INTERSECTIONS INC - FORM 8-K - EX-99.1 - PRESS RELEASE - August 10, 2016

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8-K - INTERSECTIONS INCp16-0380_8k.htm
EX-99.2 - SECOND QUARTER 2016 INVESTOR UPDATE - INTERSECTIONS INCp16-0380_exh992.htm
Exhibit 99.1
 
For more information:
Ron Barden
Intersections Inc.
703.488.6810
IR@intersections.com
Intersections Inc. Reports Second Quarter 2016 Results
Identity Guard(R) U.S. subscriber base increased 5.3% during the first half of 2016
First half 2016 Consolidated loss before income taxes improved 24.8% compared to 2015
CHANTILLY, VA – August 9, 2016 – Intersections Inc. (NASDAQ: INTX) today announced financial results for the quarter ended June 30, 2016.
Consolidated revenue for the quarter ended June 30, 2016 was $44.8 million, compared to $52.0 million for the quarter ended June 30, 2015. Loss before income taxes for the quarter ended June 30, 2016 was $(5.3) million, compared to $(11.0) million for the quarter ended June 30, 2015. Consolidated adjusted EBITDA (loss) before share related compensation and non-cash impairment charges for the quarter ended June 30, 2016 was $(969) thousand, compared to $(506) thousand for the quarter ended June 30, 2015. Diluted loss per share for the quarter ended June 30, 2016 was $(0.23), compared to $(1.28) for the quarter ended June 30, 2015. Consolidated revenue for the six months ended June 30, 2016 was $90.4 million, compared to $107.5 million for the six months ended June 30, 2015. Loss before income taxes for the six months ended June 30, 2016 was $(9.6) million, compared to $(12.7) million for the six months ended June 30, 2015. Consolidated adjusted EBITDA (loss) before share related compensation and non-cash impairment charges for the six months ended June 30, 2016 was $(2.0) million, compared to $953 thousand for the six months ended June 30, 2015. Diluted loss per share for the six months ended June 30, 2016 was $(0.41), compared to $(1.36) for the six months ended June 30, 2015.
"Our consolidated results for the second quarter and first six months of 2016, keep us on track strategically to drive growth through data-driven technologies," said Michael Stanfield, Chairman and Chief Executive Officer. "The year to date growth in our Identity Guard subscriber base and the progress made in expanding our Voyce(R) marketing and strategic relationships are encouraging toward our vision of building two high-growth, subscription-based businesses."
Second Quarter Results:
Revenue from the Company's U.S. Consumer Direct, or Identity Guard(R), subscriber base was $13.8 million for the quarter ended June 30, 2016 with a base of 394 thousand subscribers as of June 30, 2016, 5.3% higher than December 31, 2015.
Revenue from the Company's U.S. financial institution clients was $24.5 million for the quarter ended June 30, 2016 with a base of 757 thousand subscribers as of June 30, 2016. The subscriber base decreased by 1.2% per month during the second quarter, which the Company believes is representative of normal attrition given the ceased marketing and retention efforts for this population.
Core Business (the aggregate of all businesses of Intersections Inc. except for its Pet Health Monitoring, or "Voyce", business) loss before income taxes for the quarter ended June 30, 2016 was $(257) thousand compared to $(6.2) million for the quarter ended June 30, 2015. Core Business adjusted EBITDA before share related compensation and non-cash impairment charges for the quarter ended June 30, 2016 was $3.6 million compared to $3.9 million for the quarter ended June 30, 2015.
Voyce loss before income taxes for the quarter ended June 30, 2016 was $(5.1) million compared to $(4.8) million for the quarter ended June 30, 2015. Voyce adjusted EBITDA (loss) before share related compensation and non-cash impairment charges for the quarter ended June 30, 2016 was $(4.6) million compared to $(4.4) million for the quarter ended June 30, 2015.
Consolidated cash flows (used in) operations for the quarter ended June 30, 2016 were approximately $(3.6) million, compared to cash flows provided by operations of $1.4 million for the quarter ended June 30, 2015. The decrease is primarily due to the cancellations of certain subscriber portfolios by U.S. and Canadian financial institution clients in the quarter ended June 30, 2015 and an increase in accounts receivable, which was collected subsequent to June 30, 2016.
As of June 30, 2016, the Company had a cash balance of $20.3 million, and an outstanding principal balance of $18.4 million under its term loan with Crystal Financial SPV LLC.
Six Months Results:
Revenue from the Company's U.S. Consumer Direct, or Identity Guard(R), subscriber base for the six months ended June 30, 2016 was $27.9 million, 5.4% higher than the six months ended June 30, 2015.
Revenue from the Company's U.S. financial institution clients for the six months ended June 30, 2016 was $49.9 million with a base of 757 thousand subscribers as of June 30, 2016.
Core Business income (loss) before income taxes for the six months ended June 30, 2016 was $612 thousand compared to $(3.1) million for the six months ended June 30, 2015. Core Business adjusted EBITDA before share related compensation and non-cash impairment charges for the six months ended June 30, 2016 was $7.3 million compared to $10.1 million for the six months ended June 30, 2015.
Voyce loss before income taxes for the six months ended June 30, 2016 was $(10.2) million compared to $(9.6) million for the six months ended June 30, 2015. Voyce adjusted EBITDA (loss) before share related compensation and non-cash impairment charges for the six months ended June 30, 2016 was $(9.3) million compared to $(9.2) million for the six months ended June 30, 2015.

