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ValueClick Announces Fourth Quarter 2012 Results

  ValueClick Announces Fourth Quarter 2012 Results

       Revenue Meets, Profitability Exceeds High-End of Guidance Ranges

Business Wire

WESTLAKE VILLAGE, Calif. -- February 13, 2013

ValueClick, Inc. (NASDAQ: VCLK) today reported financial results for the
fourth quarter ended December 31, 2012. Revenue met the high-end of its
guidance range, while Adjusted-EBITDA^1 and non-GAAP diluted net income^2 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 $(0.09)-$(0.10)
      intangibles, net of tax
      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. (NASDAQ: 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,
                                                   2012           2011
                                                   (Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents                          $  136,638     $   116,676
Accounts receivable, net                           147,487        129,076
Other current assets                               27,136        25,181
Total current assets                               311,261        270,933
                                                                  
Note receivable, less current portion              27,615         29,700
Property and equipment, net                        29,014         19,952
Goodwill                                           434,507        437,033
Intangible assets, net                             81,822         114,007
Other assets                                       15,477        9,086
TOTAL ASSETS                                       $  899,696    $   880,711
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowings under credit facility, current          $  10,000      $   10,000
Other current liabilities                          132,401        124,046
Borrowings under credit facility, less current     132,500        157,500
portion
Other non-current liabilities                      34,090        25,772
Total liabilities                                  308,991        317,318
Total stockholders' equity                         590,705       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 profit                                           128,523       106,080
Operating expenses:
Sales and marketing (Note 2)                           22,806        22,002
General and administrative (Note 2)                    21,782        18,171
Technology (Note 2)                                    16,900        15,551
Amortization of intangible assets acquired in          3,993        6,327
business combinations
Total operating expenses                               65,481       62,051
Income from operations                                 63,042        44,029
Interest and other (expense) income, net               (768      )   1,434
Income before income taxes                             62,274        45,463
Income tax expense                                     26,146       17,441
Net income from continuing operations                  36,128        28,022
Income from discontinued operations, net of tax        151          1,355
Net income                                             $ 36,279     $ 29,377
                                                                     
Basic net income from continuing operations per        $ 0.48       $ 0.34
common share
Diluted net income from continuing operations per      $ 0.47       $ 0.34
common share
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      75,225       81,505
income per common share
Weighted-average shares used to compute diluted net    76,687       82,963
income per common share
                                                                     
                                                                     
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,
                                                       2012          2011
                                                       (Unaudited)
Sales and marketing                                    $ 1,039       $ 1,675
General and administrative                             2,342         2,663
Technology                                             996          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 profit                                           411,619       307,350
Operating expenses:
Sales and marketing (Note 2)                           85,470        64,976
General and administrative (Note 2)                    81,050        58,517
Technology (Note 2)                                    66,324        49,060
Amortization of intangible assets acquired in          22,420       16,646
business combinations
Total operating expenses                               255,264      189,199
Income from operations                                 156,355       118,151
Interest and other income, net                         1,151        4,666
Income before income taxes                             157,506       122,817
Income tax expense                                     61,575       28,627
Net income from continuing operations                  95,931        94,190
Income from discontinued operations, net of tax        4,805         6,940
Gain on sale, net of tax                               980          —
Net income                                             $ 101,716    $ 101,130
                                                                     
Basic net income from continuing operations per        $ 1.24       $ 1.17
common share
Diluted net income from continuing operations per      $ 1.22       $ 1.16
common share
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      77,342       80,323
income per common share
Weighted-average shares used to compute diluted net    78,898       81,489
income per common share
                                                                     
                                                                     
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,
                                                       2012          2011
                                                       (Unaudited)
Sales and marketing                                    $ 4,918       $ 3,320
General and administrative                             11,492        7,829
Technology                                             5,357        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), net             768           (1,434    )
Provision for income tax                             26,146        17,441
Amortization of acquired intangible assets included  2,491         2,498
in cost of revenue
Amortization of acquired intangible assets included  3,993         6,327
in operating expenses
Depreciation and leasehold amortization              3,232         2,455
Stock-based compensation                             4,377        5,776     
Adjusted-EBITDA                                      $ 77,135     $ 61,085  
                                                                   
                                                                   
                                                     Year Ended December 31,
                                                     2012          2011
                                                     (Unaudited)
Net income from continuing operations                $ 95,931      $ 94,190
Interest and other income, net                       (1,151    )   (4,666    )
Provision for income tax                             61,575        28,627
Amortization of acquired intangible assets included  9,995         9,633
in cost of revenue
Amortization of acquired intangible assets included  22,420        16,646
in operating expenses
Depreciation and leasehold amortization              11,723        7,914
Stock-based compensation                             21,767        14,022
Acquisition-related costs                            —            412       
Adjusted-EBITDA                                      $ 222,260    $ 166,778 
                                                                             

Note 1 - “Adjusted-EBITDA” (GAAP net income from continuing operations before
interest, income taxes, depreciation, amortization, stock-based compensation,
and acquisition-related costs) 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
cash equivalents, note receivable and borrowings, 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 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.

