UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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): January 22, 2019
IAC/INTERACTIVECORP
(Exact name of registrant as specified in charter)
Delaware (State or other jurisdiction of incorporation) | 0-20570 (Commission File Number) | 59-2712887 (IRS Employer Identification No.) |
555 West 18th Street, New York, NY (Address of principal executive offices) | 10011 (Zip Code) |
Registrant's telephone number, including area code: (212) 314-7300
(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:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | 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 o
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. o
ITEM 7.01 REGULATION FD DISCLOSURE.
During the quarter ended December 31, 2018, IAC/InterActiveCorp (the “Company” or the “Registrant”) realigned its reportable segments as follows:
• | the Match Group, ANGI Homeservices and Applications segments remain unchanged; |
• | Vimeo is now reported as its own segment (it was previously included in the Video segment, which has been eliminated); |
• | Dotdash is now reported as its own segment (it was previously included in the Publishing segment, which has been eliminated); and |
• | the Company's Other segment has been renamed, Emerging & Other, and the businesses previously included in the Video segment (other than Vimeo) and the Publishing segment (other than Dotdash) are now included in the Emerging & Other segment. |
Attached and incorporated herein by reference as Exhibit 99.1 is certain supplemental financial information reflecting the realignment of the Company’s reportable segments described above. Exhibit 99.1 is being furnished by the Registrant pursuant to Regulation FD.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
Exhibit No. | Description | |
Supplemental financial information. | ||
2
SIGNATURES
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.
IAC/INTERACTIVECORP | |||
By: | /s/ GLENN H. SCHIFFMAN | ||
Name: | Glenn H. Schiffman | ||
Title: | Executive Vice President and Chief Financial Officer | ||
Date: January 22, 2019
3
Exhibit 99.1
The tables below reflect the realignment of the Company's reportable segments described in Item 7.01 of this Form 8-K.
2016 | 2017 | 2018 | |||||||||||||||||||||||||||||||||
FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | |||||||||||||||||||||||||||
(Unaudited; in thousands) | |||||||||||||||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||||||||
Match Group | $ | 1,118,110 | $ | 298,764 | $ | 309,572 | $ | 343,418 | $ | 378,907 | $ | 1,330,661 | $ | 407,367 | $ | 421,196 | $ | 443,943 | |||||||||||||||||
ANGI Homeservices | 498,890 | 150,745 | 180,711 | 181,717 | 223,213 | 736,386 | 255,311 | 294,822 | 303,116 | ||||||||||||||||||||||||||
Vimeo | 78,805 | 21,557 | 22,967 | 24,272 | 34,536 | 103,332 | 35,568 | 39,560 | 40,304 | ||||||||||||||||||||||||||
Dotdash | 77,913 | 17,594 | 20,660 | 22,271 | 30,365 | 90,890 | 30,031 | 30,757 | 30,053 | ||||||||||||||||||||||||||
Applications | 604,140 | 158,897 | 143,969 | 136,333 | 138,799 | 577,998 | 131,987 | 143,074 | 153,973 | ||||||||||||||||||||||||||
Emerging & Other | 762,609 | 113,486 | 89,679 | 120,550 | 144,874 | 468,589 | 134,885 | 129,796 | 133,345 | ||||||||||||||||||||||||||
Inter-segment eliminations | (585 | ) | (210 | ) | (171 | ) | (127 | ) | (109 | ) | (617 | ) | (74 | ) | (83 | ) | (142 | ) | |||||||||||||||||
Total | $ | 3,139,882 | $ | 760,833 | $ | 767,387 | $ | 828,434 | $ | 950,585 | $ | 3,307,239 | $ | 995,075 | $ | 1,059,122 | $ | 1,104,592 | |||||||||||||||||
Operating Income (Loss): | |||||||||||||||||||||||||||||||||||
Match Group | $ | 315,549 | $ | 58,871 | $ | 82,975 | $ | 91,008 | $ | 127,663 | $ | 360,517 | $ | 112,233 | $ | 150,165 | $ | 139,895 | |||||||||||||||||
ANGI Homeservices (a) | 25,363 | 1,388 | (4,141 | ) | (112,505 | ) | (33,918 | ) | (149,176 | ) | (10,756 | ) | 23,262 | 33,515 | |||||||||||||||||||||
Vimeo | (25,350 | ) | (7,080 | ) | (6,401 | ) | (5,788 | ) | (8,059 | ) | (27,328 | ) | (9,748 | ) | (9,593 | ) | (6,161 | ) | |||||||||||||||||
