UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d)
Of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2018
INTERSECTIONS INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
|
000-50580
(Commission File Number)
|
54-1956515
(IRS Employer Identification No.)
|
3901 Stonecroft Boulevard
Chantilly, Virginia 20151
(Address of Principal Executive Offices) (Zip Code)
(703) 488-6100
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
| ☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
| ☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
| ☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
| ☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter)
or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
|
Item 2.02.
|
Results of Operations and Financial Condition
|
On May 10, 2018, Intersections Inc. issued a press release announcing its results for the quarter ended March 31, 2018 and posted a First Quarter 2018
Investor Update on its website (www.intersections.com). The text of the press release and the update are attached hereto as Exhibits 99.1 and 99.2, respectively.
| Item 9.01 |
Financial Statements and Exhibits
|
| (d) |
Exhibits
|
| Exhibit No. |
Description
|
| 99.1 |
Press release issued May 10, 2018
|
| 99.2 |
First Quarter 2018 Investor Update
|
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Dated: May 10, 2018
|
INTERSECTIONS INC.
|
||
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By:
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/s/ Ronald L. Barden
|
|
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Name:
|
Ronald L. Barden
|
|
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Title:
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Chief Financial Officer
|
|
Exhibit 99.1
For more information:
Ron Barden, CFO
Intersections Inc.
703.488.6810
IR@intersections.com
Intersections Inc. Reports First Quarter 2018 Results
| · |
$39 million consolidated revenue for first quarter 2018 with Identity Guard® revenue up 12.5% compared to
first quarter 2017
|
| · |
$1.3 million consolidated income from continuing operations before income taxes for first quarter, compared to $(4.3) million loss in first quarter
2017
|
| · |
$3.3 million adjusted EBITDA for first quarter compared to $(1.0) million adjusted EBITDA loss in first quarter 2017
|
| · |
First quarter results in line with Management’s 2018 objectives
|
CHANTILLY, VA – May 10, 2018 – Intersections Inc. (NASDAQ: INTX) today announced financial results for the quarter ended March 31, 2018.
“First quarter 2018 revenue and earnings were both in line with management’s expectations as we continue to work towards our 2018 objectives,”
said Michael R. Stanfield, Executive Chairman and President. “Consolidated income from continuing operations before income taxes of $1.3 million and adjusted EBITDA of $3.3 million continued the trend of significant improvement over prior year
results.” Mr. Stanfield continued,
“We believe that having Identity Guard® with Watson™ active in all of our U.S. channels together with the continued expansion of new partner opportunities provides a
strong foundation to meet our 2018 plans and support our long-term growth objectives.”
Consolidated First Quarter Results:
Consolidated revenue for the quarter ended March 31, 2018 was $39.1 million, compared to $40.4 million for the quarter ended March 31, 2017.
Income (loss) from continuing operations before income taxes for the quarter ended March 31, 2018 was $1.3 million, compared to $(4.3) million for the quarter ended March 31, 2017. Adjusted EBITDA (loss) for the quarter ended March 31, 2018 was
$3.3 million, compared to $(1.0) million for the quarter ended March 31, 2017. Basic and diluted income (loss) from continuing operations per share for the quarter ended March 31, 2018 was $0.07, compared to $(0.18) for the quarter ended March
31, 2017.
Consolidated First Quarter Highlights:
| · |
Identity Guard® subscriber revenue was $13.5 million for the quarter ended March 31, 2018, compared to $13.6
million for the quarter ended December 31, 2017 and $12.0 million for the quarter ended March 31, 2017. The Identity Guard® subscriber base was 357 thousand subscribers as of March 31, 2018,
compared to 333 thousand subscribers as of March 31, 2017. The increase in the subscriber base was primarily from growth in the direct to consumer and employee benefits channels.
|
1
| · |
Revenue from U.S. financial institution clients was $19.6 million for the quarter ended March 31, 2018, compared to revenue of $20.0 million for the
quarter ended December 31, 2017. Revenue decreased on average by approximately 1% per month during the first quarter, which the Company believes is representative of normal attrition given the discontinuation of marketing and
retention efforts for this population.
|
| · |
Consolidated general and administrative expenses were $13.1 million for the quarter ended March 31, 2018, compared to $16.4 million for the quarter
ended March 31, 2017. Adjusted G&A Expense decreased 14.4% to $13.1 million for the quarter ended March 31, 2018 compared to $15.3 million for the quarter ended March 31,2017.
|
| · |
Income (loss) from continuing operations before income taxes for the quarter ended March 31, 2018 was $1.3 million, compared to $1.3 million for the
quarter ended December 31, 2017 and $(4.3) million for the quarter ended March 31, 2017.
|
| · |
Adjusted EBITDA (loss) for the quarter ended March 31, 2018 was $3.3 million, compared to $4.0 million for the quarter ended December 31, 2017 and
$(1.0) million for the quarter ended March 31, 2017. The first quarter 2018 marked the third consecutive quarter of positive Adjusted EBITDA.
|
Liquidity:
As of March 31, 2018, the Company had a cash balance of $8.4 million, and an outstanding principal balance of $21.5 million under its existing
credit agreement. Cash provided by operating activities of continuing operations for the quarter ended March 31, 2018 was $1.4 million.
Cash used in operating activities for the first quarter includes approximately $1.4 million for business development activities, the significant
majority of which is personnel cost. The Company expects to continue its spending on business development activities for the remainder of 2018 at approximately the same level as 2017.
The Company continued to develop new product features primarily for the Identity Guard® with Watson™ platform during the first quarter 2018. As a result, the Company invested approximately $0.8 million in internally developed capitalized software for the first quarter. The Company expects to continue its
investments in product development for the remainder of 2018 at approximately the same level as 2017.
The Company amended its existing credit agreement on April 3, 2018 and made a $1.0 million voluntary, partial prepayment of the outstanding
principal balance. For more information, please see “Note 21 — Subsequent Events” in our most recent Form 10-Q.
