UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.___)
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Onvia, Inc.
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 TABLE OF CONTENTS Safe Harbor Proxy Communication Statement Investment Case for Turnaround Plan Appendix: Business Summary * * * |
 This presentation may contain, in addition to historical information, forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Words such as "believe," "demonstrate," "expect," "estimate," "anticipate," "should" and "likely" and similar expressions identify forward- looking statements. In addition, statements that are not historical should also be considered forward-looking statements. Forward-looking statements contained in this presentation may relate to, but are not limited to, statements regarding Onvia’s future results of operations, the progress to be made by Onvia’s turnaround plan, the future financial impact of Onvia’s new business model, future options for Onvia to maximize value for stockholders, Onvia’s future product offerings, and Onvia’s ability to use its net operating losses to offset future taxable net income. Such forward-looking statements are based on current expectations that involve a number of known and unknown risks, uncertainties and other factors, which may cause actual events to be materially different from those expressed or implied by such forward-looking statements. The following factors, among others, could cause actual results to differ materially from those described in the forward-looking statements: Onvia's "targeted accounts" strategy may fail to increase contract value of new customers; identifying partners to distribute Onvia's content may be slower than expected; client adoption of Onvia's enterprise solutions may be slower than expected; Onvia's market driven product development process may fail to improve sales penetration and client retention rates; and Onvia's technology may fail to handle the increased demands on its infrastructure caused by increasing network traffic and the volume of aggregated data. Additional information on factors that may impact these forward-looking statements can be found in the "Business," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Risk Factors" sections, as applicable, in Onvia's Annual Report on Form 10-K for the year December 31, 2010 and Quarterly Report on Form 10-Q for the quarter ended September 30, 2011. Although Onvia believes that the expectations reflected in the forward-looking statements are reasonable, you should not rely upon forward-looking statements as predictions of future events. Onvia cannot guarantee that future results, levels of activity, performance or events and circumstances reflected in the forward-looking statement will be achieved or occur. The information contained in this presentation is as of the date indicated. Onvia assumes no obligation (and expressly disclaims any such obligation) to update any forward-looking statements contained in this presentation as a result of new information, future events or developments, or otherwise. SAFE HARBOR 3 * * |
 PROXY COMMUNICATIONS STATEMENT This presentation may be deemed to be solicitation material in respect of the solicitation of proxies from stockholders in connection with the 2012 annual meeting of stockholders. Onvia, Inc. (“Onvia”) and its directors and certain executive officers are deemed participants in the solicitation of proxies from stockholders in connection with the 2012 Annual Meeting of Stockholders (the “2012 Annual Meeting”). Onvia plans to file a preliminary proxy statement with the Securities and Exchange Commission (the “SEC”) relating to the 2012 Annual Meeting. Information regarding the interests of such participants will be included in the Preliminary Proxy Statement. WE URGE INVESTORS TO READ THE PRELIMINARY PROXY STATEMENT (INCLUDING ANY SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS THAT ONVIA WILL FILE WITH THE SEC WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Stockholders will be able to obtain, free of charge, copies of the Preliminary Proxy Statement and any other documents filed by Onvia with the SEC in connection with the 2012 Annual Meeting at the SEC’s website at http://www.sec.gov and Onvia’s website at http://www.onvia.com. * * |
 INVESTMENT CASE FOR TURNAROUND PLAN * * * * * * * * * * * * * * * * * |
 KEY POINTS Developing a high value added, proprietary database Significant progress made against turnaround plan, operating risks mitigated Continual value creation for clients and stockholders Risks are manageable Execution of turnaround plan will maximize stockholder value Onvia Board and stockholder interests are aligned * * * |
 DEVELOPING A HIGH VALUE ADDED PROPRIETARY DATABASE • Database and decision analytics company • Proprietary content • Significant barriers to entry • “Must have” solutions • Pricing power based on value delivered • Strong customer loyalty/ retention • Best in class consultative selling organization • Exceptional domain knowledge • Profitable, sustainable growth • Highly predictable financial performance • Strong operating leverage • Potential for 30% EBITDA margins • 95% of EBITDA converts to net income • Generates free cash flow • Significant investment in infrastructure in 2008-2010 • No federal income taxes • Compelling options to maximize stockholder value in the next few years: • Sale: go private with strategic or financial buyer • Sale: public buyer • Stay public: build scale with acquisitions and organic growth * |
