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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Intersections, Inc. | NASDAQ:INTX | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 3.67 | 3.67 | 199,999.99 | 0 | 01:00:00 |
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☒
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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☐
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
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DELAWARE
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54-1956515
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification Number)
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|
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3901 Stonecroft Boulevard,
Chantilly, Virginia
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20151
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(Address of principal executive office)
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(Zip Code)
|
|
Large accelerated filer
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☐
|
|
Accelerated filer
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☐
|
|
|
|
|
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Non accelerated filer
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☐ (Do not check if a smaller reporting company)
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Smaller reporting company
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☒
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Emerging growth company
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☐
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Page
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|
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PART I. FINANCIAL INFORMATION
|
|
|
|
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Item 1.
|
||
|
||
|
||
|
||
|
||
Item 2.
|
||
Item 4.
|
||
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PART II. OTHER INFORMATION
|
|
|
|
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Item 1.
|
||
Item 2.
|
||
Item 6.
|
Item 1.
|
Financial Statements
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
REVENUE
|
|
$
|
39,248
|
|
|
43,027
|
|
|
$
|
119,631
|
|
|
133,392
|
|
||
OPERATING EXPENSES:
|
|
|
|
|
|
|
|
|
||||||||
Marketing
|
|
2,682
|
|
|
3,202
|
|
|
9,294
|
|
|
10,292
|
|
||||
Commission
|
|
9,462
|
|
|
10,527
|
|
|
28,966
|
|
|
32,636
|
|
||||
Cost of revenue
|
|
13,126
|
|
|
13,723
|
|
|
39,694
|
|
|
41,294
|
|
||||
General and administrative
|
|
15,230
|
|
|
15,729
|
|
|
47,151
|
|
|
45,310
|
|
||||
Loss on dispositions of Captira and Habits at Work
|
|
—
|
|
|
—
|
|
|
106
|
|
|
—
|
|
||||
Depreciation
|
|
1,378
|
|
|
1,085
|
|
|
3,966
|
|
|
3,521
|
|
||||
Amortization
|
|
29
|
|
|
82
|
|
|
123
|
|
|
431
|
|
||||
Total operating expenses
|
|
41,907
|
|
|
44,348
|
|
|
129,300
|
|
|
133,484
|
|
||||
LOSS FROM OPERATIONS
|
|
(2,659
|
)
|
|
(1,321
|
)
|
|
(9,669
|
)
|
|
(92
|
)
|
||||
Interest expense, net
|
|
(701
|
)
|
|
(621
|
)
|
|
(1,895
|
)
|
|
(1,702
|
)
|
||||
Loss on extinguishment of debt
|
|
—
|
|
|
—
|
|
|
(1,525
|
)
|
|
—
|
|
||||
Other (expense) income, net
|
|
(3
|
)
|
|
(234
|
)
|
|
133
|
|
|
(419
|
)
|
||||
LOSS FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
|
(3,363
|
)
|
|
(2,176
|
)
|
|
(12,956
|
)
|
|
(2,213
|
)
|
||||
Income tax (expense) benefit
|
|
(6
|
)
|
|
76
|
|
|
23
|
|
|
69
|
|
||||
LOSS FROM CONTINUING OPERATIONS
|
|
(3,369
|
)
|
|
(2,100
|
)
|
|
(12,933
|
)
|
|
(2,144
|
)
|
||||
Loss from discontinued operations, net of tax
|
|
(1,030
|
)
|
|
(6,008
|
)
|
|
(2,449
|
)
|
|
(15,538
|
)
|
||||
NET LOSS
|
|
$
|
(4,399
|
)
|
|
$
|
(8,108
|
)
|
|
$
|
(15,382
|
)
|
|
$
|
(17,682
|
)
|
Basic and diluted loss per common share:
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
|
$
|
(0.14
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.55
|
)
|
|
$
|
(0.09
|
)
|
Loss from discontinued operations
|
|
(0.04
|
)
|
|
(0.26
|
)
|
|
(0.10
|
)
|
|
(0.67
|
)
|
||||
Net loss per common share—basic and diluted
|
|
$
|
(0.18
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(0.76
|
)
|
Weighted average common shares outstanding—basic and diluted
|
|
23,953
|
|
|
23,378
|
|
|
23,818
|
|
|
23,178
|
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
ASSETS
|
|
|
|
|
|
|
||
CURRENT ASSETS:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
6,970
|
|
|
$
|
10,797
|
|
Accounts receivable, net of allowance for doubtful accounts of $0 (2017) and $15 (2016)
|
|
6,496
|
|
|
7,964
|
|
||
Prepaid expenses and other current assets
|
|
3,861
|
|
|
3,711
|
|
||
Income tax receivable
|
|
2,548
|
|
|
3,314
|
|
||
Deferred subscription solicitation and commission costs
|
|
2,904
|
|
|
5,050
|
|
||
Current assets of discontinued operations and assets held for sale
|
|
—
|
|
|
575
|
|
||
Total current assets
|
|
22,779
|
|
|
31,411
|
|
||
PROPERTY AND EQUIPMENT, net
|
|
10,430
|
|
|
10,611
|
|
||
GOODWILL
|
|
9,763
|
|
|
9,763
|
|
||
INTANGIBLE ASSETS, net
|
|
88
|
|
|
210
|
|
||
OTHER ASSETS
|
|
1,170
|
|
|
862
|
|
||
TOTAL ASSETS
|
|
$
|
44,230
|
|
|
$
|
52,857
|
|
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|
|
|
|
|
|
||
CURRENT LIABILITIES:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
2,912
|
|
|
$
|
2,000
|
|
Accrued expenses and other current liabilities
|
|
11,009
|
|
|
10,978
|
|
||
Accrued payroll and employee benefits
|
|
2,581
|
|
|
4,128
|
|
||
Commissions payable
|
|
360
|
|
|
316
|
|
||
Current portion of long-term debt, net
|
|
—
|
|
|
2,146
|
|
||
Capital leases, current portion
|
|
467
|
|
|
471
|
|
||
Deferred revenue
|
|
5,852
|
|
|
8,295
|
|
||
Current liabilities of discontinued operations and liabilities held for sale
|
|
—
|
|
|
858
|
|
||
Total current liabilities
|
|
23,181
