Intersections Inc. Reports Fourth Quarter and 2006 Results; Fourth Quarter Revenue Increases 27% and 2006 Full Year Revenue Increases 22% from 2005

Intersections Inc. (NASDAQ:INTX) today announced financial results for the quarter and year ended December 31, 2006. Revenue for the fourth quarter of 2006 was $54.7 million compared to $55.3 million for the third quarter of 2006 and $43.2 million for the quarter ended December 31, 2005. Revenue for the year ended December 31, 2006 increased 21.7 percent to $201.1 million compared to 2005 revenue of $165.2 million. Net income for the quarter ended December 31, 2006 was $639 thousand, compared to $2.6 million for the quarter ended September 30, 2006 and $4.0 million for the quarter ended December 31, 2005. Net income for the year ended December 31, 2006 was $9.4 million, compared to $12.5 million for the year ended December 31, 2005, a decrease of 24.3 percent. Diluted earnings per share ("EPS”) were $0.04 for the fourth quarter of 2006 and $0.54 for the year ended December 31, 2006, compared to $0.23 for the fourth quarter of 2005 and $0.70 for the year ended December 31, 2005. Fourth quarter and full year 2006 pre-tax earnings were impacted by several items during the fourth quarter: We incurred approximately $1.2 million in previously announced severance payments to former senior executives, plus an additional $300 thousand related to organizational consulting services related to these changes. We experienced an increase in the rate of credit card declines at one of our clients due to changes in the manner in which the client administers third party products, which resulted in a negative impact of approximately $1.4 million to pre tax income. This increase in decline rates occurred simultaneously with a systems conversion implementation at the client, and was originally believed to be the result of conversion errors. As a result, we continued providing service to these customers throughout the fourth quarter and into the beginning of 2007, while working with the client to investigate and address the causes of the increased decline rates. In the first quarter of 2007, we successfully collected approximately $490 thousand dollars in revenue by re-billing the impacted customers. We also expect to cancel service to approximately 250 to 300 thousand subscribers from this client, and have made adjustments to our going forward assumptions on credit card decline rates associated with this client. ”Despite the surprise we faced in the fourth quarter at a major client, we are pleased with our overall performance for the year in 2006. We delivered very strong revenue growth and continued strong cash flow generation while positioning the company for the future," said Chairman and Chief Executive Officer, Michael Stanfield. "We are especially pleased with the strategic moves we executed in 2006, including the acquisition of Chartered Marketing Services, Inc. the creation of our Screening International, LLC joint venture, the reorganization of our management team, the agreement on amendments or new contracts with our major clients and the addition of a major financial institution client. We believe we are well positioned to capitalize on opportunities in our markets to drive future revenue and earnings growth and shareholder value.” Our financial results include American Background Information Services, Inc. (ABI) for the period January 1, 2005 through May 30, 2006, and Screening International, LLC (SI), our joint venture that combined ABI with Control Risks Group Holdings Limited’s (CRG) background screening business, for the period May 31, 2006 through December 31, 2006. Our financial results also include Chartered Marketing Services, Inc. (CMSI), which we acquired on July 3, 2006. CMSI’s results are not separately reported. Financial highlights are as follows: Fourth Quarter 2006 Financial Highlights: Total subscribers for our Consumer Products and Services segment increased to approximately 4.63 million as of December 31, 2006, compared to approximately 3.66 million as of December 31, 2005, an increase of 26.4 percent. Subscriber additions in the fourth quarter of 2006 were approximately 861 thousand. Total revenue for the fourth quarter of 2006 was $54.7 million, including $6.8 million from SI, compared to $55.3 million, including $7.5 million from SI, for the third quarter of 2006, and $43.2 million for the fourth quarter of 2005, including $3.4 million from ABI. Subscription revenue, net of marketing and commissions associated with subscription revenue, decreased to $30.9 million for the fourth quarter of 2006 from $31.8 million for the third quarter of 2006, and increased from $27.7 million for the fourth quarter of 2005. 