PRESSROOM

ValueClick announces third quarter 2010 results

WESTLAKE VILLAGE, Calif., Nov 03, 2010 (BUSINESS WIRE) --


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

third quarter ended September 30, 2010. Revenue, adjusted-EBITDA1,

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

ranges management provided on August 5.



For the third quarter of 2010, the Company generated $106.8 million in

revenue. Third quarter 2010 adjusted-EBITDA was $31.0 million, resulting

in an adjusted-EBITDA margin of 29.1 percent.


During the third quarter, ValueClick repurchased 1.3 million shares of

its common stock for $13.2 million dollars. Year-to-date, the Company

has spent $38.6 million to repurchase 4.0 million shares of its common

stock. Today, ValueClick announced that its board of directors has

increased the share repurchase program authorization by $68.6 million.

The Company is now authorized to repurchase up to $100 million of its

common stock.


"In the third quarter we accelerated year-over-year revenue growth,

expanded margins and made significant progress on our initiatives to

leverage our traffic, data and optimization capabilities for future

growth," said Jim Zarley, chief executive officer of ValueClick. "As our

share repurchases and increased authorization suggest, we have

confidence in our ability to continue to capitalize on the long-term

opportunities in our industry."


GAAP net income from continuing operations for the third quarter was

$36.2 million, or $0.44 per diluted common share. In the quarter, the

Company recorded favorable tax adjustments of approximately $24 million,

and recorded a loss of $3.1 million related to certain investments in

auction rate securities. Excluding these items and assuming the

normalized 42 percent effective tax rate included in the Company's

previously-issued guidance, net income would have been $13.2 million, or

$0.16 per diluted common share.


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

compensation and amortization of intangible assets was $40.4 million, or

$0.49 per diluted common share for the third 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 September 30, 2010 includes

approximately $164 million in cash, cash equivalents and marketable

securities and no debt. The Company generated approximately $59 million

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

expenditures, in the first nine months of 2010.


Business Outlook


Today, ValueClick is announcing guidance for the fourth quarter of 2010:














Guidance
Revenue
$122-$126 million
Adjusted-EBITDA
$39-$40 million
Mid-Point Adjusted-EBITDA Margin
~32.0%
GAAP diluted net income per common share
$0.22-$0.23
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 or decrease from fourth quarter 2009 reported

revenue levels:




  • Affiliate Marketing: up low double digits


  • Media: up mid to high single digits


  • Owned & Operated: up low twenties


  • Technology: up low double digits

Fourth quarter 2010 non-GAAP and GAAP diluted net income per common

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

amortization of intangible assets of $5.5 million, interest and other

income of $1.0 million, a 40 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 third quarter

during a conference call and webcast on November 3 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 November 10 at

(888) 203-1112 and (719) 457-0820 (pass code: 7302430). An archive of

the Webcast will also be available through November 10.


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, stock-based

compensation, and goodwill impairment charges. 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)
September 30, December 31,
2010 2009
(Unaudited)

ASSETS

CURRENT ASSETS:

Cash and cash equivalents

$

147,494

$

158,497

Marketable securities

16,486

-

Accounts receivable, net

71,824

68,484

Other current assets

26,143

20,856

Assets held for sale

-

11,098

Total current assets

261,947

258,935

Assets held for sale, less current portion

-

25,777

Note receivable, less current portion

31,627

-

Marketable securities, less current portion

-

22,026

Property and equipment, net

11,252

11,272

Goodwill

183,264

157,123

Intangible assets, net

38,844

38,718

Other assets

55,419

52,711

TOTAL ASSETS

$

582,353

$

566,562

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

$

92,696

$

98,404

Non-current liabilities

38,366

61,669

Total liabilities

131,062

160,073

Total stockholders' equity

451,291

406,489

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

582,353

$

566,562

































































































































































































































































VALUECLICK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three-month Period
Ended September 30,
2010 2009
(Unaudited)

Revenue

$

106,768

$

105,166

Cost of revenue

28,502

26,146

Gross profit

78,266

79,020

Operating expenses:

Sales and marketing (Note 1)

29,351

31,093

General and administrative (Note 1)

12,331

16,700

Technology (Note 1)

8,897

6,143

Amortization of intangible assets acquired in business combinations

5,376

4,991

Total operating expenses

55,955

58,927

Operating income from continuing operations

22,311

20,093

Interest and other income (expense), net

(2,683

)

(513

)

Income before income taxes from continuing operations

19,628

19,580

Income tax benefit

(16,549

)

(3,677

)

Net income from continuing operations

36,177

23,257

Income from discontinued operations, net of tax impact

-

1,773

Net income

$

36,177

$

25,030

Basic net income from continuing operations per common share

$

0.45

$

0.27

Diluted net income from continuing operations per common share

$

0.44

$

0.26

Basic net income per common share

$

0.45

$

0.29

Diluted net income per common share

$

0.44

$

0.29

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

share

81,228

87,194

Weighted-average shares used to compute diluted net income per

common share

81,814

87,790

Note 1 - Includes stock-based compensation as follows:
Three-month Period
Ended September 30,
2010 2009
(Unaudited)

Sales and marketing

$

257

$

394

General and administrative

1,261

1,555

Technology

163

228

Total stock-based compensation

$

1,681

$

2,177





































































































































































































































VALUECLICK, INC.