|
|
|
29,192
|
|
||
LONG-TERM DEBT, net
|
|
19,182
|
|
|
10,092
|
|
||
OBLIGATIONS UNDER CAPITAL LEASES, less current portion
|
|
484
|
|
|
865
|
|
||
OTHER LONG-TERM LIABILITIES
|
|
3,107
|
|
|
3,436
|
|
||
DEFERRED TAX LIABILITY, net
|
|
1,905
|
|
|
1,905
|
|
||
TOTAL LIABILITIES
|
|
47,859
|
|
|
45,490
|
|
||
COMMITMENTS AND CONTINGENCIES (see Notes 13 and 15)
|
|
|
|
|
|
|
||
STOCKHOLDERS’ (DEFICIT) EQUITY:
|
|
|
|
|
|
|
||
Common stock at $0.01 par value, shares authorized 50,000; shares issued 28,179 (2017) and 27,303 (2016); shares outstanding 24,122 (2017) and 23,733 (2016)
|
|
282
|
|
|
273
|
|
||
Additional paid-in capital
|
|
146,291
|
|
|
142,247
|
|
||
Warrants
|
|
2,140
|
|
|
—
|
|
||
Treasury stock, shares at cost; 4,057 (2017) and 3,570 (2016)
|
|
(35,628
|
)
|
|
(33,822
|
)
|
||
Accumulated deficit
|
|
(116,714
|
)
|
|
(101,331
|
)
|
||
TOTAL STOCKHOLDERS’ (DEFICIT) EQUITY
|
|
(3,629
|
)
|
|
7,367
|
|
||
TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY
|
|
$
|
44,230
|
|
|
$
|
52,857
|
|
|
Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
||
Net loss
|
$
|
(15,382
|
)
|
|
$
|
(17,682
|
)
|
Loss from discontinued operations, net of tax
|
(2,449
|
)
|
|
(15,538
|
)
|
||
Loss from continuing operations
|
(12,933
|
)
|
|
(2,144
|
)
|
||
Adjustments to reconcile net loss to cash flows used in operating activities:
|
|
|
|
|
|||
Depreciation and amortization
|
4,089
|
|
|
3,951
|
|
||
Amortization of debt issuance costs
|
184
|
|
|
658
|
|
||
Accretion of debt discount
|
66
|
|
|
—
|
|
||
Provision for doubtful accounts
|
(15
|
)
|
|
(54
|
)
|
||
(Gain) loss on disposal of fixed assets
|
—
|
|
|
261
|
|
||
Share based compensation
|
4,564
|
|
|
4,658
|
|
||
Amortization of deferred subscription solicitation costs
|
8,482
|
|
|
9,981
|
|
||
Loss on disposition of Captira Analytical
|
130
|
|
|
—
|
|
||
Gain on disposition of Habits at Work
|
(24
|
)
|
|
—
|
|
||
Loss on extinguishment of debt
|
1,525
|
|
|
—
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
1,483
|
|
|
(1,092
|
)
|
||
Prepaid expenses, other current assets and other assets
|
(412
|
)
|
|
709
|
|
||
Income tax receivable, net
|
766
|
|
|
594
|
|
||
Deferred subscription solicitation and commission costs
|
(6,336
|
)
|
|
(7,164
|
)
|
||
Accounts payable and accrued liabilities
|
(677
|
)
|
|
(5,569
|
)
|
||
Commissions payable
|
29
|
|
|
(71
|
)
|
||
Deferred revenue
|
(2,411
|
)
|
|
618
|
|
||
Other long-term liabilities
|
(329
|
)
|
|
(382
|
)
|
||
Cash flows (used in) provided by continuing operations
|
(1,819
|
)
|
|
4,954
|
|
||
Cash flows used in discontinued operations
|
(2,313
|
)
|
|
(11,687
|
)
|
||
Net cash used in operating activities
|
(4,132
|
)
|
|
(6,733
|
)
|
||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Cash received for the liquidating distribution of White Sky, Inc.
|
—
|
|
|
57
|
|
||
Net cash paid for the disposition of Captira Analytical
|
(315
|
)
|
|
—
|
|
||
Decrease (increase) in restricted cash
|
115
|
|
|
(265
|
)
|
||
Cash paid for withholding tax on vesting of RSUs in exchange for promissory note
|
(130
|
)
|
|
—
|
|
||
Proceeds from sale of property and equipment
|
—
|
|
|
394
|
|
||
Acquisition of property and equipment
|
(3,964
|
)
|
|
(4,591
|
)
|
||
Cash flows used in continuing operations
|
(4,294
|
)
|
|
(4,405
|
)
|
||
Cash flows provided by (used in) discontinued operations
|
4
|
|
|
(853
|
)
|
||
Net cash used in investing activities
|
(4,290
|
)
|
|
(5,258
|
)
|
||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
|
|
|
|
|
||
Proceeds from issuance of debt
|
20,000
|
|
|
20,000
|
|
||
Repayments of debt
|
(13,920
|
)
|
|
(2,895
|
)
|
||
Repurchase of common stock
|
(1,510
|
)
|
|
—
|
|
||
Proceeds from issuance of warrants
|
1,500
|
|
|
—
|
|
||
Cash paid for debt and equity issuance costs
|
(323
|
)
|
|
(1,856
|
)
|
||
Capital lease payments
|
(411
|
)
|
|
(524
|
)
|
||
Withholding tax payment on vesting of restricted stock units
|
(1,122
|
)
|
|
(408
|
)
|
||
Cash flows provided by financing activities
|
4,214
|
|
|
14,317
|
|
||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(4,208
|
)
|
|
2,326
|
|
||
CASH AND CASH EQUIVALENTS — Beginning of period
|
10,857
|
|
|
11,471
|
|
||
Cash reclassified to assets held for sale at beginning of period
|
321
|
|
|
—
|
|
||
CASH AND CASH EQUIVALENTS — End of period
|
$
|
6,970
|
|
|
$
|
13,797
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
|
|
|
|
|
|
||
Equipment obtained under capital lease, including acquisition costs
|
$
|
40
|
|
|
$
|
101
|
|
Equipment additions accrued but not paid
|
$
|
209
|
|
|
$
|
490
|
|
Shares withheld in lieu of withholding taxes on vesting of restricted stock awards
|
$
|
117
|
|
|
$
|
15
|
|
Standard
|
|
Description
|
|
Date of Adoption
|
|
Application
|
|
Effect on the Consolidated Financial Statements (or Other Significant Matters)
|
ASU 2017-04,
Intangibles— Goodwill and Other (Topic 350) |
|
The primary amendments in this update simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments of this update, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value.
|
|
January 1, 2017
|
|
Prospective
|
|
We early adopted this update to reduce the cost and complexity of our annual and interim goodwill impairment analyses. There was no material impact on our condensed consolidated financial statements.
|
ASU 2014-09,
Revenue from Contracts with Customers (Topic 606) |
|
This update supersedes the revenue recognition requirements in Topic 605, Revenue Recognition, by creating a new Topic 606, Revenue from Contracts with Customers. The guidance in this update affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the trade of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Additionally, various updates have been issued during 2015 and 2016 to clarify the guidance in Topic 606.
