LOCK Lifelock, Inc. (delisted)

Recorded the 43rd consecutive quarter of sequential growth in revenue and cumulative ending members

Fiscal year adjusted net income per diluted share was up 31% year over year

Cumulative ending members of approximately 4.2 million, up 16% year-over-year

LifeLock, Inc. (NYSE: LOCK), an industry leader in identity theft protection, today announced financial results for the fourth quarter ended December 31, 2015.

Fourth Quarter 2015 Financial Highlights:

• Revenue: Total revenue was $156.2 million for the fourth quarter of 2015, up 20% from $129.7 million for the fourth quarter of 2014. Consumer revenue was $148.3 million for the fourth quarter of 2015, up 21% from $122.7 million for the fourth quarter of 2014. Enterprise revenue was $7.9 million for the fourth quarter of 2015, up 13% from $6.9 million for the fourth quarter of 2014.
• Net income: Net income was $21.7 million for the fourth quarter of 2015, compared with net income of $2.8 million for the fourth quarter of 2014, which included $20.0 million related to a potential settlement with the FTC which was partially offset by a $5.0 million legal settlement in our favor resulting from indemnification claims we previously made with respect to our Lemon acquisition. Net income per diluted share was $0.22 for the fourth quarter of 2015 based on 100.9 million weighted-average shares outstanding, compared with net income per diluted share of $0.03 for the fourth quarter of 2014 based on 99.6 million weighted-average shares outstanding.
• Adjusted Net Income*: Adjusted net income was $30.5 million for the fourth quarter of 2015, compared with adjusted net income of $27.7 million for the fourth quarter of 2014. Adjusted net income per diluted share was $0.30 for the fourth quarter of 2015 based on 100.9 million weighted-average shares outstanding, compared with adjusted net income per diluted share of $0.28 for the fourth quarter of 2014 based on 99.6 million weighted-average shares outstanding.
• Adjusted EBITDA*: Adjusted EBITDA was $33.0 million for the fourth quarter of 2015, compared with $30.2 million for the fourth quarter of 2014.
• Cash Flow: Net cash used in operations was $79.5 million for the fourth quarter of 2015, leading to free cash flow* of $21.2 million after taking into consideration the $100.0 million settlement payment made to settle actions brought by the FTC and a nationwide consumer class action, $5.1 million of capital expenditures, and $5.8 million of payments for expenses incurred in connection with the litigation surrounding the actions mentioned above. This compares with cash flow from operations of $37.0 million and free cash flow of $28.6 million, after taking into consideration $3.4 million of capital expenditures and the $5.0 million received from the legal settlement resulting from indemnification claims we previously made with respect to our Lemon acquisition, for the fourth quarter of 2014.
• Balance Sheet: Total cash and marketable securities at the end of the fourth quarter of 2015 was $246.7 million, down from $332.2 million at the end of the third quarter of 2015, primarily as a result of the $100.0 million settlement paid to the FTC and the nationwide consumer class action.

* A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures."

“LifeLock delivered its 43rd consecutive quarter of sequential growth in both revenue and cumulative ending members in the fourth quarter, despite the headwinds from the FTC litigation, which has now been resolved," Todd Davis said. “A major highlight was our best-ever quarter in the employee benefits channel, which contributed to an 18% increase in gross new members.”

“In January, we announced that Hilary Schneider will succeed me as CEO effective March 1st. With her leadership skills, technology expertise and clear vision for our company, there is no one I trust more to build on all we have achieved to date. I know LifeLock has a tremendous future ahead.”

Hilary Schneider said, “Our ability to deliver solid growth in a challenging quarter gives me great confidence in the future of LifeLock. We continued to expand our product offerings and build out our operations to enhance our position as the most trusted identity theft solution provider in the industry. Our products are more important than ever, and we are ideally situated to pioneer the next generation of advanced tools that consumers need to not only protect their identities, but to also manage them. I look forward to working with the fantastic team at LifeLock to seize this great opportunity.”

LifeLock also announced that it intends to enter into an accelerated share repurchase agreement, or ASR, to repurchase $50 million of LifeLock’s common stock and continues to expect that it will complete the full $100 million repurchase program announced in November 2015 by the end of calendar 2016.

