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ReachLocal Reports Second Quarter 2012 Results

ReachLocal, Inc. (NASDAQ:RLOC), a leader in local online marketing solutions for small- and medium-sized businesses (SMBs), today reported financial results for the second quarter ended June 30, 2012.
  • Revenue growth of 21% over the second quarter of 2011, highlighted by 43% growth in international markets and 23% growth in the direct local channel
  • International revenue expanded to 26% of revenue from 22% for the prior year period. On a constant foreign exchange basis, international revenue grew 50% from the prior year period and consolidated revenue grew 23%
  • Adjusted EBITDA grew 34% to $5.9 million, compared to $4.4 million for the prior year period
  • Active Advertisers grew 17% to 21,300 and Active Campaigns grew 24% to 31,500 from the prior year period
  • Repurchased $1.2 million or 134,000 shares of stock ($10.7 million or 1,410,000 shares to date) under the company’s $20 million buy-back authorization

Management Commentary

“Significant growth across all of our geographies and sales channels, combined with solid gains in advertisers and campaigns over the prior year period resulted in a strong second quarter for ReachLocal,” said Zorik Gordon, CEO. “Looking ahead to the second half of 2012 we intend to expand our global footprint, both in terms of entering new markets and expanding our salesforce in existing foreign markets to further leverage the solid productivity trends of our international IMCs. We also plan to introduce new products in the areas of online advertising, mobile and local commerce in the second half of 2012.”

Quarterly Results at a Glance

(Table amounts in 000’s except key metrics and per share amounts)
  Q2 2012     Q2 2011     % Change
Revenue $112,212 $92,752 21%
Net Income (Loss) from Continuing Operations $332 $(276) 220%
Net Income (Loss) from Continuing Operations per Diluted Share $0.01 $(0.01) 200%
Net Income (Loss) $332 $(949) 135%
Net Income (Loss) per Diluted Share $0.01 $(0.03) 133%
Non-GAAP Net Income $3,402 $3,023 13%
Non-GAAP Net Income per Diluted Share $0.12 $0.10 20%
Adjusted EBITDA $5,947 $4,446 34%
Underclassmen Expense $11,328 $10,728 6%
Cash Flow from Continuing Operations $9,203 $9,139 1%
Cash Flow from Operating Activities $9,161 $8,835 4%


Revenue by Channel and Geography:
Direct Local Revenue $88,246 $71,839 23%
National Brands, Agencies and Resellers (NBAR) Revenue $23,966 $20,913 15%
International Revenue (included above) $29,536 $20,670 43%

Key Metrics (at period end):
Active Advertisers 21,300 18,200 17%
Active Campaigns 31,500 25,500 24%
Total Upperclassmen 397 330 20%
Total Underclassmen 431 439 (2)%
Total IMCs 828 769 8%

Business Outlook

“Based on a strong first half of the year, we are raising our 2012 full year guidance,” said Ross Landsbaum, Chief Financial Officer. “We expect 2012 revenue to be in the range of $445 million to $454 million, and Adjusted EBITDA to be in the range of $19 million to $22 million.”

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