|
|
January 1, 2018
|
|
1) Retrospectively to each prior reporting period presented, or
2) retrospectively with the cumulative effect of initially applying these updates recognized at the date of initial application. |
|
We will adopt the provisions of the new standard as of January 1, 2018. For additional information, see below. (1)
|
ASU 2016-02,
Leases (Topic 842) |
|
The primary amendments in this update require the recognition of lease assets and lease liabilities on the balance sheet, as well as certain qualitative disclosures regarding leasing arrangements.
|
|
January 1, 2019
|
|
Modified retrospective
|
|
We are currently in the planning stage and have not yet begun implementation of the new standard. We have not yet determined the potential impact on our condensed consolidated financial statements.
|
ASU 2016-15,
Statement of Cash Flows (Topic 230) |
|
This update clarifies the guidance regarding the classification of operating, investing, and financing activities for certain types of cash receipts and payments.
|
|
January 1, 2018
|
|
Retrospective
|
|
Upon adoption, approximately $400 thousand of our loss on extinguishment of debt that occurred in 2017 will be retrospectively reclassified from operating to financing cash flows. We are currently unaware of any other material impacts of adoption on our condensed consolidated financial statements.
|
ASU 2016-17,
Consolidation (Topic 810) |
|
This update amends the consolidation guidance on how a reporting entity that is the single decision maker of a variable interest entity (VIE) should treat indirect interests in the entity held through related parties that are under common control with the reporting entity when determining whether it is the primary beneficiary of that VIE. The primary beneficiary of a VIE is the reporting entity that has a controlling financial interest in a VIE and, therefore, consolidates the VIE.
|
|
January 1, 2017
|
|
Retrospective
|
|
We adopted this update as of January 1, 2017, and there was no material impact to our condensed consolidated financial statements.
|
ASU 2017-09,
Compensation—Stock Compensation (Topic 718) |
|
This update clarifies the guidance regarding changes in the terms or conditions of a share based payment award. Under the amendments of this update, an entity should account for the effects of a modification unless certain criteria remain the same immediately before and after the modification.
|
|
January 1, 2018
|
|
Prospective
|
|
We will adopt this update as of January 1, 2018, and do not anticipate any material impact to our condensed consolidated financial statements.
|
(1)
|
We will adopt the provisions of ASU 2014-09 as of January 1, 2018. We have not completed our final review of the impact of the new standard and all significant revenue streams and identified contracts with customers. Our implementation process has not currently met our previously established internal submission dates for key analyses; however, we expect to complete this process in a timely manner. We expect to adopt the new standard on a modified retrospective basis with the cumulative effect of applying the new standard recognized at the date of initial application. We are continuing to measure
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Major classes of line items constituting loss from discontinued operations:
|
|
|
|
|
|
|
|
|
||||||||
Revenue
|
|
$
|
—
|
|
|
35
|
|
|
$
|
—
|
|
|
69
|
|
||
Marketing expenses
|
|
(1
|
)
|
|
(387
|
)
|
|
(18
|
)
|
|
(1,392
|
)
|
||||
Cost of revenue
|
|
—
|
|
|
(1,000
|
)
|
|
(4
|
)
|
|
(1,379
|
)
|
||||
General and administrative expenses
|
|
(500
|
)
|
|
(4,294
|
)
|
|
(1,718
|
)
|
|
(11,632
|
)
|
||||
Impairment
|
|
—
|
|
|
—
|
|
|
(180
|
)
|
|
—
|
|
||||
Depreciation and amortization
|
|
(1
|
)
|
|
(418
|
)
|
|
(1
|
)
|
|
(1,263
|
)
|
||||
Interest expense
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
(2
|
)
|
||||
Other income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
||||
Loss from discontinued operations before income taxes
|
|
(502
|
)
|
|
(6,065
|
)
|
|
(1,921
|
)
|
|
(15,595
|
)
|
||||
Loss on disposal of discontinued operations
|
|
(528
|
)
|
|
—
|
|
|
(528
|
)
|
|
—
|
|
||||
Income tax benefit
|
|
—
|
|
|
57
|
|
|
—
|
|
|
57
|
|
||||
Total loss from discontinued operations, net of tax
|
|
$
|
(1,030
|
)
|
|
$
|
(6,008
|
)
|
|
$
|
(2,449
|
)
|
|
$
|
(15,538
|
)
|
|
|
December 31, 2016
|
||
Carrying amounts of the major classes of assets included in discontinued operations:
|
|
|
||
Cash and cash equivalents
|
|
$
|
60
|
|
Accounts receivable, net
|
|
8
|
|
|
Prepaid expenses and other current assets
|
|
153
|
|
|
Inventory
|
|
250
|
|
|
Total major classes of assets of the discontinued operations
|
|
471
|
|
|
Other assets in the disposal group classified as held for sale:
|
|
|
||
