Form 8-K Care.com Inc For: Nov 06

November 6, 2019 6:08 AM



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): November 6, 2019
 





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))

Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.001
 
CRCM
 
The New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
 
Emerging growth company x
 





If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. x 
 

 









Item 2.02. Results of Operations and Financial Condition
On November 6, 2019, Care.com, Inc. (the "Company") issued a press release announcing financial results for the third quarter ended on September 30, 2019. A copy of the press release is furnished as Exhibit 99.1 to this Current Report and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On November 6, 2019, the Company made available on its website an investor presentation and a results supplement that the Company intends to use in connection with its discussions of its third quarter 2019 results of operations. Copies of the investor presentation and results supplement are furnished herewith as Exhibits 99.2 and 99.3, respectively.
The information set forth under Items 2.02 and 7.01 of this Current Report, including Exhibits 99.1, 99.2 and 99.3, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (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, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. Financial Statements and Exhibits
(d) The following exhibits relating to Item 2.02 and Item 7.01 shall be deemed to be furnished and not filed.
 
Exhibit Number
 
Exhibit Title or Description
 
 
99.1
 
99.2
 
99.3
 
This Current Report 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 these 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.
 
        
 
 
 
 
 
 
Dated: November 6, 2019
 
 
By:
/s/ MICHAEL GOSS
 
 
 
 
Michael Goss
 
 
 
 
Acting Chief Financial Officer



Exhibit 99.1


Care.com Announces Third Quarter 2019 Financial Results


Waltham, MA - November 6, 2019 - Care.com (NYSE: CRCM), the world's largest online destination for finding and managing family care, today is announcing financial results for the third quarter ended September 30, 2019.
“In the third quarter of 2019, revenue exceeded the top end of our guidance range and Care@Work continued to grow impressively,” said Sheila Lirio Marcelo, Chairwoman and CEO of Care.com.  “During the quarter, our traffic remained strong and we started to see improvements in both organic traffic and conversion.  Coupled with the improvements we have seen in consumer awareness and positive brand perception, we are optimistic about our potential for growth over the coming quarters.”

Financial Results

Revenue for the third quarter of 2019 was $53.3 million, an increase of 8% from $49.2 million in the third quarter of 2018.

Revenue attributable to our US Consumer offering totaled $39.5 million in the third quarter of 2019, an increase of 3% from $38.5 million in the third quarter of 2018.

Revenue attributable to our other businesses totaled $13.8 million in the third quarter of 2019, an increase of 29% from $10.7 million in the third quarter of 2018.

Net loss was $2.2 million in the third quarter of 2019, compared to net income of $1.9 million in the third quarter of 2018, a decrease of $4.1 million.

Adjusted EBITDA was $5.2 million in the third quarter of 2019, compared to $6.9 million in the third quarter of 2018.

GAAP EPS (Diluted) was a loss of $0.09 in the third quarter of 2019, compared to income of $0.03 in the third quarter of 2018. Q3 GAAP EPS (Diluted) was based on 32.9 million weighted average diluted shares outstanding versus 33.9 million in the third quarter of 2018.

Non-GAAP EPS (Diluted) was $0.11 in the third quarter of 2019, compared to the third quarter of 2018, which was $0.18. Note that Non-GAAP EPS excludes the impact of non-cash stock-based compensation, adjustments relating to preferred stock and other non-recurring items, such as M&A expenses and restructuring costs.

The Company ended the quarter with $129.6 million in cash and cash equivalents and short-term investments.

Business Highlights

Our total members grew 14% to 35.2 million at the end of the third quarter of 2019, compared to 30.8 million in the same period of 2018.

Total families grew to 20.6 million at the end of the third quarter of 2019, an increase of 16% over the same period of 2018, and total caregivers grew to 14.6 million at the end of the third quarter of 2019, an increase of 11% over the same period of 2018.


Financial Expectations




 
Q4 2019 Guidance
 
Full Year 2019 Guidance
 
 
 
 
 
 
 
 
Revenue
$
50.7

$
50.9

 
$
208.3

$
208.5

 
 
 
 
 
 
 
 
Adjusted EBITDA
$
6.2

$
6.4

 
$
21.6

$
21.8

 
 
 
 
 
 
 
 
Non-GAAP EPS
~$0.17
 
~$0.49
 
 
 
 
 
 
 
 
Figures in millions except for Non-GAAP EPS
Q4 Non-GAAP EPS based on approximately 40 million weighted average dilutive shares
FY'19 full year Non-GAAP EPS based on 40 million weighted average diluted shares

Future GAAP Net Income and GAAP EPS may be significantly affected by changes in ongoing assumptions and judgments, and may also be affected by non-recurring, unusual or unanticipated charges, expenses or gains, which we are not able to estimate and which therefore are excluded in the calculation of the Company’s adjusted EBITDA and non-GAAP EPS guidance as described in this press release. Due to the nature of any such items, we are not able to estimate their significance, and it is therefore currently not practical to reconcile adjusted EBITDA and non-GAAP EPS guidance to the most comparable GAAP measure.

