at the end of the period | 7 years 6 months 7 days | |
Options exercisable at the end of the period | 0 years | |
Stock options, Aggregate Intrinsic Value | ||
Outstanding at the end of the period | $ 0 | |
Options exercisable at the end of the period | $ 0 | |
Stock options, Grant Date Fair Value Valuation | ||
Grant date fair value | $ 196.07 | |
Expected term | P7Y | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Expected Volatility Rate | 51.00% | |
Expected dividend rate | 0.00% | |
Risk-free interest rate | 1.03% | |
Expected dividends | $ 0 | |
Maximum number of shared to be earned | 805,885 | |
Percentage of target number of shares | 167.00% | |
Performance Awards Earned | 481,669 | |
Minimum | Aggregate stock options | ||
Stock options, Grant Date Fair Value Valuation | ||
Expected term | P6Y | |
Maximum | Aggregate stock options | ||
Stock options, Grant Date Fair Value Valuation | ||
Expected term | P6Y3M | |
33% over a period of three years from the grant date | Share-based Payment Arrangement, Option [Member] | ||
Stock options, Grant Date Fair Value Valuation | ||
Vesting period | 3 years | |
25% over a period of four years from the grant date | Share-based Payment Arrangement, Option [Member] | ||
Stock options, Grant Date Fair Value Valuation | ||
Vesting period | 4 years |
STOCK-BASED COMPENSATION (Det_3
STOCK-BASED COMPENSATION (Details - RSA & RSU Rollforwards) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Restricted Stock Units (RSUs) | |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Number of Shares | |
Nonvested at the beginning of the period (in shares) | 144,939 |
Granted (in shares) | 97,375 |
Vested (in shares) | (40,676) |
Forfeited (in shares) | (4,181) |
Nonvested at the end of the period (in shares) | 197,457 |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Weighted Average Grant Date Fair Value | |
Nonvested at the beginning of the period (in dollars per share) | $ / shares | $ 267.85 |
Granted (in dollars per share) | $ / shares | 276.84 |
Vested (in dollars per share) | $ / shares | 243.25 |
Forfeited (in dollars per share) | $ / shares | 265.80 |
Nonvested at the end of the period (in dollars per share) | $ / shares | $ 277.42 |
Restricted Stock Units with performance conditions | |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Number of Shares | |
Nonvested at the beginning of the period (in shares) | 14,647 |
Granted (in shares) | 0 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Nonvested at the end of the period (in shares) | 14,647 |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Weighted Average Grant Date Fair Value | |
Nonvested at the beginning of the period (in dollars per share) | $ / shares | $ 210.55 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Nonvested at the end of the period (in dollars per share) | $ / shares | $ 210.55 |
Restricted Stock with performance conditions | |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Number of Shares | |
Nonvested at the beginning of the period (in shares) | 47,608 |
Granted (in shares) | 0 |
Vested (in shares) | (5,951) |
Forfeited (in shares) | 0 |
Nonvested at the end of the period (in shares) | 41,657 |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Weighted Average Grant Date Fair Value | |
Nonvested at the beginning of the period (in dollars per share) | $ / shares | $ 340.25 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 340.25 |
Forfeited (in dollars per share) | $ / shares | 0 |
Nonvested at the end of the period (in dollars per share) | $ / shares | $ 340.25 |
Restricted Stock with market conditions | |
STOCK-BASED COMPENSATION | |
Maximum number of shared to be earned | 44,545 |
Percentage of target number of shares | 167.00% |
Performance Awards Earned | 29,601 |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Number of Shares | |
Nonvested at the beginning of the period (in shares) | 26,674 |
Granted (in shares) | 0 |
Vested (in shares) | 0 |
Forfeited (in shares) | 0 |
Nonvested at the end of the period (in shares) | 26,674 |
Nonvested RSUs, Restricted Stock and Restricted Stock Units with Performance Conditions, Weighted Average Grant Date Fair Value | |
Nonvested at the beginning of the period (in dollars per share) | $ / shares | $ 340.25 |
Granted (in dollars per share) | $ / shares | 0 |
Vested (in dollars per share) | $ / shares | 0 |
Forfeited (in dollars per share) | $ / shares | 0 |
