WESTLAKE VILLAGE, Calif., Nov 03, 2010 (BUSINESS WIRE) --
ValueClick, Inc. (Nasdaq: VCLK) today reported financial results for the
third quarter ended September 30, 2010. Revenue, adjusted-EBITDA1,
and earnings per share metrics all exceeded the high-end of the guidance
ranges management provided on August 5.
For the third quarter of 2010, the Company generated $106.8 million in
revenue. Third quarter 2010 adjusted-EBITDA was $31.0 million, resulting
in an adjusted-EBITDA margin of 29.1 percent.
During the third quarter, ValueClick repurchased 1.3 million shares of
its common stock for $13.2 million dollars. Year-to-date, the Company
has spent $38.6 million to repurchase 4.0 million shares of its common
stock. Today, ValueClick announced that its board of directors has
increased the share repurchase program authorization by $68.6 million.
The Company is now authorized to repurchase up to $100 million of its
common stock.
"In the third quarter we accelerated year-over-year revenue growth,
expanded margins and made significant progress on our initiatives to
leverage our traffic, data and optimization capabilities for future
growth," said Jim Zarley, chief executive officer of ValueClick. "As our
share repurchases and increased authorization suggest, we have
confidence in our ability to continue to capitalize on the long-term
opportunities in our industry."
GAAP net income from continuing operations for the third quarter was
$36.2 million, or $0.44 per diluted common share. In the quarter, the
Company recorded favorable tax adjustments of approximately $24 million,
and recorded a loss of $3.1 million related to certain investments in
auction rate securities. Excluding these items and assuming the
normalized 42 percent effective tax rate included in the Company's
previously-issued guidance, net income would have been $13.2 million, or
$0.16 per diluted common share.
Non-GAAP net income, which excludes discontinued operations, stock-based
compensation and amortization of intangible assets was $40.4 million, or
$0.49 per diluted common share for the third 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 September 30, 2010 includes
approximately $164 million in cash, cash equivalents and marketable
securities and no debt. The Company generated approximately $59 million
in free cash flow, defined as cash flow from operations net of capital
expenditures, in the first nine months of 2010.
Business Outlook
Today, ValueClick is announcing guidance for the fourth quarter of 2010:
Guidance | |
Revenue | $122-$126 million |
Adjusted-EBITDA | $39-$40 million |
Mid-Point Adjusted-EBITDA Margin | ~32.0% |
GAAP diluted net income per common share | $0.22-$0.23 |
Non-GAAP diluted net income per common share | $0.27-$0.28 |
The consolidated revenue guidance range is based on the following
segment-level assumptions for revenue growth rates expressed as a
percentage increase or decrease from fourth quarter 2009 reported
revenue levels:
Affiliate Marketing: up low double digits
Media: up mid to high single digits
Owned & Operated: up low twenties
Technology: up low double digits
Fourth quarter 2010 non-GAAP and GAAP diluted net income per common
share guidance assume stock-based compensation of $2.0 million,
amortization of intangible assets of $5.5 million, interest and other
income of $1.0 million, a 40 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 third quarter
during a conference call and webcast on November 3 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 November 10 at
(888) 203-1112 and (719) 457-0820 (pass code: 7302430). An archive of
the Webcast will also be available through November 10.
