“We have not yet seen a material impact on claims activity over the last few weeks, although it remains difficult to predict howCOVID-19 will impact our business this year,” said Tibbens. “Our first-quarter 2020 revenue is tracking as planned and our first-quarter 2020 Adjusted EBITDA is expected to be at the high end of the guidance range we provided in late February. However, we are currently evaluating the impact of theCOVID-19 situation for the balance of 2020 and anticipate that the U.S. real-estate market and our first-year real estate sales channel will be adversely impacted by the virus. We continue to assess the situation and will provide further updates to our business response and financial outlook on our first quarter earnings call in early May.”
The Company has established a strong financial position over the last 18 months. As of the end of 2019, Frontdoor had a net leverage ratio of 2.4 times and $516 million of liquidity, consisting of $266 million of unrestricted cash and a $250 million revolver that allows for ample liquidity to manage our business for an extended period. The Company has continued to increase its cash position during the first quarter of 2020.
Nearlytwo-thirds of Frontdoor’s annual revenues are derived from existing customers and nearly 70% of customers are on monthlyauto-pay. “Our strong, subscription-based model provides a good line of sight intoin-period revenues,” said Tibbens. “Thus far, we continue to see the same high level of customer retention, as they appreciate the value our home service plans provide.”
About Frontdoor
Frontdoor is a company that’s obsessed with taking the hassle out of owning a home. With services powered by people and enabled by technology, it is the parent company of four home service plan brands: American Home Shield, HSA, Landmark and OneGuard, as well as Candu Home Solutions, anon-demand membership service for home repairs and maintenance, and Streem, a technology company that enables businesses to serve customers through an enhanced augmented reality, computer vision and machine learning platform. Frontdoor serves 2.2 million customers across the U.S. through a network of approximately 17,000pre-qualified contractor firms that employ approximately 60,000 technicians. The company’s customizable home service plans help customers protect and maintain their homes from costly and unexpected breakdowns of essential home systems and appliances. With nearly 50 years of experience, the company responds to over four million service requests annually. For details, visitfrontdoorhome.com.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements about Frontdoor’s plans, strategies and prospects and the impact ofCOVID-19 on Frontdoor’s business. Forward-looking statements can be identified by the use of forward-looking terms such as “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project,” “will,” “shall,” “would,” “aim,” or other comparable terms. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Such risks and uncertainties include, but are not limited to: the impact of the globalCOVID-19 pandemic; weather conditions and seasonality; weakening general economic conditions; lawsuits, enforcement actions and other claims by third parties or governmental authorities; the effects of our substantial indebtedness; the success of our business strategies; and failure to achieve some or all of the expected benefits of theSpin-off. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of new markets or market segments in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this news release. For a discussion of other important factors that could cause Frontdoor’s results to differ materially from those expressed in, or implied by, the forward-looking statements included in this document, you should refer to the risks and uncertainties detailed from time to time in Frontdoor’s periodic reports filed with the SEC as well as the disclosure contained in Item 1A. Risk Factors in our 2019 Annual Report on Form10-K filed with the SEC. Except as required by law, Frontdoor does not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review Frontdoor’s filings with the Securities and Exchange Commission, which are available from the SEC’s EDGAR database atsec.gov, and via Frontdoor’s website atfrontdoorhome.com.
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