Nonvested at the end of the period (in dollars per share) | $ / shares | $ 340.25 |
INCOME TAXES - Additional infor
INCOME TAXES - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax benefit | $ 3,061 | $ 7,752 |
Effective tax rates (as a percent) | (19.20%) | 107.60% |
Federal statutory income tax rate (as a percentage) | 21.00% | |
Excess tax benefit on stock compensation | $ 1,054 | $ 6,003 |
Impact of CARES Act | $ 6,104 | 0 |
Excess tax benefit on stock compensation | $ 6,000 |
INCOME TAXES - Reconciliation o
INCOME TAXES - Reconciliation of income tax (expense) benefit (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax (expense) benefit - excluding excess tax benefit on stock compensation | $ (4,097) | $ 1,749 |
Excess tax benefit on stock compensation | 1,054 | 6,003 |
Impact of CARES Act | 6,104 | 0 |
Income tax benefit | $ 3,061 | $ 7,752 |
DEBT (Details - Convertible Sen
DEBT (Details - Convertible Senior Notes) $ / shares in Units, $ in Thousands | May 31, 2017USD ($)day$ / sharesRateshares | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) |
Debt Instrument [Line Items] | ||||
Aggregate principal amount of convertible senior notes | $ 300,000 | $ 299,985 | $ 299,991 | |
Annual interest rate on convertible senior notes | Rate | 0.625% | |||
Initial conversion rate, shares per $1,000 principal amount of notes | shares | 4.8163 | |||
Initial conversion price per share | $ / shares | $ 207.63 | |||
Conversion rate, sales price of common stock as a percentage of the conversion price | Rate | 130.00% | |||
Threshold trading days | day | 5 | |||
Threshold consecutive trading days | day | 5 | |||
Conversion rate, sales price of common stock as a percentage of the conversion price, five business days | Rate | 98.00% | |||
Cash repurchase at a price equal to the principal amount of the notes, Percentage | Rate | 100.00% | |||
Nonconvertible debt borrowing rate at the date of issuance | Rate | 5.36% | |||
Debt component of the principal amount of the Convertible Senior Notes | $ 238,400 | |||
Equity component of the principal amount of the Convertible Senior Notes | 61,600 | |||
Financing costs related to the issuance of the Convertible Senior Notes | 9,300 | |||
Debt issuance costs, liability component | 7,400 | 3,438 | 3,811 | |
Debt issuance costs, equity component | $ 1,900 | |||
Total interest expense on the Convertible Senior Notes | 4,000 | $ 3,800 | ||
Interest expense recognized associated with the 0.625% coupon rate | 500 | 500 | ||
Amortization of convertible debt discount | 3,111 | 2,951 | ||
Amortization of debt issuance costs | 582 | 483 | ||
Long-term debt | 267,870 | 264,391 | ||
Fair value of the Convertible Senior Notes using a Level 1 observable input | 337,100 | |||
Unamortized debt discount | 28,677 | $ 31,789 | ||
Convertible Notes Payable [Member] | ||||
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs | $ 400 | $ 300 |
DEBT (Details - Convertible Not
DEBT (Details - Convertible Note Hedge and Warrant Transactions) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | May 31, 2017 | Mar. 31, 2020 | May 24, 2017 |
Debt Instrument [Line Items] | |||
Net proceeds from the Convertible Notes used to pay for the cost of the Convertible Note Hedge | $ 18.1 | ||
Payment of convertible note hedge transactions | $ 61.5 | ||
Number of shares covered by the hedge transactions | 1.4 | ||
Initial conversion price per share | $ 207.63 | ||
Strike price of warrants sold | $ 266.39 | ||
Premium of warrant strike price over sales price of common stock | 70.00% | ||
Share price | $ 183.39 | $ 156.70 | |
Proceeds from the sale of warrants | $ 43.4 |
DEBT (Details - Revolving Credi
DEBT (Details - Revolving Credit Facility) | Dec. 10, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Oct. 26, 2018USD ($) |
Line of Credit Facility [Line Items] | |||||
Letters of Credit Outstanding, Amount | $ 200,000 | $ 200,000 | |||
Credit Agreement, Potential Additional Borrowing Capacity | $ 185,000,000 | ||||
Long-term Debt, Current Maturities | $ 130,000,000 | $ 75,000,000 | |||
Long-term Debt, Weighted Average Interest Rate, at Point in Time | 2.21% | 3.01% | |||
Ratio of Debt to EBITDA Step-Down | 4 | ||||
Ratio of Debt to EBITDA Increase | 0.5 | ||||
Interest Expense, Debt | $ 4,000,000 | $ 3,800,000 | |||
Debt Instrument, Unused Borrowing Capacity, Fee | 300,000 | 100,000 | |||