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, stock-based
compensation, and goodwill impairment charges. 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) | ||||||||
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(Unaudited) | ||||||||
ASSETS |
||||||||
CURRENT ASSETS: |
||||||||
Cash and cash equivalents |
$ |
147,494 |
$ |
158,497 |
||||
Marketable securities |
16,486 |
- |
||||||
Accounts receivable, net |
71,824 |
68,484 |
||||||
Other current assets |
26,143 |
20,856 |
||||||
Assets held for sale |
- |
11,098 |
||||||
Total current assets |
261,947 |
258,935 |
||||||
Assets held for sale, less current portion |
- |
25,777 |
||||||
Note receivable, less current portion |
31,627 |
- |
||||||
Marketable securities, less current portion |
- |
22,026 |
||||||
Property and equipment, net |
11,252 |
11,272 |
||||||
Goodwill |
183,264 |
157,123 |
||||||
Intangible assets, net |
38,844 |
38,718 |
||||||
Other assets |
55,419 |
52,711 |
||||||
TOTAL ASSETS |
$ |
582,353 |
$ |
566,562 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
Current liabilities |
$ |
92,696 |
$ |
98,404 |
||||
Non-current liabilities |
38,366 |
61,669 |
||||||
Total liabilities |
131,062 |
160,073 |
||||||
Total stockholders' equity |
451,291 |
406,489 |
||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
582,353 |
$ |
566,562 |
VALUECLICK, INC. | |||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(In thousands, except per share data) | |||||||
Three-month Period Ended September 30, |
|||||||
2010 | 2009 | ||||||
(Unaudited) | |||||||
Revenue |
$ |
106,768 |
$ |
105,166 |
|||
Cost of revenue |
28,502 |
26,146 |
|||||
Gross profit |
78,266 |
79,020 |
|||||
Operating expenses: |
|||||||
Sales and marketing (Note 1) |
29,351 |
31,093 |
|||||
General and administrative (Note 1) |
12,331 |
16,700 |
|||||
Technology (Note 1) |
8,897 |
6,143 |
|||||
Amortization of intangible assets acquired in business combinations |
5,376 |
4,991 |
|||||
Total operating expenses |
55,955 |
58,927 |
|||||
Operating income from continuing operations |
22,311 |
20,093 |
|||||
Interest and other income (expense), net |
(2,683 |
) |
(513 |
) |
|||
Income before income taxes from continuing operations |
19,628 |
19,580 |
|||||
Income tax benefit |
(16,549 |
) |
(3,677 |
) |
|||
Net income from continuing operations |
36,177 |
23,257 |
|||||
Income from discontinued operations, net of tax impact |
- |
1,773 |
|||||
Net income |
$ |
36,177 |
$ |
25,030 |
|||
Basic net income from continuing operations per common share |
$ |
0.45 |
$ |
0.27 |
|||
Diluted net income from continuing operations per common share |
$ |
0.44 |
$ |
0.26 |
|||
Basic net income per common share |
$ |
0.45 |
$ |
0.29 |
|||
Diluted net income per common share |
$ |
0.44 |
$ |
0.29 |
|||
Weighted-average shares used to compute basic net income per common share |
81,228 |
87,194 |
|||||
Weighted-average shares used to compute diluted net income per common share |
81,814 |
87,790 |
|||||
Note 1 - Includes stock-based compensation as follows: |
Three-month Period Ended September 30, |
||||||
2010 | 2009 | ||||||
(Unaudited) | |||||||
Sales and marketing |
$ |
257 |
$ |
394 |
|||
General and administrative |
1,261 |
1,555 |
|||||
Technology |
163 |
228 |
|||||
Total stock-based compensation |
$ |
1,681 |
$ |
2,177 |
VALUECLICK, INC. |
||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||
(In thousands, except per share data) |
||||||
Nine-month Period Ended September 30, |
||||||
2010 | 2009 | |||||
(Unaudited) | ||||||
Revenue |
$ |
302,051 |
$ |
