Form 8-K Care.com Inc For: Oct 29

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October 29, 2015 4:13 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K




 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
 
Date of report (Date of earliest event reported): October 26, 2015
 




Care.com, Inc.
(Exact name of registrant as specified in its charter)




 
Delaware
 
001-36269
 
20-5785879
(State or other jurisdiction of
incorporation or organization)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
 
 
77 Fourth Avenue, Fifth Floor
 Waltham, MA 02451
 (Address of principal executive offices) (Zip Code)
 
(781) 642-5900
 (Registrant’s telephone number, include area code)
 
 
 
 
 
N/A
 (Former Name or Former Address, if Changed Since Last Report)
 




 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 








Item 2.02. Results of Operations and Financial Condition
On October 29, 2015, Care.com, Inc. (the "Company") issued a press release announcing financial results for the third quarter ended on September 26, 2015. A copy of the press release is furnished as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
The information set forth under this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any other filing under the Securities Act of 1933 or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 2.05. Costs Associated with Exit or Disposal Activities
On October 26, 2015, as part of the Company's efforts to reduce costs and focus resources on higher growth potential businesses such as its payments and workplace solutions businesses, the Board of Directors (the "Board") of the Company determined to begin to wind down the operations of Citrus Lane, Inc., which the Company acquired in July 2014. The Company expects to complete the wind down in the first quarter of 2016.
At this time, the Company is unable to make a good faith estimate of the total amount or range of amounts to be incurred in connection with the wind down, nor an estimate of the amount or range of amounts of any charges that would result in future cash expenditures. In accordance with Item 2.05 of Form 8-K, the Company will timely file an amendment to this report upon the determination of such amounts.

Item 2.06. Material Impairments
During the third quarter of 2015, the Company determined that it should consider the advisability of a sale or wind down of the Citrus Lane business. As a result of this determination, the Company concluded that indicators of impairment existed in the Citrus Lane business and began an analysis of whether any material impairment charges would be required. On October 26, 2015, based on the Company's preliminary calculations, the Company recorded a goodwill impairment charge of $8.0 million and an intangible asset impairment charge of $1.7 million during the quarter ended September 26, 2015. These charges are reflected in the third quarter financial statements included in Exhibit 99.1 to this report on Form 8-K and will also be included as part of the Company's Form 10-Q for the quarter ended September 26, 2015. The measurement of impairment will be completed in the fourth quarter of 2015, and any adjustment to the preliminary impairment charges, if any, would be recognized when the Company finalizes the second step of the impairment test as part of the annual goodwill impairment analysis at that time. The Company does not expect these non-cash impairment charges to result in any future cash expenditures.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
On October 26, 2015, Antonio Rodriguez resigned from the Board, and as a member of the nominating and corporate governance committee of the Board, effective immediately. Mr. Rodriguez's decision to resign was not related to a disagreement with the Company over any of its operations, policies or practices.

Item 9.01. Financial Statements and Exhibits
(d) The following exhibit relating to Item 2.02 shall be deemed to be furnished and not filed.
 
Exhibit Number
 
Exhibit Title or Description
 
 
99.1
 
Press release issued by Care.com, Inc. entitled “Care.com Announces Third Quarter 2015 Financial Results” dated October 29, 2015

This report on Form 8-K contains projections and other forward-looking statements regarding future events. These statements are only predictions and reflect our current beliefs and expectations. Actual events or results may differ materially from those contained in the projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter and year progress, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change. Although these expectations may change, we will not necessarily inform you if they do nor will we necessarily update the information contained in this report on Form 8-K. Readers are urged to read the reports and




documents filed from time to time by the Company with the Securities and Exchange Commission for a discussion of important risk factors that could cause actual results to differ materially from those discussed in the forward-looking statements. Forward-looking statements in this report are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.





SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
        
 
 
 
 
 
 
Date: October 29, 2015
 
 
By:
/s/ MICHAEL ECHENBERG
 
 
 
 
Michael Echenberg
 
 
 
 
Executive Vice President and Chief Financial Officer





Exhibit Index

 
Exhibit Number
 
Exhibit Title or Description
 
 
99.1
 
Press release issued by Care.com, Inc. entitled “Care.com Announces Third Quarter 2015 Financial Results” dated October 29, 2015
 
 
 




Exhibit 99.1


Care.com Announces Third Quarter 2015 Financial Results
    

Strong Revenue and Member Growth with Increased Operating Leverage


Waltham, MA - October 29, 2015 - Care.com, Inc. (NYSE: CRCM), the world's largest online destination for finding and managing family care, today announced financial results for the third quarter ended on September 26, 2015.

“We delivered solid revenue and member growth, increased operating leverage, and executed well against our strategic plans,” said Sheila Lirio Marcelo, Founder, Chairwoman, and CEO of Care.com. “We continue to lead the market with our consumer matching and payments solutions, with a focus on mobile innovation and better pricing and packaging to meet the needs of our consumers. We are also investing more in workplace solutions as we see continuous strong growth of this high ROI business.  As a result of these on-going investments, we’ve aligned our company focus on these high growth areas, while managing costs to meet our target of break-even for our entire business by mid-2016."

Highlights

•
Third quarter consolidated revenue was $38.9 million, an increase of 21% over the third quarter of 2014. Organic revenue, which excludes revenue from Citrus Lane, a company we acquired in Q3 2014, grew 22%. Organic sales and marketing expense declined 3%, as compared to the third quarter of 2014, this led to a 15.4 percentage point reduction in organic sales and marketing expenses as a percent of revenue.

•
Third quarter net loss on a consolidated basis was $17.4 million, as compared to a net loss of $14.5 million in the third quarter 2014. Excluding the impact of Citrus Lane, net loss margin improvement was 23 percentage points.

•
On an adjusted EBITDA basis for the consolidated business, the third quarter 2015 loss was $3.9 million. This compares to an adjusted EBITDA loss of $8.7 million in third quarter of 2014. The resulting margin improvement was 17 percentage points. Excluding the impact of Citrus Lane, adjusted EBITDA margin improvement was 15 percentage points.

•
As part of its cost-savings initiatives and desire to focus on investment in the workplace solutions (WPS) and payments businesses, the Company decided during the third quarter to evaluate the advisability of a sale or wind down of the Citrus Lane business and on October 26, the Company decided to wind down Citrus Lane. As a result, the Company wrote off $9.7 million dollars in goodwill and intangible assets during the third quarter of 2015.

Financial Results

•
Revenue for the third quarter of 2015 was $38.9 million, compared to $32.1 million in the third quarter of 2014.
 
◦
Revenue attributable to the US Consumer Businesses totaled $30.2 million in the third quarter of 2015, a 23% increase from $24.6 million in third quarter of 2014.

◦
Revenue attributable to the WPS, International and B2B businesses totaled $5.9 million in the third quarter of 2015, an increase of 19% from Q3 2014, or 26% on a constant currency basis.




◦
Revenue attributable to the Citrus Lane, which we acquired in Q3 2014, totaled $2.7 million in the third quarter of 2015, an 11% increase from $2.5 million in third quarter of 2014.

•
GAAP net loss for the third quarter of 2015 was $17.4 million, compared to a net loss of $14.5 million in the third quarter of 2014.

•
Adjusted EBITDA was a loss of $3.9 million in the third quarter of 2015, compared to an adjusted EBITDA loss of $8.7 million in the third quarter of 2014.

•
GAAP EPS was a $(0.54) loss in the third quarter of 2015 compared to a $(0.46) loss in the third quarter 2014. Q3 GAAP EPS was based on 32.1 million weighted average basic shares outstanding versus 31.4 million shares outstanding in the third quarter of 2014.

