Contact: Gary J. Fuges, CFA ValueClick, Inc. 1.818.575.4677
VALUECLICK ANNOUNCES FIRST QUARTER 2007 RESULTS
Results Exceed Previously Issued Guidance; Company Raises 2007 Outlook
Westlake Village, CA – May 2, 2007 –ValueClick, Inc. (Nasdaq: VCLK) today reported financial results for the first quarter ended March 31, 2007. Revenue, adjusted- EBITDA1 and diluted net income per common share for the quarter exceeded previously issued guidance.
“The first quarter was a great start to 2007 for ValueClick, with 34 percent revenue growth and all segments performing above plan,” said James Zarley, chairman and chief executive officer of ValueClick. “We continue to differentiate ourselves through a unique combination of technology, process, relationships, and our constant focus on industry best practices. The fundamentals of our businesses are strong, and I am confident in our ability to deliver strong growth and profitability in 2007.”
Revenue for the first quarter of 2007 was $156.9 million, above the high end of the Company’s previously issued guidance and an increase of $39.6 million, or 34 percent, from $117.3 million for the first quarter of 2006. First quarter 2007 results include three months of operations from Shopping.net, acquired in December 2006. Year-over-year pro-forma organic revenue growth was 33 percent in the first quarter of 2007.
Income before income taxes for the first quarter of 2007 was $32.1 million compared to $18.1 million for the first quarter of 2006. Adjusted-EBITDA for the first quarter of 2007 was $41.0 million, above the high end of the Company’s previously issued guidance and an increase of $13.7 million, or 50 percent, from $27.4 million for the first quarter of 2006.
Net income for the first quarter of 2007 was $18.6 million, or $0.18 per diluted common share, compared to $9.8 million, or $0.09 per diluted common share, for the first quarter of 2006. First quarter 2007 diluted net income per common share exceeded the Company’s previously issued guidance by $0.01.
The consolidated balance sheet as of March 31, 2007 includes $334 million in cash, cash equivalents and marketable securities, approximately $671 million in total stockholders’ equity and no long-term debt.
1 Adjusted-EBITDA is defined as GAAP (Generally Accepted Accounting Principles) net income before interest, income taxes, depreciation, amortization, and stock-based compensation. Please see the attached schedule for a reconciliation of GAAP net income to adjusted-EBITDA, and a discussion of why the Company believes adjusted-EBITDA is a useful financial measure to investors and how Company management uses this financial measure.
Business Outlook The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions or other business combinations that may be completed after the date of this release. Actual stock-based compensation expense may differ from these estimates based on the timing and amount of options granted, the assumptions used in option valuation and other factors. Actual income tax expense may differ from these estimates based on tax planning, changes in tax accounting rules and laws, and other factors.
Based on its first quarter results and outlook for 2007, ValueClick is raising its fiscal year 2007 guidance ranges, issued previously on February 21, 2007:
Fiscal Year 2007
Previous Guidance
Updated Guidance
Revenue
$645-$665 million
$655-$665 million
Adjusted-EBITDA
$175-$180 million
$177-$182 million
Diluted net income per common share
$
0.78-$0.80
$
0.79-$0.81
Fiscal year 2007 guidance for diluted net income per common share includes a reduction of $0.12 per diluted common share for stock-based compensation expense, and assumes a 42.5 percent effective tax rate.
Additionally, ValueClick is announcing guidance for the second quarter of 2007:
Second Quarter 2007
Guidance
Revenue
$157-$159 million
Adjusted-EBITDA
$40-$42 million
Diluted net income per common share
$
0.17-$0.18
Second quarter 2007 diluted net income per common share guidance includes a reduction of $0.03 per diluted common share for stock-based compensation expense and assumes a 42.5 percent effective tax rate.
Conference Call Today James Zarley, chairman and chief executive officer, and Sam Paisley, chief administrative officer, will present an overview of the results and other factors affecting ValueClick’s financial performance for the first quarter during a conference call and webcast on May 2, 2007 at 1:30PM PT. Investors and analysts may obtain the dial-in information through StreetEvents (www.streetevents.com).
The live webcast and other information of potential interest to investors will be available to the public in the Investor Relations section of the Company’s website (www.valueclick.com). Replay information will be available for seven days after the call and may be accessed at (888) 203-1112 for domestic callers and (719) 457-0820 for international callers. The passcode is 5077746.