Non-GAAP Financial Measures:
Intersections' Consolidated Financial Statements, "Other Data" and reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures and related notes can be found in the accompanying tables and footnotes to this release and in the "GAAP and Non-GAAP Measures" link under the "Investor & Media" page on our website at www.intersections.com.
Forward-Looking Statements:
Statements in this release relating to future plans, results, performance, expectations, achievements and the like are considered "forward-looking statements." You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "estimate," "expect," "project,'' "plan," "intend," "believe," "may," "should," "can have," "likely" and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. Those forward-looking statements involve known and unknown risks and uncertainties and are subject to change based on various factors and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements, including the timing and success of new product launches, including our Identity Guard(R), Voyce(R) and Voyce Pro(TM) platforms, and other growth initiatives; the continuing impact of the regulatory environment on our business; the continued dependence on a small number of financial institutions for a majority of our revenue and to service our U.S. financial institution customer base; our ability to execute our strategy and previously announced transformation plan; our incurring additional restructuring charges; our incurring impairment charges on goodwill and/or assets, including assets related to our Voyce(R) products; our ability to control costs; and our needs for additional capital to grow our business, including our ability to maintain compliance with the covenants under our new term loan or seek additional sources of debt and/or equity financing. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed under "Forward-Looking Statements," "Item 1. Business—Government Regulation" and "Item 1A. Risk Factors" in the Company's most recent Annual Report on Form 10-K, and in its other filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to revise or update any forward-looking statements unless required by applicable law.

About Intersections:

Intersections Inc. (Nasdaq: INTX) provides innovative, information based solutions that help consumers manage risks and make better informed life decisions. Under its Identity Guard(R) brand and other brands, the company helps consumers monitor, manage and protect against the risks associated with their identities and personal information. The company's subsidiary Intersections Insurance Services provides insurance and other services that help consumers manage risks and achieve personal goals. The company's i4C Innovations subsidiary provides Voyce(R), a groundbreaking pet wellness monitoring system for pet owners and veterinarians. Headquartered in Chantilly, Virginia, the company was founded in 1996. To learn more, visit www.intersections.com.

INTERSECTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)


   
Three Months Ended
    
Six Months Ended
  
   
June 30,
    
June 30,
  
   
2016
    
2015
    
2016
    
2015
  
REVENUE:
                                
Services
  
$
44,742
    
$
51,937
    
$
90,381
    
$
107,447
  
Hardware
    
9
      
31
      
18
      
33
  
Net revenue
    
44,751
      
51,968
      
90,399
      
107,480
  
OPERATING EXPENSES:
                                
Marketing
    
3,532
      
5,405
      
8,097
      
11,036
  
Commission
    
10,887
      
13,083
      
22,109
      
26,919
  
Cost of services revenue
    
12,984
      
15,160
      
27,674
      
32,945
  
Cost of hardware revenue
    
167
      
182
      
275
      
242
  
General and administrative
    
19,773
      
20,081
      
36,919
      
38,374
  
Impairment of intangibles and other long-lived assets
    
—
      
7,355
      
—
      
7,355
  
Depreciation
    
1,589
      
1,613
      
3,245
      
2,910
  
Amortization
    
192
      
156
      
384
      
275
  
Total operating expenses
    
49,124
      
63,035
      
98,703
      
120,056
  
LOSS FROM OPERATIONS
    
(4,373
)
    
