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Vocus Announces Results for First Quarter 2013



Vocus Announces Results for First Quarter 2013

Company Reports 33% Revenue Growth and Strong Free Cash Flow With Continued
Demand for the Vocus Marketing Suite

BELTSVILLE, Md., April 23, 2013 (GLOBE NEWSWIRE) -- Via PRWeb -- Vocus, Inc.
(Nasdaq:VOCS), a leading marketing cloud provider, announced today financial
results for the first quarter ended March 31, 2013.

"We have one of the fastest growing marketing clouds today, as bookings in the
first quarter for the Vocus Marketing Suite grew 200% over the prior year,"
said Rick Rudman, President and CEO of Vocus, Inc. "We remain focused on
continuing our expansion beyond PR software into the much larger cloud
marketing space which we believe will deliver the next phase of growth and
success for Vocus."

Financial Highlights

Income Statement

  * GAAP revenue for the first quarter of 2013 was $46.2 million, a 33%
    increase over the comparable period in 2012.
  * Non-GAAP revenue for the first quarter of 2013 was $46.3 million, a 30%
    increase over the comparable period in 2012. Non-GAAP revenue includes the
    revenue excluded from the GAAP results due to purchase accounting
    adjustments, which reduced deferred revenue to its fair value as of the
    date of acquisition.
  * GAAP loss from operations for the first quarter of 2013 was $(7.7)
    million, compared to $(10.4) million for the comparable period in 2012.
  * Non-GAAP income from operations for the first quarter of 2013 was $2.5
    million, compared to $854,000 for the comparable period in 2012.
  * GAAP net loss for the first quarter of 2013 was $(8.1) million or $(0.41)
    per diluted share, compared to $(10.8) million or $(0.57) per diluted
    share for the comparable period in 2012.
  * Non-GAAP net income for the first quarter of 2013 was $2.1 million or
    $0.09 per diluted share, compared to $452,000 or $0.02 per diluted share
    for the comparable period in 2012.

Balance Sheet and Other Financial Information

  * Total deferred revenue as of March 31, 2013 was $78.1 million compared to
    $66.4 million at March 31, 2012.
  * Cash flow from operations for the first quarter of 2013 was $10.8 million,
    and free cash flow for the first quarter of 2013 was $8.5 million.

Business Highlights

  * Added 828 net new annual subscription customers during the first quarter
    of 2013 compared to 1,196 net new annual subscription customers added
    during the comparable period in 2012 and ended the quarter with 17,322
    total active annual subscription customers.
  * Signed subscription agreements with new and existing customers including
    Bankers Toolbox, Convergent Wealth Advisors, Creative Outlook on Life,
    Diamond Nexus, Euronews, Karl Strauss Brewing, Network Automation,
    Standard Aero, The Children's Hospital of Philadelphia, The United Way
    Worldwide, Universities Space Research Association, Vinci, Vitesse
    Consulting and Washington Nationals.
  * Launched new mobile versions of the Vocus Marketing Suite which includes
    updated mobile capabilities for all smartphone and tablet users on both
    Apple® and Android® platforms.

Guidance

Vocus is providing, for the first time, guidance for the second quarter and
adjusting guidance for the full year 2013 based on information as of April 23,
2013:

  * For the second quarter of 2013, revenue is expected to be in the range of
    approximately $45.1 million to $45.5 million. Non-GAAP EPS is expected to
    be in the range of $(0.03) to $(0.02) assuming an estimated tax provision
    of $450,000. Non-GAAP adjustments are expected to be $0.32 per share. GAAP
    EPS is expected to be in the range of $(0.35) to $(0.34) assuming an
    estimated weighted average 20.1 million basic and diluted shares
    outstanding.
  * For the full year of 2013, revenue is expected to be in the range of
    $188.0 million to $189.0 million. Non-GAAP diluted EPS is expected to be
    in the range of $0.15 to $0.18 assuming an estimated non-GAAP weighted
    average 24.4 million diluted shares outstanding and an estimated tax
    provision of $1.7 million. Non-GAAP adjustments are expected to be $1.38
    per share. GAAP EPS is expected to be in the range of $(1.23) to $(1.20)
    assuming an estimated weighted average 20.1 million basic and diluted
    shares outstanding. Free cash flow is expected to range from $12.0 million
    to $13.0 million. Capital expenditures are expected to be $6.5 million.

This release includes non-GAAP financial measures and adjustments. For a
description of these non-GAAP financial measures and adjustments, please refer
to section "Use of Non-GAAP Financial Measures" and the accompanying tables
entitled "Reconciliation of Non-GAAP Measures" and "Reconciliation of 2013
Guidance."

