Press Releases

August 2, 2011


Revenue and Profitability Exceed High-End of Guidance Ranges



Company to Acquire Dotomi, Leader in Dynamically-Optimized Display


Advertising


WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--


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


second quarter ended June 30, 2011. Revenue, adjusted-EBITDA1,


and earnings per share metrics all exceeded the high-end of the guidance


ranges management provided on May 3, 2011.


Highlights from the second quarter of 2011 results include:



  • Revenue of $125.1 million, up 26 percent from the second quarter of


    2010 (Q2 2010);




  • Adjusted-EBITDA of $37.1 million, up 36 percent from Q2 2010;




  • Adjusted-EBITDA margin of 29.6 percent versus 27.4 percent in Q2 2010;


    and




  • GAAP net income of $0.21 per diluted share versus $0.15 in Q2 2010.



In a separate press release, ValueClick also announced today that it has


signed a definitive agreement to acquire privately-held Dotomi, the


leading provider of data-driven, intelligent display media for major


retailers. Through its unique set of capabilities, Dotomi has developed


strategic, direct relationships with over 100 retail brands, including


over forty brands from the Internet Retailer Top 100. For more


information on this acquisition, please see today's press release


entitled "ValueClick to Acquire Dotomi."


"Our momentum continued in the second quarter, as our investments to


expand our growth profile and addressable markets continued to pay off,"


said
Jim Zarley, chief executive officer of ValueClick. "Our unique


combination of traffic, data, optimization, and services is resonating


in the marketplace, and Dotomi will add direct advertiser relationships


and strategic capabilities that will position us further as a powerhouse


in both branding and performance-based digital marketing."


Non-GAAP net income, which excludes stock-based compensation and


amortization of intangible assets was $22.4 million, or $0.28 per


diluted common share for the second quarter. A table reconciling GAAP


net income to non-GAAP diluted net income per common share is included


in this press release.


The consolidated balance sheet as of June 30, 2011 included


approximately $142.5 million in cash and cash equivalents and no debt.


Business Outlook


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





















 



 




Guidance



Revenue



 



$128-$130 million



Adjusted-EBITDA



 



$36-$38 million



Mid-Point Adjusted-EBITDA Margin



 



28.7%



GAAP diluted net income per common share



 



$0.21-$0.22



Non-GAAP diluted net income per common share



 



$0.27-$0.28


The consolidated revenue guidance range is based on the following


segment-level assumptions for revenue growth rates expressed as a


percentage increase from third quarter 2010 reported revenue levels:











































 



 



 






 



 



Affiliate Marketing:



 



 



up low double-digits











Media:





up low forties on a reported basis, up low twenties excluding


Greystripe











Owned & Operated:





up low double-digits











Technology:





up high single-digits


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


guidance assume stock-based compensation of $2.8 million, amortization


of intangible assets of $5.0 million, interest and other income of $0.8


million, a 38 percent effective tax rate, and 80.5 million diluted


shares outstanding.


Third quarter 2011 guidance does not include the impact of the pending


Dotomi acquisition. ValueClick expects to update its business outlook


after the closing of this transaction, which is anticipated to occur in


late August.


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 second quarter,


during a conference call and webcast on August 2 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 August 9 at


(888) 203-1112 and (719) 457-0820 (pass code: 2296590). An archive of


the Webcast will also be available through August 9.


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, 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 risk that the closing of the


Dotomi acquisition will not occur, the effects of the merger 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, 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)



 




 



June 30,



 



December 31,





2011





2010





(Unaudited)



ASSETS







Current Assets:







Cash and cash equivalents




$



142,534




$



194,317



Marketable securities









3,000



Accounts receivable, net





87,106





86,738



Other current assets




 



24,372




 



18,470



Total current assets





254,012





302,525







 



Note receivable, less current portion





30,510





31,267



Property and equipment, net





14,169





12,414



Goodwill





232,174





183,218



Intangible assets, net





47,366





33,525



Other assets




 



46,640




 



50,618



TOTAL ASSETS




$



624,871




$



613,567







 



LIABILITIES AND STOCKHOLDERS' EQUITY







Current liabilities




$



100,157




$



103,258



Non-current liabilities




 



38,482




 



37,668



Total liabilities





138,639





140,926



Total stockholders' equity




 



486,232




 



