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8-K - FORM 8-K - MARCHEX INCd49183d8k.htm

Exhibit 99.1

Marchex Announces Second Quarter 2015 Results

SEATTLE — (BUSINESS WIRE) – August 5, 2015— Marchex, Inc. (NASDAQ:MCHX), a mobile advertising analytics company, today announced its financial results for the second quarter ended June 30, 2015.

“We are seeing greater demand for Marchex’s mobile advertising analytics from enterprise marketers across the world. This is leading to increased adoption of our products with the channels and clients we view as most strategically important,” said Pete Christothoulou, Chief Executive Officer. “Advertising leaders want products that provide an unparalleled level of visibility into the entire mobile consumer journey and increasingly, these leaders are choosing Marchex to improve their mobile performance and drive overall growth.”

Q2 2015 Financial Highlights1

 

    GAAP revenue was $35.3 million for the second quarter of 2015, compared to $47.0 million for the second quarter of 2014. In the second quarter Marchex sold the bulk of its domain portfolio, which included a sale to GoDaddy Inc. for proceeds of $28.1 million.

 

    GAAP net income including discontinued operations was $20.9 million for the second quarter of 2015 compared to a GAAP net income including discontinued operations of $980,000 in second quarter of 2014. GAAP net loss from continuing operations was $1.3 million for the second quarter of 2015, compared to GAAP net loss from continuing operations of $102,000 for the second quarter of 2014.

 

    GAAP net income including discontinued operations attributable to common stockholders per diluted share for the second quarter of 2015 was $0.50, compared to $0.02 for the second quarter of 2014. GAAP net loss from continuing operations attributable to common stockholders per diluted share was $0.03 for the second quarter of 2015 compared to GAAP net loss from continuing operations of $0.00 for the second quarter of 2014.

 

     Q2 2015      Q2 2014  

GAAP Revenue

   $ 35.3 million       $ 47.0 million   

Call-Driven and related revenue

   $ 34.5 million       $ 45.9 million   

Non-GAAP Results:

     

Call-Driven Adjusted OIBA2

   $ 1.4 million       $ 2.9 million   

Call-Driven Adjusted EBITDA2

   $ 2.4 million       $ 3.8 million   

Adjusted OIBA2

   $ 1.3 million       $ 3.1 million   

Adjusted EBITDA2

   $ 2.3 million       $ 4.0 million   

Archeo Revenue

   $ 0.8 million       $ 1.1 million   

Domain transaction proceeds3

   $ 28.1 million      

Domain sales proceeds4

   $ 0.4 million       $ 2.2 million   

 

    Adjusted non-GAAP EPS2 including discontinued operations1 for the second quarter of 2015 was $0.37, compared to $0.07 for the second quarter of 2014. Adjusted non-GAAP EPS2 from continuing operations for the second quarter of 2015 was $0.02, compared to $0.05 for the second quarter of 2014.

 

1  The Company sold certain Archeo domain name and related assets in April 2015 and certain pay-per-click assets in July 2013. As a result, the financial results of these dispositions are presented as discontinued operations net of tax in our condensed consolidated statements of operations in accordance with GAAP, and are excluded from all other results unless otherwise noted.
2  Reconciliations of non-GAAP measures are included in the financial tables attached to this press release and we encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures.
3  Represents proceeds from the sale of certain Archeo domain name and related assets recognized in discontinued operations.
4  Represents proceeds from domain sales recognized in discontinued operations.


Marchex Q2 2015 and Recent Business Highlights:

 

    Strategic integrations. In July, Marchex announced a strategic, exclusive global partnership with Light Reaction, a mobile-first performance advertising business that is part of Xaxis, to launch M-Call, a new click-to-call mobile performance product that enables advertisers to generate high quality phone leads directly from mobile Web and in-app ads across hundreds of top publishers, social media sites and apps. Through the partnership, Light Reaction and Xaxis clients also gain access to Marchex Call Analytics, a real-time mobile advertising platform that measures sales, audiences and consumer intent from mobile, click-to-call campaigns. M-Call and Call Analytics are available to both Light Reaction and Xaxis clients, including GroupM agencies.

