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ValueClick Announces First Quarter 2008 Results
WESTLAKE VILLAGE, Calif.-(Business Wire)-May 6, 2008 - ValueClick, Inc. (Nasdaq:VCLK) today reported financial results for the first quarter ended March 31, 2008. Revenue, adjusted-EBITDA(1) and diluted net income per common share for the quarter exceeded previously issued guidance.
The Company also announced that it has repurchased 3.2 million shares year-to-date for $54.7 million as part of its Stock Repurchase Program, and that the Company's board of directors has authorized a $100 million increase to the program.
"The first quarter demonstrated the strategic value of our diversified performance marketing offerings and our operating team's ability to deliver strong financial performance," said Tom Vadnais, chief executive officer of ValueClick. "In spite of some macroeconomic weakness and continued challenges in the lead generation industry, we delivered solid performance in the quarter and continue to believe we will achieve our 2008 financial performance goals."
First Quarter 2008 Results
Revenue for the first quarter of 2008 was $176.0 million, which exceeded the high end of the Company's previously issued guidance and increased $19.1 million, or 12 percent, from $156.9 million for the first quarter of 2007. First quarter 2008 results include three months of operations from MeziMedia, which was acquired in July 2007.
Income before income taxes for the first quarter of 2008 was $32.9 million compared to $32.1 million for the first quarter of 2007. Stock-based compensation expense and amortization of intangibles expense totaled $13.5 million for the first quarter of 2008, compared to $9.4 million for the first quarter of 2007.
Adjusted-EBITDA for the first quarter of 2008 was $46.0 million, which exceeded the high end of the Company's previously issued guidance and compared to $41.0 million for the first quarter of 2007.
Net income for the first quarter of 2008 was $19.2 million, or $0.19 per diluted common share, which exceeded the high end of the Company's previously issued guidance and compared to $18.6 million, or $0.18 per diluted common share, for the first quarter of 2007.
The consolidated balance sheet as of March 31, 2008 includes $195 million in cash, cash equivalents and marketable securities, more than $697 million in total stockholders' equity and no long-term debt.
Stock Repurchase Program Update
Today, ValueClick also provided an update on its Stock Repurchase Program. In the first quarter of 2008, the Company repurchased 2.3 million shares of its outstanding common stock for $39.3 million. Year-to-date, the Company has repurchased approximately 3.2 million shares for $54.7 million. ValueClick today also announced that its board of directors has authorized a $100 million increase to the Company's Stock Repurchase Program. As of today, up to $101.3 million of ValueClick's capital may be used to repurchase shares of the Company's common stock under the Stock Repurchase Program.
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 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.
Based on its first quarter results and outlook for 2008, ValueClick is updating its fiscal year 2008 guidance ranges, issued previously on February 13, 2008: -0- *T Fiscal Year 2008 Previous Guidance Updated Guidance ——————————————————————————————————— Revenue $730-$745 million $730-$745 million ——————————————————————————————————— Adjusted-EBITDA $185-$190 million $190-$195 million ——————————————————————————————————— Diluted net income per common share $0.78-$0.81 $0.81-$0.83 ——————————————————————————————————— *T
Fiscal year 2008 diluted net income per common share guidance includes a reduction of approximately $0.15 per diluted common share for stock-based compensation expense and assumes a 42 percent effective tax rate.
Additionally, ValueClick is announcing guidance for the second quarter of 2008: -0- *T Second Quarter 2008 Guidance ——————————————————————————————————— Revenue $166-$170 million ——————————————————————————————————— Adjusted-EBITDA $40-$42 million ——————————————————————————————————— Diluted net income per common share $0.15-$0.16 ——————————————————————————————————— *T
Second quarter 2008 diluted net income per common share guidance includes a reduction of $0.04 per diluted common share for stock-based compensation expense and assumes a 42 percent effective tax rate.
Conference Call Today
Tom Vadnais, 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 first quarter during a conference call and webcast on May 6, 2008 at 1:30PM PT. Investors and analysts may obtain the 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 through May 13 and may be accessed at (888) 203-1112 for domestic callers and (719) 457-0820 for international callers. The passcode is 4955781.
