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ValueClick exceeds first quarter revenue and increases 2006 guidance

ValueClick Exceeds First Quarter Revenue and Increases 2006 Guidance

ValueClick Exceeds First Quarter Revenue and Increases 2006 Guidance


WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)--May 8,

2006--ValueClick, Inc. (Nasdaq:VCLK) today reported financial results

for the first quarter ended March 31, 2006.


"We began the year on a strong note, as our leadership in the key

online marketing areas of media and affiliate marketing translated

into year-over-year pro-forma revenue growth of 25 percent," said

James Zarley, chairman and chief executive officer of ValueClick. "We

are positioned well to benefit from continued growth in online ad

spending, and our increased 2006 guidance illustrates our optimism

about the industry and our ability to execute throughout the year."


Reported revenue for the first quarter of 2006 was $117.3 million,

above the Company's previously issued guidance range of $110-$112

million and an increase of $65.9 million, or 128 percent, from revenue

of $51.4 million for the first quarter of 2005. First quarter 2006

results include a full quarter of operations from: E-Babylon and

Webclients, both acquired in June 2005; and Fastclick, acquired in

September 2005.


Income before taxes for the first quarter of 2006 was $18.1

million, compared to $14.1 million for the first quarter of 2005.

First quarter 2006 income before taxes includes approximately $3.3

million of stock-based compensation expense due primarily to the

Company's adoption of Statement of Financial Accounting Standards

(SFAS) 123® on January 1, 2006. First quarter 2006 income before

taxes also includes approximately $2.6 million of unanticipated

professional service fees, including those associated with the

Company's recently-completed restatement of its financial statements

as of and for the year ended December 31, 2004 to reflect tax-related

corrections. None of these unanticipated expenses were included in the

Company's original guidance.


Adjusted-EBITDA(1) for the first quarter of 2006 was $27.4

million, an increase of $11.8 million, or 76 percent, compared to

$15.6 million for the first quarter of 2005. Adjusted-EBITDA was

within the Company's previously issued guidance range of $27-$28

million, despite the $2.6 million of unanticipated expenses discussed

above.


Net income for the first quarter of 2006 was $9.8 million, or

$0.09 per diluted common share, compared to $8.7 million, or $0.10 per

diluted common share, for the first quarter of 2005. First quarter

2006 net income includes approximately $2.4 million of stock-based

compensation expense, net of tax, largely due to the Company's

adoption of SFAS 123®. This stock-based compensation expense reduced

diluted net income per common share by approximately $0.02.


The consolidated balance sheet as of March 31, 2006 includes $260

million in cash, cash equivalents and marketable securities, $635

million in total stockholders' equity and no long-term debt.


Business Outlook


The following statements are 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 expense impact may differ from these estimates based on

the timing and amount of options granted, the assumptions used in

option valuation and other factors.


Based on its first quarter results and outlook for 2006,

ValueClick is raising its fiscal year 2006 guidance ranges, issued

previously on February 27, 2006:


Fiscal Year 2006                   Previous Guidance Updated Guidance
---------------------------------------------------- -----------------
Revenue $490-$500 million $495-$505 million
---------------------------------------------------- -----------------
Adjusted-EBITDA $125-$130 million $128-$131 million
---------------------------------------------------- -----------------
Diluted net income per common share $0.46-$0.48
---------------------------------------------------- -----------------

ValueClick's full year 2006 guidance for diluted net income per

common share includes a deduction of approximately $0.10 per share for

stock-based compensation. The updated guidance for fiscal year 2006

also reflects the impact of the $2.6 million of unanticipated expenses

for the first quarter of 2006 as discussed above.


Additionally, ValueClick is announcing guidance for the second

quarter of 2006:


Second Quarter 2006                                      Guidance
----------------------------------------------------------------------
Revenue $118-$120 million
----------------------------------------------------------------------
Adjusted-EBITDA $29-$31 million
----------------------------------------------------------------------
Diluted net income per common share $0.11
----------------------------------------------------------------------

Second quarter 2006 diluted net income per common share is reduced

by approximately $0.02 per share for stock-based compensation, and

second quarter and full year 2006 diluted net income per common share

guidance assumes an effective tax rate of approximately 45.5 percent.


Conference Call Today


James Zarley, chairman and chief executive officer, and Sam

Paisley, chief administrative officer, will present an overview of the

results and other factors affecting financial performance for the

first quarter during a webcast on May 8, 2006 at 1:30PM PT. Investors

and analysts may obtain dial-in information through StreetEvents

(www.streetevents.com).


The live webcast and other information of potential interest to

investors will be available to the public in the Investor Relations

section of the Company's website (www.valueclick.com). Replay

information will be available for seven days after the call and may be

accessed at (888) 203-1112 for domestic callers and (719) 457-0820 for

international callers. The passcode is 7474106.


About ValueClick


ValueClick, Inc. (Nasdaq:VCLK) is one of the world's largest

integrated online marketing companies, offering comprehensive and

scalable solutions to deliver cost-effective customer acquisition for

advertisers and significant revenue for publishers. Through its

individual brands, ValueClick's performance-based solutions allow

advertisers and publishers to reach their potential through all online

marketing channels, including display advertising, affiliate

marketing, lead generation, search, e-mail, and comparison shopping.