 

    Increased global scale. In June, Marchex announced its expansion into Europe, Canada, Australia and New Zealand to support enterprise marketers that need to tie mobile advertising spend to sales at scale - globally and seamlessly. Marchex now has clients utilizing its products within multiple geographies including CDK Global, Hearst, Yell and Intuit.

 

    YP contributed $10.4 million in call-driven revenues in the second quarter of 2015, compared to $10.2 million in the second quarter 2014.

Non-Operating Q2 2015 Highlights:

 

    During the second quarter, Marchex purchased 79,000 shares of its outstanding Class B common stock for a total price of $355,000. This brings Marchex’s total shares repurchased under its November 2014 share repurchase program to 973,000 shares or 3% of its outstanding Class B common stock.

Business Outlook

The following forward-looking statements reflect Marchex’s expectations as of August 5, 2015, and exclude any impact from Archeo operating results and discontinued operations. Archeo operating results are not included in our Call-Driven revenue, profitability, and other measures below:

Call-Driven financial guidance for the Third Quarter ending September 30, 2015

 

Call-Driven Revenue

   $ 34.5 million or more   

Call-Driven Adjusted OIBA 5

   $ 1.0 million or more   

Call-Driven Adjusted EBITDA 5

   $ 2.0 million or more   

 

5 These non-GAAP Call-Driven measures assign all Marchex corporate overhead costs to the Call-Driven results. Reconciliations of non-GAAP measures are included in the financial tables attached to this press release and we encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures.


Conference Call and Webcast Information

Management will hold a conference call, starting at 5:00 p.m. ET on Wednesday, August 5, 2015 to discuss its second quarter ended June 30, 2015 financial results, and other company updates. Access to the live webcast of the conference call will be available online from the Investors section of Marchex’s website at www.marchex.com. An archived version of the webcast will also be available at the same location, beginning two hours after completion of the call.

About Marchex

Marchex is a mobile advertising analytics company that connects online behavior to real-world, offline actions. By linking critical touchpoints in the customer journey, Marchex’s products enable a 360-degree view of marketing effectiveness. Brands and agencies utilize Marchex’s products to transform business performance.

Please visit www.marchex.com, blog.marchex.com or @marchex on Twitter (Twitter.com/Marchex), where Marchex discloses material information from time to time about the Company, its financial information, and its business.

Forward-Looking Statements:

This press release contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, included in this press release regarding our strategy, future operations, future financial position, future revenues, other financial guidance, acquisitions, dispositions, projected costs, prospects, plans and objectives of management are forward-looking statements. We may not actually achieve the plans, intentions, or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Marchex’s actual results to differ materially from those indicated by such forward-looking statements which are described in the “Risk Factors” section of our most recent periodic report and registration statement filed with the SEC. All of the information provided in this release is as of August 5, 2015 and Marchex undertakes no duty to update the information provided herein.

Non-GAAP Financial Information:

To supplement Marchex’s consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Marchex uses certain non-GAAP measures of financial performance and liquidity, including OIBA, Adjusted OIBA, Adjusted EBITDA, Adjusted non-GAAP EPS and Call-Driven and Archeo Adjusted OIBA and EBITDA. Additionally, Marchex also provides Call-Driven and Archeo Revenue excluding revenue generated from our contracts with


Yellowpages.com LLC (“YP”). In conjunction with the sale of the bulk of Marchex’s domain portfolio and certain related assets in April 2015, Marchex has also presented Adjusted OIBA and EBITDA from discontinued operations and Adjusted non-GAAP EPS including discontinued operations.

OIBA represents income (loss) from operations plus (1) stock-based compensation expense and (2) amortization of intangible assets from acquisitions. This measure, among other things, is one of the primary metrics by which Marchex evaluates the performance of its business. Additionally, Marchex’s management uses Adjusted OIBA, which excludes acquisition and disposition related costs, as this item is not indicative of Marchex’s recurring core operating results. Adjusted OIBA is the basis on which Marchex’s internal budgets are based and by which Marchex’s management is currently evaluated. Marchex believes these measures are useful to investors because they represent Marchex’s consolidated operating results, taking into account depreciation and other intangible amortization, which Marchex believes is an ongoing cost of doing business, but excluding the effects of certain other expenses such as stock-based compensation, amortization of intangible assets from acquisitions and acquisition and disposition related costs. Adjusted EBITDA represents income before interest, income taxes, depreciation, amortization, stock compensation expense, and acquisition and disposition related cost. Marchex believes that Adjusted EBITDA is another alternative measure of liquidity to GAAP net cash provided by operating activities that provides meaningful supplemental information regarding liquidity and is used by Marchex’s management to measure its ability to fund operations and its financing obligations.