Fourth Quarter 2015 & Recent Business Highlights:

• Hilary Schneider, the company’s president, will succeed Todd Davis as chief executive officer, effective March 1, 2016, and Roy Guthrie, the company’s lead director, will become independent chairman. Mr. Davis will continue with the Company as executive vice chairman.
• Recorded the 43rd consecutive quarter of sequential growth in revenue and cumulative ending members.
• Added approximately 296,000 gross new members in the fourth quarter of 2015 and ended the quarter with approximately 4.2 million members.
• Increased monthly average revenue per member to $11.97 for the fourth quarter of 2015 from $11.43 for the fourth quarter of 2014.

Fiscal Year 2015 Financial Highlights:

• Revenue: Total revenue was $587.5 million for the fiscal year 2015, up 23% from $476.0 million for the fiscal year 2014. Consumer revenue was $559.5 million for the fiscal year 2015, up 25% from $449.2 million for the fiscal year 2014. Enterprise revenue was $28.0 million for the fiscal year 2015, up 4% from $26.8 million for the fiscal year 2014.
• Net income (loss): Net loss was $52.0 million for the fiscal year 2015, which included a pre-tax charge of $96.0 million related to a settlement with the FTC, a nationwide consumer class action suit, and a potential settlement with certain states' attorneys general, compared with net income of $2.5 million for the fiscal year 2014, which included $20.0 million related to a potential settlement with the FTC which was partially offset by a $5.0 million legal settlement in our favor resulting from indemnification claims we previously made with respect to our Lemon acquisition. Net loss per diluted share was $0.55 for the fiscal year 2015 based on 94.9 million weighted-average shares outstanding, compared with net income per diluted share of $0.03 for the fiscal year 2014 based on 99.1 million weighted-average shares outstanding.
• Adjusted Net Income*: Adjusted net income was $62.8 million for the fiscal year 2015, compared with adjusted net income of $47.1 million for the fiscal year 2014. Adjusted net income per diluted share was $0.63 for the fiscal year 2015 based on 100.2 million weighted-average shares outstanding, compared with adjusted net income per diluted share of $0.48 for the fiscal year 2014 based on 99.1 million weighted-average shares outstanding.
• Adjusted EBITDA*: Adjusted EBITDA was $72.3 million for the fiscal year 2015, compared with $55.5 million for the fiscal year 2014.
• Cash Flow: Net cash used in operations was $3.8 million for the fiscal year 2015, leading to free cash flow* of $89.5 million after taking into consideration the $100.0 million settlement payment made to resolve actions brought by the FTC and a nationwide consumer class action, $14.2 million of capital expenditures, and $7.5 million of payments for expenses incurred in connection with the litigation surrounding the actions mentioned above. This compares with cash flow from operations of $109.2 million and free cash flow of $89.6 million, after taking into consideration $14.6 million of capital expenditures and the $5.0 million received from the legal settlement resulting from indemnification claims we previously made with respect to our Lemon acquisition, for the fiscal year 2014.

Guidance:

As of February 10, 2016, we are initiating guidance for our first quarter of 2016 as well as the full year 2016.

• First Quarter 2016 Guidance: Total revenue is expected to be in the range of $156 million to $158 million. Adjusted net loss per share is expected to be in the range of $0.08 to $0.07 based on approximately 95 million basic weighted-average shares outstanding. Adjusted EBITDA is expected to be in the range of $(4) million to $(3) million.
• Full Year 2016 Guidance: Total revenue is expected to be in the range of $660 million to $670 million. Adjusted net income per diluted share is expected to be in the range of $0.71 to $0.76 based on approximately 100 million fully diluted weighted-average shares outstanding and a cash tax rate of 3%. Adjusted EBITDA is expected to be in the range of $83 million to $88 million. Free cash flow is expected to be in the range of $93 million to $98 million.

Conference Call Details:

• What: LifeLock fourth quarter 2015 financial results.
• When: Wednesday, February 10, 2016 at 2PM PT (5PM ET).
• Dial in: To access the call in the United States, please dial (877) 407-3982, and for international callers dial (201) 493-6780. Callers may provide confirmation number 13627938 to access the call more quickly, and are encouraged to dial into the call 10 to 15 minutes prior to the start to prevent any delay in joining.
• Webcast: http://investor.lifelock.com/ (live and replay)
• Replay: A replay of the call will be available via telephone for seven days, beginning two hours after the call. To listen to the telephone replay in the United States, please dial (877) 870-5176, and for international callers dial (858) 384-5517 and enter access code 13627938.