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, net of marketing and commissions associated with subscription revenue normalizes the effect of changes in the mix of indirect and direct marketing arrangements. Depreciation and amortization expense for the fourth quarter of 2006 was $2.7 million compared to $2.9 million for the third quarter of 2006 and $1.8 million for the fourth quarter of 2005. Income before income taxes and minority interest was $890 thousand for the fourth quarter of 2006, including a pre tax loss of $554 thousand for SI, compared to $4.6 million for the third quarter of 2006, including income before income taxes and minority interest of $570 thousand for SI, and $6.3 million including $273 thousand of income before income taxes and minority interest for ABI for the fourth quarter of 2005. Year End Results: Total revenue increased 21.7 percent to $201.1 million, for the year ended December 31, 2006, including $24.1 million from SI, from $165.2 million including $13.9 million from ABI, for the comparable period in 2005. Subscription revenue, net of marketing and commissions associated with subscription revenue, increased 15.3 percent to $118.4 million for the year ended December 31, 2006, from $102.6 million for the comparable period in 2005. Depreciation and amortization expense for the year ended December 31, 2006 was $10.0 million compared to $6.5 million for the year ended December 31, 2005. Income before income taxes and minority interest decreased 21.8 percent to $15.9 million for the year ended December 31, 2006, including $1.1 million from SI, from $20.2 million for the year ended December 31, 2005, including $971 thousand from ABI. Income before income taxes and minority interest for the year ended December 31, 2005 included a software impairment charge recognized during the first quarter of 2005 of approximately $1.5 million that was due primarily to the decision to revise our development approach for our small business product in an effort to accelerate its launch while reducing our overall investment in the project. Net income was $9.4 million, or $0.54 per diluted share, for the year ended December 31, 2006, compared to $12.5 million, or $0.70 per diluted share, for the year ended December 31, 2005. Cash flow provided by operations for the year ended December 31, 2006 was $17.9 million. Intersections’ quarter and year end December 31, 2006 results will be discussed in more detail on February 28, 2007 at 5:00 pm EST via teleconference. A live audio webcast will be available on Intersections’ Web site at www.intersections.com or www.fulldisclosure.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. Wednesday, February 28, through 11:59 p.m. Friday, March 2, 2007, at 888-286-8010, or if you are based internationally at, +1-617-801-6888 (Passcode: 28986718). 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 has no intention and 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 5 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, Chartered Marketing 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. 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)   2006  2005  2006  2005    Revenue $ 54,733  $ 43,219  $ 201,051  $ 165,171  Operating expenses: Marketing 6,720  5,025  25,173  19,646  Commissions 7,779  6,479  25,786  26,687  Cost of revenue 20,972  15,174  75,188  57,351  General and administrative 15,417  8,879  49,978  34,518  Depreciation and amortization 2,719  1,826  10,018  6,457  Impairment of software development —  —  —  1,515    Total operating expenses 53,607  37,383  186,143  146,174    Income from operations 1,126  5,836  14,908  18,997  Interest (expense)/income, net (86) 397  780  1,183  Other (expense)/income, net (150) 31  173  37    Income before income taxes and minority interest 890  6,264  15,861  20,217    Income tax expense (392) (2,268) (6,328) (7,747)   Income before minority interest 498  3,996  9,533  12,470    Minority Interest 141  —  (97) —    Net income $ 639  $ 3,996  $ 9,436  $ 12,470      Net income per basic share $ 0.04  $ 0.24  $ 0.56  $ 0.73    Net income per diluted share $ 0.04  $ 0.23  $ 0.54  $ 0.70    Weighted average common shares outstanding 16,843  16,776  16,770  17,002  Dilutive effect of common stock equivalents 966  644  836  813  Weighted average common shares outstanding – assuming dilution 17,809  17,420  17,606  17,815  INTERSECTIONS INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)   December 31, December 31, 2006  2005  (in thousands) ASSETS   CURRENT ASSETS: Cash and cash equivalents $ 15,580  $ 17,555  Short-term investments 10,453  34,087  Accounts receivable, net 22,369  14,746  Prepaid expenses and other current assets 5,241  3,071  Income tax receivable 2,113  —  Notes receivable 750  —  Deferred subscription solicitation costs 11,786  8,818  Total current assets 68,292  78,277    PROPERTY AND EQUIPMENT—Net 21,699  20,653  GOODWILL 66,663  16,741  INTANGIBLE ASSETS 12,388  1,325  OTHER ASSETS 10,425  6,191  TOTAL ASSETS $ 179,467  $123,187    LIABILITIES AND STOCKHOLDERS' EQUITY   CURRENT LIABILITIES: Note payable $ 3,333  $ —  Current obligations under capital leases 1,176  1,370  Accounts payable 5,193  3,863  Accrued expenses and