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Exhibit 99.1

 

LOGO

ANCESTRY.COM LLC REPORTS Q2 2013 FINANCIAL RESULTS

– Ancestry.com Subscriber Growth of 5% Year-Over-Year –

– Q2 Non-GAAP Revenues $138 million, Up 16% Year-Over-Year –

– Adjusted EBITDA Growth of 26% Year-Over-Year –

PROVO, Utah, July 30, 2013 – Ancestry.com LLC, the world’s largest online family history resource, reported financial results today for the second quarter ended June 30, 2013.

“Ancestry.com performed solidly in the second quarter, and through the first half of 2013 we have seen steady subscriber increases and strong growth in non-GAAP revenue and adjusted EBITDA,” said Tim Sullivan, Chief Executive Officer of Ancestry.com. “These first half results have enabled us to de-lever our balance sheet more quickly than we anticipated, while maintaining our commitment to healthy levels of investment. We remain focused on delivering unique content and user experiences through new features and advancements in our sharing, mobile and DNA capabilities.”

Second Quarter 2013 Financial Highlights

 

   

Total revenue for the second quarter of 2013 was $131.9 million.

 

   

Non-GAAP revenue for the second quarter of 2013 totaled $137.7 million, an increase of 15.6% over $119.1 million in the second quarter of 2012, driven by growth in our core Ancestry.com branded websites revenues, Archives.com revenues and AncestryDNA revenues.

 

   

Adjusted EBITDA for the second quarter of 2013 was $54.2 million, compared to $42.9 million in the second quarter of 2012. The adjusted EBITDA margin of non-GAAP revenues for the second quarter of 2013 was 39.4%, compared to 36.0% in the second quarter of 2012.

 

   

Net income (loss) for the second quarter 2013 was a loss of $(21.3) million, compared to net income of $20.0 million in the second quarter of 2012. The loss was primarily due to the non-cash amortization of acquired intangible assets of $46.3 million, due to the December 2012 transaction.

 

   

Free cash flow totaled $12.1 million for the second quarter of 2013 compared to $16.3 million for the second quarter of 2012.

 

   

Cash and cash equivalents totaled $32.6 million as of June 30, 2013.

 

   

Obligations under long-term debt totaled $930.8 million as of June 30, 2013.

Recent Business Highlights

 

   

Total subscribers across all websites, including Ancestry.com, Archives.com, Fold3.com and Newspapers.com, were approximately 2,715,000 as of June 30, 2013.

 

   

Subscribers of Ancestry.com branded websites totaled approximately 2,112,000 as of June 30, 2013, a 5.3% increase over the end of the second quarter of 2012 and up slightly from the end of the first quarter of 2013.

 

   

Launch of StoryView product experience that enables users to create a highly sharable narrative around a person in their family tree.

 

   

Launch of the Shoebox by Ancestry.com mobile app that empowers members to easily scan and upload photos and documents to the site using their mobile phones.

 

   

The Company added more than 100 million records during the quarter. New collections added in Q2 included:

 

   

National Archives and Records Administration records spanning 1812 Pensions to the Mexican Civil War – 450,000 records

 

   

Surrey, England Parish records, 1538-1987 – 2.6 million records

 

   

Puerto Rico Social and Population Schedule records, 1935-1936 – 1.7 million records

 

   

Canadian Pre-Confederation Military collections – 1.9 million records


Conference Call & Webcast

Ancestry.com will host a conference call today at 3:00 p.m. MT (5:00 p.m. ET). Participants can access the conference call by dialing (719) 325-2362 approximately ten minutes prior to the start time.

Use of Non-GAAP Measures

The Company believes that non-GAAP revenues, adjusted EBITDA and free cash flow are useful measures of operating performance because they exclude items that the Company does not consider indicative of its core performance. Non-GAAP revenue is calculated by adding the effects of non-cash adjustments to revenue from purchase accounting for the merger transaction. In the case of adjusted EBITDA, net income (loss) is adjusted for such expenses as non-cash adjustments to revenue from purchase accounting, interest expense, net; other (income) expense, net; income tax expense (benefit); and non-cash charges including depreciation, amortization and stock-based compensation expense. Free cash flow subtracts from adjusted EBITDA the capitalization of content databases, purchases of property and equipment and cash received (paid) for income taxes and interest. However, these non-GAAP measures should be considered in addition to, not as a substitute for or superior to, revenue, net income (loss) and net cash provided by operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of these non-GAAP measures is contained in tabular form on the attached unaudited summary financial statements.

The Company uses non-GAAP revenues, adjusted EBITDA and free cash flow as measures of operating performance; for planning purposes, including the preparation of the annual operating budget; to allocate resources to enhance the financial performance of its business; to evaluate the effectiveness of its business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of its results with those of other companies; and in communications with its operating committee concerning its financial performance. The Company also uses non-GAAP revenues and adjusted EBITDA as factors when determining the incentive compensation pool.

