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8-K - LIVE FILING - CONVERSANT, INC. | htm_40754.htm |
EX-99.2 - EX-99.2 - CONVERSANT, INC. | exhibit2.htm |
Exhibit 99.1
Contact:
Gary J. Fuges, CFA
ValueClick, Inc.
1.818.575.4677
VALUECLICK ANNOUNCES FOURTH QUARTER 2010 RESULTS
Revenue and Profitability Exceed High-End of Guidance Ranges
Westlake Village, CA February 15, 2011 ValueClick, Inc. (Nasdaq: VCLK) today reported financial results for the fourth quarter and fiscal year ended December 31, 2010. Fourth quarter revenue, adjusted-EBITDA1, and earnings per share metrics all exceeded the high-end of the guidance ranges management provided on November 3, 2010.
Highlights from the fourth quarter 2010 results include:
| Revenue of $128.7 million, up 17 percent from the fourth quarter of 2009 (Q4 2009) |
| Adjusted-EBITDA of $41.9 million, up 19 percent from Q4 2009 |
| Adjusted-EBITDA margin of 32.5 percent versus 31.8 percent in Q4 2009 |
| GAAP net income from continuing operations of $0.26 per diluted share versus $0.20 in Q4 2009 |
The fourth quarter capped a successful year for ValueClick, where we streamlined our offerings, invested for the long-term, and delivered revenue growth and margin expansion, said Jim Zarley, chief executive officer of ValueClick. Our momentum in the quarter is setting the tone for 2011, and we remain confident in our ability to capitalize on our industrys growth opportunities to generate strong financial performance while investing in growth initiatives across all of our businesses.
Non-GAAP net income, which excludes discontinued operations, stock-based compensation and amortization of intangible assets was $25.5 million, or $0.31 per diluted common share for the fourth 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 December 31, 2010 includes approximately $197 million in cash, cash equivalents and marketable securities and no debt. The Company generated approximately $90 million in free cash flow, defined as cash flow from operations less net capital expenditures, in fiscal year 2010.
1 Adjusted-EBITDA is defined as GAAP (Generally Accepted Accounting Principles) net
income from continuing operations before interest, income taxes, depreciation, amortization, and
stock-based compensation expenses. 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.
Business Outlook
Today, ValueClick is announcing guidance for the first quarter of 2011:
Guidance | ||||
Revenue |
$111-$113 million | |||
Adjusted-EBITDA |
$31-$32 million | |||
Mid-Point Adjusted-EBITDA Margin |
~28 | % | ||
GAAP diluted net income per common share |
$ | 0.16-$0.17 | ||
Non-GAAP diluted net income per common share |
$ | 0.21-$0.22 |
The consolidated revenue guidance range is based on the following segment-level assumptions for revenue growth rates expressed as a percentage increase from first quarter 2010 reported revenue levels:
| Affiliate Marketing: up low double-digits |
| Media: up low double-digits |
| Owned & Operated: up high twenties to low thirties |
| Technology: up low to mid single-digits |
First quarter 2011 non-GAAP and GAAP diluted net income per common share guidance assume stock-based compensation of $2.0 million, amortization of intangible assets of $5.0 million, interest and other income of $1.0 million, a 41 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 ValueClicks financial performance for the
fourth quarter during a conference call and webcast on February 15 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 February 22 at (888)
203-1112 and (719) 457-0820 (pass code: 4951342). An archive of the Webcast will also be available
through February 22.
About ValueClick
ValueClick, Inc. (Nasdaq: VCLK) is one of the worlds 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. ValueClicks
performance-based solutions allow its customers to reach their potential through multiple online
marketing channels, including affiliate marketing, display advertising, , and comparison shopping.
ValueClicks 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 Companys 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.