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 December 31,
                                                     2012         2011
                                                     (Unaudited)
Net income from continuing operations                $ 36,128      $ 28,022
Stock-based compensation                             4,377         5,776
Amortization of acquired intangible assets           2,491         2,498
included in cost of revenue
Amortization of acquired intangible assets           3,993         6,327
included in operating expenses
Tax impact of above items                            (4,175    )   (4,693    )
Non-GAAP net income                                  $ 42,814     $ 37,930  
Non-GAAP diluted net income per common share         $ 0.56       $ 0.46    
Weighted-average shares used to compute non-GAAP     76,687       82,963    
diluted net income per common share
                                                                   
                                                     Year Ended December 31,
                                                     2012          2011
                                                     (Unaudited)
Net income from continuing operations                $ 95,931      $ 94,190
Stock-based compensation                             21,767        14,022
Amortization of acquired intangible assets           9,995         9,633
included in cost of revenue
Amortization of acquired intangible assets           22,420        16,646
included in operating expenses
Tax impact of above items                            (19,636   )   (14,377   )
Non-GAAP net income                                  $ 130,477    $ 120,114 
Non-GAAP diluted net income per common share         $ 1.65       $ 1.47    
Weighted-average shares used to compute non-GAAP     78,898       81,489    
diluted net income per common share
                                                                             

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 and amortization of intangibles) 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 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.

VALUECLICK, INC.

SEGMENT OPERATING RESULTS

(In thousands)
                                                  
                         Three-month Period          Year Ended
                         Ended December 31,          December 31,
                         2012         2011          2012         2011
                         (Unaudited)                 (Unaudited)
Affiliate Marketing:
Revenue                  $ 43,944      $ 39,794      $ 149,527     $ 139,409
Cost of revenue          4,656        4,227        17,546       17,125    
Gross profit             39,288        35,567        131,981       122,284
Operating expenses       10,913       9,407        40,631       37,711    
Segment income from      $ 28,375     $ 26,160     $ 91,350     $ 84,573  
operations
Media:
Revenue                  $ 122,694     $ 102,029     $ 390,635     $ 261,324
Cost of revenue          45,971       42,229       152,197      113,763   
Gross profit             76,723        59,800        238,438       147,561
Operating expenses       31,690       27,839       118,233      72,984    
Segment income from      $ 45,033     $ 31,961     $ 120,205    $ 74,577  
operations
Owned & Operated
Websites:
Revenue                  $ 33,009      $ 33,703      $ 121,058     $ 128,419
Cost of revenue          17,967       20,438       69,678       81,118    
Gross profit             15,042        13,265        51,380        47,301
Operating expenses       6,265        5,170        23,337       21,468    
Segment income from      $ 8,777      $ 8,095      $ 28,043     $ 25,833  
operations
Reconciliation of
segment income from
operations to
consolidated income
from operations:
Total segment income     $ 82,185      $ 66,216      $ 239,598     $ 184,983
from operations
Corporate expenses       (8,282    )   (7,586    )   (29,061   )   (26,531   )
Stock-based              (4,377    )   (5,776    )   (21,767   )   (14,022   )
compensation
Amortization of
acquired intangible
assets included          (2,491    )   (2,498    )   (9,995    )   (9,633    )

in consolidated cost
of revenue
Amortization of
acquired intangible
assets included          (3,993    )   (6,327    )   (22,420   )   (16,646   )

in consolidated
operating expense
Consolidated income      $ 63,042     $ 44,029     $ 156,355    $ 118,151 
from operations
Reconciliation of
segment revenue to
consolidated revenue:
Affiliate Marketing      $ 43,944      $ 39,794      $ 149,527     $ 139,409
Media                    122,694       102,029       390,635       261,324
Owned & Operated         33,009        33,703        121,058       128,419
Websites
Inter-segment            (70       )   (89       )   (342      )   (399      )
eliminations
Consolidated revenue     $ 199,577    $ 175,437    $ 660,878    $ 528,753 
                                                                             

Contact:

ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677
 
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