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.
     
 
By:
/s/ Ronald L. Barden
 
Name:
Ronald L. Barden
 
Title:
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:
Intersections Inc. First Quarter 2018 Conference Call
   
WHEN:
May 10, 2018
 
4:30 p.m. Eastern Time
   
HOW:
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