About Ancestry.com

Ancestry.com is the world’s largest online family history resource with approximately 2.7 million paying subscribers across all its websites. More than 11 billion records have been added to the Ancestry.com sites and users have created more than 50 million family trees containing more than 5 billion profiles. In addition to its flagship site www.ancestry.com, the company operates several Ancestry international websites along with a suite of online family history brands, including Archives.com, Fold3.com and Newspapers.com, all designed to empower people to discover, preserve and share their family history.

Forward-Looking Statements

This press release contains forward-looking statements. These statements relate to future events or to future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause the Company’s actual results, levels of activity, performance, or achievements to be materially different from those anticipated in these forward-looking statements. In some cases, you can identify forward-looking statements by the use of words such as “appears,” “may,” “designed,” “expect,” “intend,” “focus,” “seek,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “should,” “continue” or “work” or the negative of these terms or other comparable terminology. These statements include statements describing the Company’s subscriber base, its reach, its activities to enhance subscribers’ experience and deliver product innovations and enhancements, improved features and tools, its activities to develop and promote its products (including DNA services), its business outlook, its leadership position and its opportunities and prospects for growth, including growth in revenues, adjusted EBITDA and number of subscribers. These forward-looking statements are based on information available to the Company as of the date of this press release. Forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those anticipated by these forward-looking statements. Such risks and uncertainties include a variety of factors, some of which are beyond the Company’s control. In particular, such risks and uncertainties include the Company’s continued ability to attract and retain subscribers; its continued ability to acquire content and make it available online; its ability to add tools and features and provide value to satisfy customer demand; difficulties encountered in integrating acquired businesses and retaining customers; the timing and amount of investments in the Company’s DNA service; market conditions; the Company’s substantial debt obligations as a result of the acquisition of the Company by a company controlled by the Permira funds and co-investors; the availability of cash and credit; the adverse impact of competitive product announcements; failure to


achieve anticipated revenues and operating performance; changes in overall economic conditions; the loss of key employees; competitors’ actions; pricing and gross margin pressures; inability to control costs and expenses; and significant litigation. Information concerning additional factors that could cause events or results to differ materially from those projected in the forward-looking statements is contained under the caption “Risk Factors” in our Registration Statement on Form S-4 and in discussions in other of our Securities and Exchange Commission filings.

These forward-looking statements should not be relied upon as representing our views as of any subsequent date and we assume no obligation to publicly update or revise these forward-looking statements for any reason, whether as a result of new information, future events, or otherwise.

ANCESTRY.COM LLC

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands)

 

     June 30,
2013
    December 31,
2012
 
     (unaudited)        
ASSETS     

Current assets:

    

Cash and cash equivalents

   $ 32,645      $ 35,651   

Restricted cash

     60,170        83,863   

Accounts receivable, net of allowances of $539 and $661 at June 30, 2013 and December 31, 2012, respectively

     10,800        11,089   

Income tax receivable

     28,817        41,799   

Deferred income taxes

     7,067        —     

Prepaid expenses and other current assets

     8,977        9,816   
  

 

 

   

 

 

 

Total current assets

     148,476        182,218   

Property and equipment, net

     33,175        27,813   

Content database costs, net

     266,587        270,984   

Intangible assets, net

     507,946        600,628   

Goodwill

     944,267        945,619   

Other assets

     42,760        50,192   
  

 

 

   

 

 

 

Total assets

   $ 1,943,211      $ 2,077,454   
LIABILITIES AND MEMBER’S INTERESTS     

Current liabilities:

    

Accounts payable

   $ 13,157      $ 11,432   

Accrued expenses

     34,388        62,120   

Acquisition-related liabilities

     60,170        83,863   

Deferred revenues

     139,416        116,953   

Current deferred income taxes

     —          2,021   

Current portion of long-term debt

     34,105        6,432   
  

 

 

   

 

 

 

Total current liabilities

     281,236        282,821   

Long-term debt, net

     875,860        936,797   

Deferred income taxes

     207,720        235,167   

Other long-term liabilities

     6,005        13,323   
  

 

 

   

 

 

 

Total liabilities

     1,370,821        1,468,108   

Commitments and contingencies

    

Member’s interests

     687,772        682,021   

Accumulated deficit

     (115,382     (72,675
  

 

 

   

 

 

 

Total member’s interests

     572,390        609,346   
  

 

 

   

 

 

 

Total liabilities and member’s interests

   $ 1,943,211      $ 2,077,454   


ANCESTRY.COM LLC

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

 

     Successor          Predecessor     Successor          Predecessor  
     Three Months Ended     Six Months Ended  
     June 30, 2013          June 30, 2012     June 30, 2013          June 30, 2012  
     (unaudited)  

