PRESSROOM

ValueClick announces fourth quarter 2010 results

February 15, 2011


Revenue and Profitability Exceed High-End of Guidance Ranges


WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--


ValueClick, Inc. (Nasdaq:VCLK) today reported financial results for the


fourth quarter and fiscal year ended December 31, 2010. Fourth quarter


revenue, adjusted-EBITDA1, and earnings per share metrics all


exceeded the high-end of the guidance ranges management provided on


November 3, 2010.


Highlights from the fourth quarter 2010 results include:



  • Revenue of $128.7 million, up 17 percent from the fourth quarter of


    2009 (Q4 2009)




  • Adjusted-EBITDA of $41.9 million, up 19 percent from Q4 2009




  • Adjusted-EBITDA margin of 32.5 percent versus 31.8 percent in Q4 2009




  • GAAP net income from continuing operations of $0.26 per diluted share


    versus $0.20 in Q4 2009



"The fourth quarter capped a successful year for ValueClick, where we


streamlined our offerings, invested for the long-term, and delivered


revenue growth and margin expansion," said
Jim Zarley, chief executive


officer of ValueClick. "Our momentum in the quarter is setting the tone


for 2011, and we remain confident in our ability to capitalize on our


industry's growth opportunities to generate strong financial performance


while investing in growth initiatives across all of our businesses."


Non-GAAP net income, which excludes discontinued operations, stock-based


compensation and amortization of intangible assets was $25.5 million, or


$0.31 per diluted common share for the fourth quarter. 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 consolidated balance sheet as of December 31, 2010 includes


approximately $197 million in cash, cash equivalents and marketable


securities and no debt. The Company generated approximately $90 million


in free cash flow, defined as cash flow from operations less net capital


expenditures, in fiscal year 2010.


Business Outlook


Today, ValueClick is announcing guidance for the first quarter of 2011:
























 

 

Guidance

Revenue

 

$111-$113 million

Adjusted-EBITDA

 

$31-$32 million

Mid-Point Adjusted-EBITDA Margin

 

~28%

GAAP diluted net income per common share

 

$0.16-$0.17

Non-GAAP diluted net income per common share

 

$0.21-$0.22


 

The consolidated revenue guidance range is based on the following


segment-level assumptions for revenue growth rates expressed as a


percentage increase from first quarter 2010 reported revenue levels:
















-- Affiliate Marketing:

 

up low double-digits

-- Media:

up low double-digits

-- Owned & Operated:

up high twenties to low thirties

-- Technology:

up low to mid single-digits

First quarter 2011 non-GAAP and GAAP diluted net income per common share


guidance assume stock-based compensation of $2.0 million, amortization


of intangible assets of $5.0 million, interest and other income of $1.0


million, a 41 percent effective tax rate, and 82.0 million diluted


shares outstanding.


Conference Call Today at 4:30 p.m. ET


Jim Zarley, 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 fourth quarter


during a conference call and webcast on February 15 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 February 22 at


(888) 203-1112 and (719) 457-0820 (pass code: 4951342). An archive of


the Webcast will also be available through February 22.


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


marketing, display


advertising, ad


serving and related technologies, and comparison shopping.


ValueClick's brands include Commission Junction, ValueClick Media,


Mediaplex, Smarter.com, CouponMountain.com, Investopedia.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 on Form 10-K filed on February 26, 2010;


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.


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 expenses. 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.






























































































































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED BALANCE SHEETS



(In thousands)


 

 

 

 









 



December 31,

December 31,



2010

2009



(Unaudited)

ASSETS







CURRENT ASSETS:







Cash and cash equivalents


$

194,317


$

158,497

Marketable securities



3,000



-

Accounts receivable, net



86,738



68,484

Other current assets



18,470



20,856

Assets held for sale


 

-



11,098

Total current assets



302,525



258,935








 

Assets held for sale, less current portion



-



25,777

Note receivable, less current portion



31,267



-

Marketable securities, less current portion



-



22,026

Property and equipment, net



12,414



11,272

Goodwill



183,218



157,123

Intangible assets, net



33,525



38,718

Other assets


 

50,618



52,711

TOTAL ASSETS


$

613,567


$

566,562








 

LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities


$

103,258


$

98,404

Non-current liabilities


 

37,668



61,669

Total liabilities



140,926



160,073

Total stockholders' equity


 

472,641



406,489

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY


$

613,567


$

566,562









 














































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)


 