About LifeLock

LifeLock, Inc. (NYSE:LOCK) is a leading provider of proactive identity theft protection services for consumers and consumer risk management services for enterprises. LifeLock’s threat detection, proactive identity alerts, and comprehensive remediation services help provide peace of mind for consumers amid the growing threat of identity theft. Leveraging unique data, science and patented technology from ID Analytics, LLC, a wholly owned subsidiary, LifeLock offers identity theft protection that goes significantly beyond credit monitoring. As part of its commitment to help fight identity theft, LifeLock works to train law enforcement and partners with a variety of non-profit organizations to help consumers establish positive habits to combat this threat.

Forward-Looking Statements

This press release contains “forward-looking” statements, as that term is defined under the federal securities laws, including statements regarding our expected total revenue, profitability, long-term growth prospects, business performance expectations, succession plan, adjusted net income per diluted share, adjusted EBITDA, free cash flow for the first quarter of 2016 and for fiscal year 2016, and the final resolution of the FTC and consumer class action matters, along with a potential settlement with certain states' attorneys general for related claims. These forward-looking statements are based on our current assumptions, expectations, and beliefs and are subject to substantial risks, uncertainties, assumptions, and changes in circumstances that may cause our actual results, performance, or achievements to differ materially from those expressed or implied in any forward-looking statement.

The risks and uncertainties referred to above include, but are not limited to, risks associated with our ability to maintain profitability on an annual basis; our ability to protect our customers’ confidential information; our ability to maintain and enhance our brand recognition and reputation; the competitive nature of the industries in which we conduct our business; our ability to retain our existing customers and attract new customers; our ability to improve our services and develop and introduce new services with broad appeal; our ability to maintain existing and secure new relationships with strategic partners; regulatory compliance; and other “Risk Factors” set forth in our most recent SEC filings.

Further information on these and other factors that could affect our financial results and the forward-looking statements in this press release is included in our SEC filings, including our Annual Report on Form 10-K for the year ended December 31, 2014, particularly under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Forms 10-Q. Copies of these documents are available on our Investor Relations website at http://investor.lifelock.com/ or the SEC's website at www.sec.gov.

We assume no obligation and do not intend to update these forward-looking statements, except as required by law.

Non-GAAP Financial Measures

Our reported results include certain non-GAAP financial measures, including adjusted net income, adjusted net income per diluted share, adjusted EBITDA, and free cash flow. We calculate adjusted net income as net income (loss) excluding amortization of acquired intangible assets, share-based compensation, income tax benefits and expenses resulting from changes in our deferred tax assets, and acquisition related expenses. We calculate adjusted net income per diluted share by dividing our adjusted net income by the weighted-average diluted shares outstanding. We calculate adjusted EBITDA as net income (loss) excluding depreciation and amortization, share-based compensation, interest expense, interest income, other income (expense), income tax (benefit) expense, and acquisition related expenses. For the fourth quarters and the years ended December 31, 2015, and 2014 we have also excluded from adjusted net income and adjusted EBITDA the impact of the legal reserve for the settlements with the FTC and a nationwide class of consumers, along with a possible settlement with certain states' attorneys general for related claims. We have also excluded expenses related to the FTC litigation. For the fourth quarter and full year 2014, we have also subtracted the $5 million positive legal settlement resulting from indemnification claims we previously made with respect to our Lemon acquisition. We define free cash flow as net cash provided by operating activities less net cash used in investing activities for acquisitions of property and equipment. For the fourth quarter and full year 2015, we have added back to net cash provided by (used in) operating activities the $100.0 million we paid in the settlement agreement with the FTC and cash paid for expenses related to the FTC litigation. For the fourth quarter and full year 2014, we have also subtracted from net cash provided by operating activities the $5.0 million received from the legal settlement resulting from indemnification claims we previously made with respect to our Lemon acquisition.

We have included adjusted net income, adjusted net income per diluted share, and adjusted EBITDA in this press release because they are key measures used by us to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating adjusted net income and adjusted EBITDA can provide a useful measure for period-to-period comparisons of our core business. Additionally, adjusted EBITDA is a key financial measure used in determining management’s incentive compensation.