About ValueClick ValueClick, Inc. (Nasdaq: VCLK) is one of the world’s largest integrated online marketing companies, offering comprehensive and scalable solutions to deliver cost-effective customer acquisition for advertisers and transparent revenue streams for publishers. ValueClick’s performance-based solutions allow its customers to reach their potential through multiple online marketing channels, including affiliate and search marketing, display advertising, lead generation, ad serving and related technologies, and comparison shopping. ValueClick brands include Commission Junction, ValueClick Media, Mediaplex, and PriceRunner. For more information, please visit www.valueclick.com.
This release contains forward-looking statements that involve risks and uncertainties, including, but not limited to, trends in online advertising spending and estimates of future online performance-based advertising. Actual results may differ materially from the results predicted, and reported results should not be considered an indication of future performance. Important factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are detailed under “Risk Factors” and elsewhere in filings with the Securities and Exchange Commission made from time to time by ValueClick, including, but not limited to: its annual report onForm 10-K filed on March 1, 2007; recent quarterly reports onForm 10-Q; and other current reports onForm 8-K. ValueClick undertakes no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
###
1
VALUECLICK, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
Three-month Period
Ended March 31,
(Unaudited)
(Note 1)
2007
2006
Revenue
$
156,924
$
117,287
Cost of revenue
47,047
39,237
Gross profit
109,877
78,050
Operating expenses:
Sales and marketing(Note 2)
48,452
31,374
General and administrative(Note 2)
17,541
16,831
Technology(Note 2)
8,927
8,046
Amortization of intangible assets
5,771
5,655
Total operating expenses
80,691
61,906
Income from operations
29,186
16,144
Interest income, net
2,939
1,918
Income before income taxes
32,125
18,062
Income tax expense
13,491
8,273
Net income
$
18,634
$
9,789
Basic net income per common share
$
0.19
$
0.10
Weighted-average shares used to compute basic net income per common share
99,562
102,026
Diluted net income per common share
$
0.18
$
0.09
Weighted-average shares used to compute diluted net income per common share
101,036
104,788
Note 1 – The condensed consolidated statements of operations include the results of Shopping.net from acquisition consummation date (December 1, 2006). Had this transaction been completed as of January 1, 2006, on an unaudited pro-forma basis, revenue would have been $118.0 million, and net income would have been $9.5 million, or $0.09 per diluted common share, for the three-month period ended March 31, 2006. These unaudited pro-forma results are for information purposes only, are not necessarily indicative of what the actual results would have been had this transaction occurred on January 1, 2006, and are not necessarily indicative of future results.
Note 2 – Includes stock-based compensation expense as follows:
Three-month Period
Ended March 31,
(Unaudited)
2007
2006
Sales and marketing
$
1,028
$
1,276
General and administrative
2,084
1,366
Technology
526
678
Total stock-based compensation expense
$
3,638
$
3,320
2
VALUECLICK, INC. RECONCILIATION OF NET INCOME TO ADJUSTED-EBITDA (Note 1) (In thousands)
Three-month Period
Ended March 31,
(Unaudited)
2007
2006
Net Income
$
18,634
$
9,789
Less interest income, net
(2,939
)
(1,918
)
Plus income tax expense
13,491
8,273
Plus amortization of intangible assets
5,771
5,655
Plus depreciation and leasehold amortization
2,434
2,249
Plus stock-based compensation
3,638
3,320
Adjusted-EBITDA
$
41,029
$
27,368
Note 1–“Adjusted-EBITDA” (earnings before interest, income taxes, depreciation, amortization, and stock-based compensation) included in this press release is a non-GAAP financial measure.
Adjusted-EBITDA, as defined above, may not be similar to adjusted-EBITDA measures used by other companies and is not a measurement under GAAP. Management believes that adjusted-EBITDA provides useful information to investors about the Company’s performance because it eliminates the effects of period-to-period changes in income from interest on the Company’s cash and marketable securities and the costs associated with income tax expense, capital investments, and stock-based compensation expense which are not directly attributable to the underlying performance of the Company’s business operations. Management uses adjusted-EBITDA in evaluating the overall performance of the Company’s business operations.
