Delaware
|
|
001-34063
|
|
26-2414818
|
(State or other jurisdiction
|
|
(Commission
|
|
(IRS Employer
|
of incorporation)
|
|
File Number)
|
|
Identification No.)
|
11115 Rushmore Drive, Charlotte, NC
|
|
28277
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Exhibit No.
|
|
Exhibit Description
|
2.1
|
|
|
23.1
|
|
|
99.1
|
|
|
99.2
|
|
|
99.3
|
|
|
99.4
|
|
*
|
|
The schedules (and similar attachments) to this exhibit have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish a supplemental copy of any omitted schedule (or similar attachment) to the Securities and Exchange Commission upon request.
|
†
|
|
Previously filed on Form 8-K/A on October 12, 2018.
|
††
|
|
Previously filed on Form 8-K on October 10, 2018.
|
Date: January 11, 2019
|
|
|
|
|
|
|
LENDINGTREE, INC.
|
|
|
|
|
|
|
|
|
By:
|
/s/ J.D. Moriarty
|
|
|
J.D. Moriarty
|
|
|
Chief Financial Officer
|
Exhibit No.
|
|
Exhibit Description
|
2.1
|
|
|
23.1
|
|
|
99.1
|
|
|
99.2
|
|
|
99.3
|
|
|
99.4
|
|
*
|
|
The schedules (and similar attachments) to this exhibit have been omitted from this filing pursuant to Item 601(b)(2) of Regulation S-K. The registrant agrees to furnish a supplemental copy of any omitted schedule (or similar attachment) to the Securities and Exchange Commission upon request.
|
†
|
|
Previously filed on Form 8-K/A on October 12, 2018.
|
††
|
|
Previously filed on Form 8-K on October 10, 2018.
|
•
|
the Company's audited financial statements and related notes for the year ended December 31, 2017, contained within the Company's Annual Report on Form 10-K filed with the SEC on February 26, 2018;
|
•
|
the Company's historical unaudited condensed consolidated interim financial statements and related notes as of and for the six months ended June 30, 2018, included in the Company's Quarterly Report on Form 10-Q filed with the SEC on July 27, 2018;
|
•
|
the historical financial statements of QuoteWizard as of and for the year ended December 31, 2017 included as Exhibit 99.2 to the Company's Amendment No. 1 to Current Report on Form 8-K/A filed herewith; and
|
•
|
the historical unaudited financial statements of QuoteWizard as of and for the six months ended June 30, 2018, included as Exhibit 99.3 to the Company's Amendment No. 1 to Current Report on Form 8-K/A filed herewith.
|
|
LendingTree, Inc.
|
|
QuoteWizard
|
|
Pro Forma Adjustments (Note 3)
|
|
Pro Forma Combined
|
||||||||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
365,136
|
|
|
$
|
75,460
|
|
|
$
|
—
|
|
|
$
|
440,596
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue
(exclusive of depreciation and amortization shown separately below)
|
11,739
|
|
|
1,729
|
|
|
—
|
|
|
13,468
|
|
||||
Selling and marketing expense
|
249,990
|
|
|
54,964
|
|
|
—
|
|
|
304,954
|
|
||||
General and administrative expense
|
47,573
|
|
|
5,160
|
|
|
(206
|
)
|
(a)
|
52,527
|
|
||||
Product development
|
12,227
|
|
|
3,363
|
|
|
—
|
|
|
15,590
|
|
||||
Depreciation
|
3,304
|
|
|
355
|
|
|
(49
|
)
|
(b)
|
3,610
|
|
||||
Amortization of intangibles
|
7,927
|
|
|
291
|
|
|
10,766
|
|
(c)
|
18,984
|
|
||||
Change in fair value of contingent consideration
