Press Releases

February 7, 2012


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 ended December 31, 2011. Revenue, adjusted-EBITDA1


and non-GAAP diluted net income per common share were all above the


high-end of their respective guidance ranges.


"We completed a successful 2011 with strong fourth quarter results,


including Media segment results that were driven by 20 percent organic


growth in our display business, double digit growth in the Affiliate


Marketing and Technology segments, and very strong performance by our


recent acquisitions," said
Jim Zarley, chief executive officer of


ValueClick. "We will continue to invest in people and in our data,


optimization and traffic platforms to expand our presence in the digital


marketing industry, and we remain confident in our ability to generate


more than $700 million in revenue in 2012."


Highlights from the fourth quarter of 2011 results include:



  • Revenue of $182.6 million, up 42 percent from the fourth quarter of


    2010 (Q4 2010);




  • Adjusted-EBITDA of $62.7 million, up 50 percent from Q4 2010;




  • Adjusted-EBITDA margin of 34.3 percent versus 32.5 percent in Q4 2010;




  • Income from operations of $45.6 million, up 39% from Q4 2010;




  • Non-GAAP net income2 of $0.47 per diluted share versus


    $0.31 in Q4 2010; and




  • GAAP net income of $0.35 per diluted share versus $0.26 in Q4 2010.



The consolidated balance sheet as of December 31, 2011 included


approximately $117 million in cash and cash equivalents, and $167.5


million in total debt associated with the August 31 acquisition of


Dotomi and subsequent share repurchases.


Share Repurchase Program Update


During the quarter, the Company repurchased 2.8 million shares of its


common stock for a total cost of $44.2 million. During fiscal year 2011,


ValueClick repurchased 9.7 million shares of its common stock for a


total cost of $145.0 million. Since the Dotomi acquisition announcement


on August 1, ValueClick repurchased 7.1 million shares, which largely


offsets the shares issued as part of the acquisition.


Today, ValueClick announced that its board of directors has increased


the share repurchase program authorization by $59 million, bringing the


program's current total authorization to $100 million.


Cost Reclassifications


Beginning with the fourth quarter 2011 results, the Company will make


two accounting reclassifications that have no impact on the Company's


historical consolidated revenue, operating income, cash flows, net


income, net income per diluted common share or adjusted-EBITDA, or on


historical revenue or operating income by segment.


First, ValueClick is electing to reclassify certain costs associated


with payments to search engines for driving consumer traffic to the


Company's owned and operated websites. Historically, these traffic


acquisition costs have been classified in operating expenses in the Sales


and marketing expense line item. The Company is now classifying


these costs in Cost of revenue, which the Company believes will


provide increased transparency into the drivers of the Owned & Operated


Websites segment.


Second, ValueClick is correcting the accounting classification of the


amortization of developed technologies and websites acquired in business


combinations by including it in Cost of revenue. Amortization


related to developed technologies and websites acquired in business


combinations was considered immaterial prior to the Dotomi acquisition


and was previously recorded in operating expenses in the Amortization


of intangible assets acquired in business combinations line item.


All prior periods presented in the Consolidated Statement of Operations


and Segment Operating Results included in this press release are


presented using the new classifications. A table with historical trend


information is available at http://ir.conversantmedia.com.


Business Outlook


Today, ValueClick is announcing guidance for the first quarter of 2012:


















 



Guidance



Revenue



$155-$160 million



Adjusted-EBITDA



$46-$48 million



Non-GAAP diluted net income per common share



$0.34-$0.35



Impact of stock-based compensation and amortization of intangibles,


net of tax



 



$(0.12)



GAAP diluted net income per common share



$0.22-$0.23




 


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 2011 reported revenue levels:

































 





Affiliate Marketing:



 



 



up low double digits






Media:





up over 100 percent on a reported basis, up mid teens excluding the


impact of acquisitions






Owned & Operated:





down high single digits to low double digits






Technology:





up high single digits








 


First quarter 2012 guidance assumes stock-based compensation of $6.2


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


$2.5 million recorded in Cost of revenue), net interest and other income


of zero, a 38 percent effective tax rate, and 82 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 7 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 at http://ir.conversantmedia.com.


A replay of the conference call will be available through February 14 at


(888) 203-1112 and (719) 457-0820 (pass code: 4205958). An archive of


the webcast will also be available through February 14.


