Local Corporation Reports Third Quarter 2012 Financial Results

  Local Corporation Reports Third Quarter 2012 Financial Results

    Company Exceeds Prior Third Quarter Guidance, Achieves Key Milestones

Business Wire

IRVINE, Calif. -- November 08, 2012

Local Corporation (NASDAQ: LOCM), a leading online local media company, today
reported its financial results for the third quarter 2012.

“During the third quarter, we made great progress in growing our digital media
and mobile ecosystem, reaching record overall, organic and mobile traffic. We
also released Launch by Local, our digital media suite for small businesses,
grew our direct sales force by 50 percent and achieved record subscribers for
this product. We’re also pleased with the successful sale of our Rovion
business earlier this quarter,” said Heath Clarke, Local Corporation chairman
and chief executive officer. “We expect to continue the momentum in growing
high-margin organic traffic and organic ad revenues into the fourth quarter,
although we expect this will be offset by monetization dislocation in our
Owned and Operated business from a combination of recent policy changes and
price per click challenges from key partners. We believe the impact will be
temporary and that these changes represent long-term opportunity. Our updated
fourth quarter guidance of $22 to $23 million in revenues and Adjusted Net
Income of approximately breakeven is down slightly from the third quarter.
Fiscal 2012 revenues are expected to grow to approximately $100 million, an
increase of over 27 percent compared to 2011 revenues, with Adjusted Net
Income for 2012 of approximately $750,000. Continued growth of organic traffic
and organic ad revenues, which are both at near-record levels, gives us
confidence to expect revenue and Adjusted Net Income growth in future
periods.”

SUMMARY RESULTS
(in thousands, except per share amounts)
                                                                
                                          Q3 2012     Q2 2012     Q3 2011
Consumer Properties:
Owned & Operated                          $ 18,340     $ 20,478     $ 13,457
Network                                     4,961        4,114        4,364
Business Solutions                         1,470      2,480      2,867  
Revenue                                   $ 24,771    $ 27,072    $ 20,688 
                                                                    
Adjusted Net Income (Loss)*               $ 152        $ 468        $ (444   )
Less interest expense, net                  (131   )     (97    )     (227   )
Less provision for income taxes             (22    )     (44    )     (47    )
Less non-cash depreciation,                 (3,466 )     (2,393 )     (3,001 )
amortization and stock compensation
Plus gain (loss) on revaluation of          65           166          513
warrants
Less net loss from Rovion assets held       (256   )     (482   )     (825   )
for sale
Less asset impairment charge                -            (6,451 )     -
Less severance charges                     (144   )    (514   )    -      
GAAP net loss                             $ (3,802 )   $ (9,347 )   $ (4,031 )
                                                                    
Diluted Adjusted Net Income (Loss) per    $ 0.01       $ 0.02       $ (0.02  )
share *
Diluted GAAP net income (loss) per        $ (0.17  )   $ (0.42  )   $ (0.18  )
share

Diluted weighted average shares used
for Adjusted Net Income (Loss) per          22,245       22,219       21,940
share
Diluted weighted average shares used        22,092       22,086       21,940
for GAAP net loss per share
                                                                    
Cash                                      $ 3,706      $ 7,103      $ 10,119

 * See detailed reconciliation of GAAP to non-GAAP measures in the financial
                       tables attached to this release.

Adjusted Net Income (Loss) is defined as net income (loss) excluding:
provision for income taxes; interest and other income (expense), net;
depreciation; amortization; stock-based compensation charges; gain or loss on
warrant revaluation; net income (loss) from discontinued operations;
impairment charges and severance charges.

An explanation of the company’s use of non-GAAP financial measures, including
the limitations of such measures relative to GAAP measures is included below
and reconciliation between GAAP and non-GAAP measures, where appropriate, is
included in the financial tables attached to this release.

Third Quarter Results Highlights:

• Revenue – Third quarter 2012 revenue was $24.8 million representing an
increase of 20% over third quarter 2011 revenue of $20.7 million.

• GAAP Net Income (Loss) – Third quarter 2012 GAAP net loss was $3.8 million,
or ($0.17) per diluted share, compared to the third quarter 2011 GAAP net loss
of $4.0 million, or ($0.18) per diluted share.

• Adjusted Net Income (Loss) – Third quarter 2012 Adjusted Net Income was $0.2
million, or $0.01 per diluted share, compared to third quarter 2011 Adjusted
Net Loss of $0.4 million, or ($0.02) per diluted share.

