ValueClick, Inc. (NASDAQ: VCLK) today reported financial results for the
first quarter ended March 31, 2013. Revenue was within its guidance
range, while adjusted-EBITDA1, GAAP net income from
continuing operations per diluted share, and non-GAAP net income2
per diluted share exceeded the high-end of their respective guidance
ranges.
"2013 is a transformational year for ValueClick, as we raise our
long-term growth potential by integrating our multiple offerings and
leveraging our core strengths in data, personalization and cross-device
targeting," said
John Giuliani, president and chief executive officer of
ValueClick. "As we mentioned during our recent analyst day, short-term
disruptions will occur as we integrate multiple offerings and
geographies. We are confident that our strategic initiatives will best
serve the long-term interests of our advertisers and shareholders."
Mr. Giuliani continued, "In addition to integration initiatives, we are
focused today on capitalizing on the unprecedented short-term
opportunity in affiliate marketing. Google's recent decision to exit
this market is a seismic shift in the competitive landscape, and we are
prioritizing resources to take full advantage. The affiliate marketing
industry and its customers are at an inflection point, and ValueClick
stands alone as the company with affiliate marketing at its core."
Highlights from the first quarter of 2013 include:
Revenue increased 13 percent from the first quarter of 2012 (Q1 2012)
to $165.4 million;
Adjusted-EBITDA increased 21 percent from Q1 2012 to $56.3 million;
Adjusted-EBITDA margin increased to 34.0 percent from 31.7 percent in
Q1 2012;
Income from operations increased 45 percent from Q1 2012 to $41.8
million;
Non-GAAP diluted net income of $0.42 per common share versus $0.36 in
Q1 2012;
GAAP diluted income from continuing operations of $0.34 per common
share versus $0.25 in Q1 2012; and
Free cash flow (defined as cash from operations less capital
expenditures) for the three-month period ended March 31, 2013, of
$48.1 million.
The consolidated balance sheet as of March 31, 2013 included
approximately $129.1 million in cash and cash equivalents, and $80.0
million in total debt.
__________________________________
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 from continuing operations 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.
2 Non-GAAP net income is defined as GAAP income from
continuing operations before the impact of stock-based compensation and
amortization of intangible assets. Please see the attached schedule for
a reconciliation of GAAP income from continuing operations to non-GAAP
diluted net income per common share.
Share Repurchase Program Authorization
Increased to $150 Million
Today, ValueClick also announced that its board of directors has
authorized an increase to the Company's share repurchase program of
approximately $61 million, raising the Company's total authorization to
$150 million. For the twelve-month period ended December 31, 2012,
ValueClick repurchased 6.6 million shares of its common stock for a
total cost of $110.8 million. No shares were repurchased in the
three-month period ended March 31, 2013.
Business Outlook
Today, ValueClick is providing guidance for the second quarter of 2013:
Q2 Guidance
Revenue
$164-$168 million
Adjusted-EBITDA
$52-$54 million
Mid-Point Adjusted-EBITDA Margin
31.9%
Non-GAAP diluted net income per common share
$0.38-0.40
Impact of stock-based compensation and amortization of intangibles,
net of tax
$(0.09) - $(0.10)
GAAP diluted net income per common share
$0.29-$0.30
The consolidated revenue guidance mid-point is based on the following
segment-level assumptions for revenue growth rates expressed as a
percentage change from second quarter 2012 reported revenue levels:
•
Affiliate Marketing:
Up high single-digits
•
Media:
Up high single-digits
•
Owned & Operated:
Up mid single-digits
Second quarter 2013 guidance assumes: stock-based compensation of $5.5
million; amortization of intangible assets of $6.5 million ($2.5 million
of which will be classified in Cost of revenue); net interest and other
income of zero; a 39 percent effective tax rate; and 78 million diluted
shares outstanding.
Conference Call Today at 4:30 p.m. ET
John Giuliani, 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 first
quarter during a conference call and Webcast at 4:30 p.m. ET today. The
live conference call can be accessed by dialing (888) 329-8893 or (719)
325-2494. Please dial in approximately ten minutes prior to the start
time and provide the operator with the pass code 2102101. A replay of
the conference call will be available from Tuesday, May 7, at 7:30 p.m.
ET through Tuesday, May 14, at 7:30 p.m. ET at (888) 203-1112 and (719)
457-0820 (pass code: 2102101). The live and archived Webcast of the
conference call will be available at http://ir.conversantmedia.com.
About ValueClick
ValueClick, Inc. (NASDAQ: VCLK) is one of the world's largest digital
marketing companies. Through a unique combination of data, technology
and services, ValueClick increases brand awareness and drives customer
acquisition at scale for the world's largest advertisers, and maximizes
advertising revenue for tens of thousands of online and mobile
publishers. The Company is based in Westlake Village, California, and
has offices in major advertising markets worldwide. 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 on Form 10-K filed on February 27, 2013;
recent quarterly reports on Form 10-Q; and other current reports on Form
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.