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 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, stock-based


compensation expenses, and acquisition-related costs. 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.
















































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED BALANCE SHEETS



(In thousands)





 





December 31,




December 31,




2011




2010




(Unaudited)



ASSETS






Current Assets:






Cash and cash equivalents



$



116,676





$



194,317



Marketable securities







3,000



Accounts receivable, net



129,076





86,738



Other current assets



25,181



 




18,470



Total current assets



270,933





302,525






 



Note receivable, less current portion



29,700





31,267



Property and equipment, net



19,952





12,414



Goodwill



437,033





183,218



Intangible assets, net



114,007





33,525



Other assets



9,086



 




50,618



TOTAL ASSETS



$



880,711



 




$



613,567






 



LIABILITIES AND STOCKHOLDERS' EQUITY






Borrowings under credit facility, current



$



10,000





$





Other current liabilities



125,616





103,258



Borrowings under credit facility, less current portion



157,500







Other non-current liabilities



24,202



 




37,668



Total liabilities



317,318





140,926



Total stockholders' equity



563,393



 




472,641



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY



$



880,711



 




$



613,567









 





















































































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)




 






Three-month Period





Ended December 31,





2011



 



2010





(Unaudited)



Revenue




$



182,594





$



128,747



Cost of revenue (Note 1)




74,128



 




56,907



Gross profit




108,466





71,840



Operating expenses:







Sales and marketing (Note 2)




22,275





12,047



General and administrative (Note 2)




18,678





14,019



Technology (Note 2)




15,608





9,924



Amortization of intangible assets acquired in business combinations




6,327



 




3,153



Total operating expenses




62,888



 




39,143



Income from operations




45,578





32,697



Interest and other income, net




1,434



 




1,891



Income before income taxes




47,012





34,588



Income tax expense




17,635



 




13,526



Net income




$



29,377



 




$



21,062







 



Basic net income per common share




$



0.36



 




$



0.26



Diluted net income per common share




$



0.35



 




$



0.26



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


share




81,505



 




80,817



Weighted-average shares used to compute diluted net income per


common share




82,963



 




81,837







 







 



Note 1 - Includes amortization of intangible assets acquired in


business combinations of $2.5 million and $2.2 million for the


three-month periods ended December 31, 2011 and 2010, respectively.







 



Note 2 - Includes stock-based compensation as follows:









Three-month Period





Ended December 31,





2011




2010





(Unaudited)



Sales and marketing




$



1,675





$



363



General and administrative




2,663





1,457



Technology




1,438



 




286



Total stock-based compensation




$



5,776



 




$



2,106










 




































































































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)




 




Year Ended December 31,




2011



 



2010




(Unaudited)



Revenue



$



560,155





$



430,798




Cost of revenue (1)



242,249



 




190,856



 



Gross profit



317,906





239,942




Operating expenses:






Sales and marketing (Note 2)



65,996





45,750




General and administrative (Note 2)



59,906





53,536




Technology (Note 2)



49,276





35,047




Amortization of intangible assets acquired in business combinations



16,646



 




13,089



 



Total operating expenses



191,824



 




147,422



 



Income from operations



126,082





92,520




Interest and other income, net



4,666



 




2,204



 



Income before income taxes



130,748





94,724




Income tax expense



29,618



 




14,120



 



Income from continuing operations



101,130





80,604




Loss from discontinued operations, net of tax







(134



)



Gain on sale, net of tax





 




10,040



 



Net income



$



101,130



 




$



90,510



 






 



Basic income from continuing operations per common share



$



1.26



 




$



0.99



 



Diluted income from continuing operations per common share



$



1.24



 




$



0.98



 



Basic net income per common share



$



1.26



 




$



1.11



 



Diluted net income per common share



$



1.24



 




$



1.10



 



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


share



80,323



 




81,615



 



Weighted-average shares used to compute diluted net income per


common share



81,489



 




82,334



 






 






 



Note 1 - Includes amortization of intangible assets acquired in


business combinations of $9.6 million and $7.5 million for the years


ended December 31, 2011 and 2010, respectively.






 



Note 2 - Includes stock-based compensation as follows:







Year Ended December 31,




2011




2010




(Unaudited)



Sales and marketing



$



3,320





$



1,280




General and administrative



7,829





5,815




Technology



2,873



 




849



 



Total stock-based compensation



$



14,022



 




$



7,944



 










 





























































































































































VALUECLICK, INC.



RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS



TO ADJUSTED-EBITDA (Note 1)



(In thousands)




 




Three-month Period




Ended December 31,




2011



 



2010




(Unaudited)



Net income



$



29,377





$



21,062




Interest and other income, net



(1,434



)




(1,891



)



Provision for income tax



17,635





13,526




Amortization of acquired intangible assets included in cost of


revenue



2,498





2,180




Amortization of acquired intangible assets included in operating


expenses



6,327





3,153




Depreciation and leasehold amortization



2,476





1,742




Stock-based compensation



5,776





2,106




Acquisition-related costs





 






 



Adjusted-EBITDA



$



62,655



 




$



41,878



 






 






 




Year Ended December 31,




2011




2010




(Unaudited)



Income from continuing operations



$



101,130





$



80,604




Interest and other income, net



(4,666



)