(11,067
)
    
(8,304
)
    
(12,576
)
Interest (expense) income, net
    
(840
)
    
21
      
(1,082
)
    
(82
)
Other (expense) income, net
    
(94
)
    
10
      
(181
)
    
(72
)
LOSS BEFORE INCOME TAXES
    
(5,307
)
    
(11,036
)
    
(9,567
)
    
(12,730
)
INCOME TAX EXPENSE
    
—
      
(13,804
)
    
(7
)
    
(13,333
)
NET LOSS
  
$
(5,307
)
  
$
(24,840
)
  
$
(9,574
)
  
$
(26,063
)
                                 
Net loss per common share—basic and diluted
  
$
(0.23
)
  
$
(1.28
)
  
$
(0.41
)
  
$
(1.36
)
Weighted average common shares outstanding—basic and diluted
    
23,268
      
19,369
      
23,078
      
19,104
  


INTERSECTIONS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(unaudited)

   
June 30,
    
December 31,
  
   
2016
    
2015
  
ASSETS
                
CURRENT ASSETS:
                
Cash and cash equivalents
  
$
20,317
    
$
11,471
  
Accounts receivable, net of allowance for doubtful accounts of $130 (2016) and $115 (2015)
    
10,961
      
8,163
  
Prepaid expenses and other current assets
    
7,610
      
7,524
  
Inventory
    
2,133
      
2,253
  
Income tax receivable
    
7,010
      
7,730
  
Deferred subscription solicitation and commission costs
    
4,474
      
6,961
  
Total current assets
    
52,505
      
44,102
  
PROPERTY AND EQUIPMENT, net
    
12,849
      
13,438
  
GOODWILL
    
9,763
      
9,763
  
INTANGIBLE ASSETS, net
    
1,308
      
1,693
  
OTHER ASSETS
    
560
      
1,034
  
TOTAL ASSETS
  
$
76,985
    
$
70,030
  
LIABILITIES AND STOCKHOLDERS' EQUITY
                
CURRENT LIABILITIES:
                
Accounts payable
  
$
2,133
    
$
3,207
  
Accrued expenses and other current liabilities
    
15,580
      
15,845
  
Accrued payroll and employee benefits
    
3,992
      
7,091
  
Commissions payable
    
334
      
375
  
Current portion of long-term debt, net
    
7,975
      
—
  
Capital leases, current portion
    
603
      
631
  
Deferred revenue
    
3,843
      
2,380
  
Total current liabilities
    
34,460
      
29,529
  
LONG-TERM DEBT, net
    
8,823
      
—
  
OBLIGATIONS UNDER CAPITAL LEASES, less current portion
    
901
      
1,147
  
OTHER LONG-TERM LIABILITIES
    
4,761
      
3,971
  
DEFERRED TAX LIABILITY, net
    
1,905
      
1,905
  
TOTAL LIABILITIES
    
50,850
      
36,552
  
COMMITMENTS AND CONTINGENCIES (see Notes 14 and 16)
                
STOCKHOLDERS' EQUITY:
                
Common stock at $0.01 par value, shares authorized 50,000; shares issued 27,232 (2016) and 26,730 (2015); shares outstanding 23,679 (2016) and 23,236 (2015)
    
272
      
267
  
Additional paid-in capital
    
140,089
      
137,705
  
Treasury stock, shares at cost; 3,553 (2016) and 3,494 (2015)
    
(33,790
)
    
(33,632
)
Accumulated deficit
    
(80,436
)
    
(70,862
)
TOTAL STOCKHOLDERS' EQUITY
    
26,135
      
33,478
  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  
$
76,985
    
$
70,030
  

INTERSECTIONS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
   
Six Months Ended
  
   
June 30,
  
   
2016
    
2015
  
CASH FLOWS FROM OPERATING ACTIVITIES:
                
Net loss
  
$
(9,574
)
  