For additional information, please see “Item 2. Management’s Discussion
and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” in our most recent Form 10-Q.
2
First Quarter 2018 Business Update Conference Call:
The Company will hold a conference call to provide a first quarter 2018 business update on Thursday, May 10, 2018 at 4:30 p.m. Eastern Time.
Interested parties can access the live webcast on the Investor's page at Intersections Inc.’s website www.intersections.com.
The live call can be accessed by dialing the toll-free numbers below. Those who wish to participate in the Q&A session must dial in.
|
WHAT:
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Intersections Inc. First Quarter 2018 Conference Call
|
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WHEN:
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May 10, 2018
|
|
4:30 p.m. Eastern Time
|
|
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HOW:
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Dial in: 888-771-4384
International: 847-585-4409
For a current list of alternate local and International Freephone telephone numbers, please click here.
To pre-register for the conference, please click here.
|
The replay of the webcast will be available May 10, 2018 at 7:00 p.m. (Eastern Time) through May 17, 2018 at 11:59 PM (Eastern Time). The dial-in
for the replay is 888-843-7419 or 630-652-3042 with the replay access code of 7701147#.
Non-GAAP Financial Measures:
“Adjusted EBITDA” represents consolidated income (loss) from continuing operations before income taxes plus (minus): share related compensation;
non-cash impairment of goodwill, intangibles and other assets; (gain) loss on sale of Captira Analytical and Habits at Work; loss on extinguishment of debt; (benefit) from change in vacation policy; depreciation and amortization; and interest
expense.
Intersections' Consolidated Financial Statements, "Other Data" and reconciliations of these non-GAAP financial measures to the most directly
comparable GAAP financial measures and related notes can be found in the accompanying tables and footnotes to this release and in the "GAAP and Non-GAAP Measures" link under the "Investor & Media" page on our website at www.intersections.com.
3
Forward-Looking Statements:
Statements in this release relating to future plans, results, performance, expectations, achievements and the like are
considered “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may
include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of
future operating or financial performance or other events. Those forward-looking statements involve known and unknown risks and uncertainties and are subject to change based on various factors and uncertainties that may cause actual results to
differ materially from those expressed or implied by those statements, including the success of our strategic objectives; our ability to meet the targets disclosed by management with respect to costs and revenue, and that these targets do not
represent historical performance, projected results or guidance; our ability to generate revenue from our partner sales strategy and business development pipeline with our distribution partners; the impact of shutting down and then divesting our
Pet Health Monitoring segment; the timing and success of new product launches and other growth initiatives, including our Identity Guard® with Watson™ service;
the continuing impact of the regulatory environment on our business; the continued dependence on a small number of financial institutions for a majority of our revenue and to service our U.S. financial institution customer base; our ability to
execute our strategy and previously announced transformation plan; our incurring additional restructuring charges; our incurring additional charges for non-income business taxes or otherwise, or impairment costs or charges on goodwill and/or
other assets; our ability to control costs; our failure to protect private data due to a security breach or other unauthorized access; our ability to maintain sufficient liquidity and produce sufficient cash flow to fund our business, growth
strategy and debt service obligations; the impact of our recent senior management changes; and our needs for additional capital to grow our business, including our ability to maintain compliance with the covenants under our term loan or seek
additional sources of debt and/or equity financing. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed under “Forward-Looking Statements,” “Item 1. Business—Government Regulation”
and “Item 1A. Risk Factors” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and in its recent other filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to
revise or update any forward-looking statements unless required by applicable law.
About Intersections:
Intersections Inc. (Nasdaq: INTX) provides innovative software solutions to help consumers and businesses manage the potential risks associated
with the proliferation of their data in the virtual world. Under its IDENTITY GUARD® brand, the company utilizes advanced data-enabled technologies, including artificial intelligence, to help monitor,
manage and protect sensitive information. Headquartered in Chantilly, Virginia, the company was founded in 1996. To learn more, visit www.intersections.com.
4
Explanatory Note:
The information in the following tables is presented giving effect to the disposal of Voyce, with its historical financial results reflected as
discontinued operations. We made adjustments to our historical financial results for certain costs and overhead allocations to either discontinued or continuing operations for the year ended December 31, 2017; for additional information, please
see "Note 2 — Basis of Presentation and Consolidation" in our most recent Form 10-Q.