• Cash – On Sept. 30, 2012, the company’s cash balance was $3.7 million, a
decrease of $3.4 million over the prior quarter. The decrease in cash is due
to cash used in operating activities of approximately $2.2 million,
approximately $0.8 million of cash used for capital expenditures, and $0.4
million used in financing activities relating to the net repayments on the
revolving line of credit.

• Debt – On Sept. 30, 2012, the company had borrowings of $7.6 million
outstanding under its Square One Bank revolving line of credit.

“The company exceeded revenue and bottom-line projections for the quarter,”
said Ken Cragun, Local Corporation chief financial officer. “Early in the
fourth quarter we closed the sale of the Rovion business for $3.9 million with
$3.5 million cash at closing. The sale of Rovion also eliminated the $300,000
per quarter cash burn related to this business.”

Third Quarter 2012 Operating Highlights:

• Record Overall and Organic Traffic – Overall traffic on the site and network
was a record 101 million monthly unique visitors (MUVs) in the third quarter
2012, slightly up from second quarter 2012 and up 10.0% from the year ago
period. Organic traffic on the site and network was a record 39.1 million MUVs
in the third quarter 2012, up 1.3% from the second quarter 2012 and up 34.0%
from the year ago period. Organic traffic is defined as all non-SEM sourced
traffic. Overall mobile traffic was 24.6 million MUVs in the third quarter
2012, up 28.1% from the second quarter 2012.

• Asset and Liabilities Held for Sale – On Oct. 19, 2012, we sold all assets
related to the Rovion business. The sales price totaled $3.9 million, of which
$3.5 million was paid at the close with the remainder being held in escrow for
a period of 18 months.

Consumer Properties:

Owned & Operated (O&O):

• Revenue – Third quarter 2012 total revenue related to the O&O business unit
was $18.3 million, up 36% from third quarter 2011 O&O revenue of $13.5 million
and down 11% from second quarter 2012 O&O revenue of $20.5 million.

• Monetization of Traffic – Revenue per thousand visitors (RKV) for third
quarter 2012 was $276, up 9% from third quarter 2011 RKV of $254 and down 8%
from second quarter 2012 RKV of $299.

Network:

• Revenue – Third quarter 2012 total revenue related to the Network business
unit was $5.0 million, up 14% from the third quarter 2011 Network revenue of
$4.4 million and up 22% from second quarter 2012 Network revenue of $4.1
million.

• Network Sites – The Network business unit ended the third quarter 2012 with
more than 1,000 regional media sites utilizing the company’s white label
business directory solution.

Business Solutions:

• Revenue – Third quarter 2012 revenue was $1.5 million, down 48% from third
quarter 2011 revenue of $2.9 million and down 40% from second quarter 2012
revenue of $2.5 million. The reduction was primarily due to the previously
disclosed phasing out of legacy customers.

• Digital Media Enrollments – The company ended the third quarter 2012 with
approximately 900 Launch by Local subscribers. The company also has over
10,000 additional subscribers via self service, network and channel partners.

• Legacy Small and Medium-Sized Businesses (SMBs) – The company ended the
third quarter 2012 with approximately  6,000 legacy subscribers. The company
expects to cease billing all legacy subscribers by the end of 2012, as will be
fully discussed in its Form 10-Q.

Recent News Highlights:

• Rovion Sold for $3.9 Million –In the fourth quarter, Gannett Company, Inc.
(“Gannett”) acquired the company’s Rovion business and all related assets. The
company has licensed the Rovion technology as part of the agreement and will
continue to use the technology in its Launch by Local product offering.

• Krillion Licensed to Gannett – In conjunction with the Rovion sale, Gannett
will license the Krillion technology from the company. Krillion’s real time
shopping inventory data has been integrated into the Rovion rich media ad
platform, providing Gannett’s customers with access to real time shopping
data.

• New Yahoo! Five Year Agreement – In the fourth quarter, the company and
Yahoo! entered into an expanded five year search and advertising agreement,
extending a seven year business partnership.

• Small Medium Business (SMB) Product Bundle - “Launch by Local” (“Launch”) is
the company’s new, full-service digital marketing and advertising solution for
small and medium-sized businesses (SMBs). Launch is a complete, cost-effective
digital marketing and advertising solution designed to help SMBs build online
presence, reach new customers and engage with existing ones.

• Record Third Quarter Search Traffic – The company reached over 101 million
total monthly unique visitors (MUVs), up 10.0 percent from the year ago
period.