$
(26,063
)
Adjustments to reconcile net loss to cash flows (used in) provided by operating activities:
                
Depreciation
    
3,245
      
2,910
  
Depreciation of other operating assets
    
16
      
—
  
Amortization
    
384
      
275
  
Deferred income tax, net
    
—
      
15,252
  
Amortization of debt issuance cost
    
387
      
50
  
Provision for doubtful accounts
    
25
      
(2
)
Loss on disposal of fixed assets
    
256
      
60
  
Share based compensation
    
2,601
      
3,001
  
Amortization of deferred subscription solicitation costs
    
7,170
      
8,748
  
Impairment of intangibles and other long-lived assets
    
—
      
7,355
  
Changes in assets and liabilities:
                
Accounts receivable
    
(2,824
)
    
3,327
  
Prepaid expenses and other current assets
    
67
      
1,665
  
Inventory
    
120
      
(1,873
)
Income tax receivable, net
    
720
      
(445
)
Deferred subscription solicitation and commission costs
    
(4,682
)
    
(9,431
)
Other assets
    
388
      
1,959
  
Accounts payable
    
(1,097
)
    
(892
)
Accrued expenses and other current liabilities
    
(298
)
    
(1,440
)
Accrued payroll and employee benefits
    
(3,150
)
    
(1,948
)
Commissions payable
    
(40
)
    
(33
)
Deferred revenue
    
1,463
      
330
  
Other long-term liabilities
    
790
      
(202
)
Cash flows (used in) provided by operating activities
    
(4,033
)
    
2,603
  
CASH FLOWS FROM INVESTING ACTIVITIES:
                
Cash paid for acquisition of technology related intangible
    
—
      
(202
)
Cash paid for business acquisitions
    
—
      
(626
)
Increase in restricted cash
    
(375
)
    
—
  
Proceeds from sale of property and equipment
    
394
      
—
  
Acquisition of property and equipment
    
(2,972
)
    
(2,275
)
Cash flows used in investing activities
    
(2,953
)
    
(3,103
)
CASH FLOWS FROM FINANCING ACTIVITIES:
                
Proceeds from issuance of debt
    
20,000
      
—
  
Repayments of debt
    
(1,644
)
    
—
  
Cash paid for debt issuance costs
    
(1,856
)
    
—
  
Capital lease payments
    
(347
)
    
(417
)
Withholding tax payment on vesting of restricted stock units and stock option exercises
    
(321
)
    
(824
)
Cash flows provided by (used in) financing activities
    
15,832
      
(1,241
)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
    
8,846
      
(1,741
)
CASH AND CASH EQUIVALENTS — Beginning of period
    
11,471
      
11,325
  
CASH AND CASH EQUIVALENTS — End of period
  
$
20,317
    
$
9,584
  
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:
                
Equipment obtained under capital lease, including acquisition costs
  
$
105
    
$
427
  
Equipment additions accrued but not paid
  
$
130
    
$
289
  
Withholding tax payments accrued on vesting of restricted stock units and stock option exercises
  
$
33
    
$
—
  
Shares withheld in lieu of withholding taxes on vesting of restricted stock awards
  
$
18
    
$
91
  
Shares issued in the business acquired from White Sky, Inc.
  
$
—
    
$
1,200
  
Shares issued in the business acquired from Health at Work Wellness Actuaries LLC
  
$
—
    
$
1,551
  


INTERSECTIONS INC.
OTHER DATA
(unaudited)

Personal Information Services Segment Revenue
The following tables provide details of our Personal Information Services segment revenue information for the three and six months ended June 30, 2016 and 2015:

   
Three Months Ended June 30,
   
2016
    
2015
    
2016
  
2015
   
(In thousands)
    
(Percent of total)
Bank of America
  
$
19,776
    
$
22,783
    
47.6%
  
47.7%
All other financial institution clients
    
4,754
      
6,001
    
11.4%
  
12.5%
Consumer direct
    
13,810
      
13,837
    
33.2%
  
28.9%
Canadian business lines
    
3,227
      
5,223
    
7.8%
  
10.9%
Total Personal Information Services revenue
  
$
41,567
    
$
47,844
    
100.0%
  
100.0%



   
Six Months Ended June 30,
   
2016
    
2015
    
2016
  
2015
   
(In thousands)
    
