Highlights Consistent Growth and
Profitability
Care.com (NYSE: CRCM), the world's largest online destination
for finding and managing family care, today is announcing financial
results for the fourth quarter and full year ended December 29,
2018.
“2018 was a strong year for Care.com, as we continued
to drive profitable growth while investing in our mobile-first
consumer platform and our enterprise Care@Work business,”
said Sheila Lirio Marcelo, Founder, Chairwoman and CEO
of Care.com. “It was another year of continuous
topline growth and net income. We also saw an expansion
in EBITDA margin and a $25.8M increase in cash and short-term
investments. As we look ahead, we believe that the building blocks
that we put in place in 2018, along with incremental investments we
have planned for 2019, will enable us to accelerate top-line growth
while maintaining healthy margins.”
Financial Results
- Revenue for the fourth quarter of 2018
was $49.8 million, an increase of 13% from $44.2 million in the
fourth quarter of 2017. Revenue for fiscal 2018 was $192.3 million,
an increase of 10% from $174.1 million in fiscal 2017.
- Revenue attributable to the US Consumer
offering totaled $37.7 million in the fourth quarter of 2018, an
increase of 11% from $34.0 million in the fourth quarter of 2017.
For the fiscal year, revenue attributable to the US Consumer
offering totaled $148.8 million, an increase of 8% from $137.9
million in fiscal 2017.
- Revenue attributable to our Other
businesses totaled $12.1 million in the fourth quarter of 2018, an
increase of 18% from $10.2 million in the fourth quarter of 2017.
For the fiscal year, revenue attributable to Other businesses
totaled $43.5 million, an increase of 20% from $36.2 million in
fiscal 2017.
- Net income was $48.5 million in the
fourth quarter of 2018, compared to $7.9 million in the fourth
quarter of 2017, an increase of $40.6 million. Net income for
fiscal 2018 was $52.9 million, compared to $10.7 million in fiscal
2017, an increase of $42.2 million. For both the quarter and the
fiscal year the significant increase was primarily attributable to
the reversal of the Company’s valuation allowance related to
certain net operating losses and deferred tax assets that are now
expected to be realized.
- Adjusted EBITDA was $12.7 million in
the fourth quarter of 2018, compared to $11.4 million in the fourth
quarter of 2017, an improvement of $1.3 million. Adjusted EBITDA
for fiscal 2018 was $32.2 million, compared to $23.3 million in
fiscal 2017, an increase of $8.9 million.
- GAAP EPS (Diluted) was $1.23 in the
fourth quarter of 2018, compared to $0.19 in the fourth quarter of
2017. Q4 GAAP EPS (Diluted) was based on 34.0 million weighted
average diluted shares outstanding versus 33.1 million in the
fourth quarter of 2017. GAAP EPS (Diluted) for the fiscal year was
$1.29, compared to $0.22 in fiscal 2017. Q4 YTD GAAP EPS (Diluted)
was based on 33.8 million weighted average diluted shares
outstanding versus 32.4 million in fiscal 2017.
- Non-GAAP EPS (Diluted) was $0.26 in the
fourth quarter of 2018, compared to $0.32 in the fourth quarter of
2017. Non-GAAP EPS (Diluted) for the fiscal year was $0.77,
compared to $0.69 in fiscal 2017. 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, restructuring costs, and releases of valuation
allowances for deferred taxes.
- The Company ended the year with $127.5
million in cash and cash equivalents and short-term
investments.
Business Highlights
- Our total members grew 16% to 31.7
million at the end of the fourth quarter of 2018, compared to 27.3
million in the same period of 2017.
- Total families grew to 18.3 million at
the end of the fourth quarter of 2018, an increase of 18% over the
same period of 2017, and total caregivers grew to 13.4 million at
the end of the fourth quarter of 2018, an increase of 14% over the
same period of 2017.
Financial Expectations
Q1 2019 Guidance Full Year
2019 Guidance Revenue $ 52.5 - $
52.8 $ 217.0 - $ 221.0 Adjusted EBITDA $ 3.7 - $ 4.0 $ 33.0
- $ 35.0 Non-GAAP EPS ~$0.08 $ 0.73 - $ 0.78 Figures
in millions except for Non-GAAP EPS Q1 Non-GAAP EPS based on
approximately 40 million weighted average dilutive shares FY'19
full-year Non-GAAP EPS based on approximately 41 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
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 today 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# 13686404. The telephone replay will
be available from 11:00 AM ET March 7, 2019 through 11:59 PM ET
March 21, 2019. Additional investor information can be accessed at
http://investors.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 18.3 million families and 13.4 million
caregivers* across more than 20 countries, including the U.S., UK,
Canada and parts of Western Europe, and approximately 1.7 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 which
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 December 2018
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 Company
investments and initiatives, anticipated revenue growth and
margins, and the Company’s financial guidance for the first quarter
of 2019 and full year 2019.