Call-Driven Adjusted OIBA and EBITDA include the above descriptions of Adjusted OIBA and EBITDA for the Call-Driven segment. The Call-Driven Adjusted OIBA and EBITDA assign all Marchex general corporate overhead costs to the Call-Driven results. Archeo Adjusted OIBA and EBITDA include the above descriptions of Adjusted OIBA and EBITDA for the Archeo segment. Adjusted OIBA and EBITDA from discontinued operations include revenue and adjusted OIBA and EBITDA contributed by discontinued operations. Call-Driven and Archeo Revenue excluding YP excludes revenue generated through our contracts with YP. Financial analysts and investors may use Adjusted OIBA and EBITDA and Revenue excluding YP to help with comparative financial evaluation to make informed investment decisions. Adjusted non-GAAP EPS represents Adjusted non-GAAP net income applicable to common stockholders divided by GAAP diluted shares outstanding. Adjusted non-GAAP net income applicable to common stockholders generally captures those items on the statement of operations that have been, or ultimately will be, settled in cash exclusive of certain items that are not indicative of Marchex’s recurring core operating results and represents net income applicable to common stockholders plus the net of tax effects of: (1) stock-based compensation expense, (2) amortization of intangible assets from acquisitions, (3) acquisition and disposition related costs, (4) interest and other income (expense), (5) discontinued operations, net of tax and (6) dividends paid to participating securities. Adjusted non-GAAP EPS including discontinued operations includes the above description of Adjusted non-GAAP EPS but includes the results of discontinued operations. Financial analysts and investors may use Adjusted non-GAAP EPS to analyze Marchex’s financial performance since these groups have historically used EPS related measures, along with other measures, to estimate the value of a company, to make informed investment decisions, and to evaluate a company’s operating performance compared to that of other companies in its industry.

Marchex’s management believes that investors should have access to, and Marchex is obligated to provide, the same set of tools that management uses in analyzing the company’s results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Marchex’s non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar titled terms used by other companies, and accordingly, care should be exercised in understanding how Marchex defines its non-GAAP financial measures in this release. Marchex endeavors to compensate for the limitations


of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence, GAAP financial statements, and detailed descriptions of the reconciling items and adjustments, including quantifying such items, to derive the non-GAAP measure.

For further information, contact:

Trevor Caldwell

Marchex Investor Relations

Telephone: 206.331.3600

Email: ir(at)marchex.com

Or

MEDIA INQUIRIES

Marchex Corporate Communications

Telephone: 206.331.3434

Email: pr(at)marchex.com


MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

     Three months ended  
     June 30,  
     2014     2015  

Revenue

   $ 47,042      $ 35,346   

Expenses:

    

Service costs (1)

     31,455        19,797   

Sales and marketing (1)

     2,711        4,245   

Product development (1)

     7,458        8,147   

General and administrative (1)

     5,386        4,505   

Amortization of intangible assets from acquisitions

     31        —     

Acquisition and disposition related costs

     (68     118   
  

 

 

   

 

 

 

Total operating expenses

     46,973        36,812   
  

 

 

   

 

 

 

Income (loss) from operations

     69        (1,466

Interest expense and other, net

     (22     (16
  

 

 

   

 

 

 

Income (loss) from continuing operations before provision for income taxes

     47        (1,482

Income tax expense (benefit)

     149        (185
  

 

 

   

 

 

 

Net loss from continuing operations

     (102     (1,297

Discontinued operations:

    

Income (loss) from discontinued operations, net of tax

     1,082        (92

Gain on sale from discontinued operations, net of tax

     —          22,257   
  

 

 

   

 

 

 

Discontinued operations, net of tax

     1,082        22,165   
  

 

 

   

 

 

 

