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Section 1: 8-K (FORM 8-K)

Form 8-K

 

 

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): February 8, 2017

 

 

RETAILMENOT, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-36005   26-0159761

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

301 Congress Avenue, Suite 700

Austin, Texas 78701

(Address of principal executive offices, including zip code)

(512) 777-2970

(Registrant’s telephone number, including area code)

Not Applicable

(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 (see General Instruction A.2 below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On February 14, 2017, RetailMeNot, Inc. (the “Company”) issued a press release reporting its preliminary financial results for the fourth quarter and year ended December 31, 2016. In the press release, the Company also announced that it would be holding a conference call on February 14, 2017 to discuss its preliminary financial results for the fourth quarter and year ended December 31, 2016. A copy of the press release is furnished herewith as Exhibit 99.1.

The information furnished in this Current Report under this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

2017 Bonus Plan and Compensation of Named Executive Officers

On February 8, 2017, the Board of Directors (the “Board”) of the Company approved a 2017 Bonus Plan for the Company’s employees, including certain of the Company’s named executive officers. Each participant in the 2017 Bonus Plan is assigned a target bonus for 2017.

On February 8, 2017, the Compensation Committee (the “Committee”) of the Board approved base salaries of the Company’s named executive officers for fiscal year 2017 as set forth in the table below, effective January 1, 2017. The Committee also established target bonus levels for fiscal year 2017 for the named executive officers. The bonuses for the named executive officers will be determined based on the achievement of certain goals related to one or more of the following: (i) consolidated net revenues, (ii) consolidated adjusted EBITDA, (iii) segment operating income, (iv) gross profit (with respect to the Company’s gift-card segment only), and (v) the audience for the Company’s portfolio of websites and mobile applications.

In addition, the Committee approved equity-based incentives to certain of the named executive officers that will be granted on February 15, 2017, pursuant to the Company’s 2013 Equity Incentive Plan (the “Equity Incentive Plan”), a copy of which has been filed with the Securities and Exchange Commission. The equity-based incentives include both performance-based restricted stock units (“PRSUs”) and time-based restricted stock units (“TRSUs”).

The Committee approved PRSUs for certain of the Company’s named executive officers, as set forth below. The vesting of the PRSUs will be based on the Company’s total shareholder return during each of two performance measurement periods as compared to the Russell 2000 Index during such periods (the “PRSU Performance Goal”). Upon the achievement of the PRSU Performance Goal during either period, 50% of the total amount of PRSUs set forth for each named executive officer below will be eligible to vest. Upon the overachievement of the PRSU Performance Goal during either period, a maximum amount of 75% of the total amount of PRSUs set forth for each named executive officer below will be eligible to vest. The two PRSU Performance Goal measurement periods will be (a) the 18-month period beginning January 1, 2017, and ending June 30, 2018, after which the number of PRSUs determined to be eligible to vest during such period will vest (i) 60% on August 15, 2018, and (ii) 40% on August 15, 2019, and (b) the 36-month period beginning January 1, 2017, and ending December 31, 2019, after which the number of PRSUs determined to be eligible to vest during such period will vest (i) 60% on February 15, 2020, and (ii) 40% on February 15, 2021; provided in each case that recipients must remain employed by the Company through such dates for their PRSUs to vest, except to the extent otherwise provided in an employment agreement between a recipient and the Company. There is no minimum number of the PRSUs guaranteed to vest for any named executive officer.

The Committee also approved TRSUs for certain of the Company’s named executive officers, as set forth below. The TRSUs will vest with respect to 25% of the total number of TRSUs for each named executive officer on each of the first, second, third and fourth anniversaries of the date of grant, which will be February 15, 2017, and will therefore be fully vested as of February 15, 2021; provided in each case that recipients must remain employed by the Company through such dates for their TRSUs to vest, except to the extent otherwise provided in an employment agreement between a recipient and the Company.

The Committee believes that PRSUs and TRSUs align the Company’s named executive officers’ compensation with the Company’s performance, motivate behavior consistent with long-term value creation, and better assist in retaining the Company’s named executive officers.


Officer

  

Title

   Base
Salary
     Target
Bonus(1)
    Target
Performance
RSUs(2)
     Time-based
RSUs(2)
 

G. Cotter Cunningham(3)

   President and Chief Executive Officer    $ 478,000         100     117,800         117,800   

J. Scott Di Valerio

   Chief Financial Officer    $ 381,000         70     47,300         47,300   

Kelli A. Beougher

   Chief Operating Officer    $ 412,000         70     44,700         44,700   

Paul Rogers

   Chief Technical Officer    $ 360,000         55     29,300         29,300   

Louis J. Agnese, III

   Senior Vice President and General Manager, Gift Cards    $ 335,000         60     15,500         15,500   

 

(1) The target bonus is a percentage of base salary.
(2) Represents the right to receive one share of the Company’s common stock per restricted stock unit.
(3) The Committee did not make any changes to Mr. Cunningham’s salary or bonus target.

The foregoing description of the 2017 Bonus Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the 2017 Bonus Plan, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The Committee also approved discretionary bonus payouts to certain named executive officers listed in the table below in connection with their performance during 2016:

 

Officer

   Title    Bonus
Amount
 

J. Scott Di Valerio

   Chief Financial Officer    $ 50,000   

Kelli A. Beougher

   Chief Operating Officer    $ 25,000   

Paul Rogers

   Chief Technical Officer    $ 40,000   

Louis J. Agnese, III

   Senior Vice President and General Manager, Gift Cards    $ 25,000   

Resignation of Named Executive Officer

Michael Magaro has notified the Company of his decision to resign from his position as Senior Vice President, Corporate Development and Investor Relations, effective February 28, 2017 or such other later date as may be mutually agreed by he and the Company.

 

Item 8.01. Other Events.

On February 13, 2017, the Board approved an extension of the existing stock repurchase program of the Company’s Series 1 common stock from February 13, 2017 to February 13, 2018. Under the stock repurchase program, the Company is authorized to repurchase a total of $150 million (including repurchases made under the stock repurchase plan prior to the date hereof) of the Company’s Series 1 common stock.

 

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit
No.

  

Description

10.1    2017 Bonus Plan
99.1    Press release dated February 14, 2017


SIGNATURES

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.

 

        RETAILMENOT, INC.
Date: February 14, 2017      

/s/ Jonathan B. Kaplan

        Jonathan B. Kaplan
        General Counsel and Secretary


EXHIBIT INDEX

 

Exhibit
No.

  

Description

10.1    2017 Bonus Plan
99.1    Press release dated February 14, 2017
(Back To Top)

Section 2: EX-10.1 (EX-10.1)

EX-10.1

Exhibit 10.1

RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

Executive Summary of the 2017 Bonus Plan

There are two types of bonuses within the Company that may be earned twice-yearly – the Base Bonus and the Company Overachievement Bonus. To be eligible for a bonus, a Team Member must be a regular full-time employee of the Company and not terminated as of the date of payment.