INTERSECTIONS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
|
Three Months Ended March 31,
|
||||||||
|
2018
|
2017
|
|||||||
|
REVENUE
|
$
|
39,078
|
40,449
|
|||||
|
OPERATING EXPENSES:
|
||||||||
|
Marketing
|
912
|
3,450
|
||||||
|
Commission
|
9,305
|
9,748
|
||||||
|
Cost of revenue
|
12,382
|
12,999
|
||||||
|
General and administrative
|
13,128
|
16,381
|
||||||
|
Loss on disposition of Captira Analytical
|
—
|
130
|
||||||
|
Impairment of intangibles and other assets
|
—
|
86
|
||||||
|
Depreciation
|
1,453
|
1,300
|
||||||
|
Amortization
|
49
|
47
|
||||||
|
Total operating expenses
|
37,229
|
44,141
|
||||||
|
INCOME (LOSS) FROM OPERATIONS
|
1,849
|
(3,692
|
)
|
|||||
|
Interest expense, net
|
(531
|
)
|
(592
|
)
|
||||
|
Other (expense) income, net
|
(48
|
)
|
34
|
|||||
|
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
1,270
|
(4,250
|
)
|
|||||
|
Income tax benefit
|
523
|
10
|
||||||
|
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
1,793
|
(4,240
|
)
|
|||||
|
Loss from discontinued operations, net of tax
|
—
|
(562
|
)
|
|||||
|
NET INCOME (LOSS)
|
$
|
1,793
|
$
|
(4,802
|
)
|
|||
|
Basic earnings (loss) per common share:
|
||||||||
|
Income (loss) from continuing operations
|
$
|
0.07
|
$
|
(0.18
|
)
|
|||
|
Loss from discontinued operations
|
—
|
(0.02
|
)
|
|||||
|
Basic net income (loss) per common share
|
$
|
0.07
|
$
|
(0.20
|
)
|
|||
|
Diluted earnings (loss) per common share:
|
||||||||
|
Income (loss) from continuing operations
|
$
|
0.07
|
$
|
(0.18
|
)
|
|||
|
Loss from discontinued operations
|
—
|
(0.02
|
)
|
|||||
|
Diluted net income (loss) per common share
|
$
|
0.07
|
$
|
(0.20
|
)
|
|||
|
Weighted average common shares outstanding—basic
|
24,203
|
23,675
|
||||||
|
Weighted average common shares outstanding—diluted
|
24,529
|
23,675
|
||||||
5
INTERSECTIONS INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
|
March 31, 2018
|
December 31, 2017
|
|||||||
|
ASSETS
|
||||||||
|
CURRENT ASSETS:
|
||||||||
|
Cash and cash equivalents
|
$
|
8,437
|
$
|
8,502
|
||||
|
Accounts receivable, net of allowance for doubtful accounts of $35 (2018) and $34 (2017)
|
6,006
|
8,225
|
||||||
|
Contract assets
|
353
|
—
|
||||||
|
Prepaid expenses and other current assets
|
3,584
|
3,232
|
||||||
|
Income tax receivable
|
1,290
|
2,545
|
||||||
|
Deferred subscription solicitation and commission costs
|
—
|
1,655
|
||||||
|
Total current assets
|
19,670
|
24,159
|
||||||
|
PROPERTY AND EQUIPMENT, net
|
10,591
|
11,040
|
||||||
|
GOODWILL
|
9,763
|
9,763
|
||||||
|
INTANGIBLE ASSETS, net
|
249
|
58
|
||||||
|
CONTRACT COSTS
|
419
|
—
|
||||||
|
OTHER ASSETS
|
1,378
|
1,459
|
||||||
|
TOTAL ASSETS
|
$
|
42,070
|
$
|
46,479
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
|
CURRENT LIABILITIES:
|
||||||||
|
Accounts payable
|
$
|
2,417
|
$
|
3,498
|
||||
|
Accrued expenses and other current liabilities
|
9,223
|
8,533
|
||||||
|
Accrued payroll and employee benefits
|
487
|
1,501
|
||||||
|
Commissions payable
|
416
|
141
|
||||||
|
Capital leases, current portion
|
332
|
423
|
||||||
|
Contract liabilities, current
|
5,307
|
7,759
|
||||||
|
Total current liabilities
|
18,182
|
21,855
|
||||||
|
LONG-TERM DEBT, net
|
20,790
|
20,736
|
||||||
|
OBLIGATIONS UNDER CAPITAL LEASES, non-current
|
334
|
392
|
||||||
|
OTHER LONG-TERM LIABILITIES
|
2,076
|
2,895
|
||||||
|
DEFERRED TAX LIABILITY, net
|
7
|
7
|
||||||
|
TOTAL LIABILITIES
|
41,389
|
45,885
|
||||||
|
STOCKHOLDERS’ EQUITY:
|
||||||||
|
Common stock at $0.01 par value, shares authorized 50,000; shares issued 28,371 (2018) and
28,194 (2017); shares outstanding 24,264 (2018) and 24,102 (2017)
|
284
|
282
|
||||||
|
Additional paid-in capital
|
150,184
|
150,305
|
||||||
|
Warrants
|
2,840
|
2,840
|
||||||
|
Treasury stock, shares at cost; 4,107 (2018) and 4,092 (2017)
|
(35,781
|
)
|
(35,745
|
)
|
||||
|
Accumulated deficit
|
(116,846
|
)
|
(117,088
|
)
|
||||
|
TOTAL STOCKHOLDERS’ EQUITY
|
681
|
594
|
||||||
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
42,070
|
$
|
46,479
|
||||
6
INTERSECTIONS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
|
Three Months Ended March 31,
|
||||||||
|
2018
|
2017
|
|||||||
|
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net income (loss)
|
$
|
1,793
|
$
|
(4,802
|
)
|
|||
|
Less: loss from discontinued operations, net of tax
|
—
|
(562
|
)
|
|||||
|
Income (loss) from continuing operations
|
1,793
|
(4,240
|
)
|
|||||
|
Adjustments to reconcile net income (loss) to cash flows from operating activities:
|
||||||||
|
Depreciation and amortization
|
1,502
|
1,347
|
||||||
|
Amortization of debt issuance costs
|
16
|
156
|
||||||
|
Accretion of debt discount
|
38
|
—
|
||||||
|
Provision for doubtful accounts
|
—
|
(9
|
)
|
|||||
|
Share based compensation
|
4
|
1,096
|
||||||
|
Amortization of deferred subscription solicitation costs
|
—
|
3,087
|
||||||
|
Amortization of deferred contract costs
|
203
|
—
|
||||||
|
Loss on disposition of Captira Analytical
|
—
|
130
|
||||||
|
Impairment of intangibles and other long-lived assets
|
—
|
86
|
||||||
|
Changes in assets and liabilities:
|
||||||||
|
Accounts receivable
|
1,757
|
12
|
||||||
|
Contract assets
|
(1,252
|
)
|
—
|
|||||
|
Prepaid expenses, other current assets and other assets
|
(512
|
)
|
(264
|
)
|
||||
|
Income tax receivable, net
|
1,255
|
649
|
||||||
|
Deferred subscription solicitation and commission costs
|
—
|
(4,011
|
)
|
|||||
|
Contract costs
|
(300
|
)
|
—
|
|||||
|
Accounts payable and accrued liabilities
|
(1,272
|
)
|
301
|
|||||
|
Commissions payable
|
58
|
(16
|
)
|
|||||
|
Contract liabilities, current