Net income

     980        20,868   

Dividends paid to participating securities

     (33     (19
  

 

 

   

 

 

 

Net income applicable to common stockholders

   $ 947      $ 20,849   
  

 

 

   

 

 

 

Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders:

    

Continuing operations

   $ 0.00      $ (0.03

Discontinued operations, net of tax

   $ 0.02        0.53   
  

 

 

   

 

 

 

Basic and diluted net income per Class A and Class B share applicable to common stockholders

   $ 0.02      $ 0.50   

Dividends paid per share

   $ 0.02      $ 0.02   

Shares used to calculate basic net income (loss) per share applicable to common stockholders

    

Class A

     5,243        5,233   

Class B

     35,441        36,072   

Shares used to calculate diluted net income (loss) per share applicable to common stockholders

    

Class A

     5,243        5,233   

Class B

     40,684        41,305   

(1)    Includes stock-based compensation allocated as follows:

    

Service costs

   $ 360      $ 552   

Sales and marketing

     231        309   

Product development

     691        644   

General and administrative

     1,831        1,162   
  

 

 

   

 

 

 

Total

   $ 3,113      $ 2,667   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

 

     Six Months Ended  
     June 30,  
     2014     2015  

Revenue

   $ 95,137      $ 71,261   

Expenses:

    

Service costs (1)

     62,957        39,163   

Sales and marketing (1)

     5,946        7,703   

Product development (1)

     15,018        15,839   

General and administrative (1)

     10,747        10,204   

Amortization of intangible assets from acquisitions

     434        —     

Acquisition and disposition related costs

     (68     118   
  

 

 

   

 

 

 

Total operating expenses

     95,034        73,027   

Income (loss) from operations

     103        (1,766

Interest expense and other, net

     (24     (41
  

 

 

   

 

 

 

Income (loss) from continuing operations before provision for income taxes

     79        (1,807

Income tax expense (benefit)

     260        (180
  

 

 

   

 

 

 

Net loss from continuing operations

     (181     (1,627

Discontinued operations:

    

Income from discontinued operations, net of tax

     2,016        5,047   

Gain on sale from discontinued operations, net of tax

     —          22,032   
  

 

 

   

 

 

 

Discontinued operations, net of tax

     2,016        27,079   
  

 

 

   

 

 

 

Net income

     1,835        25,452   

Dividends paid to participating securities

     (69     (37
  

 

 

   

 

 

 

Net income applicable to common stockholders

   $ 1,766      $ 25,415   
  

 

 

   

 

 

 

Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders

    

Continuing operations

   $ 0.00      $ (0.04

Discontinued operations, net of tax

   $ 0.05        0.66   
  

 

 

   

 

 

 

Basic and diluted net income per Class A and Class B share applicable to common stockholders

   $ 0.05      $ 0.62   

Dividends paid per share

   $ 0.04      $ 0.04   

Shares used to calculate basic net income (loss) per share applicable to common stockholders

    

Class A

     6,483        5,233   

Class B

     32,277        35,919   

Shares used to calculate diluted net income (loss) per share applicable to common stockholders

    

Class A

     6,483        5,233   

Class B

     38,760        41,152   

(1)    Includes stock-based compensation allocated as follows:

    

Service costs

   $ 640      $ 772   

Sales and marketing

     434        554   

Product development

     1,350        1,223   

General and administrative

     3,569        2,909   
  

 

 

   

 

 

 

Total

   $ 5,993      $ 5,458   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands)

(unaudited)

 

     December 31,
2014
    June 30,
2015
 
Assets     

Current assets:

    

Cash and cash equivalents

   $ 80,032      $ 104,431   

Accounts receivable, net

     25,941        30,513   

Prepaid expenses and other current assets

     3,143        2,615   

Refundable taxes

     131        120   
  

 

 

   

 

 

 

Total current assets

     109,247        137,679   

Property and equipment, net

     5,430        6,471   

Intangibles and other assets, net

     313        245   

Goodwill

     65,679        63,305   
  

 

 

   

 

 

 

Total Assets

   $ 180,669      $ 207,700   
  

 

 

   

 

 

 
Liabilities and Stockholders’ Equity     

Current liabilities:

    