Base Bonus: Individual Performance (unless Team Member has an agreement with the Company that states otherwise) + Company Performance

 

    Individual Performance

 

    Team Member is evaluated twice annually by manager who will determine the payout percentage.

 

    If the payout percentage is less than 50% for a Team Member in the 1H Period or the 2H Period, no Company Performance Element will be earned for that Team Member in that period.

 

    Company Performance

 

    Five Metrics that the Company Measures:

 

    Net Revenues

 

    Segment Operating Income

 

    Gross Profit

 

    Adjusted EBITDA

 

    Audience

 

    Two Payout Periods (1H and 2H) and Weighted Factors:

 

    Team Members in the Core Segment: (1) a Core Segment Operating Income metric, (2) an Audience metric and (3) a Core Segment Net Revenues metric. Each metric is based upon the country, region or regions for which the Team Member has operational responsibility.

 

    Team Members and “C-level” Executives in the Gift Card Segment: (1) a Gift Card Segment Operating Income element, (2) a Gift Card Segment Gross Profit element and (3) a Gift Card Segment Net Revenues element.

 

    Senior Vice President or “C-level” Executive with Global Responsibilities: (1) an Adjusted EBITDA metric, (2) a consolidated Audience metric and (3) a consolidated Net Revenues metric.

Base Bonus Payout Example:

 

Annual Salary:

   $70,000

Bonus Rate:

   7.5%

Annual Target:

   $5,250

H1 Target:

   $2,625

 

Element

   Weighting     Total
Target
     Earned     Payout  

Individual Goals

     50   $ 1,312.50         100.0   $ 1,312.50   

Net Revenue

     15   $ 393.75         90.5   $ 356.34   

Audience

     20   $ 525.00         104.5   $ 548.63   

Segment Operating Income

     15   $ 393.75         107.0   $ 421.31   
         

 

 

 

Total Payout

          $ 2,638.78   
         

 

 

 

 

1


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

Company Overachievement Bonus: To be eligible for the Company Overachievement Bonus, the Team Member’s individual performance percentage payout must be at least 85%. The Company Overachievement Bonus can be earned by a Team Member in the event the Company over-performs in any of the Company’s performance metrics (Net Revenues, Segment Operating Income, Audience, or Gross Profit) as measured against its annual target and is capped at 200%. Team Members who serve in a role as Senior Vice President and above will not have the opportunity to earn a Company Overachievement Bonus in 1H.

 

2


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

2017 Bonus Plan

 

I. Overview.

RetailMeNot, Inc. and its affiliated companies (the “Company”) are committed to sharing their success with the people who make it possible — the Company’s Team Members. The purpose of this 2017 Bonus Plan (this “Plan”) is to encourage the Company’s Team Members to contribute to the achievement of the Company’s goals and to share in the rewards of the Company’s success. The term of this Plan is for the 2017 fiscal year.

 

II. Eligible Team Members.

To be eligible to participate in the Plan, a Team Member must be a regular full-time employee of the Company. Each Team Member’s aggregate annual target bonus shall be communicated in the Team Member’s 2017 compensation overview letter or in the offer letter for Team Members hired in 2017.

 

III. Performance Periods.

There will be two separate performance periods under this Plan: January 1 through June 30, 2017 (the “1H Period”) and July 1 through December 31, 2017 (the “2H Period”).

 

IV. Individual and Company Performance Elements.

Team Members’ bonuses generally have two components: the individual performance element and the Company performance element. Also, an additional bonus is available in the event the Company over-performs in any of the five metrics listed below in Section VII(A)(2).

 

V. Weighting and Payment.

Any bonus amounts earned will be determined twice annually. Payment for performance in the 1H Period will be made by September 30, 2017, and payment for performance in the 2H Period will be made by March 15, 2018 after completion of the audit of the 2017 financial statements. Weighting percentages for each Team Member’s individual performance elements and the Company performance elements are generally based on the region for which the Team Member has operational responsibility.

 

VI. Operating Segments.

The Company has two operating segments, the core segment (the “Core Segment”) and the gift card segment (the “Gift Card Segment”). Team Members are assigned to one of these two segments after considering the Team Member’s operational responsibilities. All such determinations are made in the Company’s sole discretion.

 

3


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

VII. Calculating the Base Bonus.

The Base Bonus under this Plan will be calculated as follows:

 

  A. Base Bonus: Individual Performance Element + Company Performance Element

 

  1. Individual Performance Element

A Team Member’s individual performance element is based on their performance against individual goals, the competencies established for the Team Member’s role and the Company’s core values. A Team Member’s individual performance is evaluated by the Team Member’s manager at mid-year for the 1H Period and year-end for the 2H Period. After each Team Member evaluation, the Team Member’s individual performance will be used to inform a percentage payout for bonus purposes. If the Team Member’s individual performance in the 1H Period or 2H Period is deemed unsatisfactory, then that Team Member’s percentage payout will be 0% in such period. If the Team Member’s individual performance is satisfactory, then the Team Member is eligible for a percentage payout ranging from 50%-150% according to the discretion of the Team Member’s manager and consistent with the examples set forth in the table below. The payout percentage will be multiplied by the applicable weighting percentage for the individual performance element to determine the amount of the “Individual Performance Element” actually earned.1

Below are examples of Team Member individual performance and payout scenarios:

 

Team Member Performance Example

  

Example
Payout %

  

Comments

Team Member exceeded expectations on goal performance, delivered meaningful contributions on an important project that was added to the goal plan, mastered all competencies associated with their role and consistently modeled the Company’s core values to other Team Members.    150%    Maximum bonus for exceptional goal achievement and modeling RMN’s core values.
Team Member exceeded expectations on goal performance and achieved both of the following criteria: (1) satisfied all competencies associated with their role and (2) consistently embodied the Company’s core values.    115%    Team Member over-achieved on goals and satisfied or exceeded all other expectations.

 

1  Team Members who serve in a role as a Senior Vice President and above do not have an Individual Performance Element in their Base Bonus calculation.

 

4


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

Team Member Performance Example

  

Example
Payout %

  

Comments

Team Member met expectations on goal performance and achieved both of the following criteria: (1) satisfied all competencies associated with their role and (2) demonstrated alignment with the Company’s core values.    100%    Team Member met all expectations.
Team Member met expectations on goal performance and achieved one of the following criteria: (1) satisfied all competencies associated with their role or (2) demonstrated alignment with the Company’s core values.    75%    Team Member achieved all goals, but did not successfully meet all expectations either in terms of competencies or alignment with core values.
Team Member missed expectations on some goals and competencies and met expectations on other goals and competencies. However, they consistently demonstrated alignment with the Company’s core values and displayed an openness to improve their own performance.    50%    Missing expectations on goals and competencies suggests a discounted bonus is appropriate. Alignment with core values keeps the bonus from being discounted to 0%. This category may apply to Team Members on performance improvement plans.
Team Member missed expectations on most goals.    0%    Goal achievement is critical. While Team Member has the opportunity to improve their performance and earn a bonus in the next performance cycle, they did not earn a bonus for the current performance cycle. This category may apply to Team Members on performance improvement plans.