Cash and cash equivalents
|
|
321
|
|
|
Accounts receivable, net
|
|
177
|
|
|
Prepaid expenses and other current assets
|
|
97
|
|
|
Property and equipment, net
|
|
247
|
|
|
Other assets
|
|
6
|
|
|
Write-down to fair value
|
|
(744
|
)
|
|
Total other assets in the disposal group classified as held for sale:
|
|
104
|
|
|
Current assets of discontinued operations and assets held for sale
|
|
$
|
575
|
|
|
|
|
||
Carrying amounts of the major classes of liabilities included in discontinued operations:
|
|
|
||
Accounts payable
|
|
$
|
536
|
|
Accrued expenses and other current liabilities
|
|
90
|
|
|
Accrued payroll and employee benefits
|
|
128
|
|
|
Total major classes of liabilities of the discontinued operations
|
|
754
|
|
|
Other liabilities in the disposal group classified as held for sale:
|
|
|
||
Accounts payable
|
|
9
|
|
|
Accrued expenses and other current liabilities
|
|
15
|
|
|
Accrued payroll and employee benefits
|
|
80
|
|
|
Total other liabilities in the disposal group classified as held for sale:
|
|
104
|
|
|
Current liabilities of discontinued operations and liabilities held for sale
|
|
$
|
858
|
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Net loss—basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
|
$
|
(3,369
|
)
|
|
$
|
(2,100
|
)
|
|
$
|
(12,933
|
)
|
|
$
|
(2,144
|
)
|
Loss from discontinued operations
|
|
(1,030
|
)
|
|
(6,008
|
)
|
|
(2,449
|
)
|
|
(15,538
|
)
|
||||
Net loss—basic and diluted
|
|
$
|
(4,399
|
)
|
|
$
|
(8,108
|
)
|
|
$
|
(15,382
|
)
|
|
$
|
(17,682
|
)
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding—basic
|
|
23,953
|
|
|
23,378
|
|
|
23,818
|
|
|
23,178
|
|
||||
Dilutive effect of common stock equivalents
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding—diluted
|
|
23,953
|
|
|
23,378
|
|
|
23,818
|
|
|
23,178
|
|
||||
Net loss per common share—basic and diluted:
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations
|
|
$
|
(0.14
|
)
|
|
$
|
(0.09
|
)
|
|
$
|
(0.55
|
)
|
|
$
|
(0.09
|
)
|
Loss from discontinued operations
|
|
(0.04
|
)
|
|
(0.26
|
)
|
|
(0.10
|
)
|
|
(0.67
|
)
|
||||
Net loss per common share—basic and diluted
|
|
$
|
(0.18
|
)
|
|
$
|
(0.35
|
)
|
|
$
|
(0.65
|
)
|
|
$
|
(0.76
|
)
|
|
Fair Value at
September 30, 2017 |
|
Valuation Technique
|
|
Unobservable Inputs
|
|
Quantitative Inputs Used
|
|||
Warrant
|
$
|
2,140
|
|
|
Monte Carlo
|
|
Volatility of underlying
|
|
50.0
|
%
|
|
|
|
|
|
Risk-free rate
|
|
1.78
|
%
|
||
|
|
|
|
|
Dividend yield
|
|
—
|
%
|
||
|
|
|
|
|
Probability of Designated Event (1)
|
|
0% - 15%
|
|
||
|
|
|
|
|
Timing of Designated Event (1)
|
|
2-5 years from issuance
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
(In thousands)
|
||||||
Prepaid services
|
$
|
377
|
|
|
$
|
837
|
|
Other prepaid contracts
|
2,882
|
|
|
2,293
|
|
||
Restricted cash
|
260
|
|
|
265
|
|
||
Other
|
342
|
|
|
316
|
|
||
Total
|
$
|
3,861
|
|
|
$
|
3,711
|
|
|
Gross Carrying
Amount |
|
Accumulated
Depreciation |
|
Net Carrying
Amount |
||||||
Balance at December 31, 2016
|
$
|
15,015
|
|
|
$
|
(7,931
|
)
|
|
$
|
7,084
|
|
Additions
|
2,703
|
|
|
—
|
|
|
2,703
|
|
|||
Depreciation expense
|
—
|
|
|
(2,864
|
)
|
|
(2,864
|
)
|
|||
Balance at September 30, 2017
|
$
|
17,718
|
|
|
$
|
(10,795
|
)
|
|
$
|
6,923
|
|
|
|
|
|
|
|
||||||
Balance at December 31, 2015
|
$
|
10,441
|
|
|
$
|
(5,888
|
)
|
|
$
|
4,553
|
|
Additions
|
240
|
|
|
—
|
|
|
240
|
|
|||
Disposals
|
(560
|
)
|
|
388
|
|
|
(172
|
)
|
|||
Depreciation expense
|
—
|
|
|
(1,680
|
)
|
|
(1,680
|
)
|
|||
Balance at September 30, 2016
|
$
|
10,121
|
|
|
$
|
(7,180
|
)
|
|
$
|
2,941
|
|
For the remaining three months ending December 31, 2017
|
$
|
986
|
|
For the years ending December 31:
|
|
|
|
2018
|
3,301
|
|
|
2019
|
2,307
|
|
|
2020
|
329
|
|
|
Total
|
$
|
6,923
|
|
|
Personal
Information Services Reporting Unit |
|
Insurance and
Other Consumer Services Reporting Unit |
|
Bail Bonds
Industry Solutions Reporting Unit |
|
Totals
|
||||||||
Balance as of September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross carrying amount
|
$
|
35,253
|
|
|
$
|
10,665
|
|
|
$
|
—
|
|
|
$
|
45,918
|
|
Accumulated impairment losses
|
(25,837
|
)
|
|
(10,318
|
)
|
|
—
|
|
|
(36,155
|
)
|
||||
Net carrying value of goodwill
|
$
|
9,416
|
|
|
$
|
347
|
|
|
$
|
—
|
|
|
$
|
9,763
|
|
|
|
|
|
|
|
|
|
||||||||
Balance as of December 31, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross carrying amount
|
$
|
35,253
|
|
|
$
|
10,665
|
|
|
$
|
1,390
|
|
|
$
|
47,308
|
|
Accumulated impairment losses
|
(25,837
|
)
|
|
(10,318
|
)
|
|
(1,390
|
)
|
|
(37,545
|
)
|
||||
Net carrying value of goodwill
|
$
|
9,416
|
|
|
$
|
347
|
|
|
$
|
—
|
|
|
$
|
9,763
|
|
|
Gross
Carrying Amount |
|
Accumulated
Amortization |
|
Impairment
|
|
Net
Carrying Amount |
||||||||
As of September 30, 2017:
|
|
|
