PRESSROOM

ValueClick announces fourth quarter 2007 results

ValueClick Announces Fourth Quarter 2007 Results<br />

ValueClick Announces Fourth Quarter 2007 Results

Revenue and Adjusted-EBITDA Exceed Guidance; Company Provides 2008 Outlook Company Announces Settlement with the U.S. Federal Trade Commission


WESTLAKE VILLAGE, Calif., Feb 13, 2008 (BUSINESS WIRE) -- ValueClick, Inc. (Nasdaq:VCLK) today reported financial results

for the fourth quarter and fiscal year ended December 31, 2007.

Highlights for the quarter included:


  • Revenue of $183.1 million, which exceeded previously issued

    guidance and increased 14 percent from the fourth quarter of

    2006;



  • A settlement agreement with the U.S. Federal Trade Commission

    (FTC), subject to Department of Justice and presiding court

    approval, including a $2.9 million payment which the Company

    recorded in the fourth quarter of 2007;


  • Diluted net income per common share of $0.18, which was at the

    high end of the previously issued guidance range; and



  • Adjusted-EBITDA(1) of $45.6 million, which exceeded previously

    issued guidance.

The charge associated with FTC settlement payment, which was not

included in the Company's previously issued guidance, lowered diluted

net income per common share by $0.03 and lowered adjusted-EBITDA by

$2.9 million.


"We ended 2007 on a strong note and we are pleased to announce a

settlement with the FTC," said Tom Vadnais, chief executive officer of

ValueClick. "While macroeconomic uncertainties are a current industry

concern, we believe we are positioned to generate growth and healthy

margins in 2008. Our diversified offerings and scale make us a

preferred partner for major digital marketers in the U.S. and abroad."


Fourth Quarter 2007 Results


Revenue for the fourth quarter of 2007 was $183.1 million, which

exceeded the high end of the Company's previously issued guidance and

increased $22.7 million, or 14 percent, from $160.4 million for the

fourth quarter of 2006. Fourth quarter 2007 results include three

months of operations from MeziMedia, which was acquired in July 2007,

and Shopping.net, which was acquired in December 2006.


Income before income taxes for the fourth quarter of 2007 was

$32.5 million compared to $38.5 million for the fourth quarter of

2006. General and administrative expenses for the fourth quarter of

2007 included a $2.9 million charge related to the Company's

settlement with the FTC. Stock-based compensation expense and

amortization of intangibles expense totaled $13.3 million for the

fourth quarter of 2007, compared to $7.7 million for the fourth

quarter of 2006.


Adjusted-EBITDA for the fourth quarter of 2007 was $45.6 million,

which exceeded the high end of the Company's previously issued

guidance and compared to $46.1 million for the fourth quarter of 2006.

The charge related to the FTC investigation lowered adjusted-EBITDA by

$2.9 million in the fourth quarter of 2007.


Net income for the fourth quarter of 2007 was $18.1 million, or

$0.18 per diluted common share, at the high end of the Company's

previously issued guidance and compared to $21.6 million, or $0.22 per

diluted common share, for the fourth quarter of 2006. The charge

related to the FTC investigation lowered diluted net income per common

share by $0.03.


The consolidated balance sheet as of December 31, 2007 includes

$287.5 million in cash, cash equivalents and marketable securities,

more than $700 million in total stockholders' equity and no long-term

debt. In fiscal year 2007, the Company repurchased 2.3 million shares

of its outstanding common stock for $44.0 million. Year-to-date for

2008, the Company has repurchased approximately 288,000 shares for

$5.4 million. ValueClick currently has $50.6 million of authorization

remaining on it stock repurchase program.


Fiscal Year 2007 Results


For the fiscal year ended December 31, 2007, ValueClick reported

revenue of $645.6 million, an increase of $100.0 million, or 18

percent, from revenue of $545.6 million for fiscal year 2006. Pro

forma year-over-year revenue growth was 17 percent in 2007.


Fiscal year 2007 income before taxes was $123.3 million compared

to $110.1 million for fiscal year 2006. General and administrative

expenses for fiscal year 2007 included a $2.9 million charge related

to the Company's preliminary settlement with the FTC. Stock-based

compensation expense and amortization of intangibles expense totaled

$44.4 million for fiscal year 2007, compared to $33.7 million for

fiscal year 2006.


Fiscal year 2007 adjusted-EBITDA was $165.4 million compared to

$145.1 million for fiscal year 2006. Net income for fiscal year 2007

was $71.2 million, or $0.71 per diluted common share, compared to

$62.6 million, or $0.62 per diluted common share, for fiscal year

2006.


