Press Releases

May 2, 2012 |  Westlake Village, CA

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

first quarter ended March 31, 2012. Highlights from the quarter include:


  • Revenue of $152.9 million, up 31 percent from the first quarter of

    2011 (Q1 2011);


  • Adjusted-EBITDA1 of $47.9 million, up 37 percent from Q1

    2011;


  • Adjusted-EBITDA margin of 31.4 percent versus 30.1 percent in Q1 2011;


  • Non-GAAP net income2 of $0.38 per diluted share versus

    $0.26 in Q1 2011;


  • GAAP net income of $0.26 per diluted share versus $0.21 in Q1 2011; and


  • The appointment of
    John Giuliani, president of ValueClick's Dotomi

    division, to the role of chief operating officer.

"This was an important quarter for ValueClick, as we executed on many of

our strategic initiatives, including expanding the Greystripe mobile

business into Europe, accelerating the integrated-sales approach among

our divisions, and continuing to evolve our Owned & Operated Websites

segment," said
James R. Zarley, chief executive officer of ValueClick.

"We are just scratching the surface of providing a broader range of

services to our clients as we execute on our vision of becoming the

leading digital marketing services partner for major advertisers."

During the quarter, the Company paid down $62.5 million in debt and did

not repurchase any shares. The share repurchase program's current total

authorization is $100 million. The consolidated balance sheet as of

March 31, 2012 includes approximately $107.7 million in cash and cash

equivalents, and $105.0 million in total debt.

The Company's effective tax rate of 29.6 percent in the first quarter of

2012 was positively impacted by discrete state tax adjustments. Assuming

the normalized 38 percent effective tax rate included in the Company's

previously-issued guidance, non-GAAP net income would have been $28.7

million, or $0.35 per diluted common share.

_______________________________________________

1 Adjusted-EBITDA is defined as GAAP (Generally Accepted

Accounting Principles) net income before interest, income taxes,

depreciation, amortization, 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.

2 Non-GAAP net income excludes stock-based compensation and

amortization of intangible assets. Please see the attached schedule for

a reconciliation of GAAP net income to non-GAAP diluted net income per

common share.

Business Outlook

Today, ValueClick is providing guidance for the second quarter of 2012:


Guidance

Revenue

$155-$160 million

Adjusted-EBITDA

$46-$48 million

Mid-Point Adjusted-EBITDA Margin

29.8%

Non-GAAP diluted net income per common share

$0.33-$0.34

Impact of stock-based compensation and amortization of intangibles,

net of tax

$(0.12)

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 second quarter 2011 reported revenue levels:


Affiliate Marketing:

up mid single-digits


Media:

up over 85 percent on a reported basis, up approximately 30 percent

on a pro forma basis*


Owned & Operated:

down high teens



Technology:

flat

* The financial results of Dotomi, acquired on August 31, 2011, were not

included in ValueClick's reported financial results for Q2 2011.

Dotomi's revenue in Q2 2011 was approximately $19 million. The financial

results of Greystripe, acquired on April 21, 2011, were included in

ValueClick's reported financial results for the majority of Q2 2011.

"Given the success of our efforts to reduce the paid traffic component

of our Owned & Operated segment in the past two quarters while improving

this segment's margin profile, we will accelerate this process in the

second quarter," said
John Pitstick, chief financial officer of

ValueClick. "We expect this will result in a sequential revenue decrease

in the O&O segment in the second quarter of approximately five percent

compared to Q1, but with continued gross margin improvement."

Second quarter 2012 guidance assumes stock-based compensation of $6.5

million, amortization of intangible assets of $8.8 million ($2.5 million

of which will be classified in Cost of revenue), net interest and other

income of zero, a 39 percent effective tax rate, and 82.5 million

diluted shares outstanding.

Conference Call Today at 4:30 p.m. ET

Jim Zarley, chief executive officer;
John Giuliani, chief operating

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 2 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 9 at

888-203-1112 and 719-457-0820 (pass code: 6218014). An archive of the

webcast will also be available through May 9.

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, Dotomi,

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, the

risk that legislation and governmental regulation could negatively

impact the Company's performance, the effects of recent acquisitions on

ValueClick's financial results, the potential inability to successfully

operate or integrate Dotomi's business, including the potential

inability to retain customers, key employees or vendors. 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 29,

2012; 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)

March 31,

December 31,

2012

2011

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$

107,696

$

116,676

Accounts receivable, net

106,466

129,076

Other current assets

26,038

25,181

Total current assets

240,200

270,933

Note receivable, less current portion

29,185

29,700

Property and equipment, net

21,296

19,952

Goodwill

435,206

437,033

Intangible assets, net

105,383

114,007

Other assets

9,940

9,086

TOTAL ASSETS

$

841,210

$

880,711

LIABILITIES AND STOCKHOLDERS' EQUITY

Borrowings under credit facility, current

$

10,000

$

10,000

Other current liabilities

114,043

125,616

Borrowings under credit facility, less current portion

95,000

157,500

Other non-current liabilities

23,548

24,202

Total liabilities

242,591

317,318

Total stockholders' equity

598,619

563,393

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

841,210

$

880,711

VALUECLICK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

Three-month Period

Ended March 31,

2012

2011

(Unaudited)