Dotdash | (248,705 | ) | (11,321 | ) | (7,904 | ) | (1,407 | ) | 4,938 | (15,694 | ) | 3,191 | 1,339 | 2,416 | |||||||||||||||||||||
Applications | 109,663 | 32,768 | 39,134 | 29,386 | 28,888 | 130,176 | 25,461 | 33,077 | 33,041 | ||||||||||||||||||||||||||
Emerging & Other | (99,696 | ) | (8,597 | ) | 3,619 | 11,063 | 11,327 | 17,412 | 6,493 | 6,079 | 10,893 | ||||||||||||||||||||||||
Corporate | (109,449 | ) | (28,969 | ) | (31,647 | ) | (30,346 | ) | (36,479 | ) | (127,441 | ) | (36,924 | ) | (35,892 | ) | (40,767 | ) | |||||||||||||||||
Total | $ | (32,625 | ) | $ | 37,060 | $ | 75,635 | $ | (18,589 | ) | $ | 94,360 | $ | 188,466 | $ | 89,950 | $ | 168,437 | $ | 172,832 | |||||||||||||||
Stock-based compensation expense: | |||||||||||||||||||||||||||||||||||
Match Group | $ | 52,370 | $ | 18,024 | $ | 15,654 | $ | 19,949 | $ | 15,463 | $ | 69,090 | $ | 16,963 | $ | 16,706 | $ | 16,141 | |||||||||||||||||
ANGI Homeservices | 8,916 | 4,461 | 11,839 | 103,980 | 28,950 | 149,230 | 24,906 | 22,053 | 22,474 | ||||||||||||||||||||||||||
Vimeo | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Dotdash | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Applications | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Emerging & Other | 1,258 | 1,729 | 133 | 134 | 134 | 2,130 | 131 | 1,293 | 323 | ||||||||||||||||||||||||||
Corporate | 42,276 | 9,761 | 11,289 | 10,409 | 12,709 | 44,168 | 17,082 | 17,509 | 16,425 | ||||||||||||||||||||||||||
Total | $ | 104,820 | $ | 33,975 | $ | 38,915 | $ | 134,472 | $ | 57,256 | $ | 264,618 | $ | 59,082 | $ | 57,561 | $ | 55,363 | |||||||||||||||||
2016 | 2017 | 2018 | |||||||||||||||||||||||||||||||||
FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | |||||||||||||||||||||||||||
(Unaudited; in thousands) | |||||||||||||||||||||||||||||||||||
Depreciation: | |||||||||||||||||||||||||||||||||||
Match Group | $ | 27,726 | $ | 7,589 | $ | 7,883 | $ | 8,147 | $ | 8,994 | $ | 32,613 | $ | 8,147 | $ | 8,399 | $ | 8,513 | |||||||||||||||||
ANGI Homeservices | 8,419 | 2,996 | 3,218 | 3,491 | 4,838 | 14,543 | 6,184 | 5,886 | 6,100 | ||||||||||||||||||||||||||
Vimeo | 1,085 | 358 | 364 | 347 | 339 | 1,408 | 335 | 321 | 291 | ||||||||||||||||||||||||||
Dotdash | 2,775 | 833 | 437 | 654 | 331 | 2,255 | 249 | 246 | 246 | ||||||||||||||||||||||||||
Applications | 5,095 | 1,011 | 921 | 1,155 | 776 | 3,863 | 755 | 773 | 617 | ||||||||||||||||||||||||||
Emerging & Other | 12,675 | 2,208 | 681 | 602 | 574 | 4,065 | 753 | 349 | 294 | ||||||||||||||||||||||||||
Corporate | 13,901 | 4,893 | 4,835 | 2,867 | 2,923 | 15,518 | 2,834 | 2,831 | 2,864 | ||||||||||||||||||||||||||
Total | $ | 71,676 | $ | 19,888 | $ | 18,339 | $ | 17,263 | $ | 18,775 | $ | 74,265 | $ | 19,257 | $ | 18,805 | $ | 18,925 | |||||||||||||||||
Amortization of intangibles: | |||||||||||||||||||||||||||||||||||
Match Group | $ | 16,932 | $ | 403 | $ | 404 | $ | 401 | $ | 260 | $ | 1,468 | $ | 242 | $ | 237 | $ | 435 | |||||||||||||||||
ANGI Homeservices | 3,153 | 1,367 | 2,750 | 2,768 | 16,376 | 23,261 | 16,306 | 15,778 | 15,611 | ||||||||||||||||||||||||||
Vimeo | 4,176 | 313 | 313 | 313 | 1,374 | 2,313 | 1,629 | 1,641 | 1,641 | ||||||||||||||||||||||||||
Dotdash | 30,754 | 4,848 | 4,567 | 250 | 1,011 | 10,676 | 409 | 409 | 409 | ||||||||||||||||||||||||||
Applications | 5,483 | 606 | 491 | 536 | 537 | 2,170 | 536 | 1,554 | 1,331 | ||||||||||||||||||||||||||
Emerging & Other | 18,928 | 1,624 | 99 | 98 | 434 | 2,255 | 831 | 569 | 725 | ||||||||||||||||||||||||||
Corporate | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Total | $ | 79,426 | $ | 9,161 | $ | 8,624 | $ | 4,366 | $ | 19,992 | $ | 42,143 | $ | 19,953 | $ | 20,188 | $ | 20,152 | |||||||||||||||||
Acquisition-related contingent consideration fair value adjustments: | |||||||||||||||||||||||||||||||||||
Match Group | $ | (9,197 | ) | $ | 1,344 | $ | 2,994 | $ | 59 | $ | 856 | $ | 5,253 | $ | 156 | $ | 54 | $ | 55 | ||||||||||||||||
ANGI Homeservices | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Vimeo | (192 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Dotdash | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Applications | 12,035 | 548 | — | — | — | 548 | — | — | — | ||||||||||||||||||||||||||
