Revenue and Profitability Exceed High-End of Guidance Ranges
fourth quarter ended
and non-GAAP diluted net income per common share were all above the
high-end of their respective guidance ranges.
"We completed a successful 2011 with strong fourth quarter results,
including Media segment results that were driven by 20 percent organic
growth in our display business, double digit growth in the Affiliate
Marketing and Technology segments, and very strong performance by our
recent acquisitions," said
optimization and traffic platforms to expand our presence in the digital
marketing industry, and we remain confident in our ability to generate
more than
Highlights from the fourth quarter of 2011 results include:
Revenue of
$182.6 million , up 42 percent from the fourth quarter of
2010 (Q4 2010);
Adjusted-EBITDA of
$62.7 million , up 50 percent from Q4 2010;
Adjusted-EBITDA margin of 34.3 percent versus 32.5 percent in Q4 2010;
Income from operations of
$45.6 million , up 39% from Q4 2010;
Non-GAAP net income2 of
$0.47 per diluted share versus
$0.31 in Q4 2010; and
GAAP net income of
$0.35 per diluted share versus$0.26 in Q4 2010.
The consolidated balance sheet as of
approximately
million in total debt associated with the
Dotomi and subsequent share repurchases.
Share Repurchase Program Update
During the quarter, the Company repurchased 2.8 million shares of its
common stock for a total cost of
total cost of
on
offsets the shares issued as part of the acquisition.
Today,
the share repurchase program authorization by
program's current total authorization to
Cost Reclassifications
Beginning with the fourth quarter 2011 results, the Company will make
two accounting reclassifications that have no impact on the Company's
historical consolidated revenue, operating income, cash flows, net
income, net income per diluted common share or adjusted-EBITDA, or on
historical revenue or operating income by segment.
First,
with payments to search engines for driving consumer traffic to the
Company's owned and operated websites. Historically, these traffic
acquisition costs have been classified in operating expenses in the Sales
and marketing expense line item. The Company is now classifying
these costs in Cost of revenue, which the Company believes will
provide increased transparency into the drivers of the Owned & Operated
Websites segment.
Second,
amortization of developed technologies and websites acquired in business
combinations by including it in Cost of revenue. Amortization
related to developed technologies and websites acquired in business
combinations was considered immaterial prior to the Dotomi acquisition
and was previously recorded in operating expenses in the Amortization
of intangible assets acquired in business combinations line item.
All prior periods presented in the Consolidated Statement of Operations
and Segment Operating Results included in this press release are
presented using the new classifications. A table with historical trend
information is available at http://ir.conversantmedia.com.
Business Outlook
Today,
|
Guidance |
|
Revenue |
|
|
Adjusted-EBITDA |
|
|
Non-GAAP diluted net income per common share |
|
|
Impact of stock-based compensation and amortization of intangibles, net of tax |
|
|
GAAP diluted net income per common share |
|
|
|
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 2011 reported revenue levels:
|
■ |
Affiliate Marketing: |
|
|
up low double digits |
■ |
Media: |
up over 100 percent on a reported basis, up mid teens excluding the impact of acquisitions |
|||
■ |
Owned & Operated: |
down high single digits to low double digits |
|||
■ |
Technology: |
up high single digits |
|||
|
First quarter 2012 guidance assumes stock-based compensation of
million, amortization of intangible assets of
of zero, a 38 percent effective tax rate, and 82 million diluted shares
outstanding.
Conference Call Today at
officer, will present an overview of the results and other factors
affecting
during a conference call and webcast on
Investors and analysts may obtain the dial-in information through
StreetEvents (www.streetevents.com).
The live webcast of the conference call will be available at http://ir.conversantmedia.com.
A replay of the conference call will be available through
(888) 203-1112 and (719) 457-0820 (pass code: 4205958). An archive of
the webcast will also be available through
About
marketing companies. Through a unique combination of data, technology
and services,
acquisition at scale for the world's largest advertisers, and maximizes
advertising revenue for tens of thousands of online and mobile
publishers.
