Local Corporation Reports Third Quarter 2012 Financial Results

Local Corporation (NASDAQ: LOCM), a leading online local media company, today reported its financial results for the third quarter 2012.

“During the third quarter, we made great progress in growing our digital media and mobile ecosystem, reaching record overall, organic and mobile traffic. We also released Launch by Local, our digital media suite for small businesses, grew our direct sales force by 50 percent and achieved record subscribers for this product. We’re also pleased with the successful sale of our Rovion business earlier this quarter,” said Heath Clarke, Local Corporation chairman and chief executive officer. “We expect to continue the momentum in growing high-margin organic traffic and organic ad revenues into the fourth quarter, although we expect this will be offset by monetization dislocation in our Owned and Operated business from a combination of recent policy changes and price per click challenges from key partners. We believe the impact will be temporary and that these changes represent long-term opportunity. Our updated fourth quarter guidance of $22 to $23 million in revenues and Adjusted Net Income of approximately breakeven is down slightly from the third quarter. Fiscal 2012 revenues are expected to grow to approximately $100 million, an increase of over 27 percent compared to 2011 revenues, with Adjusted Net Income for 2012 of approximately $750,000. Continued growth of organic traffic and organic ad revenues, which are both at near-record levels, gives us confidence to expect revenue and Adjusted Net Income growth in future periods.”
SUMMARY RESULTS
(in thousands, except per share amounts)
     
Q3 2012   Q2 2012   Q3 2011
Consumer Properties:
Owned & Operated $ 18,340 $ 20,478 $ 13,457
Network 4,961 4,114 4,364
Business Solutions   1,470     2,480     2,867  
Revenue $ 24,771   $ 27,072   $ 20,688  
 
Adjusted Net Income (Loss)* $ 152 $ 468 $ (444 )
Less interest expense, net (131 ) (97 ) (227 )
Less provision for income taxes (22 ) (44 ) (47 )

Less non-cash depreciation, amortization and stock compensation
(3,466 ) (2,393 ) (3,001 )
Plus gain (loss) on revaluation of warrants 65 166 513
Less net loss from Rovion assets held for sale (256 ) (482 ) (825 )
Less asset impairment charge - (6,451 ) -
Less severance charges   (144 )   (514 )   -  
GAAP net loss $ (3,802 ) $ (9,347 ) $ (4,031 )
 
Diluted Adjusted Net Income (Loss) per share * $ 0.01 $ 0.02 $ (0.02 )
Diluted GAAP net income (loss) per share $ (0.17 ) $ (0.42 ) $ (0.18 )

 
Diluted weighted average shares used for Adjusted Net Income (Loss) per share 22,245 22,219 21,940
Diluted weighted average shares used for GAAP net loss per share 22,092 22,086 21,940
 
Cash $ 3,706 $ 7,103 $ 10,119

* See detailed reconciliation of GAAP to non-GAAP measures in the financial tables attached to this release.

Adjusted Net Income (Loss) is defined as net income (loss) excluding: provision for income taxes; interest and other income (expense), net; depreciation; amortization; stock-based compensation charges; gain or loss on warrant revaluation; net income (loss) from discontinued operations; impairment charges and severance charges.

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