Three-month Period
Ended December 31,



2010

 

2009



(Unaudited)






 

Revenue

$ 128,747

$ 110,394

Cost of revenue

35,455

31,173

Gross profit

93,292

79,221

Operating expenses:





Sales and marketing (Note 1)

31,319

27,228

General and administrative (Note 1)

14,019

14,434

Technology (Note 1)

9,924

6,179

Amortization of intangible assets acquired in business combinations

5,333

4,999

Total operating expenses

60,595

52,840

Operating income from continuing operations

32,697

26,381

Interest and other income (expense), net

1,891

(176

)

Income before income taxes from continuing operations

34,588

26,205

Income tax expense

13,526

8,834

Net income from continuing operations

21,062

17,371

Loss from discontinued operations, net of tax impact

-

(1,874

)

Net income

$ 21,062

$ 15,497






 

Basic net income from continuing operations per common share

$ 0.26

$ 0.20

Diluted net income from continuing operations per common share

$ 0.26

$ 0.20

Basic net income per common share

$ 0.26

$ 0.18

Diluted net income per common share

$ 0.26

$ 0.18

Weighted-average shares used to compute basic net income per common


share

80,817

85,779

Weighted-average shares used to compute diluted net income per


common share

81,837

86,384






 















































Note 1 — Includes stock-based compensation as follows:

 

Three-month Period
Ended December 31,



2010

 

2009



(Unaudited)

Sales and marketing

$

363

$

355

General and administrative


1,457


1,361

Technology

 

286

 

197

Total stock-based compensation

$

2,106

$

1,913







 






















































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)


 



Year Ended December 31,



2010

2009



(Unaudited)





 

Revenue

$ 430,798

$ 422,723

Cost of revenue

116,802

116,509

Gross profit

313,996

306,214

Operating expenses:




Sales and marketing (Note 1)

112,282

118,457

General and administrative (Note 1)

53,536

60,373

Technology (Note 1)

35,047

25,050

Amortization of intangible assets acquired in business combinations

20,611

19,803

Total operating expenses

221,476

223,683

Operating income from continuing operations

92,520

82,531

Interest and other income, net

2,204

302

Income before income taxes from continuing operations

94,724

82,833

Income tax expense

14,120

21,264

Net income from continuing operations

80,604

61,569

(Loss) income from discontinued operations, net of tax impact

(134

)

7,047

Gain on sale, net of tax

10,040

-

Net income

$ 90,510

$ 68,616





 

Basic net income from continuing operations per common share

$ 0.99

$ 0.71

Diluted net income from continuing operations per common share

$ 0.98

$ 0.71

Basic net income per common share

$ 1.11

$ 0.79

Diluted net income per common share

$ 1.10

$ 0.79

Weighted-average shares used to compute basic net income per common


share

81,615

86,716

Weighted-average shares used to compute diluted net income per


common share

82,334

87,210





 





































Note 1 — Includes stock-based compensation as follows:

 

Year Ended December 31,



2010

 

2009



(Unaudited)

Sales and marketing

$ 1,280

$ 1,907

General and administrative

5,815

6,034

Technology

849

928

Total stock-based compensation

$ 7,944

$ 8,869





 












































































VALUECLICK, INC.



RECONCILIATION OF NET INCOME FROM CONTINUING



OPERATIONS TO ADJUSTED-EBITDA (Note 1)



(In thousands)


 



Three-month Period



Ended December 31,



2010

2009



(Unaudited)

Net income from continuing operations

$

21,062

$

17,371

Interest and other (income) expense, net


(1,891

)

176

Provision for income tax


13,526


8,834

Amortization of intangible assets acquired in business combinations


5,333


4,999

Depreciation and leasehold amortization


1,742


1,795

Stock-based compensation

 

2,106

 

1,913

Adjusted-EBITDA

$

41,878

$

35,088







 








































































 

Year Ended December 31,



2010

2009



(Unaudited)

Net income from continuing operations

$

80,604

$

61,569

Interest and other (income) expense, net


(2,204

)

(302

)

Provision for income taxes


14,120


21,264

Amortization of intangible assets acquired in business combinations


20,611


19,803

Depreciation and leasehold amortization


6,620


7,563

Stock-based compensation

 

7,944

 

8,869

Adjusted-EBITDA

$

127,695

$

118,766

Note 1 — "Adjusted-EBITDA" (GAAP net income from continuing


operations before interest, income taxes, depreciation, amortization,


and stock-based compensation expenses) 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.





























