•
Non-GAAP EPS was a $(0.18) loss in the third quarter of 2015 compared to a $(0.31) loss in the third quarter 2014. Non-GAAP EPS excludes the impact of non-cash stock based compensation and non-recurring items, such as M&A expenses and impairment charges.

•
The Company ended the quarter with $59.7 million in cash and cash equivalents.

Business Highlights

•
Our total members grew 34% to 17.8 million at the end of the third quarter of 2015, compared to 13.3 million at the end of the third quarter 2014.

•
Total families grew to 10.1 million at the end of the third quarter of 2015, a 36% increase over the third quarter of 2014, and total caregivers grew to 7.7 million at the end of the quarter, a 32% increase over the third quarter of 2014.

•
Third quarter 2015 US Consumer Business end-of-period paying members grew to over 296,000, a 25% increase over the third quarter of 2014.

Financial Expectations
 
Q4 2015
 
Full Year 2015
Revenue
 
 
 
 
 
 
 
Organic (ex. Citrus Lane)
$35.0
-
$37.0
 
$136.0
-
$138.0
Citrus Lane
$2.5
-
$2.5
 
$11.0
-
$11.0
Total
$37.5
-
$39.5
 
$147.0
-
$149.0
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
 
 
Organic (ex. Citrus Lane)
$4.5
-
$5.5
 
$(7)
-
$(6)
Citrus Lane
$(0.5)
-
$(0.5)
 
$(3.7)
-
$(3.7)
Total
$4
-
$5
 
$(10.7)
-
$(9.7)
 
 
 
 
 
 
 
 
Non-GAAP EPS
$0.08
-
$0.11
 
$(0.57)
-
$(0.54)
 
 
 
 
 
 
 
 
Figures in millions except for Non-GAAP EPS
Non-GAAP EPS based on weighted average shares




Earnings Teleconference Information
The Company will discuss its third quarter 2015 financial results during a teleconference today, October 29, 2015, at 4:30 PM ET. The conference call can be accessed at (877) 407-4018 or (201) 689-8471 (international), conference ID# 13622024. The call will also be broadcast simultaneously at http://investors.care.com. Following the completion of the call, a recorded replay of the webcast will be available on Care.com’s website. To listen to the telephone replay, call toll-free (877) 870-5176 or (858) 384-5517 (international), conference ID # 13622024. The telephone replay will be available from 7:30 PM ET October 29 through 11:59 PM ET November 5, 2015. Additional investor information can be accessed at http://www.care.com

About Care.com
Since launching in 2007, Care.com (NYSE: CRCM) has been committed to solving the complex care challenges that impact families, caregivers, employers, and care service companies. Today, Care.com is the world’s largest online destination for finding and managing family care, with 17.8 million member consumers* across 16 countries, including the US, UK, Canada and parts of Western Europe, and approximately half a million employees of corporate clients having access to our services. Spanning child care to senior care, pet care, housekeeping and more, Care.com provides a sweeping array of services for families and caregivers to find, manage and pay for care or find employment. These include: a comprehensive suite of safety tools and resources members may use to help make more informed hiring decisions - such as third-party background check services, monitored messaging, and tips on hiring best practices; easy ways for caregivers to be paid online or via mobile app; and household payroll and tax services provided by Care.com HomePay. Care.com builds employers customized benefits packages covering child care, back up care and senior care consulting services through its Global Workplace Solutions, and serves care businesses with marketing and recruiting support. To further connect families, Care.com has expanded its consumer service with its 2013 acquisition of Big Tent, a community platform. Headquartered in Waltham, Massachusetts, Care.com has offices in Berlin, Austin, New York City and Silicon Valley.
*As of September 2015

Cautionary Language Concerning Forward-Looking Statements:
This press release contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including but not limited to, statements regarding the anticipated profitability of our business in 2016 on an adjusted EBITDA basis and the Company’s financial guidance for the fourth quarter of 2015 and full year 2015. 

