PRESSROOM

ValueClick announces fourth quarter 2010 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


fourth quarter and fiscal year ended December 31, 2010. Fourth quarter


revenue, adjusted-EBITDA1, and earnings per share metrics all


exceeded the high-end of the guidance ranges management provided on


November 3, 2010.


Highlights from the fourth quarter 2010 results include:



  • Revenue of $128.7 million, up 17 percent from the fourth quarter of


    2009 (Q4 2009)




  • Adjusted-EBITDA of $41.9 million, up 19 percent from Q4 2009




  • Adjusted-EBITDA margin of 32.5 percent versus 31.8 percent in Q4 2009




  • GAAP net income from continuing operations of $0.26 per diluted share


    versus $0.20 in Q4 2009



"The fourth quarter capped a successful year for ValueClick, where we


streamlined our offerings, invested for the long-term, and delivered


revenue growth and margin expansion," said
Jim Zarley, chief executive


officer of ValueClick. "Our momentum in the quarter is setting the tone


for 2011, and we remain confident in our ability to capitalize on our


industry's growth opportunities to generate strong financial performance


while investing in growth initiatives across all of our businesses."


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


compensation and amortization of intangible assets was $25.5 million, or


$0.31 per diluted common share for the fourth 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.


The consolidated balance sheet as of December 31, 2010 includes


approximately $197 million in cash, cash equivalents and marketable


securities and no debt. The Company generated approximately $90 million


in free cash flow, defined as cash flow from operations less net capital


expenditures, in fiscal year 2010.


Business Outlook


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
























 



 



Guidance



Revenue



 



$111-$113 million



Adjusted-EBITDA



 



$31-$32 million



Mid-Point Adjusted-EBITDA Margin



 



~28%



GAAP diluted net income per common share



 



$0.16-$0.17



Non-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 first quarter 2010 reported revenue levels:
















-- Affiliate Marketing:



 



up low double-digits



-- Media:




up low double-digits



-- Owned & Operated:




up high twenties to low thirties



-- Technology:




up low to mid single-digits


First quarter 2011 non-GAAP and GAAP diluted net income per common share


guidance assume stock-based compensation of $2.0 million, amortization


of intangible assets of $5.0 million, interest and other income of $1.0


million, a 41 percent effective tax rate, and 82.0 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 fourth quarter


during a conference call and webcast on February 15 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 February 22 at


(888) 203-1112 and (719) 457-0820 (pass code: 4951342). An archive of


the Webcast will also be available through February 22.


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


marketing, display


advertising, ad


serving and related technologies, and comparison shopping.


ValueClick's brands include Commission Junction, ValueClick Media,


Mediaplex, Smarter.com, CouponMountain.com, Investopedia.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 February 26, 2010;


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)




 



 




 



 












 





December 31,




December 31,





2010




2009





(Unaudited)



ASSETS










CURRENT ASSETS:










Cash and cash equivalents





$



194,317





$



158,497



Marketable securities






3,000






-



Accounts receivable, net






86,738






68,484



Other current assets






18,470






20,856



Assets held for sale





 



-






11,098



Total current assets






302,525






258,935










 



Assets held for sale, less current portion






-






25,777



Note receivable, less current portion






31,267






-



Marketable securities, less current portion






-






22,026



Property and equipment, net






12,414






11,272



Goodwill






183,218






157,123



Intangible assets, net






33,525






38,718



Other assets





 



50,618






52,711



TOTAL ASSETS





$



613,567





$



566,562










 



LIABILITIES AND STOCKHOLDERS' EQUITY










Current liabilities





$



103,258





$



98,404



Non-current liabilities





 



37,668






61,669



Total liabilities






140,926






160,073



Total stockholders' equity





 



472,641






406,489



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY





$



613,567





$



566,562











 















































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)




 







Three-month Period
Ended December 31,






2010



 



2009






(Unaudited)









 



Revenue




$ 128,747




$ 110,394




Cost of revenue




35,455




31,173




Gross profit




93,292




79,221




Operating expenses:








Sales and marketing (Note 1)




31,319




27,228




General and administrative (Note 1)




