Exhibit 99.1
Investor Relations Contact:
Lisa Laukkanen
The Blueshirt Group
415-217-4967
lisa@blueshirtgroup.com
Fastclick Reports First Quarter 2005 Financial Results;
Revenue Grows 80% Year Over Year
Santa Barbara, Calif. — May 5, 2005 — Fastclick, Inc. (Nasdaq: FSTC), a provider of Internet advertising technologies and services, today reported financial results for the first quarter ended March 31, 2005.
“We are pleased to deliver such strong results for our first publicly reported quarter,” stated Kurt Johnson, CEO of Fastclick. “We attribute our record revenue in the first quarter to the success of our performance-based online advertising technology solutions and continued growth of our diverse advertiser and publisher network. Through our proprietary optimization technology, we are able to provide advertisers with a highly-automated method to increase their ROI. Simultaneously, our publisher partners enhance the value of their Internet advertising space through the greater revenue-generating opportunities our network provides.”
First quarter highlights include:
• Revenue for the first quarter of 2005 increased 80% to $19.6 million compared to the year ago period and marks the ninth consecutive quarter of sequential revenue growth.
• Adjusted EBITDA grew by more than 20% to $2.4 million in the first quarter of 2005 from $2.0 million in the first quarter of 2004.
• Net income was $0.9 million, or $0.06 per fully diluted share.
• Fastclick’s network grew to become the second largest online media property reaching over 119 million unique users in March, ahead of Yahoo!, AOL and MSN, according to comScore Media Metrix from its March 2005 Ad Focus report.
• Our network of websites grew to more than 9,000 and delivered more than 8.8 billion ad impressions across our network in March 2005.
First Quarter 2005 Results
Revenue — Fastclick reported record revenue of $19.6 million for the first quarter of 2005, an increase of 80 percent from $10.9 million for the first quarter of 2004.
Adjusted EBITDA — Fastclick’s Adjusted EBITDA grew to $2.4 million for the first quarter of 2005, an increase of 20 percent over the $2.0 million reported for the first quarter of 2004. Adjusted EBITDA is defined as income before interest, taxes, depreciation, amortization and the non-cash stock-based compensation charge.
1
Net Income — The Company reported first quarter net income of $0.9 million, or $0.06 per fully diluted share, compared to $1.8 million, or $0.17 per fully diluted share, for the first quarter of 2004. Net income benefited from a lower tax rate of 2.3% due to the Company’s S corporation status during the first quarter 2004. On September 27, 2004 Fastclick revoked its subchapter S corporation status and began operating as a C corporation. The Company’s first quarter 2005 financial results reflect an effective tax rate of 42.8%, and increased expenses from the expansion of our operations. Adjusted net income, which excludes stock-based compensation, was $1.5 million for the first quarter of 2005 as compared to $1.8 million for the first quarter of 2004. Adjusted net income on a fully diluted per share basis was $0.11 per share in the first quarter of 2005 compared to $0.17 per fully diluted share in the first quarter of 2004.
2005 Outlook
“We are confident that our strategy will enable us to capture significant opportunities in the rapidly growing online advertising market in 2005. With the proceeds from the closing of our successful initial public offering, we currently have cash, cash equivalents and short-term investments totaling more than $80 million, and are well positioned to aggressively pursue our growth strategy,” concluded Johnson.
For full year 2005 the Company expects revenues to be in the range of $88 million to $92 million and Adjusted EBITDA in the range of $12 million to $13 million. Fastclick expects total revenue for the second quarter of 2005 in the range of $20 million to $21 million and Adjusted EBITDA of $2.4 million to $2.6 million.
Conference Call Details
The Fastclick first quarter 2005 teleconference and webcast is scheduled to begin at 5:00 p.m. Eastern Time, on Thursday, May 5, 2005. To access the live webcast, please visit the investor relations section of the Company’s website http://ir.fastclick.com at least 30 minutes prior to the scheduled time to download any necessary audio or plug-in software. To listen to the live conference call, please dial (800) 366-7417 or (303) 262-2190 at 4:50 p.m. ET on May 5. An audio replay of the call will also be available to investors beginning at 7:00 p.m. ET on May 5, 2005, through May 12, 2005, by dialing (800) 405-2236 and entering the passcode 11028184#.
