Contact: Gary J. Fuges, CFA ValueClick, Inc. 1.818.575.4677
VALUECLICK ANNOUNCES SECOND QUARTER 2009 RESULTS
Westlake Village, CA – August 4, 2009 –ValueClick, Inc. (Nasdaq: VCLK) today reported financial results for the second quarter ended June 30, 2009.
Revenue was $130.4 million. Adjusted-EBITDA1 was $34.4 million and adjusted-EBITDA margin was 26.4 percent.
GAAP net income was $14.9 million, or $0.17 per diluted common share. Non-GAAP net income, which excludes discontinued operations, stock-based compensation, and amortization of intangible assets, was $20.4 million, or $0.23 per diluted common share. A table reconciling GAAP net income from continuing operations to non-GAAP diluted net income per common share is included in this press release.
The Company’s comparison shopping and search segment, display advertising business within the media segment, and technology segment performed above expectations, and each delivered revenue growth as compared to the first quarter of 2009. Strength in these businesses was offset by under-performance in the media segment’s lead generation business.
“The second quarter is another example of how ValueClick’s diversified portfolio of performance-based online advertising offerings is driving strong financial results in a challenging macroeconomic environment,” said Tom Vadnais, chief executive officer of ValueClick. “Visibility continues to be limited, but we are confident we have the right technology platforms, relationships, and management to deliver results for advertisers and publishers.”
In the second quarter of 2009, the Company generated approximately $23.5 million in free cash flow, defined as net cash from operations less capital expenditures. The consolidated balance sheet as of June 30, 2009 includes $158.7 million in cash, cash equivalents and marketable securities and no long-term debt.
1
1 Adjusted-EBITDA is defined as GAAP (Generally Accepted Accounting Principles) net income from continuing operations 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
Today, ValueClick is announcing guidance for the third quarter of 2009:
Guidance
Revenue
$125-$130 million
Adjusted-EBITDA
$30-$32 million
GAAP diluted net income per common share
$
0.13-$0.14
Non-GAAP diluted net income per common share
$
0.19-$0.20
Third quarter 2009 non-GAAP and GAAP diluted net income per common share guidance assume a 42 percent effective tax rate.
Conference Call Today at 4:30 p.m. ET
Tom Vadnais, chief executive officer, and John Pitstick, chief financial officer, will present an overview of the results and other factors affecting ValueClick’s financial performance for the second quarter during a conference call and webcast on August 4 at 4:30 p.m. ET. Investors and analysts may obtain the dial-in information through StreetEvents (www.streetevents.com). The live Webcast of the conference call will be available on the Investor Relations section of www.valueclick.com. A replay of the conference call will be available through August 11 at (888) 203-1112 and (719) 457-0820 (pass code: 3371004). An archive of the Webcast will also be available through August 11.
About ValueClick ValueClick, Inc. (Nasdaq: VCLK) is one of the world’s largest integrated online marketing services 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, Smarter.com, CouponMountain.com, 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, the risk that market demand for on-line advertising in general, and performance based on-line advertising in particular, will not grow as rapidly as predicted, and the risk that legislation and governmental regulation could negatively impact the Company’s performance. 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 2, 2009; recent quarterly reports onForm 10-Q; and other current reports onForm 8-K.
The Business Outlook contained in this release is 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 may differ from these estimates based on the timing and amount of stock awards granted, the assumptions used in stock award 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.
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.
