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Angie's List Reports Third Quarter 2013 Results



Angie's List Reports Third Quarter 2013 Results

  * Third quarter revenue was $65.5 million, up 56% over the prior year
    quarter
  * Third quarter cash used in operations was $0.8 million; cash provided by
    operations for the nine months ended September 30, 2013 was $13.4 million
  * Cost per acquisition ("CPA") in the third quarter was $76, which was flat
    compared to the prior year period

INDIANAPOLIS, Oct. 23, 2013 (GLOBE NEWSWIRE) -- Angie's List, Inc.
(Nasdaq:ANGI) announced today third quarter 2013 financial results for the
quarter ended September 30, 2013.

"Our third quarter growth was driven by solid results across our key operating
metrics," said Angie's List CEO Bill Oesterle. "We added a record number of
new members while making significant investments in the business."

Key Operating Metrics

Three months ended                                                    
                                               9/30/13    9/30/12    Change
Total paid memberships (end of period)          2,378,867  1,656,768 44%
Gross paid memberships added (in period)        371,318    341,522   9%
Marketing cost per paid membership acquisition  $ 76       $ 76      flat
(in period)
First-year membership renewal rate (in period) 75%        76%        (1.0) pts
Average membership renewal rate (in period)    78%        78%        flat
Participating service providers (end of         44,876     33,209    35%
period)
Total service provider contract value (end of   $ 181,975  $ 119,091 53%
period, in thousands)
                                                                      
Nine months ended                                                     
                                               9/30/13    9/30/12    Change
Gross paid memberships added (in period)        993,556    862,014   15%
Marketing cost per paid membership acquisition  $ 76       $ 83      (8%)
(in period)
First-year membership renewal rate (in period) 75%        76%        (1.0) pts
Average membership renewal rate (in period)    78%        78%        flat

Market Cohort Analysis

"Our cohorts continued to perform well in the third quarter," continued
Oesterle. "Each cohort recorded strong membership growth, higher penetration
rates, and increasing average revenue per market and contribution."    

                                         Service      Avg.                                 
                            Membership   Provider     Marketing               Estimated   Annual
       # of    Avg.         Revenue/Paid Revenue/Paid Expense/    Total Paid  Penetration Membership
               Revenue/
Cohort Markets Market       Membership   Membership   Market      Memberships Rate *      Growth
                                                                                          Rate
Pre    10       $ 5,933,585  $ 39.05      $ 110.62     $1,285,741 454,016     10.7%       34%
2003
2003 - 35       3,965,746    34.20        92.42        1,352,104  1,293,550   8.3%        44%
2007
2008 - 103      220,786      16.28        32.40        187,168    550,209     8.6%        43%
2010
Post   96       20,885       12.07        22.49        55,460     81,092      4.6%        **
2010
       244                                                        2,378,867                
                                                                                           
Cohort table presents financial and operational data for the twelve months ended 9/30/2013
* Demographic information used in penetration rate calculations is based on a third party study we
commissioned in September, 2013. 
 According to the study, the number of U.S. households in our target demographic was 31 million.
** Not meaningful

Third Quarter Results

Third quarter 2013 total revenue was $65.5 million, an increase of 56 percent
compared to $42.0 million in the prior year period. Membership revenue in the
third quarter of 2013 was $17.1 million, an increase of 34 percent compared to
the prior year period. Service provider revenue was the largest component of
total revenue at $48.4 million and the fastest growing with a 66 percent
growth rate year-over-year. Service provider revenue includes revenue from
advertising contracts and fees from e-commerce transactions. Advertising
revenue was $42.0 million in the third quarter of 2013, an increase of 65
percent compared to the prior year period and e-commerce revenue was $6.4
million, an increase of 70 percent year-over-year.  

Marketing expense increased 8 percent, or $2.1 million, compared to the prior
year period. Net loss was $13.5 million, with selling expense of $24.0 million
and marketing expense of $28.2 million, compared to a net loss of $18.5
million with selling expense of $16.2 million and marketing expense of $26.1
million in the prior year period. Adjusted EBITDA loss, a non-GAAP financial
measure, was $11.3 million, compared to a loss of $16.5 million in the prior
year period.

"We remain focused on producing strong unit economics and are pleased with our
continued leverage improvement and solid cash position," said Tom Fox, Angie's
List CFO. "In addition, we are quite encouraged by the growth we recorded from
our e-commerce offerings during the third quarter."

Business Outlook

The Company's financial and operating expectations for the fourth quarter of
2013 are as follows:

  * Total revenue in the range of $68.0 million to $69.0 million.
  * Marketing expense in the range of $10.7 million to $11.7 million.

