PRESSROOM

ValueClick announces first quarter 2011 results


Revenue and Profitability Exceed High-End of Guidance Ranges


WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--


ValueClick, Inc. (Nasdaq: VCLK) today reported financial results for the


first quarter ended March 31, 2011. Revenue, adjusted-EBITDA1,


and earnings per share metrics all exceeded the high-end of the guidance


ranges management provided on February 15, 2011.


Highlights from the first quarter of 2011 results include:



  • Revenue of $116.5 million, up 22 percent from the first quarter of


    2010 (Q1 2010)




  • Adjusted-EBITDA of $35.1 million, up 27 percent from Q1 2010




  • Adjusted-EBITDA margin of 30.1 percent versus 28.7 percent in Q1 2010




  • GAAP net income from continuing operations of $0.21 per diluted share,


    up 50 percent from Q1 2010



"The sales and technology investments we made last year fueled growth in


the quarter and set the stage for continued strong performance


throughout 2011," said
Jim Zarley, chief executive officer of


ValueClick. "We are expanding our addressable market into branding


budgets through organic growth initiatives and through the acquisition


of Greystripe, while also realizing revenue synergies across our


divisions. We are in a very strong position to capitalize further on the


growth opportunities in both direct-response and branding-oriented


digital advertising."


Non-GAAP net income, which excludes discontinued operations, stock-based


compensation and amortization of intangible assets, was $20.9 million,


or $0.26 per diluted common share for the first 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.


ValueClick repurchased approximately 2.2 million shares of its common


stock in the first quarter of 2011 and an additional 0.4 million shares


in April 2011, for an aggregate cost of $37.7 million. As of today,


ValueClick has $62.3 million remaining authorization under its stock


repurchase program.


The consolidated balance sheet as of March 31, 2011 included


approximately $200 million in cash and cash equivalents and no debt. In


April, the Company utilized $70 million for the Greystripe acquisition


and approximately $6.2 million to repurchase 419,000 shares of its


common stock through its stock repurchase program. For more information


on the Greystripe acquisition, please refer to the April 25 acquisition


announcement.


Business Outlook


Today, ValueClick is announcing guidance for the second quarter of 2011:





















 



 



Guidance



Revenue



 



$120-$122 million



Adjusted-EBITDA



 



$34-$35 million



Mid-Point Adjusted-EBITDA Margin



 



28.5%



GAAP diluted net income per common share



 



$0.19-$0.20



Non-GAAP diluted net income per common share



 



$0.25-$0.26


The consolidated revenue guidance range is based on the following


segment-level assumptions for revenue growth rates expressed as a


percentage increase from second quarter 2010 reported revenue levels:











































 






 



 



Affiliate Marketing:



 



 



 



 



up mid teens









Media:







up mid teens organically; up high twenties including Greystripe


contribution









Owned & Operated:







up low twenties









Technology:







up high single-digits to low double-digits


The above guidance assumes that the Greystripe acquisition, which closed


on April 21 and will be included in the Media segment, will have the


following impact on the second quarter reported results: positive


revenue contribution of approximately $4 million; minimal


adjusted-EBITDA contribution; negative $0.01 impact on GAAP diluted net


income per common share as a result of additional amortization and


stock-based compensation expense; and no impact on Non-GAAP diluted net


income per common share.


Second quarter 2011 non-GAAP and GAAP diluted net income per common


share guidance assume stock-based compensation of $2.7 million,


amortization of intangible assets of $6.0 million, interest and other


income of $1.0 million, a 38 percent effective tax rate, and 80.0


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 ValueClick's financial performance for the first quarter


during a conference call and webcast on May 3 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 May 10 at


(888) 203-1112 and (719) 457-0820 (pass code: 2296590). An archive of


the Webcast will also be available through May 10.