Revenue

$

152,852

$

116,511

Cost of revenue

58,961

51,974

Gross profit

93,891

64,537

Operating expenses:

Sales and marketing (Note 1)

21,180

12,632

General and administrative (Note 1)

19,883

12,523

Technology (Note 1)

16,091

10,166

Amortization of intangible assets acquired in business combinations

6,324

2,708

Total operating expenses

63,478

38,029

Income from operations

30,413

26,508

Interest and other income, net

229

408

Income before income taxes

30,642

26,916

Income tax expense

9,071

10,054

Net income

$

21,571

$

16,862

Basic net income per common share

$

0.27

$

0.21

Diluted net income per common share

$

0.26

$

0.21


Weighted-average shares used to compute basic net income per

common share

80,339

80,687


Weighted-average shares used to compute diluted net income per

common share

82,106

81,644

Note 1 - Includes stock-based compensation as follows:

Three-month Period

Ended March 31,

2012

2011

(Unaudited)

Sales and marketing

$

1,654

$

286

General and administrative

3,026

1,413

Technology

1,406

218

Total stock-based compensation

$

6,086

$

1,917

VALUECLICK, INC.

RECONCILIATION OF NET INCOME TO ADJUSTED-EBITDA (Note 1)

(In thousands)

Three-month Period

Ended March 31,

2012

2011

(Unaudited)

Net income

$

21,571

$

16,862

Interest and other income, net

(229

)

(408

)

Provision for income tax

9,071

10,054


Amortization of acquired intangible assets included in cost of

revenue

2,493

2,180


Amortization of acquired intangible assets included in operating

expenses

6,324

2,708

Depreciation and leasehold amortization

2,630

1,754

Stock-based compensation

6,086

1,917

Adjusted-EBITDA

$

47,946

$

35,067

Note 1 - "Adjusted-EBITDA" (GAAP net income before interest,

income taxes, depreciation, amortization, and stock-based compensation)

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 cash equivalents, note receivable and borrowings, 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 NET INCOME TO

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

(In thousands)

Three-month Period

Ended March 31,

2012

2011

(Unaudited)

Net income

$

21,571

$

16,862

Stock-based compensation

6,086

1,917


Amortization of acquired intangible assets included in cost of

revenue

2,493

2,180


Amortization of acquired intangible assets included in operating

expenses

6,324

2,708

Tax impact of above items

(5,250

)

(2,726

)

Non-GAAP net income

$

31,224

$

20,941

Non-GAAP diluted net income per common share

$

0.38

$

0.26

Weighted-average shares used to compute non-GAAP


diluted net income per common share

82,106

81,644

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

net income per common share before the impact of stock-based

compensation and amortization of intangibles) 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,

2012

2011

(Unaudited)

Affiliate Marketing:

Revenue

$

37,107

$

34,474

Cost of revenue

4,176

4,324

Gross profit

32,931

30,150

Operating expenses

9,993

9,661

Segment income from operations

$

22,938

$

20,489

Media:

Revenue

$

72,129

$

36,202

Cost of revenue

29,482

19,713

Gross profit

42,647

16,489

Operating expenses

23,631

8,641

Segment income from operations

$

19,016

$

7,848

Owned & Operated Websites:

Revenue

$

35,095

$

37,947

Cost of revenue

21,733

24,992

Gross profit

13,362

12,955

Operating expenses

6,460

5,908

Segment income from operations

$

6,902

$

7,047

Technology:

Revenue

$

8,687

$

8,081

Cost of revenue

1,188

918

Gross profit

7,499

7,163

Operating expenses

4,111

3,034

Segment income from operations

$

3,388

$

4,129

Reconciliation of segment income from operations to


consolidated income from operations:

Total segment income from operations

$

52,244

$

39,513

Corporate expenses

(6,928

)

(6,200

)

Stock-based compensation

(6,086

)

(1,917

)


Amortization of acquired intangible assets included in cost of

revenue

(2,493

)

(2,180

)


Amortization of acquired intangible assets included in operating

expenses

(6,324

)

(2,708

)

Consolidated income from operations

$

30,413

$

26,508

Reconciliation of segment revenue to consolidated revenue:

Affiliate Marketing

$

37,107

$

34,474

Media

72,129

36,202

Owned & Operated Websites

35,095

37,947

Technology

8,687

8,081

Inter-segment eliminations

(166

)

(193

)

Consolidated revenue

$

152,852

$

116,511

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

Source: ValueClick, Inc.

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