Conference Call Information

The company will host a conference call on October 23, 2013 at approximately
5:00 PM (ET) / 2:00 PM (PT) to discuss the quarterly financial results with
the investment community. A live webcast of the event will be available on the
Angie's List Investor Relations website at http://investor.angieslist.com/

A live domestic dial-in is available at (877) 380-5664 or (253) 237-1143
internationally. An audio replay will be available at (855) 859-2056
domestically or (404) 537-3406 internationally, using Conference ID 72913994
through October 29, 2013.

Live audio webcast of the presentation will be available on the Angie's List
Investor Relations website at http://investor.angieslist.com/

About Angie's List

Angie's List helps consumers have happy transactions with local service
professionals in more than 720 categories of service, ranging from home
improvement to health care. More than 2 million subscribers across the U.S.
share their consumer experiences and use Angie's List to gain unlimited access
to local ratings, exclusive discounts, the Angie's List magazine, the Angie's
List complaint resolution service and information about how to make the most
of their home improvement projects.

Non-GAAP Financial Measures

In addition to providing financial measurements based on generally accepted
accounting principles in the United States (GAAP), Angie's List has disclosed
in this press release financial information that has not been prepared in
accordance with GAAP. This information includes non-GAAP Adjusted EBITDA,
which Angie's List defines as earnings before interest, income taxes,
depreciation, amortization, and non-cash stock-based compensation. Angie's
List uses Adjusted EBITDA internally in analyzing its financial results and
has determined to disclose this measure to investors because it believes it
will be useful to them, as a supplement to GAAP measures, in evaluating
Angie's List's operating performance relative to its industry sector and
competitors. Angie's List believes that the use of Adjusted EBITDA provides
additional insight for investors to use in evaluation of ongoing operating
results and trends. However, non-GAAP financial measures such as Adjusted
EBITDA should not be considered in isolation from, or as a substitute for,
financial information prepared in accordance with GAAP. Angie's List has
significant uses of cash flows, including capital expenditures and other
contractual commitments, interest payments and income taxes that are not
reflected in Adjusted EBITDA. Adjusted EBITDA does not consider the
potentially dilutive impact of issuing non-cash stock-based compensation to
Angie's List's management and other employees. It should also be noted that
other companies, including companies in the same industry, may calculate
Adjusted EBITDA in a different manner than Angie's List. Angie's List has
provided a reconciliation of Adjusted EBITDA measure to the most directly
comparable GAAP financial measure. 

Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including statements
regarding expected revenue, future marketing expense and growth opportunities.
These forward-looking statements are based on Angie's List's current
assumptions, expectations and beliefs and involve substantial risks and
uncertainties that may cause results, performance or achievement to materially
differ from those expressed or implied by these forward-looking
statements. Factors that could cause or contribute to such differences
include, but are not limited to: our ability to accurately measure and predict
revenue per paid membership, membership acquisition costs or costs associated
with servicing our members; our ability to protect our brand and maintain our
reputation among consumers and local service providers; our ability to attract
and retain local service providers to advertise on our service; our ability to
increase our pricing on memberships and service provider contracts as we
increase our market penetration; our ability to replicate our business model
in our less penetrated markets; our success in converting consumers and local
service providers into paid memberships and participating service providers;
competitive factors; our ability to stay abreast of modified or new laws and
regulations applying to our business, including those regarding sales or
transaction taxes and privacy regulation; our ability to adequately protect
our intellectual property; our ability to manage our growth; and general
economic conditions worldwide.

Further information on these factors and other risks that may affect our
business is included in filings we make with the Securities and Exchange
Commission from time to time, including Angie's List's Annual Report on Form
10-K and its subsequent Quarterly Reports on Form 10-Q and Current Reports on
Form 8-K.

These documents are or will be available online from the SEC or on the SEC
Filings section of the Investor Relations section of our website at
http://investor.angieslist.com. Information on our website is not part of this
release. All forward-looking statements in this press release are based on
information currently available to us, and we assume no obligation to update
these forward-looking statements in light of new information or future events.

Angie's List, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
                                                    September 30, December 31,
                                                    2013          2012
                                                    (Unaudited)    
Assets                                                             
Cash and cash equivalents                           $ 41,609      $ 42,638
Restricted cash                                     50            50
Short term investments                              20,972        10,460
Accounts receivable, net                            10,636        7,787
Prepaid expenses and other current assets           15,000        19,810
Total current assets                                88,267        80,745
                                                                   
Property and equipment, net                         16,003        12,079
Goodwill                                            1,145         415
Amortizable intangible assets, net                  3,864         2,356
Deferred financing fees, net                        456           634
Total assets                                        $ 109,735     $ 96,229
                                                                   
Liabilities and stockholders' equity (deficit)                     
Accounts payable                                    $ 3,814       $ 6,489
Accrued liabilities                                 35,481        14,058
Deferred membership revenue                         37,563        27,627
Deferred advertising revenue                        35,564        23,160
Total current liabilities                           112,422       71,334
                                                                   