14,019




14,434




Technology (Note 1)




9,924




6,179




Amortization of intangible assets acquired in business combinations




5,333




4,999




Total operating expenses




60,595




52,840




Operating income from continuing operations




32,697




26,381




Interest and other income (expense), net




1,891




(176



)



Income before income taxes from continuing operations




34,588




26,205




Income tax expense




13,526




8,834




Net income from continuing operations




21,062




17,371




Loss from discontinued operations, net of tax impact




-




(1,874



)



Net income




$ 21,062




$ 15,497









 



Basic net income from continuing operations per common share




$ 0.26




$ 0.20




Diluted net income from continuing operations per common share




$ 0.26




$ 0.20




Basic net income per common share




$ 0.26




$ 0.18




Diluted net income per common share




$ 0.26




$ 0.18




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


share




80,817




85,779




Weighted-average shares used to compute diluted net income per


common share




81,837




86,384









 

















































Note 1 — Includes stock-based compensation as follows:



 



Three-month Period
Ended December 31,





2010



 



2009





(Unaudited)



Sales and marketing




$



363




$



355



General and administrative





1,457





1,361



Technology




 



286




 



197



Total stock-based compensation




$



2,106




$



1,913









 























































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)




 






Year Ended December 31,





2010




2009





(Unaudited)







 



Revenue




$ 430,798




$ 422,723



Cost of revenue




116,802




116,509



Gross profit




313,996




306,214



Operating expenses:







Sales and marketing (Note 1)




112,282




118,457



General and administrative (Note 1)




53,536




60,373



Technology (Note 1)




35,047




25,050



Amortization of intangible assets acquired in business combinations




20,611




19,803



Total operating expenses




221,476




223,683



Operating income from continuing operations




92,520




82,531



Interest and other income, net




2,204




302



Income before income taxes from continuing operations




94,724




82,833



Income tax expense




14,120




21,264



Net income from continuing operations




80,604




61,569



(Loss) income from discontinued operations, net of tax impact




(134



)



7,047



Gain on sale, net of tax




10,040




-



Net income




$ 90,510




$ 68,616







 



Basic net income from continuing operations per common share




$ 0.99




$ 0.71



Diluted net income from continuing operations per common share




$ 0.98




$ 0.71



Basic net income per common share




$ 1.11




$ 0.79



Diluted net income per common share




$ 1.10




$ 0.79



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


share




81,615




86,716



Weighted-average shares used to compute diluted net income per


common share




82,334




87,210







 







































Note 1 — Includes stock-based compensation as follows:



 



Year Ended December 31,





2010



 



2009





(Unaudited)



Sales and marketing




$ 1,280




$ 1,907



General and administrative




5,815




6,034



Technology




849




928



Total stock-based compensation




$ 7,944




$ 8,869







 













































































VALUECLICK, INC.



RECONCILIATION OF NET INCOME FROM CONTINUING



OPERATIONS TO ADJUSTED-EBITDA (Note 1)



(In thousands)




 






Three-month Period



Ended December 31,





2010




2009





(Unaudited)



Net income from continuing operations




$



21,062




$



17,371



Interest and other (income) expense, net





(1,891



)




176



Provision for income tax





13,526





8,834



Amortization of intangible assets acquired in business combinations





5,333





4,999



Depreciation and leasehold amortization





1,742





1,795



Stock-based compensation




 



2,106




 



1,913



Adjusted-EBITDA




$



41,878




$



35,088









 










































































 



Year Ended December 31,






2010




2009






(Unaudited)




Net income from continuing operations




$



80,604




$



61,569




Interest and other (income) expense, net





(2,204



)




(302



)



Provision for income taxes





14,120





21,264




Amortization of intangible assets acquired in business combinations





20,611





19,803




Depreciation and leasehold amortization





6,620





7,563




Stock-based compensation




 



7,944




 



8,869




Adjusted-EBITDA




$



127,695




$



118,766



Note 1 "Adjusted-EBITDA" (GAAP net 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 base-line 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 December 31,




2010




2009








 