VALUECLICK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31,
December 31,
2013
2012
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents
$
129,134
$
136,638
Accounts receivable, net
123,017
147,487
Other current assets
26,284
27,136
Total current assets
278,435
311,261
Note receivable, less current portion
27,117
27,615
Property and equipment, net
29,429
29,014
Goodwill
434,265
434,507
Intangible assets, net
75,346
81,822
Other assets
13,778
15,477
TOTAL ASSETS
$
858,370
$
899,696
LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowings under credit facility, current
$
10,000
$
10,000
Other current liabilities
115,826
132,401
Borrowings under credit facility, less current portion
70,000
132,500
Other non-current liabilities
35,546
34,090
Total liabilities
231,372
308,991
Total stockholders' equity
626,998
590,705
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$
858,370
$
899,696
VALUECLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three-month Period
Ended March 31,
2013
2012
(Unaudited)
Revenue
$
165,438
$
146,432
Cost of revenue
62,355
54,685
Gross profit
103,083
91,747
Operating expenses:
Sales and marketing (Note 1)
22,465
20,927
General and administrative (Note 1)
18,213
19,572
Technology (Note 1)
16,700
16,080
Amortization of intangible assets acquired in business combinations
3,923
6,324
Total operating expenses
61,301
62,903
Income from operations
41,782
28,844
Interest and other (expense) income, net
(595
)
229
Income before income taxes
41,187
29,073
Income tax expense
14,904
8,875
Net income from continuing operations
26,283
20,198
Net income from discontinued operations
—
1,373
Net income
$
26,283
$
21,571
Basic income from continuing operations per common share
$
0.35
$
0.25
Diluted income from continuing operations per common share
$
0.34
$
0.25
Basic net income per common share
$
0.35
$
0.27
Diluted net income per common share
$
0.34
$
0.26
Weighted-average shares used to compute basic net income per
common share
75,648
80,339
Weighted-average shares used to compute diluted net income per
common share
77,567
82,106
Note 1 - Includes stock-based compensation as follows:
Three-month Period
Ended March 31,
2013
2012
(Unaudited)
Sales and marketing
$
1,174
$
1,654
General and administrative
2,439
3,026
Technology
1,184
1,406
Total stock-based compensation
$
4,797
$
6,086
VALUECLICK, INC.
RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED-EBITDA (Note 1)
(In thousands)
Three-month Period
Ended March 31,
2013
2012
(Unaudited)
Net income from continuing operations
$
26,283
$
20,198
Interest and other expense (income), net
595
(229
)
Income tax expense
14,904
8,875
Amortization of acquired intangible assets included in cost of
revenue
2,494
2,493
Amortization of acquired intangible assets included in operating
expenses
3,923
6,324
Depreciation and leasehold amortization
3,292
2,614
Stock-based compensation
4,797
6,086
Adjusted-EBITDA
$
56,288
$
46,361
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 cash equivalents, note receivable and borrowings, 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 baseline 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.
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 March 31,
2013
2012
(Unaudited)
Net income from continuing operations
$
26,283
$
20,198
Stock-based compensation
4,797
6,086
Amortization of acquired intangible assets included in cost of
revenue
2,494
2,493
Amortization of acquired intangible assets included in operating
expenses
3,923
6,324
Tax impact of above items
(4,784
)
(5,250
)
Non-GAAP net income
$
32,713
$
29,851
Non-GAAP diluted net income per common share
$
0.42
$
0.36
Weighted-average shares used to compute non-GAAP diluted net
income per common share
77,567
82,106
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 and amortization of intangible assets)
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
baseline 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.
VALUECLICK, INC.
SEGMENT OPERATING RESULTS
(In thousands)
Three-month Period
Ended March 31,
2013
2012
(Unaudited)
Affiliate Marketing:
Revenue
$
38,311
$
37,107
Cost of revenue
4,562
4,176
Gross profit
33,749
32,931
Operating expenses
10,824
9,993
Segment income from operations
$
22,925
$
22,938
Media:
Revenue
$
96,256
$
80,749
Cost of revenue
35,839
30,603
Gross profit
60,417
50,146
Operating expenses
29,094
27,742
Segment income from operations
$
31,323
$
22,404
Owned & Operated Websites:
Revenue
$
30,955
$
28,675
Cost of revenue
19,516
17,457
Gross profit
11,439
11,218
Operating expenses
5,819
5,885
Segment income from operations
$
5,620
$
5,333
Reconciliation of segment income from operations to
consolidated income from operations:
Total segment income from operations
$
59,868
$
50,675
Corporate expenses
(6,872
)
(6,928
)
Stock-based compensation
(4,797
)
(6,086
)
Amortization of acquired intangible assets included in cost of
revenue
(2,494
)
(2,493
)
Amortization of acquired intangible assets included in operating
expenses
(3,923
)
(6,324
)
Consolidated income from operations
$
41,782
$
28,844
Reconciliation of segment revenue to consolidated revenue:
Affiliate Marketing
$
38,311
$
37,107
Media
96,256
80,749
Owned & Operated Websites
30,955
28,675
Inter-segment eliminations
(84
)
(99
)
Consolidated revenue
$
165,438
$
146,432
ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677
Source: ValueClick, Inc.
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