Accounts payable

   $ 13,766      $ 13,369   

Accrued expenses and other current liabilities

     7,515        7,942   

Deferred revenue

     2,117        1,305   
  

 

 

   

 

 

 

Total current liabilities

     23,398        22,616   

Other non-current liabilities

     1,118        898   
  

 

 

   

 

 

 

Total Liabilities

     24,516        23,514   

Class A common stock

     55        55   

Class B common stock

     373        372   

Treasury stock

     (2,503     (144

Additional paid-in capital

     348,467        348,690   

Accumulated deficit

     (190,239     (164,787
  

 

 

   

 

 

 

Total Stockholders’ Equity

     156,153        184,186   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 180,669      $ 207,700   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation of GAAP Income (Loss) from Operations to Operating Income Before Amortization (OIBA)

and Adjusted Operating Income Before Amortization (Adjusted OIBA)

(in thousands)

(unaudited)

 

     Three Months Ended
June 30,
 
     2014     2015  

Income (loss) from operations

   $ 69      $ (1,466

Stock-based compensation

     3,113        2,667   

Amortization of intangible assets from acquisitions

     31        —     
  

 

 

   

 

 

 

Operating income before amortization (OIBA)

     3,213        1,201   

Acquisition and disposition related costs

     (68     118   
  

 

 

   

 

 

 

Adjusted operating income before amortization (Adjusted OIBA)

   $ 3,145      $ 1,319   
  

 

 

   

 

 

 
     Six Months Ended
June 30,
 
     2014     2015  

Income (loss) from operations

   $ 103      $ (1,766

Stock-based compensation

     5,993        5,458   

Amortization of intangible assets from acquisitions

     434        —     
  

 

 

   

 

 

 

Operating income before amortization (OIBA)

     6,530        3,692   

Acquisition and disposition related costs

     (68     118   
  

 

 

   

 

 

 

Adjusted operating income before amortization (Adjusted OIBA)

   $ 6,462      $ 3,810   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation from Net Cash provided by (used in) Operating Activities to Adjusted EBITDA

(in thousands)

(unaudited)

 

     Three Months Ended  
     June 30,  
     2014     2015  

Net cash provided by (used in) operating activities

   $ 3,289      $ (1,814

Changes in assets and liabilities

     1,672        3,883   

Income tax expense (benefit)

     149        (185

Acquisition and disposition related costs

     —          118   

Interest expense and other, net

     22        16   

Loss (income) from discontinued operations, net of tax

     (1,120     91   

Tax effect on gain on sale of discontinued operations

     —          163   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 4,012      $ 2,272   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

   $ (545   $ 23,767   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

   $ 33,680      $ (1,181
  

 

 

   

 

 

 
     Six Months Ended
June 30,
 
     2014     2015  

Net cash provided by operating activities

   $ 11,367      $ 4,437   

Changes in asset and liabilities

     (1,312     6,111   

Income tax expense (benefit)

     260        (180

Acquisition and disposition related costs

     —          118   

Interest expense and other, net

     24        41   

Income on discontinued operations, net of tax

     (2,109     (5,065

Tax effect on gain on sale of discontinued operations

     —          163   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 8,230      $ 5,625   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

   $ (1,352   $ 22,840   
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

   $ 34,023      $ (2,878
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS

(in thousands, except per share data)

(unaudited)

 

     Three Months Ended  
     June 30,  
     2014     2015  

Adjusted Non-GAAP EPS from continuing operations

   $ 0.05      $ 0.02   
  

 

 

   

 

 

 

Net income (loss) from continuing operations applicable to common stockholders - diluted (GAAP EPS)

   $ 0.00      $ (0.03

Shares used to calculate diluted net income (loss) per share applicable to common stockholders

     40,684        41,305   

Net income applicable to common stockholders

   $ 947      $ 20,849   

Stock-based compensation

     3,113        2,667   

Acquisition and disposition related costs

     (68     118   

Amortization of intangible assets from acquisitions

     31        —     

Interest expense and other, net

     22        16   

Dividends paid to participating securities

     33        19   

Discontinued operations, net of tax

     (1,082     (22,165

Estimated impact of income taxes

     (973     (646
  

 

 

   

 

 

 

