Press Releases

May 7, 2013 |  Westlake Village, CA

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

first quarter ended March 31, 2013. Revenue was within its guidance

range, while adjusted-EBITDA1, GAAP net income from

continuing operations per diluted share, and non-GAAP net income2

per diluted share exceeded the high-end of their respective guidance

ranges.

"2013 is a transformational year for ValueClick, as we raise our

long-term growth potential by integrating our multiple offerings and

leveraging our core strengths in data, personalization and cross-device

targeting," said
John Giuliani, president and chief executive officer of

ValueClick. "As we mentioned during our recent analyst day, short-term

disruptions will occur as we integrate multiple offerings and

geographies. We are confident that our strategic initiatives will best

serve the long-term interests of our advertisers and shareholders."

Mr. Giuliani continued, "In addition to integration initiatives, we are

focused today on capitalizing on the unprecedented short-term

opportunity in affiliate marketing. Google's recent decision to exit

this market is a seismic shift in the competitive landscape, and we are

prioritizing resources to take full advantage. The affiliate marketing

industry and its customers are at an inflection point, and ValueClick

stands alone as the company with affiliate marketing at its core."

Highlights from the first quarter of 2013 include:


  • Revenue increased 13 percent from the first quarter of 2012 (Q1 2012)

    to $165.4 million;


  • Adjusted-EBITDA increased 21 percent from Q1 2012 to $56.3 million;


  • Adjusted-EBITDA margin increased to 34.0 percent from 31.7 percent in

    Q1 2012;


  • Income from operations increased 45 percent from Q1 2012 to $41.8

    million;


  • Non-GAAP diluted net income of $0.42 per common share versus $0.36 in

    Q1 2012;


  • GAAP diluted income from continuing operations of $0.34 per common

    share versus $0.25 in Q1 2012; and


  • Free cash flow (defined as cash from operations less capital

    expenditures) for the three-month period ended March 31, 2013, of

    $48.1 million.

The consolidated balance sheet as of March 31, 2013 included

approximately $129.1 million in cash and cash equivalents, and $80.0

million in total debt.

__________________________________

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. Please see the attached schedule for a reconciliation of

GAAP net income from continuing operations 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 is defined as GAAP income from

continuing operations before the impact of stock-based compensation and

amortization of intangible assets. Please see the attached schedule for

a reconciliation of GAAP income from continuing operations to non-GAAP

diluted net income per common share.

Share Repurchase Program Authorization

Increased to $150 Million

Today, ValueClick also announced that its board of directors has

authorized an increase to the Company's share repurchase program of

approximately $61 million, raising the Company's total authorization to

$150 million. For the twelve-month period ended December 31, 2012,

ValueClick repurchased 6.6 million shares of its common stock for a

total cost of $110.8 million. No shares were repurchased in the

three-month period ended March 31, 2013.

Business Outlook

Today, ValueClick is providing guidance for the second quarter of 2013:

Q2 Guidance

Revenue

$164-$168 million

Adjusted-EBITDA

$52-$54 million

Mid-Point Adjusted-EBITDA Margin

31.9%

Non-GAAP diluted net income per common share

$0.38-0.40

Impact of stock-based compensation and amortization of intangibles,

net of tax

$(0.09) - $(0.10)

GAAP diluted net income per common share

$0.29-$0.30

The consolidated revenue guidance mid-point is based on the following

segment-level assumptions for revenue growth rates expressed as a

percentage change from second quarter 2012 reported revenue levels:


Affiliate Marketing:

Up high single-digits


Media:

Up high single-digits


Owned & Operated:

Up mid single-digits

Second quarter 2013 guidance assumes: stock-based compensation of $5.5

million; amortization of intangible assets of $6.5 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 78 million diluted

shares outstanding.

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

John Giuliani, 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 at 4:30 p.m. ET today. The

live conference call can be accessed by dialing (888) 329-8893 or (719)

325-2494. Please dial in approximately ten minutes prior to the start

time and provide the operator with the pass code 2102101. A replay of

the conference call will be available from Tuesday, May 7, at 7:30 p.m.

ET through Tuesday, May 14, at 7:30 p.m. ET at (888) 203-1112 and (719)

457-0820 (pass code: 2102101). The live and archived Webcast of the

conference call will be available at http://ir.conversantmedia.com.

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. 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 27, 2013;

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,

2013

2012

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$

129,134

$

136,638

Accounts receivable, net

123,017

147,487

Other current assets

26,284

27,136

Total current assets

278,435

311,261

Note receivable, less current portion

27,117

27,615

Property and equipment, net

29,429

29,014

Goodwill

434,265

434,507

Intangible assets, net

75,346

81,822

Other assets

13,778

15,477

TOTAL ASSETS

$

858,370

$

899,696

LIABILITIES AND STOCKHOLDERS' EQUITY

Borrowings under credit facility, current

$

10,000

$

10,000

Other current liabilities

115,826

132,401

Borrowings under credit facility, less current portion

70,000

132,500

Other non-current liabilities

35,546

34,090

Total liabilities

231,372

308,991

Total stockholders' equity

626,998

590,705

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

858,370

$

899,696


VALUECLICK, INC.


