|
|
|
ý
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the Quarterly Period Ended September 30, 2017
|
|
Or
|
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from__________to__________
|
|
Delaware
(State or other jurisdiction of
incorporation or organization)
|
|
82-1204801
(I.R.S. Employer
Identification No.)
|
14023 Denver West Parkway, Building 64, Golden, CO 80401
(Address of registrant's principal executive offices)
|
||
(303) 963-7200
(Registrant's telephone number, including area code)
|
Large accelerated filer
o
|
|
Accelerated filer
o
|
|
Non-accelerated filer
o
(Do not check if a smaller
reporting company)
|
|
Smaller reporting
company
o
|
|
Emerging growth
company
ý
|
|
|
Page
Number
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In thousands, except par value amounts)
|
||||||
ASSETS
|
|
|
|
||||
Cash and cash equivalents
|
$
|
59,543
|
|
|
$
|
36,377
|
|
Accounts receivable, net of allowance and reserv
es of $9,839 at September 30, 2017
and $9,177 at December 31, 2016
|
30,684
|
|
|
18,696
|
|
||
Other current assets
|
23,386
|
|
|
8,739
|
|
||
Total current assets
|
113,613
|
|
|
63,812
|
|
||
Property and equipment, net of accumulated depreciation and amortization of $26,503 at September 30, 2017 and $18,077 at December 31, 2016
|
47,635
|
|
|
23,645
|
|
||
Goodwill
|
774,191
|
|
|
170,990
|
|
||
Intangible assets, net
|
343,393
|
|
|
10,792
|
|
||
Other non-current assets
|
72,918
|
|
|
26,278
|
|
||
TOTAL ASSETS
|
$
|
1,351,750
|
|
|
$
|
295,517
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
||||
LIABILITIES:
|
|
|
|
||||
Current portion of long-term debt—related party
|
$
|
—
|
|
|
$
|
2,838
|
|
Accounts payable
|
50,041
|
|
|
11,544
|
|
||
Deferred revenue
|
58,955
|
|
|
18,828
|
|
||
Accrued expenses and other current liabilities
|
90,008
|
|
|
34,438
|
|
||
Total current liabilities
|
199,004
|
|
|
67,648
|
|
||
Long-term debt—related party
|
79,504
|
|
|
47,000
|
|
||
Deferred income taxes
|
5,363
|
|
|
2,228
|
|
||
Other long-term liabilities
|
4,942
|
|
|
2,247
|
|
||
|
|
|
|
||||
Redeemable noncontrolling interests
|
18,844
|
|
|
13,781
|
|
||
|
|
|
|
||||
Commitments and contingencies
|
|
|
|
||||
|
|
|
|
||||
SHAREHOLDERS' EQUITY:
|
|
|
|
||||
Class A common stock, $0.001 par value; authorized 2,000,000 share
s; 61,291 sh
ares issued and outstanding
|
61
|
|
|
—
|
|
||
Class B common stock, $0.001 par value; authorized 1,500,000 shares; 414,754 shares issued and outstanding
|
415
|
|
|
—
|
|
||
Class C common stock, $0.001 par value; authorized 1,500,000
shares; no sha
res issued and outstanding
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
1,094,046
|
|
|
—
|
|
||
Accumulated deficit
|
(63,540
|
)
|
|
—
|
|
||
Invested capital
|
—
|
|
|
154,852
|
|
||
Accumulated other comprehensive income (loss)
|
3,348
|
|
|
(1,721
|
)
|
||
Total ANGI Homeservices Inc. shareholders' equity and invested capital, respectively
|
1,034,330
|
|
|
153,131
|
|
||
Noncontrolling interests
|
9,763
|
|
|
9,482
|
|
||
Total shareholders' equity
|
1,044,093
|
|
|
162,613
|
|
||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
|
$
|
1,351,750
|
|
|
$
|
295,517
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Net (loss) earnings
|
$
|
(72,158
|
)
|
|
$
|
4,468
|
|
|
$
|
(46,296
|
)
|
|
$
|
8,575
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Change in foreign currency translation adjustment
|
3,579
|
|
|
32
|
|
|
5,592
|
|
|
610
|
|
||||
Total other comprehensive income
|
3,579
|
|
|
32
|
|
|
5,592
|
|
|
610
|
|
||||
Comprehensive (loss) income
|
(68,579
|
)
|
|
4,500
|
|
|
(40,704
|
)
|
|
9,185
|
|
||||
Comprehensive loss attributable to noncontrolling interests
|
396
|
|
|
607
|
|
|
879
|
|
|
1,833
|
|
||||
Comprehensive (loss) income attributable to ANGI Homeservices Inc. shareholders
|
$
|
(68,183
|
)
|
|
$
|
5,107
|
|
|
$
|
(39,825
|
)
|
|
$
|
11,018
|
|
|
|
|
|
ANGI Homeservices Inc. Shareholders' Equity and Invested Capital
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||
|
|
|
|
Class A
Common Stock
$0.001
Par Value
|
|
Class B
Common Stock
$0.001
Par Value
|
|
Class C Common Stock
$0.001
Par Value
|
|
|
|
|
|
|
|
|
|
Total
ANGI Homeservices Inc. Shareholders' Equity and Invested Capital
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
|
|
|
|
Total
Shareholders'
Equity
|
|||||||||||||||||||||||||||||||||||
|
Redeemable
Noncontrolling
Interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Invested
Capital
|
|
|
|
Noncontrolling
Interests
|
|
||||||||||||||||||||||||||||
|
|
|
$
|
|
Shares
|
|
$
|
|
Shares
|
|
$
|
|
Shares
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||||
|
|
|
(In thousands)
|
|
|
||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2016
|
$
|
13,781
|
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
154,852
|
|
|
$
|
(1,721
|
)
|
|
$
|
153,131
|
|
|
$
|
9,482
|
|
|
$
|
162,613
|
|
Net (loss) earnings
|
(1,256
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(63,540
|
)
|
|
18,646
|
|
|
—
|
|
|
(44,894
|
)
|
|
(146
|
)
|
|
(45,040
|
)
|
|||||||||||
Other comprehensive income
|
280
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,069
|
|
|
5,069
|
|
|
243
|
|
|
5,312
|
|
|||||||||||
Stock-based compensation expense
|
1,577
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,939
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