These forward-looking statements are made as of the date they
were first issued and were based on current expectations,
estimates, forecasts and projections as well as the beliefs and
assumptions of management. Words such as “plan,” "expect,"
"anticipate," "should," "believe," "hope," "target," "project,"
"goals," "estimate," "potential," "predict," "may," "will,"
"might," "could," "intend," “designed,” variations of these terms
or the negative of these terms and similar expressions are intended
to identify these forward-looking statements. Forward-looking
statements are subject to a number of risks and uncertainties, many
of which involve factors or circumstances that are beyond the
Company's control. The Company's actual results could differ
materially from those stated or implied in forward-looking
statements due to a number of factors, including but not limited
to: our ability to grow our membership while leveraging our
investment in sales and marketing, our success in converting
non-paying members to paying members 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, and other risks detailed in the Company's other
publicly available filings with the Securities and Exchange
Commission. Past performance is not necessarily indicative of
future results. The forward-looking statements included in
this press release represent the Company's views as of the date of
this press release. The Company anticipates that subsequent
events and developments will cause its views to change. The Company
undertakes no intention or obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law. These
forward-looking statements should not be relied upon as
representing the Company's views as of any date subsequent to the
date of this press release.
Use of Non-GAAP Financial Measures
To supplement the financial measures presented in the Company’s
press release and related conference call or webcast in accordance
with accounting principles generally accepted in the United States
("GAAP"), we also present the following non-GAAP measures of
financial performance: adjusted EBITDA, non-GAAP net income and
non-GAAP earnings per share (“EPS”). Reconciliations of the
non-GAAP financial measures to the most directly comparable GAAP
financial measures are appended to the end of this press
release.
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.
We define adjusted EBITDA as income / (loss), which excludes the
accretion of preferred stock dividends and issuance costs, as well
as: 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. 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), which
excludes the accretion of preferred stock dividends, plus
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 and the release of a valuation allowance for deferred taxes
due to projections of taxable income. 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) December 29,2018
December 30,2017 Assets (unaudited) Current assets: Cash and cash
equivalents $ 92,432 $ 86,728 Short-term investments 35,099 15,000
Accounts receivable (net of allowance of $100 and $102,
respectively) (1) 4,663 5,171 Unbilled accounts receivable (2)
6,394 5,454 Prepaid expenses and other current assets 7,223
4,883 Total current assets 145,811 117,236
Property and equipment, net 3,423 3,651 Intangible assets, net
4,061 1,142 Goodwill 68,176 60,281 Other non-current assets 2,859
2,066 Deferred tax assets 43,737 -
Total assets $ 268,067 $ 184,376 Liabilities,
redeemable convertible preferred stock, and stockholders' equity
Current liabilities: Accounts payable (3) $ 3,437 $ 1,873 Accrued
expenses and other current liabilities (4) 20,463 17,086 Current
contingent acquisition consideration 1,527 - Deferred revenue (5)
20,176 18,626 Total current liabilities
45,603 37,585 Non-current contingent acquisition consideration 438
- Deferred tax liability - 1,292 Other non-current liabilities
6,806 5,779 Total liabilities 52,847
44,656 Series A Redeemable Convertible Preferred Stock,
$0.001 par value - 46 shares designated; 46 shares issued and
outstanding at December 29, 2018 and December 30, 2017; at
aggregate liquidation and redemption value at December 29, 2018 and
December 30, 2017 53,007 50,259 Stockholders' equity Preferred
Stock, $0.001 par value; 5,000 shares authorized at December 29,
2018 and December 30, 2017, respectively - - Common stock, $0.001
par value; 300,000 shares authorized; 32,057 and 30,390 shares
issued and outstanding at December 29, 2018 and December 30, 2017
respectively 32 30 Additional paid-in capital 286,295 266,030
Accumulated deficit (124,122 ) (177,145 ) Accumulated other
comprehensive income 8 546 Total
stockholders' equity 162,213 89,461
Total liabilities, redeemable convertible preferred stock, and
stockholders' equity $ 268,067 $ 184,376
(1)
Includes accounts receivable due from related party of $421
and $307 at December 29, 2018 and December 30, 2017.