|
(908
|
)
|
|
—
|
|
|
—
|
|
|
(908
|
)
|
||||
Severance
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Litigation settlements and contingencies
|
(192
|
)
|
|
—
|
|
|
—
|
|
|
(192
|
)
|
||||
Total costs and expenses
|
331,663
|
|
|
65,862
|
|
|
10,511
|
|
|
408,036
|
|
||||
Operating income
|
33,473
|
|
|
9,598
|
|
|
(10,511
|
)
|
|
32,560
|
|
||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense, net
|
(5,912
|
)
|
|
(266
|
)
|
|
(2,139
|
)
|
(d)
|
(8,317
|
)
|
||||
Other expense, net
|
(37
|
)
|
|
—
|
|
|
—
|
|
|
(37
|
)
|
||||
Income before income taxes
|
27,524
|
|
|
9,332
|
|
|
(12,650
|
)
|
|
24,206
|
|
||||
Income tax benefit
|
53,182
|
|
|
—
|
|
|
921
|
|
(e)
|
54,103
|
|
||||
Net income from continuing operations
|
80,706
|
|
|
9,332
|
|
|
(11,729
|
)
|
|
78,309
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
12,254
|
|
|
|
|
|
|
12,254
|
|
||||||
Diluted
|
14,527
|
|
|
|
|
|
|
14,527
|
|
||||||
Income per share from continuing operations:
|
|
|
|
|
|
0
|
|
|
|
|
|||||
Basic
|
$
|
6.59
|
|
|
|
|
|
|
$
|
6.39
|
|
||||
Diluted
|
$
|
5.56
|
|
|
|
|
|
|
$
|
5.39
|
|
|
LendingTree, Inc.
|
|
QuoteWizard
|
|
Pro Forma Adjustments (Note 3)
|
|
Pro Forma Combined
|
||||||||
(in thousands, except per share amounts)
|
|
|
|
|
|
|
|
||||||||
Revenue
|
$
|
617,736
|
|
|
$
|
83,448
|
|
|
$
|
—
|
|
|
$
|
701,184
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenue
(exclusive of depreciation and amortization shown separately below)
|
17,223
|
|
|
646
|
|
|
—
|
|
|
17,869
|
|
||||
Selling and marketing expense
|
432,784
|
|
|
63,655
|
|
|
—
|
|
|
496,439
|
|
||||
General and administrative expense
|
71,541
|
|
|
8,734
|
|
|
(4
|
)
|
(a)
|
80,271
|
|
||||
Product development
|
17,925
|
|
|
5,385
|
|
|
—
|
|
|
23,310
|
|
||||
Depreciation
|
7,085
|
|
|
750
|
|
|
(118
|
)
|
(b)
|
7,717
|
|
||||
Amortization of intangibles
|
12,992
|
|
|
—
|
|
|
22,113
|
|
(c)
|
35,105
|
|
||||
Change in fair value of contingent consideration
|
23,931
|
|
|
—
|
|
|
—
|
|
|
23,931
|
|
||||
Severance
|
404
|
|
|
125
|
|
|
—
|
|
|
529
|
|
||||
Litigation settlements and contingencies
|
718
|
|
|
1,600
|
|
|
—
|
|
|
2,318
|
|
||||
Total costs and expenses
|
584,603
|
|
|
80,895
|
|
|
21,991
|
|
|
687,489
|
|
||||
Operating income
|
33,133
|
|
|
2,553
|
|
|
(21,991
|
)
|
|
13,695
|
|
||||
Other expense, net:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense
|
(7,028
|
)
|
|
(115
|
)
|
|
(5,016
|
)
|
(d)
|
(12,159
|
)
|
||||
Other expense, net
|
(396
|
)
|
|
(113
|
)
|
|
—
|
|
|
(509
|
)
|
||||
Income before income taxes
|
25,709
|
|
|
2,325
|
|
|
(27,007
|
)
|
|
1,027
|
|
||||
Income tax (expense) benefit
|
(6,291
|
)
|
|
—
|
|
|
10,029
|
|
(e)
|
3,738
|
|
||||
Net income from continuing operations
|
19,418
|
|
|
2,325
|
|
|
(16,978
|
)
|
|
4,765
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
11,945
|
|
|
|
|
|
|
11,945
|
|
||||||
Diluted
|
13,682
|
|
|
|
|
|
|
13,682
|
|
||||||
Income per share from continuing operations:
|
|
|
|
|
|
|
0
|
|
|
|
|
||||
Basic
|
$
|
1.63
|
|
|
|
|
|
|
$
|
0.40
|
|
||||
Diluted
|
$
|
1.42
|
|
|
|
|
|
|
$
|
0.35
|
|
|
LendingTree, Inc.