###
VALUECLICK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
December 31, | December 31, | |||||||||||||||||||||||||||||||
2010 | 2009 | |||||||||||||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||||||||||
CURRENT ASSETS: |
||||||||||||||||||||||||||||||||
Cash and cash equivalents |
$ | 194,317 | $ | 158,497 | ||||||||||||||||||||||||||||
Marketable securities |
3,000 | | ||||||||||||||||||||||||||||||
Accounts receivable, net |
86,738 | 68,484 | ||||||||||||||||||||||||||||||
Other current assets |
18,470 | 20,856 | ||||||||||||||||||||||||||||||
Assets held for sale |
| 11,098 | ||||||||||||||||||||||||||||||
Total current assets |
302,525 | 258,935 | ||||||||||||||||||||||||||||||
Assets held for sale, less current portion |
| 25,777 | ||||||||||||||||||||||||||||||
Note receivable, less current portion |
31,267 | | ||||||||||||||||||||||||||||||
Marketable securities, less current portion |
| 22,026 | ||||||||||||||||||||||||||||||
Property and equipment, net |
12,414 | 11,272 | ||||||||||||||||||||||||||||||
Goodwill |
183,218 | 157,123 | ||||||||||||||||||||||||||||||
Intangible assets, net |
33,525 | 38,718 | ||||||||||||||||||||||||||||||
Other assets |
50,618 | 52,711 | ||||||||||||||||||||||||||||||
TOTAL ASSETS |
$ | 613,567 | $ | 566,562 | ||||||||||||||||||||||||||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||||||||||||||||||||||||||
Current liabilities |
$ | 103,258 | $ | 98,404 | ||||||||||||||||||||||||||||
Non-current liabilities |
37,668 | 61,669 | ||||||||||||||||||||||||||||||
Total liabilities |
140,926 | 160,073 | ||||||||||||||||||||||||||||||
Total stockholders equity |
472,641 | 406,489 | ||||||||||||||||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS EQUITY |
$ | 613,567 | $ | 566,562 | ||||||||||||||||||||||||||||
VALUECLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three-month Period | ||||||||||||||||
Ended December 31, | ||||||||||||||||
(Unaudited) | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Revenue |
$ | 128,747 | $ | 110,394 | ||||||||||||
Cost of revenue |
35,455 | 31,173 | ||||||||||||||
Gross profit |
93,292 | 79,221 | ||||||||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing (Note 1) |
31,319 | 27,228 | ||||||||||||||
General and administrative (Note 1) |
14,019 | 14,434 | ||||||||||||||
Technology (Note 1) |
9,924 | 6,179 | ||||||||||||||
Amortization of intangible assets acquired in business combinations |
5,333 | 4,999 | ||||||||||||||
Total operating expenses |
60,595 | 52,840 | ||||||||||||||
Operating income from continuing operations |
32,697 | 26,381 | ||||||||||||||
Interest and other income (expense), net |
1,891 | (176 | ) | |||||||||||||
Income before income taxes from continuing operations |
34,588 | 26,205 | ||||||||||||||
Income tax expense |
13,526 | 8,834 | ||||||||||||||
Net income from continuing operations |
21,062 | 17,371 | ||||||||||||||
Loss from discontinued operations, net of tax impact |
| (1,874 | ) | |||||||||||||
Net income |
$ | 21,062 | $ | 15,497 | ||||||||||||
Basic net income from continuing operations per common share |
$ | 0.26 | $ | 0.20 | ||||||||||||
Diluted net income from continuing operations per common share |
$ | 0.26 | $ | 0.20 | ||||||||||||
Basic net income per common share |
$ | 0.26 | $ | 0.18 | ||||||||||||
Diluted net income per common share |
$ | 0.26 | $ | 0.18 | ||||||||||||
Weighted-average shares used to compute basic net income per common share |
80,817 | 85,779 | ||||||||||||||
Weighted-average shares used to compute diluted net income per common share |
81,837 | 86,384 | ||||||||||||||
Note 1 Includes stock-based compensation as follows:
Three-month Period | ||||||||||||
Ended December 31, | ||||||||||||
(Unaudited) | ||||||||||||
2010 | 2009 | |||||||||||
Sales and marketing |
$ | 363 | $ | 355 | ||||||||
General and administrative |
1,457 | 1,361 | ||||||||||
Technology |
286 | 197 | ||||||||||
Total stock-based compensation |
$ | 2,106 | $ | 1,913 | ||||||||
VALUECLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended December 31, | ||||||||||||||||
(Unaudited) | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Revenue |
$ | 430,798 | $ | 422,723 | ||||||||||||
Cost of revenue |
116,802 | 116,509 | ||||||||||||||
Gross profit |
313,996 | 306,214 | ||||||||||||||
Operating expenses: |
||||||||||||||||
Sales and marketing (Note 1) |
112,282 | 118,457 | ||||||||||||||
General and administrative (Note 1) |
53,536 | 60,373 | ||||||||||||||
Technology (Note 1) |
35,047 | 25,050 | ||||||||||||||
Amortization of intangible assets acquired in business combinations |
20,611 | 19,803 | ||||||||||||||
Total operating expenses |
221,476 | 223,683 | ||||||||||||||
Operating income from continuing operations |
92,520 | 82,531 | ||||||||||||||
Interest and other income, net |
2,204 | 302 | ||||||||||||||
Income before income taxes from continuing operations |
94,724 | 82,833 | ||||||||||||||
Income tax expense |
14,120 | 21,264 | ||||||||||||||
Net income from continuing operations |
80,604 | 61,569 | ||||||||||||||
(Loss) income from discontinued operations, net of tax impact |
(134 | ) | 7,047 | |||||||||||||
Gain on sale, net of tax |
10,040 | | ||||||||||||||
Net income |
$ | 90,510 | $ | 68,616 | ||||||||||||
Basic net income from continuing operations per common share |
$ | 0.99 | $ | 0.71 | ||||||||||||
Diluted net income from continuing operations per common share |
$ | 0.98 | $ | 0.71 | ||||||||||||
Basic net income per common share |
$ | 1.11 | $ | 0.79 | ||||||||||||
Diluted net income per common share |
$ | 1.10 | $ | 0.79 | ||||||||||||
Weighted-average shares used to compute basic net income per common share |
81,615 | 86,716 | ||||||||||||||
Weighted-average shares used to compute diluted net income per common share |
82,334 | 87,210 | ||||||||||||||
Note 1 Includes stock-based compensation as follows:
Year Ended December 31, | ||||||||||||
(Unaudited) | ||||||||||||
2010 | 2009 | |||||||||||
Sales and marketing |
$ | 1,280 | $ | 1,907 | ||||||||
General and administrative |
5,815 | 6,034 | ||||||||||
Technology |
849 | 928 | ||||||||||
Total stock-based compensation |
$ | 7,944 | $ | 8,869 | ||||||||
VALUECLICK, INC.
RECONCILIATION OF NET INCOME FROM CONTINUING
OPERATIONS TO ADJUSTED-EBITDA (Note 1)
(In thousands)
Three-month Period | ||||||||||||||||
Ended December 31, | ||||||||||||||||
(Unaudited) | ||||||||||||||||
2010 | 2009 | |||||||||||||||
Net income from continuing operations |
$ | 21,062 | $ | 17,371 | ||||||||||||
Interest and other (income) expense, net |
(1,891 | ) | 176 | |||||||||||||
Provision for income tax |
13,526 | 8,834 | ||||||||||||||
Amortization of intangible assets
acquired in business combinations |
5,333 | 4,999 | ||||||||||||||
Depreciation and leasehold amortization |
1,742 | 1,795 | ||||||||||||||
Stock-based compensation |
2,106 | 1,913 | ||||||||||||||
Adjusted-EBITDA |
$ | 41,878 | $ | 35,088 | ||||||||||||
Year Ended December 31, | ||||||||||||
(Unaudited) | ||||||||||||
2010 | 2009 | |||||||||||
Net income from continuing operations |
$ | 80,604 | $ | 61,569 | ||||||||
Interest and other (income) expense, net |
(2,204 | ) | (302 | ) | ||||||||
Provision for income taxes |
14,120 | 21,264 | ||||||||||
Amortization of intangible assets
acquired in business combinations |
20,611 | 19,803 | ||||||||||
Depreciation and leasehold amortization |
6,620 | 7,563 | ||||||||||
Stock-based compensation |
7,944 | 8,869 | ||||||||||
Adjusted-EBITDA |
$ | 127,695 | $ | 118,766 | ||||||||
Note 1 Adjusted-EBITDA (GAAP net income from continuing operations before interest, income taxes, depreciation, amortization, and stock-based compensation expenses) 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 Companys performance because it eliminates the effects of period-to-period changes in income from interest on the Companys 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 Companys business operations. Management uses adjusted-EBITDA in evaluating the overall performance of the Companys business operations.