|
|
|
|
|
||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|||||
Customer related
|
$
|
38,831
|
|
|
$
|
(38,831
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Marketing related
|
2,929
|
|
|
(2,901
|
)
|
|
—
|
|
|
28
|
|
||||
Technology related
|
1,889
|
|
|
(1,829
|
)
|
|
—
|
|
|
60
|
|
||||
Total amortizable intangible assets at September 30, 2017
|
$
|
43,649
|
|
|
$
|
(43,561
|
)
|
|
$
|
—
|
|
|
$
|
88
|
|
As of December 31, 2016:
|
|
|
|
|
|
|
|
||||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Customer related
|
$
|
38,874
|
|
|
$
|
(38,822
|
)
|
|
$
|
(17
|
)
|
|
$
|
35
|
|
Marketing related
|
3,336
|
|
|
(3,143
|
)
|
|
(138
|
)
|
|
55
|
|
||||
Technology related
|
4,068
|
|
|
(3,197
|
)
|
|
(751
|
)
|
|
120
|
|
||||
Subtotal
|
46,278
|
|
|
(45,162
|
)
|
|
(906
|
)
|
|
210
|
|
||||
Less: held for sale
|
(1,704
|
)
|
|
1,704
|
|
|
—
|
|
|
—
|
|
||||
Total amortizable intangible assets at December 31, 2016
|
$
|
44,574
|
|
|
$
|
(43,458
|
)
|
|
$
|
(906
|
)
|
|
$
|
210
|
|
For the remaining three months ending December 31, 2017
|
$
|
29
|
|
For the year ending December 31, 2018
|
59
|
|
|
Total
|
$
|
88
|
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
|
(In thousands)
|
||||||
Accrued marketing
|
$
|
478
|
|
|
$
|
1,121
|
|
Accrued cost of sales, including credit bureau costs
|
5,151
|
|
|
5,451
|
|
||
Accrued general and administrative expense and professional fees
|
1,290
|
|
|
2,137
|
|
||
Insurance premiums
|
353
|
|
|
360
|
|
||
Estimated liability for non-income business taxes
|
1,461
|
|
|
94
|
|
||
Other
|
2,276
|
|
|
1,815
|
|
||
Total
|
$
|
11,009
|
|
|
$
|
10,978
|
|
|
|
September 30,
|
|
December 31,
|
||||
|
|
2017
|
|
2016
|
||||
|
|
(In thousands)
|
||||||
Accrued payroll
|
|
$
|
461
|
|
|
$
|
1,075
|
|
Accrued benefits
|
|
1,658
|
|
|
1,613
|
|
||
Accrued severance
|
|
462
|
|
|
1,440
|
|
||
Total accrued payroll and employee benefits
|
|
$
|
2,581
|
|
|
$
|
4,128
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Balance, beginning of period
|
|
$
|
1,297
|
|
|
$
|
1,001
|
|
|
$
|
1,440
|
|
|
$
|
4,148
|
|
Adjustments to expense
|
|
6
|
|
|
8
|
|
|
1,500
|
|
|
(189
|
)
|
||||
Payments
|
|
(841
|
)
|
|
(479
|
)
|
|
(2,478
|
)
|
|
(3,429
|
)
|
||||
Balance, end of period
|
|
$
|
462
|
|
|
$
|
530
|
|
|
$
|
462
|
|
|
$
|
530
|
|
|
Operating
Leases |
|
Capital
Leases |
||||
|
(In thousands)
|
||||||
For the remaining three months ending December 31, 2017
|
$
|
648
|
|
|
$
|
118
|
|
For the years ending December 31:
|
|
|
|
|
|
||
2018
|
3,407
|
|
|
539
|
|
||
2019
|
1,466
|
|
|
400
|
|
||
2020
|
110
|
|
|
20
|
|
||
2021
|
93
|
|
|
7
|
|
||
Total minimum lease payments
|
$
|
5,724
|
|
|
1,084
|
|
|
Less: amount representing interest
|
|
|
|
(133
|
)
|
||
Present value of minimum lease payments
|
|
|
|
951
|
|
||
Less: current obligation
|
|
|
|
(467
|
)
|
||
Long-term obligations under capital lease
|
|
|
|
$
|
484
|
|
|
Non-Income Business Tax Liability
|
||||||
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
$
|
94
|
|
|
$
|
3,427
|
|
Adjustments to existing liabilities
|
1,461
|
|
|
(1,038
|
)
|
||
Payments
|
(94
|
)
|
|
(21
|
)
|
||
Balance at September 30
|
$
|
1,461
|
|
|
$
|
2,368
|
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
|
(In thousands)
|
||||||
Deferred rent
|
$
|
1,407
|
|
|
$
|
1,850
|
|
Uncertain tax positions, interest and penalties not recognized
|
1,646
|
|
|
1,582
|
|
||
Accrued general and administrative expenses
|
54
|
|
|
4
|
|
||
Total other long-term liabilities
|
$
|
3,107
|
|
|
$
|
3,436
|
|
For the remaining three months ending December 31, 2017
|
$
|
—
|
|
For the years ending December 31:
|
|
|
|
2018
|
—
|
|
|
2019
|
1,250
|
|
|
2020
|
5,000
|
|
|
2021
|
13,750
|
|
|
Total outstanding
|
$
|
20,000
|
|
|
|
Number of
Shares |
|
Weighted-Average
Exercise Price |
|
Aggregate Intrinsic Value
|
|
Weighted-Average
Remaining Contractual Term |
||||
|
|
|
|
|
|
(In thousands)
|
|
(In years)
|
||||
Outstanding at December 31, 2016
|
|
861,366
|
|
$
|
3.99
|
|
|
|
|
|
|
|
Granted
|
|
1,670,000
|
|
$
|
4.35
|
|
|
|
|
|
|
|
Canceled
|
|
(51,824)
|
|
$
|
6.03
|
|
|
|
|
|
|
|
Outstanding at September 30, 2017
|
|
2,479,542
|
|
$
|
4.21
|
|
|
$
|
452
|
|
|
8.18
|
Exercisable at September 30, 2017
|
|
430,542
|
|
$
|
5.24
|
|
|
$
|
46
|
|
|
1.71
|
|
|
Number of
RSUs |
|
Weighted-Average
Grant Date Fair Value |
||
Outstanding at December 31, 2016
|
|
3,363,946
|
|
$
|
2.78
|
|
Granted
|
|
2,001,642
|
|
$
|
4.35
|
|
Canceled
(1)
|
|
(1,772,885)
|
|
$
|
2.67
|
|
Vested
|
|
(664,885)
|
|
$
|
3.73
|
|
Outstanding at September 30, 2017
|
|
2,927,818
|
|
$
|
3.70
|
|
(1)
|
Includes shares net-settled to cover statutory employee taxes related to the vesting of restricted stock awards, which increased treasury shares by
68 thousand
in the
nine months ended September 30, 2017
.
