ANCESTRY.COM LLC REPORTS Q FINANCIAL RESULTS

Transcription

1 REPORTS Q2 FINANCIAL RESULTS Ancestry.cm Subscriber Grwth f 5% Year-Over-Year Q2 Nn-GAAP Revenues $138 millin, Up 16% Year-Over-Year Adjusted EBITDA Grwth f 26% Year-Over-Year PROVO, Utah, July 30, Ancestry.cm LLC, the wrld s largest nline family histry resurce, reprted financial results tday fr the secnd quarter ended. "Ancestry.cm perfrmed slidly in the secnd quarter, and thrugh the first half f we have seen steady subscriber increases and strng grwth in nn-gaap revenue and adjusted EBITDA," said Tim Sullivan, Chief Executive Officer f Ancestry.cm. "These first half results have enabled us t de-lever ur balance sheet mre quickly than we had anticipated, while maintaining ur cmmitment t healthy levels f investment. We remain fcused n delivering unique cntent and user experiences thrugh new features and advancements in ur sharing, mbile and DNA capabilities." Secnd Quarter Financial Highlights Ttal revenue fr the secnd quarter f was $131.9 millin. Nn-GAAP revenue 1 fr the secnd quarter f ttaled $137.7 millin, an increase f 15.6% ver $119.1 millin in the secnd quarter f, driven by grwth in ur cre Ancestry.cm branded websites revenues, Archives.cm revenues and AncestryDNA revenues. Adjusted EBITDA 2 fr the secnd quarter f was $54.2 millin, cmpared t $42.9 millin in the secnd quarter f. The adjusted EBITDA margin f nn-gaap revenues fr the secnd quarter f was 39.4%, cmpared t 36.0% in the secnd quarter f. Net incme (lss) fr the secnd quarter was a lss f $(21.3) millin, cmpared t net incme f $20.0 millin in the secnd quarter f. The lss was primarily due t the nn-cash amrtizatin f acquired intangible assets f $46.3 millin, due t the December transactin. Free cash flw 3 ttaled $12.1 millin fr the secnd quarter f cmpared t $16.3 millin fr the secnd quarter f. Cash and cash equivalents ttaled $32.6 millin as f. Obligatins under lng-term debt ttaled $930.8 millin as f. Recent Business Highlights Ttal subscribers acrss all websites, including Ancestry.cm, Archives.cm, Fld3.cm and Newspapers.cm, were apprximately 2,715,000 as f. Subscribers f Ancestry.cm branded websites ttaled apprximately 2,112,000 as f, a 5.3% increase ver the end f the secnd quarter f and up slightly frm the end f the first quarter f. Launch f StryView prduct experience that enables users t create a highly sharable narrative arund a persn in their family tree. Launch f the Shebx by Ancestry.cm mbile app that empwers members t easily scan and uplad phts and dcuments t the site using their mbile phnes. The Cmpany added mre than 100 millin recrds during the quarter. New cllectins added in Q2 included: 1 Nn-GAAP revenues are defined as the revenues that wuld have been recgnized, except fr the write-dwn f deferred revenue t fair value as a result f the applicatin f purchase accunting fr the merger transactin. 2 Adjusted EBITDA is defined as net incme (lss) plus nn-cash adjustments t revenue frm purchase accunting, interest expense, net; ther (incme) expense, net; incme tax expense (benefit); nn-cash charges including depreciatin, amrtizatin, impairment f intangible assets and stckbased cmpensatin expense. 3 Free cash flw subtracts frm adjusted EBITDA capitalizatin f cntent databases, purchases f prperty and equipment and cash received (paid) fr incme taxes and interest.