Though management finds adjusted-EBITDA useful for evaluating aspects of the Company’s business, its reliance on this measure is limited because excluded items often have a material effect on the Company’s earnings and earnings per common share calculated in accordance with GAAP. Therefore, management always uses adjusted-EBITDA in conjunction with GAAP earnings and earnings per common share measures. The Company believes that adjusted-EBITDA provides investors with an additional tool for evaluating the Company’s core performance, which management uses in its own evaluation of overall performance, and a base-line for assessing the future earnings potential of the Company. While the GAAP results are more complete, the Company prefers to allow investors to have this supplemental metric since, with a reconciliation to GAAP, it may provide greater insight into the Company’s financial results.
3
VALUECLICK, INC. SEGMENT OPERATING RESULTS (Amounts in thousands)
Three-month Period Ended
March 31,
(Unaudited)
2007
2006
Media:
Revenue
$
108,422
$
79,385
Cost of revenue
38,532
33,736
Gross profit
69,890
45,649
Operating expenses
44,096
27,054
Segment income from operations
$
25,794
$
18,595
Comparison Shopping:
Revenue
$
8,617
$
5,546
Cost of revenue
1,349
293
Gross profit
7,268
5,253
Operating expenses
6,725
5,373
Segment income from operations
$
543
$
(120
)
Affiliate Marketing:
Revenue
$
32,798
$
26,862
Cost of revenue
5,958
4,111
Gross profit
26,840
22,751
Operating expenses
9,889
8,863
Segment income from operations
$
16,951
$
13,888
Technology:
Revenue
$
7,470
$
5,775
Cost of revenue
1,452
1,325
Gross profit
6,018
4,450
Operating expenses
3,439
3,082
Segment income from operations
$
2,579
$
1,368
Total segment income from operations
$
45,867
$
33,731
Corporate expenses
(7,272
)
(8,612
)
Stock-based compensation
(3,638
)
(3,320
)
Amortization of intangible assets
(5,771
)
(5,655
)
Consolidated income from operations
$
29,186
$
16,144
Reconciliation of segment revenue to consolidated revenue:
Media
$
108,422
$
79,385
Comparison Shopping
8,617
5,546
Affiliate Marketing
32,798
26,862
Technology
7,470
5,775
Inter-segment eliminations
(383
)
(281
)
Consolidated revenue
$
156,924
$
117,287
4
VALUECLICK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands)
March 31, 2007
December 31, 2006
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
78,040
$
76,769
Marketable securities, at fair value
��
256,304
204,825
Accounts receivable, net
100,593
107,785
Other current assets
16,750
13,611
Total current assets
451,687
402,990
Property and equipment, net
18,309
18,995
Goodwill
277,674
278,070
Intangible assets, net
85,384
91,383
Other assets
2,236
1,828
TOTAL ASSETS
$
835,290
$
793,266
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
$
94,743
$
87,414
Non-current liabilities
69,419
62,143
Total liabilities
164,162
149,557
Total stockholders’ equity
671,128
643,709
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$
835,290
$
793,266
5
VALUECLICK, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
Three-month Period Ended March 31,
(Unaudited)
2007
2006
Cash flows from operating activities:
Net income
$
18,634
$
9,789
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
8,205
7,904
Non-cash, stock-based compensation expense
3,486
2,595
Benefit from deferred income taxes
(3,330
)
(1,512
)
Other non-cash adjustments
416
748
Changes in operating assets and liabilities
21,225
(2,058
)
Net cash provided by operating activities
48,636
17,466
Cash flows from investing activities:
Net purchases of marketable securities
(51,326
)
(5,431
)
Purchases of property and equipment
(1,771
)
(2,201
)
Acquisition of businesses, net of cash acquired
—
(1,000
)
Net cash used in investing activities
(53,097
)
(8,632
)
Cash flows from financing activities:
Proceeds from exercise of stock options
3,914
1,651
Excess tax benefits from stock option exercises
1,728
2,937
Repayment of capital lease obligations
—
(62
)
Net cash provided by financing activities
5,642
4,526
Effect of foreign currency translations
90
318
Net increase in cash and cash equivalents
1,271
13,678
Cash and cash equivalents, beginning of period
76,769
46,875
Cash and cash equivalents, end of period
$
78,040
$
60,553
6
We use cookies on this site to provide a more responsive and personalized service. Continuing to browse, clicking I Agree, or closing this banner indicates agreement. See our Cookie Policy for more information.