96,939
|
|
|
—
|
|
|
96,939
|
|
|||||||||||
Redeemable noncontrolling interests created in acquisitions
|
14,692
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Purchase of redeemable noncontrolling interests
|
(11,991
|
)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||||||
Purchase of noncontrolling interests
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(633
|
)
|
|
(633
|
)
|
|||||||||||
Adjustment of redeemable noncontrolling interests to fair value
|
1,725
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,725
|
)
|
|
—
|
|
|
(1,725
|
)
|
|
—
|
|
|
(1,725
|
)
|
|||||||||||
Net increase in IAC/InterActiveCorp’s investment in HomeAdvisor prior to the Combination
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46,339
|
|
|
—
|
|
|
46,339
|
|
|
—
|
|
|
46,339
|
|
|||||||||||
Contribution of IAC/InterActiveCorp's HomeAdvisor business to ANGI Homeservices Inc. and Combination with Angie's List
|
—
|
|
|
|
61
|
|
|
61,291
|
|
|
415
|
|
|
414,754
|
|
|
—
|
|
|
—
|
|
|
997,107
|
|
|
—
|
|
|
(218,112
|
)
|
|
—
|
|
|
779,471
|
|
|
—
|
|
|
779,471
|
|
|||||||||||
Other
|
36
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
817
|
|
|
817
|
|
|||||||||||
Balance as of September 30, 2017
|
$
|
18,844
|
|
|
|
$
|
61
|
|
|
61,291
|
|
|
$
|
415
|
|
|
414,754
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
1,094,046
|
|
|
$
|
(63,540
|
)
|
|
$
|
—
|
|
|
$
|
3,348
|
|
|
$
|
1,034,330
|
|
|
$
|
9,763
|
|
|
$
|
1,044,093
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Cash flows from operating activities:
|
|
|
|
||||
Net (loss) earnings
|
$
|
(46,296
|
)
|
|
$
|
8,575
|
|
Adjustments to reconcile net (loss) earnings to net cash provided by operating activities:
|
|
|
|
||||
Bad debt expense
|
20,625
|
|
|
12,336
|
|
||
Stock-based compensation expense
|
120,280
|
|
|
6,685
|
|
||
Depreciation
|
9,705
|
|
|
5,824
|
|
||
Amortization of intangibles
|
6,885
|
|
|
2,271
|
|
||
Deferred income taxes
|
(71,446
|
)
|
|
(2,742
|
)
|
||
Other adjustments, net
|
(1,328
|
)
|
|
488
|
|
||
Changes in assets and liabilities, net of effects of acquisitions:
|
|
|
|
||||
Accounts receivable
|
(30,080
|
)
|
|
(20,999
|
)
|
||
Other current assets
|
(5,972
|
)
|
|
(925
|
)
|
||
Accounts payable and other current liabilities
|
41,847
|
|
|
18,278
|
|
||
Income taxes payable
|
22
|
|
|
4,664
|
|
||
Deferred revenue
|
7,788
|
|
|
6,171
|
|
||
Net cash provided by operating activities
|
52,030
|
|
|
40,626
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Acquisitions, net of cash acquired
|
(66,378
|
)
|
|
—
|
|
||
Capital expenditures
|
(16,278
|
)
|
|
(13,742
|
)
|
||
Net cash used in investing activities
|
(82,656
|
)
|
|
(13,742
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from the issuance of related party debt
|
131,359
|
|
|
446
|
|
||
Funds returned from escrow for MyHammer tender offer
|
10,604
|
|
|
—
|
|
||
Transfers from (to) IAC/InterActiveCorp
|
30,216
|
|
|
(26,485
|
)
|
||
Purchase of noncontrolling interests
|
(12,574
|
)
|
|
—
|
|
||
Principal payments on related party debt
|
(104,089
|
)
|
|
—
|
|
||
Other
|
34
|
|
|
—
|
|
||
Net cash provided by (used in) financing activities
|
55,550
|
|
|
(26,039
|
)
|
||
Total cash provided
|
24,924
|
|
|
845
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
(1,758
|
)
|
|
65
|
|
||
Net increase in cash and cash equivalents
|
23,166
|
|
|
910
|
|
||
Cash and cash equivalents at beginning of period
|
36,377
|
|
|
2,462
|
|
||
Cash and cash equivalents at end of period
|
$
|
59,543
|
|
|
$
|
3,372
|
|
|
Angie's List
|
||
|
(In thousands)
|
||
Class A common stock
|
$
|
763,684
|
|
Cash consideration for holders who elected to receive $8.50 in cash per share of Angie's List common stock
|
1,913
|
|
|
Fair value of vested and pro rata portion of unvested stock options attributable to pre-combination services
|
11,749
|
|
|
Fair value of the pro rata portion of unvested restricted stock units attributable to pre-combination services
|
4,038
|
|
|
Total purchase price
|
$
|
781,384
|
|
|
Angie's List
|
||
|
(In thousands)
|
||
Cash and cash equivalents
|
$
|
44,270
|
|
Other current assets
|
10,641
|
|
|
Property and equipment
|
16,341
|
|
|
Goodwill
|
546,851
|
|
|
Intangible assets
|
317,300
|
|
|
Total assets
|
935,403
|
|
|
Deferred revenue
|
(32,130
|
)
|
|
Other current liabilities
|
(46,106
|
)
|
|
Long-term debt - related party
|
(61,498
|
)
|
|
Deferred income taxes
|
(12,933
|
)
|
|
Other long-term liabilities
|
(1,352
|
)
|
|
Net assets acquired
|
$
|
781,384
|
|
|
Angie's List
|
||||
|
(In thousands)
|
|
Weighted-average useful life
(years)
|
||
Indefinite-lived trade names and trademarks
|
$
|
137,000
|
|
|
Indefinite
|
Service providers
|
90,500
|
|
|
3
|
|
Developed technology
|
63,900
|
|
|
6
|
|
Memberships
|
15,900
|
|
|
3
|
|
User base
|
10,000
|
|
|
1
|
|
Total identifiable intangible assets acquired
|
$
|
317,300
|
|
|
|
|
HomeStars
|
||
|
(In thousands)
|
||
Cash and cash equivalents
|
$
|
181
|
|
Other current assets
|
165
|
|
|
Goodwill
|
9,841
|
|
|
Intangible assets
|
6,414
|
|
|
Total assets
|
16,601
|
|
|
Current liabilities
|
(649
|
)
|
|
Other long-term liabilities
|
(1,873
|
)
|
|
Net assets acquired
|
$
|
14,079
|
|
|
HomeStars
|
||||
|
(In thousands)
|
|
Weighted-average useful life