 

  2. Company Performance Element

The Company performance element is based on the Company’s performance against targets set for certain financial results in the Company’s annual budget. The five metrics for Company performance are below.

 

  a)

Metrics 1-4: (1) Net Revenues, (2) Segment Operating Income, (3) Gross Profit (Gift Card Segment only), and (4) Adjusted EBITDA mean, respectively, the corresponding amount as reported in the Company’s Statements of Operations or its periodic report on

 

5


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

  Form 10-K or 10-Q (as applicable) as of June 30, 2017 with respect to the 1H Period and as of December 31, 2017 with respect to the 2H Period, excluding, for each such period (unless otherwise determined by the Compensation Committee), the impact of any acquisitions closed in fiscal year 2017.

Calculating the Percentage Payout for each metric listed above:

 

  i. The actual amount of the individual metric will be divided by the applicable target to determine the percentage achievement. The percentage achieved will be applied as set forth below to determine the percentage payout.

If the percentage achieved falls between two table results, the percentage payout will be extrapolated. For example, 98% achievement would result in 96% payout since each percentage point drop in achievement between 95% and 100% results in a two-percentage point drop in percentage payout.

 

% Metric Target Achieved   Payout
0%   0.0%
70%   25.0%
75%   40.0%
80%   55.0%
85%   67.5%
90%   80.0%
95%   90.0%
100%   100.0%

 

  ii. The percentage payout will be multiplied by the applicable individual metric weighting percentage as set forth in the Team Member’s 2017 compensation overview to determine the percentage of the individual metric earned.

 

  b) Metric 5: Audience means the number of the Company’s user days during the 1H Period and the 2H Period, excluding the impact of any acquisitions completed in fiscal year 2017. The Company determines user days by summing the number of days each user is active during a calendar month. Users of the Company’s desktop and mobile websites are determined using browser cookies from Google Analytics, a third-party product that provides digital marketing intelligence. Users of the Company’s native applications are determined using device ID. Because user days are tracked separately for each domain, the Company counts each of the following as a separate user day: (i) the first time a user accesses one of its desktop or mobile websites using a specific device or browser on a particular day, (ii) each time a user re-accesses one of our desktop or mobile websites on the same device or browser on a particular day after that user clears their browser cookies and (iii) the first time a specific mobile device accesses one of our mobile applications on a particular day.

 

6


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

Calculating the Audience Percentage Payout:

 

  i. The actual amount for the Audience metric will be divided by the applicable target to determine the percentage achievement. The percentage achieved will be applied as set forth above in Section 2(a)(i) with respect to Metrics 1-5 to determine the percentage payout.

 

  ii. The percentage payout will be multiplied by the applicable Audience weighting percentage to determine the percentage of the Audience metric earned.

 

  3. Performance Period Formula

Each Company performance metric listed above is weighted for the 1H Period and the 2H Period depending on the Team Member’s operating segment and role within the Company per the formulas below:

Team Members in the Core Segment

Each Team Member in the Core Segment will have (1) a Core Segment Operating Income metric, (2) an Audience metric and (3) a Core Segment Net Revenues metric. Each metric is based upon the country, region or regions for which the Team Member has operational responsibility.

Team Members and Senior Vice Presidents in the Gift Card Segment

Each Team Member and Senior Vice Presidents in the Gift Card Segment will have (1) a Gift Card Segment Operating Income metric, (2) a Gift Card Segment Gross Profit metric and (3) a Gift Card Segment Net Revenues metric.

Team Members who serve as Senior Vice Presidents or certain “C-level” Executives

Team Members who serve as a Senior Vice President or certain “C-level” executives (excluding those in the Gift Card Segment) with global responsibilities will have (1) an Adjusted EBITDA, (2) a consolidated Audience metric and (3) a consolidated Net Revenues metric.

 

VIII. Calculating the Company Overachievement Bonus.

The Company Overachievement Bonus can be earned by Team Members in the event the Company over-performs in any of the Company’s performance metrics (Net Revenues, Segment Operating Income, Audience, Gross Profit, or Adjusted EBITDA) as measured against that metric’s target in the Company’s annual budget.

The Company Overachievement Bonus will be calculated as follows:

 

  i.

Over-performance against the target Company performance element earns a Team Member Company Overachievement Bonus percentage points as set forth below.

 

7


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

Element vs.
Target (1)
   Company
Overachievement
Bonus (2)
  Element vs.
Target (1)
  Company
Overachievement
Bonus (2)
>=1%    2.5%   >=11%   40.0%
>=2%    5.0%   >=12%   45.0%
>=3%    7.5%   >=13%   51.9%
>=4%    10.0%   >=14%   58.8%
>=5%    12.5%   >=15%   65.6%
>=6%    15.0%   >=16%   72.5%
>=7%    20.0%   >=17%   79.4%
>=8%    25.0%   >=18%   86.3%
>=9%    30.0%   >=19%   93.1%
>=10%    35.0%   >=20%   100.0%

 

(1) Percentage by which any of the five Company Performance Elements exceeds the Target.
(2) The Company Overachievement Bonus percentage will be multiplied by the actual amount of each applicable metric in the Company Performance Element. For example, if the actual Net Revenue metric exceeds the target by 16%, the Company Overachievement Bonus for the Net Revenue metric would be calculated by multiplying the Net Revenue amount by 172.5% (i.e. 100% represents the Net Revenue amount and 72.5% represents the Net Revenue amount for the Company Overachievement Bonus calculation).

 

  ii. The aggregate Company Overachievement Bonus is capped at 200%.

 

  iii. Team Members who serve in a role as a Senior Vice President and above are not eligible to earn the Company Overachievement Bonus in the 1H Period. Overachievement for these executives will be determined on an annualized basis and paid with the Base Bonus for the 2H Period.

 

IX. General Provisions.

 

  1. Bonuses are subject to all applicable taxes and other required deductions.

 

  2. If the individual performance percentage payout is less than 50% for a Team Member in the 1H Period or the 2H Period, no Company Performance Element will be earned for that Team Member in that period. To be eligible for any Company Overachievement Bonus, the Team Member’s individual performance percentage payout must be at least 85%.

 

  3. The Plan does not constitute a guarantee of employment nor does it restrict the Company’ rights to terminate employment at any time or for any lawful reason.