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 December 31,


2010

2009





 

GAAP net income from continuing operations

$ 21,062

$ 17,371

Stock-based compensation

2,106

1,913

Amortization of intangible assets acquired in business combinations

5,333

4,999

Tax impact of above items

(2,955

)

(2,664

)

Non-GAAP net income

$ 25,546

$ 21,619

Non-GAAP diluted net income per common share

$ 0.31

$ 0.25

Weighted-average shares used to compute non-GAAP diluted net income


per



common share

81,837

86,384





 






































































Year Ended December 31,


2010

2009





 

GAAP net income from continuing operations

$

80,604

$

61,569

Stock-based compensation

7,944


8,869

Amortization of intangible assets acquired in business combinations

20,611


19,803

Tax impact of above items

 

(11,220

)

 

(10,821

)

Non-GAAP net income

$

97,939

$

79,420

Non-GAAP diluted net income per common share

$

1.19

$

0.91

Weighted-average shares used to compute non-GAAP diluted net income


per



common share

 

82,334

 

87,210







 

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.





















































































































































































































































































































































































































































































































































































































































VALUECLICK, INC.



SEGMENT OPERATING RESULTS



(In thousands)



(Note 1)




 

 




Three-month Period Ended
December 31,




Year Ended



December 31,


 


2010

2009



2010

2009


(Unaudited)



(Unaudited)

Affiliate Marketing:










Revenue

$

36,188

$

31,544



$

124,126

$

111,903

Cost of revenue

 

4,667

 

4,005



 

17,215

 

15,617

Gross profit

31,521


27,539




106,911


96,286

Operating expenses

 

9,832

 

9,244



 

37,359

 

38,165

Segment income from operations

$

21,689

$

18,295



$

69,552

$

58,121











 

Media:










Revenue

$

41,726

$

40,149



$

137,487

$

135,086

Cost of revenue

 

23,102

 

21,013



 

74,102

 

71,320

Gross profit

18,624


19,136




63,385


63,766

Operating expenses

 

8,056

 

7,295



 

29,760

 

30,505

Segment income from operations

$

10,568

$

11,841



$

33,625

$

33,261











 

Owned & Operated Websites:










Revenue

$

42,749

$

31,771



$

138,545

$

149,599

Cost of revenue

 

7,117

 

5,715



 

23,107

 

27,002

Gross profit

35,632


26,056




115,438


122,597

Operating expenses

 

25,196

 

18,917



 

87,475

 

87,563

Segment income from operations

$

10,436

$

7,139



$

27,963

$

35,034











 

Technology:










Revenue

$

8,484

$

7,507



$

31,889

$

27,686

Cost of revenue

 

908

 

894



 

3,359

 

3,709

Gross profit

7,576


6,613




28,530


23,977

Operating expenses

 

3,029

 

2,923



 

11,932

 

11,202

Segment income from operations

$

4,547

$

3,690



$

16,598

$

12,775

Reconciliation of segment income from operations to consolidated


income from operations:










Total segment income from operations

$

47,240

$

40,965



$

147,738

$

139,191

Corporate expenses

(7,104

)

(7,672

)



(26,663

)

(27,988

)

Stock-based compensation

(2,106

)

(1,913

)



(7,944

)

(8,869

)

Amortization of intangible assets

 

(5,333

)

 

(4,999

)


 

(20,611

)

 

(19,803

)

Consolidated income from continuing operations


$


32,697


$


26,381




$


92,520


$


82,531











 

Reconciliation of segment revenue to consolidated revenue:










Affiliate Marketing

$

36,188

$

31,544



$

124,126

$

111,903

Media

41,726


40,149




137,487


135,086

Owned & Operated Websites

42,749


31,771




138,545


149,599

Technology

8,484


7,507




31,889


27,686

Inter-segment eliminations

 

(400

)

 

(577

)


 

(1,249

)

 

(1,551

)

Consolidated revenue

$

128,747

$

110,394



$

430,798

$

422,723















 

Note 1 — On February 1, 2010, the Company announced the divestiture of


the Web Clients business, which had been included in the Media segment.


The Company has presented this divested business as discontinued


operations and has recast its historical statements of operations and


segment operating results to reflect this change. The information in


this table excludes the divested business for all periods presented. A


PDF file containing historical consolidated statements of operations and


segment operating results information is available for download on the


Investor Relations page at www.valueclick.com.




ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677


Source: ValueClick, Inc.



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