(years)
|
||
Indefinite-lived trade name
|
$
|
2,358
|
|
|
Indefinite
|
Contractor relationships
|
2,435
|
|
|
2
|
|
Developed technology
|
1,522
|
|
|
2
|
|
User base
|
99
|
|
|
1
|
|
Total identifiable intangible assets acquired
|
$
|
6,414
|
|
|
|
|
MyBuilder
|
||
|
(In thousands)
|
||
Cash and cash equivalents
|
$
|
6,004
|
|
Other current assets
|
344
|
|
|
Goodwill
|
38,521
|
|
|
Intangible assets
|
13,490
|
|
|
Total assets
|
58,359
|
|
|
Current liabilities
|
(2,065
|
)
|
|
Other long-term liabilities
|
(2,296
|
)
|
|
Net assets acquired
|
$
|
53,998
|
|
|
MyBuilder
|
||||
|
(In thousands)
|
|
Weighted-average useful life
(years)
|
||
Indefinite-lived trade name
|
$
|
6,245
|
|
|
Indefinite
|
Contractor relationships
|
4,122
|
|
|
2
|
|
Developed technology
|
1,499
|
|
|
2
|
|
User base
|
1,624
|
|
|
1
|
|
Total identifiable intangible assets acquired
|
$
|
13,490
|
|
|
|
|
MyHammer
|
||
|
(In thousands)
|
||
Cash and cash equivalents
|
$
|
4,041
|
|
Other current assets
|
790
|
|
|
Goodwill
|
22,277
|
|
|
Intangible assets
|
8,107
|
|
|
Total assets
|
35,215
|
|
|
Current liabilities
|
(2,642
|
)
|
|
Other long-term liabilities
|
(2,447
|
)
|
|
Net assets acquired
|
$
|
30,126
|
|
|
MyHammer
|
||||
|
(In thousands)
|
|
Weighted-average useful life
(years)
|
||
Indefinite-lived trade name
|
$
|
4,553
|
|
|
Indefinite
|
Contractor relationships
|
1,444
|
|
|
4
|
|
Developed technology
|
1,222
|
|
|
3
|
|
User base
|
888
|
|
|
1
|
|
Total identifiable intangible assets acquired
|
$
|
8,107
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Revenue
|
$
|
251,995
|
|
|
$
|
214,212
|
|
|
$
|
731,920
|
|
|
$
|
607,802
|
|
Net loss attributable to ANGI Homeservices Inc. shareholders
|
$
|
(7,172
|
)
|
|
$
|
(25,159
|
)
|
|
$
|
(2,178
|
)
|
|
$
|
(68,345
|
)
|
Basic and diluted loss per share attributable to ANGI Homeservices Inc. shareholders
|
$
|
(0.02
|
)
|
|
$
|
(0.06
|
)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.16
|
)
|
|
September 30,
2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Goodwill
|
$
|
774,191
|
|
|
$
|
170,990
|
|
Intangible assets with indefinite lives
|
151,735
|
|
|
4,884
|
|
||
Intangible assets with definite lives, net
|
191,658
|
|
|
5,908
|
|
||
Total goodwill and intangible assets, net
|
$
|
1,117,584
|
|
|
$
|
181,782
|
|
|
Balance at
December 31, 2016 |
|
Additions
|
|
Deductions
|
|
Foreign
exchange translation |
|
Balance at September 30,
2017 |
||||||||||
|
(In thousands)
|
||||||||||||||||||
North America
|
$
|
140,930
|
|
|
$
|
556,692
|
|
|
$
|
—
|
|
|
$
|
640
|
|
|
$
|
698,262
|
|
Europe
|
30,060
|
|
|
38,643
|
|
|
—
|
|
|
7,226
|
|
|
75,929
|
|
|||||
Total goodwill
|
$
|
170,990
|
|
|
$
|
595,335
|
|
|
$
|
—
|
|
|
$
|
7,866
|
|
|
$
|
774,191
|
|
|
Balance at
December 31, 2015 |
|
Additions
|
|
(Deductions)
|
|
Foreign
exchange translation |
|
Balance at
December 31, 2016 |
||||||||||
|
(In thousands)
|
||||||||||||||||||
North America
|
$
|
140,930
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
140,930
|
|
Europe
|
9,700
|
|
|
21,985
|
|
|
—
|
|
|
(1,625
|
)
|
|
30,060
|
|
|||||
Total goodwill
|
$
|
150,630
|
|
|
$
|
21,985
|
|
|
$
|
—
|
|
|
$
|
(1,625
|
)
|
|
$
|
170,990
|
|
|
September 30, 2017
|
||||||||||||
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net
|
|
Weighted-average useful life
(years) |
||||||
|
(Dollars in thousands)
|
||||||||||||
Contractor and service provider relationships
|
$
|
99,628
|
|
|
$
|
(2,989
|
)
|
|
$
|
96,639
|
|
|
3.0
|
Technology
|
78,761
|
|
|
(10,714
|
)
|
|
68,047
|
|
|
5.6
|
|||
Memberships
|
15,900
|
|
|
(15
|
)
|
|
15,885
|
|
|
3.0
|
|||
Customer lists and user base
|
13,911
|
|
|
(2,973
|
)
|
|
10,938
|
|
|
1.1
|
|||
Trade names
|
5,612
|
|
|
(5,463
|
)
|
|
149
|
|
|
3.1
|
|||
Total
|
$
|
213,812
|
|
|
$
|
(22,154
|
)
|
|
$
|
191,658
|
|
|
3.8
|
|
December 31, 2016
|
||||||||||||
|
Gross
carrying amount |
|
Accumulated
amortization |
|
Net
|
|
Weighted-average
useful life (years) |
||||||
|
(Dollars in thousands)
|
||||||||||||
Contractor relationships
|
$
|
1,830
|
|
|
$
|
(495
|
)
|
|
$
|
1,335
|
|
|
4.0
|
Technology
|
11,377
|
|
|
(7,834
|
)
|
|
3,543
|
|
|
4.3
|
|||
Customer lists and user base
|
4,136
|
|
|
(3,432
|
)
|
|
704
|
|
|
1.8
|
|||
Trade names
|
5,260
|
|
|
(4,934
|
)
|
|
326
|
|
|
2.9
|
|||
Total
|
$
|
22,603
|
|
|
$
|
(16,695
|
)
|
|
$
|
5,908
|
|
|
3.5
|
•
|
Level 1: Observable inputs obtained from independent sources, such as quoted prices for identical assets and liabilities in active markets.
|
•
|
Level 2: Other inputs, which are observable directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and inputs that are derived principally from or corroborated by observable market data. The fair values of the Company's Level 2 financial assets are primarily obtained from observable market prices for identical underlying securities that may not be actively traded. Certain of these securities may have different market prices from multiple market data sources, in which case an average market price is used.
|
•
|
Level 3: Unobservable inputs for which there is little or no market data and require the Company to develop its own assumptions, based on the best information available in the circumstances, about the assumptions market participants would use in pricing the assets or liabilities.
