Attached files
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| 8-K - FORM 8-K - LOCAL Corp | d409357d8k.htm |
 Corporate Overview
3Q2012
Exhibit 99.1 |
 CORPORATE OVERVIEW | 3Q2012
2
………………..…………………………………….
Forward looking statements
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; gain or loss on warrant revaluation; net
income (loss) from discontinued operations; impairment 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.
|
 CORPORATE OVERVIEW | 3Q2012
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…………………………..…………………………………….
Local Corporation
We connect local businesses with online consumers |
 CORPORATE OVERVIEW | 3Q2012
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………………………………………………..
Local Corporation Overview
Founded
IPO Date
Ticker
Reach
Network of Websites
Direct SMB Subscribers
Patents
Headquarters
1999
2004
LOCM (NASDAQ)
~1 million consumers/day
Over 1,000
~1,000
9 issued + 11 pending
Irvine, CA
KEY FACTS
REVENUE IN MILLIONS |
 CORPORATE OVERVIEW | 3Q2012
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…………………………...………………….
Beneficiary of Secular Trends
Digital media is going local....
…& we have assets in all areas |
 CORPORATE OVERVIEW | 3Q2012
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…………………………………………………….
The Challenge for SMBs
SMBs spend thousands and need
multiple vendors to solve for their most basic
marketing and advertising needs *Research by Vsplash and BIA/Kelsey: SMB Digital Scope and
Audit Study
Only 33.4% have a local phone number on their home
page Only 22% have an email address on
their website Just
6.7% of SMB websites are mobile-compatible
Only
6% have a Facebook business page
|
 CORPORATE OVERVIEW | 3Q2012
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………….…………………..….
Local customers are worth more!
Pay-per-click rates for local versus national keyword terms…
Search: Why Local Consumers Matter
* Bids as of June 25, 2012
282%
235%
139%
114%
147%
200%
Search Term
Click Bids*
Premium
Plumber
$9.55
Plumber
Los Angeles
Credit Union
Seattle
Credit Union
Restaurant
San Francisco
Restaurant
Moving Company
Denver
Moving Company
Wedding Florist
Orlando
Wedding
Florist
Hotel
New
York
City
Hotel
$26.91
$0.91
$2.14
$1.39
$1.93
$10.82
$12.38
$1.92
$2.82
$1.80
$3.60 |
 CORPORATE OVERVIEW | 3Q2012
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Search: Our Business Model
LOCAL BUSINESS DATA
(may include deals, coupons,
product info, business content,
events, activities, ratings &
reviews and more)
WE AGGREGATE & PUBLISH LOCAL CONTENT
THAT CONTENT IS INDEXED BY SEARCH ENGINES
WE MONETIZE THAT TRAFFIC
MAJOR
SEARCH
ENGINES
OUR
PARTNERS’
ADVERTISERS
OVER 30MM
CONSUMERS
PER MONTH
DIRECT
CUSTOMERS
Traffic x Monetization = Revenue
PROPRIETARY NETWORK OF
1,200+ SITES
PROPRIETARY NETWORK OF
1,200+ SITES |
 CORPORATE OVERVIEW | 3Q2012
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…………………………………………………………...………………………..
Assets
•
9 Patents issued/11 pending
•
Aggregate & publish local
content
•
Proprietary platform for SMB
Solution
•
Greater than 30M MUVs
on our site and network
•
~ 300K daily deal
subscribers
•
Channel Partners
•
Regional media
publishers
•
SMB Solution
resellers
•
Google
•
Yahoo!
•
Super Media
•
ATTi
•
~ 1,000 Direct SMB
Subscribers |
 CORPORATE OVERVIEW | 3Q2012
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Simple Growth Strategy
Number of sites
Volume per site
Mobile
..……………………………………………….………….
Grow Traffic
Increase Monetization
•
Optimize yield
Direct customers |
 CORPORATE OVERVIEW | 3Q2012
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..……………..…………………………………….
Growth & Momentum: Traffic
* MUVs |
 CORPORATE OVERVIEW | 3Q2012
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..…..…………………………………….
Growth & Momentum: Monetization |
 CORPORATE OVERVIEW | 3Q2012
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……………………..….……………………………….
Organic Traffic & Revenue
•
More balanced revenue
•
Higher margin
•
More predictable
•
Better visibility
Organic/direct revenue includes revenue from organic traffic and direct advertiser relationships
|
 CORPORATE OVERVIEW | 3Q2012
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...………….….
A Complete, Unique Digital Media Solution for SMBs
SMBs could spend over $1,000/month with other providers to get
everything that is already included in our one solution.
•
Monthly subscription sold to SMBs starting at $249 per
month •
Powered by our own proprietary technology
•
Launch by Local announced August 2012 |
 ..……….....…….