2 Natinal Archives and Recrds Administratin recrds spanning 1812 Pensins t the Mexican Civil War 450,000 recrds Surrey, England Parish recrds, millin recrds Puert Ric Scial and Ppulatin Schedule recrds, millin recrds Canadian Pre-Cnfederatin Military cllectins 1.9 millin recrds Cnference Call & Webcast Ancestry.cm will hst a cnference call tday at 3:00 p.m. MT (5:00 p.m. ET). Participants can access the cnference call by dialing (719) apprximately ten minutes prir t the start time. Use f Nn-GAAP Measures The Cmpany believes that nn-gaap revenues, adjusted EBITDA and free cash flw are useful measures f perating perfrmance because they exclude items that the Cmpany des nt cnsider indicative f its cre perfrmance. Nn- GAAP revenue is calculated by adding the effects f nn-cash adjustments t revenue frm purchase accunting fr the merger transactin. In the case f adjusted EBITDA, net incme (lss) is adjusted fr such expenses as nn-cash adjustments t revenue frm purchase accunting, interest expense, net; ther (incme) expense, net; incme tax expense (benefit); and nn-cash charges including depreciatin, amrtizatin and stck-based cmpensatin expense. Free cash flw subtracts frm adjusted EBITDA the capitalizatin f cntent databases, purchases f prperty and equipment and cash received (paid) fr incme taxes and interest. Hwever, these nn-gaap measures shuld be cnsidered in additin t, nt as a substitute fr r superir t, revenue, net incme (lss) and net cash prvided by perating activities, r ther financial measures prepared in accrdance with GAAP. A recnciliatin t the GAAP equivalents f these nn-gaap measures is cntained in tabular frm n the attached unaudited summary financial statements. The Cmpany uses nn-gaap revenues, adjusted EBITDA and free cash flw as measures f perating perfrmance; fr planning purpses, including the preparatin f the annual perating budget; t allcate resurces t enhance the financial perfrmance f its business; t evaluate the effectiveness f its business strategies; t prvide cnsistency and cmparability with past financial perfrmance; t facilitate a cmparisn f its results with thse f ther cmpanies; and in cmmunicatins with its perating cmmittee cncerning its financial perfrmance. The Cmpany als uses nn-gaap revenues and adjusted EBITDA as factrs when determining the incentive cmpensatin pl. Abut Ancestry.cm Ancestry.cm is the wrld's largest nline family histry resurce with apprximately 2.7 millin paying subscribers acrss all its websites. Mre than 11 billin recrds have been added t the Ancestry.cm sites and users have created mre than 50 millin family trees cntaining mre than 5 billin prfiles. In additin t its flagship site the cmpany perates several Ancestry internatinal websites alng with a suite f nline family histry brands, including Archives.cm, Fld3.cm and Newspapers.cm, all designed t empwer peple t discver, preserve and share their family histry. Frward-Lking Statements This press release cntains frward-lking statements. These statements relate t future events r t future financial perfrmance and invlve knwn and unknwn risks, uncertainties, and ther factrs that may cause the Cmpany's actual results, levels f activity, perfrmance, r achievements t be materially different frm thse anticipated in these frwardlking statements. In sme cases, yu can identify frward-lking statements by the use f wrds such as "appears," "may," "designed," "expect," "intend," "fcus," "seek," "anticipate," "believe," "estimate," "predict," "ptential," "shuld," "cntinue" r "wrk" r the negative f these terms r ther cmparable terminlgy. These statements include statements describing the Cmpany's subscriber base, its reach, its activities t enhance subscribers' experience and deliver prduct innvatins and enhancements, imprved features and tls, its activities t develp and prmte its prducts (including DNA services), its business utlk, its leadership psitin and its pprtunities and prspects fr grwth, including grwth in revenues, adjusted EBITDA and number f subscribers. These frward-lking statements are based n infrmatin available t the Cmpany as f the date f this press release. Frward-lking statements invlve a number f risks and uncertainties that culd cause actual results t differ materially frm thse anticipated by these frward-lking statements. Such risks and uncertainties include a variety f factrs, sme f which are beynd the Cmpany's cntrl. In particular, such risks and uncertainties include the Cmpany's cntinued ability t attract and retain subscribers; its cntinued ability t acquire cntent and make it available nline; its ability t add tls and features and

3 prvide value t satisfy custmer demand; difficulties encuntered in integrating acquired businesses and retaining custmers; the timing and amunt f investments in the Cmpany's DNA service; market cnditins; the Cmpany s substantial debt bligatins as a result f the acquisitin f the Cmpany by a cmpany cntrlled by the Permira funds and c-investrs; the availability f cash and credit; the adverse impact f cmpetitive prduct annuncements; failure t achieve anticipated revenues and perating perfrmance; changes in verall ecnmic cnditins; the lss f key emplyees; cmpetitrs' actins; pricing and grss margin pressures; inability t cntrl csts and expenses; and significant litigatin. Infrmatin cncerning additinal factrs that culd cause events r results t differ materially frm thse prjected in the frward-lking statements is cntained under the captin Risk Factrs in ur Registratin Statement n Frm S-4 and in discussins in ther f ur Securities and Exchange Cmmissin filings. These frward-lking statements shuld nt be relied upn as representing ur views as f any subsequent date and we assume n bligatin t publicly update r revise these frward-lking statements fr any reasn, whether as a result f new infrmatin, future events, r therwise. CONDENSED CONSOLIDATED BALANCE SHEETS (in thusands) (unaudited) December 31, ASSETS Current assets: Cash and cash equivalents $32,645 $35,651 Restricted cash 60,170 83,863 Accunts receivable, net f allwances f $539 and $661 at and December 31,, respectively 10,800 11,089 Incme tax receivable 28,817 41,799 Deferred incme taxes 7,067 - Prepaid expenses and ther current assets 8,977 9,816 Ttal current assets 148, ,218 Prperty and equipment, net 33,175 27,813 Cntent database csts, net 266, ,984 Intangible assets, net 507, ,628 Gdwill 944, ,619 Other assets 42,760 50,192 Ttal assets $1,943,211 $2,077,454 LIABILITIES AND MEMBER'S INTERESTS Current liabilities: Accunts payable $13,157 $11,432 Accrued expenses 34,388 62,120 Acquisitin-related liabilities 60,170 83,863 Deferred revenues 139, ,953 Current deferred incme taxes - 2,021 Current prtin f lng-term debt 34,105 6,432 Ttal current liabilities 281, ,821 Lng-term debt, net 875, ,797 Deferred incme taxes 207, ,167 Other lng-term liabilities 6,005 13,323 Ttal liabilities 1,370,821 1,468,108 Cmmitments and cntingencies Member's interests 687, ,021 Accumulated deficit (115,382) (72,675) Ttal member's interests 572, ,346 Ttal liabilities and member's interests $1,943,211 $2,077,454