These forward-looking statements are made as of the date they were first issued and were based on current expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management. Words such as "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend," variations of these terms or the negative of these terms and similar expressions are intended to identify these forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, many of which involve factors or circumstances that are beyond the Company's control.  The Company's actual results could differ materially from those stated or implied in forward-looking statements due to a number of factors, including but not limited to: our ability to grow our membership while leveraging our investment in sales and marketing, our success in converting non-paying members to paying members, our ability to cross-sell new and existing products and services to our members and to develop new products and services that members consider valuable, our ability to protect our brand and maintain our reputation among our members, costs associated with the expected wind down of our Citrus Lane business and other risks detailed in the Company's other publicly available filings with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this press release represent the Company's views as of the date of this press release. The Company anticipates that subsequent events and developments will cause its views to change.  The Company undertakes no intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing the Company's views as of any date subsequent to the date of this press release.




Use of Non-GAAP Financial Measures

To supplement the financial measures presented in the Company’s press release and related conference call or webcast in accordance with accounting principles generally accepted in the United States ("GAAP"), we also present the following non-GAAP measures of financial performance: organic revenue and revenue growth; adjusted EBITDA, organic sales and marketing expenses; non-GAAP net loss and non-GAAP earnings per share (“EPS”).

A “non-GAAP financial measure” refers to a numerical measure of the Company’s historical or future financial performance, financial position, or cash flows that excludes (or includes) amounts that are included in (or excluded from) the most directly comparable measure calculated and presented in accordance with GAAP in the Company’s financial statements. The Company provides certain non-GAAP measures as additional information relating to its operating results as a complement to results provided in accordance with GAAP. The non-GAAP financial information presented here should be considered in conjunction with, and not as a substitute for or superior to, the financial information presented in accordance with GAAP and should not be considered a measure of the Company’s liquidity. There are significant limitations associated with the use of non-GAAP financial measures. Further, these measures may differ from the non-GAAP information, even where similarly titled, used by other companies and therefore should not be used to compare the Company’s performance to that of other companies.

The Company has presented: organic revenue and revenue growth, adjusted EBITDA, organic sales and marketing expenses, non-GAAP net loss and non-GAAP EPS as non-GAAP financial measures in this press release. We define organic revenue as total revenue excluding Citrus Lane revenue. We define organic revenue growth as revenue growth excluding Citrus Lane. We define adjusted EBITDA as net loss, plus: federal, state and franchise taxes, other expense (income), net, depreciation and amortization, stock-based compensation, accretion of contingent consideration, merger and acquisition related costs and other unusual or non-cash significant adjustments, such as impairment charges. Adjusted EBITDA eliminates the effects of financing, income taxes and the accounting effects of capital spending, which is based on the Company's estimate of the useful life of tangible and intangible assets. We define organic sales and marketing expenses as those expenses excluding Citrus Lane. We define non-GAAP net loss as net loss, plus stock-based compensation, accretion of contingent consideration, merger and acquisition related costs and other unusual or non-cash significant adjustments. We define non-GAAP EPS as non-GAAP net loss divided by weighted basic shares outstanding.

The Company believes the use of non-GAAP financial measures, as a supplement to GAAP measures, is useful to investors in that they eliminate items that are either not part of the Company's core operations or do not require a cash outlay, such as stock-based compensation. Care.com’s management uses these non-GAAP financial measures when evaluating the Company’s operating performance and for internal planning and forecasting purposes. The Company believes that these non-GAAP financial measures help indicate underlying trends in the Company’s business, are important in comparing current results with prior period results, and are useful to investors and financial analysts in assessing the Company’s operating performance.




Care.com, Inc.
 
