Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - LOCAL Corp | d353590d8k.htm |
 Local
Corporation Overview 2Q2012
Connecting Local Merchants with Online Consumers
Exhibit 99.1 |
 Local Corporation Presentation | 2Q2012
Safe Harbor Statement; Non-GAAP Financial Measures
2
Certain matters being discussed by Local Corporation’s management today
include forward looking statements which are made pursuant to the Safe
Harbor provisions of section 21-E of the Securities Exchange Act of 1934.
Investors are cautioned that statements which are not strictly historical
statements, including statements concerning future expected financial
performance, management objectives and plans for future operations, our
relationships with strategic or other partners, the release of new products or
services or enhancements to existing products or services, our
expectations regarding potential acquisitions and the future performance of
past acquisitions including our ability to realize expected synergies, trends
in the market for our current or planned products or services, and market
acceptance of our products or services, constitute forward looking
statements.
The forward looking statements include, but are not limited to, any
statements containing the words “expect”, “anticipate”, “estimates”,
“believes”, “should”, “could”, “may”,
“possibly”, and similar expressions and the negatives thereof. These forward looking
statements involve a number of risks and uncertainties that could cause actual results to
differ materially from the forward looking statements. Those risks and uncertainties are
detailed in the company’s filings from time to time with the Securities and
Exchange Commission. The information contained in the forward looking
statements is provided as of the date of such oral statements and the
company disclaims any obligation to update such statements. This
document includes the non-GAAP financial measure of “Adjusted Net Income/Loss”
which we define as net income/loss excluding: provision for income taxes; interest and other
income (expense), net; depreciation; amortization; stock based compensation charges, warrant
revaluation charges and non-recurring items. Adjusted Net Income/Loss, as defined
above, is not a measurement under GAAP. Adjusted Net Income/Loss is
reconciled to net loss and loss per share, which we believe are the most
comparable GAAP measures, at the end of this presentation. Management
believes that Adjusted Net Income/Loss 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 marketable securities, expense from the company’s financing
transactions and the costs associated with income tax expense, capital
investments, stock-based compensation expense, warrant revaluation
charges, and non-recurring charges which are not directly attributable to the
underlying performance of the company’s business operations. Management
uses Adjusted Net Income/Loss in evaluating the overall performance of the
company’s business operations. A
limitation of non-GAAP Adjusted Net Income/Loss is that it excludes items that often have
a material effect on the company’s net income and earnings per common share calculated in
accordance with GAAP. Therefore, management compensates for this limitation by using Adjusted
Net Income/Loss in conjunction with GAAP net loss and loss per share measures
The company believes that Adjusted Net Income/Loss provides investors
with an additional tool for evaluating the company’s core performance, which
management uses in its own evaluation of overall performance, and as 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 reconciliation to GAAP (as noted
above), it may provide greater insight into the company’s financial results.
The non-GAAP measures should be viewed as a supplement to, and not as
a substitute for, or superior to, GAAP net income or earnings per share.
|
 Local Corporation Presentation | 2Q2012
Shifting Ad Spend
3
We all know digital is growing, but did you know digital media is going local?
|
 Local Corporation Presentation | 2Q2012
Local Corporation
Founded 1999, IPO 2004: NASDAQ: LOCM
1.
We specialize in connecting online consumers with local businesses
2.
Advertising revenue model
3.
A network that reaches one million consumers a day across search, display, email &
mobile 4.
A unique, proprietary technology platform covered by 8 patents, 11 pending
5.