|
(1,091
|
)
|
(945
|
)
|
||||
|
Other long-term liabilities
|
(819
|
)
|
(83
|
)
|
||||
|
Cash flows provided by (used in) continuing operations
|
1,380
|
(2,704
|
)
|
|||||
|
Cash flows used in discontinued operations
|
—
|
(1,069
|
)
|
|||||
|
Net cash provided by (used in) operating activities
|
1,380
|
(3,773
|
)
|
|||||
|
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
|
Net cash paid for the disposition of Captira Analytical
|
—
|
(315
|
)
|
|||||
|
Decrease (increase) in restricted cash
|
—
|
25
|
||||||
|
Acquisition of property and equipment
|
(1,137
|
)
|
(1,432
|
)
|
||||
|
Cash flows used in continuing operations
|
(1,137
|
)
|
(1,722
|
)
|
||||
|
Cash flows provided by discontinued operations
|
—
|
94
|
||||||
|
Net cash used in investing activities
|
(1,137
|
)
|
(1,628
|
)
|
||||
|
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
|
Capital lease payments
|
(149
|
)
|
(166
|
)
|
||||
|
Withholding tax payment on vesting of restricted stock units
|
(159
|
)
|
(381
|
)
|
||||
|
Cash flows used in financing activities
|
(308
|
)
|
(547
|
)
|
||||
|
DECREASE IN CASH AND CASH EQUIVALENTS
|
(65
|
)
|
(5,948
|
)
|
||||
|
CASH AND CASH EQUIVALENTS — beginning of period
|
8,502
|
10,797
|
||||||
|
Cash reclassified to assets held for sale at beginning of period
|
—
|
381
|
||||||
|
Less: cash reclassified to assets held for sale at end of period
|
—
|
(56
|
)
|
|||||
|
CASH AND CASH EQUIVALENTS — end of period
|
$
|
8,437
|
$
|
5,174
|
||||
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
|
||||||||
|
Equipment additions accrued but not paid
|
$
|
92
|
$
|
164
|
||||
|
Withholding tax payments accrued on vesting of restricted stock units and stock option exercises
|
$
|
—
|
$
|
100
|
||||
|
Intangible asset placed in service but paid in prior year
|
$
|
240
|
$
|
—
|
||||
7
INTERSECTIONS INC.
OTHER DATA
(in thousands)
(unaudited)
Revenue
The following tables provide comparative details of our revenue information for the quarters ended March 31, 2018, December
31, 2017 and March 31, 2017:
|
Quarter Ended
|
||||||||||||||||||||
|
March 31,
2018
|
December 31,
2017
|
Change
|
March 31,
2017
|
Change
|
||||||||||||||||
|
Identity Guard® Services (1)
|
$
|
13,514
|
$
|
13,618
|
(0.8
|
)%
|
$
|
12,012
|
12.5
|
%
|
||||||||||
|
Canadian business
|
3,231
|
3,412
|
(5.3
|
)%
|
3,059
|
5.6
|
%
|
|||||||||||||
|
U.S. financial institutions
|
19,559
|
20,022
|
(2.3
|
)%
|
21,903
|
(10.7
|
)%
|
|||||||||||||
|
Breach services & other (1)
|
1,269
|
1,266
|
0.2
|
%
|
1,636
|
(22.4
|
)%
|
|||||||||||||
|
Personal Information Services revenue
|
37,573
|
38,318
|
(1.9
|
)%
|
38,610
|
(2.7
|
)%
|
|||||||||||||
|
Other business units
|
1,505
|
1,670
|
(9.9
|
)%
|
1,839
|
(18.2
|
)%
|
|||||||||||||
|
Consolidated revenue
|
$
|
39,078
|
$
|
39,988
|
(2.3
|
)%
|
$
|
40,449
|
(3.4
|
)%
|
||||||||||
——————————————————
| (1) |
We periodically refine the criteria used to calculate and report our subscriber data. In 2017, we determined that certain subscribers who receive our
breach response services should no longer be included in the presentation of Identity Guard® Services subscribers or revenue due to the nonrecurring nature of our breach
response services. For comparability, all periods presented have been recast to reflect this change in subscribers and revenue.
|
8
INTERSECTIONS INC.
OTHER DATA, continued
(in thousands)
(unaudited)
Personal Information Services Segment Subscribers
The following tables provide details of our Personal Information Services segment subscriber information for the three
months ended March 31, 2018:
|
Financial
Institution
|
Identity Guard®
Services (1)
|
Canadian
Business Lines
|
Total
|
|||||||||||||
|
Balance at December 31, 2017
|
620
|
359
|
161
|
1,140
|
||||||||||||
|
Additions
|
—
|
20
|
18
|
38
|
||||||||||||
|
Cancellations
|
(18
|
)
|
(22
|
)
|
(29
|
)
|
(69
|
)
|
||||||||
|
Balance at March 31, 2018
|
602
|
357
|
150
|
1,109
|
||||||||||||
——————————————————
| (1) |
We periodically refine the criteria used to calculate and report our subscriber data. In 2017, we determined that certain subscribers who receive our
breach response services should no longer be included in the presentation of Identity Guard® Services subscribers or revenue due to the nonrecurring nature of our breach response services. For
comparability, all periods presented have been recast to reflect this change in subscribers and revenue.
|
9
INTERSECTIONS INC.
OTHER DATA, continued
(unaudited)
Intersections Inc.
Reconciliation of Non-GAAP Financial Measures
The tables below include financial information prepared in accordance with accounting principles generally accepted in the United States (“GAAP”),
as well as other financial measures referred to as non-GAAP financial measures. Adjusted EBITDA and Adjusted G&A Expense (as defined below) are presented in a manner consistent with the way management evaluates operating results and which
management believes is useful to investors and others. Share related compensation includes non-cash share based compensation. An explanation regarding the Company’s use of non-GAAP financial measures and a reconciliation of non-GAAP financial
measures used by the Company to GAAP measures is provided below. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, net income (loss), general and administrative expense, and the other information
prepared in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. Management strongly encourages shareholders to review our financial statements and publicly-filed reports in their entirety and
not to rely on any single financial measure.