Media, Dotomi, Greystripe,
Investopedia.com, and PriceRunner. The Company is based in
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, the
risk that legislation and governmental regulation could negatively
impact the Company's performance, the effects of recent acquisitions on
operate or integrate Dotomi's business, including the potential
inability to retain customers, key employees or vendors. 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
Exchange Commission made from time to time by
not limited to: its annual report on Form 10-K filed on
2011; 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.
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, stock-based
compensation expenses, and acquisition-related costs. 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.
2 Non-GAAP net income excludes stock-based compensation and
amortization of intangible assets. Please see the attached schedule for
a reconciliation of GAAP net income to non-GAAP diluted net income per
common share.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands) |
||||||
|
||||||
|
December 31, |
|||||
2011 |
2010 |
|||||
(Unaudited) |
||||||
ASSETS |
||||||
Current Assets: |
||||||
Cash and cash equivalents |
$ |
116,676 |
$ |
194,317 |
||
Marketable securities |
— |
3,000 |
||||
Accounts receivable, net |
129,076 |
86,738 |
||||
Other current assets |
25,181 |
|
18,470 |
|||
Total current assets |
270,933 |
302,525 |
||||
|
||||||
Note receivable, less current portion |
29,700 |
31,267 |
||||
Property and equipment, net |
19,952 |
12,414 |
||||
Goodwill |
437,033 |
183,218 |
||||
Intangible assets, net |
114,007 |
33,525 |
||||
Other assets |
9,086 |
|
50,618 |
|||
TOTAL ASSETS |
$ |
880,711 |
|
$ |
613,567 |
|
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
Borrowings under credit facility, current |
$ |
10,000 |
$ |
— |
||
Other current liabilities |
125,616 |
103,258 |
||||
Borrowings under credit facility, less current portion |
157,500 |
— |
||||
Other non-current liabilities |
24,202 |
|
37,668 |
|||
Total liabilities |
317,318 |
140,926 |
||||
Total stockholders' equity |
563,393 |
|
472,641 |
|||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
880,711 |
|
$ |
613,567 |
|
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) |
|||||||
|
|||||||
Three-month Period |
|||||||
Ended December 31, |
|||||||
2011 |
|
2010 |
|||||
(Unaudited) |
|||||||
Revenue |
$ |
182,594 |
$ |
128,747 |
|||
Cost of revenue (Note 1) |
74,128 |
|
56,907 |
||||
Gross profit |
108,466 |
71,840 |
|||||
Operating expenses: |
|||||||
Sales and marketing (Note 2) |
22,275 |
12,047 |
|||||
General and administrative (Note 2) |
18,678 |
14,019 |
|||||
Technology (Note 2) |
15,608 |
9,924 |
|||||
Amortization of intangible assets acquired in business combinations |
6,327 |
|
3,153 |
||||
Total operating expenses |
62,888 |
|
39,143 |
||||
Income from operations |
45,578 |
32,697 |
|||||
Interest and other income, net |
1,434 |
|
1,891 |
||||
Income before income taxes |
47,012 |
34,588 |
|||||
Income tax expense |
17,635 |
|
13,526 |
||||
Net income |
$ |
29,377 |
|
$ |
21,062 |
||
|
|||||||
Basic net income per common share |
$ |
0.36 |
|
$ |
0.26 |
||
Diluted net income per common share |
$ |
0.35 |
|
$ |
0.26 |
||
Weighted-average shares used to compute basic net income per common share |
81,505 |
|
80,817 |
||||
Weighted-average shares used to compute diluted net income per common share |
82,963 |
|
81,837 |
||||
|
|||||||
|
|||||||
Note 1 - Includes amortization of intangible assets acquired in business combinations of three-month periods ended |
|||||||
|
|||||||
Note 2 - Includes stock-based compensation as follows: |
|||||||
Three-month Period |
|||||||
Ended December 31, |
|||||||
2011 |
2010 |
||||||
(Unaudited) |
|||||||
Sales and marketing |
$ |
1,675 |
$ |
363 |
|||
General and administrative |
2,663 |
1,457 |
|||||
Technology |
1,438 |
|