Earnings Teleconference Information

The Company will host a conference call at 8:00 AM ET on November 6, 2019 to discuss these results. The conference call will be accessible at (877) 407-4018 or (201) 689-8471 (International). The call will also be broadcast simultaneously at http://investors.care.com/. Following 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 (844) 512-2921 or (412) 317-6671 (International), conference ID #13694185. The telephone replay will be available from 11:00 AM ET November 6 through 11:59 PM ET November 20, 2019. 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 20.6 million families and 14.6 million caregivers* across more than 20 countries, including the U.S., UK, Canada and parts of Western Europe, and approximately 1.8 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 Care.com Benefits, including the household payroll and tax services provided by Care.com HomePay and the Care Benefit Bucks program, a peer-to-peer pooled, portable benefits platform funded by household employer contributions that provides caregivers access to professional benefits. For enterprise clients, Care.com builds customized benefits packages covering child care, back up care and senior care consulting services through its Care@Work business, and serves care businesses with marketing and recruiting support. Headquartered in Waltham, Massachusetts, Care.com has offices in Berlin, Austin and the San Francisco Bay area.
*As of September 2019
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 expected




results of product investments and initiatives, anticipated revenue growth, and the Company’s financial guidance for the fourth quarter of 2019 and full year 2019. 
These forward-looking statements are made as of the date they were first issued and are based on expectations, estimates, forecasts and projections as well as the beliefs and assumptions of management, as of such date. Words such as “plan,” "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend" and “designed,” as well as 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 risks and uncertainties, many of which involve factors or circumstances 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 and extending the length of time that paying members continue to pay for our services; 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; 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 and should not be relied upon as representing the Company’s views as of any subsequent date. The Company anticipates that subsequent events and developments will cause its views to change.  The Company has no intention nor undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. 

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: adjusted EBITDA, non-GAAP net income 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: adjusted EBITDA, non-GAAP net income and non-GAAP EPS as non-GAAP financial measures in this press release. We define adjusted EBITDA as income / (loss) before the accretion of preferred stock dividends and issuance costs, federal, state and franchise taxes, other income (expense), net, depreciation and amortization, stock-based compensation, the accretion of contingent consideration, merger and acquisition related costs, and other unusual or non-cash significant adjustments, such as impairment and restructuring 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 non-GAAP net income as income / (loss) before the accretion of preferred stock dividends, stock-based compensation, the accretion of contingent consideration, merger and acquisition related costs, and other unusual or non-cash significant adjustments such as impairment and restructuring charges and the realization of a valuation allowance for deferred taxes. We define non-GAAP EPS as non-GAAP net income divided by diluted weighted-average shares outstanding, using the treasury stock method.





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 30, 2019
 
December 29, 2018
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
94,560

 
$
92,432

Short-term investments
35,000

 
35,099

Accounts receivable (net of allowance of $100 and $100, respectively) (1) 
6,488

 
4,663

Unbilled accounts receivable (2) 
6,684

 
6,394

Prepaid expenses and other current assets
7,389

 
7,223

Total current assets
150,121

 
145,811

Property and equipment, net
3,336

 
3,423

Intangible assets, net
3,249

 
4,061

Goodwill
67,321

 
68,176

Other non-current assets
3,129

 
2,859

Operating lease right of use assets, net
23,525

 

Deferred tax assets

 
43,737

Total assets
$
250,681

 
$
268,067

 
 
 
 
Liabilities, redeemable convertible preferred stock, and stockholders' equity
 
 
 
Current liabilities:
 
 
 
Accounts payable (3) 
$
2,277

 
$
3,437

Accrued expenses and other current liabilities (4) 
25,176

 
20,463

Current contingent acquisition consideration
1,000

 
1,527

Deferred revenue (5)
24,459

 
20,176

Current operating lease liabilities
5,587

 

Total current liabilities
58,499

 
45,603

Non-current contingent acquisition consideration

 
438

Deferred tax liability
1,835

 

Other non-current liabilities
3,568

 
6,806

Non-current operating lease liabilities
24,619

 

Total liabilities
88,521

 
52,847

 
 
 
 
Series A Redeemable Convertible Preferred Stock, $0.001 par value - 46 shares designated; 46 shares issued and outstanding at September 30, 2019 and December 29, 2018; at aggregate liquidation and redemption value at September 30, 2019 and December 29, 2018, respectively
55,199

 
53,007

Stockholders' equity
 
 
 
Preferred Stock: $0.001 par value - authorized 5,000 shares at September 30, 2019 and December 29, 2018, respectively

 

Common stock, $0.001 par value; 300,000 shares authorized; 33,082 and 32,057 shares issued and outstanding at September 30, 2019 and December 29, 2018, respectively
33

 
32





Additional paid-in capital
299,679

 
286,295

Accumulated deficit
(192,191
)
 
(124,122
)
Accumulated other comprehensive (loss) income
(560
)
 
8

Total stockholders' equity
106,961

 
162,213

Total liabilities, redeemable convertible preferred stock and stockholders' equity
$
250,681

 
$
268,067

(1) Includes accounts receivable due from related party of $231 and $421 at September 30, 2019 and December 29, 2018, respectively.
(2) Includes unbilled accounts receivable due from related party of $610 and $680 at September 30, 2019 and December 29, 2018, respectively.
(3) Includes accounts payable due to related party of $0 and $530 at September 30, 2019 and December 29, 2018, respectively.
(4) Includes accrued expenses and other current liabilities due to related party of $1,352 and $403 at September 30, 2019 and December 29, 2018, respectively.  
(5) Includes deferred revenue associated with related party of $57 and $1 at September 30, 2019 and December 29, 2018, respectively.





 
Care.com, Inc.
 
