Frontdoor(US:FTDR)2021-05-05 16:00Financial Performance - For the three months ended March 31, 2021, the company generated revenue of $329 million, net income of $5 million, and Adjusted EBITDA of $36 million, compared to $294 million, $13 million, and $47 million for the same period in 2020[88]. - Revenue for the three months ended March 31, 2021, was $329 million, a 12% increase from $294 million in the same period of 2020[112]. - Net income decreased to $5 million, down 63% from $13 million in the prior year[126]. - Adjusted EBITDA was $36 million, a decline from $47 million in the same quarter of 2020[127]. Customer Metrics - 68% of the total operating revenue for Q1 2021 was derived from existing customer renewals, while 17% came from new home service plan sales related to existing home resale transactions, and 12% from direct-to-consumer sales[89]. - The company had over two million active home service plans across all 50 states and the District of Columbia as of March 31, 2021[87]. - The number of home service plans rose to 2.25 million, reflecting a 4% growth compared to 2.17 million in 2020[115]. - The company’s customer retention rate is calculated based on the ratio of ending home service plans to the sum of beginning plans, new sales, and acquired accounts[107]. Cost and Expenses - Cost of services rendered increased to $181 million, up from $147 million, primarily due to higher contract claims costs[116]. - Selling and administrative expenses rose to $118 million from $105 million, driven by increased marketing and customer service costs[117]. Cash Flow and Liquidity - Cash and cash equivalents totaled $538 million as of March 31, 2021, down from $597 million at the end of 2020[133]. - Available liquidity was $611 million, consisting of $363 million in cash not subject to third-party restrictions and $248 million of available borrowing capacity[133]. - Net cash provided from operating activities was $52 million for the three months ended March 31, 2021, a decrease of 13.3% compared to $60 million for the same period in 2020[142]. - Net cash used for investing activities increased to $7 million in Q1 2021 from $3 million in Q1 2020[144]. - Capital expenditures for Q1 2021 were $7 million, slightly down from $8 million in Q1 2020, with full-year expectations of $35 million to $45 million[145]. - Net cash used for financing activities surged to $105 million in Q1 2021 from $3 million in Q1 2020, primarily due to a $100 million partial repayment of the Term Loan Facility[147]. - Cash and cash equivalents decreased during Q1 2021, primarily due to the $100 million repayment of the Term Loan Facility[151]. - Accounts payable increased during Q1 2021, reflecting the timing of trade payables due to seasonality[151]. - Long-term debt decreased due to the repayment of $100 million of the Term Loan Facility[151]. Strategic Outlook - The COVID-19 pandemic adversely impacted the company's financial condition and results of operations in Q1 2021, leading to increased service-related costs due to higher usage of home systems and appliances[93]. - The company anticipates continued strategic acquisition opportunities in the fragmented home service plan category, focusing on underserved regions to enhance service capabilities[100]. - The company continues to monitor macroeconomic impacts on its business, particularly concerning potential impairments of goodwill and intangible assets[109]. Tax and Deferred Revenue - The effective tax rate decreased to 9.8% from 25.0% due to excess tax benefits for share-based awards[125]. - Deferred revenue increased by $45 million in Q1 2021, related to the recognition of monthly-pay customer revenue[151].