Adjusted EBITDA represents consolidated (loss) income from continuing operations before income taxes plus (minus): share related compensation;
non-cash impairment of goodwill, intangibles and other assets; (gain) loss on sale of Captira Analytical and Habits at Work; loss on extinguishment of debt; (benefit) from change in vacation policy; depreciation and amortization; and interest
expense. We believe that the consolidated Adjusted EBITDA calculation provides useful information to investors because they are indicators of our operating performance, and we use these measures in communications with our board of directors,
creditors, investors and others concerning our financial performance. Adjusted EBITDA is commonly used as a basis for investors and analysts to evaluate and compare the periodic and future operating performance and value of companies within our
industry. Our Board of Directors and management use Adjusted EBITDA to evaluate the operating performance of the Company. In addition, consolidated Adjusted EBITDA, as defined in our Credit Agreement with PEAK6 Investments, L.P., as amended, is
used to measure covenant compliance.
We provide this information to show the impact of share related compensation on our operating results, as it is excluded from our internal
operating and budgeting plans and measurements of financial performance; however, we do consider the dilutive impact to our shareholders when awarding share related compensation and consider both the Black-Scholes value and GAAP value (to the
extent applicable) in connection therewith, and value such awards accordingly.
10
INTERSECTIONS INC.
OTHER DATA, continued
(unaudited)
We do not consider share related compensation charges when we evaluate the performance of our individual business groups or formulate our short
and long-term operating plans. Due to its nature, individual managers generally are unable to project the impact of share related compensation and accordingly we do not hold them accountable for the impact of equity award grants. When we consider
making share related compensation grants, we primarily take into account the need to attract and retain high quality employees, overall shareholder dilution and the Black-Scholes values of the equity grant to the recipient, rather than the
potential accounting charges associated with such grants. For comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes share related compensation in order to better understand the long-term performance
of our core business and to compare our results to the results of our peer companies because of varying available valuation methodologies and the variety of award types that companies can use under GAAP. Furthermore, the value of share related
compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. Accordingly, we believe that the presentation of Adjusted EBITDA when read in conjunction with our reported GAAP
results can provide useful supplemental information to our management, to investors and to our lenders regarding financial and business trends relating to our financial condition and results of operations.
Adjusted EBITDA has limitations due to the fact it does not include all compensation related expenses. For example, if we only paid cash based
compensation as opposed to a portion in share related compensation, the cash compensation expense included in our general and administrative expenses would be higher. We compensate for this limitation by providing information required by GAAP
about outstanding share based awards in the footnotes to our financial statements in our SEC filings. We believe equity based compensation is an important element of our compensation program and all forms of share related awards are valued and
included as appropriate in our operating results.
Adjusted G&A Expense represents consolidated general and administrative expenses (plus) minus: share related compensation; and benefit from
change in vacation policy. We believe that the consolidated Adjusted G&A Expense calculation provides useful information to investors because they are indicators of our operating performance, and we use these measures in communications with
our board of directors, creditors, investors and others concerning our financial performance.
The following tables reconcile 1) consolidated income (loss) from continuing operations before income taxes to Adjusted EBITDA, and 2)
consolidated general and administrative expenses to Adjusted G&A Expense for the previous five quarters through March 31, 2018. The information in the following tables is presented giving effect to the disposal of Voyce, with its historical
financial results reflected as discontinued operations. We made adjustments to our historical financial results for certain costs and overhead allocations to either discontinued or continuing operations for the year ended December 31, 2017; for
additional information, please see "Note 2 — Basis of Presentation and Consolidation" in our most recent Form 10-Q. In managing our business, we analyze our performance quarterly on a consolidated income (loss) before income tax basis.
11
INTERSECTIONS INC.
OTHER DATA, continued
(in thousands, unaudited)
Consolidated Adjusted EBITDA (as recast and revised):
|
Quarter Ended
|
2017 Quarter Ended
|
|||||||||||||||||||
|
March 31, 2018
|
December 31
|
September 30
|
June 30
|
March 31
|
||||||||||||||||
|
Reconciliation from consolidated income (loss) from continuing operations before income taxes to
consolidated Adjusted EBITDA:
|
||||||||||||||||||||
|
Consolidated income (loss) from continuing operations before income taxes (1)
|
$
|
1,270
|
$
|
1,270
|
$
|
(2,960
|
)
|
$
|
(7,765
|
)
|
$
|
(4,250
|
)
|
|||||||
|
Non-cash share based compensation (1)
|
4
|
1,948
|
1,809
|
3,677
|
1,096
|
|||||||||||||||
|
Impairment of goodwill, intangibles and other assets
|
—
|
—
|
—
|
(86
|
)
|
86
|
||||||||||||||
|
(Gain) loss on sales of Captira Analytical and Habits at Work
|
—
|
—
|
—
|
(24
|
)
|
130
|
||||||||||||||
|
Loss on extinguishment of debt
|
—
|
—
|
—
|
1,525
|
—
|
|||||||||||||||
|
Benefit from change in vacation policy
|
—
|
(1,113
|
)
|
—
|
—
|
—
|
||||||||||||||
|
Depreciation and amortization
|
1,502
|
1,548
|
1,407
|
1,335
|
1,347
|
|||||||||||||||
|
Interest expense, net
|
531
|
332
|
701
|
602
|
592
|
|||||||||||||||
|
Consolidated Adjusted EBITDA
|
$
|
3,307
|
$
|
3,985
|
$
|
957
|
$
|
(736
|
)
|
$
|
(999
|
)
|
||||||||
Note (1): The results of operations for the year ended December 31, 2017 have been recast to show the effects of our discontinued operations and
to reflect an adjustment to our share based compensation expense. For additional information, please see Note 21 to our consolidated financial statements in our most recent Form 10-K.
12
INTERSECTIONS INC.