Amortization of debt issuance costs | 582,000 | 483,000 | |||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 500,000,000 | $ 350,000,000 | |||
Revolving Credit Facility, term | 5 years | ||||
Revolving Credit Facility, collateral, percent of assets | 100.00% | ||||
Revolving Credit Facility, collateral, percent of equity | 100.00% | ||||
Revolving Credit Facility, letter of credit fronting fee percentage | 0.125% | ||||
Fees and expense paid to lenders at closing | $ 2,800,000 | ||||
Line of Credit Facility, Collateral, Percent of Domestic Subsidiaries Equity | 100.00% | ||||
Line of Credit Facility, Collateral, Percent of Voting Equity | 66.00% | ||||
Line of Credit Facility, Collateral, Percent of Non-Voting Equity | 100.00% | ||||
Swingline Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Current borrowing capacity | $ 10,000,000 | ||||
Letters of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Current borrowing capacity | $ 10,000,000 | ||||
Fed Funds Effective Rate Overnight Index Swap Rate [Member] | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, basis spread on variable rate | 0.50% | ||||
London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, basis spread on variable rate | 1.00% | ||||
Interest Expense, Debt | 600,000 | 1,900,000 | |||
Minimum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, unused capacity, commitment fee percentage | 0.25% | ||||
Revolving Credit Facility, letter of credit participation fee percentage | 1.25% | ||||
Minimum | London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, basis spread on variable rate | 1.25% | ||||
Minimum | Base Rate [Member] | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, basis spread on variable rate | 0.25% | ||||
Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Ratio of Debt to EBITDA to Increase Revolving Commitment | 2.50 | ||||
Ratio of Debt to EBITDA | 4.5 | ||||
Maximum | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, unused capacity, commitment fee percentage | 0.45% | ||||
Revolving Credit Facility, letter of credit participation fee percentage | 2.00% | ||||
Maximum | London Interbank Offered Rate (LIBOR) [Member] | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, basis spread on variable rate | 2.00% | ||||
Maximum | Base Rate [Member] | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Revolving Credit Facility, basis spread on variable rate | 1.00% | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Interest Expense, Debt | 1,100,000 | 2,100,000 | |||
Amortization of debt issuance costs | $ 200,000 | $ 100,000 | |||
Revolving Credit Facility, 31 Day Borrowing | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Long-term Debt, Current Maturities | $ 50,000,000 | ||||
Revolving Credit Facility, 32 Day Borrowing | Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Long-term Debt, Current Maturities | $ 25,000,000 |
CONTINGENCIES (Details)
CONTINGENCIES (Details) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Contingencies | ||
Accrued litigation liability | $ 0.6 | $ 0.2 |
Discontinued Operations, Disposed of by Sale | ||
Contingencies | ||
Accrued litigation liability | $ 36 | $ 31 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional information (Details) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2020 | Mar. 31, 2019 | Oct. 31, 2018 | Jun. 11, 2018 | Jun. 14, 2017 | May 31, 2017 | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Annual interest rate on convertible senior notes | 0.625% | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Beginning balance | $ 33,464,000 | $ 38,837,000 | ||||
Change in fair value of contingent consideration | (8,122,000) | 14,592,000 | ||||
Contingent consideration additions | 0 | 0 | ||||
Contingent consideration payments | (3,000,000) | (4,000,000) | ||||
Ending balance | 22,342,000 | 49,429,000 | ||||
Minimum | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Contingent consideration | $ 0 | $ 0 | $ 0 | |||
Maximum | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Contingent consideration | $ 46,800,000 | $ 4,400,000 | $ 1,000,000 | |||
SnapCap | ||||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||||
Business Combination, Contingent Consideration, Future Known Payment | 3,000,000 | |||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||||
