Tree.com, Inc. Announces Special Cash Dividend of $1.00 per Share and Updates Fourth Quarter 2012 Guidance
CHARLOTTE, N.C., Dec. 6, 2012 /PRNewswire/ -- Tree.com, Inc. (NASDAQ: TREE), the parent company of wholly owned subsidiary LendingTree, LLC, today announced that its Board of Directors has approved a special cash dividend of $1.00 per share. Additionally, the company expects to meet or exceed the upper end of its most recent guidance, which was $14 million Adjusted Exchanges EBITDA for the full year 2012, and $2.5 million Adjusted EBITDA from continuing operations for the fourth quarter 2012.
Doug Lebda, chairman and CEO of Tree.com, noted, "As we committed to our shareholders, we are examining all the potential uses of our cash, and in addition to our continued share buyback plan, we believe it is appropriate at this time to return capital to our shareholders. Following this dividend, we will still have substantial capital resources to explore prudent acquisition opportunities, operate our business, and continue to repurchase our stock. We will continue to explore all of these avenues, in addition to the possibility of future dividends, and keep our shareholders appropriately informed of our strategy."
Commenting on the increased guidance for the fourth quarter, Lebda continued, "Sales to lenders and our marketing performance have continued to outperform our expectations, countering the typical seasonal trends in the fourth quarter. We are continuing to take market share and gain momentum which bodes well for our 2013 growth plans."
The $1.00 special cash dividend is payable on December 26, 2012 to shareholders of record on December 17, 2012. The total amount of the special dividend paid to shareholders will be approximately $11.5 million based on the current number of shares outstanding and will be paid using cash on hand.
Definitions of Certain Financial Measures
EBITDA is a non-GAAP measure defined as operating income or loss (which excludes interest expense and taxes) excluding amortization of intangibles and depreciation.
Adjusted EBITDA is a non-GAAP measure defined as EBITDA excluding (1) non-cash compensation expense, (2) non-cash intangible asset impairment charges, (3) gain/loss on disposal of assets, (4) restructuring expenses, (5) litigation settlements and contingencies, (6) pro forma adjustments for significant acquisitions or dispositions, and (7) one-time items.
Adjusted Exchanges EBITDA is defined as Adjusted EBITDA from continuing operations, plus modeled revenue for leads provided to the company's former mortgage origination business, minus Exchanges selling and marketing expense allocated to the company's former mortgage origination business and recorded in discontinued operations.
Tree.com is not able to provide a reconciliation of projected adjusted Exchanges EBITDA or adjusted EBITDA to expected reported results due to the unknown effect, timing and potential significance of the effects of the wind-down of discontinued operations and tax considerations.
Non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for or superior to GAAP results. For further information on Tree.com's non-GAAP measures, see Tree.com's press release dated November 5, 2012, including as Exhibit 99.1 to Form 8-K filed with the Securities and Exchange Commission on November 5, 2012.
Variable marketing margin is defined as revenue minus the portion of selling and marketing expense attributable to the business for variable costs paid for advertising, direct marketing and related expenses. This metric excludes overhead, fixed costs and personnel-related expenses.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
The matters contained in the discussion above may be considered to be "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations or anticipations of Tree.com and members of our management team. Factors currently known to management that could cause actual results to differ materially from those in forward-looking statements include the following: adverse conditions in the primary and secondary mortgage markets and in the economy, particularly interest rates; seasonality of results; potential liabilities to secondary market purchasers; changes in the Company's relationships with network lenders; breaches of network security or the misappropriation or misuse of personal consumer information; failure to provide competitive service; failure to maintain brand recognition; ability to attract and retain customers in a cost-effective manner; ability to develop new products and services and enhance existing ones; competition; allegations of failure to comply with existing or changing laws, rules or regulations, or to obtain and maintain required licenses; failure of network lenders or other affiliated parties to comply with regulatory requirements; failure to maintain the integrity of systems and infrastructure; liabilities as a result of privacy regulations; failure to adequately protect intellectual property rights or allegations of infringement of intellectual property rights; and changes in management. These and additional factors to be considered are set forth under "Risk Factors" in our Annual Report on Form 10-K for the period ended December 31, 2011, our Quarterly Reports on Form 10-Q for the periods ended March 31, 2012 and June 30, 2012, and in our other filings with the Securities and Exchange Commission. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results or expectations.
About Tree.com, Inc.
Tree.com, Inc. (NASDAQ: TREE) is the parent of several brands and businesses that provide information, tools, advice, products and services for critical transactions in consumers' lives. Our family of brands includes: LendingTree®, GetSmart®, DegreeTree®, LendingTreeAutos, DoneRight!®, ServiceTreeSM, InsuranceTree® and HealthTree. Together, these brands serve as an ally for consumers who are looking to comparison shop for loans, education, auto, home services and other services from multiple businesses and professionals who will compete for their business.
Tree.com, Inc. is headquartered in Charlotte, N.C. and maintains operations solely in the United States. For more information, please visit www.tree.com.
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