|
|
QuoteWizard
|
|
Pro Forma Adjustments (Note 3)
|
|
Pro Forma Combined
|
||||||||
(in thousands)
|
|
|
|
|
|
|
|
||||||||
ASSETS:
|
|
|
|
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
293,301
|
|
|
$
|
823
|
|
|
$
|
(180,963
|
)
|
(f)
|
$
|
113,161
|
|
Restricted cash and cash equivalents
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
||||
Accounts receivable, net
|
80,135
|
|
|
16,026
|
|
|
—
|
|
|
96,161
|
|
||||
Prepaid and other current assets
|
13,856
|
|
|
1,208
|
|
|
126
|
|
(m)
|
15,190
|
|
||||
Current assets of discontinued operations
|
175
|
|
|
—
|
|
|
—
|
|
|
175
|
|
||||
Total current assets
|
387,516
|
|
|
18,057
|
|
|
(180,837
|
)
|
|
224,736
|
|
||||
Property and equipment, net
|
37,876
|
|
|
1,337
|
|
|
(124
|
)
|
(g)
|
39,089
|
|
||||
Goodwill
|
124,903
|
|
|
1,271
|
|
|
184,197
|
|
(h)
|
310,371
|
|
||||
Intangible assets, net
|
81,654
|
|
|
3,912
|
|
|
114,988
|
|
(i)
|
200,554
|
|
||||
Deferred income tax assets
|
73,163
|
|
|
—
|
|
|
1,306
|
|
(o)
|
74,469
|
|
||||
Other non-current assets
|
1,793
|
|
|
—
|
|
|
386
|
|
(m)
|
2,179
|
|
||||
Non-current assets of discontinued operations
|
2,428
|
|
|
—
|
|
|
—
|
|
|
2,428
|
|
||||
Total assets
|
$
|
709,333
|
|
|
$
|
24,577
|
|
|
$
|
119,916
|
|
|
$
|
853,826
|
|
|
|
|
|
|
|
|
|
||||||||
LIABILITIES:
|
|
|
|
|
|
|
|
|
|
||||||
Line of credit
|
$
|
—
|
|
|
$
|
9,462
|
|
|
$
|
115,538
|
|
(l)
|
125,000
|
|
|
Accounts payable, trade
|
11,066
|
|
|
2,548
|
|
|
—
|
|
|
13,614
|
|
||||
Accrued expenses and other current liabilities
|
70,721
|
|
|
6,484
|
|
|
(19
|
)
|
(j)
|
77,186
|
|
||||
Current contingent consideration
|
7,283
|
|
|
—
|
|
|
—
|
|
|
7,283
|
|
||||
Notes payable to members
|
—
|
|
|
3,163
|
|
|
(3,163
|
)
|
(l)
|
—
|
|
||||
Current liabilities of discontinued operations
|
18,782
|
|
|
—
|
|
|
—
|
|
|
18,782
|
|
||||
Total current liabilities
|
107,852
|
|
|
21,657
|
|
|
112,356
|
|
|
241,865
|
|
||||
Long-term debt
|
244,480
|
|
|
—
|
|
|
—
|
|
|
244,480
|
|
||||
Non-current contingent consideration
|
7,958
|
|
|
—
|
|
|
13,900
|
|
(k)
|
21,858
|
|
||||
Other non-current liabilities
|
1,615
|
|
|
27
|
|
|
(27
|
)
|
(j)
|
1,615
|
|
||||
Total liabilities
|
361,905
|
|
|
21,684
|
|
|
126,229
|
|
|
509,818
|
|
||||
|
|
|
|
|
|
|
|
||||||||
SHAREHOLDERS' EQUITY:
|
|
|
|
|
|
|
|
|
|
||||||
Common stock
|
151
|
|
|
—
|
|
|
—
|
|
|
151
|
|
||||
Additional paid-in capital
|
1,110,688
|
|
|
2,893
|
|
|
(2,893
|
)
|
(n)
|
1,110,688
|
|
||||
Accumulated deficit
|
(632,910
|
)
|
|
—
|
|
|
(3,420
|
)
|
(o)
|
(636,330
|
)
|
||||
Treasury stock
|
(131,088
|
)
|
|
—
|
|
|
—
|
|
|
(131,088
|
)
|
||||
Noncontrolling interest
|
587
|
|
|
—
|
|
|
—
|
|
|
587
|
|
||||
Total shareholders' equity
|
347,428
|
|
|
2,893
|
|
|
(6,313
|
)
|
|
344,008
|
|
||||
Total liabilities and shareholders' equity