|
|
Personal Information Services
|
|
Insurance and Other Consumer Services
|
|
Bail Bonds Industry Solutions
|
|
Corporate
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Three months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
37,845
|
|
|
$
|
1,403
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
39,248
|
|
Depreciation
|
1,355
|
|
|
23
|
|
|
—
|
|
|
—
|
|
|
1,378
|
|
|||||
Amortization
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29
|
|
|||||
(Loss) income from operations
|
(1,155
|
)
|
|
386
|
|
|
—
|
|
|
(1,890
|
)
|
|
(2,659
|
)
|
|||||
(Loss) income from continuing operations before income taxes
|
(1,859
|
)
|
|
386
|
|
|
—
|
|
|
(1,890
|
)
|
|
(3,363
|
)
|
|||||
Three months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
40,071
|
|
|
$
|
2,440
|
|
|
$
|
516
|
|
|
$
|
—
|
|
|
$
|
43,027
|
|
Depreciation
|
1,009
|
|
|
36
|
|
|
30
|
|
|
10
|
|
|
1,085
|
|
|||||
Amortization
|
47
|
|
|
35
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|||||
Income (loss) from operations
|
2,791
|
|
|
3
|
|
|
(190
|
)
|
|
(3,925
|
)
|
|
(1,321
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
1,957
|
|
|
3
|
|
|
(190
|
)
|
|
(3,946
|
)
|
|
(2,176
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Nine months ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
114,832
|
|
|
$
|
4,617
|
|
|
$
|
182
|
|
|
$
|
—
|
|
|
$
|
119,631
|
|
Depreciation
|
3,880
|
|
|
86
|
|
|
—
|
|
|
—
|
|
|
3,966
|
|
|||||
Amortization
|
123
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
123
|
|
|||||
(Loss) income from operations
|
(6,514
|
)
|
|
1,226
|
|
|
(46
|
)
|
|
(4,335
|
)
|
|
(9,669
|
)
|
|||||
(Loss) income from continuing operations before income taxes
|
(9,800
|
)
|
|
1,225
|
|
|
(46
|
)
|
|
(4,335
|
)
|
|
(12,956
|
)
|
|||||
Nine months ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Revenue
|
$
|
124,118
|
|
|
$
|
7,726
|
|
|
$
|
1,548
|
|
|
$
|
—
|
|
|
$
|
133,392
|
|
Depreciation
|
3,283
|
|
|
110
|
|
|
79
|
|
|
49
|
|
|
3,521
|
|
|||||
Amortization
|
140
|
|
|
291
|
|
|
—
|
|
|
—
|
|
|
431
|
|
|||||
Income (loss) from operations
|
11,000
|
|
|
(694
|
)
|
|
(386
|
)
|
|
(10,012
|
)
|
|
(92
|
)
|
|||||
Income (loss) from continuing operations before income taxes
|
9,030
|
|
|
(694
|
)
|
|
(386
|
)
|
|
(10,163
|
)
|
|
(2,213
|
)
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||||||
|
Property and Equipment, net
|
|
Total Assets
|
|
Property and Equipment, net
|
|
Total Assets
|
||||||||
|
(in thousands)
|
||||||||||||||
Segment:
|
|
|
|
|
|
|
|
||||||||
Personal Information Services
|
$
|
10,393
|
|
|
$
|
33,300
|
|
|
$
|
10,412
|
|
|
$
|
36,144
|
|
Insurance and Other Consumer Services
|
37
|
|
|
10,386
|
|
|
123
|
|
|
11,092
|
|
||||
Bail Bonds Industry Solutions
|
—
|
|
|
—
|
|
|
247
|
|
|
137
|
|
||||
Corporate
|
—
|
|
|
544
|
|
|
76
|
|
|
5,013
|
|
||||
Subtotal
|
10,430
|
|
|
44,230
|
|
|
10,858
|
|
|
52,386
|
|
||||
Adjustment for assets of discontinued operations and assets held for sale
|
—
|
|
|
—
|
|
|
(247
|
)
|
|
471
|
|
||||
Consolidated
|
$
|
10,430
|
|
|
$
|
44,230
|
|
|
$
|
10,611
|
|
|
$
|
52,857
|
|
|
United States
|
|
Canada
|
|
Consolidated
|
||||||
|
(in thousands)
|
||||||||||
Revenue:
|
|
|
|
|
|
||||||
For the three months ended September 30, 2017
|
$
|
35,843
|
|
|
$
|
3,405
|
|
|
$
|
39,248
|
|
For the three months ended September 30, 2016
|
$
|
39,870
|
|
|
$
|
3,157
|
|
|
$
|
43,027
|
|
|
|
|
|
|
|
||||||
For the nine months ended September 30, 2017
|
$
|
109,947
|
|
|
$
|
9,684
|
|
|
$
|
119,631
|
|
For the nine months ended September 30, 2016
|
$
|
123,988
|
|
|
$
|
9,404
|
|
|
$
|
133,392
|
|
Item 2.
|
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
|
|
Three Months Ended September 30,
|
|
Change
|
|||||||||||||||||
|
2017
|
|
Percent of Revenue
|
|
2016
|
|
Percent of Revenue
|
|
Dollars
|
|
Percent
|
|||||||||
Revenue
|
$
|
39,248
|
|
|
100.0
|
%
|
|
$
|
43,027
|
|
|
100.0
|
%
|
|
$
|
(3,779
|
)
|
|
(8.8
|
)%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Marketing
|
2,682
|
|
|
6.8
|
%
|
|
3,202
|
|
|
7.4
|
%
|
|
(520
|
)
|
|
(16.2
|
)%
|
|||
Commission
|
9,462
|
|
|
24.1
|
%
|
|
10,527
|
|
|
24.5
|
%
|
|
(1,065
|
)
|
|
(10.1
|
)%
|
|||
Cost of revenue
|
13,126
|
|
|
33.4
|
%
|
|
13,723
|
|
|
31.9
|
%
|
|
(597
|
)
|
|
(4.4
|
)%
|
|||
General and administrative
|
15,230
|
|
|
38.8
|
%
|
|
15,729
|
|
|
36.6
|
%
|
|
(499
|
)
|
|
(3.2
|
)%
|
|||
Depreciation
|
1,378
|
|
|
3.5
|
%
|
|
1,085
|
|
|
2.5
|
%
|
|
293
|
|
|
27.0
|
%
|
|||
Amortization
|
29
|
|
|
0.1
|
%
|
|
82
|
|
|
0.2
|
%
|
|
(53
|
)
|
|
(64.6
|
)%
|
|||
Total operating expenses
|
41,907
|
|
|
106.8
|
%
|
|
44,348
|
|
|
103.1
|
%
|
|
(2,441
|
)
|
|
(5.5
|
)%
|
|||
Loss from operations
|
(2,659
|
)
|
|
(6.8
|
)%
|
|
(1,321
|
)
|
|
(3.1
|
)%
|
|
(1,338
|
)
|
|
101.3
|
%
|
|||
Interest expense, net
|
(701
|
)
|
|
(1.8
|
)%
|
|
(621
|
)
|
|
(1.4
|
)%
|
|
(80
|
)
|
|
12.9
|
%
|
|||
Other income (expense), net
|
(3
|
)
|
|
—
|
%
|
|
(234
|
)
|
|
(0.5
|
)%
|
|
231
|
|
|
(98.7
|
)%
|
|||
Loss from continuing operations before income taxes
|
(3,363
|
)
|
|
(8.6
|
)%
|
|
(2,176
|
)