OTHER DATA, continued
(in thousands, unaudited)
Consolidated Adjusted G&A Expense (as recast and revised):
|
Quarter Ended
|
2017 Quarter Ended
|
|||||||||||||||||||
|
March 31, 2018
|
December 31
|
September 30
|
June 30
|
March 31
|
||||||||||||||||
|
Reconciliation from consolidated general and administrative expenses to Adjusted G&A Expense:
|
||||||||||||||||||||
|
Consolidated general and administrative expenses (1)
|
$
|
13,128
|
$
|
13,361
|
$
|
14,826
|
$
|
17,962
|
$
|
16,381
|
||||||||||
|
Non-cash share based compensation (1)
|
(4
|
)
|
(1,948
|
)
|
(1,809
|
)
|
(3,676
|
)
|
(1,097
|
)
|
||||||||||
|
Benefit from change in vacation policy
|
—
|
1,113
|
—
|
—
|
—
|
|||||||||||||||
|
Adjusted G&A Expense
|
$
|
13,124
|
$
|
12,526
|
$
|
13,017
|
$
|
14,286
|
$
|
15,284
|
||||||||||
Note (1): The results of operations for the year ended December 31, 2017 have been recast to show the effects of our discontinued operations and
to reflect an adjustment to our share based compensation expense. For additional information, please see Note 21 to our consolidated financial statements in our most recent Form 10-K.
13
Exhibit 99.2
Business Update May 10, 2018
Disclaimers Forward-Looking StatementsStatements in this presentation relating to future plans,
results, performance, expectations, achievements and the like are considered “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. You can identify forward-looking statements by the fact that they do not
relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and other words and terms of similar
meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Those forward-looking statements involve known and unknown risks and uncertainties and are subject to change based
on various factors and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements, including the success of our strategic objectives; our ability to meet the targets
disclosed by
management with respect to costs and revenue, and that these targets do not represent historical performance, projected results or guidance; our ability to generate revenue from our partner sales strategy and business development pipeline
with our distribution partners; the impact of shutting down and then divesting our Pet Health Monitoring segment; the timing and success of new product launches and other growth initiatives, including our Identity Guard® with Watson™ service;
the continuing impact of the regulatory environment on our business; the continued dependence on a small number of financial institutions for a majority of our revenue and to service our U.S. financial institution customer base; our ability
to execute our strategy and previously announced transformation plan; our incurring additional restructuring charges; our incurring additional charges for non-income business taxes or otherwise, or impairment costs or charges on goodwill
and/or other assets; our ability to control costs; our failure to protect private data due to a security breach or other unauthorized access; our ability to maintain sufficient liquidity and produce sufficient cash flow to fund our business,
growth strategy and debt service obligations; the impact of our recent senior management changes; and our needs for additional capital to grow our business, including our ability to maintain compliance with the covenants under our term loan
or seek additional sources of debt and/or equity financing. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed under “Forward-Looking Statements,” “Item 1. Business—Government
Regulation” and “Item 1A. Risk Factors” in the Company’s most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q and in its recent other filings with the U.S. Securities and Exchange Commission. The Company undertakes no
obligation to revise or update any forward-looking statements unless required by applicable law.Non-GAAP Financial MeasuresThis presentation includes financial information prepared in accordance with accounting principles generally accepted
in the United States (“GAAP”), as well as other financial measures referred to as non-GAAP financial measures. “Adjusted EBITDA” represents consolidated (loss) income from continuing operations before income taxes plus (minus): share related
compensation; non-cash impairment of goodwill, intangibles and other assets; gain (loss) on sale of Captira Analytical and Habits at Work; loss on extinguishment of debt; (benefit) from change in vacation policy; depreciation and
amortization; and interest expense. “Adjusted G&A Expense” represents consolidated general and administrative expenses (plus) minus: share related compensation; and benefit from change in vacation policy. A reconciliation of non-GAAP
financial measures used by the Company to GAAP measures is provided in the Appendix. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, net income (loss), general and administrative expense,
and the other information prepared in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. Management strongly encourages stockholders to review our financial statements and publicly-filed
reports in their entirety and not to rely on any single financial measure. Further description of the reconciliation of Non-GAAP Financial Measures can be found in the tables and footnotes accompanying the Company’s earnings release and the
“GAAP and Non-GAAP Measures” link under the “Investor and Media” page on our website at www.intersections.com. 2
Intersections Inc. (Nasdaq: INTX) 47 million Number of consumers Intersections has protected.Largest
independent identity theft monitoring provider in the U.S.Intersections Inc. provides innovative software and data monitoring and analytics solutions that help consumers manage financial and personal risks associated with the proliferation of
their personal data in the virtual and financial world.Intersections delivers its services via a broad base of partner and employer engagement channels. Under our IDENTITY GUARD® brand, we utilize technology solutions, including artificial
intelligence to help monitor, manage and protect against the risks associated with identities and personal information, including: Helping prevent, detect and resolve identity theft associated with financial fraud,Providing social media
monitoring and information adjustment or deletion to help protect one’s reputation that may impact school choice, job choice and life experiences,Providing AI based monitoring services to help protect children from cyberbullying,Creating and
delivering software services to protect computers and personal devices against “bad” browsing sites and phishing attacks, andProviding Breach prevention and management tools to small and medium sized businesses. 3
Business Transition Tracking to Management’s Objectives Identity Guard® with Watson™Partner
distribution modelGrew in-house business development team to 13 professionals plus support teamEliminated Discontinued Operations that used cash of $17.2 million in 2016 and $2.4 million in 2017 Strategic Objectives 2018: Restore Top Line
Trajectory2019: Accelerate Revenue Growth2020: Accelerate Adjusted EBITDASignificant Product EnhancementSales & Business Development Team ExpansionChannel Diversification & ExpansionCost Structure Positioned for Operating
Leverage $39.1 million consolidated revenue in Q1 2018$1.3 million consolidated income from continuing operations before income taxes for Q1 2018 and Q4 2017 after six quarters of losses$3.3 million Adjusted EBITDA(1) in Q1 2018 compared to
$(1.0) million Adjusted EBITDA loss in Q1 2017Identity Guard® with Watson made available in all U.S. channels 2017 Transition Q1 2018 Results 4 (1) See reconciliation of non-GAAP financial measures in appendix.