|
$
|
709,333
|
|
|
$
|
24,577
|
|
|
$
|
119,916
|
|
|
$
|
853,826
|
|
•
|
Cost of revenue reclassified from selling, general and administrative expenses;
|
•
|
Selling and marketing expense reclassified from cost of services, selling, general and administrative expenses and stock compensation for Quote Wizard EIP, LLC and shown separately;
|
•
|
General and administrative expense reclassified from selling, general and administrative expenses and stock compensation for Quote Wizard EIP, LLC and shown separately;
|
•
|
Product development expense reclassified from selling, general and administrative expenses and stock compensation for Quote Wizard EIP, LLC and shown separately;
|
•
|
Depreciation, amortization and severance reclassified from selling, general and administrative expenses and shown separately;
|
•
|
Prepaid expenses and other assets, which have been condensed into prepaid and other current assets;
|
•
|
Intangible assets, net reclassified from property and equipment, net;
|
•
|
Accrued expenses and other current liabilities reclassified from accounts payable;
|
•
|
Customer deposits and current portion of deferred rent, which have been condensed into accrued expenses and other current liabilities; and
|
•
|
Deferred rent, net of current portion, which has been condensed into other non-current liabilities.
|
|
Year ended December 31, 2017
|
||||||||||
|
QuoteWizard
historical
presentation
|
|
Reclassifications
|
|
QuoteWizard
proforma historical
presentation
|
||||||
Statement of Operations
|
|
|
|
|
|
||||||
Cost of services
|
$
|
9,062
|
|
|
$
|
(8,416
|
)
|
|
$
|
646
|
|
Selling, general and administrative expenses
|
65,932
|
|
|
(65,932
|
)
|
|
—
|
|
|||
Selling and marketing expense
|
—
|
|
|
63,655
|
|
|
63,655
|
|
|||
General and administrative expense
|
—
|
|
|
8,734
|
|
|
8,734
|
|
|||
Product development
|
—
|
|
|
5,385
|
|
|
5,385
|
|
|||
Stock compensation for Quote Wizard EIP, LLC
|
4,301
|
|
|
(4,301
|
)
|
|
—
|
|
|||
Depreciation
|
—
|
|
|
750
|
|
|
750
|
|
|||
Severance
|
—
|
|
|
125
|
|
|
125
|
|
|
As of and for the six months ended June 30, 2018
|
||||||||||
|
QuoteWizard
historical
presentation
|
|
Reclassifications
|
|
QuoteWizard
proforma historical
presentation
|
||||||
Statement of Operations
|
|
|
|
|
|
||||||
Cost of services
|
$
|
7,424
|
|
|
$
|
(5,695
|
)
|
|
$
|
1,729
|
|
Selling, general and administrative expenses
|
55,514
|
|
|
(55,514
|
)
|
|
—
|
|
|||
Selling and marketing expense
|
—
|
|
|
54,964
|
|
|
54,964
|
|
|||
General and administrative expense
|
—
|
|
|
5,160
|
|
|
5,160
|
|
|||
Product development
|
—
|
|
|
3,363
|
|
|
3,363
|
|
|||
Stock compensation for Quote Wizard EIP, LLC
|
2,924
|
|
|
(2,924
|
)
|
|
—
|
|
|||
Depreciation
|
—
|
|
|
355
|
|
|
355
|
|
|||
Amortization of intangibles
|
—
|
|
|
291
|
|
|
291
|
|