|
|
September 30, 2017
|
||||||||||||||
|
Quoted market
prices in active markets for identical assets (level 1) |
|
Significant
other observable inputs (level 2) |
|
Significant
unobservable inputs (level 3) |
|
Total
fair value measurements |
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
1,670
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,670
|
|
Treasury discount notes
|
1,199
|
|
|
—
|
|
|
—
|
|
|
1,199
|
|
||||
Certificates of deposit
|
—
|
|
|
6,199
|
|
|
—
|
|
|
6,199
|
|
||||
Total
|
$
|
2,869
|
|
|
$
|
6,199
|
|
|
$
|
—
|
|
|
$
|
9,068
|
|
|
December 31, 2016
|
||||||||||||||
|
Quoted market prices in active markets for identical assets
(level 1) |
|
Significant
other observable inputs (level 2) |
|
Significant
unobservable inputs (level 3) |
|
Total
fair value measurements |
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents:
|
|
|
|
|
|
|
|
||||||||
Money market funds
|
$
|
28,064
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,064
|
|
Total
|
$
|
28,064
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,064
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Carrying
value |
|
Fair
value |
|
Carrying
value |
|
Fair
value |
||||||||
|
(In thousands)
|
||||||||||||||
Current portion of long-term debt—related party
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(2,838
|
)
|
|
$
|
(2,776
|
)
|
Long-term debt—related party, net of current portion
|
(79,504
|
)
|
|
(79,611
|
)
|
|
(47,000
|
)
|
|
(46,324
|
)
|
|
Three Months Ended September 30, 2017
|
||||||
|
Foreign
currency translation adjustment |
|
Accumulated
other comprehensive (loss) income |
||||
|
(In thousands)
|
||||||
Balance at July 1
|
$
|
(230
|
)
|
|
$
|
(230
|
)
|
Other comprehensive income
|
3,578
|
|
|
3,578
|
|
||
Balance at September 30
|
$
|
3,348
|
|
|
$
|
3,348
|
|
|
|
|
|
||||
|
Three Months Ended September 30, 2016
|
||||||
|
Foreign
currency translation adjustment |
|
Accumulated
other comprehensive (loss) income |
||||
|
(In thousands)
|
||||||
Balance at July 1
|
$
|
(486
|
)
|
|
$
|
(486
|
)
|
Other comprehensive income
|
32
|
|
|
32
|
|
||
Balance at September 30
|
$
|
(454
|
)
|
|
$
|
(454
|
)
|
|
Nine Months Ended September 30, 2017
|
||||||
|
Foreign
currency translation adjustment |
|
Accumulated
other comprehensive (loss) income |
||||
|
(In thousands)
|
||||||
Balance at January 1
|
$
|
(1,721
|
)
|
|
$
|
(1,721
|
)
|
Other comprehensive income
|
5,069
|
|
|
5,069
|
|
||
Balance at September 30
|
$
|
3,348
|
|
|
$
|
3,348
|
|
|
|
|
|
||||
|
Nine Months Ended September 30, 2016
|
||||||
|
Foreign
currency translation adjustment |
|
Accumulated
other comprehensive (loss) income |
||||
|
(In thousands)
|
||||||
Balance at January 1
|
$
|
(1,064
|
)
|
|
$
|
(1,064
|
)
|
Other comprehensive income
|
610
|
|
|
610
|
|
||
Balance at September 30
|
$
|
(454
|
)
|
|
$
|
(454
|
)
|
|
Three Months Ended September 30,
|
||||||||||||||
|
2017
|
|
2016
|
||||||||||||
|
Basic
|
|
Diluted
|
|
Basic
|
|
Diluted
|
||||||||
|
(In thousands, except per share data)
|
||||||||||||||
Numerator:
|
|
|
|
|
|
|
|
||||||||
Net (loss) earnings
|
$
|
(72,158
|
)
|
|
$
|
(72,158
|
)
|
|
$
|
4,468
|
|
|
$
|
4,468
|
|
Net loss attributable to noncontrolling interests
|
397
|
|
|
397
|
|
|
607
|
|
|
607
|
|
||||
Net (loss) earnings attributable to ANGI Homeservices Inc. shareholders
|
$
|
(71,761
|
)
|
|
$
|
(71,761
|
)
|
|
$
|
5,075
|
|
|
$
|
5,075
|
|
|
|
|
|
|
|
|
|
||||||||
Denominator:
|
|
|
|
|
|
|
|
||||||||
Weighted average basic shares outstanding
|
415,420
|
|
|
415,420
|
|
|
414,754
|
|
|
414,754
|
|
||||
Dilutive securities including stock appreciation rights, stock options, RSUs and subsidiary denominated equity awards
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Denominator for earnings per share—weighted average shares
(b)
|
415,420
|
|
|
415,420
|
|
|
414,754
|
|
|
414,754
|
|
||||
|
|
|
|
|
|
|
|
||||||||
(Loss) earnings per share attributable to ANGI Homeservices Inc. shareholders:
|
|
|
|
|
|||||||||||
(Loss) earnings per share
|
$
|
(0.17
|
)
|
|
$
|
(0.17
|
)
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
(a)
|
For the three and nine months ended September 30, 2017, the Company had a loss from operations and as a result, approximately
58.3 million
potentially dilutive securities were excluded from computing dilutive earnings per share because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute diluted earnings per share amounts.
|
(b)
|
The Company computed basic and diluted earnings per share for the three and nine months ended September 30, 2016 using the shares issued to IAC for the contribution of the HomeAdvisor business.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
167,104
|
|
|
$
|
125,226
|
|
|
$
|
470,667
|
|
|
$
|
348,287
|
|
Europe
|
14,613
|
|
|
8,334
|
|
|
42,506
|
|
|
26,935
|
|
||||
Total
|
$
|
181,717
|
|
|
$
|
133,560
|
|
|
$
|
513,173
|
|
|
$
|
375,222
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Operating (Loss) Income:
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
(107,687
|
)
|
|
$
|
11,573
|
|
|
$
|
(99,479
|
)
|
|
$
|
23,202
|
|
Europe
|
(4,818
|
)
|
|
(2,730
|
)
|
|
(14,474
|
)
|
|
(5,360
|
)
|
||||
Total
|
$
|
(112,505
|
)
|
|
$
|
8,843
|
|
|
$
|
(113,953
|
)
|
|
$
|
17,842
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Adjusted EBITDA
(a)
:
|
|
|
|
|
|
|
|
||||||||
North America
|
$
|
60
|
|
|
$
|
16,119
|
|
|
$
|
31,356
|
|
|
$
|
35,990
|
|
Europe
|
(2,326
|
)
|
|
(2,133
|
)
|
|
(8,439
|
)
|
|
(3,368
|
)
|
||||
Total
|
$
|
(2,266
|
)
|
|
$
|
13,986
|
|
|
$
|
22,917
|
|
|
$
|
32,622
|
|
(a)
|
The Company’s primary financial measure is Adjusted EBITDA, which is defined as operating income excluding: (1) stock-based compensation expense; (2) depreciation; and (3) acquisition-related items consisting of amortization of intangible assets and impairments of goodwill and intangible assets, if applicable. The Company believes this measure is useful for analysts and investors as this measure allows a more meaningful comparison between our performance and that of our competitors. Moreover, our management uses this measure internally to evaluate the performance of our business as a whole and our individual business segments, and this measure is one of the primary metrics by which our internal budgets are based and by which management is compensated. The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, and we believe that by excluding these items, Adjusted EBITDA corresponds more closely to the cash operating income generated from our business, from which capital investments are made and long-term related party debt is serviced. Adjusted EBITDA has certain limitations in that it does not take into account the impact to ANGI Homeservices Inc.'s statement of operations of certain expenses.