 
 
Consolidated Balance Sheets
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
 
 
September 26,
2015
 
December 27, 2014
Assets
 
(unaudited)
Current assets:
 
 
 
 
Cash and cash equivalents
$
59,736

 
$
71,881

 
Accounts receivable
3,478

 
2,592

 
Unbilled accounts receivable
3,643

 
3,541

 
Prepaid expenses and other current assets
6,423

 
8,046

 
 
Total current assets
73,280

 
86,060

Property and equipment, net
6,723

 
6,323

Intangible assets, net
4,111

 
8,965

Goodwill
59,011

 
68,685

Other non-current assets
3,093

 
3,071

 
 
Total assets
$
146,218

 
$
173,104

 
 
 
 
 
 
 
Liabilities and stockholders' equity
 
 
Current liabilities:
 
 
 
 
Accounts payable
$
1,544

 
$
5,463

 
Accrued expenses and other current liabilities
20,297

 
12,732

 
Current contingent acquisition consideration
15,884

 
10,685

 
Deferred revenue
16,124

 
13,346

 
 
Total current liabilities
53,849

 
42,226

Contingent acquisition consideration
—

 
7,267

Deferred tax liability
3,139

 
2,119

Other non-current liabilities
3,958

 
3,442

 
 
Total liabilities
60,946

 
55,054

 
 
 
 
 
 
 
Stockholders' equity
 
 
 
 
Common stock, $0.001 par value; 300,000 shares authorized; 32,127 and 31,615 shares issued and outstanding, respectively
32

 
32

 
Additional paid-in capital
282,184

 
277,583

 
Accumulated deficit
(196,456
)
 
(159,859
)
 
Accumulated other comprehensive (loss) income
(488
)
 
294

 
 
Total stockholders' equity
85,272

 
118,050

Total liabilities and stockholders' equity
$
146,218

 
 $ 173,104

 
 
 
 
 
 
 




Care.com, Inc.
 
 
 
 
 
 
 
 
Consolidated Statement of Operations
 
 
 
 
 
 
 
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
 
 
 
September 26,
2015
 
September 27,
2014
 
September 26,
2015
 
September 27,
2014
 
 
 
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
 
 
 
Revenue
 
$
38,893

 
$
32,054

 
$
109,666

 
$
83,161

Cost of revenue*
 
10,326

 
9,132

 
29,098

 
20,616

Operating expenses:
 
 
 
 
 
 
 
 
 
Selling and marketing
 
22,128

 
22,900

 
61,891

 
61,371

 
Research and development
 
5,808

 
4,417

 
16,229

 
12,559

 
General and administrative
 
7,597

 
9,479

 
24,526

 
22,299

 
Depreciation and amortization
 
1,087

 
1,113

 
3,613

 
3,249

 
Impairment of goodwill and intangible assets
 
8,766

 
—

 
8,766

 
—

 
 
Total operating expenses
 
45,386

 
37,909

 
115,025

 
99,478

Operating loss
 
(16,819
)
 
(14,987
)
 
(34,457
)
 
(36,933
)
Other expense, net
 
(272
)
 
(644
)
 
(976
)
 
(3,323
)
Loss before income taxes
 
(17,091
)
 
(15,631
)
 
(35,433
)
 
(40,256
)
Provision for (benefit from) income taxes
 
259

 
(1,178
)
 
1,164

 
(384
)
Net loss
 
$
(17,350
)
 
$
(14,453
)
 
$
(36,597
)
 
$
(39,872
)
Accretion of preferred stock
 
—

 
—

 
—

 
(4
)
Net loss attributable to common stockholders
 
$
(17,350
)
 
$
(14,453
)
 
$
(36,597
)
 
$
(39,876
)
 
 
 
 
 
 
 
 
 
 
 
Net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
$
(0.54
)
 
$
(0.46
)
 
$
(1.15
)
 
$
(1.42
)
 
 
 
 
 
 
 
 
 
Weighted-average shares used to compute net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
 
 
Basic and diluted
 
32,069

 
31,362

 
31,938

 
27,995


* Note that $1.0 million of the Citrus Lane impairment charge in 2015 resides within the Cost of Revenue line



Care.com, Inc.
 
