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Angie's List Reports Fourth Quarter And Fiscal Year 2012 Results

Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding expected revenue, future marketing expense and growth opportunities. These forward-looking statements are based on Angie's List's current assumptions, expectations and beliefs and involve substantial risks and uncertainties that may cause results, performance or achievement to materially differ from those expressed or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to: our ability to accurately measure and predict revenue per paid membership, membership acquisition costs or costs associated with servicing our members; our ability to protect our brand and maintain our reputation among consumers and local service providers; our ability to attract and retain local service providers to advertise on our service; our ability to increase our pricing on memberships and service provider contracts as we increase our market penetration; our ability to replicate our business model in our less penetrated markets; our success in converting consumers and local service providers into paid memberships and participating service providers; competitive factors; our ability to stay abreast of modified or new laws and regulations applying to our business, including those regarding sales or transaction taxes and privacy regulation; our ability to adequately protect our intellectual property; our ability to manage our growth; and general economic conditions worldwide.

Further information on these factors and other risks that may affect our business is included in filings we make with the Securities and Exchange Commission from time to time, including Angie's List's Annual Report on Form 10-K and its subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

These documents are or will be available online from the SEC or on the SEC Filings section of the Investor Relations section of our website at Information on our website is not part of this release. All forward-looking statements in this press release are based on information currently available to us, and we assume no obligation to update these forward-looking statements in light of new information or future events.

Angie's List, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
  December 31, December 31,
  2012 2011
Cash and cash equivalents $42,638 $88,607
Investments 10,460 -
Restricted cash 50 300
Accounts receivable, net 7,787 3,937
Prepaid expenses and other current assets 19,810 11,835
Total current assets 80,745 104,679
Property and equipment, net 12,079 3,883
Goodwill 415 415
Amortizable intangible assets, net 2,356 1,555
Deferred financing fees, net 634 866
Total assets $96,229 $111,398
Liabilities and stockholders' equity    
Accounts payable $6,489 $5,266
Accrued liabilities 14,058 10,532
Deferred membership revenue 27,627 17,153
Deferred advertising revenue 23,160 13,643
Total current liabilities 71,334 46,594
Long-term debt, including accrued interest 14,869 14,820
Deferred membership revenue, noncurrent 4,330 3,751
Deferred advertising revenue, noncurrent 214 239
Deferred income taxes 163 158
Total liabilities 90,910 65,562
Stockholders' equity:    
Common stock 66 65
Additional paid-in-capital 248,326 235,950
Treasury stock (23,719) (23,719)
Accumulated deficit (219,354) (166,460)
Total stockholders' equity 5,319 45,836
Total liabilities and stockholders' equity $96,229 $111,398
Angie's List, Inc. 
Condensed Consolidated Statements of Operations 
(in thousands, except per share data) 
  Three Months Ended December 31, Year Ended December 31,  
  2012 2011 2012 2011
  (Unaudited)  (Unaudited)
 Membership  $13,681 $9,733 $47,717 $33,815
 Service provider  32,498 17,716 108,082 56,228
Total revenue  46,179 27,449 155,799 90,043
Operating expenses        
 Operations and support  7,450 4,123 27,081 16,417
 Selling  15,622 11,423 58,596 33,815
 Marketing  8,914 8,131 80,230 56,122
 Technology  4,647 3,106 16,870 9,109
 General and administrative  6,635 6,010 24,055 18,740
Operating income (loss)  2,911 (5,344) (51,033) (44,160)
 Interest expense, net  476 485 1,856 3,004
 Loss on debt extinguishment —   —   —   1,830
Income (loss) before income taxes  2,435 (5,829) (52,889) (48,994)
Income tax expense  5 43   5 43
Net income (loss)  $2,430  $ (5,872)  $ (52,894)  $ (49,037)
Net income (loss) per common share         
 Basic $0.04  $ (0.14)  $ (0.92)  $ (1.60)
 Diluted $0.04  $ (0.14)  $ (0.92)  $ (1.60)
Weighted average common shares outstanding        
 Basic  57,831 41,131 57,486 30,656
 Diluted 57,889 41,131 57,486 30,656
Non-cash stock-based compensation        
 Technology $199 $424 $762 $786
 General and administrative 531 1,574 2,181 3,056
Total non-cash stock-based compensation $730 $1,998 $2,943 $3,842
Reconciliation of adjusted EBITDA (loss) to net income (loss) (Unaudited):        
Net income (loss): $2,430  $ (5,872)  $ (52,894)  $ (49,037)
 Income tax 5  43  5   43
 Interest expense, net 476 485 1,856 3,004
 Depreciation and amortization 793 465 2,753 1,660
 Loss on debt extinguishment —   —  —   1,830
 Non-cash stock-based compensation 730 1,998 2,943 3,842
Adjusted EBITDA (loss) $4,434  $ (2,881)  $ (45,337)  $ (38,658)
Angie's List, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
  Year Ended Year Ended 
  2012 2011
Operating activities    
Net loss  $ (52,894)  $ (49,037)
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 2,753 1,660
Deferred income taxes 5 4
Accrued interest due on debt maturity date 625
Amortization of debt discount and deferred financing fees 312 596
Non-cash stock-based compensation expense 2,943 3,842
Non-cash loss on debt extinguishment 1,075
Changes in certain assets:    
Accounts receivable, prepaid expenses and other current (11,825) (7,343)
Changes in certain liabilities:    
Accounts payable and accrued liabilities 4,764 3,918
Deferred advertising revenue 9,492 5,433
Deferred membership revenue 11,053 6,092
Net cash used in operating activities (33,397) (33,135)
Investing activities    
Purchase of short-term investments (10,491)
Restricted cash 250
Property and equipment (9,730) (3,085)
Data acquisition costs (2,035) (1,191)
Net cash used in investing activities (22,006) (4,276)
Financing activities    
Principal payments on long-term debt, net (6,797)
Sale of common stock, net of costs 8,627 88,565
Proceeds from exercise of stock options 807 — 
Cash paid for financing costs and capital lease obligation (985)
Purchase of treasury shares (21,897)
Sales of preferred stock, net of costs —  57,923
Net cash provided by financing activities 9,434 116,809
Net increase (decrease) in cash (45,969) 79,398
Cash and cash equivalents, beginning of period 88,607 9,209
Cash and cash equivalents, end of period $42,638 $88,607
CONTACT: Investor Relations at Angie's List
         Tom Ward
         Investor Relations
         Cheryl Reed
         Public Relations

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