286 |
||||
Total stock-based compensation |
$ |
5,776 |
|
$ |
2,106 |
||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data) |
|||||||
|
|||||||
Year Ended December 31, |
|||||||
2011 |
|
2010 |
|||||
(Unaudited) |
|||||||
Revenue |
$ |
560,155 |
$ |
430,798 |
|||
Cost of revenue (1) |
242,249 |
|
190,856 |
|
|||
Gross profit |
317,906 |
239,942 |
|||||
Operating expenses: |
|||||||
Sales and marketing (Note 2) |
65,996 |
45,750 |
|||||
General and administrative (Note 2) |
59,906 |
53,536 |
|||||
Technology (Note 2) |
49,276 |
35,047 |
|||||
Amortization of intangible assets acquired in business combinations |
16,646 |
|
13,089 |
|
|||
Total operating expenses |
191,824 |
|
147,422 |
|
|||
Income from operations |
126,082 |
92,520 |
|||||
Interest and other income, net |
4,666 |
|
2,204 |
|
|||
Income before income taxes |
130,748 |
94,724 |
|||||
Income tax expense |
29,618 |
|
14,120 |
|
|||
Income from continuing operations |
101,130 |
80,604 |
|||||
Loss from discontinued operations, net of tax |
— |
(134 |
) |
||||
Gain on sale, net of tax |
— |
|
10,040 |
|
|||
Net income |
$ |
101,130 |
|
$ |
90,510 |
|
|
|
|||||||
Basic income from continuing operations per common share |
$ |
1.26 |
|
$ |
0.99 |
|
|
Diluted income from continuing operations per common share |
$ |
1.24 |
|
$ |
0.98 |
|
|
Basic net income per common share |
$ |
1.26 |
|
$ |
1.11 |
|
|
Diluted net income per common share |
$ |
1.24 |
|
$ |
1.10 |
|
|
Weighted-average shares used to compute basic net income per common share |
80,323 |
|
81,615 |
|
|||
Weighted-average shares used to compute diluted net income per common share |
81,489 |
|
82,334 |
|
|||
|
|||||||
|
|||||||
Note 1 - Includes amortization of intangible assets acquired in business combinations of ended |
|||||||
|
|||||||
Note 2 - Includes stock-based compensation as follows: |
|||||||
Year Ended December 31, |
|||||||
2011 |
2010 |
||||||
(Unaudited) |
|||||||
Sales and marketing |
$ |
3,320 |
$ |
1,280 |
|||
General and administrative |
7,829 |
5,815 |
|||||
Technology |
2,873 |
|
849 |
|
|||
Total stock-based compensation |
$ |
14,022 |
|
$ |
7,944 |
|
|
|
RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS
TO ADJUSTED-EBITDA (Note 1)
(In thousands) |
|||||||
|
|||||||
Three-month Period |
|||||||
Ended December 31, |
|||||||
2011 |
|
2010 |
|||||
(Unaudited) |
|||||||
Net income |
$ |
29,377 |
$ |
21,062 |
|||
Interest and other income, net |
(1,434 |
) |
(1,891 |
) |
|||
Provision for income tax |
17,635 |
13,526 |
|||||
Amortization of acquired intangible assets included in cost of revenue |
2,498 |
2,180 |
|||||
Amortization of acquired intangible assets included in operating expenses |
6,327 |
3,153 |
|||||
Depreciation and leasehold amortization |
2,476 |
1,742 |
|||||
Stock-based compensation |
5,776 |
2,106 |
|||||
Acquisition-related costs |
— |
|
— |
|
|||
Adjusted-EBITDA |
$ |
62,655 |
|
$ |
41,878 |
|
|
|
|||||||
|
|||||||
Year Ended December 31, |
|||||||
2011 |
2010 |
||||||
(Unaudited) |
|||||||
Income from continuing operations |
$ |
101,130 |
$ |
80,604 |
|||
Interest and other income, net |
(4,666 |
) |
(2,204 |
) |
|||
Provision for income tax |
29,618 |
14,120 |
|||||
Amortization of acquired intangible assets included in cost of revenue |
9,633 |
7,522 |
|||||
Amortization of acquired intangible assets included in operating expenses |
16,646 |
13,089 |
|||||
Depreciation and leasehold amortization |
8,028 |
6,620 |
|||||
Stock-based compensation |
14,022 |
7,944 |
|||||
Acquisition-related costs |
412 |
|
— |
|
|||
Adjusted-EBITDA |
$ |
174,823 |
|
$ |
127,695 |
|
|
|
Note 1 - "Adjusted-EBITDA" (GAAP income from continuing
operations before interest, income taxes, depreciation, amortization,
stock-based compensation expenses, and acquisition-related costs)
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, 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.
RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO
NON-GAAP DILUTED NET INCOME PER COMMON SHARE (Note 1)
(In thousands) |
|||||||
|
|||||||
Three-month Period |
|||||||
Ended December 31, |
|||||||
2011 |
|
2010 |
|||||
(Unaudited) |
|||||||
Net income |
$ |
29,377 |
$ |
21,062 |
|||
Stock-based compensation |
5,776 |
2,106 |
|||||
Amortization of acquired intangible assets included in cost of revenue |
2,498 |
2,180 |
|||||
Amortization of acquired intangible assets included in operating expenses |
6,327 |
3,153 |
|||||
Tax impact of above items |
(4,693 |
) |
(2,956 |
) |
|||
Non-GAAP net income |
$ |
39,285 |
|
$ |
25,545 |
|
|
Non-GAAP diluted net income per common share |
$ |
0.47 |
|
$ |
0.31 |
|
|
Weighted-average shares used to compute non-GAAP diluted net income per common share |
82,963 |
|
81,837 |
|
|||
|
|||||||
Year Ended December 31, |
|||||||
2011 |
2010 |
||||||
(Unaudited) |
|||||||
Income from continuing operations |
$ |
101,130 |
$ |
80,604 |
|||
Stock-based compensation |
14,022 |
7,944 |
|||||
Amortization of acquired intangible assets included in cost of revenue |
9,633 |
7,522 |
|||||
Amortization of acquired intangible assets included in operating expenses |
16,646 |
13,089 |
|||||
Tax impact of above items |
(14,377 |
) |
(11,220 |
) |
|||
Non-GAAP net income |
$ |
127,054 |
|
$ |
97,939 |
|
|
Non-GAAP diluted net income per common share |
$ |
1.56 |
|
$ |
1.19 |
|
|
Weighted-average shares used to compute non-GAAP diluted net income per common share |
81,489 |
|
82,334 |
|
|||
|
Note 1 - "Non-GAAP diluted net income per common share" (GAAP diluted
income from continuing operations per common share before the impact of
stock-based compensation and amortization of intangibles) 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.