Emerging & Other | (91 | ) | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||
Corporate | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Total | $ | 2,555 | $ | 1,892 | $ | 2,994 | $ | 59 | $ | 856 | $ | 5,801 | $ | 156 | $ | 54 | $ | 55 | |||||||||||||||||
Goodwill impairment: | |||||||||||||||||||||||||||||||||||
Match Group | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
ANGI Homeservices | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Vimeo | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Dotdash (b) | 198,330 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Applications | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Emerging & Other (b) | 77,037 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Corporate | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Total | $ | 275,367 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||
2016 | 2017 | 2018 | |||||||||||||||||||||||||||||||||
FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | |||||||||||||||||||||||||||
(Unaudited; in thousands) | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA: | |||||||||||||||||||||||||||||||||||
Match Group | $ | 403,380 | $ | 86,231 | $ | 109,910 | $ | 119,564 | $ | 153,236 | $ | 468,941 | $ | 137,741 | $ | 175,561 | $ | 165,039 | |||||||||||||||||
ANGI Homeservices (a) | 45,851 | 10,212 | 13,666 | (2,266 | ) | 16,246 | 37,858 | 36,640 | 66,979 | 77,700 | |||||||||||||||||||||||||
Vimeo | (20,281 | ) | (6,409 | ) | (5,724 | ) | (5,128 | ) | (6,346 | ) | (23,607 | ) | (7,784 | ) | (7,631 | ) | (4,229 | ) | |||||||||||||||||
Dotdash | (16,846 | ) | (5,640 | ) | (2,900 | ) | (503 | ) | 6,280 | (2,763 | ) | 3,849 | 1,994 | 3,071 | |||||||||||||||||||||
Applications | 132,276 | 34,933 | 40,546 | 31,077 | 30,201 | 136,757 | 26,752 | 35,404 | 34,989 | ||||||||||||||||||||||||||
Emerging & Other | 10,111 | (3,036 | ) | 4,532 | 11,897 | 12,469 | 25,862 | 8,208 | 8,290 | 12,235 | |||||||||||||||||||||||||
Corporate | (53,272 | ) | (14,315 | ) | (15,523 | ) | (17,070 | ) | (20,847 | ) | (67,755 | ) | (17,008 | ) | (15,552 | ) | (21,478 | ) | |||||||||||||||||
Total | $ | 501,219 | $ | 101,976 | $ | 144,507 | $ | 137,571 | $ | 191,239 | $ | 575,293 | $ | 188,398 | $ | 265,045 | $ | 267,327 | |||||||||||||||||
__________________________________________________________________
(a) | In connection with the completion of the HomeAdvisor and Angie's List combination on September 29, 2017 (the "Combination"): |
Q3 2017 operating loss of $112.5 million at ANGI Homeservices reflects: (i) $96.9 million in stock-based compensation expense related primarily to: (A) a modification charge arising from the conversion of vested HomeAdvisor equity awards into ANGI Homeservices equity awards in connection with the Combination and (B) expense related to the acceleration of converted ANGI Homeservices equity awards held by Angie’s List employees upon the termination of their employment in connection with the Combination and (ii) $26.0 million in costs related to the Combination.
Q4 2017, Q1 2018, Q2 2018 and Q3 2018 operating (loss) income of $(33.9) million, $(10.8) million, $23.3 million and $33.5 million, respectively, at ANGI Homeservices includes $25.1 million, $19.1 million, $16.7 million and $16.0 million, respectively, in stock-based compensation expense related primarily to: (i) a modification charge related to previously issued and unvested HomeAdvisor equity awards and the expense related to the conversion of previously issued and unvested Angie's List equity awards, both in connection with the Combination, and (ii) expense related to the acceleration of converted ANGI Homeservices equity awards held by Angie's List employees upon the termination of their employment in connection with the Combination, as well as $22.0 million, $5.3 million, $2.6 million and $1.0 million, respectively, in costs related to the Combination (including $7.6 million, $2.8 million, $1.8 million and $0.7 million, respectively, of deferred revenue write-offs).