|||
Balance Sheet
|
|
|
|
|
|
||||||
Prepaid expenses
|
688
|
|
|
(688
|
)
|
|
—
|
|
|||
Other assets
|
520
|
|
|
(520
|
)
|
|
—
|
|
|||
Prepaid and other current assets
|
—
|
|
|
1,208
|
|
|
1,208
|
|
|||
Property and equipment, net
|
1,837
|
|
|
(500
|
)
|
|
1,337
|
|
|||
Intangible assets, net
|
3,412
|
|
|
500
|
|
|
3,912
|
|
|||
Accounts payable, trade
|
5,309
|
|
|
(2,761
|
)
|
|
2,548
|
|
|||
Accrued expenses and other current liabilities
|
2,647
|
|
|
3,837
|
|
|
6,484
|
|
|||
Customer deposits
|
1,057
|
|
|
(1,057
|
)
|
|
—
|
|
|||
Current portion of deferred rent
|
19
|
|
|
(19
|
)
|
|
—
|
|
|||
Deferred rent, net of current portion
|
27
|
|
|
(27
|
)
|
|
—
|
|
|||
Other non-current liabilities
|
—
|
|
|
27
|
|
|
27
|
|
Cash transferred
|
$
|
299,902
|
|
Estimated fair value of the Earnout Payments
|
13,900
|
|
|
Estimated fair value of consideration transferred
|
$
|
313,802
|
|
Current assets
|
$
|
17,234
|
|
Property and equipment, net
|
1,213
|
|
|
Intangible assets with definite lives, net
|
118,900
|
|
|
Goodwill
|
185,468
|
|
|
Total assets acquired
|
322,815
|
|
|
|
|
||
Current liabilities
|
9,013
|
|
|
Estimated fair value of consideration transferred
|
$
|
313,802
|
|
(a)
|
The adjustments reflect the removal of transaction expenses incurred during the six months ended June 30, 2018 and the year ended December 31, 2017 that are directly attributable to the Acquisition and will not have an ongoing impact on the Company.
|
(b)
|
The adjustments represent the changes in depreciation expense for the six months ended June 30, 2018 and the year ended December 31, 2017 associated with the change in fair value of the property, plant and equipment recorded in relation to the Acquisition.
|
|
Preliminary fair value
|
|
Estimated weighted average life
|
|
Amortization expense for the
six months ended
June 30, 2018
|
|
Amortization expense for the
year ended
December 31, 2017
|
|||||||
Trademarks and tradenames
|
$
|
7,600
|
|
|
5.0
|
|
|
$
|
760
|
|
|
$
|
1,520
|
|
Technology
|
69,600
|
|
|
4.0
|
|
|
8,700
|
|
|
17,400
|
|
|||
Content
|
1,000
|
|
|
3.0
|
|
|
167
|
|
|
333
|
|
|||
Customer lists
|
40,700
|
|
|
14.7
|
|
|
1,430
|
|
|
2,860
|
|
|||
Total
|
$
|
118,900
|
|
|
|
|
$
|
11,057
|
|
|
$
|
22,113
|
|
|
Less: QuoteWizard historical amortization expense
|
|
|
|
|
$
|
(291
|
)
|
|
$
|
—
|
|
|||
Pro forma adjustments
|
|
|
|
|
$
|
10,766
|
|
|
$
|
22,113
|
|
(d)
|
The adjustments reflect the elimination of interest expense associated with QuoteWizard's revolving credit facility and notes payable to members that were not assumed with the Acquisition, as well as an estimate of interest expense associated with debt issued to finance the Acquisition and related deferred financing costs. A 1/8% variance in interest rates would impact annual interest expense by $156.
