ValueClick Announces Fourth Quarter 2012 Results

ValueClick Announces Fourth Quarter 2012 Results

Revenue Meets, Profitability Exceeds High-End of Guidance Ranges

WESTLAKE VILLAGE, Calif.--(BUSINESS WIRE)-- ValueClick, Inc. (NAS: 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.valueclick.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. (NAS: 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,
20122011
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents$136,638$116,676
Accounts receivable, net147,487129,076
Other current assets27,136 25,181
Total current assets311,261270,933
 
Note receivable, less current portion27,61529,700
Property and equipment, net29,01419,952
Goodwill434,507437,033
Intangible assets, net81,822114,007
Other assets15,477 9,086
TOTAL ASSETS$899,696 $880,711
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowings under credit facility, current$10,000$10,000
Other current liabilities132,401124,046
Borrowings under credit facility, less current portion132,500157,500
Other non-current liabilities34,090 25,772
Total liabilities308,991317,318
Total stockholders' equity590,705 563,393
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 profit128,523106,080
Operating expenses:
Sales and marketing (Note 2)22,80622,002
General and administrative (Note 2)21,78218,171
Technology (Note 2)16,90015,551
Amortization of intangible assets acquired in business combinations3,993 6,327
Total operating expenses65,481 62,051
Income from operations63,04244,029
Interest and other (expense) income, net(768)1,434
Income before income taxes62,27445,463
Income tax expense26,146 17,441
Net income from continuing operations36,12828,022
Income from discontinued operations, net of tax151 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 share75,225 81,505
Weighted-average shares used to compute diluted net income per common share76,687 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,
20122011
(Unaudited)
Sales and marketing$1,039$1,675
General and administrative2,3422,663
Technology996 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 profit411,619307,350
Operating expenses:
Sales and marketing (Note 2)85,47064,976
General and administrative (Note 2)81,05058,517
Technology (Note 2)66,32449,060
Amortization of intangible assets acquired in business combinations22,420 16,646
Total operating expenses255,264 189,199
Income from operations156,355118,151
Interest and other income, net1,151 4,666
Income before income taxes157,506122,817
Income tax expense61,575 28,627
Net income from continuing operations95,93194,190
Income from discontinued operations, net of tax4,8056,940
Gain on sale, net of tax980 
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 share77,342 80,323
Weighted-average shares used to compute diluted net income per common share78,898 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,
20122011
(Unaudited)
Sales and marketing$4,918$3,320
General and administrative11,4927,829
Technology5,357 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), net768(1,434)
Provision for income tax26,14617,441
Amortization of acquired intangible assets included in cost of revenue2,4912,498
Amortization of acquired intangible assets included in operating expenses3,9936,327
Depreciation and leasehold amortization3,2322,455
Stock-based compensation4,377 5,776 
Adjusted-EBITDA$77,135 $61,085 
 
 
Year Ended December 31,
20122011
(Unaudited)
Net income from continuing operations$95,931$94,190
Interest and other income, net(1,151)(4,666)
Provision for income tax61,57528,627
Amortization of acquired intangible assets included in cost of revenue9,9959,633
Amortization of acquired intangible assets included in operating expenses22,42016,646
Depreciation and leasehold amortization11,7237,914
Stock-based compensation21,76714,022
Acquisition-related costs 412 
Adjusted-EBITDA$222,260 $ Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.

Markets

DJIA20,894.8389.990.43%
NASDAQ6,133.6249.910.82%
S&P 5002,394.0212.290.52%
NIKKEI 22519,678.2887.520.45%
HANG SENG25,391.34216.470.86%
DAX12,619.46-19.23-0.15%
USD (per EUR)1.120.000.29%
USD (per CHF)0.970.000.06%
JPY (per USD)111.290.010.01%
GBP (per USD)1.300.00-0.09%
More to Explore
Mon, May 22
Set Your Location
City, State, or Zip