(Percent of total)
Bank of America
  
$
40,252
    
$
46,638
    
47.9%
  
47.1%
All other financial institution clients
    
9,614
      
14,842
    
11.5%
  
15.0%
Consumer direct
    
27,933
      
26,501
    
33.2%
  
26.7%
Canadian business lines
    
6,247
      
11,111
    
7.4%
  
11.2%
Total Personal Information Services revenue
  
$
84,046
    
$
99,092
    
100.0%
  
100.0%

INTERSECTIONS INC.
OTHER DATA, continued
(unaudited)

Personal Information Services Segment Subscribers
The following tables provide details of our Personal Information Services segment subscriber information for the three and six months ended June 30, 2016 and 2015:

   
Financial
Institution
    
Consumer
Direct
    
Canadian
Business Lines
    
Total
  
   
(in thousands)
  
Balance at March 31, 2016
    
786
      
398
      
164
      
1,348
  
Additions
    
—
      
45
      
31
      
76
  
Cancellations
    
(29
)
    
(49
)
    
(29
)
    
(107
)
Balance at June 30, 2016
    
757
      
394
      
166
      
1,317
  
Balance at March 31, 2015
    
1,354
      
381
      
280
      
2,015
  
Additions
    
1
      
72
      
23
      
96
  
Cancellations
    
(462
)
    
(74
)
    
(127
)
    
(663
)
Balance at June 30, 2015
    
893
      
379
      
176
      
1,448
  



   
Financial
Institution
    
Consumer
Direct
    
Canadian
Business Lines
    
Total
  
   
(in thousands)
  
Balance at December 31, 2015
    
829
      
363
      
165
      
1,357
  
Reclassification (1)
    
(11
)
    
11
      
—
      
—
  
Additions
    
1
      
126
      
66
      
193
  
Cancellations
    
(62
)
    
(106
)
    
(65
)
    
(233
)
Balance at June 30, 2016
    
757
      
394
      
166
      
1,317
  
                                 
Balance at December 31, 2014
    
1,421
      
342
      
296
      
2,059
  
Additions
    
2
      
155
      
42
      
199
  
Cancellations
    
(530
)
    
(118
)
    
(162
)
    
(810
)
Balance at June 30, 2015
    
893
      
379
      
176
      
1,448
  
____________________________
(1) We periodically refine the criteria used to calculate and report our subscriber data. In the six months ended June 30, 2016, we reclassified certain subscribers that receive our breach response services, and the associated revenue, from the Financial Institution category to the Consumer Direct category. The reclassification is excluded from our calculations of decrease and increase in subscribers in our Financial Institution and Consumer Direct categories, respectively.



INTERSECTIONS INC.
OTHER DATA, continued
(unaudited)

Intersections Inc.
Reconciliation of Non-GAAP Financial Measures

The table below includes financial information prepared in accordance with accounting principles generally accepted in the United States, or GAAP, as well as other financial measures referred to as non-GAAP financial measures. Consolidated adjusted EBITDA before share related compensation and non-cash impairment charges is presented in a manner consistent with the way management evaluates operating results and which management believes is useful to investors and others. Share related compensation includes non-cash share based compensation. An explanation regarding the company's use of non-GAAP financial measures and a reconciliation of non-GAAP financial measures used by the company to GAAP measures is provided below. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, net income (loss) and the other information prepared in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies. Management strongly encourages shareholders to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure.

Consolidated adjusted EBITDA before share related compensation and non-cash impairment charges represents consolidated loss before income taxes plus: share related compensation; non-cash impairment of goodwill, intangibles and other long-lived assets; (gain) loss on disposal of fixed assets; depreciation and amortization; and interest (income) expense. We believe that the consolidated adjusted EBITDA before share related compensation and non-cash impairment charges calculation provides useful information to investors because they are indicators of our operating performance, and we use these measures in communications with our board of directors, creditors, investors and others concerning our financial performance. Consolidated adjusted EBITDA before share related compensation and non-cash impairment charges is commonly used as a basis for investors and analysts to evaluate and compare the periodic and future operating performance and value of companies within our industry. Our Board of Directors and management use consolidated adjusted EBITDA before share related compensation and non-cash impairment charges to evaluate the operating performance of the company. In addition, consolidated and Core Business adjusted EBITDA before share related compensation and non-cash impairment charges are used to measure covenant compliance under our credit agreement with Crystal Financial SPV LLC ("Credit Agreement").