About ValueClick


ValueClick, Inc. (Nasdaq: VCLK) is one of the world's largest digital


marketing companies. Through a unique combination of data, technology


and services, ValueClick increases brand awareness and drives customer


acquisition at scale for the world's largest advertisers, and maximizes


advertising revenue for tens of thousands of online and mobile


publishers. ValueClick's brands include Commission Junction, ValueClick


Media, Greystripe, Mediaplex, Smarter.com, CouponMountain.com,


Investopedia.com, and PriceRunner. The Company is based in Westlake


Village, California, and has offices in major advertising markets


worldwide. 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 Company's 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 28, 2011;


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.


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.





























































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED BALANCE SHEETS



(In thousands)



 




 



March 31,



 



December 31,





2011




2010





(Unaudited)



ASSETS







Current Assets:







Cash and cash equivalents




$



199,777




$



194,317



Marketable securities









3,000



Accounts receivable, net





81,076





86,738



Other current assets




 



15,452




 



18,470



Total current assets





296,305





302,525







 



Note receivable, less current portion





30,895





31,267



Property and equipment, net





12,619





12,414



Goodwill





184,769





183,218



Intangible assets, net





29,126





33,525



Other assets




 



50,252




 



50,618



TOTAL ASSETS




$



603,966




$



613,567







 



LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities




$



97,759




$



103,258



Non-current liabilities




 



38,095




 



37,668



Total liabilities





135,854





140,926



Total stockholders' equity




 



468,112




 



472,641



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY




$



603,966




$



613,567

















































































































































































































































































 



VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)



 




 



Three-month Period





Ended March 31,





2011



 



 



2010



 





(Unaudited)



Revenue




$



116,511




$



95,682




Cost of revenue




 



32,877




 



25,499



 



Gross profit





83,634





70,183




Operating expenses:







Sales and marketing (Note 1)





29,549





24,495




General and administrative (Note 1)





12,523





13,823




Technology (Note 1)





10,166





7,924




Amortization of intangible assets acquired in business combinations




 



4,888




 



4,966



 




Total operating expenses




 



57,126




 



51,208



 



Income from operations





26,508





18,975




Interest and other income, net




 



408




 



559



 



Income before income taxes





26,916





19,534




Income tax expense




 



10,054




 



8,211



 



Income from continuing operations





16,862





11,323




Loss from discontinued operations, net of tax









(134



)



Gain on sale, net of tax




 






 



10,040



 



Net income




$



16,862




$



21,229



 







 



Basic income from continuing operations per common share




$



0.21




$



0.14



 



Diluted income from continuing operations per common share




$



0.21




$



0.14



 



Basic net income per common share




$



0.21




$



0.26



 



Diluted net income per common share




$



0.21




$



0.25



 



Weighted-average shares used to compute basic net income per common


share




 



80,687




 



82,892



 



Weighted-average shares used to compute diluted net income per


common share




 



81,644




 



83,496



 







 







 



Note 1 - Includes stock-based compensation as follows:









Three-month Period





Ended March 31,





2011




 



2010



 





(Unaudited)



Sales and marketing




$



286




$



328




General and administrative





1,413





1,437




Technology




 



218




 



192



 



Total stock-based compensation




$



1,917




$



1,957



 
































































































 



VALUECLICK, INC.



RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS



TO ADJUSTED-EBITDA (Note 1)



(In thousands)



 




 



Three-month Period





Ended March 31,





 



2011



 



 



 



2010



 





(Unaudited)



Income from continuing operations




$



16,862





$



11,323




Interest and other income, net





(408



)





(559



)



Provision for income tax





10,054






8,211




Amortization of intangible assets acquired in business combinations





4,888






4,966




Depreciation and leasehold amortization





1,754






1,606




Stock-based compensation




 



1,917



 




 



1,957



 



Adjusted-EBITDA




$



35,067



 




$



27,504



 



 




Note 1 - "Adjusted-EBITDA" (GAAP 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 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 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


Company's business operations. Management uses adjusted-EBITDA in


evaluating the overall performance of the Company's business


operations.