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS



(In thousands, except per share data)


Nine-month Period
Ended September 30,
2010 2009
(Unaudited)

Revenue

$

302,051

$

312,329

Cost of revenue

81,347

85,336

Gross profit

220,704

226,993

Operating expenses:

Sales and marketing (Note 1)

80,963

91,229

General and administrative (Note 1)

39,517

45,939

Technology (Note 1)

25,123

18,871

Amortization of intangible assets acquired in business combinations

15,278

14,804

Total operating expenses

160,881

170,843

Operating income from continuing operations

59,823

56,150

Interest and other income, net

313

478

Income before income taxes from continuing operations

60,136

56,628

Income tax expense

594

12,430

Net income from continuing operations

59,542

44,198

Income (loss) from discontinued operations, net of tax impact

(134

)

8,921

Gain on sale, net of tax

10,040

-

Net income

$

69,448

$

53,119

Basic net income from continuing operations per common share

$

0.73

$

0.51

Diluted net income from continuing operations per common share

$

0.72

$

0.51

Basic net income per common share

$

0.85

$

0.61

Diluted net income per common share

$

0.84

$

0.61

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

share

81,884

87,032

Weighted-average shares used to compute diluted net income per

common share

82,501

87,489

Note 1 - Includes stock-based compensation as follows:
Nine-month Period
Ended September 30,
2010 2009
(Unaudited)

Sales and marketing

$

917

$

1,552

General and administrative

4,358

4,673

Technology

563

731

Total stock-based compensation

$

5,838

$

6,956




































































































































































VALUECLICK, INC.
RECONCILIATION OF NET INCOME FROM CONTINUING
OPERATIONS TO ADJUSTED-EBITDA (Note 1)
(In thousands)
Three-month Period

Ended September 30,


2010 2009
(Unaudited)

Net income from continuing operations

$

36,177

$

23,257

Interest and other (income) expense, net

2,683

513

Income tax benefit

(16,549

)

(3,677

)

Amortization of intangible assets acquired in business combinations

5,376

4,991

Depreciation and leasehold amortization

1,664

1,866

Stock-based compensation

1,681

2,177

Adjusted-EBITDA

$

31,032

$

29,127
Nine-month Period

Ended June 30,


2010 2009
(Unaudited)

Net income from continuing operations

$

59,542

$

44,198

Interest and other (income) expense, net

(313

)

(478

)

Provision for income taxes

594

12,430

Amortization of intangible assets acquired in business combinations

15,278

14,804

Depreciation and leasehold amortization

4,878

5,768

Stock-based compensation

5,838

6,956

Adjusted-EBITDA

$

85,817

$

83,678

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

operations before interest, income taxes, depreciation, amortization,

stock-based compensation, and goodwill impairment charges) 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 September 30,


2010 2009

GAAP net income from continuing operations

$

36,177

$

23,257

Stock-based compensation

1,681

2,177

Amortization of intangible assets acquired in business combinations

5,376

4,991

Tax impact of above items

(2,818

)

(2,741

)

Non-GAAP net income

$

40,416

$

27,684

Non-GAAP diluted net income per common share

$

0.49

$

0.32

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

per


common share



81,814

87,790
Nine-Month Period

Ended September 30,


2010 2009

GAAP net income from continuing operations

$

59,542

$

44,198

Stock-based compensation

5,838

6,956

Amortization of intangible assets acquired in business combinations

15,278

14,804

Tax impact of above items

(8,265

)

(8,157

)

Non-GAAP net income

$

72,393

$

57,801

Non-GAAP diluted net income per common share

$

0.88

$

0.66

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

per


common share



82,501

87,489

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, 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 September 30,



Nine-month Period Ended


September 30,


2010 2009 2010 2009
(Unaudited) (Unaudited)
Affiliate Marketing:

Revenue

$

29,841

$

26,342

$

87,938

$

80,359

Cost of revenue

4,111

3,692

12,548

11,612

Gross profit

25,730

22,650

75,390

68,747

Operating expenses

9,190

9,505

27,527

28,921

Segment income from operations

$

16,540

$

13,145

$

47,863

$

39,826
Media:

Revenue

$

33,321

$

30,946

$

95,761

$

94,937

Cost of revenue

18,239

16,393

51,000

50,307

Gross profit

15,082

14,553

44,761

44,630

Operating expenses

7,257

7,238

21,704

23,210

Segment income from operations

$

7,825

$

7,315

$

23,057

$

21,420
Owned & Operated Websites:

Revenue

$

35,913

$

41,536

$

95,796

$

117,828

Cost of revenue

5,473

5,366

15,990

21,287

Gross profit

30,440

36,170

79,806

96,541

Operating expenses

23,307

25,002

62,279

68,646

Segment income from operations

7,133

$

11,168

$

17,527

$

27,895
Technology:

Revenue

$

7,901

$

6,638

$

23,405

$

20,179

Cost of revenue

826

933

2,451

2,815

Gross profit

7,075

5,705

20,954

17,364

Operating expenses

2,887

2,882

8,903

8,279

Segment income from operations

$

4,188

$

2,823

$

12,051

$

9,085
Reconciliation of segment income from operations to consolidated

income from operations:

Total segment income from operations

$

35,686

$

34,451

$

100,498

$

98,226

Corporate expenses

(6,318

)

(7,190

)

(19,559

)

(20,316

)

Stock-based compensation

(1,681

)

(2,177

)

(5,838

)

(6,956

)

Amortization of intangible assets

(5,376

)

(4,991

)

(15,278

)

(14,804

)

Consolidated income from continuing operations


$




22,311




$




20,093




$




59,823




$




56,150


Reconciliation of segment revenue to consolidated revenue:

Affiliate Marketing

$

29,841

$

26,342

$

87,938

$

80,359

Media

33,321

30,946

95,761

94,937

Owned & Operated Websites

35,913

41,536

95,796

117,828

Technology

7,901

6,638

23,405

20,179

Inter-segment eliminations

(208

)

(296

)

(849

)

(974

)

Consolidated revenue

$

106,768

$

105,166

$

302,051

$

312,329

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.



SOURCE: ValueClick, Inc.


ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677