 SIGNIFICANT PROGRESS MADE, OPERATING RISKS MITIGATED Onvia Attributes January 2011 March 2012 Culture Insular Customer-Centric Target Market Poorly Defined Low Lifetime Value New client ACVC - $3,900 Targeted Accounts High Lifetime Value New Client ACVC – nearly doubled to $6,800 Business Model Transactional Growth without Profit Solution-Based Monetize Added Value Sales Process Lack of Repeatable Process SMB is Disciplined and Effective Imposing Same Process on Enterprise Database Platform Difficult to Use Onvia 5 Launched 2/12 Database Strategy No Value-Add Data Not Normalized Low Barrier to Entry Adding Enhanced, Differentiated Content Data Normalization Initiated Increasing Barriers Value Proposition Sales Leads Only Commodity Vendor Product Roadmap Expands Client Value Becoming a High Value Business Partner Financial Results EBITDA - $1.8MM Net Loss – ($805k) EBTIDA - $3.8MM Net Income – $1.6MM 8 |
 CONTINUAL VALUE CREATION FOR CLIENTS AND STOCKHOLDERS 9 * |
 RISKS ARE MANAGEABLE Execution Risk Magnitude Mitigation Strategy Content Expansion Low Core Competency Taxonomy Low Hired Skillset in 2011 Data Normalization Medium Using Third Party Tools Develop Decision Analytics Medium Content Capture 2012 Third Party Applications Sell Analytics Low Market Validation Complete Solution Selling Successful in H2 2011 Delay in Execution of Strategy Medium Leverage Third Party Tools ** ** |
 EXECUTION OF TURNAROUND PLAN WILL MAXIMIZE STOCKHOLDER VALUE Moving to a Business Model with Higher Stockholder Value — Higher valuations for Database vs. Lead Generation companies — Scalable business model with significant operating leverage Value Creation at Each Stage of Turnaround Plan — Continued increases in EBITDA, Cash and Net Income in each year of turnaround Leverage Significant Technology Investment from 2008-2010 with Right Strategy, Leadership, Organization and Culture * |
 EXECUTION OF TURNAROUND PLAN WILL MAXIMIZE STOCKHOLDER VALUE Market Validation for Product Roadmap — Doubled ACVC in 2011 Management Team Has Proven It Can Execute Successfully in 18 Months — Defined Strategy and Product Roadmap — Aligned Organization to Execute Strategy — Institutionalized Customer-Centric Culture — Redefined Market — Moved from Transactional to Solutions Selling — Executed Phase One of Roadmap (Onvia 5) — Began to Normalize Data (Public Sector Agencies) Board of Directors In Alignment with Stockholders * |
 ONVIA BOARD AND STOCKHOLDER INTERESTS ARE ALIGNED Our Board, consistent with its fiduciary duties, remains receptive to any option that would maximize value for ALL our stockholders but believes that any sale of Onvia now would likely be a “fire sale” that would deprive our stockholders of the opportunity to share in the future growth and profitability of Onvia * |
 BUSINESS SUMMARY * * * * * * * * |
 TABLE OF CONTENTS Business Overview Products Financial Results Tax Benefit Preservation Plan Board of Directors Corporate Governance * * |
 $23 million revenue provider of solutions that connects businesses to government agency buyers, primarily within the highly decentralized state and local government marketplace Focused on a very targeted market of companies with a strategic, long-term interest in the public sector Strong business intelligence for actionable sales and marketing activities, expanding into data and analytics for enterprise-wide strategic planning Solutions are organized around targeted industries — Architecture, Engineering, Construction — IT Telecom — Operations and Transportation Business Information Services ONVIA OVERVIEW |
 Onvia Database Annual subscription Categorized 89,000 government agencies, 275,000 company profiles, & 700,000 government personnel Applications within the Onvia Database Project Center Included in core database subscription Identify and qualify projects for specific goods and services Refine target markets and identify new markets/buyers Identify and monitor potential competitors Evaluate awards for pricing information CURRENT PRODUCTS 17 |
 Applications within the Onvia Database (cont) Agency Center Included in core database subscription Provides insight into buying patterns, projects and competition at the government agency level Spending Forecast Center Annual subscription (additional to base price) Database of capital improvement plans, budget documents Used for strategic planning, such as demand forecasting, resource allocation CURRENT PRODUCTS 18 |
 Onvia Guide Annual subscription Daily sales leads from “real time” market events Custom Management Reports Target upcoming contract renewals, identify agency buyers, and inform the proposal development process Term contracts, contact lists, winning proposals CURRENT PRODUCTS (CONT) 19 |