(2,204



)



Provision for income tax



29,618





14,120




Amortization of acquired intangible assets included in cost of


revenue



9,633





7,522




Amortization of acquired intangible assets included in operating


expenses



16,646





13,089




Depreciation and leasehold amortization



8,028





6,620




Stock-based compensation



14,022





7,944




Acquisition-related costs



412



 






 



Adjusted-EBITDA



$



174,823



 




$



127,695



 










 


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


operations before interest, income taxes, depreciation, amortization,


stock-based compensation expenses, and acquisition-related costs)


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, 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 INCOME FROM CONTINUING OPERATIONS TO



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



(In thousands)




 




Three-month Period




Ended December 31,




2011



 



2010




(Unaudited)



Net income



$



29,377





$



21,062




Stock-based compensation



5,776





2,106




Amortization of acquired intangible assets included in cost of


revenue



2,498





2,180




Amortization of acquired intangible assets included in operating


expenses



6,327





3,153




Tax impact of above items



(4,693



)




(2,956



)



Non-GAAP net income



$



39,285



 




$



25,545



 



Non-GAAP diluted net income per common share



$



0.47



 




$



0.31



 



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


per common share



82,963



 




81,837



 






 




Year Ended December 31,




2011




2010




(Unaudited)



Income from continuing operations



$



101,130





$



80,604




Stock-based compensation



14,022





7,944




Amortization of acquired intangible assets included in cost of


revenue



9,633





7,522




Amortization of acquired intangible assets included in operating


expenses



16,646





13,089




Tax impact of above items



(14,377



)




(11,220



)



Non-GAAP net income



$



127,054



 




$



97,939



 



Non-GAAP diluted net income per common share



$



1.56



 




$



1.19



 



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


per common share



81,489



 




82,334



 








 


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 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




Year Ended




Ended December 31,




December 31,




2011



 



2010




2011



 



2010




(Unaudited)




(Unaudited)



Affiliate Marketing:










Revenue



$



39,794





$



36,188





$



139,409





$



124,126




Cost of revenue



4,227



 




4,667



 




17,125



 




17,215



 



Gross profit



35,567





31,521





122,284





106,911




Operating expenses



9,407



 




9,832



 




37,711



 




37,359



 



Segment income from operations



$



26,160



 




$



21,689



 




$



84,573



 




$



69,552



 



Media:










Revenue



$



92,672





$



41,726





$



224,574





$



137,487




Cost of revenue



41,216



 




23,102



 




110,115



 




74,102



 



Gross profit



51,456





18,624





114,459





63,385




Operating expenses



24,150



 




8,056



 




59,439



 




29,760



 



Segment income from operations



$



27,306



 




$



10,568



 




$



55,020



 




$



33,625



 




Owned & Operated Websites:










Revenue



$



40,860





$



42,749





$



159,821





$



138,545




Cost of revenue



25,209



 




26,389



 




101,964



 




89,639



 



Gross profit



15,651





16,360





57,857





48,906




Operating expenses



6,007



 




5,924



 




24,093



 




20,943



 



Segment income from operations



$



9,644



 




$



10,436



 




$



33,764



 




$



27,963



 



Technology:










Revenue



$



9,459





$



8,484





$



37,031





$



31,889




Cost of revenue



1,112



 




908



 




3,917



 




3,359



 



Gross profit



8,347





7,576





33,114





28,530




Operating expenses



3,692



 




3,029



 




13,557



 




11,932



 



Segment income from operations



$



4,655



 




$



4,547



 




$



19,557



 




$



16,598



 



Reconciliation of segment income from operations to consolidated


income from operations:










Total segment income from operations



$



67,765





$



47,240





$



192,914





$



147,738




Corporate expenses



(7,586



)




(7,104



)




(26,531



)




(26,663



)



Stock-based compensation



(5,776



)




(2,106



)




(14,022



)




(7,944



)



Amortization of acquired intangible assets included



in consolidated cost of revenue



(2,498



)




(2,180



)




(9,633



)




(7,522



)



Amortization of acquired intangible assets included



in consolidated operating expense



(6,327



)




(3,153



)




(16,646



)




(13,089



)



Consolidated income from operations



$



45,578



 




$



32,697



 




$



126,082



 




$



92,520



 



Reconciliation of segment revenue to consolidated revenue:










Affiliate Marketing



$



39,794





$



36,188





$



139,409





$



124,126




Media



92,672





41,726





224,574





137,487




Owned & Operated Websites



40,860





42,749





159,821





138,545




Technology



9,459





8,484





37,031





31,889




Inter-segment eliminations



(191



)




(400



)




(680



)




(1,249



)



Consolidated revenue



$



182,594



 




$



128,747



 




$



560,155



 




$



430,798



 


















 



ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677



Source: ValueClick, Inc.



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