other current liabilities 15,690  8,480  Accrued payroll and employee benefits 7,073  3,094  Commissions payable 1,194  1,966  Deferred revenue 5,292  3,888  Income tax payable —  1,116  Deferred tax liability 2,483  2,007  Total current liabilities 41,434  25,784    NOTE PAYABLE 11,667  —  OBLIGATIONS UNDER CAPITAL LEASES—Less current portion 1,637  2,797  OTHER LONG-TERM LIABILITIES 551  292  DEFERRED TAX LIABILITY 8,152  1,370    Minority Interest 11,450  —    STOCKHOLDERS' EQUITY:   Common stock 178  176  Additional paid-in capital 95,462  93,357  Treasury stock, 965,000 shares at cost (8,600) (8,600) Retained earnings 17,447  8,011  Accumulated other comprehensive loss 89  —    Total stockholders' equity 104,576  92,944    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 179,467  $ 123,187  INTERSECTIONS INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)   Year Ended December 31, 2006  2005  (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 9,436  $ 12,470  Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 10,113  6,457  Amortization of gain from sale leaseback (95) —  Loss on disposal of fixed asset 54  15  Minority interest 97  —  Amortization of debt issuance cost 31  —  Increase in allowance for doubtful accounts 33  19  Tax benefit of stock options exercised —  784  Deferred income tax 2,142  2,418  Stock based compensation 1,121  20  Amortization of deferred subscription solicitation costs 21,175  21,714  Impairment of software development costs —  1,515  Changes in assets and liabilities: Accounts receivable (3,998) (4,795) Prepaid expenses and other current assets 129  (294) Income tax receivable (2,341) —  Deferred subscription solicitation costs (20,583) (21,347) Other assets (4,085) (5,807) Accounts payable (2,154) 183  Accrued expenses and other current liabilities 3,921  1,969  Accrued payroll and employee benefits 2,932  888  Commissions payable (771) 34  Income tax payable (1,115) 1,116  Deferred revenue 1,403  197  Other long-term liabilities 452  41  Net cash provided by operating activities 17,897  17,597    NET CASH PROVIDED BY INVESTING ACTIVITIES: Net investments sold 23,634  6,084  Investment - Screening International 1,710  —  Investment – Chartered Marketing Services Incorporated (50,609) —  Acquisition of property and equipment (8,331) (10,552) Proceeds from sale leaseback —  1,243  Net cash used in investing activities (33,596) (3,225)   NET CASH PROVIDED BY FINANCING ACTIVITIES: Options exercised 471  1,143  Tax benefit of stock options exercised 514  —  Proceeds from note 15,000  —  Capital lease payments (1,391) (1,387) Note receivable (750) —  Debt issuance costs (261) —  Repurchase of treasury stock —  (8,600)   Net cash provided by (used in) financing activities 13,583  (8,844)   EFFECT OF EXCHANGE RATE ON CASH 141  —    (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,975) 5,528  CASH AND CASH EQUIVALENTS—Beginning of period 17,555  12,027  CASH AND CASH EQUIVALENTS—End of period $ 15,580  $ 17,555  INTERSECTIONS INC. OTHER DATA (Unaudited)   Three Months Ended Year Ended December 31, December 31, (dollars in thousands)   2006  2005  2006  2005    Subscribers at beginning of period 4,327,739  3,413,299  3,659,975  2,885,223  New subscribers – indirect 583,657  620,776  2,459,032  2,180,964  New subscribers – direct 276,902  149,173  1,168,002  700,297  Cancelled subscribers within first 90 days of subscription 204,744  188,217  887,629  845,522  Cancelled subscribers after first 90 days of subscription 357,723  335,056  1,773,549  1,260,987  Subscribers at end of period 4,625,831  3,659,975  4,625,831  3,659,975    Indirect subscribers 68.8% 67.5% 68.8% 67.5% Direct subscribers 31.2  32.5  30.2  32.5  100.0% 100.0% 100.0% 100.0%   *Cancellations within first 90 days of subscription 23.8% 24.4% 21.9% 27.6% **Cancellations after first 90 days of subscription 27.7% 25.9% 27.7% 25.9%   ***Overall retention 63.5% 63.5% 63.5% 63.5%   Percentage of revenue from indirect marketing arrangements to total subscription revenue 39.7% 36.6% 40.7% 33.8%   Percentage of revenue from direct marketing arrangements to total subscription revenue 60.3  63.4  59.3  66.2    Total subscription revenue 100.0% 100.0% 100.0% 100.0%   Total revenue $ 54,733  $ 43,219  $201,051  $ 165,171  Revenue from transactional sales (9,324) (4,014) (31,702) (16,263) Revenue from lost/stolen credit card registry (20) (20) (81) (77) Subscription revenue 45,389  39,185  169,268  148,831    Marketing and commissions 14,499  11,504  50,959  46,333  Commissions paid on transactional sales (6) (21) (30) (105) Commissions paid on lost/stolen credit card registry (9) (6) (31) (36) Marketing and commissions associated with subscription revenue 14,484  11,477  50,898  46,192    Subscription revenue, net of marketing and commissions associated with subscription revenue $ 30,905  $ 27,708  $ 118,370  $ 102,639  * Percentage of cancellation with in 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