We have included free cash flow in this press release because we believe it typically presents a more conservative measure of cash flow as purchases of property and equipment are necessary components of ongoing operations. We believe that this non-GAAP financial measure is useful in evaluating our business because free cash flow reflects the cash surplus available to fund the expansion of our business after payment of capital expenditures relating to the necessary components of ongoing operations. We also believe that the use of free cash flow provides consistency and comparability with our past financial performance, facilitates period-to-period comparisons of operations, and also facilitates comparisons with other companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Although adjusted net income, adjusted EBITDA, and free cash flow are frequently used by investors in their evaluations of companies, these non-GAAP financial measures have limitations as analytical tools and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered alongside other financial performance measures.

We have not reconciled adjusted net income per diluted share guidance to net income (loss) per diluted share guidance or adjusted EBITDA guidance to net income (loss) guidance because we do not provide guidance for share-based compensation expense, provision for income taxes, interest income, interest expense, change in fair value of warrant liabilities, change in fair value of embedded derivatives, other income and expenses, depreciation expense, amortization of intangible assets, acquisition expenses, legal reserves and settlements, or income tax (benefit) expense, which are reconciling items between net income (loss) and adjusted net income and net income (loss) and adjusted EBITDA. As items that impact net income (loss) are out of our control and/or cannot be reasonably predicted, we are unable to provide such guidance. Accordingly, reconciliation to net income (loss) is not available without unreasonable effort. For a reconciliation of historical non-GAAP financial measures to the nearest comparable GAAP measures, see the reconciliation tables included in this press release.

LifeLock, Inc. Condensed Consolidated Statements of Operations (in thousands, except per share amounts) (Unaudited)            

Three Months EndedDecember 31,

Year EndedDecember 31,

2015     2014 2015     2014 Revenue: Consumer revenue $ 148,289 $ 122,745 $ 559,467 $ 449,193 Enterprise revenue 7,863   6,941   28,002   26,823   Total revenue 156,152 129,686 587,469 476,016 Cost of services 33,886   30,747   137,356   120,422   Gross profit 122,266 98,939 450,113 355,594 Costs and expenses: Sales and marketing 63,919 47,274 273,389 213,984 Technology and development 16,187 12,977 69,115 50,973 General and administrative 22,444 30,184 183,259 75,673 Amortization of acquired intangible assets 2,852   2,205   9,103   8,898   Total costs and expenses 105,402   92,640   534,866   349,528   Income (loss) from operations 16,864 6,299 (84,753 ) 6,066 Other income (expense): Interest expense (106 ) (89 ) (371 ) (353 ) Interest income 272 92 770 281 Other (6 ) 14   (189 ) (137 ) Total other income (expense) 160   17   210   (209 ) Income (loss) before provision for income taxes 17,024 6,316 (84,543 ) 5,857 Income tax (benefit) expense (4,723 ) 3,478   (32,507 ) 3,362   Net income (loss) $ 21,747   $ 2,838   $ (52,036 ) $ 2,495   Net income available (loss attributable) per share to common stockholders: Basic $ 0.23 $ 0.03 $ (0.55 ) $ 0.03 Diluted $ 0.22 $ 0.03 $ (0.55 ) $ 0.03 Weighted-average common shares outstanding: Basic 95,471 93,614 94,897 92,733 Diluted 100,927 99,629 94,897 99,102 LifeLock, Inc. Condensed Consolidated Balance Sheets (in thousands) (Unaudited)           December 31, December 31, 2015 2014

Assets

Current assets: Cash and cash equivalents $ 50,239 $ 146,569 Marketable securities 196,474 127,305 Trade and other receivables, net 13,974 10,220 Deferred tax assets, net — 21,243