• Record Third Quarter Mobile Traffic – Mobile traffic represented over 24.6
million MUVs, up over 274 percent from the year ago period.

• Record Third Quarter Organic Traffic – The company reached organic traffic
of over 39.1 million MUVs, up 34.0 percent from the year ago period.

• Website Magazine’s Top 50 Digital Advertising Networks – The company was
ranked 8^th on Website Magazine’s “Top 50 Digital Advertising Networks”.

• Mobile App– The company released its Local.com mobile app for iOS® and
Android™ enabled devices. The new app enables mobile consumers to search for
information on local businesses, including products and services.

• Corporate Name Change - The company’s legal name has been changed to Local
Corporation, from Local.com Corporation. The name change reflects the growth
in the company’s operations beyond its flagship Local.com website and into a
more diversified local media business.

• Small Medium Businesses to Increase Digital Marketing Spend -The company
released a Small Business Sentiment Survey study conducted in October by
Kelton, examining the factors that small business owners weigh when they
consider their digital marketing spend.

Fourth Quarter 2012 Financial Guidance:

Due to a combination of recent policy and CPC pricing changes and challenges
from key monetization partners we are revising our fourth quarter fiscal 2012
guidance.

Revenue – The company expects fourth quarter 2012 revenue to be between $22.0
and $23.0 million.

Adjusted Net Income – Adjusted Net Income for the fourth quarter 2012 is
expected to be approximately breakeven, or $0.00 per diluted share, assuming
diluted weighted average shares of 23 million.

Projected fourth quarter 2012 Adjusted Net Income (Loss) Factors:

  *Interest Expense of $100,000
  *Tax Provision Expense of $50,000
  *Depreciation Expense of $1.0 million
  *Amortization Expense of $600,000
  *Stock Compensation Expense of $750,000
  *Net Loss from Rovion assets held for sale of $0.3 million
  *Gain on sale of Rovion assets of $1.4 million
  *Warrant Revaluation Expense and Other items are undeterminable*

Fiscal 2012 Financial Guidance:

Revenue - The company now expects 2012 revenue to be between $99 million and
$100 million, which is an increase of over 27% compared to 2011 revenues.

Adjusted Net Income – Adjusted Net Income for 2012 is expected to be
approximately $750,000, or $0.03 per diluted share, assuming diluted weighted
average shares of 23.0 million, and taking into account the dilutive effect of
stock options and warrants.

Projected 2012 Adjusted Net Income Factors:

  *Interest Expense of $400,000
  *Income Tax Provision of $200,000
  *Depreciation Expense of $3.7 million
  *Amortization Expense of $4.4 million
  *Stock Compensation Expense of $3.0 million
  *Impairment Charge of $6.5 million
  *Severance Charges of $750,000
  *Net Loss from Rovion assets held for sale of $1.6 million
  *Gain on sale of Rovion assets of $1.4 million
  *Warrant Revaluation Expense and Other items are undeterminable*

* The valuation of the warrant liability is based in large part on the
underlying price and volatility of our common stock during the quarter. Since
we cannot predict this, we cannot project the non-cash gain or loss in
connection with these warrants, and therefore cannot reasonably project our
GAAP net income (loss). We therefore cannot provide GAAP guidance, but do
report GAAP results.

Conference Call Information:

Chairman and CEO Heath Clarke and CFO Ken Cragun will host a conference call
today at 5 p.m. ET to discuss the results and outlook. Investors and analysts
can participate in the call by dialing 1-877-454-9136 or 1-617-826-1724,
passcode # 53634853. To listen to the webcast, or to view the press release,
please visit the Investor Relations section of the Local Corporation website
at: http://ir.local.com. Institutional investors can access the call via
Thomson/CCBN's password-protected event management site, StreetEvents, at:
www.streetevents.com.

The replay can be accessed for approximately one week starting at 7:30 p.m. ET
the day of the call by dialing 1-800-585-8367 or 1-404-537-3406, passcode #
53634853. A replay of the webcast will be available for approximately 90 days
on the company's website, starting approximately one hour after the completion
of the call.

About Local ^  Corporation

Local Corporation (NASDAQ:LOCM) is a leading online local media company that
connects brick-and-mortar businesses with over a million online and mobile
consumers each day using a variety of innovative digital marketing products.
To advertise, or for more information, visit: http://www.localcorporation.com.