Adjusted Non-GAAP net income from continuing operations

   $ 2,023      $ 858   

Discontinued operations, net of tax

     1,086        22,164   

Estimated impact of income taxes

     —          (7,706
  

 

 

   

 

 

 

Adjusted Non-GAAP net income including discontinued operations

   $ 3,109      $ 15,316   
  

 

 

   

 

 

 

Adjusted Non-GAAP EPS from continuing operations

   $ 0.05      $ 0.02   
  

 

 

   

 

 

 

Adjusted Non-GAAP EPS including discontinued operations

   $ 0.07      $ 0.37   
  

 

 

   

 

 

 

Shares used to calculate diluted net income (loss) per share applicable to common stockholders (GAAP)

     40,684        41,305   

Weighted average stock options and common shares subject to purchase or cancellation (if applicable)

     2,769        415   
  

 

 

   

 

 

 

Diluted shares used to calculate Adjusted Non-GAAP EPS (1)

     43,453        41,720   
  

 

 

   

 

 

 

 

(1) For the purpose of computing the number of diluted shares for Adjusted Non-GAAP EPS, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP EPS.

Certain reclassifications have been made to prior periods to conform to current presentation.


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS

(in thousands, except per share data)

(unaudited)

 

     Six Months Ended  
     June 30,  
     2014     2015  

Adjusted Non-GAAP EPS from continuing operations

   $ 0.10      $ 0.06   
  

 

 

   

 

 

 

Net income (loss) from continuing operations applicable to common stockholders - diluted (GAAP EPS)

   $ 0.00      $ (0.04

Shares used to calculate diluted net income (loss) per share applicable to common stockholders

     38,760        41,152   

Net income (loss) applicable to common stockholders

   $ 1,766      $ 25,415   

Stock-based compensation

     5,993        5,458   

Acquisition and disposition related costs

     (68     118   

Amortization of intangible assets from acquisitions

     434        —     

Interest expense and other, net

     24        41   

Dividends paid to participating securities

     69        37   

Discontinued operations, net of tax

     (2,016     (27,079

Estimated impact of income taxes

     (2,041     (1,516
  

 

 

   

 

 

 

Adjusted Non-GAAP net income from continuing operations

   $ 4,161      $ 2,474   

Discontinued operations, net of tax

     2,023        27,081   

Estimated impact of income taxes

     —          (9,521
  

 

 

   

 

 

 

Adjusted Non-GAAP net income including discontinued operations

   $ 6,184      $ 20,034   
  

 

 

   

 

 

 

Adjusted Non-GAAP EPS from continuing operations

   $ 0.10      $ 0.06   
  

 

 

   

 

 

 

Adjusted Non-GAAP EPS including discontinued operations

   $ 0.15      $ 0.48   
  

 

 

   

 

 

 

Shares used to calculate diluted net income (loss) per share applicable to common stockholders (GAAP)

     38,760        41,152   

Weighted average stock options and common shares subject to purchase or cancellation (if applicable)

     2,898        366   
  

 

 

   

 

 

 

Diluted shares used to calculate Adjusted Non-GAAP EPS (1)

     41,658        41,518   
  

 

 

   

 

 

 

 

(1) For the purpose of computing the number of diluted shares for Adjusted Non-GAAP EPS, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP EPS.

Certain reclassifications have been made to prior periods to conform to current presentation.


MARCHEX, INC. AND SUBSIDIARIES

Quarterly Financial Summary Information

(in thousands)

(unaudited)

NON-GAAP MEASURES

 