 

  4.

The Plan does not create vested rights of any nature nor does it constitute a contract of employment or a contract of any other kind. The Plan does not create any customary concession or privilege to which there is any entitlement from year-to-year, except to the extent required under applicable law.

 

8


RetailMeNot, Inc.

2017 Bonus Plan

(Team Member)

 

  Nothing in the Plan entitles a Team Member to any remuneration or benefits not set forth in the Plan nor does it restrict the Company’ rights to increase or decrease the compensation of any Team Member, except as otherwise required under applicable law.

 

  5. To be eligible to participate in the Plan, a Team Member must be a regular, full-time employee of the Company. Part-time employees, temporary employees, contract employees, interns, independent contractors, and consultants are not eligible to participate in the Plan. Team Members who become eligible to participate in the Plan after the first day of the 1H Period or the 2H Period for which a bonus is paid shall be eligible to receive a pro-rated bonus for such period.

 

  6. Team Members who are not eligible to participate in the Plan as of April 30, 2017 are not eligible for the 1H Period. Team Members who are not eligible to participate in the Plan as of October 31, 2017 are not eligible for the 2H Period.

 

  7. Team Members who are terminated prior to the actual payment of a bonus shall not receive a bonus.

 

  8. This Plan constitutes the entire arrangement regarding the Plan, supersedes any prior oral or written description of the Plan and may not be modified except by a written document that specifically references this Plan and is signed by the Company’s Chief Executive Officer.

 

  9. The Plan is provided at the Company’s sole discretion and the Company may modify or eliminate it at any time, individually or in the aggregate, prospectively or retroactively, without notice or obligation during the plan year. In addition, there is no obligation to extend or establish a similar plan in subsequent years.

 

  10. The Plan shall not become a part of any employment condition, regular salary, remuneration package, contract or agreement, but shall remain gratuitous in all respects. Bonuses are not to be taken into account for determining severance pay, termination pay, “extra months” bonuses or payments, or any other form of pay or compensation.

 

  11. Team Members who are separated from employment with the Company due to divestiture, closure, or dissolution of a business prior to the actual payment of a bonus are not eligible to receive a bonus.

 

  12. The Plan (i) will be subject to such amendments as are required to be effected according to applicable law and (ii) will not be available to Team Members where applicable law prohibits the Plan or where tax or other business considerations make a Team Member’s participation impracticable in the judgment of the Compensation Committee.

 

  13. At a minimum, the Company will fund 50% of the calculated payout for the 2H Period at December 31. If the actual payout for the 2H Period under this Plan exceeds 50% of the calculated payout at December 31, then the actual payout shall be distributed to all Team Members employed as of the date the bonus for the 2H Period is paid based on the payout calculated for such Team Member in accordance with this Plan. If the actual bonus payout under this Plan for the 2H Period is less than 50% of the calculated payout at December 31, then the amount that shall be distributed to all Team Members employed as of the date the bonus for the 2H Period is paid (but excluding any Team Member who serves as a Senior Vice President or certain “C-level” Executive) shall equal the actual 2H Period payout calculated for such Team Member in accordance with this Plan plus a pro rata amount equal to the difference between the calculated payout amount for the 2H Period at December 31, multiplied by 50% minus the amount of actual payout.

 

9

(Back To Top)

Section 3: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

RetailMeNot, Inc. Announces Fourth Quarter & Fiscal Year 2016 Financial Results

 

    Fourth Quarter consolidated net revenues of $96.9 million

 

    Fourth Quarter GAAP net income of $2.4 million and non-GAAP net income of $18.3 million

 

    Fourth Quarter adjusted EBITDA of $29.7 million and adjusted EBITDA margins of 31%

 

    Fourth Quarter GAAP EPS of $ 0.05 and non-GAAP EPS of $0.37

AUSTIN, Texas, February 14, 2017 — RetailMeNot, Inc. (NASDAQ:SALE), a leading savings destination connecting consumers with retailers, restaurants and brands, both online and in-store, today announced its financial results for the fourth quarter and fiscal year ended December 31, 2016. In addition to this release, the company has also provided a prepared remarks document, which is available on the Investor Relations section of our website.

“During 2016 we continued to make strides toward our long-term goal of becoming a leading savings destination for consumers,” said Cotter Cunningham, CEO & Founder, RetailMeNot, Inc. “While the year had its challenges, we closed out the fourth quarter on a positive note and believe we are well positioned to capitalize on our initiatives in 2017 and beyond.”

Fourth Quarter 2016 Financial Results Highlights and Key Operating Metrics

(All comparisons are made to the fourth quarter of 2015 unless otherwise noted. Amounts may not compute due to rounding.)

 

    Core Segment

 

    Total net revenues $78.3 million, down 6%.

 

    In-store & advertising net revenues were up 23%, representing 34% of total core net revenues.

 

    Mobile online transaction net revenues were up 8%, representing 12% of total core net revenues.

 

    Desktop online transaction net revenues declined 20%, representing 53% of total core net revenues.

 

    Segment operating income (“SOI”) was $30.6 million, representing SOI margins of 39%.

 

    Total website visits were 189.8 million, down 12%.

 

    Mobile visits in the quarter declined 2% to 91.8 million, representing 48% of total visits.

 

    Desktop visits in the quarter declined 19% to 98.0 million.

 

    Mobile unique visitors were flat at 23.1 million.

 

    Gift Card Segment

 

    Net revenues were $18.6 million.


    Gross profit was $0.9 million, representing gross profit margins of 5%.

 

    Consolidated Results (Core + Gift Card Segments)

 

    Net revenues grew 17% to $96.9 million.

 

    Net revenues from international markets were $14.8 million, representing 15% and 19% of consolidated and core segment total net revenues, respectively.

 

    GAAP net income was $2.4 million, compared to GAAP net income of $9.0 million.

 

    Non-GAAP net income was $18.3 million, compared to non-GAAP net income of $19.1 million.

 

    GAAP EPS was $0.05 per share, based on 49.3 million fully-diluted, weighted-average shares outstanding, compared to GAAP EPS of $0.17 per share, based on 52.4 million fully-diluted, weighted-average shares outstanding.

 

    Non-GAAP EPS was $0.37 per share, based on 49.3 million fully-diluted, weighted-average shares outstanding, compared to $0.36 per share, based on 52.4 million fully-diluted, weighted-average shares outstanding.

 

    Adjusted EBITDA was $29.7 million, representing adjusted EBITDA margins of 31%, inclusive of our gift card segment, compared to adjusted EBITDA of $30.8 million, or adjusted EBITDA margins of 37%.

Full Year 2016 Financial Results Highlights and Key Operating Metrics

(All comparisons are made to the full year 2015 unless otherwise noted. Amounts may not compute due to rounding.)

 

    Core Segment

 

    Total net revenues were $236.9 million, down 5%.

 

    In-store & advertising net revenues were up 29%, representing 28% of total core net revenues.

 

    Mobile online transaction net revenues were up 11%, representing 11% of total core net revenues.

 

    Desktop online transaction net revenues declined 17%, representing 61% of total core net revenues.

 

    Segment operating income (“SOI”) was $63.1 million, representing SOI margins of 27%.

 

    Total website visits were 650.1 million, down 10%.

 

    Mobile visits increased slightly to 298.3 million, representing 46% of total visits.

 

    Desktop visits declined 16% to 351.8 million.

 

    Gift Card Segment

 

    Net revenues were $43.5 million.

 

    Gross profit was $2.6 million, representing gross profit margins of 6%.


    Consolidated Results (Core + Gift Card Segments)

 

    Net revenues grew 13% to $280.4 million.

 

    Net revenues from international markets were $48.7 million, representing 17% and 21% of consolidated and core segment total net revenues, respectively.

 

    GAAP net income was $2.0 million, compared to GAAP net income of $11.8 million.

 

    Non-GAAP net income was $34.2 million, compared to non-GAAP net income of $41.2 million.

 

    GAAP EPS was $0.04 per share, based on 49.8 million fully-diluted, weighted-average shares outstanding, compared to GAAP EPS of $0.22 per share, based on 54.1 million fully-diluted, weighted-average shares outstanding.

 

    Non-GAAP EPS was $0.69 per share, based on 49.8 million fully-diluted, weighted-average shares outstanding, compared to $0.76 per share, based on 54.1 million fully-diluted, weighted-average shares outstanding.

 

    Adjusted EBITDA was $61.3 million, representing adjusted EBITDA margins of 22%, inclusive of our gift card segment, compared to adjusted EBITDA of $71.9 million, or adjusted EBITDA margins of 29%.

BUSINESS OUTLOOK

(All comparisons are made to the first quarter or full year of 2016, respectively, unless otherwise noted. Amounts may not compute due to rounding.)

First Quarter 2017 (ending March 31, 2017)

With respect to our core segment, we expect:

 

    Total net revenues to be in the range of $49.0 to $53.0 million, reflecting a decline of 7% at the mid-point.

 

    Segment operating income to be in the range of $8.5 to $12.5 million, representing SOI margins of 21% at the midpoint.

With respect to our gift card segment, we expect:

 

    Net revenues to be in the range of $13.5 to $18.5 million.

 

    Gross profit to be in the range of $700 to $970 thousand, or gross profit margins of 5% at the midpoint.

On a consolidated basis (Core + Gift Card Segments), we expect:

 

    Net revenues to be in the range of $62.5 to $71.5 million.


    Adjusted EBITDA to be in the range of $7.5 to $11.5 million, or adjusted EBITDA margins of 14% at the midpoint.

Full Year 2017 (ending December 31, 2017)

With respect to the core segment, we expect:

 

    Total net revenues to be in the range of $223.5 to $238.5 million, reflecting a decline of 2% at the mid-point.

 

    Segment operating income to be in the range of $54.0 to $65.0 million, representing SOI margins of 26% at the midpoint.

With respect to the gift card segment, we expect:

 

    Net revenues to be in the range of $72.5 to $87.5 million.

 

    Gross profit to be in the range of $4.0 to $4.8 million, or gross profit margins of 6% at the midpoint.

On a consolidated basis, we expect:

 

    Net revenues to be in the range of $296.0 to $326.0 million.

 

    Adjusted EBITDA to be in the range of $50.5 to $60.5 million, or adjusted EBITDA margins of 18% at the midpoint.

The above statements are based on current expectations and actual results may differ materially as explained under the caption “Forward-looking Statements” below. Information about RetailMeNot’s use of non-GAAP financial measures, including adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share, is provided below under the caption “Use of Non-GAAP Financial Measures.”

Quarterly Conference Call

RetailMeNot will host a webcast to discuss its fourth quarter & fiscal year 2016 financial results and key operating metrics and its first quarter and fiscal year 2017 business outlook today at 7:00 a.m. Central Time (8:00 a.m. Eastern Time).

A live webcast of the conference call can be accessed within the investor relations section of the RetailMeNot website at http://investor.retailmenot.com. This webcast will contain forward-looking statements and other material information regarding the company’s financial and operating results.

Following completion of the call, a replay of the call will be available beginning at 9:30 a.m. Eastern Time on February 14, 2076. To listen to the telephone replay, call (877) 344-7529 within the US, or (412) 317-0088 if calling internationally. Access Code 10100598.

RetailMeNot uses its investor relations website (http://investor.retailmenot.com) as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Accordingly, investors should monitor the investor relations website, in addition to following press releases, SEC filings, public conference calls and webcasts.


About RetailMeNot, Inc.

RetailMeNot, Inc. (http://www.retailmenot.com/corp/) is a leading savings destination connecting consumers with retailers, restaurants and brands, both online and in-store. The company enables consumers across the globe to find hundreds of thousands of digital offers to save money while they shop or dine out. During the 12 months ended December 31, 2016, RetailMeNot, Inc. experienced over 650 million visits to its websites. It also averaged 23.1 million mobile unique visitors per month during the three months ended December 31, 2016. RetailMeNot, Inc. estimates that approximately $4.4 billion in retailer sales were attributable to consumer transactions from paid digital offers in its marketplace in 2016, more than $600 million of which were attributable to its in-store solution. The RetailMeNot, Inc. portfolio of websites and mobile applications includes RetailMeNot.com in the United States; RetailMeNot.ca in Canada; VoucherCodes.co.uk in the United Kingdom; ma-reduc.com and Poulpeo.com in France; and GiftCardZen.com and Deals2Buy.com in North America. RetailMeNot, Inc. is listed on the NASDAQ stock exchange under the ticker symbol “SALE.”

Key Operating Metrics

Visits. RetailMeNot defines a visit as a group of interactions that take place on one of RetailMeNot Inc.’s websites from computers, smartphones, tablets or other mobile devices within a given time frame as measured by Google Analytics, a product that provides digital marketing intelligence. A single visit can contain multiple page views, events, social interactions and e-commerce transactions. A single visitor can open multiple visits. Visits can occur on the same day, or over several days, weeks or months. As soon as one visit ends, there is then an opportunity to start a new visit. A visit ends either through the passage of time or a campaign change, with a campaign generally meaning arrival via search engine, referring site or campaign-tagged information. A visit ends through passage of time either after 30 minutes of inactivity or at midnight Pacific Time. A visit ends through a campaign change if a visitor arrives via one campaign or source, leaves the site, and then returns via another campaign or source. Visits for the period do not include interactions through our mobile applications or interactions with giftcardzen.com.

Mobile Unique Visitors. This amount represents the average number of mobile unique visitors per month for the three month period ended December 31, 2016. RetailMeNot counts each of the following as a mobile unique visitor: (i) the first time a specific mobile device accesses one of our mobile applications during a calendar month, and (ii) the first time a specific mobile device accesses one of our mobile websites using a specific web browser during a calendar month. If a mobile device accesses more than one of our mobile websites or mobile applications in a single calendar month, the first access to each such mobile website or mobile application is counted as a mobile unique visitor as they are tracked separately for each mobile domain. We measure mobile unique visitors with a combination of internal data sources and Google Analytics data.


Use of Non-GAAP Financial Measures

To provide investors with additional information regarding our financial results, this document includes references to adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share, each of which is a non-GAAP financial measure. For a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures, see the tables provided below in this release.

RetailMeNot has not reconciled adjusted EBITDA guidance to net income (loss) guidance because we do not provide guidance for third party acquisition-related costs or other operating expense, net interest income/expense, other non-operating income and expenses and income taxes, net of any foreign exchange income or expense. As these items cannot be reasonably predicted at this time, we are unable to provide such guidance. Accordingly a reconciliation to net income (loss) guidance is not available without unreasonable effort.

RetailMeNot defines adjusted EBITDA as net income (loss) plus depreciation, amortization of intangible assets, stock-based compensation expense, third-party acquisition-related costs, other operating expenses (including non-cash impairments and compensation arrangements entered into in connection with acquisitions), net interest expense, other non-operating income or expense (including net foreign exchange gains and losses) and income taxes.

RetailMeNot discloses adjusted EBITDA on a consolidated basis because it is a key measure used by RetailMeNot and its board of directors to understand and evaluate RetailMeNot’s financial and operating performance, establish budgets and operational goals and as an element in determining compensation of certain of its executives. RetailMeNot believes adjusted EBITDA facilitates period-to-period comparisons of operations that could otherwise be masked by the effect of the expenses that RetailMeNot excludes in this non-GAAP financial measure and facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

RetailMeNot’s presentation of non-GAAP net income (loss) and non-GAAP net income (loss) per share excludes the impact of amortization of purchased intangible assets, stock-based compensation expense, third party acquisition-related costs, other non-cash operating expenses (including non-cash impairments and compensation arrangements entered into in connection with acquisitions) and income taxes, net of the tax effect of the adjustments above. These measures are not key metrics used by RetailMeNot or its board of directors to measure financial or operating performance or otherwise manage the business. However, RetailMeNot provides non-GAAP net income (loss) and non-GAAP net income (loss) per share as supplemental information for investors, as they facilitate period-to-period comparisons of operations that could otherwise be masked by the effect of the expenses that RetailMeNot excludes in these non-GAAP financial measures and facilitates comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share have limitations as analytical tools, and you should not consider these measures in isolation or as substitutes for analysis of RetailMeNot’s results as reported under GAAP. Because of these


limitations, you should consider adjusted EBITDA, non-GAAP net income (loss) and non-GAAP net income (loss) per share alongside other financial performance measures, including various cash flow metrics, operating income (loss), net income (loss) and RetailMeNot’s other GAAP results.

Forward-looking Statements

This release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included herein regarding RetailMeNot’s strategy, future operations, future financial position, future net revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would” or similar expressions (or the negative of these terms) are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. These forward-looking statements include, among other things, statements about management’s estimates regarding future net revenues, adjusted EBITDA, segment operating income, gross profit and other financial performance, visits, mobile unique visitors, e-mail subscribers, other consumer engagement metrics, new product and content offerings and other statements about management’s beliefs, intentions or goals. RetailMeNot may not actually achieve the expectations disclosed in the forward-looking statements, and you should not place undue reliance on RetailMeNot’s forward-looking statements. These forward-looking statements involve risks and uncertainties that could cause actual results or events to differ materially from the expectations disclosed in the forward-looking statements, including, but not limited to, (1) RetailMeNot’s ability to attract visitors to its websites from search engines, to attract and retain users and to maintain or increase users’ engagement with its solutions; (2) the competitive environment for RetailMeNot’s business; (3) RetailMeNot’s ability to monetize digital offers through its mobile solutions; (4) RetailMeNot’s ability to attract and retain paid retailers and maintain its relationships with performance marketing networks and suppliers of gift cards; (5) RetailMeNot’s ability to obtain and maintain high quality digital offer content and maintain the positive perception of its brands, including with respect to its gift card business; (6) RetailMeNot’s ability to have access to gift card inventory sufficient to meet consumer demand; (7) RetailMeNot’s ability to manage the growth in scope and complexity of its business, including accurately planning and forecasting its financial results; (8) consumer adoption of the electronic sale of discount gift cards or the continued attractiveness of discount gift cards; (9) RetailMeNot’s need to manage regulatory, tax and litigation risks, including regulations related to gift cards and imposing sales tax on e-commerce; (10) RetailMeNot’s ability to retain its existing management team and other key employees; (11) RetailMeNot’s ability to use and protect consumer data and to protect its intellectual property; (12) RetailMeNot’s ability to manage international business uncertainties; (13) the impact and integration of current and future acquisitions; and (14) other risks and potential factors that could affect RetailMeNot’s business and financial results identified in RetailMeNot’s filings with the Securities and Exchange Commission (the “SEC”), including its quarterly report on Form 10-Q filed with the SEC on November 1, 2016. Additional information will also be set forth in RetailMeNot’s future quarterly reports on Form 10-Q, annual reports on Form 10-K and other filings that RetailMeNot makes with the SEC. RetailMeNot does not intend or undertake any duty to release publicly any updates or revisions to any forward-looking statements contained herein.


Investor Contacts

Michael Magaro

RetailMeNot, Inc.

mmagaro@rmn.com

(512) 777-2899

Anne Bawden

RetailMeNot, Inc.

abawden@rmn.com

(415) 200-8654

Media Contact

Michelle Skupin

RetailMeNot, Inc.

mskupin@rmn.com

(808) 224-3215


RetailMeNot, Inc.

Condensed Consolidated Statements of Operations

(Unaudited, in thousands, except per share data)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2016     2015     2016     2015  

Net revenues

   $ 96,885     $ 83,139     $ 280,421     $ 249,115  

Cost of net revenues (1)

     23,165       4,871       61,511       19,904  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     73,720       78,268       218,910       229,211  

Operating expenses:

        

Product development (1)

     13,705       12,177       52,283       51,580  

Sales and marketing (1)

     27,975       33,173       98,209       99,380  

General and administrative (1)

     12,288       10,906       42,731       39,813  

Amortization of purchased intangible assets

     2,497       2,488       9,466       10,664  

Other operating expenses

     2,213       2,334       7,547       4,616  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     58,678       61,078       210,236       206,053  
  

 

 

   

 

 

   

 

 

   

 

 

 

Income from operations

     15,042       17,190       8,674       23,158  

Other income (expense):

        

Interest expense, net

     (559     (539     (2,275     (1,988

Other income (expense), net

     (344     (14     288       (315
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     14,139       16,637       6,687       20,855  

Provision for income taxes

     (11,778     (7,600     (4,719     (9,007
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income

   $ 2,361     $ 9,037     $ 1,968     $ 11,848  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income per share:

        

Basic

   $ 0.05     $ 0.17     $ 0.04     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.05     $ 0.17     $ 0.04     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of common shares used in computing net income per share:

        

Basic

     48,202       51,782       48,724       53,076  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     49,331       52,406       49,824       54,099  
  

 

 

   

 

 

   

 

 

   

 

 

 

RetailMeNot, Inc.

Condensed Consolidated Statements of Operations (continued)

(Unaudited, in thousands)

 

     Three Months Ended December 31,      Year Ended December 31,  
     2016      2015      2016      2015  

(1)    Includes stock-based compensation as follows:

           

Cost of net revenues

   $ 482      $ 568      $ 1,846      $ 2,211  

Product development

     2,301        2,200        8,367        8,667  

Sales and marketing

     1,518        1,598        5,360        6,254  

General and administrative

     2,952        2,437        10,608        9,762  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 7,253      $ 6,803      $ 26,181      $ 26,894  
  

 

 

    

 

 

    

 

 

    

 

 

 


RetailMeNot, Inc.

Reconciliation of Adjusted EBITDA

(Unaudited, in thousands)

 

     Three Months Ended December 31,      Year Ended December 31,  
     2016      2015      2016     2015  

Net income

   $ 2,361      $ 9,037      $ 1,968     $ 11,848  

Depreciation and amortization

     4,908        4,389        18,146       17,131  

Stock-based compensation expense

     7,253        6,803        26,181       26,894  

Third party acquisition-related costs

     239        36        727       91  

Other operating expenses

     2,213        2,334        7,547       4,616  

Interest expense, net

     559        539        2,275       1,988  

Other (income) expense, net

     344        14        (288     315  

Provision for income taxes

     11,778        7,600        4,719       9,007  
  

 

 

    

 

 

    

 

 

   

 

 

 

Adjusted EBITDA

   $ 29,655      $ 30,752      $ 61,275     $ 71,890  
  

 

 

    

 

 

    

 

 

   

 

 

 

RetailMeNot, Inc.

Reconciliation of Non-GAAP Net Income and Non-GAAP Diluted EPS

(Unaudited, in thousands, except per share data and percentage rates)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2016     2015     2016     2015  

GAAP Income before income taxes

   $ 14,139     $ 16,637       6,687       20,855  

GAAP Provision for income taxes

     (11,778     (7,600     (4,719     (9,007
  

 

 

   

 

 

   

 

 

   

 

 

 

GAAP Net income

   $ 2,361     $ 9,037     $ 1,968     $ 11,848  

Non-GAAP adjustments to net income:

        

Amortization of purchased intangibles

     2,497       2,488       9,466       10,664  

Stock-based compensation expense

     7,253       6,803       26,181       26,894  

Third party acquisition-related costs

     239       36       727       91  

Other operating expenses

     2,213       2,334       7,547       4,616  

Less: Tax effect of adjustments above

     3,693       (1,622     (11,730     (12,947
  

 

 

   

 

 

   

 

 

   

 

 

 

Total non-GAAP net income

   $ 18,256     $ 19,076     $ 34,159     $ 41,166  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted net income per share:

        

GAAP

   $ 0.05     $ 0.17     $ 0.04     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP

   $ 0.37     $ 0.36     $ 0.69     $ 0.76  
  

 

 

   

 

 

   

 

 

   

 

 

 

Shares used in non-GAAP diluted EPS calculation:

        

Weighted-average shares outstanding used in calculating GAAP diluted EPS

     49,331       52,406       49,824       54,099  

Additional dilutive securities for non-GAAP diluted EPS

     —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted-average shares outstanding used in calculating non-GAAP diluted EPS

     49,331       52,406       49,824       54,099  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of non-GAAP effective tax rate:

        

GAAP Effective tax rate

     83.3     45.7     70.6     43.2

Tax effect of non-GAAP adjustments to net income

     -52.6     -13.1     -38.1     -8.4
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP effective tax rate

     30.7     32.6     32.5     34.8
  

 

 

   

 

 

   

 

 

   

 

 

 


RetailMeNot, Inc.

Segment Results

(Unaudited, in thousands)

 

     Three Months Ended December 31, 2016  
     Core      Gift Cards     Unallocated     Total  

Net revenues

   $ 78,261      $ 18,624     $ —       $ 96,885  

Cost of net revenues

     4,983        17,682       500       23,165  
  

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     73,278        942       (500     73,720  

Operating expenses:

         

Product development

     9,722        399       3,584       13,705  

Sales and marketing

     25,746        683       1,546       27,975  

General and administrative

     7,164        851       4,273       12,288  

Amortization of purchased intangible assets

     —          —         2,497       2,497  

Other operating expenses

     —          —         2,213       2,213  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total operating expenses

     42,632        1,933       14,113       58,678  
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from operations

   $ 30,646      $ (991   $ (14,613   $ 15,042  
  

 

 

    

 

 

   

 

 

   

 

 

 
     Three Months Ended December 31, 2015  
     Core      Gift Cards     Unallocated     Total  

Net revenues

   $ 83,139      $ —       $ —       $ 83,139  

Cost of net revenues

     4,163        —         708       4,871  
  

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     78,976        —         (708     78,268  

Operating expenses:

         

Product development

     8,903        —         3,274       12,177  

Sales and marketing

     31,210        —         1,963       33,173  

General and administrative

     8,111        —         2,795       10,906  

Amortization of purchased intangible assets

     —          —         2,488       2,488  

Other operating expenses

     —          —         2,334       2,334  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total operating expenses

     48,224        —         12,854       61,078  
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from operations

   $ 30,752      $ —       $ (13,562   $ 17,190  
  

 

 

    

 

 

   

 

 

   

 

 

 
     Year Ended December 31, 2016  
     Core      Gift Cards     Unallocated     Total  

Net revenues

   $ 236,874      $ 43,547     $ —       $ 280,421  

Cost of net revenues

     18,426        40,922       2,163       61,511  
  

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     218,448        2,625       (2,163     218,910  

Operating expenses:

         

Product development

     38,123        944       13,216       52,283  

Sales and marketing

     90,658        1,477       6,074       98,209  

General and administrative

     26,563        2,033       14,135       42,731  

Amortization of purchased intangible assets

     —          —         9,466       9,466  

Other operating expenses

     —          —         7,547       7,547  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total operating expenses