312,329 |
||
Cost of revenue |
81,347 |
85,336 |
||||
Gross profit |
220,704 |
226,993 |
||||
Operating expenses: |
||||||
Sales and marketing (Note 1) |
80,963 |
91,229 |
||||
General and administrative (Note 1) |
39,517 |
45,939 |
||||
Technology (Note 1) |
25,123 |
18,871 |
||||
Amortization of intangible assets acquired in business combinations |
15,278 |
14,804 |
||||
Total operating expenses |
160,881 |
170,843 |
||||
Operating income from continuing operations |
59,823 |
56,150 |
||||
Interest and other income, net |
313 |
478 |
||||
Income before income taxes from continuing operations |
60,136 |
56,628 |
||||
Income tax expense |
594 |
12,430 |
||||
Net income from continuing operations |
59,542 |
44,198 |
||||
Income (loss) from discontinued operations, net of tax impact |
(134 |
) |
8,921 |
|||
Gain on sale, net of tax |
10,040 |
- |
||||
Net income |
$ |
69,448 |
$ |
53,119 |
||
Basic net income from continuing operations per common share |
$ |
0.73 |
$ |
0.51 |
||
Diluted net income from continuing operations per common share |
$ |
0.72 |
$ |
0.51 |
||
Basic net income per common share |
$ |
0.85 |
$ |
0.61 |
||
Diluted net income per common share |
$ |
0.84 |
$ |
0.61 |
||
Weighted-average shares used to compute basic net income per common share |
81,884 |
87,032 |
||||
Weighted-average shares used to compute diluted net income per common share |
82,501 |
87,489 |
||||
Note 1 - Includes stock-based compensation as follows: |
Nine-month Period Ended September 30, |
|||||
2010 | 2009 | |||||
(Unaudited) | ||||||
Sales and marketing |
$ |
917 |
$ |
1,552 |
||
General and administrative |
4,358 |
4,673 |
||||
Technology |
563 |
731 |
||||
Total stock-based compensation |
$ |
5,838 |
$ |
6,956 |
VALUECLICK, INC. | |||||||
RECONCILIATION OF NET INCOME FROM CONTINUING | |||||||
OPERATIONS TO ADJUSTED-EBITDA (Note 1) | |||||||
(In thousands) | |||||||
Three-month Period Ended September 30, |
|||||||
2010 | 2009 | ||||||
(Unaudited) | |||||||
Net income from continuing operations |
$ |
36,177 |
$ |
23,257 |
|||
Interest and other (income) expense, net |
2,683 |
513 |
|||||
Income tax benefit |
(16,549 |
) |
(3,677 |
) |
|||
Amortization of intangible assets acquired in business combinations |
5,376 |
4,991 |
|||||
Depreciation and leasehold amortization |
1,664 |
1,866 |
|||||
Stock-based compensation |
1,681 |
2,177 |
|||||
Adjusted-EBITDA |
$ |
31,032 |
$ |
29,127 |
|||
Nine-month Period Ended June 30, |
|||||||
2010 | 2009 | ||||||
(Unaudited) | |||||||
Net income from continuing operations |
$ |
59,542 |
$ |
44,198 |
|||
Interest and other (income) expense, net |
(313 |
) |
(478 |
) |
|||
Provision for income taxes |
594 |
12,430 |
|||||
Amortization of intangible assets acquired in business combinations |
15,278 |
14,804 |
|||||
Depreciation and leasehold amortization |
4,878 |
5,768 |
|||||
Stock-based compensation |
5,838 |
6,956 |
|||||
Adjusted-EBITDA |
$ |
85,817 |
$ |
83,678 |
Note 1 - "Adjusted-EBITDA" (GAAP net income from continuing
operations before interest, income taxes, depreciation, amortization,
stock-based compensation, and goodwill impairment charges) 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 September 30, |
||||||
2010 | 2009 | |||||
GAAP net income from continuing operations |
$ |
36,177 |
$ |
23,257 |
||
Stock-based compensation |
1,681 |
2,177 |
||||
Amortization of intangible assets acquired in business combinations |
5,376 |
4,991 |
||||
Tax impact of above items |
(2,818 |
) |
(2,741 |
) |
||
Non-GAAP net income |
$ |
40,416 |
$ |
27,684 |
||