CONSOLIDATED1

   Q214      Q314     Q414     Q115     Q215  

GAAP Revenue

   $  47,042       $ 47,238      $ 31,226      $ 35,915      $ 35,346   

Adjusted OIBA

   $ 3,145       $ 3,214      $ 2,355      $ 2,491      $ 1,319   

Adjusted EBITDA

   $  4,012       $ 4,105      $ 3,253      $ 3,353      $ 2,272   

CALL-DRIVEN AND RELATED

   Q214      Q314     Q414     Q115     Q215  

GAAP Revenue

   $  45,856       $ 46,379      $ 30,324      $ 35,028      $ 34,458   

Adjusted OIBA

   $ 2,896       $ 3,280      $ 2,511      $ 2,632      $ 1,400   

Adjusted EBITDA

   $  3,763       $ 4,171      $ 3,409      $ 3,494      $ 2,353   

ARCHEO EXCLUDING DISCONTINUED OPERATIONS1

   Q214      Q314     Q414     Q115     Q215  

GAAP Revenue

   $  1,186       $ 859      $ 902      $ 887      $ 888   

Adjusted OIBA

   $ 249       $ (66   $ (156   $ (141   $ (81

Adjusted EBITDA

   $ 249       $ (66   $ (156   $ (141   $ (81

CALL-DRIVEN REVENUE EXCLUDING YP

   Q214      Q314     Q414     Q115     Q215  

GAAP Revenue

   $  45,856       $ 46,379      $ 30,324      $ 35,028      $ 34,458   

Revenue excluding YP

   $ 35,634       $ 35,162      $ 19,261      $ 24,271      $ 24,096   

YP Revenue

   $ 10,222       $ 11,217      $ 11,063      $ 10,757      $ 10,362   

ARCHEO REVENUE EXCLUDING YP AND DISCONTINUED OPERATIONS1

   Q214      Q314     Q414     Q115     Q215  

GAAP Revenue

   $  1,186       $ 859      $ 902      $ 887      $ 888   

Revenue excluding YP

   $ 716       $ 608      $ 524      $ 525      $ 515   

YP Revenue

   $ 470       $ 251      $ 378      $ 362      $ 373   

DISCONTINUED OPERATIONS1

   Q214      Q314     Q414     Q115     Q215  

Revenue from Discontinued Operations

   $ 2,634       $ 1,943      $ 2,065      $ 6,659      $ 422   

Adjusted OIBA from Discontinued Operations

   $ 1,646       $ 1,035      $ 1,113      $ 5,142      $ (56

Adjusted EBITDA from Discontinued Operations

   $ 1,680       $ 1,050      $ 1,127      $ 5,156      $ (53

 

1 In April 2015, Marchex divested certain Archeo domain name and related assets. The operating results of the divested assets are included in discontinued operations net of tax in the unaudited consolidated financial statements. The financial results for the discontinued operations are preliminary, subject to updates, and have been derived from the unaudited consolidated financial statements of Marchex, Inc.for all periods presented.

Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods.


MARCHEX, INC. AND SUBSIDIARIES

(in thousands)

(unaudited)

Reconciliation of GAAP Income (Loss) from Operations to Operating Income before Amortization (OIBA) and Adjusted Operating Income Before Amortization (Adjusted OIBA)

 

     Three Months Ended  
     6/30/2014     9/30/2014     12/31/2014     3/31/2015     6/30/2015  

Income (loss) from operations

   $ 69      $ 193      $ (521   $ (300   $ (1,466

Stock-based compensation

     3,113        3,021        2,876        2,791        2,667   

Amortization of intangible assets from acquisitions

     31        —          —          —          —     
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Operating income before amortization (OIBA)

     3,213        3,214        2,355        2,491        1,201   

Acquisition and disposition related costs

     (68     —          —          —          118   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted OIBA - Consolidated

   $ 3,145      $ 3,214      $ 2,355      $ 2,491      $ 1,319   

Less: Archeo Adjusted OIBA1

     249        (66     (156     (141     (81
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Call-Driven1 and related Adjusted OIBA

   $ 2,896      $ 3,280      $ 2,511      $ 2,632      $ 1,400   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA

 

     Three Months Ended  
     6/30/2014     9/30/2014     12/31/2014     3/31/2015     6/30/2015  

Net cash provided by (used in) operating activities

   $ 3,289      $ 6,750      $ 4,302      $ 6,251      $ (1,814

Changes in assets and liabilities

     1,672        (24,736     58        2,228        3,883   

Income tax expense (benefit)

     149        22,980        —          5        (185

Disposition related costs

     —          —          —          —          118   

Discontinued operations

     (1,120     (1,050     (1,127     (5,156     91   

Tax effect of gain on sale of discontinued operations

     —          143        —          —          163   

Interest expense and other, net

     22        18        20        25        16   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA - Consolidated