Local SMB Customer: Fabi’s Hair Studio (Murray Hill Hair Salon)
Facebook and Twitter pages engage
customers and increase awareness
Mobile-optimized site
features directions and
click-to-call
Beautiful site design and web
hosting with geo-targeted URL
and custom content
A consistent brand
and user experience
across multiple channels
add to business credibility
CORPORATE OVERVIEW | 3Q2012
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 CORPORATE OVERVIEW | 3Q2012
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…..…….……….
•
More direct customers =
»
Better monetization
»
Greater margins
»
Greater defensibility
»
More visibility
Local
SMB
Customer:
Fabi’s
Hair
Studio
(Murray
Hill
Hair
Salon)
Search engine optimization ensures
page 1 placement by business category
and keyword on a major search engine
Display ad and enhanced listing on
Local.com raise awareness in local markets |
 CORPORATE OVERVIEW | 3Q2012
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………………….……….
An Experienced Team with Strategy Discipline
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 |
 CORPORATE OVERVIEW | 3Q2012
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…………………………………………..………….…….……….
Long Term Growth
•
75% YoY revenue growth (Q2’12 over Q2’11)
•
~40% CAGR 2006-2012
•
FY12 Guidance: $106MM revenues: ~35% YOY growth and $2.2MM Adjusted Net
Income •
Forward-Looking:
Increased organic revenue = higher margins and improved bottom line
Note: See reconciliation of Adjusted Net Income to GAAP net income at presentation
end. |
 CORPORATE OVERVIEW | 3Q2012
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………………………………...……….
2Q12 Balance Sheet & Cap. Table
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
Key Balance Sheet Items
(in thousands)
June 30, 2012
Cash
$7,103
Accounts Receivable
15,224
Total Assets
65,621
Total Debt
8,000
Total Liabilities
26,983
Shareholders Equity
$38,638
June 30, 2012
Common stock
22,088
Options
(Avg. Strike $4.28)
4,508
Warrants
(Avg. Strike $7.48)
1,239
RSUs
384
PSUs
94
Fully Diluted
28,313
Capitalization
(in thousands) |
 CORPORATE OVERVIEW | 3Q2012
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………………………………………………………
Digital Media Landscape |
 CORPORATE OVERVIEW | 3Q2012
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…………………………..…….……….
Why Invest in Local Corporation?
•
Track record of growth
•
Strong management team with proven agility
•
Leverage via new and growing revenue streams
•
Proprietary platform |
 CORPORATE OVERVIEW | 3Q2012
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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 |
 CORPORATE OVERVIEW | 3Q2012
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P&L Trend
2
Actual
Actual
Forecast
Description
FY-10
FY-11
FY-12
Revenue
$ 84,137
$ 78,259
$ 106,000
Sequential revenue growth
49%
-8%
35%
Gross Margin
37,620
29,001
Gross Margin %
45%
37%
Other Operating Expenses
33,908
43,629
Operating income (loss)
3,712
(14,628)
Interest and other income (expense)
(275)
(413)
Change in fair value of warrant liability
887
2,633
Income (Loss) before income taxes
4,324
(12,408)
Provision for income taxes
102
178
Net income (loss) from continuing operations
$ 4,222
$ (12,586)
Income (loss) from discontinued operations
(1,972)
Net income (loss)
$ 4,222
$ (14,558)
Adjusted Net Income (Loss)
$ 13,775
$ (1,090)
$ 2,200
Weighted average shares
16,788
21,384
23,000
Net income (loss) per share from discontinued operations
$ 0.25
$ (0.68)
Adjusted Net Income (Loss) per share
$ 0.82
$ (0.05)
$ 0.10
Note: See reconciliation of Adjusted Net Income to GAAP net income at slide
22. (in thousands, except per share amounts) |
 CORPORATE OVERVIEW | 3Q2012
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……..……….
Reconciliation: Adjusted Net Income to GAAP Net Inc
2
Actual
Actual
Forecast
Description
FY-10
FY-11
FY-12
Adjusted Net Income (Loss)
$ 13,775
$ (1,090)
$ 2,200
Plus interest and other income (expense), net
(275)
(413)
(400)
Less provision for income taxes
(102)
(178)
(150)
Less amortization of intangibles
(5,734)
(5,136)
(3,500)
Less depreciation
(1,418)
(3,277)
(3,900)
Less stock-based compensation
(2,911)
(3,663)
(3,400)
Less revaluation of warrants
887
2,633
unknown
Less non-recurring charges
-
(1,461)
(609)
Less impairment charge
(6,500)
Less Rovion assets held for sale
(1,972)
(900)
GAAP Net income (loss)
$ 4,222
$(14,558)
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
$ (0.05)
$ 0.10
GAAP Net income (loss) per share
$ 0.25
$ (0.68)
unknown
(in thousands, except per share amounts) |