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Capital expenditures:
|
|
|
|
||||
North America
|
$
|
14,472
|
|
|
$
|
12,238
|
|
Europe
|
1,806
|
|
|
1,504
|
|
||
Total
|
$
|
16,278
|
|
|
$
|
13,742
|
|
|
Three Months Ended September 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
North America
|
|
Europe
|
|
Total
|
|
North America
|
|
Europe
|
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Consumer connection revenue
(b)
|
$
|
141,055
|
|
|
$
|
10,001
|
|
|
$
|
151,056
|
|
|
$
|
104,427
|
|
|
$
|
6,447
|
|
|
$
|
110,874
|
|
Membership subscription revenue
|
17,826
|
|
|
4,320
|
|
|
22,146
|
|
|
12,379
|
|
|
1,704
|
|
|
14,083
|
|
||||||
Other revenue
|
8,223
|
|
|
292
|
|
|
8,515
|
|
|
8,420
|
|
|
183
|
|
|
8,603
|
|
||||||
Total
|
$
|
167,104
|
|
|
$
|
14,613
|
|
|
$
|
181,717
|
|
|
$
|
125,226
|
|
|
$
|
8,334
|
|
|
$
|
133,560
|
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
North America
|
|
Europe
|
|
Total
|
|
North America
|
|
Europe
|
|
Total
|
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Consumer connection revenue
(b)
|
$
|
398,218
|
|
|
$
|
29,636
|
|
|
$
|
427,854
|
|
|
$
|
289,952
|
|
|
$
|
21,010
|
|
|
$
|
310,962
|
|
Membership subscription revenue
|
48,947
|
|
|
12,198
|
|
|
61,145
|
|
|
34,774
|
|
|
5,234
|
|
|
40,008
|
|
||||||
Other revenue
|
23,502
|
|
|
672
|
|
|
24,174
|
|
|
23,561
|
|
|
691
|
|
|
24,252
|
|
||||||
Total
|
$
|
470,667
|
|
|
$
|
42,506
|
|
|
$
|
513,173
|
|
|
$
|
348,287
|
|
|
$
|
26,935
|
|
|
$
|
375,222
|
|
(b)
|
Fees paid by services professionals for consumer matches.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(In thousands)
|
||||||||||||||
Revenue
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
164,999
|
|
|
$
|
125,124
|
|
|
$
|
466,134
|
|
|
$
|
347,934
|
|
All other countries
|
16,718
|
|
|
8,436
|
|
|
47,039
|
|
|
27,288
|
|
||||
Total
|
$
|
181,717
|
|
|
$
|
133,560
|
|
|
$
|
513,173
|
|
|
$
|
375,222
|
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Long-lived assets (excluding goodwill and intangible assets)
|
|
|
|
||||
United States
|
$
|
44,027
|
|
|
$
|
21,775
|
|
All other countries
|
3,608
|
|
|
1,870
|
|
||
Total
|
$
|
47,635
|
|
|
$
|
23,645
|
|
|
Three Months Ended September 30, 2017
|
||||||||||||||||||
|
Operating
loss |
|
Stock-based
compensation |
|
Depreciation
|
|
Amortization
of intangibles |
|
Adjusted EBITDA
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
North America
|
$
|
(107,687
|
)
|
|
$
|
103,565
|
|
|
$
|
3,085
|
|
|
$
|
1,097
|
|
|
$
|
60
|
|
Europe
|
(4,818
|
)
|
|
415
|
|
|
406
|
|
|
1,671
|
|
|
(2,326
|
)
|
|||||
Total
|
(112,505
|
)
|
|
$
|
103,980
|
|
|
$
|
3,491
|
|
|
$
|
2,768
|
|
|
$
|
(2,266
|
)
|
|
Interest expense—related party
|
(1,864
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Other income, net
|
1,364
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(113,005
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax benefit
|
40,847
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(72,158
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to noncontrolling interests
|
397
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to ANGI Homeservices Inc. shareholders
|
$
|
(71,761
|
)
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2016
|
||||||||||||||||||
|
Operating
income (loss) |
|
Stock-based
compensation |
|
Depreciation
|
|
Amortization
of intangibles |
|
Adjusted EBITDA
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
North America
|
$
|
11,573
|
|
|
$
|
1,977
|
|
|
$
|
1,944
|
|
|
$
|
625
|
|
|
$
|
16,119
|
|
Europe
|
(2,730
|
)
|
|
414
|
|
|
82
|
|
|
101
|
|
|
(2,133
|
)
|
|||||
Total
|
8,843
|
|
|
$
|
2,391
|
|
|
$
|
2,026
|
|
|
$
|
726
|
|
|
$
|
13,986
|
|
|
Interest expense—related party
|
(156
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Other income, net
|
195
|
|
|
|
|
|
|
|
|
|
|||||||||
Earnings before income taxes
|
8,882
|
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
(4,414
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
4,468
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to noncontrolling interests
|
607
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings attributable to ANGI Homeservices Inc. shareholders
|
$
|
5,075
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2017
|
||||||||||||||||||
|
Operating
loss |
|
Stock-based
compensation |
|
Depreciation
|
|
Amortization
of intangibles |
|
Adjusted EBITDA
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
North America
|
$
|
(99,479
|
)
|
|
$
|
118,961
|
|
|
$
|
8,862
|
|
|
$
|
3,012
|
|
|
$
|
31,356
|
|
Europe
|
(14,474
|
)
|
|
1,319
|
|
|
843
|
|
|
3,873
|
|
|
(8,439
|
)
|
|||||
Total
|
(113,953
|
)
|
|
$
|
120,280
|
|
|
$
|
9,705
|
|
|
$
|
6,885
|
|
|
$
|
22,917
|
|
|
Interest expense—related party
|
(5,538
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Other income, net
|
2,100
|
|
|
|
|
|
|
|
|
|
|||||||||
Loss before income taxes
|
(117,391
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Income tax benefit
|
71,095
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss
|
(46,296
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to noncontrolling interests
|
1,402
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to ANGI Homeservices Inc. shareholders
|
$
|
(44,894
|
)
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||
|
Operating
income (loss) |
|
Stock-based
compensation |
|
Depreciation
|
|
Amortization
of intangibles |
|
Adjusted EBITDA
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
North America
|
$
|
23,202
|
|
|
$
|
5,351
|
|
|
$
|
5,469
|
|
|
$
|
1,968
|
|
|
$
|
35,990
|
|
Europe
|
(5,360
|
)
|
|
1,334
|
|
|
355
|
|
|
303
|
|
|
(3,368
|
)
|
|||||
Total
|
17,842
|
|
|
$
|
6,685
|
|
|
$
|
5,824
|
|
|
$
|
2,271
|
|
|
$
|
32,622
|
|
|
Interest expense—related party
|
(240
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Other expense, net
|
(304
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Earnings before income taxes
|
17,298
|
|
|
|
|
|
|
|
|
|
|||||||||
Income tax provision
|
(8,723
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings
|
8,575
|
|
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to noncontrolling interests
|
1,833
|
|
|
|
|
|
|
|
|
|
|||||||||
Net earnings attributable to ANGI Homeservices Inc. shareholders
|
$
|
10,408
|
|
|
|
|
|
|
|
|
|
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Cash transfers (from) to IAC related to its centrally managed U.S. treasury management function, acquisitions and cash expenses paid by IAC on behalf of HomeAdvisor, net
|
$
|
(80,368
|
)
|
|
$
|
21,094
|
|
Taxes
|
38,162
|
|
|
(1,948
|
)
|
||
Interest income
(a)
|
656
|
|
|
170
|
|
||
Allocation of general and administrative expense
|
(4,789
|
)
|
|
(3,173
|
)
|
||
Net (increase) decrease in IAC’s investment in HomeAdvisor
|
$
|
(46,339
|
)
|
|
$
|
16,143
|
|
(a)
|
Interest expense on long-term debt—related party is not included.