 
 
Consolidated Statement of Cash Flows
Nine Months Ended
(in thousands)
September 26,
2015
 
September 27,
2014
 
 
 
 
(unaudited)
Cash flows from operating activities
 
 
 
Net loss
$
(36,597
)
 
$
(39,872
)
Adjustments to reconcile net loss to net cash used in operating activities:
 
 
 
 
Stock-based compensation
4,179

 
4,829

 
Depreciation and amortization
4,273

 
3,914

 
Deferred taxes
1,053

 
(548
)
 
Contingent consideration expense
777

 
404

 
Change in fair value of contingent consideration payable in preferred stock
—

 
2,258

 
Change in fair value of stock warrants
—

 
606

 
Foreign currency remeasurement gain
983

 
—

 
Impairment of goodwill and intangible assets
9,741

 
—

 
Other non-operating expenses
(42
)
 
—

Changes in operating assets and liabilities, net of effects from acquisitions:
 
 
 
 
Accounts receivable
(906
)
 
(1,003
)
 
Unbilled accounts receivable
(339
)
 
(974
)
 
Prepaid expenses and other current assets
1,419

 
(797
)
 
Other non-current assets
(13
)
 
490

 
Accounts payable
(3,349
)
 
3,479

 
Accrued expenses and other current liabilities
8,637

 
9,270

 
Deferred revenue
3,110

 
3,705

 
Other non-current liabilities
623

 
639

 
 
Net cash used in operating activities
(6,451
)
 
(13,600
)
 
 
 
 
 
 
 
Cash flows from investing activities
 
 
 
Purchases of property and equipment
(4,287
)
 
(878
)
Payments for acquisitions, net of cash acquired
—

 
(23,364
)
Cash withheld for purchase consideration
73

 
(73
)
Net increase in other assets
—

 
(2,825
)
 
 
Net cash used in investing activities
(4,214
)
 
(27,140
)
 
 
 
 
 
 
 
Cash flows from financing activities
 
 
 
Proceeds from initial public offering net of offering costs
—

 
96,007

Proceeds from exercise of common stock options
630

 
319

Payments of contingent consideration previously established in purchase accounting
(1,840
)
 
(2,845
)
 
 
Net cash (used in) provided by financing activities
(1,210
)
 
93,481

 
 
 
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
(270
)
 
383

Net (decrease) increase in cash and cash equivalents
(12,145
)
 
53,124

Cash and cash equivalents, beginning of the period
71,881

 
29,959

Cash and cash equivalents, end of the period
$
59,736

 
$
83,083




Care.com, Inc.
 
 
 
 
 
 
 
Reconciliation of Adjusted EBITDA
 
 
 
 
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 26,
2015
 
September 27,
2014
 
September 26,
2015
 
September 27,
2014
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Net Loss
$
(17,350
)
 
$
(14,453
)
 
$
(36,597
)
 
$
(39,872
)
 
 
 
 
 
 
 
 
Federal, state and franchise taxes
310

 
(1,129
)
 
1,305

 
(157
)
Other (income) expense, net
272

 
644

 
976

 
3,323

Depreciation and amortization
1,295

 
1,394

 
4,273

 
3,914

 
 
 
 
 
 
 
 
EBITDA
(15,473
)
 
(13,544
)
 
(30,043
)
 
(32,792
)
 
 
 
 
 
 
 
 
Stock-based compensation
1,584

 
2,747

 
4,179

 
4,829

Accretion of contingent consideration
155

 
257

 
777

 
404

Non-cash rent expense
—

 
398

 
—

 
398

Merger and acquisition related costs
122

 
1,457

 
748

 
2,109

Impairment of goodwill and intangible assets
9,741

 
—

 
9,741

 
—

IPO related costs
—

 
—

 
—

 
164

 
 
 
 
 
 
 
 
Adjusted EBITDA
$
(3,871
)
 
$
(8,685
)
 
$
(14,598
)
 
$
(24,888
)



Care.com, Inc.
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Net Loss
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
(in thousands, except per share data)
September 26,
2015
 
