Press Releases

February 13, 2013


Revenue Meets, Profitability Exceeds 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, 2012. Revenue met the high-end of its


guidance range, while Adjusted-EBITDA1 and non-GAAP diluted


net income2 per common share exceeded the high-end of their


respective guidance ranges.


"We are seeing the early results of our initiatives to elevate our


conversations with advertisers to become a more strategic and persistent


marketing partner, while also executing on our goals of strong organic


growth and profitability," said
John Giuliani, chief executive officer


of ValueClick. "We expect 2013 to be a watershed year for ValueClick,


and we look forward to articulating our vision and strategic initiatives


in greater detail at our March 14th analyst and investor day."


Highlights from the fourth quarter of 2012 include:



  • Revenue of $199.6 million, up 14 percent from the fourth quarter of


    2011 (Q4 2011);




  • Adjusted-EBITDA of $77.1 million, up 26 percent from Q4 2011;




  • Adjusted-EBITDA margin of 38.6 percent versus 34.8 percent in Q4 2011;




  • Income from operations of $63.0 million, up 43 percent from Q4 2011;




  • Non-GAAP diluted net income of $0.56 per common share versus $0.46 in


    Q4 2011;




  • GAAP net income from continuing operations of $0.47 per diluted share


    versus $0.34 in Q4 2011; and




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


    expenditures) for the twelve-month period ended December 31, 2012 of


    $139 million, up 34 percent from the prior year.



The consolidated balance sheet as of December 31, 2012 included


approximately $136.6 million in cash and cash equivalents, and $142.5


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, stock-based


compensation, and acquisition-related costs. 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 net 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 net income from continuing operations to


non-GAAP diluted net income per common share.


Share Repurchase Program Update


During the quarter, the Company repurchased approximately 113,000 shares


of its common stock for a total cost of $2.0 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.


As of today, ValueClick's share repurchase program authorization is


$89.3 million.


Business Outlook


Today, ValueClick is announcing guidance for the first quarter of 2013:

































 



 



 



Revenue



$165-$168 million






Adjusted-EBITDA



$53-$55 million






Non-GAAP diluted net income per common share



$0.39-$0.41






Impact of stock-based compensation and amortization of intangibles,


net of tax



$(0.09)-$(0.10)






GAAP diluted net income per common share



$0.30-$0.31







 


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 2012 reported revenue levels:



































 



 



 



 





Affiliate Marketing:



 



up mid to high single-digits









Media:




up high teens









Owned & Operated:




up high single-digits










 


First quarter 2013 guidance assumes stock-based compensation of $5.0


million, amortization of intangible assets of $6.5 million (including


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


of zero, a 40 percent effective tax rate, and 77 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 fourth


quarter during a conference call and Webcast at 4:30 p.m. ET today. The


live conference call can be accessed by dialing (888) 219-1420 or (913)


312-0420. Please dial in approximately ten minutes prior to the start


time and provide the operator with pass code 9841608. A replay of the


conference call will be available from Wednesday, February 13 at 7:30


p.m. ET through Wednesday, February 20 at 7:30 p.m. ET at (888) 203-1112


and (719) 457-0820 (pass code: 9841608). The live and archived Webcast


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


Analyst and Investor Day: March 14


The Company recently announced that senior management will host an


analyst and investor day on Thursday, March 14, at the Four Seasons


Hotel in Westlake Village, California. The event is expected to begin at


7:30 a.m. PT and conclude at approximately 2:00 p.m. PT. Financial


analysts and investors can register for this event by email at analystday@valueclick.com


or by phone at (818) 575-4952. Registration is required for admittance.


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 29, 2012;


recent quarterly reports on Form 10-Q; and other current reports on Form


8-K.


The Business Outlook contained in this release is based on current


expectations. These statements are forward-looking, and actual results


may differ materially. These statements do not include the potential


impact of any mergers, acquisitions or other business combinations that


may be completed after the date of this release. Actual stock-based


compensation may differ from these estimates based on the timing and


amount of stock awards granted, the assumptions used in stock award


valuation and other factors. Actual income tax expense may differ from


these estimates based on tax planning, changes in tax accounting rules


and laws, and other factors.