GAAP net income from continuing operations



$ 21,062




$ 17,371




Stock-based compensation



2,106




1,913




Amortization of intangible assets acquired in business combinations



5,333




4,999




Tax impact of above items



(2,955



)



(2,664



)



Non-GAAP net income



$ 25,546




$ 21,619




Non-GAAP diluted net income per common share



$ 0.31




$ 0.25




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


per



common share



81,837




86,384








 








































































Year Ended December 31,




2010




2009








 



GAAP net income from continuing operations



$



80,604




$



61,569




Stock-based compensation




7,944





8,869




Amortization of intangible assets acquired in business combinations




20,611





19,803




Tax impact of above items



 



(11,220



)



 



(10,821



)



Non-GAAP net income



$



97,939




$



79,420




Non-GAAP diluted net income per common share



$



1.19




$



0.91




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


per



common share



 



82,334




 



87,210










 


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, 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


base-line 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)



(Note 1)






 



 







Three-month Period Ended
December 31,







Year Ended



December 31,




 




2010




2009






2010




2009





(Unaudited)






(Unaudited)




Affiliate Marketing:













Revenue



$



36,188




$



31,544






$



124,126




$



111,903




Cost of revenue



 



4,667




 



4,005






 



17,215




 



15,617




Gross profit




31,521





27,539







106,911





96,286




Operating expenses



 



9,832




 



9,244






 



37,359




 



38,165




Segment income from operations



$



21,689




$



18,295






$



69,552




$



58,121














 



Media:













Revenue



$



41,726




$



40,149






$



137,487




$



135,086




Cost of revenue



 



23,102




 



21,013






 



74,102




 



71,320




Gross profit




18,624





19,136







63,385





63,766




Operating expenses



 



8,056




 



7,295






 



29,760




 



30,505




Segment income from operations



$



10,568




$



11,841






$



33,625




$



33,261














 



Owned & Operated Websites:













Revenue



$



42,749




$



31,771






$



138,545




$



149,599




Cost of revenue



 



7,117




 



5,715






 



23,107




 



27,002




Gross profit




35,632





26,056







115,438





122,597




Operating expenses



 



25,196




 



18,917






 



87,475




 



87,563




Segment income from operations



$



10,436




$



7,139






$



27,963




$



35,034














 



Technology:













Revenue



$



8,484




$



7,507






$



31,889




$



27,686




Cost of revenue



 



908




 



894






 



3,359




 



3,709




Gross profit




7,576





6,613







28,530





23,977




Operating expenses



 



3,029




 



2,923






 



11,932




 



11,202




Segment income from operations



$



4,547




$



3,690






$



16,598




$



12,775




Reconciliation of segment income from operations to consolidated


income from operations:













Total segment income from operations



$



47,240




$



40,965






$



147,738




$



139,191




Corporate expenses




(7,104



)




(7,672



)






(26,663



)




(27,988



)



Stock-based compensation




(2,106



)




(1,913



)






(7,944



)




(8,869



)



Amortization of intangible assets



 



(5,333



)



 



(4,999



)





 



(20,611



)



 



(19,803



)



Consolidated income from continuing operations




$




32,697





$




26,381







$




92,520





$




82,531














 



Reconciliation of segment revenue to consolidated revenue:













Affiliate Marketing



$



36,188




$



31,544






$



124,126




$



111,903




Media




41,726





40,149







137,487





135,086




Owned & Operated Websites




42,749





31,771







138,545





149,599




Technology




8,484





7,507







31,889





27,686




Inter-segment eliminations



 



(400



)



 



(577



)





 



(1,249



)



 



(1,551



)



Consolidated revenue



$



128,747




$



110,394






$



430,798




$



422,723


















 


Note 1 — On February 1, 2010, the Company announced the divestiture of


the Web Clients business, which had been included in the Media segment.


The Company has presented this divested business as discontinued


operations and has recast its historical statements of operations and


segment operating results to reflect this change. The information in


this table excludes the divested business for all periods presented. A


PDF file containing historical consolidated statements of operations and


segment operating results information is available for download on the


Investor Relations page at www.valueclick.com.




ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677


Source: ValueClick, Inc.



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