Non-GAAP diluted net income per common share |
$ |
0.49 |
$ |
0.32 |
||
Weighted-average shares used to compute non-GAAP diluted net income per
|
81,814 |
87,790 |
||||
Nine-Month Period Ended September 30, |
||||||
2010 | 2009 | |||||
GAAP net income from continuing operations |
$ |
59,542 |
$ |
44,198 |
||
Stock-based compensation |
5,838 |
6,956 |
||||
Amortization of intangible assets acquired in business combinations |
15,278 |
14,804 |
||||
Tax impact of above items |
(8,265 |
) |
(8,157 |
) |
||
Non-GAAP net income |
$ |
72,393 |
$ |
57,801 |
||
Non-GAAP diluted net income per common share |
$ |
0.88 |
$ |
0.66 |
||
Weighted-average shares used to compute non-GAAP diluted net income per
|
82,501 |
87,489 |
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 September 30, |
Nine-month Period Ended September 30, |
|||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||
(Unaudited) | (Unaudited) | |||||||||||
Affiliate Marketing: | ||||||||||||
Revenue |
$ |
29,841 |
$ |
26,342 |
$ |
87,938 |
$ |
80,359 |
||||
Cost of revenue |
4,111 |
3,692 |
12,548 |
11,612 |
||||||||
Gross profit |
25,730 |
22,650 |
75,390 |
68,747 |
||||||||
Operating expenses |
9,190 |
9,505 |
27,527 |
28,921 |
||||||||
Segment income from operations |
$ |
16,540 |
$ |
13,145 |
$ |
47,863 |
$ |
39,826 |
||||
Media: | ||||||||||||
Revenue |
$ |
33,321 |
$ |
30,946 |
$ |
95,761 |
$ |
94,937 |
||||
Cost of revenue |
18,239 |
16,393 |
51,000 |
50,307 |
||||||||
Gross profit |
15,082 |
14,553 |
44,761 |
44,630 |
||||||||
Operating expenses |
7,257 |
7,238 |
21,704 |
23,210 |
||||||||
Segment income from operations |
$ |
7,825 |
$ |
7,315 |
$ |
23,057 |
$ |
21,420 |
||||
Owned & Operated Websites: | ||||||||||||
Revenue |
$ |
35,913 |
$ |
41,536 |
$ |
95,796 |
$ |
117,828 |
||||
Cost of revenue |
5,473 |
5,366 |
15,990 |
21,287 |
||||||||
Gross profit |
30,440 |
36,170 |
79,806 |
96,541 |
||||||||
Operating expenses |
23,307 |
25,002 |
62,279 |
68,646 |
||||||||
Segment income from operations |
7,133 |
$ |
11,168 |
$ |
17,527 |
$ |
27,895 |
|||||
Technology: | ||||||||||||
Revenue |
$ |
7,901 |
$ |
6,638 |
$ |
23,405 |
$ |
20,179 |
||||
Cost of revenue |
826 |
933 |
2,451 |
2,815 |
||||||||
Gross profit |
7,075 |
5,705 |
20,954 |
17,364 |
||||||||
Operating expenses |
2,887 |
2,882 |
8,903 |
8,279 |
||||||||
Segment income from operations |
$ |
4,188 |
$ |
2,823 |
$ |
12,051 |
$ |
9,085 |
||||
Reconciliation of segment income from operations to consolidated income from operations: |
||||||||||||
Total segment income from operations |
$ |
35,686 |
$ |
34,451 |
$ |
100,498 |
$ |
98,226 |
||||
Corporate expenses |
(6,318 |
) |
(7,190 |
) |
(19,559 |
) |
(20,316 |
) |
||||
Stock-based compensation |
(1,681 |
) |
(2,177 |
) |
(5,838 |
) |
(6,956 |
) |
||||
Amortization of intangible assets |
(5,376 |
) |
(4,991 |
) |
(15,278 |
) |
(14,804 |
) |
||||
Consolidated income from continuing operations |
|
|
|
|
|
|
|
|
||||
Reconciliation of segment revenue to consolidated revenue: | ||||||||||||
Affiliate Marketing |
$ |
29,841 |
$ |
26,342 |
$ |
87,938 |
$ |
80,359 |
||||
Media |
33,321 |
30,946 |
95,761 |
94,937 |
||||||||
Owned & Operated Websites |
35,913 |
41,536 |
95,796 |
117,828 |
||||||||
Technology |
7,901 |
6,638 |
23,405 |
20,179 |
||||||||
Inter-segment eliminations |
(208 |
) |
(296 |
) |
(849 |
) |
(974 |
) |
||||
Consolidated revenue |
$ |
106,768 |
$ |
105,166 |
$ |
302,051 |
$ |
312,329 |
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.
SOURCE: ValueClick, Inc.
ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677