|
|
September 30,
2017 |
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Long-term debt—related party
|
|
|
|
||||
Intercompany note due September 29, 2024
|
$
|
61,498
|
|
|
$
|
—
|
|
Intercompany note due September 29, 2024
|
15,000
|
|
|
—
|
|
||
Promissory note due October 14, 2023
|
—
|
|
|
42,000
|
|
||
Promissory note due August 29, 2018
|
—
|
|
|
5,000
|
|
||
Other
|
3,006
|
|
|
2,838
|
|
||
Total long-term debt—related party
|
79,504
|
|
|
49,838
|
|
||
Less: Current portion of long-term debt—related party
|
—
|
|
|
2,838
|
|
||
Total long-term debt—related party, net of current portion
|
$
|
79,504
|
|
|
$
|
47,000
|
|
|
(In thousands)
|
||
2019
|
$
|
3,006
|
|
2024
|
76,498
|
|
|
Total long-term debt—related party, net of current portion
|
$
|
79,504
|
|
|
September 30,
2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Other current assets:
|
|
|
|
||||
Prepaid expenses
|
$
|
20,324
|
|
|
$
|
6,456
|
|
Other
|
3,062
|
|
|
2,283
|
|
||
Other current assets
|
$
|
23,386
|
|
|
$
|
8,739
|
|
|
September 30,
2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Other non-current assets:
|
|
|
|
||||
Deferred income taxes
|
$
|
72,195
|
|
|
$
|
15,211
|
|
Other
|
723
|
|
|
11,067
|
|
||
Other non-current assets
|
$
|
72,918
|
|
|
$
|
26,278
|
|
•
|
Marketplace (formerly Domestic) Revenue
reflects the domestic HomeAdvisor branded marketplace service. It excludes the other businesses within the North America segment.
|
•
|
Marketplace (formerly Domestic) Service Requests
are fully completed and submitted domestic customer service requests.
|
•
|
Marketplace (formerly Domestic) Paying Service Professionals (or “Marketplace Paying SPs”)
are the number of domestic service professionals that had an active membership and/or paid for consumer matches in the last month of the period.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
||||||||||||||
|
(Amounts in thousands)
|
||||||||||||||||||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
North America
|
$
|
167,104
|
|
|
$
|
41,878
|
|
|
33
|
%
|
|
$
|
125,226
|
|
|
$
|
470,667
|
|
|
$
|
122,380
|
|
|
35
|
%
|
|
$
|
348,287
|
|
Europe
|
14,613
|
|
|
6,279
|
|
|
75
|
%
|
|
8,334
|
|
|
42,506
|
|
|
15,571
|
|
|
58
|
%
|
|
26,935
|
|
||||||
Total Revenue
|
$
|
181,717
|
|
|
$
|
48,157
|
|
|
36
|
%
|
|
$
|
133,560
|
|
|
$
|
513,173
|
|
|
$
|
137,951
|
|
|
37
|
%
|
|
$
|
375,222
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Percentage of Total Revenue:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
North America
|
92
|
%
|
|
|
|
|
|
94
|
%
|
|
92
|
%
|
|
|
|
|
|
93
|
%
|
||||||||||
Europe
|
8
|
%
|
|
|
|
|
|
6
|
%
|
|
8
|
%
|
|
|
|
|
|
7
|
%
|
||||||||||
Total Revenue
|
100
|
%
|
|
|
|
|
|
100
|
%
|
|
100
|
%
|
|
|
|
|
|
100
|
%
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Key metrics:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Marketplace Revenue
|
$
|
156,595
|
|
|
$
|
40,120
|
|
|
34
|
%
|
|
$
|
116,475
|
|
|
$
|
442,024
|
|
|
$
|
118,460
|
|
|
37
|
%
|
|
$
|
323,564
|
|
Marketplace Service Requests
|
5,023
|
|
|
1,339
|
|
|
36
|
%
|
|
3,684
|
|
|
13,902
|
|
|
3,791
|
|
|
37
|
%
|
|
10,111
|
|
||||||
Marketplace Paying SPs
|
172
|
|
|
35
|
|
|
25
|
%
|
|
137
|
|
|
172
|
|
|
35
|
|
|
25
|
%
|
|
137
|
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Cost of revenue
|
$7,999
|
|
$1,173
|
|
17%
|
|
$6,826
|
Percentage of revenue
|
4%
|
|
|
|
|
|
5%
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Cost of revenue
|
$22,391
|
|
$2,826
|
|
14%
|
|
$19,565
|
Percentage of revenue
|
4%
|
|
|
|
|
|
5%
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Selling and marketing expense
|
$130,866
|
|
$50,592
|
|
63%
|
|
$80,274
|
Percentage of revenue
|
72%
|
|
|
|
|
|
60%
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
General and administrative expense
|
$129,088
|
|
$99,579
|
|
337%
|
|
$29,509
|
Percentage of revenue
|
71%
|
|
|
|
|
|
22%
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Product development expense
|
$20,010
|
|
$14,654
|
|
274%
|
|
$5,356
|
Percentage of revenue
|
11%
|
|
|
|
|
|
4%
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Depreciation
|
$3,491
|
|
$1,465
|
|
72%
|
|
$2,026
|
Percentage of revenue
|
2%
|
|
|
|
|
|
2%
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Depreciation
|
$9,705
|
|
$3,881
|
|
67%
|
|
$5,824
|
Percentage of revenue
|
2%
|
|
|
|
|
|
2%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
$
Change
|
|
%
Change
|
|
2016
|
|
2017
|
|
$
Change
|
|
%
Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||||||||||
Operating (loss) income
|
$(112,505)
|
|
$(121,348)
|
|
NM
|
|
$8,843
|
|
$(113,953)
|
|
$(131,795)
|
|
NM
|
|
$17,842
|
Percentage of revenue
|
(62)%
|
|
|
|
|
|
7%
|
|
(22)%
|
|
|
|
|
|
5%
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|||||||||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
|
(Dollars in thousands)
|
|||||||||||||||
Adjusted EBITDA
|
$(2,266)
|
|
$(16,252)
|
|
NM
|
|
$13,986
|
|
$22,917
|
|
$(9,705)
|
|
(30)%
|
|
$32,622
|
|
Percentage of revenue
|
(1)%
|
|
|
|
|
|
10%
|
|
4%
|
|
|
|
|
|
9
|
%
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Interest expense—related party
|
$1,864
|
|
$1,708
|
|
1095%
|
|
$156
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Interest expense—related party
|
$5,538
|
|
$5,298
|
|
2208%
|
|
$240
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Other income, net
|
$1,364
|
|
$1,169
|
|
599%
|
|
$195
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Other income (expense), net
|
$2,100
|
|
$2,404
|
|
NM
|
|
$(304)
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Income tax benefit (provision)
|
$40,847
|
|
$45,261
|
|
NM
|
|
$(4,414)
|
Effective income tax rate
|
36%
|
|
|
|
|
|
50%
|
|
Three Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Net loss attributable to noncontrolling interests
|
$397
|
|
$(210)
|
|
(35)%
|
|
$607
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
$ Change
|
|
% Change
|
|
2016
|
|