 
 
 
 
 
 
Consolidated Statement of Operations
 
 
 
 
 
 
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2019
 
September 29,
2018
 
September 30,
2019
 
September 29,
2018
 
 
 
 
 
 
 
 
Revenue (1)
$
53,285

 
$
49,160

 
$
157,599

 
$
142,451

Cost of revenue
15,598

 
11,532

 
43,050

 
30,798

Operating expenses:
 
 
 
 
 
 
 
Selling and marketing (2)
17,732

 
16,439

 
53,287

 
49,197

Research and development
8,417

 
8,860

 
36,563

 
25,640

General and administrative
13,281

 
10,987

 
35,604

 
33,047

Depreciation and amortization
478

 
416

 
1,408

 
1,245

Goodwill and intangible asset impairment charge

 

 
8,183

 

Restructuring and right of use asset impairment charges
(134
)
 
89

 
2,855

 
568

Total operating expenses
39,774

 
36,791

 
137,900

 
109,697

Operating (loss) income
(2,087
)
 
837

 
(23,351
)
 
1,956

Other (expense) income, net
(222
)
 
38

 
454

 
(168
)
(Loss) income before income taxes
(2,309
)
 
875

 
(22,897
)
 
1,788

(Benefit from) provision for income taxes
(73
)
 
(977
)
 
45,172

 
(2,592
)
Net (loss) income
(2,236
)
 
1,852

 
(68,069
)
 
4,380

Accretion of Series A Redeemable Convertible Preferred Stock dividends
(773
)
 
(718
)
 
(2,192
)
 
(2,063
)
Net (income) attributable to Series A Redeemable Convertible Preferred Stock

 
(155
)
 

 
(321
)
Net (loss) income attributable to common stockholders
$
(3,009
)
 
$
979

 
$
(70,261
)
 
$
1,996

 
 
 
 
 
 
 
 
Net (loss) income per share attributable to common stockholders (Basic):
$
(0.09
)
 
$
0.03

 
$
(2.16
)
 
$
0.06

Net (loss) income per share attributable to common stockholders (Diluted):
$
(0.09
)
 
$
0.03

 
$
(2.16
)
 
$
0.06

 
 
 
 
 
 
 
 
Weighted-average shares used to compute net (loss) income per share attributable to common stockholders:
 
 
 
 
 
 
 
Basic
32,863

 
31,356

 
32,539

 
30,980

Diluted
32,863

 
33,880

 
32,539

 
33,633


(1) Includes related party revenue of $937 and $819 for the three months ended September 30, 2019 and September 29, 2018, respectively. Includes related party revenue of $2,759 and $2,161 for the nine months ended September 30, 2019 and September 29, 2018, respectively.
(2) Includes related party expenses of $3,482 and $2,912 for the three months ended September 30, 2019 and September 29, 2018, respectively. Includes related party expenses of $9,946 and $8,565 for the nine months ended September 30, 2019 and September 29, 2018, respectively.




Care.com, Inc.
 
 
 
 
 
 
 
Reconciliation of Adjusted EBITDA & Non-GAAP Income
 
 
 
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30,
2019
 
September 29,
2018
 
September 30,
2019
 
September 29,
2018
 
(unaudited)
 
(unaudited)
 
 
 
 
 
 
 
 
Net (loss) income
$
(2,236
)
 
$
1,852

 
$
(68,069
)
 
$
4,380

 
 
 
 
 
 
 
 
Federal, state and franchise taxes
96

 
(833
)
 
45,718

 
(2,055
)
Other expense (income), net
222

 
(38
)
 
(454
)
 
168

Depreciation and amortization
623

 
603

 
2,150

 
1,527

EBITDA
(1,295
)
 
1,584

 
(20,655
)
 
4,020

 
 
 
 
 
 
 
 
Stock-based compensation
2,261

 
4,281

 
9,705

 
12,981

Merger and acquisition related costs
880

 
751

 
3,309

 
1,262

Restructuring, right of use asset impairment and other charges
692

 
89

 
3,681

 
568

Litigation related costs
517

 
157

 
549

 
177

Software implementation costs
71

 
5

 
351

 
308

Severance related costs

 

 
175

 
67

Strategic consulting and non-recurring professional fees
2,089

 

 
2,210

 

Impairment of goodwill, intangible assets and related costs

 

 
16,127

 
142

Adjusted EBITDA
$
5,215

 
$
6,867

 
$
15,452

 
$
19,525

 
 
 
 
 
 
 
 
Add back for Non-GAAP Net Income
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Federal, state and franchise taxes
(96
)
 
833

 
(1,212
)
 
2,055

Other (expense) income, net
(222
)
 
38

 
454

 
(168
)
Depreciation and amortization
(623
)
 
(603
)
 
(2,150
)
 
(1,527
)
Non-GAAP net income
$
4,274

 
$
7,135

 
$
12,544

 
$
19,885

 
 
 
 
 
 
 
 
Non-GAAP net income per share:
 
 
 
 
 
 
 
Basic
$
0.13

 
$
0.23

 
$
0.39

 
$
0.64

Diluted
$
0.11

 
$
0.18

 
$
0.32

 
$
0.51

 
 
 
 
 
 
 
 
Weighted-average shares used to compute non-GAAP net income per share:
 
 
 
 
 
 
 
Basic
32,863

 
31,356

 
32,539

 
30,980

Diluted
39,071

 
38,863

 
39,477

 
38,616






Care.com, Inc.
 