First Quarter 2018 Financial Summary $39.1 million consolidated revenue for quarter ended March 31,
2018.Slightly below $40 million for fourth quarter 2017 due to run-off of legacy subscribers.New growth areas performed as expected as new programs were launched in the first quarter.$1.3 million consolidated income from continuing operations
before income taxes in first quarter of 2018, consistent with fourth quarter after six consecutive quarters with reported losses.Generated approximately $3.3 million Adjusted EBITDA in first quarter 2018 compared to $4.0 million in fourth
quarter 2017, and an Adjusted EBITDA loss of ($1.0) million in the first quarter of 2017.1.1 million subscribers as of March 31, 2018.357 thousand Identity Guard® subscribers at the end of the first quarter was consistent with December
31,2017 and 7.2% higher than March 31, 2017.Continued expansion of client base through completed and scheduled launches of new employer programs.Continued expansion of new business pipeline of employer and marketing partner opportunities.$8.4
million of cash as of March 31, 2018 compared to $8.5 million as of December 31, 2017. 5 Management believes Q1 2018 financial results position the Company to remain on target to meet management’s 2018 financial objectives as outlined on
page 10 of this presentation.
Recent Events Chief Executive Officer SearchA national search for a new CEO was launched in the first
quarter.A number of candidates have been, identified, screened and interviewed as the search continues.The Search Committee’s objective is to complete the search process over the next few months with the new CEO on board by the end of the
third quarter.The management team led by Michael Stanfield, Executive Chairman and President continues to aggressively pursue our operating plans while the search process progresses. 6
SOCIAL & DIGITALSELF & FAMILY FINANCIAL WELL-BEING Credit monitoringCredit reportsExpanded
Public recordsBank/financial recordsGovernment ID monitoringExpanded Dark Web monitoringTax fraud EXCEEDINGcategory expectations Social reputation managerCyberbullying monitoringSafe browsing technologyAnti Phishing appJob &
ReputationPersonalized real time scam alertsAlchemy news event detectionInternet of things PERSONAL SAFETY Geo-location aware alertsPolice reportsSex-Offender alerts SUPPORT & RESOLUTION $1M Theft InsuranceFastest alerts vs major
competitorsVictim recovery specialistsU.S.-based call center PHYSICAL awareness/protection INDUSTRY LEADINGalerts/remediation DIGITALtools/alerts/information Identity Guard® Platform Dynamic Artificial Intelligence technology for
broadest data monitoring capability.Uses Watson to digest more than 250,000 news articles from 75,000 sources every day to identify news that could impact a consumer’s digital safety.Scans millions of news articles, blogs, and posts to warn
of potential, emerging threats such as data breaches, software vulnerabilities, and dangerous online habits.Proactively search the dark web, public records, credit files, thousands of news sources to detect identity risks. 7
Sales & Marketing Transformation On Track Digital display and direct response consumer advertising
led to high cost of acquisition & low ROIOn-line marketing affiliate program in place secondary to direct marketing effortsMinimal investment in business development capabilities, new partner acquisition and distribution network
developmentNo presence in employee benefit channelOpportunistic presence in breach response services market 2015 – 1H 2017 2017 - Forward Eliminated low return direct marketing programsFocus on effective on-line affiliates with cash
efficient financial incentive programsContinue growth of experienced in-house development professionalsEstablished strong position in high growth employee benefit channel with highly differentiated solutionsHighly competitive in large scale
breach responses with differentiated solutions.First to market among competitors with breach preparedness services for small and medium businesses Sales & Marketing infrastructure for recurring revenue businessPartner DistributionLower
Cost of AcquisitionCash EfficiencyHigher Retention & Renewal Rates 8
Revenue Trends Combined Identity Guard channels grew to 46% of consolidated revenue.Identity Guard Q1
revenue slightly below Q4 2017 due to attrition of higher consumer subscriber additions in Q4.Revenue growth from new partner marketing programs may be driven by larger opportunities for which launch dates may be difficult to predict, but
offer substantial growth opportunities.Revenue from financial institution clients continues to attrite at approximately 1% per month.Full launch of Identity Guard with Watson is expected to drive 2018 revenue. Key Trends 9 Identity Guard®
U.S. and Canadian Revenue (In $USD millions) (a) The foregoing goals are objectives and targets developed by management with respect to revenue. They are qualified by and subject to the “Forward-Looking Statements” section of this
presentation on the page entitled “Disclaimers”. In addition, readers are cautioned that such target objectives do not represent historical performance, projected results or guidance and should not be relied upon or construed as such.
