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): March 31, 2020

frontdoor, inc.

(Exact name of registrant as specified in its charter)

Delaware	001-38617	82-3871179
(State or other jurisdiction<br> <br>of incorporation)	(Commission<br> <br>File Number)	(IRS Employer<br> <br>Identification No.)
150 Peabody Place, Memphis, Tennessee	38103
---	---
(Address of principal executive offices)	(Zip Code)

(901) 701-5002

(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))
---	---

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading<br> <br>Symbol(s)	Name of each exchange<br> <br>on which registered
Common stock, par value $0.01 per share	FTDR	NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 7.01.	Regulation FD Disclosure.

On March 31, 2020, frontdoor, inc. (the “Company”) issued a press release announcing its response to the COVID-19 outbreak. We expect to provide further information regarding the impact of the virus on our business during our first quarter 2020 earnings call based on information available to us at that time. The full text of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), all of which are subject to the cautionary statements about forward-looking statements set forth therein.

The information contained in this Current Report on Form 8-K, including the text of the press release attached as Exhibit 99.1, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01	Financial Statements and Exhibits.

(d) Exhibits.

Exhibit <br>No.		Description of Exhibit
	99.1	Press Release of frontdoor, inc., dated March 31, 2020
	104	The cover page from this Current Report on Form 8-K, formatted in Inline XBRL

SIGNATURE

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.

Dated: March 31, 2020	FRONTDOOR, INC.
	By:	/s/ Brian K. Turcotte
	Name:	Brian K. Turcotte
	Title:	Senior Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

Frontdoor Provides Update on COVID-19 Business Response andReiterates

Strong Financial Position

MEMPHIS, TENN. — March 31, 2020 — Frontdoor, Inc. (NASDAQ: FTDR), the nation’s leading provider of home service plans, today provided an update on its COVID-19 business response as well as reiterated the Company’s strong financial position.

“First, our thoughts are with those impacted by COVID-19 and the first responders assisting those in need,” said Chief Executive Officer Rex Tibbens. “We are taking unprecedented steps at Frontdoor to protect the well-being of our employees, customers and contractors, and are responding to the real-time needs of the business. I am extremely proud of our team’s effort to make substantial changes in a very short timeframe, and we will do our part to continue providing essential home services to our customers.”

“Frontdoor is in a strong financial position,” said Chief Financial Officer Brian Turcotte. “We have a significant amount of liquidity in the form of cash and an untapped revolver. We believe our business is well-positioned to successfully navigate this challenging economic environment.”

The Company has taken the following actions over the last several weeks in response to COVID-19:

•	Established Cross-Functional Business Continuity Team:
•	This core team actively monitors national and local developments and emerging issues, deploys coordinated and<br>strategic real-time responses to address the needs of employees, customers and contractors, and ensures ongoing operational efficiency during this time.
---	---
•	Changing How Associates Work:
---	---
•	The Company has fully transitioned all of its contact center agents to work remotely from their homes, ensuring<br>uninterrupted customer service.
---	---
•	All other campuses, including its Memphis corporate headquarters, Denver technology center, India technology<br>center and the Streem office in Portland, are also working remotely.
---	---
•	Increased Customer Communications:
---	---
•	The Company’s contractor network has been designated by the U.S. Department of Homeland Security as<br>“Essential Critical Infrastructure Workers” during the COVID-19 response and has consistently been deemed “essential” by state and local governments. As of today, the Company does not<br>foresee significant disruption to our ability to provide services to our customers.
---	---
•	Managing customer responses on a<br>case-by-case basis, and actions may vary by location.
---	---
•	Established a special hotline to address virus-related concerns and handle the most critical service requests<br>first.
---	---
•	Increased customer communication and implemented safety screening protocols during the claim initiation and<br>service delivery process.
---	---
•	Increased Contractor Education and Communication:
---	---
•	Providing ongoing communication to contractors to enable them to operate within CDC guidelines and help ensure<br>the health and safety of their employees, as well as our customers.
---	---
•	Leveraging CDC recommendations to increase customer and technician screening for<br>COVID-19.
---	---
•	Because the contractor network provides essential services, it is generally operating normally despite varying<br>state and local conditions.
---	---
•	The Company introduced its Streem technology platform to its contractors at no cost during this time, enabling<br>social distancing for customers and contractors through remote diagnostics, and reduced in-person interactions to resolve customers’ issues.
---	---
•	While the Company’s supply chain has not experienced significant disruptions to date, the Company is closely<br>monitoring the transportation and distribution of parts and replacement units.
---	---

Tibbens emphasized that the COVID-19 situation remains very fluid, and the Company continues to adjust its response in real time.

“We have not yet seen a material impact on claims activity over the last few weeks, although it remains difficult to predict how COVID-19 will impact our business this year,” said Tibbens. “Our first-quarter 2020 revenue is tracking as planned and our first-quarter 2020 Adjusted EBITDA is expected to be at the high end of the guidance range we provided in late February. However, we are currently evaluating the impact of the COVID-19 situation for the balance of 2020 and anticipate that the U.S. real-estate market and our first-year real estate sales channel will be adversely impacted by the virus. We continue to assess the situation and will provide further updates to our business response and financial outlook on our first quarter earnings call in early May.”

The Company has established a strong financial position over the last 18 months. As of the end of 2019, Frontdoor had a net leverage ratio of 2.4 times and $516 million of liquidity, consisting of $266 million of unrestricted cash and a $250 million revolver that allows for ample liquidity to manage our business for an extended period. The Company has continued to increase its cash position during the first quarter of 2020.

Nearly two-thirds of Frontdoor’s annual revenues are derived from existing customers and nearly 70% of customers are on monthly auto-pay. “Our strong, subscription-based model provides a good line of sight into in-period revenues,” said Tibbens. “Thus far, we continue to see the same high level of customer retention, as they appreciate the value our home service plans provide.”

About Frontdoor

Frontdoor is a company that’s obsessed with taking the hassle out of owning a home. With services powered by people and enabled by technology, it is the parent company of four home service plan brands: American Home Shield, HSA, Landmark and OneGuard, as well as Candu Home Solutions, an on-demand membership service for home repairs and maintenance, and Streem, a technology company that enables businesses to serve customers through an enhanced augmented reality, computer vision and machine learning platform. Frontdoor serves 2.2 million customers across the U.S. through a network of approximately 17,000 pre-qualified contractor firms that employ approximately 60,000 technicians. The company’s customizable home service plans help customers protect and maintain their homes from costly and unexpected breakdowns of essential home systems and appliances. With nearly 50 years of experience, the company responds to over four million service requests annually. For details, visit frontdoorhome.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, in particular, projected future performance and any statements about Frontdoor’s plans, strategies and prospects and the impact of COVID-19 on Frontdoor’s business. Forward-looking statements can be identified by the use of forward-looking terms such as “believe,” “expect,” “estimate,” “could,” “should,” “intend,” “may,” “plan,” “seek,” “anticipate,” “project,” “will,” “shall,” “would,” “aim,” or other comparable terms. These forward-looking statements are subject to known and unknown risks and uncertainties, many of which may be beyond our control. Such risks and uncertainties include, but are not limited to: the impact of the global COVID-19 pandemic; weather conditions and seasonality; weakening general economic conditions; lawsuits, enforcement actions and other claims by third parties or governmental authorities; the effects of our substantial indebtedness; the success of our business strategies; and failure to achieve some or all of the expected benefits of the Spin-off. We caution you that forward-looking statements are not guarantees of future performance or outcomes and that actual performance and outcomes, including, without limitation, our actual results of operations, financial condition and liquidity, and the development of new markets or market segments in which we operate, may differ materially from those made in or suggested by the forward-looking statements contained in this news release. For a discussion of other important factors that could cause Frontdoor’s results to differ materially from those expressed in, or implied by, the forward-looking statements included in this document, you should refer to the risks and uncertainties detailed from time to time in Frontdoor’s periodic reports filed with the SEC as well as the disclosure contained in Item 1A. Risk Factors in our 2019 Annual Report on Form 10-K filed with the SEC. Except as required by law, Frontdoor does not undertake any obligation to update or revise these forward-looking statements to reflect new information or events or circumstances that occur after the date of this news release or to reflect the occurrence of unanticipated events or otherwise. Readers are advised to review Frontdoor’s filings with the Securities and Exchange Commission, which are available from the SEC’s EDGAR database at sec.gov, and via Frontdoor’s website at frontdoorhome.com.

2

For further information, contact:

Investor Relations:

Matt Davis

901.701.5199

ir@frontdoorhome.com

Media:

Nicole Ritchie

901.701.5198

MediaCenter@frontdoorhome.com

3