ValueClick undertakes no obligation to release publicly any revisions


to any forward-looking statements to reflect events or circumstances


after the date hereof or to reflect the occurrence of unanticipated


events.











































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED BALANCE SHEETS



(In thousands)





 





December 31,




December 31,




2012




2011




(Unaudited)



ASSETS






Current Assets:






Cash and cash equivalents



$



136,638





$



116,676



Accounts receivable, net



147,487





129,076



Other current assets



27,136



 




25,181



Total current assets



311,261





270,933






 



Note receivable, less current portion



27,615





29,700



Property and equipment, net



29,014





19,952



Goodwill



434,507





437,033



Intangible assets, net



81,822





114,007



Other assets



15,477



 




9,086



TOTAL ASSETS



$



899,696



 




$



880,711






 



LIABILITIES AND STOCKHOLDERS' EQUITY






Borrowings under credit facility, current



$



10,000





$



10,000



Other current liabilities



132,401





124,046



Borrowings under credit facility, less current portion



132,500





157,500



Other non-current liabilities



34,090



 




25,772



Total liabilities



308,991





317,318



Total stockholders' equity



590,705



 




563,393



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY



$



899,696



 




$



880,711









 



















































































































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)





 






Three-month Period





Ended December 31,





2012



 



2011





(Unaudited)



Revenue




$



199,577





$



175,437



Cost of revenue (Note 1)




71,054



 




69,357



Gross profit




128,523





106,080



Operating expenses:







Sales and marketing (Note 2)




22,806





22,002



General and administrative (Note 2)




21,782





18,171



Technology (Note 2)




16,900





15,551



Amortization of intangible assets acquired in business combinations




3,993



 




6,327



Total operating expenses




65,481



 




62,051



Income from operations




63,042





44,029



Interest and other (expense) income, net




(768



)




1,434



Income before income taxes




62,274





45,463



Income tax expense




26,146



 




17,441



Net income from continuing operations




36,128





28,022



Income from discontinued operations, net of tax




151



 




1,355



Net income




$



36,279



 




$



29,377







 



Basic net income from continuing operations per common share




$



0.48



 




$



0.34



Diluted net income from continuing operations per common share




$



0.47



 




$



0.34



Basic net income per common share




$



0.48



 




$



0.36



Diluted net income per common share




$



0.47



 




$



0.35



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


share




75,225



 




81,505



Weighted-average shares used to compute diluted net income per


common share




76,687



 




82,963







 







 




Note 1 - Includes amortization of intangible assets acquired
in


business combinations of $2.5 million for the three-month
periods


ended December 31, 2012 and 2011.








 



Note 2 - Includes stock-based compensation as follows:









Three-month Period





Ended December 31,





2012




2011





(Unaudited)



Sales and marketing




$



1,039





$



1,675



General and administrative




2,342





2,663



Technology




996



 




1,438



Total stock-based compensation




$



4,377



 




$



5,776










 





















































































































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)




 






Year Ended December 31,





2012



 



2011





(Unaudited)



Revenue




$



660,878





$



528,753



Cost of revenue (1)




249,259



 




221,403



Gross profit




411,619





307,350



Operating expenses:







Sales and marketing (Note 2)




85,470





64,976



General and administrative (Note 2)




81,050





58,517



Technology (Note 2)




66,324





49,060



Amortization of intangible assets acquired in business combinations




22,420



 




16,646



Total operating expenses




255,264



 




189,199



Income from operations




156,355





118,151



Interest and other income, net




1,151



 




4,666



Income before income taxes




157,506





122,817



Income tax expense




61,575



 




28,627



Net income from continuing operations




95,931





94,190



Income from discontinued operations, net of tax




4,805





6,940



Gain on sale, net of tax




980



 






Net income




$



101,716



 




$



101,130







 



Basic net income from continuing operations per common share




$



1.24



 




$



1.17



Diluted net income from continuing operations per common share




$



1.22



 




$



1.16



Basic net income per common share




$



1.32



 




$



1.26



Diluted net income per common share




$



1.29



 




$



1.24



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


share




77,342



 




80,323



Weighted-average shares used to compute diluted net income per


common share




78,898



 




81,489







 







 




Note 1 - Includes amortization of intangible assets acquired
in


business combinations of $10.0 million and $9.6 million
for


the years ended December 31, 2012 and 2011, respectively.









 



Note 2 - Includes stock-based compensation as follows:









Year Ended December 31,





2012




2011





(Unaudited)



Sales and marketing




$



4,918





$



3,320



General and administrative




11,492





7,829



Technology




5,357



 




2,873



Total stock-based compensation




$



21,767



 




$



14,022










 

























































































































































VALUECLICK, INC.



RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS



TO ADJUSTED-EBITDA (Note 1)



(In thousands)




 




Three-month Period




Ended December 31,




2012



 



2011




(Unaudited)



Net income from continuing operations



$



36,128





$



28,022




Interest and other expense (income), net



768





(1,434



)



Provision for income tax



26,146





17,441




Amortization of acquired intangible assets included in cost of


revenue



2,491





2,498




Amortization of acquired intangible assets included in operating


expenses



3,993





6,327




Depreciation and leasehold amortization



3,232





2,455




Stock-based compensation



4,377



 




5,776



 



Adjusted-EBITDA



$



77,135



 




$



61,085



 






 






 




Year Ended December 31,




2012




2011




(Unaudited)



Net income from continuing operations



$



95,931





$



94,190




Interest and other income, net



(1,151



)




(4,666



)



Provision for income tax



61,575





28,627




Amortization of acquired intangible assets included in cost of


revenue



9,995





9,633




Amortization of acquired intangible assets included in operating


expenses



22,420





16,646




Depreciation and leasehold amortization



11,723





7,914




Stock-based compensation



21,767





14,022




Acquisition-related costs





 




412



 



Adjusted-EBITDA



$



222,260



 




$



166,778



 










 


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


operations before interest, income taxes, depreciation, amortization,


stock-based compensation, 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 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 December 31,





2012



 



2011





(Unaudited)



Net income from continuing operations




$



36,128





$



28,022




Stock-based compensation




4,377





5,776




Amortization of acquired intangible assets included in cost of


revenue




2,491





2,498




Amortization of acquired intangible assets included in operating


expenses




3,993





6,327




Tax impact of above items




(4,175



)




(4,693



)



Non-GAAP net income




$



42,814



 




$



37,930



 



Non-GAAP diluted net income per common share




$



0.56



 




$



0.46



 



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


per common share




76,687



 




82,963



 







 





Year Ended December 31,





2012




2011





(Unaudited)



Net income from continuing operations




$



95,931





$



94,190




Stock-based compensation




21,767





14,022




Amortization of acquired intangible assets included in cost of


revenue




9,995





9,633




Amortization of acquired intangible assets included in operating


expenses




22,420





16,646




Tax impact of above items




(19,636



)




(14,377



)



Non-GAAP net income




$



130,477



 




$



120,114



 



Non-GAAP diluted net income per common share




$



1.65



 




$



1.47



 



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


per common share




78,898



 




81,489



 









 


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 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,





2012



 



2011




2012



 



2011





(Unaudited)




(Unaudited)



Affiliate Marketing:











Revenue




$



43,944





$



39,794





$



149,527





$



139,409




Cost of revenue




4,656



 




4,227



 




17,546



 




17,125



 



Gross profit




39,288





35,567





131,981





122,284




Operating expenses




10,913



 




9,407



 




40,631



 




37,711



 



Segment income from operations




$



28,375



 




$



26,160



 




$



91,350



 




$



84,573



 



Media:











Revenue




$



122,694





$



102,029





$



390,635





$



261,324




Cost of revenue




45,971



 




42,229



 




152,197



 




113,763



 



Gross profit




76,723





59,800





238,438





147,561




Operating expenses




31,690



 




27,839



 




118,233



 




72,984



 



Segment income from operations




$



45,033



 




$



31,961



 




$



120,205



 




$



74,577



 



Owned & Operated Websites:











Revenue




$



33,009





$



33,703





$



121,058





$



128,419




Cost of revenue




17,967



 




20,438



 




69,678



 




81,118



 



Gross profit




15,042





13,265





51,380





47,301




Operating expenses




6,265



 




5,170



 




23,337



 




21,468



 



Segment income from operations




$



8,777



 




$



8,095



 




$



28,043



 




$



25,833



 



Reconciliation of segment income from operations to consolidated


income from operations:











Total segment income from operations




$



82,185





$



66,216





$



239,598





$



184,983




Corporate expenses




(8,282



)




(7,586



)




(29,061



)




(26,531



)



Stock-based compensation




(4,377



)




(5,776



)




(21,767



)




(14,022



)



Amortization of acquired intangible assets included



in consolidated cost of revenue




(2,491



)




(2,498



)




(9,995



)




(9,633



)



Amortization of acquired intangible assets included



in consolidated operating expense




(3,993



)




(6,327



)




(22,420



)




(16,646



)



Consolidated income from operations




$



63,042



 




$



44,029



 




$



156,355



 




$



118,151



 



Reconciliation of segment revenue to consolidated revenue:











Affiliate Marketing




$



43,944





$



39,794





$



149,527





$



139,409




Media




122,694





102,029





390,635





261,324




Owned & Operated Websites




33,009





33,703





121,058





128,419




Inter-segment eliminations




(70



)




(89



)




(342



)




(399



)



Consolidated revenue




$



199,577



 




$



175,437



 




$



660,878



 




$



528,753



 



















 



ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677



Source: ValueClick, Inc.



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