Prepaid expenses and other current assets

12,304   7,841   Total current assets 272,991 313,178 Property and equipment, net 30,485 24,204 Goodwill 172,087 159,342 Intangible assets, net 30,174 38,315 Deferred tax assets, net - non-current 76,456 22,494 Other non-current assets 9,710   5,783   Total assets $ 591,903   $ 563,316   Liabilities and stockholders' equity Current liabilities: Accounts payable $ 24,747 $ 11,543 Accrued expenses and other liabilities 76,338 67,025 Deferred revenue 166,403   145,206   Total current liabilities 267,488 223,774 Other non-current liabilities 7,382   6,706   Total liabilities 274,870 230,480 Commitments and contingencies Stockholders' equity: Common stock 96 94 Additional paid-in capital 532,388 495,912 Accumulated other comprehensive loss (361 ) (116 ) Accumulated deficit (215,090 ) (163,054 ) Total stockholders' equity 317,033   332,836   Total liabilities and stockholders' equity $ 591,903   $ 563,316   LifeLock, Inc. Condensed Consolidated Statements of Cash Flows (in thousands) (Unaudited)       Year Ended December 31, 2015     2014 Operating activities Net income (loss) $ (52,036 ) $ 2,495 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 18,674 16,266 Share-based compensation 27,204 18,147 Provision for doubtful accounts 209 346 Amortization of premiums on marketable securities 3,034 1,889 Deferred income tax benefit (32,667 ) 2,592 Other 260 126 Change in operating assets and liabilities: Trade and other receivables (7,648 ) (933 ) Prepaid expenses and other current assets (4,463 ) (880 ) Other non-current assets 389 280 Accounts payable 12,471 9,029 Accrued expenses and other liabilities 8,890 31,655 Deferred revenue 21,197 26,100 Other non-current liabilities 676   2,066   Net cash provided by (used in) operating activities (3,810 ) 109,178 Investing activities Acquisition of businesses, net of cash acquired (12,797 ) — Acquisition of property and equipment (14,156 ) (14,574 ) Acquisition of intangible assets (925 ) — Purchases of marketable securities (225,232 ) (135,178 ) Sale and maturities of marketable securities 156,230 56,060 Premiums paid for company-owned life insurance policies (4,337 ) (4,337 ) Net cash used in investing activities (101,217 ) (98,029 ) Financing activities Proceeds from share-based compensation plans 11,787 12,241 Proceeds from warrant exercises — 375 Payments for employee tax withholdings related to restricted stock units and awards (2,905 ) (1,107 ) Payments of debt issuance costs (185 ) —   Net cash provided by financing activities 8,697   11,509   Net increase (decrease) in cash and cash equivalents (96,330 ) 22,658 Cash and cash equivalents at beginning of year 146,569   123,911   Cash and cash equivalents at end of year $ 50,239   $ 146,569   Share-Based Compensation (in thousands) (Unaudited)            

Three Months EndedDecember 31,

Year EndedDecember 31,

2015     2014 2015     2014 Costs of services $ 473 $ 348 $ 1,759 $ 1,258 Sales and marketing 1,402 915 4,787 3,150 Technology and development 939 1,305 7,165 5,074 General and administrative 4,103   2,350   13,493   8,665 Total share-based compensation expense $ 6,917   $ 4,918   $ 27,204   $ 18,147 Key Financial and Operating Metrics (in thousands except percentages and per member data) (Unaudited)            

Three Months EndedDecember 31,

Year EndedDecember 31,

2015     2014 2015   2014 Revenue: Consumer revenue $ 148,289 $ 122,745 $ 559,467 $ 449,193 Enterprise revenue 7,863   6,941   28,002   26,823   Total revenue $ 156,152 $ 129,686 $ 587,469 $ 476,016 Adjusted net income $ 30,472 $ 27,677 $ 62,795 $ 47,132 Adjusted EBITDA $ 33,002 $ 30,224 $ 72,316 $ 55,479 Free cash flow $ 21,189 $ 28,600 $ 89,490 $ 89,604 Cumulative ending members 4,198 3,633 4,198 3,633 Gross new members 296 252 1,284 1,164 Member retention rate 86.5 % 87.7 % 86.5 % 87.7 % Average cost of acquisition per member $ 203 $ 174 $ 203 $ 173 Monthly average revenue per member $ 11.97 $ 11.43 $ 11.76 $ 11.13 Enterprise transactions 78,233 71,525 286,556 244,885 Reconciliation of GAAP to Adjusted Results (in thousands, except per share amounts) (Unaudited)            