Federal Trade Commission Investigation Update


Today, the Company announced in a separate press release that it

has reached a settlement agreement with the FTC, subject to Department

of Justice and presiding court approval.


In an effort to settle this matter, ValueClick has agreed to a

settlement payment of $2.9 million without an admission of liability

or conceding that the Company violated any laws. The settlement

agreement is based on the FTC's allegation that the Company utilized

deceptive marketing practices to violate the CAN-SPAM Act and FTC Act,

and relates solely to the past practices of the Company's Hi-Speed

Media division and not to any past or present practices of WebClients

or any other ValueClick subsidiary.


In the fourth quarter of 2007, ValueClick recorded a $2.9 million

charge related to the settlement discussed above. The Company also has

completed its previously-announced initiative to consolidate its lead

generation activities into the Company's WebClients division, which

now reports to the chief operating officer of U.S. Media, David

Yovanno.


Senior Management Announcement


The Company also announced today that Sam Paisley, chief

administrative officer, is resigning from his position, effective

March 2, to pursue another opportunity. James Zarley, executive

chairman, will continue to run the Company's corporate development

program. Gary J. Fuges, vice president of investor relations, and Tom

Vadnais will continue to run the Company's investor relations program.

John Pitstick, chief financial officer, will join the investor

relations team.


Business Outlook


The following statements are 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 expense may differ from these estimates based on the

timing and amount of options granted, the assumptions used in option

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.


Today, ValueClick is providing its initial fiscal year 2008

guidance ranges:


Fiscal Year 2008                             Initial Guidance
----------------------------------- ----------------------------------
Revenue $730-$745 million
----------------------------------- ----------------------------------
Adjusted-EBITDA $185-$190 million
----------------------------------- ----------------------------------
Diluted net income per common share $0.78-$0.81
----------------------------------- ----------------------------------

Fiscal year 2008 guidance for diluted net income per common share

includes a reduction of $0.14 per diluted common share for stock-based

compensation expense, and assumes a 42 percent effective tax rate.


Additionally, ValueClick is announcing guidance for the first

quarter of 2008:


First Quarter 2008                               Guidance
----------------------------------- ----------------------------------
Revenue $166-$170 million
----------------------------------- ----------------------------------
Adjusted-EBITDA $40-$41 million
----------------------------------- ----------------------------------
Diluted net income per common share $0.15-$0.16
----------------------------------- ----------------------------------

First quarter 2008 diluted net income per common share guidance

includes a reduction of $0.04 per diluted common share for stock-based

compensation expense and assumes a 42 percent effective tax rate.


Conference Call Today


Tom Vadnais, 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 fourth

quarter during a conference call and webcast on February 13, 2008 at

1:30PM PT. Investors and analysts may obtain the dial-in information

through StreetEvents (www.streetevents.com).


The live webcast and other information of potential interest to

investors will be available to the public in the Investor Relations

section of the Company's website (www.valueclick.com). Replay

information will be available for seven days after the call and may be

accessed at (888) 203-1112 for domestic callers and (719) 457-0820 for

international callers. The passcode is 1050849.


About ValueClick


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

integrated online marketing services companies, offering comprehensive

and scalable solutions to deliver cost-effective customer acquisition

for advertisers and transparent revenue streams for publishers.

ValueClick's performance-based solutions allow its customers to reach

their potential through multiple online marketing channels, including

affiliate and search marketing, display advertising, lead generation,

ad serving and related technologies, and comparison shopping.

ValueClick brands include Commission Junction, ValueClick Media,

Mediaplex, Smarter.com, CouponMountain.com, and PriceRunner. 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 March 1, 2007; recent quarterly reports on Form 10-Q;

and other current reports on Form 8-K. 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 before interest, income taxes,

depreciation, amortization, and stock-based compensation. 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 STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three-month Period
Ended December 31,
2007 2006
--------- --------
(Unaudited)
(Note 1)
Revenue $183,124 $160,436
Cost of revenue 58,047 47,789
--------- --------
Gross profit 125,077 112,647
Operating expenses:
Sales and marketing (Note 2) 53,631 47,620
General and administrative (Note 2) 24,167 15,594
Technology (Note 2) 9,573 8,183
Amortization of intangible assets 7,982 5,234
--------- --------
Total operating expenses 95,353 76,631
--------- --------
Income from operations 29,724 36,016
Interest and other income, net 2,796 2,440
--------- --------
Income before income taxes 32,520 38,456
Income tax expense (Note 3) 14,371 16,906
--------- --------
Net income $ 18,149 $ 21,550
========= ========
Basic net income per common share $ 0.18 $ 0.22
========= ========
Weighted-average shares used to compute basic net
income per common share 98,177 98,567
========= ========
Diluted net income per common share $ 0.18 $ 0.22
========= ========
Weighted-average shares used to compute diluted net
income per common share 99,245 100,175
========= ========

Note 1 - The condensed consolidated statements of operations

include the results of Shopping.net and MeziMedia from the acquisition

consummation dates (December 1, 2006 and July 30, 2007, respectively).