 




Though management finds adjusted-EBITDA useful for evaluating


aspects of the Company's business, its reliance on this measure is


limited because excluded items often have a material effect on the


Company's 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 Company's


core performance, which management uses in its own evaluation of


overall performance, and a baseline 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 Company's financial results.
































































































 



VALUECLICK, INC.



RECONCILIATION OF GAAP INCOME FROM CONTINUING OPERATIONS TO



NON-GAAP DILUTED NET INCOME PER COMMON SHARE (Note 1)



(In thousands)



 




 



Three-month Period





Ended March 31,





 



2011



 



 



 



2010



 





(Unaudited)



GAAP income from continuing operations




$



16,862





$



11,323




Stock-based compensation





1,917






1,957




Amortization of intangible assets acquired in business combinations





4,888






4,966




Tax impact of above items




 



(2,726



)




 



(2,700



)



Non-GAAP net income




$



20,941



 




$



15,546



 



Non-GAAP diluted net income per common share




$



0.26



 




$



0.19



 



Weighted-average shares used to compute non-GAAP diluted net income


per common share




 



81,644



 




 



83,496



 



 




Note 1 - "Non-GAAP diluted net income per common share" (GAAP


diluted 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


Company's performance because it eliminates the effects of items


which are not directly attributable to the underlying performance


of the Company's business operations. Management uses non-GAAP


diluted net income per common share in evaluating the overall


performance of the Company's business operations.



 




Though management finds non-GAAP diluted net income per common


share useful for evaluating aspects of the Company's business, its


reliance on this measure is limited because excluded items often


have a material effect on the Company's 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 Company's core performance, which management uses


in its own evaluation of overall performance, and a baseline 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


Company's financial results.

























































































































































































































































































































































 



VALUECLICK, INC.



SEGMENT OPERATING RESULTS



(In thousands)



 




 



Three-month Period





Ended March 31,





 



2011



 



 



 



2010



 





(Unaudited)



Affiliate Marketing:







Revenue




$



34,474





$



29,359




Cost of revenue




 



4,324



 




 



4,019



 



Gross profit





30,150






25,340




Operating expenses




 



9,661



 




 



9,291



 



Segment income from operations




$



20,489



 




$



16,049



 



Media:







Revenue




$



36,202





$



30,803




Cost of revenue




 



19,713



 




 



15,853



 



Gross profit





16,489






14,950




Operating expenses




 



8,641



 




 



7,284



 



Segment income from operations




$



7,848



 




$



7,666



 



Owned & Operated Websites:







Revenue




$



37,947





$



27,897




Cost of revenue




 



8,076



 




 



5,083



 



Gross profit





29,871






22,814




Operating expenses




 



22,824



 




 



17,930



 



Segment income from operations




$



7,047



 




$



4,884



 



Technology:







Revenue




$



8,081





$



7,894




Cost of revenue




 



918



 




 



765



 



Gross profit





7,163






7,129




Operating expenses




 



3,034



 




 



3,041



 



Segment income from operations




$



4,129



 




$



4,088



 







 



Reconciliation of segment income from operations to consolidated


income from operations:







Total segment income from operations




$



39,513





$



32,687




Corporate expenses





(6,200



)





(6,789



)



Stock-based compensation





(1,917



)





(1,957



)



Amortization of intangible assets




 



(4,888



)




 



(4,966



)



Consolidated income from operations




$



26,508



 




$



18,975



 







 



Reconciliation of segment revenue to consolidated revenue:







Affiliate Marketing




$



34,474





$



29,359




Media





36,202






30,803




Owned & Operated Websites





37,947






27,897




Technology





8,081






7,894




Inter-segment eliminations




 



(193



)




 



(271



)



Consolidated revenue




$



116,511



 




$



95,682



 



ValueClick, Inc.
Gary J. Fuges, CFA
1-818-575-4677


Source: ValueClick, Inc.



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