Operating income (loss) and Adjusted EBITDA for FY 2016, Q2 2017 and FY 2017 will not agree to the ANGI Homeservices financial segment information on a standalone basis due to a $1.3 million accrual that was recorded retrospectively in Q3 2016 as the standalone HomeAdvisor combined financial statements were prepared. This accrual was recorded in IAC’s consolidated financial statements in Q2 2017.
(b) | Prior to the fourth quarter of 2018, IAC Publishing was a reportable segment consisting of one operating segment and one reporting unit. In the fourth quarter of 2018, IAC Publishing was split into two new operating segments and reporting units: Dotdash and Ask Media Group (included in the Emerging & Other segment). The 2016 goodwill impairment of IAC Publishing was allocated to these two reporting units based upon their relative fair values as of October 1, 2018. |
Reconciliation of net (loss) earnings attributable to IAC/InterActiveCorp (“IAC”) shareholders to operating income (loss) to Adjusted EBITDA:
2016 | 2017 | 2018 | |||||||||||||||||||||||||||||||||
FY | Q1 | Q2 | Q3 | Q4 | FY | Q1 | Q2 | Q3 | |||||||||||||||||||||||||||
(Unaudited; in thousands) | |||||||||||||||||||||||||||||||||||
Net (loss) earnings attributable to IAC shareholders | $ | (41,280 | ) | $ | 26,209 | $ | 66,268 | $ | 179,643 | $ | 32,804 | $ | 304,924 | $ | 71,082 | $ | 218,353 | $ | 145,774 | ||||||||||||||||
Add back: | |||||||||||||||||||||||||||||||||||
Net earnings (loss) attributable to noncontrolling interests | 25,129 | 2,254 | 14,289 | 45,996 | (9,455 | ) | 53,084 | 16,757 | 62,501 | 25,803 | |||||||||||||||||||||||||
Income tax (benefit) provision | (64,934 | ) | (23,909 | ) | (19,420 | ) | (279,480 | ) | 31,759 | (291,050 | ) | (29,013 | ) | 31,368 | (18,242 | ) | |||||||||||||||||||
Other (income) expense, net | (60,650 | ) | 7,714 | (10,230 | ) | 10,216 | 8,513 | 16,213 | 4,619 | (171,141 | ) | (8,113 | ) | ||||||||||||||||||||||
Interest expense | 109,110 | 24,792 | 24,728 | 25,036 | 30,739 | 105,295 | 26,505 | 27,356 | 27,610 | ||||||||||||||||||||||||||
Operating (loss) income | (32,625 | ) | 37,060 | 75,635 | (18,589 | ) | 94,360 | 188,466 | 89,950 | 168,437 | 172,832 | ||||||||||||||||||||||||
Stock-based compensation expense | 104,820 | 33,975 | 38,915 | 134,472 | 57,256 | 264,618 | 59,082 | 57,561 | 55,363 | ||||||||||||||||||||||||||
Depreciation | 71,676 | 19,888 | 18,339 | 17,263 | 18,775 | 74,265 | 19,257 | 18,805 | 18,925 | ||||||||||||||||||||||||||
Amortization of intangibles | 79,426 | 9,161 | 8,624 | 4,366 | 19,992 | 42,143 | 19,953 | 20,188 | 20,152 | ||||||||||||||||||||||||||
Acquisition-related contingent consideration fair value adjustments | 2,555 | 1,892 | 2,994 | 59 | 856 | 5,801 | 156 | 54 | 55 | ||||||||||||||||||||||||||
Goodwill impairment | 275,367 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 501,219 | $ | 101,976 | $ | 144,507 | $ | 137,571 | $ | 191,239 | $ | 575,293 | $ | 188,398 | $ | 265,045 | $ | 267,327 | |||||||||||||||||
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 (i) amortization of intangible assets and impairments of goodwill and intangible assets, if applicable, and (ii) gains and losses recognized on changes in the fair value of contingent consideration arrangements. 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 businesses, and this measure is one of the primary metrics on 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. Adjusted EBITDA has certain limitations in that it does not take into account the impact to IAC's statement of operations of certain expenses. The information presented above should be read in conjunction with IAC's historical consolidated financial statements and notes thereto found on the U.S. Securities and Exchange Commission's website at http://www.sec.gov.