Partners include Google, Yahoo, Supermedia, ATTi, ReachLocal, Marchex and many others
4
Five acquisitions in 18 months have expanded our technology platform and product portfolio,
allowing us to serve emerging, high growth local ad markets
|
 Local Corporation Presentation | 2Q2012
Powered by our Proprietary Technology Platform
What We Do
5
Consumer
Properties
Business
Solutions
Media
Services
30MM+ MUVs
‘Local businesses,
products & services’
Local.com
Krillion.com
Spreebird.com
1,000+ Site Network
24,000 SMB
Subscribers
Digital Media Suite
Subscription, CPM &
Performance Pricing:
Web Hosting
Social Media
SEO, Search,
Display, Mobile,
Daily deals and more
We connect consumers with the
local businesses, products
and services they seek
Flagship Property
Direct SMBs
White Label Sites
Organic Traffic
Business Listings
Publisher Partners
MUVs in 1Q12
Channel SMBs
Daily Deal Members
Impressions Mar. ‘12
100 Publishers,
Agencies
Platform Solutions
Private Label Search &
Digital Media Products
Production
Creative Services
Ad Management &
Distribution
We enable local businesses to target those
consumers with digital media products
We enable publishers & agencies to participate
in the local media revolution via our platform
1
30% +
100
1,000+
9,000
24,000
300,000
12MM
94MM
1B |
 Local Corporation Presentation | 2Q2012
Consumer Properties
6
•
Owned & Operated plus 1,000+ regional media sites
»
94MM monthly unique visitors in 1Q12
–
Up 21% Y/Y
–
Over 30% of traffic was organic
–
High buying intent
–
Balance of traffic via marketing across major engines
•
Local businesses, products and services
»
Business name/category search
»
Coupons, specials, daily & travel deals
»
Events, activities, topics, reviews & more
»
Real-time product search
–
70k products in 70k retail locations
•
Rapidly going mobile
»
Five mobile products launched 2H11; more coming
»
A record 12MM mobile users in 1Q12
Data published across
Consumer Properties |
 Local Corporation Presentation | 2Q2012
How We Make Money
7
Users searching for local product/services on
Google, Yahoo, Bing often land on our network
We provide relevant local search results and
we also display a variety of ads on the page
We generate revenue based on the ad type |
 Local Corporation Presentation | 2Q2012
Advertisers
Pay More For Local Consumers
8
Click
Bids*
Premium
Restaurant
$0.22
577%
$1.27
Credit Union
$0.45
116%
$0.52
Plumber
$2.60
275%
Plumber Los Angeles
$7.14
Moving Company
$2.35
252%
$5.93
Divorce Attorney
$2.03
186%
Divorce Attorney Las Vegas
$3.77
Auto Repair
$1.97
157%
$3.09
Wedding Florist
$0.51
278%
Orlando
Wedding Florist
$1.42
Hotel
$0.99
138%
$1.37
* Bids
as
of
January
6,
2011
**
TMP/Yahoo-comScore
study
–
2007
Pay-per-click rates for local versus national keyword terms…
San
Francisco
Restaurant
Seattle
Credit
Union
Denver
Moving
Company
Dallas
Auto
Repair
New
York
City
Hotel
57%
of
Local.com
and
80%
of
Spreebird
traffic
is
the
‘Soccer
Mom’
demo
Aged between 25-45 with one child or more at home
Controls significant portion of the household purse strings
Typically spends 80% of that money within 20 miles of home
89% of in-store purchasers in key categories have conducted online
research**
82% of people visiting local search sites follow-up with offline action
(store visit/call)**
Soccer mom + local + commercial = ad sponsors
~70% of revenue is CPC; 20% subscriptions; 10% display
Search Term |
 Local Corporation Presentation | 2Q2012
Business Solutions
9
Exact Match Digital Media Suite
Presence. Reach. Engagement.