Though management finds adjusted-EBITDA useful for evaluating aspects of the Companys business, its reliance on this measure is limited because excluded items often have a material effect on the Companys 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 Companys 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 Companys 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 December 31, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
GAAP net income from continuing operations |
$ | 21,062 | $ | 17,371 | ||||||||||||
Stock-based compensation |
2,106 | 1,913 | ||||||||||||||
Amortization of intangible assets acquired in business combinations |
5,333 | 4,999 | ||||||||||||||
Tax impact of above items |
(2,955 | ) | (2,664 | ) | ||||||||||||
Non-GAAP net income |
$ | 25,546 | $ | 21,619 | ||||||||||||
Non-GAAP diluted net income per common share |
$ | 0.31 | $ | 0.25 | ||||||||||||
Weighted-average shares used to compute non-GAAP diluted net income per
common share |
81,837 | 86,384 | ||||||||||||||
Year Ended December 31, | ||||||||||||||||
2010 | 2009 | |||||||||||||||
GAAP net income from continuing operations |
$ | 80,604 | $ | 61,569 | ||||||||||||
Stock-based compensation |
7,944 | 8,869 | ||||||||||||||
Amortization of intangible assets acquired in business combinations |
20,611 | 19,803 | ||||||||||||||
Tax impact of above items |
(11,220 | ) | (10,821 | ) | ||||||||||||
Non-GAAP net income |
$ | 97,939 | $ | 79,420 | ||||||||||||
Non-GAAP diluted net income per common share |
$ | 1.19 | $ | 0.91 | ||||||||||||
Weighted-average shares used to compute non-GAAP diluted net income per
common share |
82,334 | 87,210 | ||||||||||||||
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 Companys performance because it eliminates the effects of items which are not directly attributable to the underlying performance of the Companys business operations. Management uses non-GAAP diluted net income per common share in evaluating the overall performance of the Companys business operations.
Though management finds non-GAAP diluted net income per common share useful for evaluating aspects of the Companys business, its reliance on this measure is limited because excluded items often have a material effect on the Companys 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 Companys 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 Companys financial results.
VALUECLICK, INC.