   $ 4,012      $ 4,105      $ 3,253      $ 3,353      $ 2,272   

Less: Archeo Adjusted EBITDA1

     249        (66     (156     (141     (81
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Call-Driven1 and related Adjusted EBITDA

   $ 3,763      $ 4,171      $ 3,409      $ 3,494      $ 2,353   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Summary of Revenue by Segment

 

     Three Months Ended  
     6/30/2014      9/30/2014      12/31/2014      3/31/2015      6/30/2015  

Call-Driven1 and related Revenue

   $ 45,856       $ 46,379       $ 30,324       $ 35,028       $ 34,458   

Archeo Revenue1

     1,186         859         902         887         888   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Revenue - Consolidated

   $ 47,042       $ 47,238       $ 31,226       $ 35,915       $ 35,346   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

1 The financial results for Call-Driven and Archeo have been derived from the unaudited condensed consolidated financial statements. The Call-Driven financial results include certain direct operating expenses and general corporate overhead expenses. The Archeo financial results include direct operating expenses.

Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods.


MARCHEX, INC. AND SUBSIDIARIES

Consolidated Continuing and Discontinued Operations

(in thousands)

(unaudited)

 

     Three months ended     Six months ended  
     6/30/2014      9/30/2014     12/31/2014     3/31/2015     6/30/2015     6/30/2014      6/30/2015  

Consolidated Continuing Operations

                

Revenue

   $ 47,042       $ 47,238      $ 31,226      $ 35,915      $ 35,346      $ 95,137       $ 71,261   

Adjusted OIBA

   $ 3,145       $ 3,214      $ 2,355      $ 2,491      $ 1,319      $ 6,462       $ 3,810   

Adjusted EBITDA

   $ 4,012       $ 4,105      $ 3,253      $ 3,353      $ 2,272      $ 8,230       $ 5,625   

Archeo Continuing Operations1

                

Revenue

   $ 1,186       $ 859      $ 902      $ 887      $ 888      $ 3,788       $ 1,775   

Adjusted OIBA

   $ 249       $ (66   $ (156   $ (141   $ (81   $ 1,155       $ (222

Adjusted EBITDA

   $ 249       $ (66   $ (156   $ (141   $ (81   $ 1,206       $ (222

Discontinued Operations2

                

Revenue

   $ 2,634       $ 1,943      $ 2,065      $ 6,659      $ 422      $ 5,035       $ 7,081   

Adjusted OIBA

   $ 1,646       $ 1,035      $ 1,113      $ 5,142      $ (56   $ 3,038       $ 5,086   

Adjusted EBITDA

   $ 1,680       $ 1,050      $ 1,127      $ 5,156      $ (53   $ 3,124       $ 5,103   

Reconciliation of GAAP Income (Loss) from Discontinued Operations, Net of Tax to

Adjusted Operating Income Before Amortization (Adjusted OIBA) and Adjusted EBITDA

 

     Three months ended     Six months ended  
     6/30/2014      9/30/2014      12/31/2014      3/31/2015      6/30/2015     6/30/2014      6/30/2015  

Discontinued Operations2

                   

Income (loss) from discontinued operations, net of tax

   $ 1,082       $ 1,031       $ 1,109       $ 5,139       $ (92   $ 2,016       $ 5,047   

Income tax expense

     560                                 37        1,014         37   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) from discontinued operations before provision for income taxes

     1,642         1,031         1,109         5,139         (55     3,030         5,084   

Stock-based compensation

     4         4         4         3         (1     8         2   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted Operating income before amortization (OIBA)

     1,646         1,035         1,113         5,142         (56     3,038         5,086   

Domain Amortization

     34         15         14         14         3        86         17   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

Adjusted EBITDA

     1,680         1,050         1,127         5,156         (53     3,124         5,103   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

    

 

 

 

 

1 The financial results of Archeo are preliminary and have been derived from the unaudited consolidated financial statements of Marchex, Inc. for all periods presented. The unaudited Archeo financial results include direct operating expenses for all periods presented.
2 Operating results of discontinued operations relate to certain pay-per-click assets sold in July 2013 and certain Archeo domain names and related assets sold in April 2015 are included in discontinued operations net of tax in the unaudited consolidated financial statements.

Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods.