Intersections Inc. Reports Fourth Quarter 2007 Earnings

Intersections Inc. (NASDAQ:INTX) today announced financial results for the quarter and year ended December 31, 2007. Revenue for the fourth quarter of 2007 was $77.0 million, compared to $54.7 million for the quarter ended December 31, 2006 and $71.4 million for the quarter ended September 30, 2007, an increase of 40.7 percent and 7.9 percent, respectively. Net income for the quarter ended December 31, 2007 was $3.3 million, compared to $639 thousand for the quarter ended December 31, 2006, and $1.7 million for the quarter ended September 30, 2007. Diluted earnings per share ("EPS”) were $0.19 for the fourth quarter of 2007, compared to $0.04 for the fourth quarter of 2006 and $0.10 for the third quarter of 2007. "The fourth quarter of 2007 was another record setting quarter in terms of revenue and gross subscriber additions for Intersections,” said Chairman and Chief Executive Officer, Michael Stanfield. "We are very pleased with our overall business growth in the quarter and year, led by increases in direct marketing enrollments and the percentage of revenue coming from direct marketing programs, which creates top line growth and enhances subscriber value in our Consumer Products and Services segment. We are pleased this top line growth is starting to translate into earnings growth, as reflected in our diluted EPS of $0.19 this quarter.” Our financial results include Intersections Insurance Services Inc. (IISI), which we acquired on July 3, 2006. Our financial results also include American Background Information Services, Inc. (ABI) for the period January 1, 2006 through May 30, 2006, and Screening International, LLC (SI), our joint venture that combined ABI, a US based company, with Control Risks Group Holdings Limited’s (CRG) background screening business located in the UK, for the period May 31, 2006 through December 31, 2007. In addition, our financial results include our Other reporting segment, which includes Captira Analytical LLC, which was acquired on August 7, 2007, and Net Enforcers, Inc., which was acquired on November 30, 2007. Fourth Quarter 2007 Financial Highlights: Total subscribers increased to approximately 5.3 million as of December 31, 2007, compared to approximately 4.6 million subscribers as of December 31, 2006. Subscriber additions of approximately 1.1 million in the fourth quarter of 2007 were partially offset by subscriber cancels of 797 thousand. Total revenue for the fourth quarter of 2007 was $77.0 million, including $7.3 million from SI, compared to $54.7 million for the fourth quarter of 2006, including $6.8 million from SI, and $71.4 million, including $7.7 million from SI, for the third quarter of 2007. Subscription revenue, net of marketing and commissions associated with subscription revenue, increased to $41.1 million for the fourth quarter of 2007 from $30.9 million for the fourth quarter of 2006, and from $39.4 million for the third quarter of 2007, an increase of 33.1 percent and 4.6 percent, respectively. Subscription revenue, net of marketing and commissions associated with subscription revenue, is a non-GAAP financial measure that we believe is important to investors and one that we utilize in managing our business as subscription revenue normalizes the effect of changes in the mix of indirect and direct marketing arrangements. Income before taxes and minority interest was $4.9 million for the fourth quarter of 2007, including a loss before taxes and minority interest of $1.1 million for SI, compared to $890 thousand for the fourth quarter of 2006, which included a loss before taxes and minority interest of $554 thousand for SI. Income before taxes and minority interest was $2.7 million for the third quarter of 2007 which included a loss before taxes and minority interest of $1.2 million for SI. Income before taxes includes a foreign currency gain of $1.1 million in other income. Net income was $3.3 million, or $0.19 per diluted share, for the quarter ended December 31, 2007, compared to $639 thousand, or $0.04 per diluted share, for the quarter ended December 31, 2006. Cash flow provided by operations for the quarter ended December 31, 2007, was approximately $9.1 million. Year End Results: Total revenue increased 35.2 percent to $271.7 million for the year ended December 31, 2007, including $29.5 million from SI, from $201.1 million including $24.1 million from SI, for the comparable period in 2006. Subscription revenue, net of marketing and commissions associated with subscription revenue, increased 24.6 percent to $147.5 million for the year ended December 31, 2007, from $118.4 million for the comparable period in 2006. Income before taxes and minority interest decreased 38.6 percent to $9.7 million for the year ended December 31, 2007, including a loss before taxes and minority interest of $4.2 million from SI, compared to $15.9 million for the year ended December 31, 2006, including $1.1 million from SI. Net income was $6.9 million, or $0.39 per diluted share, for the year ended December 31, 2007, compared to $9.4 million, or $0.54 per diluted share, for the year ended December 31, 2006. Cash flow provided by operations for the year ended December 31, 2007 was approximately $4.6 million. Intersections’ quarter and year end December 31, 2007 results will be discussed in more detail on March 13, 2008 at 5:00 pm EDT via teleconference. A live audio webcast will be available on Intersections’ Web site at www.intersections.com. Participants are encouraged to go to the selected Web site at least 15 minutes in advance to register, download, and install any necessary audio software. This webcast will be archived and available for replay after the teleconference. Additionally, the call will be available for telephonic replay from 7:00 p.m. Thursday, March 13, 2008 through 5:00 p.m. Tuesday, March 18, 2008, at 888.286.8010, or if you are based internationally, at +1-617-801-6888 (Passcode: 50680121). Statements in this press release relating to future plans, results, performance, expectations, achievements and the like are considered "forward-looking statements.” Those forward-looking statements involve known and unknown risks and are subject to change based on various factors and uncertainties that may cause actual results to differ materially from those expressed or implied by those statements, including without limitation the effect of new subscriber additions. Factors and uncertainties that may cause actual results to differ include but are not limited to the risks disclosed in the Company’s filings with the U.S. Securities and Exchange Commission. The Company undertakes no obligation to revise or update any forward-looking statements. About Intersections Inc. Intersections Inc. (NASDAQ:INTX) is a leading provider of branded and fully customized identity management solutions. By integrating its technology solutions with its comprehensive services, Intersections safeguards more than 7 million customers, who are primarily received through marketing partnerships and consumer-direct marketing of the company’s Identity Guard® brand. Intersections also provides consumer-oriented insurance and membership products through marketing partnerships with the major mortgage servicers in the United States as well as other financial institutions through its subsidiary, Intersections Insurance Services Inc. Additionally, through majority-owned Screening International LLC, Intersections provides pre-employment background screening services domestically and internationally in partnership with Control Risks Group Limited of the United Kingdom. In 2007, Intersections expanded its service solutions to include software management tools for the bail bond industry provided by its subsidiary, Captira Analytical, LLC and corporate brand protection through its recently acquired subsidiary, Net Enforcers, Inc. Learn more about Intersections Inc. at www.intersections.com/aboutus.asp. INTERSECTIONS INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited)     Three Months Ended   Year Ended December 31 December 31 (in thousands, except per share data)     2007 2006 2007 2006   Revenue $ 77,016 $ 54,733 $ 271,723 $ 201,051 Operating expenses: Marketing 10,960 6,720 36,285 25,173 Commissions 16,795 7,779 52,624 25,786 Cost of revenue 26,745 20,972 101,815 75,188 General and administrative 15,118 15,417 59,386 49,978 Depreciation 2,411 2,137 9,081 8,661 Amortization   1,010     582     3,346     1,357     Total operating expenses   73,039     53,607     262,537     186,143     Income from operations 3,977 1,126 9,186 14,908 Interest income 132 270 799 1,655 Interest expense (412 ) (356 ) (1,380 ) (875 ) Other income/(expense), net   1,162     (150 )   1,139     173     Income before income taxes and minority interest 4,859 890 9,744 15,861   Income tax expense   (2,134 )   (392 )   (4,329 )   (6,328 )   Income before minority interest 2,725 498 5,415 9,533   Minority interest in net loss (income) of Screening International, LLC   598     141     1,451     (97 )   Net income $ 3,323   $ 639   $ 6,866   $ 9,436       Net income per share - basic $ 0.19 $ 0.04 $ 0.40 $ 0.56   Net income per share - diluted $ 0.19 $ 0.04 $ 0.39 $ 0.54   Weighted average common shares outstanding - basic 17,126 16,843 17,096 16,770 Weighted average common shares outstanding – diluted 17,544 17,809 17,479 17,606 INTERSECTIONS INC. CONSOLIDATED BALANCE SHEETS (Unaudited)     December 31,   December 31, 2007 2006 (in thousands) ASSETS   CURRENT ASSETS: Cash and cash equivalents $ 19,780 $ 15,580 Short-term investments - 10,453 Accounts receivable, net 25,471 22,369 Prepaid expenses and other current assets 6,217 5,241 Income tax receivable 4,329 2,113 Note receivable - 750 Deferred subscription solicitation costs   21,912     11,786   Total current assets 77,709 68,292   PROPERTY AND EQUIPMENT—Net 18,817 21,699 GOODWILL 76,506 66,663 INTANGIBLE ASSETS—Net 16,855 12,388 OTHER ASSETS   16,381     10,425   TOTAL ASSETS $ 206,268   $ 179,467     LIABILITIES AND STOCKHOLDERS' EQUITY   CURRENT LIABILITIES: Note payable – current portion $ 3,346 $ 3,333 Note payable to Control Risks Group Ltd 900 - Capital leases – current portion 1,001 1,176 Accounts payable 10,647 5,193 Accrued expenses and other current liabilities 15,187 15,690 Accrued payroll and employee benefits 4,945 7,073 Commissions payable 2,413 1,194 Deferred revenue 2,886 5,292 Deferred tax liability – current portion   6,019     2,483   Total current liabilities   47,344     41,434     NOTE PAYABLE - less current portion 22,347 11,667 OBLIGATIONS UNDER CAPITAL LEASES – less current portion 699 1,637 OTHER LONG-TERM LIABILITIES 2,071 551 DEFERRED TAX LIABILITY – less current portion   8,935     8,152   TOTAL LIABILITIES $ 81,396 $ 63,441   MINORITY INTEREST 10,024 11,450   STOCKHOLDERS' EQUITY:   Common stock 182 178 Additional paid-in capital 99,706 95,462 Treasury stock (9,516 ) (8,600 ) Retained earnings 24,357 17,447 Accumulated other comprehensive income   119     89   Total stockholders' equity   114,848     104,576     TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 206,268   $ 179,467   INTERSECTIONS INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)     Year Ended December 31, 2007   2006 (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 6,866 $ 9,436 Adjustments to reconcile net income to net cash provided by/(used in) Depreciation and amortization 12,556 10,113 Amortization of gain from sale leaseback (94 ) (95 ) Loss on disposal of fixed asset 60 54 Amortization of debt issuance cost 75 31 Deferred tax 4,417 2,142 Provision for doubtful accounts (2 ) 33 Stock based compensation 2,715 1,121 Amortization of deferred subscription solicitation costs 35,012 21,175 Minority interest in net (loss)/income of Screening International, LLC (1,451 ) 97 Foreign currency transaction losses, net 61 - Changes in assets and liabilities: Accounts receivable (2,663 ) (3,998 ) Prepaid expenses and other current assets (1,018 ) 129 Income tax receivable (2,740 ) (2,341 ) Deferred subscription solicitation costs (46,718 ) (20,583 ) Other assets (4,375 ) (4,085 ) Accounts payable 4,806 (2,154 ) Accrued expenses and other current liabilities (836 ) 3,921 Accrued payroll and employee benefits (2,151 ) 2,932 Commissions payable 1,220 (771 ) Income tax payable - (1,115 ) Deferred revenue (2,640 ) 1,403 Other long-term liabilities   1,489     452   Net cash provided by/(used in) operating activities   4,589     17,897     NET CASH (USED IN)/PROVIDED BY INVESTING ACTIVITIES: Sale of short term investments 10,453 23,634 Cash paid in the acquisition of Intersections Insurance Services, Inc. (5 ) (50,609 ) Cash received in the acquisition of Screening International, LLC - 1,710 Cash paid in the acquisition of Hide N’Seek, LLC (1,686 ) - Cash paid in the acquisition of Net Enforcers, Inc. (14,168 ) - Acquisition of property and equipment   (6,075 )   (8,331 ) Net cash (used in)/provided by investing activities   (11,481 )   (33,596 )   NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES: Cash proceeds from stock options exercised 1,035 471 Tax benefit of stock options exercised 498 514 Proceeds from debt issuance 14,900 15,000 Debt issuance costs - (261 ) Repurchase of treasury stock (916 ) - Repayments on note payable (3,382 ) - Note receivable - (750 ) Capital lease payments   (1,037 )   (1,391 ) Net cash provided by/(used in) financing activities   11,098     13,583     EFFECT OF EXCHANGE RATE ON CASH (6 ) 141 INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 4,200 (1,975 ) CASH AND CASH EQUIVALENTS—Beginning of period   15,580     17,555   CASH AND CASH EQUIVALENTS—End of period $ 19,780   $ 15,580   INTERSECTIONS INC. OTHER DATA (Unaudited)     Three Months EndedDecember 31, Year EndedDecember 31, (dollars in thousands)       2007     2006     2007     2006     Subscribers at beginning of period 4,950 4,328 4,626 3,660 New subscribers – indirect 611 584 2,270 2,459 New subscribers – direct 494 277 1,825 1,168 Cancelled subscribers within first 90 days of subscription (262 ) (205 ) (1,031 ) (888 ) Cancelled subscribers after first 90 days of subscription   (534 )   (358 )   (2,431 )   (1,773 ) Subscribers at end of period   5,259     4,626     5,259     4,626     Indirect subscribers 62.8 % 68.8 % 62.8 % 68.8 % Direct subscribers   37.2     31.2     37.2     31.2     100.0 %   100.0 %   100.0 %   100.0 %   *Cancellations within first 90 days of subscription 23.8 % 23.8 % 25.2 % 21.9 % **Cancellations after first 90 days of subscription 31.6 % 27.7 % 31.6 % 27.7 %   ***Overall retention 60.3 % 63.5 % 60.3 % 63.5 %   Percentage of revenue from indirect marketing arrangements to total subscription revenue 29.0 % 39.7 % 31.8 % 40.7 %   Percentage of revenue from direct marketing arrangements to total subscription revenue   71.0     60.3     68.2     59.3     Total subscription revenue   100.0 %   100.0 %   100.0 %   100.0 %   Total revenue $ 77,015 $ 54,733 $ 271,723 $ 201,051 Revenue from transactional sales (8,120 ) (9,324 ) (35,349 ) (31,702 ) Revenue from lost/stolen credit card registry   (9 )   (20 )   (46 )   (81 ) Subscription revenue   68,886     45,389     236,328     169,268     Marketing and commissions 27,755 14,499 88,909 50,959 Commissions paid on transactional sales (2 ) (6 ) (13 ) (30 ) Commissions paid on lost/stolen credit card registry   (13 )   (9 )   (38 )   (31 ) Marketing and commissions associated with subscription revenue   27,740     14,484     88,858     50,898     Subscription revenue, net of marketing and commissions associated with subscription revenue $ 41,146   $ 30,905   $ 147,470   $ 118,370   * Percentage of cancellation within the first 90 days to new subscribers   ** Percentage of the number of subscribers at the beginning of the period plus new subscribers during the period less cancellations within the first 90 days   *** On a rolling 12 month basis by taking subscribers at the end of the period divided by the sum of the subscribers at the beginning of the period plus additions for the period INTERSECTIONS INC. OTHER DATA, continued (Unaudited)   Intersections Inc. Reconciliation of Non-GAAP Financial Measures (dollars in thousands, except for per subscriber information)   The table below includes financial information prepared in accordance with accounting principles generally accepted in the United States, or GAAP, as well as other financial measures referred to as non-GAAP financial measures. Consolidated EBITDA before stock based compensation is presented in a manner consistent with the way management evaluates operating results and which management believes is useful to investors and others. An explanation regarding the company's use of non-GAAP financial measures and a reconciliation of non-GAAP financial measures used by the company to GAAP measures is provided below. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, net income and the other information prepared in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.   (1) Consolidated EBITDA before stock based compensation, represents consolidated income before income taxes plus non-cash stock based compensation, depreciation and amortization, investment income (expense), and other income (expense). We believe that the consolidated EBITDA before stock based compensation calculation provides useful information to investors because they are indicators of our operating performance. Consolidated EBITDA before stock based compensation is commonly used as a basis for investors and analysts to evaluate and compare the periodic and future operating performance and value of companies within our industry. Our Board of Directors and management use consolidated EBITDA before stock based compensation to evaluate the operating performance of the company and to make compensation and bonus determinations, and our lenders use consolidated EBITDA before stock based compensation as a measure of our ability to make interest payments and to comply with our debt covenants. INTERSECTIONS INC. OTHER DATA, continued (Unaudited)     2006 For the Three Months Ended 2007 For the Three Months Ended   March 31   June 30   September 30   December 31 March 31   June 30   September 30   December 31 Consolidated EBITDA before stock based compensation Consolidated Income before income taxes $ 5,644 $ 4,709 $ 4,618 $ 890 $ 456 $ 1,733 $ 2,696 $ 4,859 Plus Stock Based Compensation 6 249 654 202 552 737 737 689 Plus Depreciation 2,002 2,215 2,307 2,137 2,147 2,301 2,222 2,411 Plus Amortization 85 101 589 582 586 839 911 1,010 Investment income (expense) (443 ) (530 ) 107 86 52 116 133 280 Other income (expense)   (1 )   (320 )   (2 )   150   42   (37 )   18   (1,162 ) Consolidated EBITDA before stock based compensation (1) $ 7,293 $ 6,424 $ 8,273 $ 4,047 $ 3,835 $ 5,689 $ 6,717 $ 8,087 The following table reconciles consolidated income before income taxes to consolidated EBITDA before stock based compensation, as defined for the previous eight quarters and year-to-date through December 31, 2006 and December 31, 2007. In managing our business, we analyze our performance quarterly on a consolidated income before income tax basis.   For the Year Ended December 31 2006   2007 Reconciliation from consolidated income before income taxes to consolidated EBITDA before stock based compensation Consolidated Income before income taxes $ 15,861 $ 9,744 Plus Stock Based Compensation 1,111 2,715 Plus Depreciation 8,661 9,081 Plus Amortization 1,357 3,346 Investment income (expense) (780 ) 581 Other income (expense)   (173 )   (1,139 ) Consolidated EBITDA before stock based compensation (1) $ 26,037 $ 24,328 INTERSECTIONS INC. OTHER DATA, continued (Unaudited)   (2) Net Amortization and stock based compensation per share is not a measurement under GAAP, may not be similar to net amortization and stock based compensation per share measures of other companies and should be considered in addition to, but not as a substitute for, the information contained in our statement of operations. We believe that net amortization and stock based compensation per share provides useful information to investors because it is an indicator of operating performance since it excludes items that are not directly attributable to ongoing business operations, as well as a non-cash stock based compensation expense that we are required to record under Statement of Financial Accounting Standards No. 123 (Revised 2004), "Share-Based Payment." We believe our net amortization and stock based compensation per share calculations are commonly used as some of the bases for investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies.   The following table provides the consolidated Net Amortization and Stock Based Compensation per Share amount:   2006   2007 For the Three Months Ended For the Three Months Ended March 31   June 30   September 30   December 31 March 31   June 30   September 30   December 31 Net amortization and stock based compensation per share Amortization $ 85 $ 101 $ 589 $ 582 $ 586 $ 839 $ 911 $ 1,010 Stock based compensation   6   249   654   202   552   737   737   689 Subtotal 91 350 1,243 784 1,138 1,576 1,648 1,699 Tax effect at 40%   36   140   497   314   455   630   659   680 Net amortization and stock based compensation 55 210 746 470 683 946 989 1,019 Diluted shares 17,234 17,524 17,855 17,809 17,400 17,558 17,560 17,544 Net amortization and stock based compensation per share (2) $ 0.00 $ 0.01 $ 0.04 $ 0.03 $ 0.04 $ 0.05 $ 0.06 $ 0.06 INTERSECTIONS INC. OTHER DATA, continued (Unaudited)       For the Year Ended December 31 2006   2007 Net amortization and stock based compensation per share Amortization $ 1,357 $ 3,346 Stock based compensation   1,111   2,715 Subtotal 2,468 6,061 Tax effect at 40%   987   2,424 Net amortization and stock based compensation 1,481 3,637 Diluted shares 17,606 17,479 Net amortization and stock based compensation per share (2) $ 0.08 $ 0.21 The following table provides components of Intersections' Consumer Products and Services (CPS) segment on a per ending subscriber per quarter basis:   2006   2007 For the Three Months Ended For the Three Months Ended March 31   June 30   September 30   December 31 March 31   June 30   September 30   December 31 Per Ending Subscriber per Quarter   Revenue $ 11.20 $ 10.49 $ 11.04 $ 10.36 $ 11.01 $ 11.81 $ 12.86 $ 13.21 Cost of revenue 3.95 3.91 3.68 3.71 4.12 4.14 4.52 4.21 Gross margin (4)(A) 7.26 6.58 7.35 6.65 6.89 7.66 8.35 9.00 Marketing 1.41 1.79 1.50 1.45 1.70 1.64 1.90 2.08 Commissions 1.64 1.20 1.71 1.68 2.06 2.51 2.83 3.19 Revenue less marketing and commissions (4)(B) 8.16 7.51 7.83 7.22 7.24 7.65 8.14 7.93 General and Administrative 2.36 2.24 2.61 2.69 2.35 2.30 2.18 2.10 Stock based compensation (0.00 ) (0.07 ) (0.15 ) (0.04 ) (0.12 ) (0.15 ) (0.15 ) (0.13 ) EBITDA before stock based compensation (4)(C) 1.85 1.42 1.69 0.87 0.90 1.36 1.59 1.75 INTERSECTIONS INC. OTHER DATA, continued (Unaudited)   Intersections Inc. Reconciliation of Non-GAAP Financial Measures (dollars in thousands, except for per subscriber information)   The table above includes financial information prepared in accordance with accounting principles generally accepted in the United States, or GAAP, as well as other financial measures referred to as non-GAAP financial measures. EBITDA before stock based compensation, CPS Gross margin per ending subscriber, CPS Revenue less marketing and commissions per ending subscriber and CPS EBITDA before stock based compensation per ending subscriber are non-GAAP financial measures that are presented in a manner consistent with the way management evaluates operating results, and which management believes is useful to investors and others. An explanation regarding the company's use of non-GAAP financial measures and a reconciliation of non-GAAP financial measures used by the company to GAAP measures is provided below. These non-GAAP financial measures should be considered in addition to, but not as a substitute for, net income and the other information prepared in accordance with GAAP, and may not be comparable to similarly titled measures reported by other companies.   (3) CPS earnings before interest, tax, depreciation and amortization, or EBITDA before stock based compensation, represents income before income taxes plus non-cash stock based compensation, depreciation and amortization, investment income (expense), and other income (expense) for the CPS segment. We believe that the EBITDA before stock based compensation calculation provides useful information to investors because they are indicators of our operating performance. EBITDA before stock based compensation is commonly used as a basis for investors and analysts to evaluate and compare the periodic and future operating performance and value of companies within our industry. Our Board of Directors and management use EBITDA before stock based compensation to evaluate the operating performance of the CPS segment and to make compensation and bonus determinations, and our lenders use EBITDA before stock based compensation as a measure of our ability to make interest payments and to comply with our debt covenants.   The following table reconciles income before income taxes to EBITDA before stock based compensation, as defined for the previous eight quarters and year-to-date through December 31, 2006 and December 31, 2007. In managing our business, we analyze the performance of our segments quarterly on an income before income tax basis.     INTERSECTIONS INC. OTHER DATA, continued (Unaudited)   2006 2007     For the Three Months Ended For the Three Months Ended             March 31 June 30 September 30 December 31 March 31 June 30 September 30 December 31   CPS reconciliation from income before income taxes to EBITDA before stock based compensation CPS Income before income taxes $ 5,448 $ 3,822 $ 3,945 $ 1,342 $ 1,141 $ 2,999 $ 4,278 $ 6,604 Stock based compensation 6 249 654 202 552 737 737 689 Plus Depreciation 1,920 2,108 2,141 1,916 1,954 2,079 1,982 2,129 Plus Amortization - - 460 460 460 714 713 713 Investment income (expense) (452 ) (532 ) 115 96 60 121 136 257 Other income (expense)   (1 )   (320 )   (4 )   9   41   (65 )   18   (1,194 ) EBITDA before stock based compensation (3) $ 6,921 $ 5,327 $ 7,311 $ 4,025 $ 4,208 $ 6,585 $ 7,864 $ 9,198   For the Year Ended December 31 2006   2007 CPS reconciliation from income before income taxes to EBITDA before stock based compensation CPS Income before income taxes $ 14,557 $ 15,022 Stock based compensation 1,111 2,715 Plus Depreciation 8,085 8,144 Plus Amortization 920 2,600 Investment income (expense) (773 ) 574 Other income (expense)   (316 )   (1,200 ) EBITDA before stock based compensation (3) $ 23,584 $ 27,855   INTERSECTIONS INC. OTHER DATA, continued (Unaudited)   (4) A. CPS gross margin per ending subscriber represents CPS revenue less cost of revenue divided by the ending number of subscribers. We believe this measure is important to investors because it demonstrates our profitability trend on a per subscriber basis and is one that we use in managing our CPS business because it demonstrates our profitability trend on a per subscriber basis. B. CPS Revenue less marketing and commissions per ending subscriber represents CPS revenue less marketing and commissions divided by the ending number of subscribers. We believe this measure is important to investors and is one that we use in managing our CPS business because it normalizes the effect of changes in the mix of direct and indirect marketing arrangements and it demonstrates our profitability trend on a per subscriber basis. C. CPS EBITDA before stock based compensation per ending subscriber represents CPS EBITDA before stock based compensation (defined in section (1) above) divided by the ending number of subscribers. We believe this measure is important to investors because it demonstrates our profitability trend on a per subscriber basis and is one that we use in managing our CPS business because it demonstrates our profitability trend on a per subscriber basis.     2006 2007   For the Three Months Ended For the Three Months Ended             March 31 June 30 September 30 December 31 March 31 June 30 September 30 December 31 A. CPS Gross Margin per Ending Subscriber Revenue $ 42,007 $ 39,273 $ 47,758 $ 47,903 $ 51,577 $ 57,251 $ 63,678 $ 69,462 Less Cost of Revenue   14,797   14,645   15,941   17,161   19,296   20,094   22,366   22,135 Gross Margin 27,210 24,628 31,817 30,742 32,281 37,157 41,312 47,327 Ending Subscribers 3,749 3,744 4,328 4,626 4,686 4,850 4,950 5,259 CPS Gross Margin per Ending Subscriber 7.26 6.58 7.35 6.65 6.89 7.66 8.35 9.00   B. CPS Revenue Less Marketing and Commissions per Ending Subscriber Revenue $ 42,007 $ 39,273 $ 47,758 $ 47,903 $ 51,577 $ 57,251 $ 63,678 $ 69,462 Less: Marketing 5,285 6,696 6,473 6,720 7,984 7,951 9,390 10,960 Commissions   6,143   4,475   7,389   7,779   9,642   12,195   13,992   16,795 Revenue Less Marketing and Commissions 30,579 28,102 33,896 33,404 33,951 37,105 40,296 41,707 Ending Subscribers 3,749 3,744 4,328 4,626 4,686 4,850 4,950 5,259 CPS Revenue Less Marketing and Commissions per Ending Subscriber 8.16 7.51 7.83 7.22 7.24 7.65 8.14 7.93   C. CPS EBITDA before stock based compensation per Ending Subscriber EBITDA before stock based compensation $ 6,921 $ 5,327 $ 7,311 $ 4,025 $ 4,208 $ 6,585 $ 7,864 $ 9,198 Ending Subscribers 3,749 3,744 4,328 4,626 4,686 4,850 4,950 5,259 CPS EBITDA before stock based compensation per Ending Subscriber 1.85 1.42 1.69 0.87 0.90 1.36 1.59 1.75   INTERSECTIONS INC. OTHER DATA, continued (Unaudited)   For the Year Ended December 31 2006   2007 A. CPS Gross Margin per Ending Subscriber Revenue $176,941 $241,968 Less Cost of Revenue 62,544 83,891 Gross Margin 114,397 158,077 Ending Subscribers 4,626 5,259 CPS Gross Margin per Ending Subscriber 24.73 30.06   B. CPS Revenue Less Marketing and Commissions per Ending Subscriber Revenue $176,941 $241,968 Less: Marketing 25,174 36,285 Commissions 25,786 52,624 Revenue Less Marketing and Commissions 125,981 153,059 Ending Subscribers 4,626 5,259 CPS Revenue Less Marketing and Commissions per Ending Subscriber 27.23 29.10   C. CPS EBITDA before stock based compensation per Ending Subscriber EBITDA before stock based compensation $23,584 $27,855 Ending Subscribers 4,626 5,259 CPS EBITDA before stock based compensation per Ending Subscriber 5.10 5.30