|
|
(5.1
|
)%
|
|
(1,187
|
)
|
|
54.5
|
%
|
|||
Income tax benefit (expense)
|
(6
|
)
|
|
—
|
%
|
|
76
|
|
|
0.2
|
%
|
|
(82
|
)
|
|
(107.9
|
)%
|
|||
Loss from continuing operations
|
(3,369
|
)
|
|
(8.6
|
)%
|
|
(2,100
|
)
|
|
(4.9
|
)%
|
|
(1,269
|
)
|
|
60.4
|
%
|
|||
Loss from discontinued operations, net of tax
|
(1,030
|
)
|
|
(2.6
|
)%
|
|
(6,008
|
)
|
|
(14.0
|
)%
|
|
4,978
|
|
|
(82.9
|
)%
|
|||
Net loss
|
$
|
(4,399
|
)
|
|
(11.2
|
)%
|
|
$
|
(8,108
|
)
|
|
(18.8
|
)%
|
|
$
|
3,709
|
|
|
(45.7
|
)%
|
|
Three Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
|
(Percent of total)
|
||||||||||
Bank of America
|
$
|
16,828
|
|
|
$
|
19,091
|
|
|
42.9
|
%
|
|
44.4
|
%
|
All other financial institution clients
|
3,946
|
|
|
4,442
|
|
|
10.1
|
%
|
|
10.3
|
%
|
||
Identity Guard
®
(1)
|
12,396
|
|
|
12,369
|
|
|
31.5
|
%
|
|
28.7
|
%
|
||
Canadian business lines
|
3,405
|
|
|
3,157
|
|
|
8.7
|
%
|
|
7.3
|
%
|
||
Breach services & other (1)
|
1,270
|
|
|
1,012
|
|
|
3.2
|
%
|
|
2.4
|
%
|
||
Total Personal Information Services revenue
|
37,845
|
|
|
40,071
|
|
|
96.4
|
%
|
|
93.1
|
%
|
||
Revenue from other segments
|
1,403
|
|
|
2,956
|
|
|
3.6
|
%
|
|
6.9
|
%
|
||
Consolidated revenue
|
$
|
39,248
|
|
|
$
|
43,027
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Financial
Institution |
|
Identity Guard
®
(1)
|
|
Canadian
Business Lines |
|
Total
|
||||
|
(in thousands)
|
||||||||||
Balance at June 30, 2017
|
663
|
|
|
329
|
|
|
161
|
|
|
1,153
|
|
Additions
|
—
|
|
|
38
|
|
|
23
|
|
|
61
|
|
Cancellations
|
(23
|
)
|
|
(29
|
)
|
|
(25
|
)
|
|
(77
|
)
|
Balance at September 30, 2017
|
640
|
|
|
338
|
|
|
159
|
|
|
1,137
|
|
|
|
|
|
|
|
|
|
||||
Balance at June 30, 2016
|
757
|
|
|
345
|
|
|
166
|
|
|
1,268
|
|
Additions
|
—
|
|
|
33
|
|
|
27
|
|
|
60
|
|
Cancellations
|
(25
|
)
|
|
(45
|
)
|
|
(32
|
)
|
|
(102
|
)
|
Balance at September 30, 2016
|
732
|
|
|
333
|
|
|
161
|
|
|
1,226
|
|
(1)
|
We periodically refine the criteria used to calculate and report our subscriber data. In the nine months ended September 30, 2017,
we determined that certain subscribers who receive our breach response services should no longer be included in the presentation of Identity Guard
®
subscribers or revenue due to the nonrecurring nature of our breach response services. For comparability, all periods presented have been recast to reflect this change in subscribers and revenue.
|
|
Nine Months Ended September 30,
|
|
Change
|
|||||||||||||||||
|
2017
|
|
Percent of Revenue
|
|
2016
|
|
Percent of Revenue
|
|
Dollars
|
|
Percent
|
|||||||||
Revenue
|
$
|
119,631
|
|
|
100.0
|
%
|
|
$
|
133,392
|
|
|
100.0
|
%
|
|
$
|
(13,761
|
)
|
|
(10.3
|
)%
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Marketing
|
9,294
|
|
|
7.8
|
%
|
|
10,292
|
|
|
7.7
|
%
|
|
(998
|
)
|
|
(9.7
|
)%
|
|||
Commission
|
28,966
|
|
|
24.2
|
%
|
|
32,636
|
|
|
24.5
|
%
|
|
(3,670
|
)
|
|
(11.2
|
)%
|
|||
Cost of revenue
|
39,694
|
|
|
33.2
|
%
|
|
41,294
|
|
|
31.0
|
%
|
|
(1,600
|
)
|
|
(3.9
|
)%
|
|||
General and administrative
|
47,151
|
|
|
39.4
|
%
|
|
45,310
|
|
|
34.0
|
%
|
|
1,841
|
|
|
4.1
|
%
|
|||
Gain on disposition of Habits at Work
|
106
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
%
|
|
106
|
|
|
N/M
|
|
|||
Depreciation
|
3,966
|
|
|
3.3
|
%
|
|
3,521
|
|
|
2.6
|
%
|
|
445
|
|
|
12.6
|
%
|
|||
Amortization
|
123
|
|
|
0.1
|
%
|
|
431
|
|
|
0.3
|
%
|
|
(308
|
)
|
|
(71.5
|
)%
|
|||
Total operating expenses
|
129,300
|
|
|
108.1
|
%
|
|
133,484
|
|
|
100.1
|
%
|
|
(4,184
|
)
|
|
(3.1
|
)%
|
|||
Loss from operations
|
(9,669
|
)
|
|
(8.1
|
)%
|
|
(92
|
)
|
|
(0.1
|
)%
|
|
(9,577
|
)
|
|
10,410
|
%
|
|||
Interest expense, net
|
(1,895
|
)
|
|
(1.6
|
)%
|
|
(1,702
|
)
|
|
(1.3
|
)%
|
|
(193
|
)
|
|
11.3
|
%
|
|||
Loss on extinguishment of debt
|
(1,525
|
)
|
|
(1.3
|
)%
|
|
—
|
|
|
—
|
%
|
|
(1,525
|
)
|
|
N/M
|
|
|||
Other income (expense), net
|
133
|
|
|
0.1
|
%
|
|
(419
|
)
|
|
(0.3
|
)%
|
|
552
|
|
|
(131.7
|
)%
|
|||
Loss from continuing operations before income taxes
|
(12,956
|
)
|
|
(10.8
|
)%
|
|
(2,213
|
)
|
|
(1.7
|
)%
|
|
(10,743
|
)
|
|
485.4
|
%
|
|||
Income tax benefit (expense)
|
23
|
|
|
—
|
%
|
|
69
|
|
|
0.1
|
%
|
|
(46
|
)
|
|
(66.7
|
)%
|
|||
Loss from continuing operations
|
(12,933
|
)
|
|
(10.8
|
)%
|
|
(2,144
|
)
|
|
(1.6
|
)%
|
|
(10,789
|
)
|
|
503.2
|
%
|
|||
Loss from discontinued operations, net of tax
|
(2,449
|
)
|
|
(2.0
|
)%
|
|
(15,538
|
)
|
|
(11.6
|
)%
|
|
13,089
|
|
|
(84.2
|
)%
|
|||
Net loss
|
$
|
(15,382
|
)
|
|
(12.9
|
)%
|
|
$
|
(17,682
|
)
|
|
(13.3
|
)%
|
|
$
|
2,300
|
|
|
(13.0
|
)%
|
|
Nine Months Ended September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||
|
(In thousands)
|
|
(Percent of total)
|
||||||||||
Bank of America
|
$
|
51,815
|
|
|
$
|
59,344
|
|
|
43.3
|
%
|
|
44.5
|
%
|
All other financial institution clients
|
12,227
|
|
|
14,055
|
|
|
10.2
|
%
|
|
10.5
|
%
|
||
Identity Guard
®
(1)
|
36,889
|
|
|
38,474
|
|
|
30.8
|
%
|
|
28.8
|
%
|
||
Canadian business lines
|
9,684
|
|
|
9,404
|
|
|
8.2
|
%
|
|
7.1
|
%
|
||
Breach services & other (1)
|
4,217
|
|
|
2,841