(Dollars in thousands)
|
||||||
Net loss attributable to noncontrolling interests
|
$1,402
|
|
$(431)
|
|
(24)%
|
|
$1,833
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
|
(In thousands)
|
||||||
Cash and cash equivalents:
|
|
|
|
|
||||
United States
(a)
|
|
$
|
55,507
|
|
|
$
|
4
|
|
All other countries
(b) (c)
|
|
4,036
|
|
|
36,373
|
|
||
Total cash and cash equivalents
|
|
$
|
59,543
|
|
|
$
|
36,377
|
|
|
|
|
|
|
||||
Long-term debt—related party
|
|
|
|
|
||||
Intercompany note due September 29, 2024
|
|
$
|
61,498
|
|
|
$
|
—
|
|
Intercompany note due September 29, 2024
|
|
15,000
|
|
|
—
|
|
||
Promissory note due October 14, 2023
|
|
—
|
|
|
42,000
|
|
||
Promissory note due August 29, 2018
|
|
—
|
|
|
5,000
|
|
||
Other
|
|
3,006
|
|
|
2,838
|
|
||
Total long-term debt—related party
|
|
79,504
|
|
|
49,838
|
|
||
Less: Current portion of long-term debt—related party
|
|
—
|
|
|
2,838
|
|
||
Total long-term debt—related party, net of current portion
|
|
$
|
79,504
|
|
|
$
|
47,000
|
|
(a)
|
Domestically, cash equivalents primarily consist of certificates of deposit and treasury discount notes. Prior to the Combination, domestically, we participated in IAC’s centrally managed U.S. treasury management function in which IAC swept domestic cash of HomeAdvisor (US).
|
(b)
|
Internationally, cash equivalents primarily consist of AAA rated government money market funds.
|
(c)
|
If needed for our U.S. operations, most of the cash and cash equivalents held by the Company's foreign subsidiaries could be repatriated; however, under current law, would be subject to U.S. federal and state income taxes. We have not provided for any such tax because the Company currently does not anticipate a need to repatriate these funds to finance our U.S. operations and it is the Company's intent to indefinitely reinvest these funds outside of the U.S.
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
(In thousands)
|
||||||
Net cash provided by (used in):
|
|
|
|
||||
Operating activities
|
$
|
52,030
|
|
|
$
|
40,626
|
|
Investing activities
|
(82,656
|
)
|
|
(13,742
|
)
|
||
Financing activities
|
55,550
|
|
|
(26,039
|
)
|
|
Payments due by period
|
||||||||||||||||||
|
Less than
1 year |
|
1 to 3
years |
|
3 to 5
years |
|
More than
5 years |
|
Total
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Long-term debt—related party
(a)
|
$
|
3,475
|
|
|
$
|
10,345
|
|
|
$
|
6,953
|
|
|
$
|
83,460
|
|
|
$
|
104,233
|
|
Operating leases
(b)
|
9,786
|
|
|
24,113
|
|
|
17,734
|
|
|
33,933
|
|
|
85,566
|
|
|||||
Purchase obligations
(c)
|
509
|
|
|
89
|
|
|
—
|
|
|
—
|
|
|
598
|
|
|||||
Total contractual obligations
(d)
|
$
|
13,770
|
|
|
$
|
34,547
|
|
|
$
|
24,687
|
|
|
$
|
117,393
|
|
|
$
|
190,397
|
|
(a)
|
Long-term debt—related party consists of intercompany notes issued to IAC which bear interest at both variable and fixed rates. Long-term debt—related party at September 30, 2017 consists of $76.7 million, which bear interest at variable rates, and $2.8 million, which bears interest at a fixed rate. The variable rate debt bears interest at LIBOR plus 3.25% per annum, or, in the case of amounts denominated in a foreign currency, the applicable foreign benchmark rate plus 3.25% per annum, or 4.48%, at September 30, 2017. The amount of interest ultimately paid on the variable rate debt may differ based on changes in interest rates. See "
Note 10— Related Party Transactions with IAC
" to the consolidated and combined financial statements included in "
Item 1. Consolidated and Combined Financial Statements
" for additional information on Long-term debt—related party. On November 1, 2017, ANGI Homeservices entered into a credit agreement which provides for a five-year term loan A facility of $275 million. The Term Loan currently bears interest at LIBOR plus 200 basis points. The Term Loan is sensitive to changes in interest rates. See "
Note 12—Subsequent Event
" to the consolidated and combined financial statements included in "
Item 1. Consolidated and Combined Financial Statements
" for additional information on this new long-term debt arrangement.
|
(b)
|
We lease office space, data center facilities and equipment used in connection with our operations under various operating leases, the majority of which contain escalation clauses. In March 2017, we entered into a new 10.5 year lease for our call center in New York and a new 10.5 year lease for our corporate headquarters in Denver, Colorado.
|
(c)
|
Purchase obligations primarily consist of advertising commitments.
|
(d)
|
We have excluded $1.3 million in unrecognized tax benefits from the table above as we are unable to make a reasonably reliable estimate of the period in which these liabilities might be paid. For additional information on income taxes, see "
Note 2—Income Taxes
" to the consolidated and combined financial statements included in "
Item 1. Consolidated and Combined Financial Statements
."
|
Exhibit Number
|
|
|
Description
|
|
Location
|
|
2.1
|
|
|
|
Agreement and Plan of Merger, dated as of May 1, 2017, as amended by Amendment No. 1 to the Agreement and Plan of Merger, dated as of August 26, 2017, by and among Angie's List, Inc., IAC/InterActiveCorp, ANGI Homeservices Inc. and Casa Merger Sub, Inc.
|
|
|
3.1
|
|
|
|
Amended and Restated Certificate of Incorporation of ANGI Homeservices Inc.
|
|
|
3.2
|
|
|
|
Amended and Restated Bylaws of ANGI Homeservices Inc.
|
|
|
4.1
|
|
|
|
Investor Rights Agreement, dated as of September 29, 2017, by and between ANGI Homeservices Inc. and IAC/InterActiveCorp.
|
|
|
10.1
|
|
|
|
Contribution Agreement, dated as of September 29, 2017, by and between ANGI Homeservices Inc. and IAC/InterActiveCorp.(1)
|
|
|
10.2
|
|
|
|
Services Agreement, dated as of September 29, 2017, by and between ANGI Homeservices Inc. and IAC/InterActiveCorp.(1)
|
|
|
10.3
|
|
|
|
Tax Sharing Agreement, dated as of September 29, 2017, by and between ANGI Homeservices Inc. and IAC/InterActiveCorp.