SEGMENT OPERATING RESULTS
(Unaudited)
(In thousands)
(Note 1)
Three-month Period Ended | Year Ended | ||||||||||||||||||||||||||
December 31, | December 31, | ||||||||||||||||||||||||||
2010 | 2009 | 2010 | 2009 | ||||||||||||||||||||||||
Affiliate Marketing: |
|||||||||||||||||||||||||||
Revenue |
$ | 36,188 | $ | 31,544 | $ | 124,126 | $ | 111,903 | |||||||||||||||||||
Cost of revenue |
4,667 | 4,005 | 17,215 | 15,617 | |||||||||||||||||||||||
Gross profit |
31,521 | 27,539 | 106,911 | 96,286 | |||||||||||||||||||||||
Operating expenses |
9,832 | 9,244 | 37,359 | 38,165 | |||||||||||||||||||||||
Segment income from operations |
$ | 21,689 | $ | 18,295 | $ | 69,552 | $ | 58,121 | |||||||||||||||||||
Media: |
|||||||||||||||||||||||||||
Revenue |
$ | 41,726 | $ | 40,149 | $ | 137,487 | $ | 135,086 | |||||||||||||||||||
Cost of revenue |
23,102 | 21,013 | 74,102 | 71,320 | |||||||||||||||||||||||
Gross profit |
18,624 | 19,136 | 63,385 | 63,766 | |||||||||||||||||||||||
Operating expenses |
8,056 | 7,295 | 29,760 | 30,505 | |||||||||||||||||||||||
Segment income from operations |
$ | 10,568 | $ | 11,841 | $ | 33,625 | $ | 33,261 | |||||||||||||||||||
Owned & Operated Websites: |
|||||||||||||||||||||||||||
Revenue |
$ | 42,749 | $ | 31,771 | $ | 138,545 | $ | 149,599 | |||||||||||||||||||
Cost of revenue |
7,117 | 5,715 | 23,107 | 27,002 | |||||||||||||||||||||||
Gross profit |
35,632 | 26,056 | 115,438 | 122,597 | |||||||||||||||||||||||
Operating expenses |
25,196 | 18,917 | 87,475 | 87,563 | |||||||||||||||||||||||
Segment income from operations |
$ | 10,436 | $ | 7,139 | $ | 27,963 | $ | 35,034 | |||||||||||||||||||
Technology: |
|||||||||||||||||||||||||||
Revenue |
$ | 8,484 | $ | 7,507 | $ | 31,889 | $ | 27,686 | |||||||||||||||||||
Cost of revenue |
908 | 894 | 3,359 | 3,709 | |||||||||||||||||||||||
Gross profit |
7,576 | 6,613 | 28,530 | 23,977 | |||||||||||||||||||||||
Operating expenses |
3,029 | 2,923 | 11,932 | 11,202 | |||||||||||||||||||||||
Segment income from operations |
$ | 4,547 | $ | 3,690 | $ | 16,598 | $ | 12,775 | |||||||||||||||||||
Reconciliation of segment income
from operations to consolidated
income from operations: |
|||||||||||||||||||||||||||
Total segment income from operations |
$ | 47,240 | $ | 40,965 | $ | 147,738 | $ | 139,191 | |||||||||||||||||||
Corporate expenses |
(7,104 | ) | (7,672 | ) | (26,663 | ) | (27,988 | ) | |||||||||||||||||||
Stock-based compensation |
(2,106 | ) | (1,913 | ) | (7,944 | ) | (8,869 | ) | |||||||||||||||||||
Amortization of intangible assets |
(5,333 | ) | (4,999 | ) | (20,611 | ) | (19,803 | ) | |||||||||||||||||||
Consolidated income from continuing | $ | 32,697 | $ | 26,381 | $92,520 | $ | 82,531 | ||||||||||||||||||||
operations |
|||||||||||||||||||||||||||
Reconciliation of segment revenue
to consolidated revenue: |
|||||||||||||||||||||||||||
Affiliate Marketing |
$ | 36,188 | $ | 31,544 | $ | 124,126 | $ | 111,903 | |||||||||||||||||||
Media |
41,726 | 40,149 | 137,487 | 135,086 | |||||||||||||||||||||||
Owned & Operated Websites |
42,749 | 31,771 | 138,545 | 149,599 | |||||||||||||||||||||||
Technology |
8,484 | 7,507 | 31,889 | 27,686 | |||||||||||||||||||||||
Inter-segment eliminations |
(400 | ) | (577 | ) | (1,249 | ) | (1,551 | ) | |||||||||||||||||||
Consolidated revenue |
$ | 128,747 | $ | 110,394 | $ | 430,798 | $ | 422,723 | |||||||||||||||||||
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.