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 and search marketing, display advertising, lead generation, ad serving and related technologies, and comparison shopping. ValueClick brands include Commission Junction, ValueClick Media, Mediaplex, Smarter.com, CouponMountain.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 29, 2008; recent quarterly reports on Form 10-Q; and other current reports on Form 8-K. 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 and other income, income taxes, depreciation, amortization, and stock-based compensation. 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. -0- *T VALUECLICK, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) Three-month Period Ended March 31, 2008 2007 ————- ———— (Unaudited) (Note 1) Revenue $176,034 $156,924 Cost of revenue 55,113 47,047 ————- ———— Gross profit 120,921 109,877 Operating expenses: Sales and marketing (Note 2) 51,701 48,452 General and administrative (Note 2) 21,654 17,541 Technology (Note 2) 9,963 8,927 Amortization of intangible assets 7,760 5,771 ————- ———— Total operating expenses 91,078 80,691 ————- ———— Income from operations 29,843 29,186 Interest and other income, net 3,051 2,939 ————- ———— Income before income taxes 32,894 32,125 Income tax expense 13,727 13,491 ————- ———— Net income $ 19,167 $ 18,634 ========= ======== Basic net income per common share $ 0.20 $ 0.19 ========= ======== Weighted-average shares used to compute basic net income per common share 97,722 99,562 ========= ======== Diluted net income per common share $ 0.19 $ 0.18 ========= ======== Weighted-average shares used to compute diluted net income per common share 98,557 101,036 ========= ======== *T
Note 1 - The condensed consolidated statements of operations include the results of MeziMedia from the acquisition consummation date (July 30, 2007). Had this transaction been completed as of January 1, 2007, on an unaudited pro forma basis, revenue would have been $176.1 million, and net income would have been $20.0 million, or $0.20 per diluted common share, for the three-month period ended March 31, 2007. These unaudited pro forma results are for information purposes only, are not necessarily indicative of what the actual results would have been had these transactions occurred on January 1, 2007, and are not necessarily indicative of future results. -0- *T Note 2 - Includes stock-based compensation as Three-month Period follows: Ended March 31, ————————— 2008 2007 —————- ——— (Unaudited) Sales and marketing $1,682 $1,028 General and administrative 3,456 2,084 Technology 651 526 —————- ——— Total stock-based compensation $5,789 $3,638 =========== ====== *T -0- *T VALUECLICK, INC. RECONCILIATION OF NET INCOME TO ADJUSTED-EBITDA (Note 1) (In thousands) Three-month Period Ended March 31, ————————— 2008 2007 ————- ———— (Unaudited) Net income $19,167 $18,634 Less interest and other income, net (3,051) (2,939) Plus provision for income taxes 13,727 13,491 Plus amortization of intangible assets 7,760 5,771 Plus depreciation and leasehold amortization 2,574 2,434 Plus stock-based compensation 5,789 3,638 ————- ———— Adjusted-EBITDA $45,966 $41,029 ========= ======== *T
Note 1 - "Adjusted-EBITDA" (earnings before interest and other income, income 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 income from interest on the Company's cash and marketable securities and the costs associated with income tax expense, amortization of intangible assets acquired in business combinations, capital investments, and stock-based compensation expense. 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. -0- *T VALUECLICK, INC. SEGMENT OPERATING RESULTS (In thousands) Three-month Period Ended March 31, ———————————— 2008 2007 ——————— ————- (Unaudited) Media: Revenue $ 79,353 $108,422 Cost of revenue 36,483 38,532 ——————— ————- Gross profit 42,870 69,890 Operating expenses 26,869 44,096 ——————— ————- Segment income from operations $ 16,001 $ 25,794 ============== ========= Comparison Shopping: Revenue $ 53,001 $ 8,617 Cost of revenue 11,060 1,349 ——————— ————- Gross profit 41,941 7,268 Operating expenses 27,264 6,725 ——————— ————- Segment income from operations $ 14,677 $ 543 ============== ========= Affiliate Marketing: Revenue $ 35,367 $ 32,798 Cost of revenue 7,022 5,958 ——————— ————- Gross profit 28,345 26,840 Operating expenses 12,103 9,889 ——————— ————- Segment income from operations $ 16,242 $ 16,951 ============== ========= Technology: Revenue $ 9,278 $ 7,470 Cost of revenue 1,407 1,452 ——————— ————- Gross profit 7,871 6,018 Operating expenses 4,094 3,439 ——————— ————- Segment income from operations $ 3,777 $ 2,579 ============== ========= Total segment income from operations $ 50,697 $ 45,867 Corporate expenses (7,305) (7,272) Stock-based compensation (5,789) (3,638) Amortization of intangible assets (7,760) (5,771) ——————— ————- Consolidated income from operations $ 29,843 $ 29,186 ============== ========= Reconciliation of segment revenue to consolidated revenue: Media $ 79,353 $108,422 Comparison Shopping 53,001 8,617 Affiliate Marketing 35,367 32,798 Technology 9,278 7,470 Inter-segment eliminations (965) (383) ——————— ————- Consolidated revenue $176,034 $156,924 ============== ========= *T -0- *T VALUECLICK, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands) March 31, December 31, 2008 2007 ————- —————— (Unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 97,860 $ 82,767 Marketable securities, at fair value 66,351 170,691 Accounts receivable, net 118,159 126,605 Other current assets 16,019 18,785 ————- —————— Total current assets 298,389 398,848 Marketable securities, less current portion 30,844 34,059 Property and equipment, net 18,484 19,357 Goodwill 440,852 439,532 Intangible assets, net 105,923 112,979 Other assets 8,752 6,247 ————- —————— TOTAL ASSETS $903,244 $1,011,022 ========= ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities $122,392 $ 219,199 Non-current liabilities 83,371 81,890 ————- —————— Total liabilities 205,763 301,089 Total stockholders' equity 697,481 709,933 ————- —————— TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $903,244 $1,011,022 ========= ============ *T
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