|
|
|
10.4
|
|
|
|
Employee Matters Agreement, dated as of September 29, 2017, by and between ANGI Homeservices Inc. and IAC/InterActiveCorp. (1)
|
|
|
10.5
|
|
|
|
Intercompany Note, dated as of September 29, 2017, by and between ANGI Homeservices Inc. and IAC Group, LLC. (1)
|
|
|
10.6
|
|
|
|
Intercompany Note, dated as of September 29, 2017, by and between ANGI Homeservices Inc. and IAC Group, LLC. (1)
|
|
|
10.7
|
|
|
|
ANGI Homeservices Inc. 2017 Stock and Annual Incentive Plan. (2)
|
|
|
|
|
|
Form of Notice and Terms and Conditions for Restricted Stock Units granted under the ANGI Homeservices Inc. 2017 Stock and Annual Incentive Plan. (2)(3)
|
|
|
|
|
|
|
Form of Notice and Terms and Conditions for Stock Options granted under the ANGI Homeservices Inc. 2017 Stock and Annual Incentive Plan. (2)(3)
|
|
|
|
10.10
|
|
|
|
Form of Terms and Conditions for Stock Appreciation Rights granted under the ANGI Homeservices Inc. 2017 Stock and Annual Incentive Plan. (2)
|
|
|
10.11
|
|
|
|
Employment Agreement between Chris Terrill and ANGI Homeservices Inc., dated as of September 28, 2017. (2)
|
|
|
10.12
|
|
|
|
Employment Agreement between William B. Ridenour and ANGI Homeservices Inc., dated as of August 24, 2017. (2)
|
|
|
10.13
|
|
|
|
Employment Agreement between Craig Smith and ANGI Homeservices Inc., dated as of August 24, 2017. (2)
|
|
|
10.14
|
|
|
|
Employment Agreement between Allison Lowrie and ANGI Homeservices Inc., dated as of August 24, 2017. (2)
|
|
|
|
|
|
Certification of the Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (3)
|
|
|
|
|
|
|
Certification of the Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. (3)
|
|
|
|
|
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (4)
|
|
|
|
|
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. (4)
|
|
|
(1)
|
Annexes, schedules and/or exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Registrant agrees to furnish supplementally a copy of any omitted attachment to the SEC on a confidential basis upon request.
|
(2)
|
Reflects management contracts and management and director compensatory plans.
|
(3)
|
Filed herewith.
|
(4)
|
Furnished herewith.
|
Dated:
|
November 9, 2017
|
|
|
|
|
|
ANGI Homeservices Inc.
|
||
|
|
|
|
|
|
|
By:
|
|
/s/ GLENN H. SCHIFFMAN
|
|
|
|
|
Glenn H. Schiffman
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
Signature
|
Title
|
|
Date
|
|
|
|
|
/s/ GLENN H. SCHIFFMAN
|
Chief Financial Officer
|
|
November 9, 2017
|
Glenn H. Schiffman
|
|
|
|
Award Recipient:
|
[NAME]
|
Award:
|
[NUMBER] restricted stock units (“RSUs”) under the ANGI Homeservices Inc. 2017 Stock and Annual Incentive Plan (the “2017 Plan”). Capitalized terms used (but not defined) in this Award Notice shall have the meanings set forth in the 2017 Plan.
|
Award Date:
|
[DATE] (the “Award Date”)
|
Vesting Schedule:
|
Subject to your continued employment with ANGI Homeservices Inc. or and of its Subsidiaries, your RSU award shall, subject to the provisions of the 2017 Plan, [VESTING SCHEUDLE].
|
Impact of a Termination of Employment:
|
Except as otherwise provided in the 2017 Plan or the attached Terms and Conditions, upon a termination of your employment or your resignation for any reason, any and all unvested RSUs then underlying your RSU award will be forfeited and canceled in their entirety.
|
Terms and Conditions:
|
Your RSU award is subject to the attached Terms and Conditions and to the 2017 Plan, which are incorporated herein by reference. Copies of these documents are also available upon request from ANGI Homeservices Inc. Human Resources.
Without a complete review of these documents, you will not have a full understanding of all the material terms of your RSU award.
|
Award Recipient:
|
[NAME]
|
Award:
|
Stock options to acquire [NUMBER]
shares of ANGI Homeservices Inc. common stock at an exercise price of $[EXERCISE PRICE]
per share (“Stock Options”) under the ANGI Homeservices Inc. 2017 Stock and Annual Incentive Plan (the “2017 Plan”). Capitalized terms used (but not defined) in this Award Notice shall have the meanings set forth in the 2017 Plan.
|
Award Date:
|
[DATE] (the “Award Date”)
|
Vesting Schedule:
|
Subject to your continued employment with ANGI Homeservices Inc. or any of its Subsidiaries, your Stock Options shall, subject to the provisions of the 2017 Plan, [VESTING SCHEDULE].
|
Expiration Date:
|
Except as otherwise provided in the 2017 Plan or the attached Terms and Conditions, once vested, your Stock Options will expire upon the earlier of: (i) the 90th day following a Termination of Employment for any reason other than death, Disability, Retirement or Cause, (ii) the one-year anniversary of a Termination of Employment due to death, Disability or Retirement, (iii) a Termination of Employment for Cause or (iv) the ten year anniversary of your Award Date,
Vested Stock Options not exercised before the applicable date set forth above will be forfeited and canceled in their entirety.
|
Impact of a Termination of Employment:
|
Except as otherwise provided in the 2017 Plan or the attached Terms and Conditions, upon a Termination of Employment: (i) your unvested Stock Options will be forfeited and canceled in their entirety and (ii) as described above, you will have a limited period to exercise your vested Stock Options.
|
Terms and Conditions:
|
Your Stock Options are subject to the attached Terms and Conditions hereto and to the 2017 Plan, which are incorporated herein by reference. Copies of these documents are available upon request from ANGI Homeservices Inc. Human Resources Department.
Without a complete review of these documents, you will not have a full understanding of all the material terms of your Stock Options.
|
1.
|
I have reviewed this report on Form 10-Q for the fiscal quarter ended September 30, 2017 of ANGI Homeservices Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
|
a)
|
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
c)
|
disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a)
|
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
Dated:
|
November 9, 2017
|
|
/s/ CHRIS TERRILL
Chris Terrill
Chief Executive Officer |
1.
|
I have reviewed this report on Form 10-Q for the fiscal quarter ended September 30, 2017 of ANGI Homeservices Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
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a)
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designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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c)
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disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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Dated:
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November 9, 2017
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/s/ GLENN H. SCHIFFMAN
Glenn H. Schiffman
Chief Financial Officer |
(1)
|
the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017 of ANGI Homeservices Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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Dated:
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November 9, 2017
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/s/ CHRIS TERRILL
Chris Terrill
Chief Executive Officer |
(1)
|
the Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2017 of ANGI Homeservices Inc. (the "Report") which this statement accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)); and
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Dated:
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November 9, 2017
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/s/ GLENN H. SCHIFFMAN
Glenn H. Schiffman
Chief Financial Officer |