We provide this information to show the impact of share related compensation on our operating results, as it is excluded from our internal operating and budgeting plans and measurements of financial performance; however, we do consider the dilutive impact to our shareholders when awarding share related compensation and consider both the Black-Scholes value and GAAP value (to the extent applicable) in connection therewith, and value such awards accordingly.

INTERSECTIONS INC.
OTHER DATA, continued
(unaudited)

We do not consider share related compensation charges when we evaluate the performance of our individual business groups or formulate our short and long-term operating plans. Due to its nature, individual managers generally are unable to project the impact of share related compensation and accordingly we do not hold them accountable for the impact of equity award grants. When we consider making share related compensation grants, we primarily take into account the need to attract and retain high quality employees, overall shareholder dilution and the Black-Scholes values of the equity grant to the recipient, rather than the potential accounting charges associated with such grants. For comparability purposes, we believe it is useful to provide a non-GAAP financial measure that excludes share related compensation in order to better understand the long-term performance of our core business and to compare our results to the results of our peer companies because of varying available valuation methodologies and the variety of award types that companies can use under GAAP. Furthermore, the value of share related compensation is determined using a complex formula that incorporates factors, such as market volatility, that are beyond our control. Accordingly, we believe that the presentation of consolidated adjusted EBITDA before share related compensation and non-cash impairment charges when read in conjunction with our reported GAAP results can provide useful supplemental information to our management, to investors and to our lenders regarding financial and business trends relating to our financial condition and results of operations.

Consolidated adjusted EBITDA before share related compensation and non-cash impairment charges has limitations due to the fact it does not include all compensation related expenses. For example, if we only paid cash based compensation as opposed to a portion in share related compensation, the cash compensation expense included in our general and administrative expenses would be higher. We compensate for this limitation by providing information required by GAAP about outstanding share based awards in the footnotes to our financial statements in our SEC filings. We believe equity based compensation is an important element of our compensation program and all forms of share related awards are valued and included as appropriate in our operating results.

The following table reconciles Core Business, Voyce and consolidated income (loss) before income taxes to consolidated adjusted EBITDA (loss) before share related compensation and non-cash impairment charges, as defined, for the previous six quarters through June 30, 2016. In managing our business, we analyze our performance quarterly on a consolidated income (loss) before income tax basis.

We changed the way we calculate consolidated adjusted EBITDA before share related compensation and non-cash impairment charges and beginning in the second quarter of 2016, we present consolidated adjusted EBITDA before share related compensation and non-cash impairment charges as it is defined in the Credit Agreement. Prior periods have been recast to reflect the new presentation. For additional information, Please see "Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources" in our most recent Form 10-Q.

INTERSECTIONS INC.
OTHER DATA, continued
(in thousands)
(unaudited)

Core Business, Voyce and consolidated adjusted EBITDA before share related compensation and non-cash impairment charges:
   
2015
    
2016
  
   
Quarter Ended
    
Quarter Ended
  
   
March 31
    
June 30
    
September 30
    
December 31
    
March 31
    
June 30
  
Reconciliation from consolidated income (loss) before income taxes to consolidated adjusted EBITDA before share related compensation and non-cash impairment charges:
      
Core Business adjusted EBITDA: (1)
                                                
Income (loss) before income taxes (2)
  
$
3,115
    
$
(6,209
)
  
$
(2,043
)
  
$
(13,835
)
  
$
869
    
$
(257
)
Non-cash share based compensation
    
1,574
      
1,427
      
1,422
      
1,018
      
1,155
      
1,446
  
Impairment of goodwill, intangibles and other long-lived assets
    
—
      
7,355
      
—
      
10,318
      
—
      
—
  
Loss on disposal of fixed assets
    
7
      
—
      
1
      
2
      
—
      
256
  
Depreciation
    
1,265
      
1,237
      
1,096
      
1,175
      
1,249
      
1,179
  
Amortization
    
119
      
142
      
189
      
189
      
175
      
174
  
Interest expense (income), net
    
103
      
(21
)
    