Three Months EndedDecember 31,

Year EndedDecember 31,

2015     2014 2015     2014 Reconciliation of Gross Profit to Adjusted Gross Profit Gross profit $ 122,266 $ 98,939 $ 450,113 $ 355,594 Share-based compensation 473   348   1,759   1,258   Adjusted gross profit $ 122,739   $ 99,287   $ 451,872   $ 356,852   Reconciliation of Sales and Marketing Expenses to Adjusted Sales and Marketing Expenses Sales and marketing expenses $ 63,919 $ 47,274 $ 273,389 $ 213,984 Share-based compensation (1,402 ) (915 ) (4,787 ) (3,150 ) Adjusted sales and marketing expenses $ 62,517   $ 46,359   $ 268,602   $ 210,834   Reconciliation of Technology and Development Expenses to Adjusted Technology and Development Expenses Technology and development expenses $ 16,187 $ 12,977 $ 69,115 $ 50,973 Share-based compensation (939 ) (1,305 ) (7,165 ) (5,074 ) Acquisition related expenses —   —   (2,970 ) —   Adjusted technology and development expenses $ 15,248   $ 11,672   $ 58,980   $ 45,899   Reconciliation of General and Administrative Expenses to Adjusted General and Administrative Expenses General and administrative expenses $ 22,444 $ 30,184 $ 183,259 $ 75,673 Share-based compensation (4,103 ) (2,350 ) (13,493 ) (8,665 ) Legal reserves and settlements — (15,000 ) (98,500 ) (15,000 ) Expenses related to the FTC litigation (3,839 ) — (9,572 ) — Acquisition related expenses —   —     (149 ) —   Adjusted general and administrative expenses $ 14,502   $ 12,834   $ 61,545   $ 52,008   Reconciliation of Income (Loss) from Operations to Adjusted Income from Operations Income (loss) from operations $ 16,864 $ 6,299 $ (84,753 ) $ 6,066 Share-based compensation 6,917 4,918 27,204 18,147 Amortization of acquired intangible assets 2,852 2,205 9,103 8,898 Legal reserves and settlements — 15,000 98,500 15,000 Expenses related to the FTC litigation 3,839 — 9,572 — Acquisition related expenses —   —   3,119   —   Adjusted income from operations $ 30,472   $ 28,422   $ 62,745   $ 48,111   Reconciliation of Net Income (Loss) to Adjusted Net Income Net income (loss) $ 21,747 $ 2,838 $ (52,036 ) $ 2,495 Amortization of acquired intangible assets 2,852 2,205 9,103 8,898 Share-based compensation 6,917 4,918 27,204 18,147 Deferred income tax (benefit) expense (4,883 ) 2,716 (32,667 ) 2,592 Legal reserves and settlements — 15,000 98,500 15,000 Expenses related to the FTC litigation 3,839 — 9,572 — Acquisition related expenses —   —   3,119   —   Adjusted net income $ 30,472   $ 27,677   $ 62,795   $ 47,132        

Three Months EndedDecember 31,

     

Year Ended December 31,

2015     2014 2015     2014 Reconciliation of Diluted Shares to Adjusted Diluted Shares Diluted shares 100,927 99,629 94,897 99,102 Dilutive securities excluded due to net loss —   —   5,282   —   Adjusted diluted shares 100,927   99,629   100,179   99,102   Reconciliation of Net Income (Loss) per Diluted Share to Adjusted Net Income per Diluted Share Net income (loss) per diluted share $ 0.22 $ 0.03 $ (0.55 ) $ 0.03 Adjustments to net income (loss) 0.08 0.25 1.15 0.45 Adjustments to diluted shares —   —   0.03   —   Adjusted net income per diluted share $ 0.30   $ 0.28   $ 0.63   $ 0.48   Reconciliation of Net Income (Loss) to Adjusted EBITDA Net income (loss) $ 21,747 $ 2,838 $ (52,036 ) $ 2,495 Depreciation and amortization 5,382 4,007 18,674 16,266 Share-based compensation 6,917 4,918 27,204 18,147 Interest expense 106 89 371 353 Interest income (272 ) (92 ) (770 ) (281 ) Other 6 (14 ) 189 137 Income tax (benefit) expense (4,723 ) 3,478 (32,507 ) 3,362 Legal reserves and settlements — 15,000 98,500 15,000 Expenses related to the FTC litigation 3,839 — 9,572 — Acquisition related expenses —   —   3,119   —   Adjusted EBITDA $ 33,002   $ 30,224   $ 72,316   $ 55,479   Reconciliation of Net Cash Provided by (Used in) Operating Activities to Free Cash Flow Net cash provided by (used in) operating activities $ (79,532 ) $ 37,047 $ (3,810 ) $ 109,178 Acquisitions of property and equipment (5,098 ) (3,447 ) (14,156 ) (14,574 ) Legal settlements 100,000 (5,000 ) 100,000 (5,000 ) Expenses related to the FTC litigation 5,819   —   7,456   —   Free cash flow $ 21,189   $ 28,600   $ 89,490   $ 89,604  

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LifeLock, Inc.Media Contact:Kelley Bonsall, 480-457-2170Media@lifelock.comorInvestor Relations Contact:Jamison Manwaring, 480-457-5000VP, Investor RelationsInvestor.relations@lifelock.com