472,641



TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY




$



624,871




$



613,567
















































































































































































































 



VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)



 




 



Three-month Period





Ended June 30,





2011



 



2010





(Unaudited)



Revenue




$



125,062




$



99,601



Cost of revenue




 



40,098




 



27,346



Gross profit





84,964





72,255



Operating expenses:







Sales and marketing (Note 1)





27,868





27,117



General and administrative (Note 1)





13,562





13,363



Technology (Note 1)





10,853





8,302



Amortization of intangible assets acquired in business combinations




 



6,147




 



4,936



Total operating expenses




 



58,430




 



53,718



Income from operations





26,534





18,537



Interest and other income, net




 



657




 



2,437



Income before income taxes





27,191





20,974



Income tax expense




 



10,210




 



8,932



Net income




$



16,981




$



12,042







 



Basic net income per common share




$



0.22




$



0.15



Diluted net income per common share




$



0.21




$



0.15



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


share




 



78,981




 



81,551



Weighted-average shares used to compute diluted net income per


common share




 



80,059




 



82,212







 







 



Note 1 - Includes stock-based compensation as follows:









Three-month Period





Ended June 30,





2011




2010





(Unaudited)



Sales and marketing




$



533




$



332



General and administrative





1,676





1,660



Technology




 



405




 



208



Total stock-based compensation




$



2,614




$



2,200

















































































































































































































































































 



VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)



 




 



Six-month Period





Ended June 30,





2011



 



 



2010



 





(Unaudited)



Revenue




$



241,573




$



195,283




Cost of revenue




 



72,975




 



52,845



 



Gross profit





168,598





142,438




Operating expenses:







Sales and marketing (Note 1)





57,417





51,612




General and administrative (Note 1)





26,085





27,186




Technology (Note 1)





21,019





16,226




Amortization of intangible assets acquired in business combinations




 



11,035




 



9,902



 



Total operating expenses




 



115,556




 



104,926



 



Income from operations





53,042





37,512




Interest and other income, net




 



1,065




 



2,996



 



Income before income taxes





54,107





40,508




Income tax expense




 



20,264




 



17,143



 



Income from continuing operations





33,843





23,365




Loss from discontinued operations, net of tax









(134



)



Gain on sale, net of tax




 






 



10,040



 



Net income




$



33,843




$



33,271



 







 



Basic income from continuing operations per common share




$



0.42




$



0.28



 



Diluted income from continuing operations per common share




$



0.42




$



0.28



 



Basic net income per common share




$



0.42




$



0.40



 



Diluted net income per common share




$



0.42




$



0.40



 



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


share




 



79,829




 



82,218



 



Weighted-average shares used to compute diluted net income per


common share




 



80,847




 



82,850



 







 







 



Note 1 - Includes stock-based compensation as follows:









Six-month Period





Ended June 30,





2011




 



2010



 





(Unaudited)



Sales and marketing




$



819




$



660




General and administrative





3,089





3,097




Technology




 



623




 



400



 



Total stock-based compensation




$



4,531




$



4,157



 






















































































































































































 



VALUECLICK, INC.



RECONCILIATION OF INCOME FROM CONTINUING OPERATIONS



TO ADJUSTED-EBITDA (Note 1)



(In thousands)



 




 



Three-month Period





Ended June 30,





 



2011



 



 



 



2010



 





(Unaudited)



Net income




$



16,981





$



12,042




Interest and other income, net





(657



)





(2,437



)



Provision for income tax





10,210






8,932




Amortization of intangible assets acquired in business combinations





6,147






4,936




Depreciation and leasehold amortization





1,762






1,608




Stock-based compensation




 



2,614



 




 



2,200



 



Adjusted-EBITDA




$



37,057



 




$



27,281



 







 





Six-month Period





Ended June 30,





 



2011



 




 



2010



 





(Unaudited)



Income from continuing operations




$



33,843





$



23,365




Interest and other income, net





(1,065



)





(2,996



)



Provision for income tax





20,264






17,143




Amortization of intangible assets acquired in business combinations





11,035






9,902




Depreciation and leasehold amortization





3,516






3,214




Stock-based compensation




 



4,531



 




 



4,157



 



Adjusted-EBITDA




$



72,124



 




$



54,785



 



 