###
2
VALUECLICK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited)
June 30,
December 31,
2009
2008
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$135,205
$122,487
Marketable securities
—
2,175
Accounts receivable, net
74,657
108,611
Other current assets
22,636
20,515
Total current assets
232,498
253,788
Marketable securities, less current portion
23,498
25,750
Property and equipment, net
13,120
15,514
Goodwill
172,593
172,583
Intangible assets, net
67,828
80,042
Other assets
56,346
55,602
TOTAL ASSETS
$565,883
$603,279
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
$96,122
$176,605
Non-current liabilities
75,441
73,195
Total liabilities
171,563
249,800
Total stockholders’ equity
394,320
353,479
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$565,883
$603,279
3
VALUECLICK, INC. PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
Three-month Period
Ended June 30,
(Unaudited)
2009
2008
Revenue
$
130,364
$
158,524
Cost of revenue
39,849
49,042
Gross profit
90,515
109,482
Operating expenses:
Sales and marketing (Note 1)
36,764
44,673
General and administrative (Note 1)
16,735
19,524
Technology (Note 1)
7,318
9,638
Amortization of intangible assets acquired in business combinations
6,287
7,680
Total operating expenses
67,104
81,515
Income from operations
23,411
27,967
Interest income and other, net
1,195
1,410
Income before income taxes
24,606
29,377
Income tax expense
9,734
12,829
Net income from continuing operations
14,872
16,548
Loss from discontinued operations, net of tax impact
—
(59
)
Net income
$
14,872
$
16,489
Basic net income from continuing operations per common share
$
0.17
$
0.17
Diluted net income from continuing operations per common share
$
0.17
$
0.17
Basic net income per common share
$
0.17
$
0.17
Diluted net income per common share
$
0.17
$
0.17
Weighted-average shares used to compute basic net income per common share
87,071
95,363
Weighted-average shares used to compute diluted net income per common share
87,645
96,133
Note 1 – Includes stock-based compensation as follows:
Three-month Period
Ended June 30,
(Unaudited)
2009
2008
Sales and marketing
$
601
$
1,648
General and administrative
1,557
2,947
Technology
362
651
Total stock-based compensation
$
2,520
$
5,246
4
VALUECLICK, INC. PRELIMINARY CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data)
Six-month Period
Ended June 30,
(Unaudited)
2009
2008
Revenue
$
265,405
$
327,650
Cost of revenue
83,796
100,294
Gross profit
181,609
227,356
Operating expenses:
Sales and marketing (Note 1)
73,754
94,643
General and administrative (Note 1)
33,229
40,404
Technology (Note 1)
14,984
19,080
Amortization of intangible assets acquired in business combinations
12,539
15,337
Total operating expenses
134,506
169,464
Income from operations
47,103
57,892
Interest income and other, net
1,029
4,457
Income before income taxes
48,132
62,349
Income tax expense
20,043
26,588
Net income from continuing operations
28,089
35,761
Loss from discontinued operations, net of tax impact
—
(105
)
Net income
$
28,089
$
35,656
Basic net income from continuing operations per common share
$
0.32
$
0.37
Diluted net income from continuing operations per common share
$
0.32
$
0.37
Basic net income per common share
$
0.32
$
0.37
Diluted net income per common share
$
0.32
$
0.37
Weighted-average shares used to compute basic net income per common share
86,949
96,543
Weighted-average shares used to compute diluted net income per common share
87,335
97,345
Note 1 – Includes stock-based compensation as follows:
Six-month Period
Ended June 30,
(Unaudited)
2009
2008
Sales and marketing
$
1,211
$
3,262
General and administrative
3,155
6,402
Technology
754
1,288
Total stock-based compensation
$
5,120
$
10,952
5
VALUECLICK, INC. RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS TO ADJUSTED-EBITDA (Note 1) (In thousands)
Three-month Period
Ended June 30,
(Unaudited)
2009
2008
Net income from continuing operations
$
14,872
$
16,548
Interest income and other, net
(1,195
)
(1,410
)
Provision for income taxes
9,734
12,829
Amortization of intangible assets acquired in business combinations
6,287
7,680
Depreciation and leasehold amortization
2,136
2,407
Stock-based compensation
2,520
5,246
Adjusted-EBITDA
$
34,354
$
43,300
Six-month Period
Ended June 30,
(Unaudited)
2009
2008
Net income from continuing operations
$
28,089
$
35,761
Interest income and other, net
(1,029
)
(4,457
)
Provision for income taxes
20,043
26,588
Amortization of intangible assets acquired in business combinations
12,539
15,337
Depreciation and leasehold amortization
4,322
4,845
Stock-based compensation
5,120
10,952
Adjusted-EBITDA
$
69,084
$
89,026
Note 1–“Adjusted-EBITDA” (GAAP net income from continuing operations 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 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 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.