About Fastclick
Fastclick is a provider of Internet advertising technologies and services. Fastclick has built a network of more than 9,000 third-party websites and its network reached over 119 million unique U.S. Internet users in March 2005 according to comScore Media Metrix from its March 2005 Ad Focus report. For more information about Fastclick, visit www.fastclick.com or call (805) 568-5334.
Non-GAAP Information
Certain non-GAAP financial measures are included in this press release. These non-GAAP financial measures are provided to enhance the user’s overall understanding of our financial performance. By excluding certain non-cash charges, as well as the related tax effects, our non-GAAP results provide information to both management and investors that is useful in assessing Fastclick’s core operating performance and in evaluating and comparing our results of operations on a consistent basis from period to period. These non-GAAP financial measures are also used by management to evaluate financial results and to plan and forecast future periods. The presentation of this
2
additional information is not meant to be considered a substitute for the corresponding financial measures prepared in accordance with generally accepted accounting principles. Investors are encouraged to review the reconciliations of GAAP to non-GAAP financial measures which are included below.
Safe Harbor Statement
This press release includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to anticipated revenues, expenses, earnings, operating cash flows, the outlook for Fastclick’s markets and the demand for its products and services. Factors that could cause Fastclick’s actual results to differ materially from these forward-looking statements include anticipated growth in the Internet advertising market, Fastclick’s ability to effectively market and sell its products and services, its ability to expand its operations, increases in costs, disruptions to information technology systems, unpredictable events and circumstances relating to increased competition, government regulatory action and general economic conditions. Please refer to our reports and filings with the Securities and Exchange Commission, including our Registration Statement on Form S-1 related to our initial public offering, for a further discussion of these risks and uncertainties. We also caution you not to place undue reliance on forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update publicly any forward-looking statements to reflect new information, events or circumstances after the date they were made or to reflect the occurrence of unanticipated events.
3
FASTCLICK, INC.
STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)
|
| Three Months Ended |
| ||||
|
| 2005 |
| 2004 |
| ||
|
|
|
|
|
| ||
Revenue |
| $ | 19,623 |
| $ | 10,922 |
|
Cost of revenue (a) |
| 12,851 |
| 7,380 |
| ||
|
|
|
|
|
| ||
Gross profit |
| 6,772 |
| 3,542 |
| ||
Operating costs: |
|
|
|
|
| ||
Sales and marketing |
| 2,462 |
| 893 |
| ||
Technology |
| 613 |
| 373 |
| ||
General and administrative |
| 1,576 |
| 404 |
| ||
Stock-based compensation (b) |
| 731 |
| — |
| ||
|
|
|
|
|
| ||
Total operating costs |
| 5,382 |
| 1,670 |
| ||
|
|
|
|
|
| ||
Operating income |
| 1,390 |
| 1,872 |
| ||
Interest income, net |
| 97 |
| 4 |
| ||
|
|
|
|
|
| ||
Income before provision for income taxes |
| 1,487 |
| 1,876 |
| ||
Provision for income taxes |
| 636 |
| 43 |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 851 |
| $ | 1,833 |
|
|
|
|
|
|
| ||
Earnings per share: |
|
|
|
|
| ||
Basic |
| $ | 0.26 |
| $ | 0.17 |
|
Fully diluted |
| $ | 0.06 |
| $ | 0.17 |
|
|
|
|
|
|
| ||
Weighted average common shares outstanding: |
|
|
|
|
| ||
Basic |
| 3,317 |
| 10,748 |
| ||
Fully diluted |
| 14,456 |
| 11,065 |
|
(a) Stock-based compensation charges are included in the following statement of income category:
Cost of revenue |
| $ | 10 |
| $ | — |
|
(b) Stock-based compensation charges are excluded from the following statement of income categories:
Sales and marketing |
| $ | 391 |
| $ | — |
|
Technology |
| 216 |
| — |
| ||
General and administrative |
| 124 |
| — |
| ||
|
| $ | 731 |
| $ | — |
|
4
FASTCLICK, INC.