Note 1 - "Adjusted-EBITDA" (GAAP 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 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 June 30,





 



2011



 



 



 



2010



 





(Unaudited)



Net income




$



16,981





$



12,042




Stock-based compensation





2,614






2,200




Amortization of intangible assets acquired in business combinations





6,147






4,936




Tax impact of above items




 



(3,349



)




 



(2,746



)



Non-GAAP net income




$



22,393



 




$



16,432



 



Non-GAAP diluted net income per common share




$



0.28



 




$



0.20



 



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


per common share




 



80,059



 




 



82,212



 







 





Six-month Period





Ended June 30,





 



2011



 




 



2010



 





(Unaudited)



GAAP income from continuing operations




$



33,843





$



23,365




Stock-based compensation





4,531






4,157




Amortization of intangible assets acquired in business combinations





11,035






9,902




Tax impact of above items




 



(6,075



)




 



(5,446



)



Non-GAAP net income




$



43,334



 




$



31,978



 



Non-GAAP diluted net income per common share




$



0.54



 




$



0.39



 



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


per common share




 



80,847



 




 



82,850



 



 




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, 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 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



 



Six-month Period





Ended June 30,




Ended June 30,





 



2011



 



 



 



2010



 




 



2011



 



 



 



2010



 






(Unaudited)





(Unaudited)



Affiliate Marketing:











Revenue




$



32,616





$



28,738





$



67,090





$



58,097




Cost of revenue




 



4,314



 




 



4,418



 




 



8,638



 




 



8,437



 



Gross profit





28,302






24,320






58,452






49,660




Operating expenses




 



9,186



 




 



9,046



 




 



18,847



 




 



18,337



 



Segment income from operations




$



19,116



 




$



15,274



 




$



39,605



 




$



31,323



 











 



Media:











Revenue




$



42,986





$



31,637





$



79,188





$



62,440




Cost of revenue




 



23,082



 




 



16,908



 




 



42,795



 




 



32,761



 



Gross profit





19,904






14,729






36,393






29,679




Operating expenses




 



10,896



 




 



7,163



 




 



19,537



 




 



14,447



 



Segment income from operations




$



9,008



 




$



7,566



 




$



16,856



 




$



15,232



 











 



Owned & Operated Websites:











Revenue




$



40,554





$



31,986





$



78,501





$



59,883




Cost of revenue




 



11,954



 




 



5,434



 




 



20,030



 




 



10,517



 



Gross profit





28,600






26,552






58,471






49,366




Operating expenses




 



19,705



 




 



21,042



 




 



42,529



 




 



38,972



 



Segment income from operations




$



8,895



 




$



5,510



 




$



15,942



 




$



10,394



 











 



Technology:











Revenue




$



9,092





$



7,610





$



17,173





$



15,504




Cost of revenue




 



888



 




 



860



 




 



1,806



 




 



1,625



 



Gross profit





8,204






6,750






15,367






13,879




Operating expenses




 



3,474



 




 



2,975



 




 



6,508



 




 



6,016



 



Segment income from operations




$



4,730



 




$



3,775



 




$



8,859



 




$



7,863



 











 



Reconciliation of segment income from operations to consolidated


income from operations:











Total segment income from operations




$



41,749





$



32,125





$



81,262





$



64,812




Corporate expenses





(6,454



)





(6,452



)





(12,654



)





(13,241



)



Stock-based compensation





(2,614



)





(2,200



)





(4,531



)





(4,157



)



Amortization of intangible assets




 



(6,147



)




 



(4,936



)




 



(11,035



)




 



(9,902



)



Consolidated income from operations




$



26,534



 




$



18,537



 




$



53,042



 




$



37,512



 











 



Reconciliation of segment revenue to consolidated revenue:











Affiliate Marketing




$



32,616





$



28,738





$



67,090





$



58,097




Media





42,986






31,637






79,188






62,440




Owned & Operated Websites





40,554






31,986






78,501






59,883




Technology





9,092






7,610






17,173






15,504




Inter-segment eliminations




 



(186



)




 



(370



)




 



(379



)




 



(641



)



Consolidated revenue




$



125,062



 




$



99,601



 




$



241,573



 




$



195,283



 



ValueClick, Inc.
Gary J. Fuges, CFA, 1-818-575-4677


Source: ValueClick, Inc.



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