Had these transactions been completed as of January 1, 2006, on an

unaudited pro forma basis, revenue would have been $178.2 million, and

net income would have been $23.0 million, or $0.23 per diluted common

share, for the three-month period ended December 31, 2006. These

unaudited pro forma results are for information purposes only, are not

necessarily indicative of what the actual results would have been had

these transactions occurred on January 1, 2006, and are not

necessarily indicative of future results.


Note 2 - Includes stock-based compensation as follows:  Three-month
Period Ended
December 31,
---------------
2007 2006
------- -------
(Unaudited)
Sales and marketing $ 1,577 $ 835
General and administrative 3,081 1,231
Technology 677 366
------- -------
Total stock-based compensation $ 5,335 $ 2,432
======= =======

Note 3 - The Company's income tax expense for the quarter ended

December 31, 2007 is preliminary and subject to change based upon the

completion of the Company's final year-end tax-related procedures.


                           VALUECLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Year Ended
December 31,
-----------------
2007 2006
-------- --------
(Unaudited)
(Note 1)
Revenue $645,616 $545,616
Cost of revenue 204,601 167,861
-------- --------
Gross profit 441,015 377,755
Operating expenses:
Sales and marketing (Note 2) 190,667 162,905
General and administrative (Note 2) 77,184 58,128
Technology (Note 2) 35,959 32,797
Amortization of intangible assets 25,949 21,801
-------- --------
Total operating expenses 329,759 275,631
-------- --------
Income from operations 111,256 102,124
Interest and other income, net 12,053 8,005
-------- --------
Income before income taxes 123,309 110,129
Income tax expense (Note 3) 52,068 47,555
-------- --------
Net income $ 71,241 $ 62,574
======== ========
Basic net income per common share $ 0.72 $ 0.63
======== ========
Weighted-average shares used to compute basic net
income per common share 99,224 99,600
======== ========
Diluted net income per common share $ 0.71 $ 0.62
======== ========
Weighted-average shares used to compute diluted net
income per common share 100,518 101,721
======== ========

Note 1 - The condensed consolidated statements of operations

include the results of Shopping.net and MeziMedia from the acquisition

consummation dates (December 1, 2006 and July 30, 2007, respectively).

Had these transactions been completed as of January 1, 2006, on an

unaudited pro forma basis, revenue would have been $690.4 million and

$589.4 million, and net income would have been $74.7 million, or $0.74

per diluted common share, and $60.0 million, or $0.59 per diluted

common share, for the years ended December 31, 2007 and 2006,

respectively. These unaudited pro forma results are for information

purposes only, are not necessarily indicative of what the actual

results would have been had these transactions occurred on January 1,

2006, and are not necessarily indicative of future results.


Note 2 - Includes stock-based compensation as follows:   Year Ended
December 31,
---------------
2007 2006
------- -------
(Unaudited)
Sales and marketing $ 5,101 $ 4,429
General and administrative 10,937 5,258
Technology 2,449 2,253
------- -------
Total stock-based compensation $18,487 $11,940
======= =======

Note 3 - The Company's income tax expense for the year ended

December 31, 2007 is preliminary and subject to change based upon the

completion of the Company's final year-end tax-related procedures.


                           VALUECLICK, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED-EBITDA (Note 1)
(In thousands)
Three-month Period
Ended December 31,
------------------
2007 2006
---------- -------
(Unaudited)
Net income (Note 2) $18,149 $21,550
Less interest income, net (2,796) (2,440)
Plus provision for income taxes 14,371 16,906
Plus amortization of intangible assets 7,982 5,234
Plus depreciation and leasehold amortization 2,555 2,413
Plus stock-based compensation 5,335 2,432
---------- -------
Adjusted-EBITDA $45,596 $46,095
========== =======
                                                       Year Ended
December 31,
-----------------
2007 2006
-------- --------
(Unaudited)
Net income (Note 2) $ 71,241 $ 62,574
Less interest income, net (12,053) (8,005)
Plus provision for income taxes 52,068 47,555
Plus amortization of intangible assets 25,949 21,801
Plus depreciation and leasehold amortization 9,757 9,264
Plus stock-based compensation 18,487 11,940
-------- --------
Adjusted-EBITDA $165,449 $145,129
======== ========

Note 1 - "Adjusted-EBITDA" (earnings 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 marketable

securities and the costs associated with income tax expense, capital

investments, and stock-based compensation expense. 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 always 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.