ValueClick brands include Commission Junction, HiSpeed Media,

Mediaplex, PriceRunner, ValueClick Media, and Webclients. For more

information, please visit www.valueclick.com.


This release contains forward-looking statements that involve

risks and uncertainties, including, but not limited to, ValueClick's

ability to successfully integrate its recently completed Fastclick and

Webclients mergers, trends in online advertising spending and

estimates of future online performance-based advertising. 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: its Annual Report on Form 10-K filed on March

31, 2006 and an amendment to its Annual Report on Form 10-K/A filed on

April 21, 2006; its current report on Form 8-K filed on February 27,

2006; recent quarterly reports on Form 10-Q and Form 10-Q/A, other

current reports on Form 8-K; its amended registration statement on

Form S-4, filed on September 27, 2005; and its final prospectus on

Form 424B3 filed on September 28, 2005. Other factors that could cause

actual results to differ materially from those expressed or implied in

the forward-looking statements include, but are not limited to, the

risk that market demand for online advertising, and performance-based

online advertising in particular, will not grow as rapidly as

predicted. 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 before interest, taxes,

depreciation, amortization, and stock-based compensation. Please see

the attached schedule for a reconciliation of Adjusted-EBITDA to GAAP

net income, 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 STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Three-month Period
Ended March 31,
------------------
2006 2005
--------- --------
(Unaudited)
(Note 1)
Revenue $117,287 $51,414
Cost of revenue 39,237 13,305
--------- --------
Gross profit 78,050 38,109
Operating expenses:
Sales and marketing (Note 2) 31,374 11,348
General and administrative (Note 2) 16,831 8,553
Technology (Note 2) 8,046 4,415
Amortization of intangible assets 5,655 1,237
Restructuring benefit, net -- (202)
--------- --------
Total operating expenses 61,906 25,351
--------- --------
Income from operations 16,144 12,758
Interest income, net 1,918 1,360
--------- --------
Income before income taxes 18,062 14,118
Income tax expense 8,273 5,435
--------- --------
Net income $9,789 $8,683
========= ========
Basic net income per common share $0.10 $0.11
========= ========
Weighted-average shares used to compute basic net
income per common share 102,026 82,300
========= ========
Diluted net income per common share $0.09 $0.10
========= ========
Weighted-average shares used to compute diluted
net income per common share 104,788 85,254
========= ========
Note 1 - The condensed consolidated statement of operations for the
three-month period ended March 31, 2006 includes the results of
E-Babylon, Webclients and Fastclick from the beginning of the
accounting period nearest to their acquisition consummation dates
(June 13, 2005, June 24, 2005 and September 29, 2005, respectively).
Had these transactions been completed as of January 1, 2005, on an
unaudited pro-forma basis, revenue would have been $93.8 million and
net income would have been $8.3 million, or $0.08 per diluted common
share, for the three-month period ended March 31, 2005. These
unaudited pro-forma results are for information purposes only, are not
necessarily indicative of what the actual results would have been had
the transactions occurred on January 1, 2005, and are not necessarily
indicative of future results.
Note 2 - Includes stock-based compensation as
follows (the increase in 2006 compared to 2005 is
primarily due to the adoption of SFAS 123(R)): Three-month Period
Ended March 31,
------------------
2006 2005
------------------
Sales and marketing $1,276 $25
General and administrative 1,366 17
Technology 678 12
--------- --------
Total stock-based compensation $3,320 $54
========= ========

VALUECLICK, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 31, December
2006 31, 2005
----------- ---------
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $60,553 $46,875
Marketable securities, at fair value 199,372 193,908
Accounts receivable, net 74,957 74,636
Other current assets 12,597 11,324
----------- ---------
Total current assets 347,479 326,743
Property and equipment, net 17,075 17,509
Goodwill 272,626 273,215
Intangible assets, net 96,497 102,245
Other assets 1,498 1,149
----------- ---------
TOTAL ASSETS $735,175 $720,861
=========== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities 59,581 66,946
Non-current liabilities 40,170 35,372
----------- ---------
Total liabilities 99,751 102,318
Total stockholders' equity 635,424 618,543
----------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $735,175 $720,861
=========== =========

VALUECLICK, INC.
RECONCILIATION OF NET INCOME TO ADJUSTED-EBITDA (Note 1)
(In thousands)
Three-month Period
Ended March 31,
--------------------
2006 2005
----------- --------
(Unaudited)
Net Income $9,789 $8,683
Less interest income, net (1,918) (1,360)
Plus provision for income taxes 8,273 5,435
Plus amortization of intangible assets 5,655 1,237
Plus depreciation and leasehold amortization 2,249 1,535
Plus stock-based compensation 3,320 54
----------- --------
Adjusted-EBITDA (Note 2) $27,368 $15,584
=========== ========
Note 1 - "Adjusted-EBITDA" (earnings before interest, taxes,
depreciation, amortization, and stock-based compensation) 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 costs associated with capital investments, income from
interest on the Company's cash and marketable securities, 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 always 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.
Note 2 - Includes approximately $2.6 million of unanticipated
professional service fees, including those associated with the
Company's recently-completed restatement of its financial statements
as of and for the year ended December 31, 2004 to reflect tax-related
corrections.


CONTACT: ValueClick, Inc.


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



SOURCE: ValueClick, Inc.