SEGMENT OPERATING RESULTS
(In thousands) |
|||||||||||||||
|
|||||||||||||||
Three-month Period |
Year Ended |
||||||||||||||
Ended |
December 31, |
||||||||||||||
2011 |
|
2010 |
2011 |
|
2010 |
||||||||||
(Unaudited) |
(Unaudited) |
||||||||||||||
Affiliate Marketing: |
|||||||||||||||
Revenue |
$ |
39,794 |
$ |
36,188 |
$ |
139,409 |
$ |
124,126 |
|||||||
Cost of revenue |
4,227 |
|
4,667 |
|
17,125 |
|
17,215 |
|
|||||||
Gross profit |
35,567 |
31,521 |
122,284 |
106,911 |
|||||||||||
Operating expenses |
9,407 |
|
9,832 |
|
37,711 |
|
37,359 |
|
|||||||
Segment income from operations |
$ |
26,160 |
|
$ |
21,689 |
|
$ |
84,573 |
|
$ |
69,552 |
|
|||
Media: |
|||||||||||||||
Revenue |
$ |
92,672 |
$ |
41,726 |
$ |
224,574 |
$ |
137,487 |
|||||||
Cost of revenue |
41,216 |
|
23,102 |
|
110,115 |
|
74,102 |
|
|||||||
Gross profit |
51,456 |
18,624 |
114,459 |
63,385 |
|||||||||||
Operating expenses |
24,150 |
|
8,056 |
|
59,439 |
|
29,760 |
|
|||||||
Segment income from operations |
$ |
27,306 |
|
$ |
10,568 |
|
$ |
55,020 |
|
$ |
33,625 |
|
|||
Owned & Operated Websites: |
|||||||||||||||
Revenue |
$ |
40,860 |
$ |
42,749 |
$ |
159,821 |
$ |
138,545 |
|||||||
Cost of revenue |
25,209 |
|
26,389 |
|
101,964 |
|
89,639 |
|
|||||||
Gross profit |
15,651 |
16,360 |
57,857 |
48,906 |
|||||||||||
Operating expenses |
6,007 |
|
5,924 |
|
24,093 |
|
20,943 |
|
|||||||
Segment income from operations |
$ |
9,644 |
|
$ |
10,436 |
|
$ |
33,764 |
|
$ |
27,963 |
|
|||
Technology: |
|||||||||||||||
Revenue |
$ |
9,459 |
$ |
8,484 |
$ |
37,031 |
$ |
31,889 |
|||||||
Cost of revenue |
1,112 |
|
908 |
|
3,917 |
|
3,359 |
|
|||||||
Gross profit |
8,347 |
7,576 |
33,114 |
28,530 |
|||||||||||
Operating expenses |
3,692 |
|
3,029 |
|
13,557 |
|
11,932 |
|
|||||||
Segment income from operations |
$ |
4,655 |
|
$ |
4,547 |
|
$ |
19,557 |
|
$ |
16,598 |
|
|||
Reconciliation of segment income from operations to consolidated income from operations: |
|||||||||||||||
Total segment income from operations |
$ |
67,765 |
$ |
47,240 |
$ |
192,914 |
$ |
147,738 |
|||||||
Corporate expenses |
(7,586 |
) |
(7,104 |
) |
(26,531 |
) |
(26,663 |
) |
|||||||
Stock-based compensation |
(5,776 |
) |
(2,106 |
) |
(14,022 |
) |
(7,944 |
) |
|||||||
Amortization of acquired intangible assets included
in consolidated cost of revenue |
(2,498 |
) |
(2,180 |
) |
(9,633 |
) |
(7,522 |
) |
|||||||
Amortization of acquired intangible assets included
in consolidated operating expense |
(6,327 |
) |
(3,153 |
) |
(16,646 |
) |
(13,089 |
) |
|||||||
Consolidated income from operations |
$ |
45,578 |
|
$ |
32,697 |
|
$ |
126,082 |
|
$ |
92,520 |
|
|||
Reconciliation of segment revenue to consolidated revenue: |
|||||||||||||||
Affiliate Marketing |
$ |
39,794 |
$ |
36,188 |
$ |
139,409 |
$ |
124,126 |
|||||||
Media |
92,672 |
41,726 |
224,574 |
137,487 |
|||||||||||
Owned & Operated Websites |
40,860 |
42,749 |
159,821 |
138,545 |
|||||||||||
Technology |
9,459 |
8,484 |
37,031 |
31,889 |
|||||||||||
Inter-segment eliminations |
(191 |
) |
(400 |
) |
(680 |
) |
(1,249 |
) |
|||||||
Consolidated revenue |
$ |
182,594 |
|
$ |
128,747 |
|
$ |
560,155 |
|
$ |
430,798 |
|
|||
|
1.818.575.4677
Source:
News Provided by Acquire Media