Revenues:

                  

Subscription revenues

   $ 122,708           $ 113,037      $ 236,482           $ 215,633   

Product and other revenues

     9,240             6,041        18,988             11,981   
  

 

 

        

 

 

   

 

 

        

 

 

 

Total revenues

     131,948             119,078        255,470             227,614   

Costs of revenues:

                  

Cost of subscription revenues

     21,661             16,403        43,404             32,697   

Cost of product and other revenues

     5,937             3,584        11,668             6,369   
  

 

 

        

 

 

   

 

 

        

 

 

 

Total cost of revenues

     27,598             19,987        55,072             39,066   
  

 

 

        

 

 

   

 

 

        

 

 

 

Gross profit

     104,350             99,091        200,398             188,548   

Operating expenses:

                  

Technology and development

     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   

Amortization of acquired intangible assets

     46,296             3,224        92,682             5,785   
  

 

 

        

 

 

   

 

 

        

 

 

 

Total operating expenses

     115,534             69,679        231,214             139,058   
  

 

 

        

 

 

   

 

 

        

 

 

 

Income (loss) from operations

     (11,184          29,412        (30,816          49,490   

Interest expense, net

     (29,492          (128     (51,500          (294

Other income (expense), net

     (161          74        (712          279   
  

 

 

        

 

 

   

 

 

        

 

 

 

Income (loss) before income taxes

     (40,837          29,358        (83,028          49,475   

Income tax benefit (expense)

     19,557             (9,381     40,321             (15,951
  

 

 

        

 

 

   

 

 

        

 

 

 

Net income (loss)

   $ (21,280        $ 19,977      $ (42,707        $ 33,524   

Comprehensive income (loss)

   $ (21,280        $ 19,578      $ (42,707        $ 33,391   

 

     Successor          Predecessor     Successor          Predecessor  
     Three Months Ended     Six Months Ended  
     June 30, 2013          June 30, 2012     June 30, 2013          June 30, 2012  
     (Unaudited)  

Reconciliation of adjusted EBITDA and free cash flow to net income (loss) (in thousands):

                  

Net income (loss)

   $ (21,280        $ 19,977      $ (42,707        $ 33,524   

Non-cash revenue adjustment

     5,750             —          17,249             —     

Interest expense, net

     29,492             128        51,500             294   

Other income (expense), net

     161             (74     712             (279

Income tax expense (benefit)

     (19,557          9,381        (40,321          15,951   

Depreciation

     4,055             3,606        7,828             7,153   

Amortization

     52,862             5,811        105,755             10,922   

Stock-based compensation expense

     2,740             4,056        3,186             7,003   
  

 

 

        

 

 

   

 

 

        

 

 

 

Adjusted EBITDA

   $ 54,223           $ 42,885      $ 103,202           $ 74,568   
  

 

 

        

 

 

   

 

 

        

 

 

 

Capitalization of content database costs

     (3,919          (7,538     (8,672          (12,678

Purchase of property and equipment

     (9,667          (5,024     (13,190          (10,117

Cash paid for interest

     (25,524          (83     (37,305          (200

Cash received (paid) for income taxes

     (3,037          (13,904     18,731             (20,524
  

 

 

        

 

 

   

 

 

        

 

 

 

Free cash flow

   $ 12,076           $ 16,336      $ 62,766           $ 31,049   
  

 

 

        

 

 

   

 

 

        

 

 

 


     Successor           Predecessor      Successor           Predecessor  
     Three Months Ended      Six Months Ended  
     June 30,
2013
          June 30,
2012
     June 30,
2013
          June 30,
2012
 
     (Unaudited)  

Reconciliation of non-GAAP revenues to total revenues (in thousands):

                     

Total revenues

   $ 131,948            $ 119,078       $ 255,470            $ 227,614   

Non-cash revenue adjustment (1)

     5,750              —           17,249              —     
  

 

 

         

 

 

    

 

 

         

 

 

 

Non-GAAP revenues

   $ 137,698            $ 119,078       $ 272,719            $ 227,614   
  

 

 

         

 

 

    

 

 

         

 

 

 

 

(1) Represents non-cash adjustments to revenue or the revenues that would have been recognized, except for the write-down of deferred revenue to fair value as a result of the application of purchase accounting for the merger transaction.

ANCESTRY.COM LLC

Total Subscribers and Net Subscriber Additions

(in thousands)

 

     Three Months Ended  
     June 30, 2013      March 31, 2013      June 30, 2012  

Total subscribers

     2,112         2,096         2,005   

Net subscriber additions

     16         80         136   

Contact:

 

Media:

  Investors:  
Heather Erickson   Mike Houston  
(801) 705-7104
herickson@ancestry.com
 

(801) 705-7942

mhouston@ancestry.com