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


(In thousands, except per share data)

Three-month Period

Ended March 31,

2013

2012

(Unaudited)

Revenue

$

165,438

$

146,432

Cost of revenue

62,355

54,685

Gross profit

103,083

91,747

Operating expenses:

Sales and marketing (Note 1)

22,465

20,927

General and administrative (Note 1)

18,213

19,572

Technology (Note 1)

16,700

16,080


Amortization of intangible assets acquired in business combinations

3,923

6,324

Total operating expenses

61,301

62,903

Income from operations

41,782

28,844

Interest and other (expense) income, net

(595

)

229

Income before income taxes

41,187

29,073

Income tax expense

14,904

8,875

Net income from continuing operations

26,283

20,198

Net income from discontinued operations

1,373

Net income

$

26,283

$

21,571


Basic income from continuing operations per common share

$

0.35

$

0.25


Diluted income from continuing operations per common share

$

0.34

$

0.25

Basic net income per common share

$

0.35

$

0.27

Diluted net income per common share

$

0.34

$

0.26


Weighted-average shares used to compute basic net income per

common share

75,648

80,339


Weighted-average shares used to compute diluted net income per

common share

77,567

82,106

Note 1 - Includes stock-based compensation as follows:

Three-month Period

Ended March 31,

2013

2012

(Unaudited)

Sales and marketing

$

1,174

$

1,654

General and administrative

2,439

3,026

Technology

1,184

1,406

Total stock-based compensation

$

4,797

$

6,086


VALUECLICK, INC.


RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS


TO ADJUSTED-EBITDA (Note 1)


(In thousands)

Three-month Period

Ended March 31,

2013

2012

(Unaudited)

Net income from continuing operations

$

26,283

$

20,198

Interest and other expense (income), net

595

(229

)

Income tax expense

14,904

8,875


Amortization of acquired intangible assets included in cost of

revenue

2,494

2,493


Amortization of acquired intangible assets included in operating

expenses

3,923

6,324

Depreciation and leasehold amortization

3,292

2,614

Stock-based compensation

4,797

6,086

Adjusted-EBITDA

$

56,288

$

46,361

Note 1 - "Adjusted-EBITDA" (GAAP net income from continuing

operations 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 FROM CONTINUING OPERATIONS TO


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


(In thousands)

Three-month Period

Ended March 31,

2013

2012

(Unaudited)

Net income from continuing operations

$

26,283

$

20,198

Stock-based compensation

4,797

6,086


Amortization of acquired intangible assets included in cost of

revenue

2,494

2,493


Amortization of acquired intangible assets included in operating

expenses

3,923

6,324

Tax impact of above items

(4,784

)

(5,250

)

Non-GAAP net income

$

32,713

$

29,851

Non-GAAP diluted net income per common share

$

0.42

$

0.36


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

income per common share

77,567

82,106

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

net income from continuing operations per common share before the impact

of stock-based compensation and amortization of intangible assets)

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,

2013

2012

(Unaudited)

Affiliate Marketing:

Revenue

$

38,311

$

37,107

Cost of revenue

4,562

4,176

Gross profit

33,749

32,931

Operating expenses

10,824

9,993

Segment income from operations

$

22,925

$

22,938

Media:

Revenue

$

96,256

$

80,749

Cost of revenue

35,839

30,603

Gross profit

60,417

50,146

Operating expenses

29,094

27,742

Segment income from operations

$

31,323

$

22,404

Owned & Operated Websites:

Revenue

$

30,955

$

28,675

Cost of revenue

19,516

17,457

Gross profit

11,439

11,218

Operating expenses

5,819

5,885

Segment income from operations

$

5,620

$

5,333


Reconciliation of segment income from operations to

consolidated income from operations:

Total segment income from operations

$

59,868

$

50,675

Corporate expenses

(6,872

)

(6,928

)

Stock-based compensation

(4,797

)

(6,086

)


Amortization of acquired intangible assets included in cost of

revenue

(2,494

)

(2,493

)


Amortization of acquired intangible assets included in operating

expenses

(3,923

)

(6,324

)

Consolidated income from operations

$

41,782

$

28,844

Reconciliation of segment revenue to consolidated revenue:

Affiliate Marketing

$

38,311

$

37,107

Media

96,256

80,749

Owned & Operated Websites

30,955

28,675

Inter-segment eliminations

(84

)

(99

)


Consolidated revenue

$

165,438

$

146,432

ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677

Source: ValueClick, Inc.

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