 
 
 
 
 
 
Reconciliation of Non-GAAP EPS
 
 
 
 
 
 
 
(in thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Nine Months Ended
 
September 30, 2019
 
September 29, 2018
 
September 30, 2019
 
September 29, 2018
 
(unaudited)
 
(unaudited)
Weighted-average shares used to compute net income per share:
 
 
 
 
 
 
 
Diluted
39,071

 
38,863

 
39,477

 
38,616

 
 
 
 
 
 
 
 
Net income per share (Diluted):
 
 
 
 
 
 
 
Net (loss) income per share attributable to common stockholders
$
(0.08
)
 
$
0.03

 
$
(1.78
)
 
$
0.05

Impact on net income per share of Series A related costs
0.02

 
0.02

 
0.06

 
0.06

Adjusted net (loss) income per share
$
(0.06
)
 
$
0.05

 
$
(1.72
)
 
$
0.11

 
 
 
 
 
 
 
 
Stock-based compensation
0.06

 
0.11

 
0.25

 
0.34

Merger and acquisition related costs
0.02

 
0.02

 
0.08

 
0.03

Restructuring, right of use asset impairment and other charges
0.02

 
0.00

 
0.09

 
0.01

Litigation related costs
0.01

 
0.00

 
0.01

 
0.00

Software implementation costs
0.00

 
0.00

 
0.01

 
0.01

Severance related costs

 

 
0.00

 
0.00

Strategic consulting and non-recurring professional fees
0.05

 

 
0.06

 

Impairment of goodwill, intangible assets and related costs

 

 
0.41

 
0.00

Realized valuation allowance

 

 
1.13

 

Non-GAAP net income per share - diluted
$
0.11

 
$
0.18

 
$
0.32

 
$
0.51






Care.com, Inc.
 
 
 
Supplemental Data
 
 
 
(in thousands, except monthly average revenue per member)
 
 
 
Period Ended
 
September 30, 2019
 
September 29, 2018
Total members
35,196

 
30,795

Total families
20,595

 
17,699

Total caregivers
14,601

 
13,096

 
 
 
 
Paying families - US Consumer Business
374

 
356

 
 
 
 
 
Period Ended
 
September 30, 2019
 
September 29, 2018
Monthly average revenue per paying family
 
 
 
US Consumer Business
$
36

 
$
38








CRCM INVESTOR PRESENTATION Care.com 2019 | Proprietary Information November 6, 2019


 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation 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 information about the Company’s 2019 priorities and profitability expectations. These forward- looking statements are made as of November 6, 2019 and are based on expectations, estimates, forecasts and projections, as well as the beliefs and assumptions of management, as of such date. Words such as “plan,” "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend" and “designed,” as well as 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 risks and uncertainties, many of which involve factors or circumstances 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 and extending the length of time that paying members continue to pay for our services; 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; and other risks detailed in the Company's filings with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this presentation represent the Company's views as of the date of November 6, 2019, and should not be relied upon as representing the Company’s views as of any subsequent date. The Company anticipates that subsequent events and developments will cause its views to change. The Company has no intention nor undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Care.com 2019 | Proprietary Information 2


 
Sheila Lirio Marcelo FOUNDER, CHAIRWOMAN & CEO Care.com 2019 || Proprietary Proprietary Information Information 3


 
Care Education Care for family members - the Financial Services most important Home Services decision in people’s lives Automotive Travel Services Entertainment Care.com 2019 | Proprietary Information 4


 
OUR MISSION Care.com launched in 2007 with the mission to connect families to great caregivers. Today, Care.com is the world's largest online marketplace for finding and managing family care. 35 MILLION MEMBERS* 20+ COUNTRIES* 1 MATCH MADE EVERY 3 MINUTES** *Care.com internal data as of September 2019 Care.com 2019 | Proprietary Information **Care.com member survey data as of December 2018 5


 
COMPANY OVERVIEW Market Massive fragmented market Leader Disruptive online marketplace Model Powerful economic model Network Effects Strong NPS and Word of Mouth Long Runway Multiple growth opportunities Financials Profitable growth Care.com 2019 | Proprietary Information 6


 
5.5% US Matching Penetration2 Enormous, 49M1 Target fragmented U.S. HHs market WE’RE EARLY $336B spend on care in U.S.3 $9-10B total addressable spending US Matching & Payments4 1U.S. Census on HH data (2018) includes child care and senior HHs 2Care.com internal data as of December 2018 of cumulative unique paying families 3U.S. Census on HH data (2018), IBISWorld market research on annual spending (2018) 4$9-10B total addressable market assumes approx. 3.0% take-rate on $336B spend on care Care.com 2019 | Proprietary Information 7


 
DISRUPTIVE SOLUTION TO A HUGE PROBLEM Newspapers Scale & No search or scale Breadth Agencies Accessible & Expensive, limited selection Affordable Referrals from friends Reluctance to share favorite Community caregivers; trust and quality anecdotal Recommendations Online Classifieds Trust & Lack of trust and quality Quality Care.com 2019 | Proprietary Information 8


 
OUR VISION: FROM MICRO TO MACRO Improving the lives of families and caregivers by helping to build a global care infrastructure that helps companies and economies grow. Drive economic growth globally by increasing participation of women Help companies improve in the workforce productivity by providing care whenever their employees need it Provide peace at home by offering access to high quality child and senior care Care.com 2019 | Proprietary Information 9


 
OUR BUSINESS CONSUMER: Families and Caregivers Help families find great care for their loved ones and help caregivers find valued jobs in the care industry. BUSINESS TO BUSINESS: Employers, Care Service Companies Help companies support their workforce with care benefits. Create a marketplace for care service companies like daycares and family care centers. INTERNATIONAL: 20+ Countries* Provide offerings globally to enable more participation in the workforce. Care.com 2019 | Proprietary Information *Care.com internal data as of September 2019 10


 
LEADER IN “WINNER TAKE ALL” BUSINESS More families More caregivers attract more caregivers attract more families GROWTH IN FAMILIES GROWTH IN CAREGIVERS 18.3 13.4 15.5 11.8 12.9 CAGR: 57% CAGR: 46% 9.9 10.3 8.1 7.6 6.2 5.3 4.5 3.6 3.1 1.9 1.7 1.1 0.9 0.7 0.2 0.5 0.3 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 (MM) (MM) Care.com 2019 | Proprietary Information 11


 
BREADTH OF COVERAGE THE LEADING ONLINE CARE MARKETPLACE IN THE U.S. 12.1M U.S. Caregivers 92% Coverage of U.S. ZIP codes Caregiver Density 5,000+ 1,000+ 500 – 1,000 250 – 500 100 – 250 1 - 100 Caregivers w/in 10 miles of 98% of ZIP codes of top 20 metro areas Care.com 2019 | Proprietary Information Source: Care.com internal data as of September 2019 12


 
AFFORDABLE FOR MASS MARKET $3,000 - $4,000 OUR MEMBERS 28% Below U.S. median HH income* 69% Dual-income or single parent families** $200 54% Seek part-time care*** Approx. Agency Fees Approx. Care.com per Placement Fees per Year *Based on U.S. Census Bureau and Care.com internal data **Based on 2017 Current Population Survey (CPS) Annual Social and Economic (ASEC) Supplement ***Care.com internal data from January – December 2018 Care.com 2019 | Proprietary Information 13


 
SAFETY AND CYBERSECURITY A key priority of 2019 is enhancing our Safety and Cybersecurity Programs. We’re investing more in these areas by adding to our dedicated teams, implementing a range of new, innovative technologies, expanding our education initiatives, and establishing a committee of our Board of Directors focused on these areas. KEY INVESTMENTS: • Enhanced member screening, including in-depth background checks • 3rd party background check options for purchase • Member reviews • Ongoing platform monitoring, including the use of data science and machine learning • Education on safety and cyber threats Care.com 2019 | Proprietary Information 14


 
INVESTING IN SAFETY Building on our longstanding commitment to families, Care.com is rolling out expansive safety enhancements during 2019 on our U.S. consumer digital platform. These enhancements include: • Social Security Number verification process for caregivers • In-depth background checking of caregivers that includes federal and county-level criminal records checks • Identity verification pilot In addition, we have appointed former Homeland Security and State Department Inspector General Clark K. Ervin to our Board of Directors. Care.com 2019 | Proprietary Information 15


 
MOBILE: ACCESS AND CONVENIENCE 70% 6.7M Of all unique visitors to Average unique Care.com on mobile mobile visitors per platforms in Q3 2019* month in Q3 2019* 4++ STARS Rating on Apple app store** Care.com 2019 | | Proprietary Information *Care.com internal data as of September 2019; US only **As of September 2019 16


 
FULL SUITE OF PAYMENTS PRODUCTS CONVENIENCE PAYMENTS FULL PAYROLL & TAX SERVICE Support multiple Nanny Premium and transactional use cases Mobile client experience Care.com 2019 | Proprietary Information 17


 
HIGH NET PROMOTER SCORE Likely to recommend service to a friend? CONSUMER MATCHING CONSUMER PAYMENTS 62% 86% NPS 51% NPS 84% 29% 9% 10% 3% Detractors Passives Promoters Detractors Passives Promoters Based on 763K customer survey responses from members Based on 2010-2018 customer who found care through Care.com satisfaction survey data (through December 2018) US customers only Care.com 2019 | Proprietary Information 18


 
CARE@WORK + 100% 34% Revenue Retention Revenue Growth 2018 2018 “Care.com is a one-stop shop for families. LinkedIn employees use the service successfully to address a range of needs” PAT WADORS, VICE PRESIDENT OF TALENT “Our employees use and love Care.com. Can we subsidize it as a benefit?” FACEBOOK, CARE@WORK’S 1ST ENTERPRISE CLIENT Care.com 2019 | Proprietary Information 19


 
OUR 2019 INVESTMENT PRIORITIES • Safety and cybersecurity enhancements • Senior care marketing: vertical diversification • Care@Work • Operational excellence Care.com 2019 | Proprietary Information 20


 
KEY FINANCIAL HIGHLIGHTS Steady revenue growth Compelling unit economics Leveraging operating expenses and S&M spend Profitable expectation of sustained profitability* *Based on current projections of adjusted EBITDA Care.com 2019 | Proprietary Information 21


 
STEADY REVENUE GROWTH Total Company Revenue ($M) FY Revenue, 2010-2018 Q3 Revenue, 2012-2019 $53 $49 $192 $45 $174 $41 $39 $162 $139 $32 $111 $22 $81 $14 $48 $26 $13 2010 2011 2012 2013 2014 2015 2016 2017 2018 2012Q3 2013Q3 2014Q3 2015Q3 2016Q3 2017Q3 2018Q3 2019Q3 Note: 2016 includes the impact of the 53rd week. Care.com 2019 | Proprietary Information 22