BALANCE SHEETS
(in thousands)
|
| March 31, |
| December 31, |
| ||
|
| (unaudited) |
|
|
| ||
ASSETS |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 10,480 |
| $ | 12,397 |
|
Short-term investments |
| 8,000 |
| 7,954 |
| ||
Accounts receivable, net |
| 10,568 |
| 9,003 |
| ||
Prepaid expenses and other current assets |
| 443 |
| 232 |
| ||
|
|
|
|
|
| ||
Total current assets |
| 29,491 |
| 29,586 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 2,317 |
| 2,078 |
| ||
Other assets |
| 2,036 |
| 2,219 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 33,844 |
| $ | 33,883 |
|
|
|
|
|
|
| ||
LIABILITIES AND STOCKHOLDERS’ |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Accounts payable |
| $ | 6,520 |
| $ | 5,695 |
|
Deferred revenue |
| 687 |
| 738 |
| ||
Accrued payroll |
| 1,360 |
| 2,048 |
| ||
Accrued other liabilities |
| 1,068 |
| 410 |
| ||
Income taxes payable |
| 288 |
| 77 |
| ||
Current portion of loans payable |
| — |
| 46 |
| ||
Deferred income taxes |
| 307 |
| 500 |
| ||
|
|
|
|
|
| ||
Total current liabilities |
| 10,230 |
| 9,514 |
| ||
|
|
|
|
|
| ||
Long-term portion of loans payable, net of current portion |
| — |
| 75 |
| ||
Deferred tax liabilities |
| 951 |
| 806 |
| ||
|
|
|
|
|
| ||
Total long-term liabilities |
| 951 |
| 881 |
| ||
|
|
|
|
|
| ||
Total liabilities |
| 11,181 |
| 10,395 |
| ||
|
|
|
|
|
| ||
Redeemable convertible preferred stock |
| — |
| 73,416 |
| ||
|
|
|
|
|
| ||
Stockholders’ equity (deficit): |
|
|
|
|
| ||
Preferred stock |
| — |
| — |
| ||
Common stock |
| 19 |
| 8,395 |
| ||
Common stock subscribed |
| (63,052 | ) | — |
| ||
Additional paid-in capital |
| 87,300 |
| — |
| ||
Deferred compensation |
| (5,767 | ) | (7,249 | ) | ||
Treasury stock |
| — |
| (54,386 | ) | ||
Retained earnings |
| 4,163 |
| 3,312 |
| ||
|
|
|
|
|
| ||
Total stockholders’ equity (deficit) |
| 22,663 |
| (49,928 | ) | ||
|
|
|
|
|
| ||
Total liabilities and stockholders’ equity (deficit) |
| $ | 33,844 |
| $ | 33,883 |
|
5
FASTCLICK, INC.
STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
|
| Three Months Ended |
| ||||
|
| 2005 |
| 2004 |
| ||
|
|
|
|
|
| ||
Cash flow from operating activities: |
|
|
|
|
| ||
Net income |
| $ | 851 |
| $ | 1,833 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
Amortization of deferred compensation |
| 741 |
| — |
| ||
Depreciation and amortization |
| 294 |
| 82 |
| ||
Deferred income taxes |
| (48 | ) | — |
| ||
Changes in operating assets and liabilities: |
|
|
|
|
| ||
Accounts receivable |
| (1,565 | ) | (930 | ) | ||
Prepaid expenses and other current assets |
| (211 | ) | (28 | ) | ||
Other assets |
| — |
| 4 |
| ||
Accounts payable |
| (38 | ) | 1,816 |
| ||
Deferred revenue |
| (51 | ) | 155 |
| ||
Accrued payroll |
| (688 | ) | 172 |
| ||
Accrued other liabilities |
| 515 |
| (68 | ) | ||
Income taxes payable |
| 211 |
| 43 |
| ||
|
|
|
|
|
| ||
Net cash provided by operating activities |
| 11 |
| 3,079 |
| ||
|
|
|
|
|
| ||
Cash flow from investing activities: |
|
|
|
|
| ||
Purchase of short-term investments |
| (46 | ) | — |
| ||
Purchase of property and equipment |
| (476 | ) | (92 | ) | ||
Purchase of domain names |
| — |
| (63 | ) | ||
Software development costs |
| (670 | ) | — |
| ||
|
|
|
|
|
| ||
Net cash used in investing activities |
| (1,192 | ) | (155 | ) | ||
|
|
|
|
|
| ||
Cash flow from financing activities: |
|
|
|
|
| ||
Financing services |
| (737 | ) | (25 | ) | ||
Net repayments of loans payable |
| (121 | ) | (7 | ) | ||
Proceeds from sale of common stock |
| 122 |
| 9 |
| ||
Distributions to shareholders |
| — |
| (1,706 | ) | ||
|
|
|
|
|
| ||
Net cash used in financing activities |
| (736 | ) | (1,729 | ) | ||
|
|
|
|
|
| ||
Increase (decrease) in cash and cash equivalents |
| (1,917 | ) | 1,195 |
| ||
Cash and cash equivalents, beginning of period |
| 12,397 |
| 1,657 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents, end of period |
| $ | 10,480 |
| $ | 2,852 |
|
6
FASTCLICK, INC.