Change in fair value of contingent consideration | $ (1,000) | $ 1,592,000 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of fair value measurement valuation (Details) | Mar. 31, 2020USD ($) | Oct. 31, 2018USD ($) | Jun. 11, 2018USD ($) | Jun. 14, 2017USD ($) |
Minimum | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration | $ 0 | $ 0 | $ 0 | |
Maximum | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration | $ 46,800,000 | $ 4,400,000 | $ 1,000,000 | |
Fair Value | Level 3 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration | $ 22,342,000 | |||
Option pricing model | Level 3 | Customer growth rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0.007 | |||
Option pricing model | Minimum | Level 3 | Operating results growth rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0.087 | |||
Option pricing model | Minimum | Level 3 | Discount rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0.103 | |||
Option pricing model | Maximum | Level 3 | Operating results growth rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0.371 | |||
Option pricing model | Maximum | Level 3 | Discount rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0.105 | |||
Option pricing model | Weighted average | Level 3 | Operating results growth rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0.229 | |||
Option pricing model | Weighted average | Level 3 | Discount rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0.104 | |||
Scenario approach based on interest rate forecasts | Level 3 | Discount rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Contingent consideration, measurement input | 0 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020USD ($)segment | Mar. 31, 2019USD ($) | |
Segment Information | ||
Number of reportable segments | segment | 3 | |
Revenue | $ 283,084 | $ 262,390 |
Cost of Revenue and Marketing Expense | 173,869 | 155,872 |
Gross Profit | 109,215 | 106,518 |
Other Cost of Operating Revenue | 13,166 | 10,334 |
Other Selling and Marketing Expense | 22,755 | 26,355 |
General and administrative expense | 32,082 | 31,117 |
Product development | 10,963 | 10,166 |
Depreciation | 3,378 | 2,482 |
Amortization of intangibles | 13,757 | 13,427 |
Change in fair value of contingent consideration | (8,122) | 14,592 |
Restructuring Charges | 158 | 54 |
Litigation Settlement, Expense | (329) | (207) |
Operating Income (Loss) | 20,749 | (1,802) |
Interest Expense | (4,834) | (5,468) |
Other Income | 0 | 68 |
Income (Loss) from Continuing Operations before Equity Method Investments, Income Taxes, Noncontrolling Interest | 15,915 | (7,202) |
Home Segment [Member] | ||
Segment Information | ||
Revenue | 79,174 | 63,437 |
Cost of Revenue and Marketing Expense | 43,263 | 39,516 |
Gross Profit | 35,911 | 23,921 |
Consumer Segment [Member] | ||
Segment Information | ||
Revenue | 119,924 | 120,729 |
Cost of Revenue and Marketing Expense | 76,825 | 66,755 |
Gross Profit | 43,099 | 53,974 |
Insurance Segment [Member] | ||
Segment Information | ||
Revenue | 82,737 | 67,092 |
Cost of Revenue and Marketing Expense | 52,204 | 39,228 |
Gross Profit | 30,533 | 27,864 |
Other Segments [Member] | ||
Segment Information | ||
Revenue | 1,249 | 11,132 |
Cost of Revenue and Marketing Expense | 1,577 | 10,373 |
Gross Profit | $ (328) | $ 759 |
DISCONTINUED OPERATIONS (Detail
DISCONTINUED OPERATIONS (Details-Disposal Groups) - USD ($) $ in Thousands | Dec. 04, 2019 | Jan. 31, 2016 | Dec. 31, 2013 | Mar. 31, 2020 | Sep. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | Jul. 21, 2019 | May 31, 2017 | Jun. 06, 2012 |
DISCONTINUED OPERATIONS | |||||||||||
Loss Contingency, Damages Sought, Value | $ 61,000 | ||||||||||
Assets | $ 1,016,620 | $ 947,969 | |||||||||
Revenue and net income (loss) of discontinued operations | |||||||||||
Revenue | 0 | $ 0 | |||||||||
Loss before income taxes | (6,102) | (1,344) | |||||||||
Income tax benefit | 1,527 | 282 | |||||||||
Loss from discontinued operations | (4,575) | $ (1,062) | |||||||||
Assets and liabilities of facilities reported as discontinued operations | |||||||||||
Annual interest rate on convertible senior notes | 0.625% | ||||||||||
Lending Tree Loans | Discover | |||||||||||
DISCONTINUED OPERATIONS | |||||||||||
Asset purchase agreement proceeds from sale | $ 55,900 | ||||||||||
Home Loan Center, Inc. | |||||||||||
DISCONTINUED OPERATIONS | |||||||||||
Assets | $ 11,200 | ||||||||||
Assets and liabilities of facilities reported as discontinued operations | |||||||||||
Cash | $ 5,900 | ||||||||||