 
REVENUE MIX 3% 23% 97% 77% 2011 | $26M 2018 | $192M Consumer Matching 12% Other US Consumer (Matching + Payments) Other (Care@Work, 82%Marketplace, International) Care.com 2019 | Proprietary Information 23


 
POWERFUL CONSUMER BUSINESS MODEL US Consumer (Matching + Payments) – First Half FY2019 $498 Lifetime Value $38 16.4 79% (Gross Profit Basis) per month months Average Revenue per Length of Paid Time Gross Margin User per Month (ARPU) (LOPT) 4.9x ROI (given $102 CAC) Care.com 2019 | Proprietary Information 24


 
LEVERAGING SALES & MARKETING SALES AND MARKETING ($M)* CUSTOMER ACQUISITION COST (CAC)** % of Revenue 68% 67% 53% 45% 38% 31% $55 $74 $74 $72 $67 $60 $122 $142 $125 $122 $97 $73 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 FY'13 FY'14 FY'15 FY'16 FY'17 FY'18 Percent of Revenue Marketing Spend **Excludes Re-Users *Excludes impact of Citrus Lane Care.com 2019 | Proprietary Information 25


 
OPERATING EXPENSE LEVERAGE Column1% REVENUE 65% 63% 61% 61% 55% 56% 53% ($M) | COR G&A R&D 16% 14% 15% 18% 15% 14% 13% 28% 23% 25% 23% 22% 20% 20% 23% 21% 21% 19% 20% 21% 22% 2012 2013 2014 2015 2016 2017 2018 Care.com 2019 | Proprietary Information 26


 
NYSE: CRCM HIGHLIGHTS Dominant leader in large and CLEAR LEADER fragmented care services market Proven business model with compelling unit STRONG MODEL economics. Profitable growth.* Significant brand leadership and trusted TRUSTED BRAND platform for growth Still low penetration of addressable market; LONG RUNWAY both vertical and horizontal growth opportunity FAVORABLE TRENDS Strong demographic tailwinds MOTIVATED TEAM Experienced, passionate management *Based on current projections of adjusted EBITDA Care.com 2019 | Proprietary Information 27


 
ThankThank you you Care.com 2019 | Proprietary & Confidential


 
Q3 2019 RESULTS SUPPLEMENT Care.com 2019 | Proprietary Information November 6, 2019


 
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS This presentation 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 information about the Company’s 2019 priorities and profitability expectations. These forward-looking statements are made as of November 6, 2019 and are based on expectations, estimates, forecasts and projections, as well as the beliefs and assumptions of management, as of such date. Words such as “plan,” "expect," "anticipate," "should," "believe," "hope," "target," "project," "goals," "estimate," "potential," "predict," "may," "will," "might," "could," "intend" and “designed,” as well as 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 risks and uncertainties, many of which involve factors or circumstances 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 and extending the length of time that paying members continue to pay for our services; 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; and other risks detailed in the Company's filings with the Securities and Exchange Commission. Past performance is not necessarily indicative of future results. The forward-looking statements included in this presentation represent the Company's views as of the date of November 6, 2019, and should not be relied upon as representing the Company’s views as of any subsequent date. The Company anticipates that subsequent events and developments will cause its views to change. The Company has no intention nor undertakes any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Care.com 2019 | Proprietary Information 2


 
Q3 2019 PERFORMANCE Q3 2019 Results from Continuing Operations Revenue 53.3 Y-Y % 8%. Gross Profit 37.7 Sales & Marketing 17.7 Research & Development 8.4 General & Administrative 13.3 Depreciation & Amortization 0.5 Restructuring and Right of Use Asset Impairment (0.1) Total Opex 39.8 Adjusted EBITDA* 5.2 Cash and Cash Equivalents & Short Term Investments 129.6 *We define adjusted EBITDA as income / (loss) before the accretion of preferred stock dividends and issuance costs, federal, state and franchise taxes, other income (expense), 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 and restructuring charges. In $M unless otherwise noted Care.com 2019 | Proprietary Information 3


 
KEY PERFORMANCE METRICS Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 Q1 Q2 Q3 FY 2018 2017 2017 2017 2017 2017 2018 2018 2018 2018 2019 2019 2019 Members (millions) - Members – Total Company 24.0 25.2 26.4 27.3 27.3 28.4 29.6 30.8 31.7 31.7 32.9 34.1 35.2 - Families – Total Company 13.6 14.2 15.0 15.5 15.5 16.2 16.9 17.7 18.3 18.3 19.0 19.8 20.6 - Caregivers – Total Company 10.4 11.0 11.4 11.8 11.8 12.2 12.7 13.1 13.4 13.4 13.9 14.3 14.6 Revenue ($ millions) - US Matching 27.2 27.6 29.5 28.4 112.7 28.6 29.6 32.4 31.9 122.5 31.9 31.8 33.0 - Payments 8.0 5.8 5.8 5.6 25.2 8.4 6.0 6.1 5.8 26.3 9.0 6.4 6.5 - Other (incl. Care@Work) 8.2 8.6 9.1 10.2 36.2 10.3 10.4 10.7 12.1 43.5 12.4 12.8 13.8 Direct Marketing Spend ($ millions) - US Matching + Payments 10.3 9.2 10.0 5.1 34.7 8.6 7.2 8.1 2.9 26.8 9.0 10.4 9.4 US Matching & Payments - End of Period Paying Families 292 294 320 302 302 318 324 356 336 336 350 349 374 (000’s) - ARPU* $41 $38 $38 $36 $40 $40 $37 $38 $36 $39 $40 $36 $36 - LOPT** (in months) 15.4 13.2 14.0 15.7 13.9 14.8 16.4 (H1’17, H2’17, FY’17, H1’18, H2’18, FY’18, H1’19) *ARPU represents the average revenue per user per month **Estimated 2010-2018 cohort performance over 8 years for US Matching and based on active users in period for Payments. LOPT represents the average total paid membership length of our customer base. Care.com 2019 | Proprietary Information 4