|
|
|
3.5
|
%
|
|
2.1
|
%
|
||
Total Personal Information Services revenue
|
114,832
|
|
|
124,118
|
|
|
96.0
|
%
|
|
93.0
|
%
|
||
Revenue from other segments
|
4,799
|
|
|
9,274
|
|
|
4.0
|
%
|
|
7.0
|
%
|
||
Consolidated revenue
|
$
|
119,631
|
|
|
$
|
133,392
|
|
|
100.0
|
%
|
|
100.0
|
%
|
|
Financial
Institution |
|
Identity Guard
®
(1)
|
|
Canadian
Business Lines |
|
Total
|
||||
|
(in thousands)
|
||||||||||
Balance at December 31, 2016
|
705
|
|
|
317
|
|
|
162
|
|
|
1,184
|
|
Additions
|
2
|
|
|
116
|
|
|
81
|
|
|
199
|
|
Cancellations
|
(67
|
)
|
|
(95
|
)
|
|
(84
|
)
|
|
(246
|
)
|
Balance at September 30, 2017
|
640
|
|
|
338
|
|
|
159
|
|
|
1,137
|
|
|
|
|
|
|
|
|
|
||||
Balance at December 31, 2015
|
818
|
|
|
348
|
|
|
165
|
|
|
1,331
|
|
Additions
|
1
|
|
|
112
|
|
|
93
|
|
|
206
|
|
Cancellations
|
(87
|
)
|
|
(127
|
)
|
|
(97
|
)
|
|
(311
|
)
|
Balance at September 30, 2016
|
732
|
|
|
333
|
|
|
161
|
|
|
1,226
|
|
(1)
|
We periodically refine the criteria used to calculate and report our subscriber data. In the
nine months ended September 30, 2017
,
we determined that certain subscribers who receive our breach response services should no longer be included in the presentation of Identity Guard
®
subscribers or revenue due to the nonrecurring nature of our breach response services. For comparability, all periods presented have been recast to reflect this change in subscribers and revenue.
|
|
Nine Months Ended September 30,
|
||||||||||
|
2017
|
|
2016
|
|
Difference
|
||||||
|
(In thousands)
|
||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
||||
Cash flows (used in) provided by continuing operations
|
$
|
(1,819
|
)
|
|
$
|
4,954
|
|
|
$
|
(6,773
|
)
|
Cash flows used in discontinued operations
|
(2,313
|
)
|
|
(11,687
|
)
|
|
9,374
|
|
|||
Net cash used in operating activities
|
(4,132
|
)
|
|
(6,733
|
)
|
|
2,601
|
|
|||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
||||
Cash flows used in continuing operations
|
(4,294
|
)
|
|
(4,405
|
)
|
|
111
|
|
|||
Cash flows provided by (used in) discontinued operations
|
4
|
|
|
(853
|
)
|
|
857
|
|
|||
Net cash used in investing activities
|
(4,290
|
)
|
|
(5,258
|
)
|
|
968
|
|
|||
Cash flows provided by financing activities
|
4,214
|
|
|
14,317
|
|
|
(10,103
|
)
|
|||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(4,208
|
)
|
|
2,326
|
|
|
(6,534
|
)
|
|||
CASH AND CASH EQUIVALENTS — Beginning of period
|
10,857
|
|
|
11,471
|
|
|
(614
|
)
|
|||
Cash reclassified to assets held for sale at beginning of period
|
321
|
|
|
—
|
|
|
321
|
|
|||
CASH AND CASH EQUIVALENTS — End of period
|
$
|
6,970
|
|
|
$
|
13,797
|
|
|
$
|
(6,827
|
)
|
|
Non-Income Business Tax Liability
|
||||||
|
2017
|
|
2016
|
||||
Balance at beginning of period
|
$
|
94
|
|
|
$
|
3,427
|
|
Adjustments to existing liabilities
|
1,461
|
|
|
(1,038
|
)
|
||
Payments
|
(94
|
)
|
|
(21
|
)
|
||
Balance at September 30
|
$
|
1,461
|
|
|
$
|
2,368
|
|
Item 4.
|
Controls and Procedures
|
Item 1.
|
Legal Proceedings
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased
as Part of Publicly
Announced Plan
|
|
Approximate Dollar
Value of Shares that
May Yet Be Purchased
Under the Plan
|
||||||
|
|
(In thousands, except average price paid per share)
|
||||||||||||
July 1, 2017 to July 31, 2017
|
|
35
|
|
|
$
|
4.70
|
|
|
—
|
|
|
$
|
—
|
|
August 1, 2017 to August 31, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
September 1, 2017 to September 30, 2017
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
Item 6.
|
Exhibits
|
2.1+
|
|
Membership Interest Purchase Agreement dated as of July 31, 2017 between Intersections Holdings Inc. and One Health Group, LLC (Incorporated by reference to Exhibit 2.1 filed with the Registrant’s Form 8-K filed August 4, 2017).
|
|
|
|
10.1
|
|
Amendment No. 1, dated as of July 31, 2017, to Credit Agreement dated as of April 20, 2017 among Intersections Inc., the Other Credit Parties party thereto, and PEAK6 Investments, L.P. (Incorporated by reference to Exhibit 10.1 filed with the Registrant’s Form 8-K filed August 4, 2017).
|
|
|
|
31.1*
|
|
Certification of Johan J. Roets, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Ronald L. Barden, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1*
|
|
Certification of Johan J. Roets, Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2*
|
|
Certification of Ronald L. Barden, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101.INS
|
|
XBRL Instance Document.
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Labels Linkbase Document.
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
+
|
The schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Intersections Inc. undertakes to furnish supplemental copies of any of the omitted schedules or exhibits upon request by the Securities and Exchange Commission.
|
|
|
|
|
*
|
Filed herewith.
|
|
|
|
INTERSECTIONS INC.
|
|
|
|
|
|
Date:
|
November 13, 2017
|
By:
|
/s/ Ronald L. Barden
|
|
|
|
Ronald L. Barden
|
|
|
|
Chief Financial Officer
|
1 Year Intersections, Inc. Chart |
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