Dividends | $ 40,000 | ||||||||||
Discontinued Operations, Disposed of by Means Other than Sale [Member] | Home Loan Center, Inc. | |||||||||||
Assets and liabilities of facilities reported as discontinued operations | |||||||||||
Loss recognized | $ 5,500 | ||||||||||
Net gain related to removal of HLC | 4,500 | ||||||||||
Recognition of liability | $ 10,000 | ||||||||||
Discontinued Operations, Disposed of by Means Other than Sale [Member] | Obligation to Repurchase Receivables Sold | Lending Tree Loans | |||||||||||
Assets and liabilities of facilities reported as discontinued operations | |||||||||||
Current liabilities | (36,000) | ||||||||||
Discontinued Operations, Disposed of by Means Other than Sale [Member] | Discontinued Operations | Minimum | Obligation to Repurchase Receivables Sold | Lending Tree Loans | |||||||||||
Assets and liabilities of facilities reported as discontinued operations | |||||||||||
Loss Contingency, Estimate of Possible Loss | 0 | ||||||||||
Discontinued Operations, Disposed of by Means Other than Sale [Member] | Discontinued Operations | Maximum | Obligation to Repurchase Receivables Sold | Lending Tree Loans | |||||||||||
Assets and liabilities of facilities reported as discontinued operations | |||||||||||
Loss Contingency, Estimate of Possible Loss | 40,000 | ||||||||||
Pending Settlement | Discontinued Operations, Disposed of by Means Other than Sale [Member] | Discontinued Operations | Obligation to Repurchase Receivables Sold | Lending Tree Loans | |||||||||||
DISCONTINUED OPERATIONS | |||||||||||
Settlement value of indemnification claim and other miscellaneous items | $ 36,000 | ||||||||||
Lehman Brothers Holdings, Inc. Demand Letter | |||||||||||
DISCONTINUED OPERATIONS | |||||||||||
Loss Contingency, Damages Sought, Value | $ 44,700 | $ 40,200 |
DISCONTINUED OPERATIONS (Deta_2
DISCONTINUED OPERATIONS (Details - Loan Loss Obligations) $ in Millions | Dec. 04, 2019USD ($) | Jun. 21, 2019USD ($) | Feb. 29, 2016defendant | Dec. 31, 2013USD ($)network_lenderclaim | Mar. 31, 2020USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019loan |
Loan Loss Obligations | |||||||
Loss Contingency, Damages Sought, Value | $ 61 | ||||||
Lehman Brothers Holdings, Inc. Demand Letter | |||||||
Loan Loss Obligations | |||||||
Loss Contingency, Damages Sought, Value | $ 44.7 | $ 40.2 | |||||
Loss Contingencies, Number of Loans Sold with Losses | loan | 370 | ||||||
Lehman Brothers Holdings, Inc. Demand Letter | Pending litigation or appeal | |||||||
Loan Loss Obligations | |||||||
Loss Contingency, Number of Defendants | defendant | 149 | ||||||
Residential Funding Co. v Home Loan Center | Judicial Ruling | |||||||
Loan Loss Obligations | |||||||
Settlement offer | $ 68.5 | ||||||
Residential Funding Co. v Home Loan Center | Judicial Ruling | Damages | |||||||
Loan Loss Obligations | |||||||
Settlement offer | 28.7 | ||||||
Residential Funding Co. v Home Loan Center | Judicial Ruling | Pre-Verdict Interest | |||||||
Loan Loss Obligations | |||||||
Settlement offer | 14.1 | ||||||
Residential Funding Co. v Home Loan Center | Judicial Ruling | Attorney Fees | |||||||
Loan Loss Obligations | |||||||
Settlement offer | 23.1 | ||||||
Residential Funding Co. v Home Loan Center | Judicial Ruling | Pre-Judgment Interest | |||||||
Loan Loss Obligations | |||||||
Settlement offer | $ 2.6 | ||||||
Residential Funding Company | Pending litigation or appeal | |||||||
Loan Loss Obligations | |||||||
Loss Contingency, Number Of Loan Originators | network_lender | 80 | ||||||
Loss Contingency, Pending Claims, Number | claim | 2 | ||||||
Discontinued Operations, Disposed of by Means Other than Sale [Member] | Minimum | Obligation to Repurchase Receivables Sold | Lending Tree Loans | Discontinued Operations | |||||||
Loan Loss Obligations | |||||||
Loss Contingency, Estimate of Possible Loss | $ 0 | ||||||
Discontinued Operations, Disposed of by Means Other than Sale [Member] | Maximum | Obligation to Repurchase Receivables Sold | Lending Tree Loans | Discontinued Operations | |||||||
Loan Loss Obligations | |||||||
Loss Contingency, Estimate of Possible Loss | 40 | ||||||
Discontinued Operations, Disposed of by Means Other than Sale [Member] | Pending litigation or appeal | Obligation to Repurchase Receivables Sold | Lending Tree Loans | Discontinued Operations | |||||||
Loan Loss Obligations | |||||||
Settlement offer | $ 36 |