 2011 RESULTS HIGHLIGHTS Revenue: Decreased 14% to $23.2MM Annual Contract Value (ACV): Decreased 16% to $18.5MM Gross margin: Stable at 85% Adjusted EBITDA: Increased 105% to $3.8MM vs. adjusted EBITDA of $1.8MM Net Income: Increased to $1.6MM vs. net loss of ($806k) in 2010 Cash: $11.5MM or $1.36 per share Year ended December 31, 2011 vs. 2010 20 |
 21 INCOME STATEMENTS (IN THOUSANDS) *2007 results include $2.7MM gain on impaired office lease **2010 results include $967k loss on impaired capitalized software costs |
 REVENUES Growth Rates are Down but Improving Sequentially 0.9% |
 ADJUSTED EBITDA Record Adjusted EBITDA in 2011 despite declining revenues |
 ANNUAL CONTRACT VALUE PER CLIENT We are acquiring and retaining our best clients |
  25 BALANCE SHEETS (IN THOUSANDS) Assets 2009A 2010A 2011A Cash and Equivalents 14,279 $ 10,883 $ 11,527 $ Current Assets 2,974 2,765 2,355 Fixed Assets 1,226 1,419 1,275 Internal Use Software 6,615 6,587 6,175 Total Assets 25,094 $ 21,654 $ 21,332 $ Liabilities Current Liabilities 2,859 $ 2,164 $ 1,461 $ Unearned Revenue 11,545 10,010 8,488 Deferred Rent 920 832 714 Total Liabilities 15,324 13,005 10,663 Stockholders Equity 9,770 8,649 10,669 Total Liab and SE 25,094 $ 21,654 $ 21,332 $ As of December 31, |
 26 PRESERVATION OF NOLS IS IN BEST INTERESTS OF ALL STOCKHOLDERS Company has $73MM in net operating losses (“NOLs”) to offset future taxable net income — NOLS expire beginning 2021 through 2031 – a long-term asset IRS rules limit the use of NOLs if there is an ownership change (greater than 50% increase involving 5% shareholders) over a three-year rolling period. This is different than a change-in-control for other legal purposes. Tax Benefit Preservation Plan enacted in March 2011 to protect this long-term, significant asset from being impaired due to such ownership changes Board of Directors retains sole discretion to exempt any stockholder from the penalties imposed by the Rights Plan — All new 5% positions and >1% changes for existing 5% shareholders |
 BOARD OF DIRECTORS Insiders own ~8% of the Company (more with stock options) — Directors have been buying stock in the market Board is paid primarily in stock options (total cash compensation $20-$30k annually depending on responsibility). — Focus is realizing value not collecting fees Independent Board with significant, relevant experience — Two Directors recommended by large stockholders — Former senior executives at major information companies (Lexis, Experian, Harte Hanks, Ziff Davis) |
 28 BOARD OF DIRECTORS |
 CORPORATE GOVERNANCE Six of seven current directors are independent Separate Chairman and CEO positions with independent Chairman Audit, Compensation, Governance and Nominating Committees comprised solely of independent directors and meet regularly in executive sessions without management No related-party transactions * |
 Hank Riner, President & CEO Cameron Way, Chief Financial Officer CONTACTS Onvia Headquarters 509 Olive Way, Suite 400 Seattle, WA 98101 Tel 206.282.5170 • Fax 206.373.8961 www.Onvia.com 30 |
 Adjusted EBITDA: Adjusted EBITDA is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to net income, operating income or any other financial measures so calculated and presented, nor as an alternative to cash flow from operating activities as a measure of the company’s liquidity. Onvia defines Adjusted EBITDA as net income before interest expense and other non-cash financing costs; taxes; depreciation; amortization; and non-cash stock-based compensation. Other companies (including the company’s competitors) may define adjusted EBITDA differently. The company presents Adjusted EBITDA because it believes Adjusted EBITDA to be an important supplemental measure of performance that is commonly used by securities analysts, investors and other interested parties in the evaluation of companies in similar industries and size. Management also uses this information internally for forecasting and budgeting. It may not be indicative of the historical operating results of Onvia nor is it intended to be predictive of potential future results. Investors should not consider Adjusted EBITDA in isolation or as a substitute for analysis of results as reported under GAAP. GLOSSARY 31 |
 Annual Contract Value (ACV): ACV represents the annualized aggregate revenue value of all subscription contracts as of the end of the quarter. ACV is driven by Annual Contract Value per Client (ACVC) and the growth in the number of clients. Most of the company’s revenues are generated from subscription contracts, which are typically prepaid and have a minimum term of one year, with revenues recognized ratably over the term of the subscription. The company also receives revenues from multi-year content reseller licenses, management reports, document download services, and list rental services, which are not included in the calculation of ACV. ACV is not a financial measure calculated and presented in accordance with U.S. generally accepted accounting principles (“GAAP”) and should not be considered as an alternative to revenue or any other financial measures so calculated. Management uses this information as a basis for planning and forecasting core business activity for future periods and believes it is useful in understanding the results of its operations. GLOSSARY 32 * |
 END PRESENTATION * * * * * * * * |