Forward Looking Statements

This press release contains certain “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. Words or expressions such as 'anticipate,'
'believe,' 'estimate,' 'plans,' 'expect,' 'intend,' ‘projects,’ ‘forecast,’
‘potential,’ ‘feel’ and similar expressions and phrases are intended to
identify such forward-looking statements. Any forward-looking statements are
based on the beliefs of our management as well as assumptions made by and
information currently available to our management. Actual results could differ
materially from those contemplated by the forward-looking statements as a
result of certain factors, including, but not limited to, our advertising
partners paying less revenue per click and revenues to us for our search
results, our ability to purchase advertising from third parties to drive users
to our sites, our ability to adapt our business following the shifts in our
monetization partners, our ability to monetize the Local.com domain, including
at a profit, our ability to retain a monetization partner for the Local.com
domain and other web properties under our management that allows us to operate
profitably, our ability to develop, market and operate our local-search
technologies, our ability to market the Local.com domain as a destination for
consumers seeking local-search results, our ability to grow our business by
enhancing our local-search services, including through businesses we acquire,
the integration and future performance of our Spreebird business and our
Krillion business, the possibility that the information and estimates used to
predict anticipated revenues and expenses associated with the businesses we
acquire are not accurate, difficulties executing integration strategies or
achieving planned synergies, the possibility that integration costs and
go-forward costs associated with the businesses we acquire will be higher than
anticipated, our ability to successfully expand our sales channels for new and
existing products and services, our ability to increase the number of
businesses that purchase our advertising products, our ability to successfully
bill our monthly subscription customers, our ability to expand our advertiser
and distribution networks, our ability to integrate and effectively utilize
our acquisitions' technologies, our ability to develop our products and sales,
marketing, finance and administrative functions and successfully integrate our
expanded infrastructure, as well as our dependence on major advertisers,
competitive factors and pricing pressures, changes in legal and regulatory
requirements, and general economic conditions. Any forward-looking statements
reflect our current views with respect to future events and are subject to
these and other risks, uncertainties and assumptions relating to our
operations, results of operations, growth strategy and liquidity. All
subsequent written and oral forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified in their entirety by this
paragraph. Unless otherwise stated, all site traffic and usage statistics are
from third-party service providers engaged by the company.

Our most recent Annual Report on Form 10-K, subsequent Quarterly Reports on
Form 10-Q, recent Current Reports on Form 8-K and Form 8-K/A, and other
Securities and Exchange Commission filings discuss the foregoing risks as well
as other important risk factors that could contribute to such differences or
otherwise affect our business, results of operations and financial condition.
The forward-looking statements in this release speak only as of the date they
are made. We undertake no obligation to revise or update publicly any
forward-looking statement for any reason.

Non-GAAP Financial Measures

This press release includes the non-GAAP financial measure of “Adjusted Net
Income” and “Adjusted Net Loss” which we define as net income (loss)
excluding: provision for income taxes; interest and other income (expense),
net; depreciation; amortization; stock based compensation charges; gain or
loss on warrant revaluation; net income (loss) from discontinued operations;
impairment charges and severance charges. Adjusted Net Income (Loss), as
defined above, is not a measurement under GAAP. Adjusted Net Income (Loss) is
reconciled to net income (loss) which we believe is the most comparable GAAP
measure. A reconciliation of net income (loss) to Adjusted Net Income (Loss)
is set forth at the end of this press release.

Management believes that Adjusted Net Income (Loss) 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, expense from the company’s financing
transactions and the costs associated with income tax expense, capital
investments, stock-based compensation expense, warrant revaluation charges and
severance charges which are not directly attributable to the underlying
performance of the company’s business operations. Management uses Adjusted Net
Income (Loss) in evaluating the overall performance of the company’s business
operations.

A limitation of non-GAAP Adjusted Net Income (Loss) is that it excludes items
that often have a material effect on the company’s net income and earnings per
common share calculated in accordance with GAAP. Therefore, management
compensates for this limitation by using Adjusted Net Income (Loss) in
conjunction with net income (loss) and net income (loss) per share measures.
The company believes that Adjusted Net Income (Loss) provides investors with
an additional tool for evaluating the company’s core performance, which
management uses in its own evaluation of overall performance, and as 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 reconciliation to GAAP; it may
provide greater insight into the company’s financial results. The non-GAAP
measures should be viewed as a supplement to, and not as a substitute for, or
superior to, GAAP net income or earnings per share.


LOCAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except par value)
                                                               
                                                  September 30,   December 31,
                                                  2012            2011
ASSETS
Current assets:
  Cash                                            $  3,706        $  10,394
  Restricted cash                                    42              10
  Accounts receivable, net of allowances of $553     13,954          13,456
  and $550, respectively
  Notes receivable – current portion                 392             392
  Prepaid expenses and other current assets          518             732
  Assets held for sale                              2,517         2,187   
                                                                  
  Total current assets                               21,129          27,171
                                                                  
Property and equipment, net                          7,116           8,018
Goodwill                                             25,870          31,370
Intangible assets, net                               4,426           8,833
Long term portion of note receivable                 183             350
Deposits                                            60            69      
                                                                  
Total assets                                      $  58,784      $  75,811  
                                                                  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                $  12,156       $  12,193
  Accrued compensation                               968             2,152
  Deferred rent                                      485             551
  Warrant liability                                  34              207
  Other accrued liabilities                          1,421           2,422
  Revolving line of credit                           7,627           8,000
  Deferred revenue                                   229             281
  Liabilities held for sale                         49            32      
                                                                  
  Total current liabilities                         22,969        25,838  
                                                                  
Deferred income taxes                               265           265     
                                                                  
Total liabilities                                   23,234        26,103  
                                                                  
Commitments and contingencies
                                                                  
Stockholders’ equity (deficit):
  Convertible preferred stock, $0.00001 par
  value; 10,000 shares authorized; none issued       -               -
  and outstanding for all periods presented
  Common stock, $0.00001 par value; 65,000 shares
  authorized; 22,095 and 22,082 issued and           -               -
  outstanding, respectively
  Additional paid-in capital                         121,261         119,068
  Accumulated deficit                               (85,711  )     (69,360 )
                                                                  
  Stockholders’ equity                              35,550        49,708  
                                                                  
Total liabilities and stockholders’ equity        $  58,784      $  75,811  


LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
                                             
                     Three Months Ended            Nine Months Ended
                     September 30,                 September 30,
                     2012         2011           2012          2011
Revenue              $ 24,771      $ 20,688      $ 76,875       $ 52,960  
Costs and
expenses:
   Cost of             18,463         12,487         55,798          34,273
   revenues
   Sales and           4,152          5,905          14,443          13,340
   marketing
   General and         2,522          2,975          7,706           8,882
   administrative
   Research and        1,227          1,511          3,684           4,396
   development
   Amortization of     1,865          1,255          3,608           3,585
   intangibles
   Impairment of
   goodwill and       -            -            6,451         -       
   intangible
   assets
                                                                   
        Total
        operating     28,229       24,133       91,690        64,476  
        expenses
                                                                   
Operating income       (3,458 )       (3,445 )       (14,815 )       (11,516 )
(loss)
                                                                   
   Interest and
   other income        (131   )       (227   )       (325    )       (312    )
   (expense), net
   Change in fair
   value of           65           513          173           2,483   
   warrant
   liability
                                                                   
Income (loss) from
continuing             (3,524 )       (3,159 )       (14,967 )       (9,345  )
operations before
income taxes
                                                                   
   Provision for      22           47           121           107     
   income taxes
                                                                   
Net income (loss)
from continuing        (3,546 )       (3,206 )       (15,088 )       (9,452  )
operations
Income (loss) from
discontinued          (256   )      (825   )      (1,263  )      (1,301  )
operations (net of
taxes)
Net Income (loss)    $ (3,802 )     $ (4,031 )     $ (16,351 )     $ (10,753 )
                                                                   
Per share data:
                                                                   
Basic net income
(loss) per share     $ (0.16  )     $ (0.15  )     $ (0.68   )     $ (0.45   )
from continuing
operations
Basic net income
(loss) per share     $ (0.01  )     $ (0.04  )     $ (0.06   )     $ (0.06   )
from discontinued
operations
Basic net income     $ (0.17  )     $ (0.18  )     $ (0.74   )     $ (0.51   )
(loss) per share
                                                                   
Diluted net income
(loss) per share     $ (0.16  )     $ (0.15  )     $ (0.68   )     $ (0.45   )
from continuing
operations
Diluted net income
(loss) per share     $ (0.01  )     $ (0.04  )     $ (0.06   )     $ (0.06   )
from discontinued
operations
Diluted net income   $ (0.17  )     $ (0.18  )     $ (0.74   )     $ (0.51   )
(loss) per share
                                                                   
