|Q3 Results Summary|
|(Does Not Include O&O Segment, Which is Now Classified as Discontinued Operations)|
|In millions, except percentages and per share amounts||Q3 2013||Q3 2012||% Change|
|GAAP Net Income from Continuing Operations||22.1||16.6||33||%|
|Non-GAAP Net Income(1)||$||28.2||$||24.5||15||%|
|GAAP Net Income from Continuing Operations Per Diluted Common Share||$||0.30||$||0.22||36||%|
|Non-GAAP Net Income Per Diluted Common Share(1)||$||0.38||$||0.32||19||%|
|(1) Adjusted EBITDA, Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share are Non-GAAP measures are described below and reconciled to their most comparable GAAP measures.|
- Revenue was $134.1 million, an increase of 2% year-over-year.
- Adjusted EBITDA was $50.2 million, an increase of 15% year-over-year.
- Adjusted EBITDA margin increased to 37.4% from 33.4% in the third quarter of 2012.
- Non-GAAP net income per diluted share was $0.38, an increase of 19% year-over-year.
- GAAP net income from continuing operations per diluted share was $0.30, an increase of 36% year-over-year.
|Comparison of Q3 2013 Results vs. Company's Pro Forma Guidance for Q3 2013|
|Q3 2013 Financial Metrics||Previously Issued Guidance(1)||O&O Segment Guidance Assumptions||"Pro Forma" Guidance (Excluding O&O)||Reported / Continuing Operations|
|Revenue (in millions)||$164 to $168||$30||$134 to $138||$134.1|
|Adjusted EBITDA (in millions)||$53 to $55||$6||$47 to $49||$50.2|
|Non-GAAP Net Income Per Diluted Common Share||$0.39 to $0.40||$0.04||$0.35 to $0.36||$0.38|
|(1) ValueClick's Q3 2013 guidance was provided on August 1, 2013.|
- Free cash flow for the nine months ended September 30, 2013 was $100.6 million, an increase of 10% year-over-year from the comparable nine-month period in 2012.
- Free cash flow for the trailing 12 month period ended September 30, 2013 was $147.4 million.
- The Company defines free cash flow as net cash provided by operating activities less capital expenditures.
- ValueClick repurchased 8 million common shares at an average cost of $21.45 per share during the third quarter ended September 30, 2013.
- Year-to-date in 2013, ValueClick has repurchased 10 million common shares, representing approximately 13% of total common shares issued and outstanding as of December 31, 2012.
- In October 2013, ValueClick’s Board of Directors increased the remaining availability under the Company’s stock repurchase authorization to $100 million.
- As of September 30, 2013, cash and cash equivalents were $54.5 million and total debt was $195 million.
- ValueClick amended its credit agreement in the third quarter, resulting in an increase of the senior secured revolving credit facility to $400 million and an extension of the maturity date to August 19, 2018.
|ValueClick Segment Financial Summary|
|In millions, except percentages||Q3 2013||Q3 2012||% Change|
|Affiliate Marketing Revenue||$||38.9||$||34.9||11||%|
|Affiliate Marketing Income from Operations||$||23.6||$||20.3||16||%|
|Media Income from Operations||30.2||27.6||9||%|
|Total Segment Income from Operations||$||53.8||$||48.0||12||%|
- Affiliate marketing segment revenue was $38.9 million, an increase of 11% year-over-year, representing the segment’s highest growth rate in more than two years. The increase in Affiliate Marketing segment revenue and operating profitability reflects continuing growth in transaction volumes and clients, including advertiser clients migrated from the former Google Affiliate Network that ceased operations in July 2013.
- Media segment revenue was $95.3 million, a decrease of 1% year-over-year. Continuing solid growth in CRM, mobile, video and cross device solutions was offset by a decline in ValueClick’s traditional insertion order-driven display business.
- O&O revenue was $28.9 million and O&O segment income from operations was $4.5 million and are included in discontinued operations.
- Discrete tax adjustments associated with the planned divestiture led to an unusually high tax provision attributable to the O&O business for the third quarter of 2013, resulting in an after-tax loss of $4.1 million in discontinued operations in the quarter.
|Consolidated Financial Outlook||Q4 2013 Guidance||Q4 2012 Actual Results|
|Revenue||$166 - $171 million||$166.6 million|
|Adjusted EBITDA||$69 - $72 million||$68.1 million|
|Mid-Point Adjusted EBITDA Margin||41.8%||40.9%|
|Non-GAAP net income per diluted common share||$0.57 - $0.58||$0.50|
|Impact of stock-based compensation and amortization of intangibles, net of tax||$(0.09)||$(0.08)|
|GAAP net income from continuing operations per diluted common share||$0.48 - $0.49||$0.42|
|Segment Revenue Assumptions||Q4 2013 Guidance||Q4 2012 Actual Results|
|Affiliate Marketing Segment Revenue||$49 - $51 million||$43.9 million|
|Media Segment Revenue||$117 - $120 million||$122.7 million|