     155,344        4,454       50,438       210,236  
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from operations

   $ 63,104      $ (1,829   $ (52,601   $ 8,674  
  

 

 

    

 

 

   

 

 

   

 

 

 
     Year Ended December 31, 2015  
     Core      Gift Cards     Unallocated     Total  

Net revenues

   $ 249,115      $ —       $ —       $ 249,115  

Cost of net revenues

     17,170        —         2,734       19,904  
  

 

 

    

 

 

   

 

 

   

 

 

 

Gross profit

     231,945        —         (2,734     229,211  

Operating expenses:

         

Product development

     39,409        —         12,171       51,580  

Sales and marketing

     91,772        —         7,608       99,380  

General and administrative

     28,874        —         10,939       39,813  

Amortization of purchased intangible assets

     —          —         10,664       10,664  

Other operating expenses

     —          —         4,616       4,616  
  

 

 

    

 

 

   

 

 

   

 

 

 

Total operating expenses

     160,055        —         45,998       206,053  
  

 

 

    

 

 

   

 

 

   

 

 

 

Income (loss) from operations

   $ 71,890      $ —       $ (48,732   $ 23,158  
  

 

 

    

 

 

   

 

 

   

 

 

 


RetailMeNot, Inc.

Reconciliation of Unallocated Expenses

(Unaudited, in thousands)

 

     Three Months Ended December 31,      Year Ended December 31,  
     2016      2015      2016      2015  

Depreciation expense

   $ 2,411      $ 1,901      $ 8,680      $ 6,467  

Stock-based compensation expense

     7,253        6,803        26,181        26,894  

Third party acquisition-related costs

     239        36        727        91  

Amortization of purchased intangible assets

     2,497        2,488        9,466        10,664  

Other operating expenses

     2,213        2,334        7,547        4,616  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Unallocated expenses

   $ 14,613      $ 13,562      $ 52,601      $ 48,732  
  

 

 

    

 

 

    

 

 

    

 

 

 


RetailMeNot, Inc.

Condensed Consolidated Balance Sheets

(Unaudited, in thousands)

 

     As of December 31,
2016
    As of December 31,
2015
 

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 216,858     $ 259,769  

Accounts receivable, net

     66,424       67,504  

Inventory

     9,529       —    

Prepaids and other current assets, net

     10,485       9,959  
  

 

 

   

 

 

 

Total current assets

     303,296       337,232  

Property and equipment, net

     24,800       21,382  

Intangible assets, net

     55,046       61,245  

Goodwill

     190,882       174,725  

Other assets, net

     7,983       8,040  
  

 

 

   

 

 

 

Total assets

   $ 582,007     $ 602,624  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 9,372     $ 8,713  

Accrued compensation and benefits

     13,104       10,136  

Accrued expenses and other current liabilities

     5,104       7,155  

Income taxes payable

     7,564       5,109  

Current maturities of long term debt

     10,000       10,000  
  

 

 

   

 

 

 

Total current liabilities

     45,144       41,113  

Deferred tax liability—noncurrent

     1,027       1,498  

Long term debt

     51,106       60,872  

Other noncurrent liabilities

     9,121       7,752  
  

 

 

   

 

 

 

Total liabilities

     106,398       111,235  

Stockholders’ equity:

    

Common stock

     48       51  

Additional paid-in capital

     480,333       495,151  

Accumulated other comprehensive loss

     (7,810     (4,883

Retained earnings

     3,038       1,070  
  

 

 

   

 

 

 

Total stockholders’ equity

     475,609       491,389  
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 582,007     $ 602,624  
  

 

 

   

 

 

 


RetailMeNot, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited, in thousands)

 

     Three Months Ended December 31,     Year Ended December 31,  
     2016     2015     2016     2015  

Cash flows from operating activities:

        

Net income

   $ 2,361      $ 9,037      $ 1,968      $ 11,848   

Adjustments to reconcile net income to cash provided by operating activities:

        

Depreciation and amortization expense

     4,908        4,389        18,146        17,131   

Stock based compensation expense

     7,253        6,803        26,181        26,894   

Excess income tax benefit from stock-based compensation

     (25     (41     (160     (1,374

Deferred income tax benefit

     (1,882     (1,087     (291     (849

Non-cash interest expense

     116        102        440        407   

Impairment of assets

     786        2,340        1,620        2,340   

Amortization of deferred compensation

     1,435        —          5,944        2,297   

Other non-cash (gains) losses, net

     361        (746     (1,355     223   

Provision for doubtful accounts receivable

     1,085        867        1,344        783   

Changes in operating assets and liabilities:

         —          —     

Accounts receivable, net

     (26,775     (28,081     (1,761     161   

Inventory

     (6,363     —          (8,796     —     

Prepaid expenses and other current assets, net

     8,210        3,823        (1,104     (1,123

Accounts payable

     3,145        4,881        667        4,035   

Accrued expenses and other current liabilities

     2,792        6,839        (3,242     (3,222

Other noncurrent assets and liabilities

     (1,922     (895     (712     938   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash (used in) provided by operating activities

     (4,515     8,231        38,889        60,489   

Cash flows from investing activities:

        

Payments for acquisition of businesses, net of acquired cash

     239        —          (20,729     —     

Proceeds from sale of property and equipment

     8        9        30        23   

Purchase of other assets

     —          (35     (44     (4,337

Purchase of non-marketable investment

     —          —          —          (4,000

Purchase of property and equipment

     (2,980     (2,162     (12,192     (10,903
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     (2,733     (2,188     (32,935     (19,217

Cash flows from financing activities:

        

Proceeds from notes payable, net of issuance costs

     —          —          —          29,950   

Payments on notes payable

     (2,500     (2,500     (10,000     (7,500

Payment of offering costs related to public offerings

     —          —          —          —     

Excess income tax benefit from stock-based compensation and other

     25        41        160        1,374   

Payments of principal on capital lease arrangements

     —          —          (67     (7

Payments for repurchase of common stock

     (7,775     (14,065     (36,209     (52,873

Proceeds from issuance of common stock, net of tax payments related to net share settlement of equity awards

     (330     (164     (1,899     4,166   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net cash used in financing activities

     (10,580     (16,688     (48,015     (24,890

Effect of foreign currency exchange rate on cash

     (581     (291     (850     (1,095
  

 

 

   

 

 

   

 

 

   

 

 

 

Change in cash and cash equivalents

     (18,409     (10,936     (42,911     15,287   

Cash and cash equivalents, beginning of period

     235,267        270,705        259,769        244,482   
  

 

 

   

 

 

   

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 216,858      $ 259,769      $ 216,858      $ 259,769   
  

 

 

   

 

 

   

 

 

   

 

 

 
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