                                                                   
Basic weighted
average shares         22,092         21,940         22,087          21,151
outstanding
Diluted weighted
average shares         22,092         21,940         22,087          21,151
outstanding


Supplemental Consolidated Statements of Operations Information
Stock-based Compensation Expense
(in thousands, except per share data)
                                                        
                                        Three Months Ended   Nine Months Ended
                                        September 30,        September 30,
                                        2012       2011     2012     2011
Cost of revenues                        $  22       $ 12     $ 61      $ 165
Sales and marketing                        261        306      846       955
General and administrative                 320        491      988       1,427
Research and development                  63        87      163      313
Total stock-based compensation          $  666      $ 896    $ 2,058   $ 2,860
expense*
                                                                       
Basic and diluted net stock-based       $  0.03     $ 0.04   $ 0.09    $ 0.14
compensation expense per share

                *- Excludes impact of discontinued operations.


LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
            
                                               Nine Months Ended September 30,
                                               2012             2011
Cash flows from operating activities:
  Net income (loss)                            $  (16,351  )     $  (10,753  )
  Adjustments to reconcile net income (loss)
  to cash provided by (used in) operating
  activities:
        Depreciation and amortization             6,581             5,981
        Provision for doubtful accounts           138               25
        Stock-based compensation expense          2,176             2,948
        Change in fair value of warrant           (173     )        (2,483   )
        liability
        Impairment of goodwill and intangible     6,451             -
        assets
        Changes in operating assets and
        liabilities:
               Accounts receivable                (636     )        (871     )
               Note receivable                    167               200
               Prepaid expenses and other         223               821
               Accounts payable and accrued       (2,248   )        789
               liabilities
               Deferred revenue                  (75      )       1,152    
                      Net cash used in           (3,747   )       (2,191   )
                      operating activities
                                                                 
Cash flows from investing activities:
  Capital expenditures                            (2,553   )        (3,144   )
  Increase in restricted cash                     (32      )        -
  Issuance of notes receivable                    -                 (1,085   )
  Proceeds from notes receivable                  -                 1,085
  Acquisitions, net of cash acquired              -                 (15,969  )
  Purchases of intangible assets                 -               (762     )
                      Net cash used in           (2,585   )       (19,875  )
                      investing activities
                                                                 
Cash flows from financing activities:
  Proceeds from exercise of options               22                170
  Proceeds from the public offering of common     -                 18,227
  stock
  Payment of revolving credit facility            (1,373   )        (7,000   )
  Proceeds from revolving credit facility         1,000             8,000
  Payment of financing related costs             (5       )       (291     )
                      Net cash (used in)
                      provided by financing      (356     )       19,106   
                      activities
Net increase (decrease) in cash                   (6,688   )        (2,960   )
Cash, beginning of period                        10,394          13,079   
Cash, end of period                            $  3,706         $  10,119   
                                                                 
Supplemental Cash Flow Information:
  Interest paid                                $  320           $  136      
  Income taxes paid                            $  12            $  11       


LOCAL CORPORATION
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED NET INCOME
(in thousands, except per share amounts)
(Unaudited)
                                                             
                                                                 Three Months
                              Three Months Ended September 30,   Ended

                                                                 June 30,
                              2012              2011            2012
GAAP net income (loss)        $   (3,802   )     $  (4,031  )    $  (9,347  )
                                                                 
Plus interest and other           131               227             97
income (expense), net
Plus provision for income         22                47              44
taxes
Plus amortization of              1,865             1,256           819
intangibles
Plus depreciation                 935               849             907
Plus stock-based compensation     666               896             667
Less revaluation of warrants      (65      )        (513    )       (166    )
Plus net loss from                256               825             482
discontinued operations
Plus asset Impairment charge      -                 -               6,451
Plus severance charges*          144             -             514     
                                                                 
Adjusted Net Income (Loss)    $   152           $  (444    )    $  468     
                                                                 
Diluted Adjusted Net Income   $   0.01          $  (0.02   )    $  0.02    
(loss) per share
                                                                 
Diluted weighted average          22,245            21,940          22,219
shares outstanding

* Included in severance charges are costs incurred due to a change in officer
as well as severance cost incurred during the quarter.

Contact:

Investor Relations Contact:
Janine Zanelli
Local Corporation
949-341-5340
jzanelli@local.com
or
Media Relations Contact:
Cameron Triebwasser
Local Corporation
949-789-5223
ctriebwasser@local.com