Long-term debt, including accrued interest          14,906        14,869
Deferred membership revenue, noncurrent             4,888         4,330
Deferred advertising revenue, noncurrent            387           214
Deferred income taxes                               163           163
Total liabilities                                   132,766       90,910
                                                                   
Stockholders' equity (deficit):                                    
Common stock                                        67            66
Additional paid-in-capital                          255,767       248,326
Treasury stock                                       (23,719)      (23,719)
Accumulated deficit                                  (255,146)     (219,354)
Total stockholders' equity (deficit)                 (23,031)      5,319
Total liabilities and stockholders' equity          $ 109,735     $ 96,229
(deficit)
                                                                   

Angie's List, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
                                                                  
                           Three Months Ended      Nine Months Ended September
                           September 30,           30,
                           2013        2012        2013          2012
                           (Unaudited)             (Unaudited)
Revenue                                                           
Membership                 $17,050     $12,769     $47,598       $34,036
Service provider           48,450      29,253      129,288       75,584
Total revenue              65,500      42,022      176,886       109,620
                                                                  
Operating expenses                                                
Operations and support     11,016      7,140       29,418        19,631
Selling                    23,960      16,240      65,582        42,974
Marketing                  28,189      26,088      75,870        71,316
Technology                 6,942       4,905       19,349        12,223
General and administrative 8,421       5,669       21,019        17,420
Total Operating Expenses   78,528      60,042      211,238       163,564
Operating loss              (13,028)    (18,020)    (34,352)      (53,944)
                                                                  
Interest expense, net      468         467         1,395         1,380
Loss before income taxes    (13,496)    (18,487)    (35,747)      (55,324)
Income tax expense         15          --          45            --
Net loss                    $ (13,511)  $ (18,487)  $(35,792)     $(55,324)
                                                                  
Net loss per common share   $ (0.23)    $ (0.32)    $ (0.62)      $ (0.96)
– basic and diluted
                                                                  
Weighted average common
shares outstanding – basic 58,389      57,769      58,164        57,370
and diluted
                                                                  
                                                                  
Non-cash stock-based                                              
compensation
Operations and support     $19         $ --        $52           $ --
Selling                    50          --          101           --
Technology                 (418)       225         (55)          563
General and administrative 1,025       545         2,568         1,650
Total non-cash stock-based $676        $770        $2,666        $2,213
compensation
                                                                  
                                                                  
Reconciliation of adjusted
EBITDA (loss) to net loss                                         
(Unaudited):
Net loss:                   $ (13,511)  $ (18,487)  $(35,792)     $(55,324)
Income tax                 15          --          45            --
Interest expense, net      468         467         1,395         1,380
Depreciation and           1,050       741         2,874         1,960
amortization
Non-cash stock-based       676         770         2,666         2,213
compensation
Adjusted EBITDA (loss)      $ (11,302)  $ (16,509)  $(28,812)     $(49,771)

 
Angie's List, Inc.
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
                                                                
                                               Nine Months Ended September 30,
                                               2013            2012
                                               (Unaudited)
Operating activities                                            
Net loss                                        $ (35,792)      $ (55,324)
Adjustments to reconcile net loss to net cash                   
provided by (used in) operating activities:
Depreciation and amortization                  2,874           1,960
Amortization of debt discount, deferred         420            209
financing fees and bond premiums
Non-cash stock-based compensation expense      2,666           2,213
                                                                
Changes in certain assets:                                      
Accounts receivable                             (2,849)         (3,353)
Prepaid expenses and other current assets       4,810           (7,994)
Changes in certain liabilities:                                 
Accounts payable                                (3,175)        4,152
Accrued liabilities                            21,423          12,601
Deferred advertising revenue                   12,577          6,540
Deferred membership revenue                    10,494          11,199
Net cash provided by (used in) operating        13,448          (27,797)
activities
                                                                
Investing activities                                            
Restricted cash                                 --              250
Purchase of short-term investments, net         (10,717)        -- 
Acquisition of business assets                  (2,150)         -- 
Property and equipment                          (5,685)         (2,583)
Data acquisition costs                          (701)           (1,968)
Net cash used in investing activities           (19,253)        (4,301)
                                                                
Financing activities                                            
Proceeds from common stock issuances under     4,776           361
employee stock option plans
Sale of common stock, net of costs             --              8,627
Net cash provided by financing activities      4,776           8,988
                                                                
Net increase (decrease) in cash and cash        (1,029)         (23,110)
equivalents
Cash and cash equivalents at beginning of      42,638          88,607
period
Cash and cash equivalents at end of period      $ 41,609        $ 65,497
                                                                

CONTACT: Investor Relations at Angie's List
         888-619-2655
         investorrelations@angieslist.com
        
         Or
        
         Tom Ward
         Investor Relations
         317-808-4527
         tomw@angieslist.com
        
         Cheryl Reed
         Public Relations
         317-396-9134
         cherylr@angieslist.com
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