•
A ‘do it for me’
digital media solution for SMBs
»
Presence: website/social/mobile
»
Reach: a variety of digital ad solutions
»
Engagement: beta testing rewards, email
•
Priced at a phenomenal $200 per month
»
Because it’s built on our platform
•
Adding new features all the time
•
Sold primarily via telesales |
 10
Private label local search
»
100 publishers representing 1,000+ sites
»
Revenue share from a variety of ad types
Private label SMB solutions
»
Over 9,000 units sold by our publisher partners
»
Subscription pricing
»
Local rich media ads that incorporate real-time ‘in
store’
product, inventory and pricing data
»
Web-based, agency quality creative with drag & drop
interface and cloud storage of digital assets
»
CPM pricing
»
Targeting existing digital media spend and helping
transition it to local ad spend, managed through us
»
Revenue derived from a variety of ad types
Media Services
Our platform enables our
clients to author rich media
ads with real-time shopping
data embedded to drive
higher conversions
Our technology platform powers a range of sophisticated media services,
enabling our clients to participate in the local online advertising revolution
Local Corporation Presentation | 2Q2012
Rich media authoring
Moving towards ‘Fortune 5,000’
market |
 Local Corporation Presentation | 2Q2012
Spreebird
11
•
Spreebird Deals to attract new customers
•
Spreebird Rewards & email to engage those customers
•
Merchant Dashboard to provide valuable data
»
Our Spreebird Merchant Dashboard begins to round out
our SMB engagement solution
–
Track deals and rewards
–
Build customer database
–
Connect via email
»
Developed under Spreebird but white labeled for Local,
our network and potential new partners |
 Local Corporation Presentation | 2Q2012
Proprietary Technologies Power Our Platform
12
12 million SMB listings across multiple
databases to validate and enhance
business information
daily deals
personalization engine
highly scalable geo-category
domain acquisition based on
consumer usage analysis
real-time product
inventory directly from
manufacturers, retailers
8 patents issued, 11
pending in local, mobile,
data & display
feed syndication
real-time ad and data integration from multiple partners
web-based drag & drop rich
media production
product-based search feeds
integrated into multiple ad types
data aggregation and normalization technologies
web crawlers
content marketplace
Keyword DNA™
technology
display ad production, management and serving
Our powerful platform incorporates a unique combination of technologies that provide an
increasingly differentiated
suite
of
digital
media
solutions
for
a
wide
range
of
customers
web hosting
search engine
optimization
daily deals
geo-targeted
display and
subscription ads
private label solutions
search engine marketing
content procurement and
management |
 Local Corporation Presentation | 2Q2012
Experienced Team with Strategy Discipline
13
Heath Clarke
Founder, Chairman & CEO
20+ yrs exp
Founded Local in ’99
VP eCommerce LanguageForce
CEO/Founder AFP (Australia)
Erick Herring
SVP Technology
Founder Townloop
CTO Feedback.com
CTO, VP Product Webvisible
CTO Adapt Technologies
Ken Cragun
CFO
20+ yrs exp
CFO Modtech
SVP MIVA
CFO ImproveNet
CFO NetCharge.com
CPA; Big 4 Exp.
Malcolm Lewis
SVP, GM Social Buying
Founder, Fablistic
SVP/GM, Local Corporation
Sr. Management, Oracle Corporation
Mike Sawtell
President & COO
20+ yrs exp
Chairman & CEO, DigitalPost Interactive
Pres. & COO , Interchange Corp. (now
Local Corporation)
COO & VP of Sales, Informative Research
Peter Hutto
SVP, Corporate Development
Co-Founder, ZeroDegrees
Managing Director, EDS & MCI
Systemhouse
Tullio Siragusa
SVP, Sales
Head of Sales, Ansearch Ltd.
SVP Global Sales, Operative Media
VP Strategic Accounts, Acxiom |
 Local Corporation Presentation | 2Q2012
Financial Performance
14
•
50% YoY revenue growth (Q1’12 over Q1’11)
•
~40% CAGR 2006-2012
•
2Q12 Revenue guidance: $27MM and $150K Adjusted Net Income
•
FY12
Revenue
guidance:
$110MM
–
40%
higher
than
2011
Adjusted Net Income (Loss) = Net income (loss) before interest, taxes, depreciation,
amortization, stock-based compensation, warrant revaluation charges, and
non-recurring Items |
 Local Corporation Presentation | 2Q2012
Percent of Total Revenue from Direct Sales Efforts
15 |
 Local Corporation Presentation | 2Q2012
Revenue/Thousand Visits & Total Monthly Unique Visitors
16 |
 Local Corporation Presentation | 2Q2012
1Q12 Balance Sheet & Capitalization
17
Key Balance Sheet Items
(in thousands)
March 31, 2012
Cash
$6,787
Accounts Receivable
14,370
Total Assets
72,155
Total Debt
8,000
Total Liabilities
24,876
Shareholders Equity
$47,279
March 31, 2012
Common stock
22,083
Options
(Avg. Strike $4.29)
4,775
Warrants
(Avg. Strike $7.48)
1,239
RSUs
109
Fully Diluted
28,207
1.