 
KEY PERFORMANCE METRICS: U.S. CONSUMER Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 2017 2017 2017 2017 2017 2018 2018 2018 2018 2018 2019 2019 2019 U.S. Consumer Matching - End of Period Paying Families 274 276 303 285 285 299 306 338 317 317 330 330 355 (000’s) -ARPU $34 $33 $34 $32 $35 $33 $33 $34 $32 $34 $33 $32 $32 - LOPT* (in months) (H1’17, H2’17, FY’17, H1’18, 10.4 10.6 10.6 10.6 11.3 11.3 11.3 H2’18, FY’18, H1’19) Payments - End of Period Paying Families 22.0 22.0 21.0 21.2 21.2 22.5 22.4 22.1 22.0 22.0 23.5 23.2 22.7 (000’s) -ARPU $130 $88 $90 $88 $104 $129 $89 $91 $88 $101 $132 $91 $95 - LOPT** (in months) (H1’17, H2’17, FY’17, H1’18, 35.5 26.7 29.0 36.2 28.2 31.1 37.7 H2’18, FY’18, H1’19) *Estimated 2010-2018 cohort performance over 8 years **Based on active users in period Care.com 2019 | Proprietary Information 5


 
FINANCIAL EXPECTATIONS Q42019Guidance Full Year 2019 Guidance Revenue ($M) $50.7-$50.9 $208.3 -$208.5 Adjusted EBITDA ($M) $6.2-$6.4 $21.6 -$21.8 Non-GAAP EPS ($) ~$0.17 ~$0.49 As of 11/6/2019 Care.com 2019 | Proprietary Information 6


 
APPENDIX Care.com 2019 | Proprietary Information


 
Care.com, Inc. Consolidated Balance Sheets (in thousands) September 30, December 29, 2019 2018 Assets (unaudited) Current assets: Cash and cash equivalents$ 94,560 $ 92,432 Short-term investments 35,000 35,099 Accounts receivable (net of allowance of $100 and $100, respectively) (1) 6,488 4,663 Unbilled accounts receivable (2) 6,684 6,394 Prepaid expenses and other current assets 7,389 7,223 Total current assets 150,121 145,811 Property and equipment, net 3,336 3,423 Intangible assets, net 3,249 4,061 Goodwill 67,321 68,176 Other non-current assets 3,129 2,859 Operating lease right of use assets, net 23,525 - Deferred tax assets - 43,737 Total assets$ 250,681 $ 268,067 Liabilities, redeemable convertible preferred stock, and stockholders' equity Current liabilities: Accounts payable (3) $ 2,277 $ 3,437 Accrued expenses and other current liabilities (4) 25,176 20,463 Current contingent acquisition consideration 1,000 1,527 Deferred revenue (5) 24,459 20,176 Current operating lease liabilities 5,587 - Total current liabilities 58,499 45,603 Non-current contingent acquisition consideration - 438 Deferred tax liability 1,835 - Other non-current liabilities 3,568 6,806 Non-current operating lease liabilities 24,619 - Total liabilities 88,521 52,847 Series A Redeemable Convertible Preferred Stock, $0.001 par value - 46 shares designated; 46 shares issued and outstanding at September 30, 2019 and December 29, 2018; at aggregate liquidation and redemption value at September 30, 2019 and December 29, 2018 55,199 53,007 Stockholders' equity Preferred Stock, $0.001 par value; 5,000 shares authorized at September 30, 2019 and December 29, 2018, respectively - - Common stock, $0.001 par value; 300,000 shares authorized; 33,082 and 32,057 shares issued and outstanding at September 30, 2019 and December 29, 2018 respectively 33 32 Additional paid-in capital 299,679 286,295 Accumulated deficit (192,191) (124,122) Accumulated other comprehensive (loss) income (560) 8 Total stockholders' equity 106,961 162,213 Total liabilities, redeemable convertible preferred stock, and stockholders' equity $ 250,681 $ 268,067 (1) Includes accounts receivable due from related party of $231 and $421 at September 30, 2019 and December 29, 2018, respectively (2) Includes unbilled accounts receivable due from related party of $610 and $680 at September 30, 2019 and December 29, 2018, respectively (3) Includes accounts payable due to related party of $0 and $530 at September 30, 2019 and December 29, 2018, respectively (4) Includes accrued expenses and other current liabilities due to related party of $1,352 and $403 at September 30, 2019 and December 29, 2018, respectively (5) Includes deferred revenue associated with related party of $57 and $1 at September 30, 2019 and December 29, 2018, respectively Care.com 2019 | Proprietary Information 8