September 27,
2014
 
September 26,
2015
 
September 27,
2014
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Net loss
$
(17,350
)
 
$
(14,453
)
 
$
(36,597
)
 
$
(39,872
)
 
 
 
 
 
 
 
 
Stock-based compensation
1,584

 
2,747

 
4,179

 
4,829

Accretion of contingent consideration
155

 
257

 
777

 
404

Merger and acquisition related costs
122

 
1,457

 
748

 
2,109

Impairment of goodwill and intangible assets
9,741

 
—

 
9,741

 
—

Non-cash rent expense
—

 
398

 
—

 
398

IPO related costs
—

 
—

 
—

 
164

Preferred stock and warrant valuation adjustments
—

 
—

 
—

 
2,864

Non-GAAP net loss
(5,748
)
 
(9,594
)
 
(21,152
)
 
(29,104
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Non-GAAP net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic and diluted
$
(0.18
)
 
$
(0.31
)
 
$
(0.66
)
 
$
(1.04
)
 
 
 
 
 
 
 
 
Weighted-average shares used to compute non-GAAP net loss per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic and diluted
32,069

 
31,362

 
31,938

 
27,995




Care.com, Inc.
 
 
 
 
 
 
 
Reconciliation of Non-GAAP Organic Revenue
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
(in thousands)
September 26,
2015
 
September 27,
2014
 
September 26,
2015
 
September 27,
2014
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Revenue
$
38,893

 
$
32,054

 
$
109,666

 
$
83,161

 
 
 
 
 
 
 
 
Citrus Lane revenue
2,714

 
2,450

 
8,535

 
2,450

 
 
 
 
 
 
 
 
Organic revenue
$
36,179

 
$
29,604

 
$
101,131

 
$
80,711

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Care.com, Inc.
Three Months Ended
 
Nine Months Ended
Reconciliation of Non-GAAP Organic Sales and Marketing
September 26,
2015
 
September 27,
2014
 
September 26,
2015
 
September 27,
2014
(in thousands)
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Selling and marketing
$
22,128

 
$
22,900

 
$
61,891

 
$
61,371

 
 
 
 
 
 
 
 
Citrus Lane selling and marketing
785

 
883

 
2,096

 
883

 
 
 
 
 
 
 
 
Organic selling and marketing
$
21,343

 
$
22,017

 
$
59,795

 
$
60,488

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Care.com, Inc.
 
 
 
 
 
 
 
Reconciliation of Organic Adjusted EBITDA
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
(in thousands)
September 26,
2015
 
September 27,
2014
 
September 26,
2015
 
September 27,
2014
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Adjusted EBITDA
$
(3,871
)
 
$
(8,685
)
 
$
(14,598
)
 
$
(24,888
)
 
 
 
 
 
 
 
 
Citrus Lane adjusted EBITDA
(775
)
 
(1,608
)
 
(3,234
)
 
(1,608
)
 
 
 
 
 
 
 
 
Organic adjusted EBITDA
$
(3,096
)
 
$
(7,077
)
 
$
(11,364
)
 
$
(23,280
)
 
 
 
 
 
 
 
 



Care.com, Inc.
 
 
 
Supplemental Data
 
 
 
(in thousands)
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
 
September 26,
2015
 
September 27,
2014
Total members**
17,828

 
13,280

Total families**
10,112

 
7,454

Total caregivers*
7,715

 
5,826

 
 
 
 
 
Paying members - US Consumer Matching & Payments
296

 
237

 
 
 
 
 
 
 
 
 
 
** data is cumulative as of the end of the respective period and includes approximately 300k members via our acquisition of Citrus Lane
* data is cumulative as of the end of the respective period
 
 
 
 
 
 
 
Three Months Ended
 
 
September 26,
2015
 
September 27,
2014
Monthly Average Revenue per Member
 
 
 
US Consumer Matching & Payments
$
37

 
$
37



###
Contacts:

Investor Relations:
Denise Garcia
ICR, Inc.
(781) 795-7244





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