Management Financial Objectives Unchanged from April 2018 Update $millions 2017 Actual Q1 2018
Actual 2018 Goal 3 Yr. Objective 2020 Goal Revenue $159.6 $39.1 $153 - $158 25% - 30% cumulative growth +/- $200 Marketing 11.3 7.1% 0.9 2.3% 2.0% – 2.2% Minimal direct response spend $2.0 Million per
year Commission 38.4 24.0% 9.3 23.8% 24% – 25% Consistent run rate 24% – 25% of Revenue Cost of Revenue 51.7 32.3% 12.4 31.7% 32% - 34% Consistent % of Revenue 32% - 34% of
Revenue G&A ExpenseAdjusted G&A Expense (a) 62.555.1 39.2%34.5% 13.113.1 33.6%33.6% $54 -$55 Hold adjusted G&A flat $54 - $55 million annual adjusted G&A Income (Loss) from Continuing
Operations before Tax ($13.7) $1.3 (b) (b) Adjusted EBITDA(a) $3.2 2.0% $3.3 8.5% $6.5 - $7.5 15% of Revenue The foregoing objectives and goals are targets developed by management with respect to costs and
revenue. They are qualified by and subject to the “Forward-Looking Statements” section of this presentation on the page entitled “Disclaimers”. In addition, readers are cautioned that such target objectives do not represent historical
performance, projected results or guidance and should not be relied upon or construed as such.See reconciliation of non-GAAP financial measures in the appendix.(b) We are unable to present a quantitative reconciliation of this forward-looking
non-GAAP financial measure to its most directly comparable forward-looking GAAP financial measure because management cannot reliably predict or estimate, without unreasonable effort, all the necessary components of such GAAP measure. See
reconciliation of non-GAAP financial measures in the appendix. Such amounts may also be excluded in the future periods and could be significant. 10
Investment Summary Largest independent identity and personal information protection provider in the
U.S.$39.1 million consolidated revenue in Q1 2018 following $160 million consolidated revenue in FY 2017.$3.3 million EBITDA in Q1 2018 following $3.9 million in Q4 2017.2018 management goal(a) of $153 – $158 million consolidated revenue and
adjusted EBITDA of $6.5 - $7.5 million.1.1 million active subscribers (4/30/18):Leading innovator – first to release almost every enhancement over the last 20 years.Leading offering – Identity Guard® platform leverages IBM Watson™ and other
services to deliver the broadest data monitoring capabilities and fastest alerts vs. major competitors.Leading platform – scalable to support high growth through partner relationships. Management believes the Company is well-positioned to
achieve the financial objectives of top-line growthand increasing profitability over the next three years. 11 (a) The foregoing objectives and goals are targets developed by management with respect to costs and revenue. They are qualified
by and subject to the “Forward-Looking Statements” section of this presentation on the page entitled “Disclaimers”. In addition, readers are cautioned that such target objectives do not represent historical performance, projected results or
guidance and should not be relied upon or construed as such.
Appendix
Revenue Identity Guard® Services revenue increased 12.5% in the first quarter of 2018 compared to the
first quarter of 2017 as a result of subscriber increases in our consumer and employer programs. Revenue decreased slightly from the fourth quarter of 2018 decreases in the higher new subscribers acquired in fourth quarter 2017 in our
consumer population.Revenue from the Canadian business increased 5.6% in the first quarter of 2018 compared to the first quarter of 2017 due primarily to higher average revenue per subscriber.Revenue from U.S. financial institution clients
decreased at an average monthly rate of 0.8% per month during the first quarter of 2018, which the Company continues to believe is representative of normal attrition given the discontinuation of marketing and retention efforts for this
subscriber population.Note (1): We periodically refine the criteria used to calculate and report our subscriber data. In 2017, we determined that certain subscribers who receive our breach response services should no longer be included in the
presentation of Identity Guard® Services subscribers or revenue due to the nonrecurring nature of our breach response services. For comparability, all periods presented have been recast to reflect this change in subscribers and revenue. 13
Subscribers The Identity Guard® Services subscriber base increased 7.2% since March 31, 2017,
primarily in its direct to consumer and employee benefits channels. The decrease compared to December 31, 2018 is due primarily to the attrition of the higher number of subscribers acquired in the fourth quarter 2017, which we believe is a
normal attrition rate.Subscribers acquired through our Canadian business marketing relationship decreased 6.8% in the first quarter 2017, due in part to cancellations of non-revenue producing subscribers and normal attrition.U.S. financial
institution subscribers declined approximately 1% per month on average since December 31, 2017, a rate we believe continues to represent normal attrition.Note (1): We periodically refine the criteria used to calculate and report our
subscriber data. In 2017, we determined that certain subscribers who receive our breach response services should no longer be included in the presentation of Identity Guard® Services subscribers or revenue due to the nonrecurring nature of
our breach response services. For comparability, all periods presented have been recast to reflect this change in subscribers and revenue. 14
Cash Flow 15 Cash from operating activities for the first quarter includes approximately $1.4 million
for business development activities, the significant majority of which is personnel cost. The Company expects to continue its spending on business development activities for the remainder of 2018 at approximately the same level as 2017.Cash
from operating activities for the first quarter includes approximately $1.3 million federal tax refund related to research & development credits.The Company continued to develop new product features primarily for the Identity Guard® with
Watson™ platform during the first quarter of 2018. As a result, the Company invested approximately $0.8 million in internally developed capitalized software for the quarter. The Company expects to continue its investments in product
development for the remainder of 2018 at approximately the same level as 2017.
Reconciliation of Non-GAAP Financial Measures 16 Reconciliation of consolidated adjusted EBITDA
(loss) before share related compensation and other non-cash expenses (benefits) (“Adjusted EBITDA”)(dollars in thousands): Further description of the reconciliation of Non-GAAP Financial Measures can be found in the tables and footnotes
accompanying the Company’s earnings release and the “GAAP and Non-GAAP Measures” link under the “Investor and Media” page on our website at www.intersections.com. Note (1): The results of operations for the years ended December 31, 2017 and
2016 have been recast to show the effects of our discontinued operations and to reflect an adjustment to our share based compensation expense. For additional information, please see Note 21 to our consolidated financial statements in our most
recent Form 10-K.
Reconciliation of Non-GAAP Financial Measures: General and Administrative Expenses 17 Further
description of the reconciliation of Non-GAAP Financial Measures can be found in the tables and footnotes accompanying the Company’s earnings release and the “GAAP and Non-GAAP Measures” link under the “Investor and Media” page on our website
at www.intersections.com. Note (1): The results of operations for the years ended December 31, 2017 and 2016 have been recast to show the effects of our discontinued operations and to reflect an adjustment to our share based compensation
expense. For additional information, please see Note 21 to our consolidated financial statements in our most recent Form 10-K. Reconciliation of consolidated adjusted general and administrative expenses before share related compensation and
other non-cash (expenses) benefits (“Adjusted G&A Expense”)(dollars in thousands):
Thank You Corporate HeadquartersIntersections Inc.3901 Stonecroft BoulevardChantilly, VA
20151Toll-free: 800.695.7536www.intersections.com Investor RelationsRon Barden, CFO rbarden@intersections.com Tel: 703.488.6810