70
      
161
      
242
      
840
  
Core Business adjusted EBITDA
  
$
6,183
    
$
3,931
    
$
735
    
$
(972
)
  
$
3,690
    
$
3,638
  
                                                 
Voyce adjusted EBITDA:
                                                
Loss before income taxes (2)
  
$
(4,809
)
  
$
(4,827
)
  
$
(4,668
)
  
$
(5,109
)
  
$
(5,129
)
  
$
(5,050
)
Loss on disposal of fixed assets
    
53
      
—
      
—
      
2
      
—
      
—
  
Depreciation
    
32
      
376
      
392
      
404
      
407
      
410
  
Depreciation of other operating assets
    
—
      
—
      
—
      
—
      
1
      
15
  
Amortization
    
—
      
14
      
17
      
17
      
17
      
18
  
Voyce adjusted EBITDA
  
$
(4,724
)
  
$
(4,437
)
  
$
(4,259
)
  
$
(4,686
)
  
$
(4,704
)
  
$
(4,607
)
                                                 
Consolidated adjusted EBITDA:
                                                
Consolidated loss before income taxes
  
$
(1,694
)
  
$
(11,036
)
  
$
(6,711
)
  
$
(18,944
)
  
$
(4,260
)
  
$
(5,307
)
Non-cash share based compensation
    
1,574
      
1,427
      
1,422
      
1,018
      
1,155
      
1,446
  
Impairment of goodwill, intangibles and other long-lived assets
    
—
      
7,355
      
—
      
10,318
      
—
      
—
  
Loss on disposal of fixed assets
    
60
      
—
      
1
      
4
      
—
      
256
  
Depreciation
    
1,297
      
1,613
      
1,488
      
1,579
      
1,656
      
1,589
  
Depreciation of other operating assets
    
—
      
—
      
—
      
—
      
1
      
15
  
Amortization
    
119
      
156
      
206
      
206
      
192
      
192
  
Interest expense (income), net
    
103
      
(21
)
    
70
      
161
      
242
      
840
  
Consolidated adjusted EBITDA
  
$
1,459
    
$
(506
)
  
$
(3,524
)
  
$
(5,658
)
  
$
(1,014
)
  
$
(969
)

INTERSECTIONS INC.
OTHER DATA, continued
(in thousands)
(unaudited)

   
Six Months Ended June 30, 2015
    
Six Months Ended June 30, 2016
  
   
Core Business (1)
    
Voyce
    
Consolidated
    
Core Business (1)
    
Voyce
    
Consolidated
  
Reconciliation from consolidated (loss) income before income taxes to consolidated adjusted EBITDA before share related compensation and non-cash impairment charges:
                                                
Consolidated (loss) income before income taxes (2)
  
$
(3,094
)
  
$
(9,636
)
  
$
(12,730
)
  
$
612
    
$
(10,179
)
  
$
(9,567
)
Non-cash share based compensation
    
3,001
      
—
      
3,001
      
2,601
      
—
      
2,601
  
Impairment of goodwill, intangibles and other long-lived assets
    
7,355
      
—
      
7,355
      
—
      
—
      
—
  
Loss on disposal of fixed assets
    
7
      
53
      
60
      
256
      
—
      
256
  
Depreciation
    
2,502
      
408
      
2,910
      
2,428
      
817
      
3,245
  
Depreciation of other operating assets
    
—
      
—
      
—
      
—
      
16
      
16
  
Amortization
    
261
      
14
      
275
      
349
      
35
      
384
  
Interest expense, net
    
82
      
—
      
82
      
1,082
      
—
      
1,082
  
Consolidated adjusted EBITDA
  
$
10,114
    
$
(9,161
)
  
$
953
    
$
7,328
    
$
(9,311
)
  
$
(1,983
)
______________________________
(1) "Core Business" comprises all the business of Intersections Inc. with the exception of its Voyce business.
(2) In the six months ended June 30, 2016, we implemented an allocation policy to charge a portion of general and administrative expenses from our Corporate business unit into our other segments. The charge is a reasonable estimate of the services provided by our Corporate business unit to support each segment's operations. For comparability, the results of operations for the year ended December 31, 2015 have been recast to reflect this allocation.

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