|
(e)
|
The adjustments reflect the tax effects of the results of operations of QuoteWizard and the preliminary pro forma adjustments made to the pro forma statements of operations using the Company's statutory tax rates for the year ended December 31, 2017 and the six months ended June 30, 2018 of 40.63% and 27.77%, respectively. QuoteWizard did not pay taxes at the entity level as it is a limited liability corporation classified as a partnership for tax purposes.
|
(f)
|
Adjustments to cash and cash equivalents reflect the preliminary net adjustment to cash in connection with the Acquisition, subject to final working capital adjustments, on a cash-free, debt-free basis.
|
Cash portion of consideration
|
$
|
(299,902
|
)
|
Add: Proceeds from debt to finance the Acquisition
|
125,000
|
|
|
Less: QuoteWizard cash balance
|
(823
|
)
|
|
Less: Estimated financing costs
|
(512
|
)
|
|
Less: Estimated transaction expenses
|
(4,726
|
)
|
|
Total cash and cash equivalents adjustment
|
$
|
(180,963
|
)
|
(g)
|
The adjustment to property, plant and equipment reflects the preliminary estimated fair value adjustment of $124.
|
(h)
|
The adjustment to goodwill reflects the preliminary estimate of the excess of the fair value of the consideration transferred over the estimated fair value of QuoteWizard's identifiable assets acquired and liabilities assumed in the Acquisition. The preliminary adjustment to goodwill is calculated as follows:
|
Estimated fair value
|
$
|
185,468
|
|
Less: QuoteWizard book value of goodwill
|
(1,271
|
)
|
|
Total goodwill adjustment
|
$
|
184,197
|
|
(i)
|
The adjustment to intangible assets, net reflects the preliminary estimate of fair value for the acquired intangible assets in the Acquisition. See pro forma footnote 3 (c) above for information related to the estimated fair value and related amortization expense of the intangible assets. The preliminary adjustment to intangible assets, net is calculated as follows:
|
Estimated fair value
|
$
|
118,900
|
|
Less: QuoteWizard book value of intangible assets, net
|
(3,912
|
)
|
|
Total intangible assets, net adjustment
|
$
|
114,988
|
|
(j)
|
The adjustments to accrued expenses and other current liabilities and other non-current liabilities reflect the removal of QuoteWizard's current and non-current portions of deferred rent as these deferred charges do not meet the definition of a liability assumed in the acquisition method of accounting.
|
(k)
|
The adjustment to contingent consideration reflects the preliminary estimated fair value of the Earnout Payments of $13.9 million. The contingent consideration is included in the preliminary estimated fair value of the consideration transferred in the Acquisition.
|
(l)
|
The adjustment reflects the removal of QuoteWizard's revolving credit facility and notes payable to members that were not assumed with the Acquisition and therefore have been removed from the pro forma balance sheet, as well as $125,000 of proceeds from the Company's revolving credit facility used to finance the Acquisition.
|
(m)
|
The adjustments to prepaid and other current assets and other non-current assets reflect the deferred financing costs of increasing the borrowing capacity on the Company's revolving credit facility in order to finance the Acquisition.
|
(n)
|
The adjustment to additional paid-in capital reflects the elimination of QuoteWizard's historical equity balances.
|
(o)
|
The adjustment to deferred income tax assets and accumulated deficit reflects the estimated transaction expenses of $4,726 that were cash settled upon the closing of the acquisition. These estimated costs have been excluded from the pro forma statements of operations as they reflect charges directly attributable to the Acquisition that will not have an ongoing impact on the Company.
|