IMPACT OF NON-GAAP ADJUSTMENTS ON NET INCOME
(in thousands, except per share amounts)
(unaudited)
|
| Three Months Ended |
| Three |
| ||||||||
|
| GAAP |
| Adjustments |
| Non-GAAP |
| GAAP |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Revenue |
| $ | 19,623 |
| $ | — |
| $ | 19,623 |
| $ | 10,922 |
|
Cost of revenue |
| 12,851 |
| (10 | )(a) | 12,841 |
| 7,380 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Gross profit |
| 6,772 |
| 10 |
| 6,782 |
| 3,542 |
| ||||
Operating costs: |
|
|
|
|
|
|
|
|
| ||||
Sales and marketing |
| 2,462 |
| — |
| 2,462 |
| 893 |
| ||||
Technology |
| 613 |
| — |
| 613 |
| 373 |
| ||||
General and administrative |
| 1,576 |
| — |
| 1,576 |
| 404 |
| ||||
Stock-based compensation |
| 731 |
| (731 | )(a) | — |
| — |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Total operating costs |
| 5,382 |
| (731 | ) | 4,651 |
| 1,670 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Operating income |
| 1,390 |
| 741 |
| 2,131 |
| 1,872 |
| ||||
Interest income, net |
| 97 |
| — |
| 97 |
| 4 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before provision for income taxes |
| 1,487 |
| 741 |
| 2,228 |
| 1,876 |
| ||||
Provision for income taxes |
| 636 |
| 52 |
| 688 |
| 43 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 851 |
| $ | 689 |
| $ | 1,540 |
| $ | 1,833 |
|
|
|
|
|
|
|
|
|
|
| ||||
Earnings per share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 0.26 |
| $ | 0.20 |
| $ | 0.46 |
| $ | 0.17 |
|
Fully diluted |
| $ | 0.06 |
| $ | 0.05 |
| $ | 0.11 |
| $ | 0.17 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 3,317 |
| — |
| 3,317 |
| 10,748 |
| ||||
Fully diluted |
| 14,456 |
| — |
| 14,456 |
| 11,065 |
|
(a) The adjustment represents the amortization of stock-based compensation related to certain stock options granted prior to our IPO in March 2005.
7
FASTCLICK, INC.
RECONCILIATION OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES
The following table presents a reconciliation from operating income to adjusted earnings before interest, income taxes, depreciation, amortization and stock-based compensation (adjusted EBITDA) (in thousands, unaudited):
|
| Three Months Ended |
| Three Months Ended |
| ||||||||||||||
|
| GAAP |
| Adjustments |
| Non-GAAP |
| GAAP |
| Adjustments |
| Non-GAAP |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Operating Income |
|
|
| Adjusted EBITDA |
| Operating Income |
|
|
| Adjusted EBITDA |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Stock-based compensation (a) |
|
|
| $ | 741 |
|
|
|
|
| $ | — |
|
|
| ||||
Depreciation and amortization (b) |
|
|
| 294 |
|
|
|
|
| 82 |
|
|
| ||||||
|
| $ | 1,390 |
| $ | 1,035 |
| $ | 2,425 |
| $ | 1,872 |
| $ | 82 |
| $ | 1,954 |
|
(a) The adjustment represents the amortization of stock-based compensation related to certain stock options granted prior to our IPO in March 2005.
(b) The adjustment represents the depreciation of property and equipment and amortization of software developed for internal use.
8