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Intersections Inc. Reports Fourth Quarter 2013 Earnings; Provides Guidance On Future Revenue

Stocks in this article: INTX

Intersections Inc. (NASDAQ: INTX) today announced financial results for the quarter and year ended December 31, 2013. Revenue for the year ended December 31, 2013 was $310.3 million, as compared to $347.4 million for the year ended December 31, 2012. Consolidated adjusted EBITDA before share related compensation and non-cash impairment charges for the year ended December 31, 2013 was $29.2 million, compared to $59.0 million for the year ended December 31, 2012. Net income for the year ended December 31, 2013 was $2.4 million, as compared to $19.7 million for the year ended December 31, 2012. Cash flow provided by operations for the year ended December 31, 2013 was $23.1 million. Diluted earnings per share decreased to $0.13 for the year ended December 31, 2013, from $1.04 for the year ended December 31, 2012. As of December 31, 2013, we had a cash balance of $20.9 million and no borrowings under our revolving credit facility.

Intersections is currently forecasting anticipated future revenue as follows:

  • 2014 revenue is projected to be in the range of $260-275 million on a consolidated basis
  • 2015 revenue is projected to exceed $300 million
  • 2016 revenue is projected to approach $400 million based largely upon growth in revenues for the Identity Guard® and VOYCE™ brands.

Michael Stanfield, Chairman and Chief Executive Officer of Intersections commented, “We are pleased with our progress in developing new products to fuel future growth for both the Identity Guard® and VOYCE™ brands. Based upon anticipated consumer demand for these products, we are hopeful that by the end of 2014 we will be back on track with sustainable revenue growth.”

Fourth Quarter 2013 Financial Highlights:

  • Total subscribers decreased to approximately 2.9 million compared to 4.5 million as of December 31, 2012, approximately 63 thousand of whom remain in a non-billable status as of December 31, 2013.
  • Total consolidated revenue for the fourth quarter of 2013 was $72.1 million compared to $84.0 million for the fourth quarter of 2012.
  • Consolidated net income for the quarter ended December 31, 2013 was $119 thousand, or less than $0.01 per diluted share, compared to consolidated net income of $1.6 million, or $0.08 per diluted share, for the quarter ended December 31, 2012.
  • Consolidated cash flow provided by operations for the quarter ended December 31, 2013 was approximately $5.7 million.

Full Year 2013 Financial Highlights:

  • Total consolidated revenue for the year ended December 31, 2013 was $310.3 million, compared to $347.4 million for the year ended December 31, 2012.
  • Consolidated net income for the year ended December 31, 2013 was $2.4 million, or $0.13 per diluted share, compared to $19.7 million, or $1.04 per diluted share, for the year ended December 31, 2012.
  • In addition, we spent approximately $9.0 million on research, development and other operating costs associated with our subsidiary i4c Innovations’ VOYCE™ product and service which we are in the process of launching.
  • Net income for 2013 was negatively impacted by an aggregate of approximately $6.2 million in pre-tax expenses for severance, expenses associated with warrants we exercised in our long-term investment in White Sky, a non-cash impairment charge, a non-cash valuation allowance on an existing deferred tax asset and technology license expenses for the new monitoring business line we are developing.
  • Consolidated cash flow provided by operations for the year ended December 31, 2013 was approximately $23.1 million.

In the year ended December 31, 2013, we ceased all business activities in our subsidiary Net Enforcers, which was included in our Online Brand Protection Segment. We determined that Net Enforcers met the requirements for classification as a discontinued operation under U.S. GAAP and we have recast our condensed consolidated statements of operations for the periods presented. Loss from discontinued operations, net of tax, was $9 thousand and $275 thousand, respectively, for the years ended December 31, 2013 and 2012. In addition, on March 10, 2014, we made the determination to cease ongoing operations at our subsidiary Intersection Business Intelligence Services (D/B/A Zumetrics®). These operations are expected to wind down and cease during the three months ending June 30, 2014. We plan to classify Zumetrics® as a discontinued operation at the time it meets the requirements under U.S. GAAP and thereafter, will no longer have a Market Intelligence segment.

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