Options and warrants represent approximately $30MM in cash
Additional
Data:
I.
In August 2011 the Company closed on a $12 million credit facility
II.
Total authorized shares 65,000,000 common and 10,000,000 preferred
III.
In January 2011 the Company completed a public offering of 4.6 million shares at a price of
$4.25 per share. Net proceeds of $18.2 million 1
1 |
 Local Corporation Presentation | 2Q2012
Why Invest in Local Corporation?
18
•
Rapidly growing company in a rapidly growing market
•
Beneficiary of secular trend towards online ad spend by SMBs
•
Extensive technology platform and differentiated product portfolio
•
Growing revenue streams with considerable future growth potential
•
Proprietary products that improve operating leverage over time
•
Experienced executive team focused on execution with strategy discipline
•
Four quarters of change, challenge and transformation –
completed
•
Not just a search engine –
a media business
•
Returned to strong growth with greater revenue diversification
An Attractive Position
in Fast Growing Markets
Strong Operating Model
with Experienced Leadership
Team
Completed a Business
Transformation |
 Local Corporation Presentation | 2Q2012
19
Thank You
Heath Clarke
Founder, Chairman & Chief Executive Officer
hclarke@local.com
Ken Cragun
Chief Financial Officer
kcragun@local.com
949.784.0800
http://www.localcorporation.com |
 Local Corporation Presentation | 2Q2012
P&L Trend
20
Adjusted Net Income (Loss) = Net income (loss) before interest, taxes,
depreciation, amortization, stock-based compensation, warrant revaluation charges, and non-recurring Items
Actual
Actual
Forecast
Description
FY-10
FY-11
FY-12
Revenue
$ 84,137
$ 78,763
$ 110,000
Sequential revenue growth
49%
-6%
40%
Gross Margin
37,620
29,444
Gross Margin %
45%
37%
Other Operating Expenses
33,908
46,042
Operating income (loss)
3,712
(16,598)
Interest and other income (expense)
(275)
(413)
Change in fair value of warrant liability
887
2,633
Income (Loss) before income taxes
4,324
(14,378)
Provision for income taxes
102
181
Net income (loss)
$ 4,222
$(14,559)
Adjusted Net income (loss)
$ 13,775
$ (2,576)
$ 1,300
Weighted average shares
16,788
21,384
23,000
Net income (loss) per share
$ 0.25
$ (0.68)
Adjusted Net income (loss) per share
$ 0.82
$ (0.12)
$ 0.06 |
 Local Corporation Presentation | 2Q2012
Reconciliation: Adjusted Net Income to GAAP Net Inc
21
Actual
Actual
Forecast
Description
FY-10
FY-11
FY-12
Adjusted Net income (loss)
$ 13,775
$ (2,576)
$ 1,300
Plus interest and other income (expense), net
(275)
(413)
(400)
Less provision for income taxes
(102)
(181)
(150)
Less amortization of intangibles
(5,734)
(5,447)
(3,500)
Less depreciation
(1,418)
(3,291)
(3,900)
Less stock-based compensation
(2,911)
(3,823)
(2,800)
Less revaluation of warrants
887
2,633
unknown
Less non
-recurring charges
-
(1,461)
-
GAAP Net income (loss)
$ 4,222
$(14,559)
unknown
Weighted
Avg
Shares
-
Adjusted
Net
income
(loss)
16,788
21,384
23,000
Weighted
Avg
Shares
-
GAAP
Net
income
(loss)
16,788
21,384
23,000
Adjusted Net income (loss) per share
$ 0.82
$ (0.12)
GAAP Net income (loss) per share
$ 0.25
$ (0.68)
unknown
$ 0.06 |