 
Care.com, Inc. Consolidated Statement of Operations (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 29, September 30, September 29, 2019 2018 2019 2018 (unaudited) Revenue (1) $ 53,285 $ 49,160 $ 157,599 $ 142,451 Cost of revenue 15,598 11,532 43,050 30,798 Operating expenses: Selling and marketing (2) 17,732 16,439 53,287 49,197 Research and development 8,417 8,860 36,563 25,640 General and administrative 13,281 10,987 35,604 33,047 Depreciation and amortization 478 416 1,408 1,245 Goodwill and intangible asset impairment charge - - 8,183 - Restructuring and right of use asset impairment charges (134) 89 2,855 568 Total operating expenses 39,774 36,791 137,900 109,697 Operating (loss) income (2,087) 837 (23,351) 1,956 Other (expense) income, net (222) 38 454 (168) (Loss) income before income taxes (2,309) 875 (22,897) 1,788 (Benefit from) provision for income taxes (73) (977) 45,172 (2,592) Net (loss) income (2,236) 1,852 (68,069) 4,380 Accretion of Series A Preferred Stock dividends (773) (718) (2,192) (2,063) Net (income) attributable to Series A Redeemable Convertible Preferred Stock - (155) - (321) Net (loss) income attributable to common stockholders$ (3,009) $ 979 $ (70,261) $ 1,996 Net (loss) income per share attributable to common stockholders (Basic):$ (0.09) $ 0.03 $ (2.16) $ 0.06 Net (loss) income per share attributable to common stockholders (Diluted):$ (0.09) $ 0.03 $ (2.16) $ 0.06 Weighted-average shares used to compute net (loss) income per share attributable to common stockholders: Basic 32,863 31,356 32,539 30,980 Diluted 32,863 33,880 32,539 33,633 Includes related party revenue of $937 and $819 for the three months ended September 30, 2019 and September 29, 2018, respectively. Includes related (1) party revenue of $2,759 and $2,161 for the nine months ended September 30, 2019 and September 29, 2018, respectively. Includes related party expenses of $3,482 and $2,912 for the three months ended September 30, 2019 and September 29, 2018, respectively. Includes (2) related party expenses of $9,946 and $8,565 for the nine months ended September 30, 2019 and September 29, 2018, respectively. Care.com 2019 | Proprietary Information 9


 
Care.com, Inc. Reconciliation of Adjusted EBITDA & Non-GAAP Net Income (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 29, September 30, September 29, 2019 2018 2019 2018 (unaudited) Net (loss) income $ (2,236) $ 1,852 $ (68,069) $ 4,380 Federal, state and franchise taxes 96 (833) 45,718 (2,055) Other expense (income), net 222 (38) (454) 168 Depreciation and amortization 623 603 2,150 1,527 EBITDA (1,295) 1,584 (20,655) 4,020 Stock-based compensation 2,261 4,281 9,705 12,981 Merger and acquisition related costs 880 751 3,309 1,262 Restructuring, right of use asset impairment and other charges 692 89 3,681 568 Litigation related costs 517 157 549 177 Software implementation costs 71 5 351 308 Severance related costs - - 175 67 Strategic consulting and non-recurring professional fees 2,089 - 2,210 - Impairment of goodwill, intangible assets and related costs - - 16,127 142 Adjusted EBITDA$ 5,215 $ 6,867 $ 15,452 $ 19,525 Add back for Non-GAAP Net Income Federal, state and franchise taxes (96) 833 (1,212) 2,055 Other (expense) income, net (222) 38 454 (168) Depreciation and amortization (623) (603) (2,150) (1,527) Non-GAAP net income$ 4,274 $ 7,135 $ 12,544 $ 19,885 Non-GAAP net income per share: Basic$ 0.13 $ 0.23 $ 0.39 $ 0.64 Diluted$ 0.11 $ 0.18 $ 0.32 $ 0.51 Weighted-average shares used to compute non-GAAP net income per share: Basic 32,863 31,356 32,539 30,980 Diluted 39,071 38,863 39,477 38,616 Care.com 2019 | Proprietary Information 10


 
Care.com, Inc. Reconciliation of Non-GAAP EPS (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 29, September 30, September 29, 2019 2018 2019 2018 (unaudited) Weighted-average shares used to compute net income per share: Diluted 39,071 38,863 39,477 38,616 Net (loss) income per share (Diluted): Net (loss) income per share attributable to common stockholders$ (0.08) $ 0.03 $ (1.78) $ 0.05 Impact on net income per share of Series A related costs 0.02 0.02 0.06 0.06 Adjusted net (loss) income per share$ (0.06) $ 0.05 $ (1.72) $ 0.11 Stock-based compensation 0.06 0.11 0.25 0.34 Merger and acquisition related costs 0.02 0.02 0.08 0.03 Restructuring, right of use asset impairment and other charges 0.02 0.00 0.09 0.01 Litigation related costs 0.01 0.00 0.01 0.00 Software implementation costs 0.00 0.00 0.01 0.01 Severance related costs - - 0.00 0.00 Strategic consulting and non-recurring professional fees 0.05 - 0.06 - Impairment of goodwill, intangible assets and related costs - - 0.41 0.00 Realized valuation allowance - - 1.13 - Non-GAAP net income per share - diluted$ 0.11 $ 0.18 $ 0.32 $ 0.51 Care.com 2019 | Proprietary Information 11


 
USE OF NON-GAAP FINANCIAL MEASURES To supplement the financial measures presented in this supplemental information, we also present, in accordance with accounting principles generally accepted in the United States ("GAAP“), the following non-GAAP measures of financial performance: adjusted EBITDA, non-GAAP net income (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 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 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. Care.com 2019 | Proprietary Information 12


 
Thank you Care.com 2019 | Proprietary Information


 

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