6
VALUECLICK, INC. RECONCILIATION OF GAAP NET INCOME FROM CONTINUING OPERATIONS TO NON-GAAP DILUTED NET INCOME PER COMMON SHARE (Note 1) (In thousands)
Three-month Period
Ended June 30,
2009
2008
GAAP net income from continuing operations
$
14,872
$
16,548
Stock-based compensation
2,520
5,246
Amortization of intangible assets acquired in business combinations
6,287
7,680
Tax impact of above items
(3,305
)
(4,923
)
Non-GAAP net income
$
20,374
$
24,551
Non-GAAP diluted net income per common share
$
0.23
$
0.26
Weighted-average shares used to compute non-GAAP diluted net income per common share
87,645
96,133
Six-month Period
Ended June 30,
2009
2008
GAAP net income from continuing operations
$
28,089
$
35,761
Stock-based compensation
5,120
10,952
Amortization of intangible assets acquired in business combinations
12,539
15,337
Tax impact of above items
(6,612
)
(9,960
)
Non-GAAP net income
$
39,136
$
52,090
Non-GAAP diluted net income per common share
$
0.45
$
0.54
Weighted-average shares used to compute non-GAAP diluted net income per common share
87,335
97,345
Note 1 – “Non-GAAP diluted net income per common share” (GAAP diluted net income from continuing operations per common share before the impact of stock-based compensation, amortization of intangibles, and other non-recurring events) included in this press release is a non-GAAP financial measure.
Non-GAAP diluted net income per common share, as defined above, may not be similar to non-GAAP diluted net income per common share measures used by other companies and is not a measurement under GAAP. Management believes that non-GAAP diluted net income per common share provides useful information to investors about the Company’s performance because it eliminates the effects of items which are not directly attributable to the underlying performance of the Company’s business operations. Management uses non-GAAP diluted net income per common share in evaluating the overall performance of the Company’s business operations.
Though management finds non-GAAP diluted net income per common share 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 uses non-GAAP diluted net income per common share in conjunction with GAAP earnings and earnings per common share measures. The Company believes that non-GAAP diluted net income per common share 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.
7
VALUECLICK, INC. SEGMENT OPERATING RESULTS (In thousands)
Three-month Period Ended
Six-month Period Ended
June 30,
June 30,
(Unaudited)
(Unaudited)
2009
2008
2009
2008
Media:
Revenue
$
58,707
$
76,429
$
122,233
$
151,123
Cost of revenue
28,767
32,372
58,519
65,512
Gross profit
29,940
44,057
63,714
85,611
Operating expenses
16,629
25,175
35,496
50,444
Segment income from operations
$
13,311
$
18,882
$
28,218
$
35,167
Comparison Shopping and Search:
Revenue
$
38,775
$
45,439
$
76,292
$
102,511
Cost of revenue
6,330
11,800
15,921
25,587
Gross profit
32,445
33,639
60,371
76,924
Operating expenses
22,496
23,145
43,644
51,229
Segment income from operations
$
9,949
$
10,494
$
16,727
$
25,695
Affiliate Marketing:
Revenue
$
26,059
$
29,827
$
54,017
$
61,027
Cost of revenue
4,034
4,527
7,920
8,726
Gross profit
22,025
25,300
46,097
52,301
Operating expenses
9,743
10,837
19,416
22,120
Segment income from operations
$
12,282
$
14,463
$
26,681
$
30,181
Technology:
Revenue
$
7,125
$
7,633
$
13,541
$
14,639
Cost of revenue
933
990
1,882
1,856
Gross profit
6,192
6,643
11,659
12,783
Operating expenses
2,714
2,754
5,397
5,505
Segment income from operations
$
3,478
$
3,889
$
6,262
$
7,278
Total segment income from operations
$
39,020
$
47,728
$
77,888
$
98,321
Corporate expenses
(6,802
)
(6,835
)
(13,126
)
(14,140
)
Stock-based compensation
(2,520
)
(5,246
)
(5,120
)
(10,952
)
Amortization of intangible assets
(6,287
)
(7,680
)
(12,539
)
(15,337
)
Consolidated income from operations
$
23,411
$
27,967
$
47,103
$
57,892
Reconciliation of segment revenue to consolidated revenue:
Media
$
58,707
$
76,429
122,233
$
151,123
Comparison Shopping and Search
38,775
45,439
76,292
102,511
Affiliate Marketing
26,059
29,827
54,017
61,027
Technology
7,125
7,633
13,541
14,639
Inter-segment eliminations
(302
)
(804
)
(678
)
(1,650
)
Consolidated revenue
$
130,364
$
158,524
$
265,405
$
327,650
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