(2)
Includes unbilled accounts receivable due from related party of
$680 and $222 at December 29, 2018 and December 30, 2017.
(3)
Includes accounts payable due to related party of $530 and $128 at
December 29, 2018 and December 30, 2017.
(4)
Includes accrued expenses and other current liabilities due to
related party of $403 and $542 at December 29, 2018 and December
30, 2017.
(5)
Includes deferred revenue associated with related party of $1 and
$2 at December 29, 2018 and December 30, 2017.
Care.com, Inc.
Consolidated Statement of Operations (in thousands, except
per share data) Three Months Ended Year Ended December 29,2018
December 30,2017
December 29,2018
December 30,2017
(unaudited) Revenue (1) $ 49,809 $ 44,216 $ 192,260 $
174,090 Cost of revenue 11,908 8,662 42,706 35,773 Operating
expenses: Selling and marketing (2) 11,291 12,107 60,488 66,906
Research and development 9,001 6,566 34,641 25,423 General and
administrative 11,313 9,686 44,360 35,214 Depreciation and
amortization 424 418 1,669 1,684 Restructuring charges 45
158 613 3,136
Total operating expenses 32,074 28,935
141,771 132,363 Operating income 5,827
6,619 7,783 5,954 Other income (expense), net 3
282 (165 ) 2,203 Income before
income taxes 5,830 6,901 7,618 8,157 Benefit from income taxes
(42,680 ) (1,003 ) (45,272 ) (2,506 )
Net income 48,510 7,904 52,890 10,663 Accretion of Series A
Preferred Stock dividends (685 ) (657 ) (2,748 ) (2,599 ) Net
income attributable to Series A Redeemable Convertible Preferred
Stock (6,542 ) (992 ) (6,983 ) (1,120 )
Net income attributable to common stockholders $ 41,283 $
6,255 $ 43,159 $ 6,944 Net income per
share attributable to common stockholders (Basic): $ 1.30 $ 0.21 $
1.38 $ 0.23 Net income per share attributable to common
stockholders (Diluted): $ 1.23 $ 0.19 $ 1.29 $ 0.22
Weighted-average shares used to compute net income (loss) per share
attributable to common stockholders: Basic 31,853 30,189 31,198
29,680 Diluted 33,991 33,128 33,816 32,406
(1)
Includes related party revenue of $992 and $573 for the
three months ended December 29, 2018 and December 30, 2017,
respectively. Includes related party revenue of $3,153 and $1,854
for the fiscal year ended December 29, 2018 and December 30, 2017,
respectively.
(2)
Includes related party expenses of $1,764 and $1,997 for the three
months ended December 29, 2018 and December 30, 2017, respectively.
Includes related party expenses of $10,329 and $13,472 for the
fiscal year ended December 29, 2018 and December 30, 2017
respectively.
Care.com, Inc. Consolidated Statement of Cash Flows
(in thousands) Year Ended
December 29,2018
December 30,2017
(unaudited) Cash flows from operating activities Net income $
52,890 $ 10,663 Adjustments to reconcile net income to net
cash provided by operating activities: Stock-based compensation
17,374 9,693 Depreciation and amortization 2,128 2,240 Deferred
income taxes (45,638 ) (2,983 ) Contingent consideration expense 58
- Change in fair value of contingent consideration 337 - Loss on
impairment of intangible assets 142 - Foreign currency
remeasurement loss (gain) 976 (1,838 ) Other non-cash operating
expenses - 489 Changes in operating assets and liabilities, net of
effects from acquisitions: Accounts receivable 477 (2,349 )
Unbilled accounts receivable (947 ) 95 Prepaid expenses and other
current assets (718 ) (636 ) Other non-current assets (1,227 ) -
Accounts payable 1,569 (638 ) Accrued expenses and other current
liabilities 1,354 3,031 Deferred revenue 1,718 2,531 Other
non-current liabilities 2,274 1,751 Net
cash provided by operating activities 32,767 22,049 Cash
flows from investing activities Purchases of property and
equipment; and software (900 ) (792 )
Payments for acquisitions, net of cash
acquired
(9,815 ) -
Issuance of loan receivable
(175 ) - Payments for security deposits - (33 ) Purchases of
short-term investment (35,099 ) (15,000 )
Sale of short-term investment
15,000 15,000 Net cash used in
investing activities (30,989 ) (825 ) Cash flows from
financing activities Proceeds from exercise of common stock options
5,584 3,906 Payments of contingent consideration previously
established in purchase accounting (354 ) -
Net cash provided by financing activities 5,230 3,906 Effect
of exchange rate changes on cash and cash equivalents (749 )
420 Net increase in cash, cash equivalents, and
restricted cash 6,259 25,550 Cash, cash equivalents and restricted
cash, beginning of the period 89,024 63,474
Cash, cash equivalents and restricted cash, end of the
period $ 95,283 $ 89,024 Cash and cash equivalents,
end of period 92,432 86,728 Restricted Cash (1) 2,851
2,296 Cash, cash equivalents and restricted cash, end
of the period $ 95,283 $ 89,024
(1)
Fiscal 2018, $1,456 and $1,395 of restricted cash was
included in Prepaid expenses and other current assets and Other
non-current assets on the Consolidated Balance Sheets,
respectively. Fiscal 2017, $537 and $1,759 of restricted cash was
included in Prepaid expenses and other current assets and Other
non-current assets on the Consolidated Balance Sheets,
respectively.
