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ValueClick Announces Third Quarter 2012 Results

Stocks in this article: VCLK

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

Company management 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 1 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 8 at (888) 203-1112 and (719) 457-0820 (pass code: 9435993). An archive of the webcast will also be available through November 8.

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. ValueClick's brands include Commission Junction, ValueClick Media, Dotomi, Greystripe, Mediaplex, Smarter.com, CouponMountain.com, Investopedia.com, and PriceRunner. 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, the risk that legislation and governmental regulation could negatively impact the Company's performance, the effects of recent acquisitions on ValueClick's financial results, the potential inability to successfully 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 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 29, 2012; 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)

 
September 30, December 31,
2012 2011
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents $ 120,236 $ 116,676
Accounts receivable, net 124,387 129,076
Other current assets 36,670   25,181
Total current assets 281,293 270,933
 
Note receivable, less current portion 28,188 29,700
Property and equipment, net 28,482 19,952
Goodwill 434,204 437,033
Intangible assets, net 88,227 114,007
Other assets 13,888   9,086
TOTAL ASSETS $ 874,282   $ 880,711
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowings under credit facility, current $ 10,000 $ 10,000
Other current liabilities 120,947 125,616
Borrowings under credit facility, less current portion 165,000 157,500
Other non-current liabilities 30,100   24,202
Total liabilities 326,047 317,318
Total stockholders' equity 548,235   563,393
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 874,282   $ 880,711
 

VALUECLICK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

 
Three-month Period Nine-month Period
Ended September 30, Ended September 30,
2012   2011 2012   2011
(Unaudited) (Unaudited)
Revenue $ 160,884 $ 127,916 $ 461,301 $ 353,316
Cost of revenue 63,143   54,399   178,205   152,046
Gross profit 97,741 73,517 283,096 201,270
Operating expenses:
Sales and marketing (Note 1) 21,088 16,534 62,664 42,974
General and administrative (Note 1) 20,177 14,834 59,268 40,346
Technology (Note 1) 16,457 12,592 49,424 33,509
Amortization of intangible assets acquired in

business combinations

5,782   4,222   18,427   10,319
Total operating expenses 63,504   48,182   189,783   127,148
Income from operations 34,237 25,335 93,313 74,122
Interest and other income, net 193   2,167   1,919   3,232
Income before income taxes 34,430 27,502 95,232 77,354
Income tax expense (benefit) 13,526   (8,546 ) 35,429   11,186
Income from continuing operations 20,904   36,048   59,803   66,168
Income from discontinued operations, net of tax 1,646 1,862 4,654 5,585
Gain on sale, net of tax 980     980  
Net income $ 23,530   $ 37,910   $ 65,437   $ 71,753
 
Basic income from continuing operations

per common share

$ 0.28   $ 0.45   $ 0.77   $ 0.83
Diluted income from continuing operations

per common share

$ 0.27   $ 0.44   $ 0.75   $ 0.82
Basic net income per common share $ 0.31   $ 0.47   $ 0.84   $ 0.90
Diluted net income per common share $ 0.31   $ 0.47   $ 0.82   $ 0.89
Weighted-average shares used to compute basic

net income per common share

75,130   80,112   78,052   79,924
Weighted-average shares used to compute diluted

net income per common share

76,513   81,277   79,640   80,992
 
 
Note 1 - Includes stock-based compensation as follows:
Three-month Period Nine-month Period
Ended September 30, Ended September 30,
2012 2011 2012 2011
(Unaudited) (Unaudited)
Sales and marketing $ 1,283 $ 826 $ 3,879 $ 1,645
General and administrative 2,904 2,077 9,150 5,166
Technology 1,369   812   4,361   1,435
Total stock-based compensation $ 5,556   $ 3,715   $ 17,390   $ 8,246
 

VALUECLICK, INC.

RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS TO ADJUSTED-EBITDA (Note 1)

(In thousands)

 
Three-month Period Nine-month Period
Ended September 30, Ended September 30,
2012   2011 2012   2011
(Unaudited) (Unaudited)
Income from continuing operations $ 20,904 $ 36,048 $ 59,803 $ 66,168
Interest and other income, net (193 ) (2,167 ) (1,919 ) (3,232 )
Income tax expense (benefit) 13,526 (8,546 ) 35,429 11,186
Amortization of acquired intangible assets included in

cost of revenue

2,519 2,197 7,504 7,135
Amortization of acquired intangible assets included in

operating expenses

5,782 4,222 18,427 10,319
Depreciation and leasehold amortization 3,090 2,015 8,491 5,459
Stock-based compensation 5,556 3,715 17,390 8,246
Acquisition-related costs   412     412  
Adjusted-EBITDA $ 51,184   $ 37,896   $ 145,125   $ 105,693  
 

Note 1 - “Adjusted-EBITDA” (GAAP income from continuing operations before interest, income taxes, depreciation, amortization, stock-based compensation, 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 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.

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