4 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thusands) Successr Predecessr Successr Predecessr Three Mnths Ended Six Mnths Ended (unaudited) Revenues: Subscriptin revenues $122,708 $113,037 $236,482 $215,633 Prduct and ther revenues 9,240 6,041 18,988 11,981 Ttal revenues 131, , , ,614 Csts f revenues: Cst f subscriptin revenues 21,661 16,403 43,404 32,697 Cst f prduct and ther revenues 5,937 3,584 11,668 6,369 Ttal cst f revenues 27,598 19,987 55,072 39,066 Grss prfit 104,350 99, , ,548 Operating expenses: Technlgy and develpment 21,418 18,778 41,935 35,405 Marketing and advertising 34,364 34,944 71,322 74,493 General and administrative 13,456 12,733 25,275 23,375 Amrtizatin f acquired intangible assets 46,296 3,224 92,682 5,785 Ttal perating expenses 115,534 69, , ,058 Incme (lss) frm peratins (11,184) 29,412 (30,816) 49,490 Interest expense, net (29,492) (128) (51,500) (294) Other incme (expense), net (161) 74 (712) 279 Incme (lss) befre incme taxes (40,837) 29,358 (83,028) 49,475 Incme tax benefit (expense) 19,557 (9,381) 40,321 (15,951) Net incme (lss) $(21,280) $19,977 $(42,707) $33,524 Cmprehensive incme (lss) $(21,280) $19,578 $(42,707) $33,391 Successr Predecessr Successr Predecessr Three Mnths Ended Six Mnths Ended (Unaudited) Recnciliatin f adjusted EBITDA and free cash flw t net incme (lss) (in thusands): Net incme (lss) $(21,280) $19,977 $(42,707) $33,524 Nn-cash revenue adjustment 5,750-17,249 - Interest expense, net 29, , Other incme (expense), net 161 (74) 712 (279) Incme tax expense (benefit) (19,557) 9,381 (40,321) 15,951 Depreciatin 4,055 3,606 7,828 7,153 Amrtizatin 52,862 5, ,755 10,922 Stck-based cmpensatin expense 2,740 4,056 3,186 7,003 Adjusted EBITDA $54,223 $42,885 $103,202 $74,568 Capitalizatin f cntent database csts (3,919) (7,538) (8,672) (12,678) Purchase f prperty and equipment (9,667) (5,024) (13,190) (10,117) Cash paid fr interest (25,524) (83) (37,305) (200) Cash received (paid) fr incme taxes (3,037) (13,904) 18,731 (20,524) Free cash flw $12,076 $16,336 $62,766 $31,049

5 Successr Predecessr Successr Predecessr Three Mnths Ended Six Mnths Ended Recnciliatin f nn-gaap revenues t ttal revenues (in thusands): (Unaudited) Ttal revenues $131,948 $119,078 $255,470 $227,614 Nn-cash revenue adjustment (1) 5,750-17,249 - Nn-GAAP revenues $137,698 $119,078 $272,719 $227,614 (1) Represents nn-cash adjustments t revenue r the revenues that wuld have been recgnized, except fr the write-dwn f deferred revenue t fair value as a result f the applicatin f purchase accunting fr the merger transactin. Ttal Subscribers and Net Subscriber Additins (in thusands) Three Mnths Ended March 31, Ttal subscribers 2,112 2,096 2,005 Net subscriber additins Cntact: Media: Heather Ericksn (801) hericksn@ancestry.cm Investrs: Mike Hustn (801) mhustn@ancestry.cm