Care.com, Inc. Reconciliation of Adjusted EBITDA
& Non-GAAP Net Income (in thousands, except per share data)
Three Months Ended Year Ended
December 29,2018
December 30,2017
December 29,2018
December 30,2017
(unaudited) Net income $ 48,510 $ 7,904 $ 52,890 $ 10,663
Federal, state and franchise taxes (42,596 ) (929 ) (44,651
) (2,228 ) Other expense (income), net (3 ) (282 ) 165 (2,203 )
Depreciation and amortization 601 539
2,128 2,240 EBITDA 6,512 7,232 10,532
8,472 Stock-based compensation 4,393 3,107 17,374 9,693
Merger and acquisition related costs 1,572 171 2,834 407
Restructuring related costs 45 158 613 3,136 Litigation related
costs 62 561 239 636 Software implementation costs - 14 308 471
Severance related costs - 166 67 487 Impairment of intangible
assets - - 142 - Non-recurring professional fees 120
- 120 -
Adjusted EBITDA
$ 12,704 $ 11,409 $ 32,229 $ 23,302
Add back for Non-GAAP Net Income Federal, state and
franchise taxes (2,113 ) 929 (58 ) 2,228 Other income (expense),
net 3 282 (165 ) 2,203 Depreciation and amortization (601 )
(539 ) (2,128 ) (2,240 ) Non-GAAP net income $
9,993 $ 12,081 $ 29,878 $ 25,493
Non-GAAP net income per share: Basic $ 0.31 $ 0.40 $ 0.96 $ 0.86
Diluted $ 0.26 $ 0.32 $ 0.77 $ 0.69 Weighted-average shares
used to compute non-GAAP net income per share : Basic 31,853 30,189
31,198 29,680 Diluted 39,039 37,915 38,864 37,192
Care.com, Inc.
Reconciliation of Non-GAAP EPS (in thousands, except per
share data) Three Months Ended
Year Ended
December 29,2018
December 30,2017
December 29,2018
December 30,2017
(unaudited) Weighted-average shares used to compute net income per
share: Diluted 39,039 37,915 38,864 37,192 Net income per
share (Diluted): Net income per share attributable to common
stockholders $ 1.06 $ 0.16 $ 1.11 $ 0.19 Impact on net income per
share of Series A related costs 0.19 0.04
0.25 0.10 Adjusted net income per share $ 1.24
$ 0.21 $ 1.36 $ 0.29 Stock-based compensation 0.11 0.08 0.45
0.26 Merger and acquisition related costs 0.04 0.00 0.07 0.01
Restructuring related costs 0.00 0.00 0.02 0.08 Litigation related
costs 0.00 0.01 0.01 0.02 Software implementation costs - 0.00 0.01
0.01 Severance related costs - 0.00 0.00 0.01 Impairment of
intangible assets - - 0.00 - Non-recurring professional fees 0.00 -
0.00 - Reversal of valuation allowance (1.15 ) -
(1.15 ) - Non-GAAP net income per share - diluted $
0.26 $ 0.32 $ 0.77 $ 0.69
Care.com,
Inc. Supplemental Data (in thousands, except monthly
average revenue per paying family)
Period
Ended
December 29,2018
December 30,2017
Total members 31,724 27,312 Total families 18,290 15,510 Total
caregivers 13,434 11,802 Paying families - US Consumer
Business 336 302
Period Ended
December 29,2018
December 30,2017
Monthly Average
Revenue per Paying Family
US Consumer Business $ 39 $ 40
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190307005181/en/
Investor Relations:Staci MortensonICR, Inc.(781)
795-7244investors@care.com
Care com (NYSE:CRCM)
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Care com (NYSE:CRCM)
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