Note 2 - Net income for the three-months and year ended December

31, 2007 included a $2.9 million expense related to the Company's

settlement with the U.S. Federal Trade Commission (FTC). As described

in this release, the Company has reached a settlement with the FTC and

is awaiting court approval. Excluding this reserve, adjusted-EBITDA

would have been $48.5 million and $168.3 million for the three- and

twelve-month periods ended December 31, 2007, respectively.


                           VALUECLICK, INC.
SEGMENT OPERATING RESULTS
(In thousands)
Three-month Year Ended
Period Ended December 31,
December 31,
----------------- -----------------
2007 2006 2007 2006
-------- -------- -------- --------
(Unaudited) (Unaudited)
Media:
Revenue $ 91,774 $111,647 $386,735 $382,973
Cost of revenue 41,220 39,763 154,767 141,457
-------- -------- -------- --------
Gross profit 50,554 71,884 231,968 241,516
Operating expenses 30,957 43,557 145,394 147,323
-------- -------- -------- --------
Segment income from operations $ 19,597 $ 28,327 $ 86,574 $ 94,193
======== ======== ======== ========
Comparison Shopping:
Revenue $ 45,808 $ 8,849 $ 92,020 $ 26,217
Cost of revenue 9,879 903 20,332 2,165
-------- -------- -------- --------
Gross profit 35,929 7,946 71,688 24,052
Operating expenses 26,164 5,904 54,239 20,976
-------- -------- -------- --------
Segment income from operations $ 9,765 $ 2,042 $ 17,449 $ 3,076
======== ======== ======== ========
Affiliate Marketing:
Revenue $ 37,508 $ 32,728 $136,696 $112,150
Cost of revenue 6,502 6,047 26,374 19,770
-------- -------- -------- --------
Gross profit 31,006 26,681 110,322 92,380
Operating expenses 11,224 8,342 42,063 34,474
-------- -------- -------- --------
Segment income from operations $ 19,782 $ 18,339 $ 68,259 $ 57,906
======== ======== ======== ========
Technology:
Revenue $ 9,085 $ 7,686 $ 32,538 $ 25,714
Cost of revenue 1,486 1,372 5,765 5,396
-------- -------- -------- --------
Gross profit 7,599 6,314 26,773 20,318
Operating expenses 3,902 3,239 14,139 12,696
-------- -------- -------- --------
Segment income from operations 3,697 $ 3,075 $ 12,634 $ 7,622
======== ======== ======== ========
Total segment income from
operations $ 52,841 $ 51,783 $184,916 $162,797
Corporate expenses (9,800) (8,101) (29,224) (26,932)
Stock-based compensation (5,335) (2,432) (18,487) (11,940)
Amortization of intangible assets (7,982) (5,234) (25,949) (21,801)
-------- -------- -------- --------
Consolidated income from
operations $ 29,724 $ 36,016 $111,256 $102,124
======== ======== ======== ========

Reconciliation of segment revenue
to consolidated revenue:
Media $ 91,774 $111,647 $386,735 $382,973
Comparison Shopping 45,808 8,849 92,020 26,217
Affiliate Marketing 37,508 32,728 136,696 112,150
Technology 9,085 7,686 32,538 25,714
Inter-segment eliminations (1,051) (474) (2,373) (1,438)
-------- -------- -------- --------
Consolidated revenue $183,124 $160,436 $645,616 $545,616
======== ======== ======== ========
                           VALUECLICK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)

December December
31, 31,
2007 2006
---------- --------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 82,767 $ 76,769
Marketable securities, at fair value 204,750 204,825
Accounts receivable, net 126,605 107,785
Other current assets 18,350 13,611
---------- --------
Total current assets 432,472 402,990
Property and equipment, net 19,357 18,995
Goodwill 439,532 278,070
Intangible assets, net 112,979 91,383
Other assets 6,247 1,828
---------- --------
TOTAL ASSETS $1,010,587 $793,266
========== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 218,135 $ 87,414
Non-current liabilities 81,890 62,143
---------- --------
Total liabilities 300,025 149,557
Total stockholders' equity 710,562 643,709
---------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $1,010,587 $793,266
========== ========

SOURCE: ValueClick, Inc.


ValueClick, Inc.


Gary J. Fuges, CFA


818-575-4677