Conference Call Information

Vocus will discuss the financial results and business highlights of the first
quarter of 2013 in a conference call at 4:30 p.m. ET, or 1:30 p.m. PT, today.
Investors are invited to listen to a live audio webcast of the conference call
on the Investor Relations section of the Company's website at
http://investor.shareholder.com/vocs/events.cfm. A replay of the webcast will
be available approximately one hour after the conclusion of the call and will
remain available for 30 calendar days following the conference call. An audio
replay of the conference call will also be available approximately two hours
after the conclusion of the call. The audio replay will be available until
April 30, 2013 at 11:59 p.m. ET and can be accessed by dialing (404) 537-3406
or (855) 859-2056 and entering conference number 73927292.

About Vocus, Inc.

Vocus, Inc. is a leading marketing cloud provider that helps businesses reach
and influence buyers across social networks, online and through media. Vocus
provides an integrated suite that combines social marketing, search marketing,
email marketing and publicity into a comprehensive solution to help businesses
attract, engage and retain customers. Vocus software is used by more than
120,000 organizations worldwide and is available in seven languages. Vocus is
based in Beltsville, MD with offices in North America, Europe and Asia. For
further information, please visit www.vocus.com or call (800) 345-5572.

Forward-Looking Statement

This release contains "forward-looking" statements that are made pursuant to
the Safe Harbor provision of the Private Securities Litigation Reform Act of
1995. These statements are predictive in nature, that depend upon or refer to
future events or conditions or that include words such as "may," "will,"
"expects," "projects," "anticipates," "estimates," "believes," "intends,"
"plans," "should," "seeks," and similar expressions. This press release
contains forward-looking statements relating to, among other things, Vocus'
expectations and assumptions concerning future financial performance.
Forward-looking statements involve known and unknown risks and uncertainties
that may cause actual future results to differ materially from those projected
or contemplated in the forward-looking statements. Forward-looking statements
may be significantly impacted by certain risks and uncertainties described in
Vocus' filings with the Securities and Exchange Commission.

The risks and uncertainties referred to above include, but are not limited to,
risks associated with possible fluctuations in our operating results and rate
of growth, our history of operating losses, risks associated with
acquisitions, including our ability to successfully integrate acquired
businesses, risks associated with our foreign operations, interruptions or
delays in our service or our web hosting, our business model, breach of our
security measures, the emerging market in which we operate, our relatively
limited operating history, our ability to hire, retain, and motivate our
employees and manage our growth, competition, our ability to continue to
release and gain customer acceptance of new and improved versions of our
service, successful customer deployment and utilization of our services,
fluctuations in the number of shares outstanding, foreign currency exchange
rates and interest rates.

Vocus, Inc. and Subsidiaries                                        
Condensed Consolidated Balance Sheets                               
(dollars in thousands)                                              
                                                                    
                                                      December 31, March 31,
                                                      2012         2013
                                                                   (unaudited)
Assets                                                              
Current assets:                                                     
Cash and cash equivalents                              $ 32,107     $ 40,332
Short-term investments                                662          643
Accounts receivable, net                              29,841       21,573
Deferred income taxes                                 1,478        1,273
Prepaid expenses and other current assets             2,933        2,939
Total current assets                                  67,021       66,760
Long-term investments                                 1,322        --
Property, equipment and software, net                 20,068       21,152
Intangible assets, net                                26,751       23,607
Goodwill                                              177,011      176,835
Other assets                                          641          759
Total assets                                           $ 292,814    $ 289,113
Liabilities, Series A redeemable convertible                        
preferred stock and stockholders' equity
Current liabilities:                                                
Accounts payable and accrued expenses (including
contingent consideration of $1,107 and $4,560 at       $ 21,701     $ 25,221
December 31, 2012 and March 31, 2013, respectively)
Notes payable and capital lease obligations           854          160
Deferred revenue                                      77,098       76,299
Total current liabilities                             99,653       101,680
Notes payable and capital lease obligations, net of   751          712
current portion
Other liabilities                                     6,786        6,636
Deferred income taxes, net of current portion         5,120        5,080
Deferred revenue, net of current portion              2,235        1,814
Total liabilities                                     114,545      115,922
Series A redeemable convertible preferred stock       77,490       77,490
Stockholders' equity:                                               
Common stock                                          219          219
Additional paid-in capital                            215,226      218,935
Treasury stock                                        (41,909)     (42,322)
Accumulated other comprehensive loss                  (426)        (675)
Accumulated deficit                                   (72,331)     (80,456)
Total stockholders' equity                            100,779      95,701
Total liabilities, Series A redeemable convertible     $ 292,814    $ 289,113
preferred stock and stockholders' equity

                                                                    
Vocus, Inc. and Subsidiaries                                        
Condensed Consolidated Statements of Operations                     
(dollars in thousands, except per share data)                       
                                                                    
                                                       Three Months Ended
                                                       March 31,
                                                       2012        2013
                                                       (unaudited) (unaudited)
Revenues                                                $ 34,853    $ 46,247
Cost of revenues                                       7,314       9,752
Gross profit                                           27,539      36,495
Operating expenses:                                                 
Sales and marketing                                    20,831      26,835
Research and development                               3,656       2,998
General and administrative                             12,393      12,333
Amortization of intangible assets                      1,100       2,020
Total operating expenses                               37,980      44,186
Loss from operations                                   (10,441)    (7,691)
Other income (expense)                                 (58)        5
Loss before provision for income taxes                 (10,499)    (7,686)
Provision for income taxes                             326         439
Net loss                                                $ (10,825)  $ (8,125)
Net loss per share:                                                 
Basic and diluted                                       $ (0.57)    $ (0.41)
Weighted average shares outstanding used in computing               
per share amounts:
Basic and diluted                                      19,042,761  19,790,692

                                                                    
Vocus, Inc. and Subsidiaries                                        
Condensed Consolidated Statements of Cash Flows                     
(dollars in thousands)                                              
                                                                    
                                                       Three Months Ended
                                                       March 31,
                                                       2012        2013
                                                       (unaudited) (unaudited)
Cash flows from operating activities:                               
Net loss                                                $ (10,825)  $ (8,125)
Adjustments to reconcile net loss to net cash provided              
by operating activities:
Depreciation and amortization                          2,592       4,297
Other non-cash charges, net                            4,522       7,524
Payments of contingent consideration for business
acquisition in excess of fair value on acquisition     (494)       --
date
Changes in operating assets and liabilities            7,724       7,127
Net cash provided by operating activities              3,519       10,823
Cash flows from investing activities:                               
Business acquisition, net of cash acquired             (79,649)    --
Net change in available-for-sale securities            6,775       1,328
Purchases of property, equipment and software, net     (227)       (2,211)
Software development costs                             (198)       (129)
Net cash used in investing activities                  (73,299)    (1,012)
Cash flows from financing activities:                               
Purchases of common stock                              (2,971)     (413)
Proceeds from exercises of stock options               14          --
Payments of contingent consideration for business      (3,112)     --
acquisitions
Net payments on notes payable and capital lease        (49)        (729)
obligations
Net cash used in financing activities                  (6,118)     (1,142)
Effect of exchange rate changes on cash and cash       227         (444)
equivalents
Net increase (decrease) in cash and cash equivalents   (75,671)    8,225
Cash and cash equivalents, beginning of period         98,284      32,107
Cash and cash equivalents, end of period                $ 22,613    $ 40,332

Use of Non-GAAP Financial Measures

Vocus provides non-GAAP measures for revenue, income from operations, net
income, diluted net income per share and free cash flow as supplemental
information.

We define non-GAAP revenue as GAAP revenue adjusted for the impact of the fair
value adjustment to deferred revenue related to purchase
accounting. Management believes the adjustment is useful to investors as a
more accurate measure of our ongoing performance from the acquisitions.

We define non-GAAP income from operations as GAAP income from operations
including the impact of non-GAAP revenue and excluding stock-based
compensation, amortization of acquired intangible assets, fair value
adjustments to contingent consideration and acquisition-related expenses. 

We define non-GAAP net income as GAAP net income including the impact of
non-GAAP revenue and excluding stock-based compensation, amortization of
acquired intangible assets, fair value adjustments to contingent consideration
including the effect of foreign currencies and acquisition-related expenses. 

Stock-based compensation included in our GAAP financial results relates to
stock option and restricted stock awards.  Companies record stock-based
compensation by applying varying valuation methodologies and subjective
assumptions to different types of equity awards.  Amortization of acquired
intangible assets included in our GAAP financial results consists of
amortization of non-compete agreements, trade names, purchased technology and
customer relationships that are not expected to be replaced when fully
amortized, as a depreciable tangible asset might.  Amortization expense can
vary from period to period due to the timing and size of our acquisitions. 
Adjustments to deferred revenue reflect the reductions in the fair value of
the acquired company's deferred revenue due to purchase accounting. Our GAAP
financial results include adjustments to the fair value of contingent
consideration for acquisition earn-outs as of each reporting date from the
fair value recorded on the acquisition date.  Acquisition-related expenses
included in our GAAP operating expenses consist of professional fees for
legal, accounting and other advisory services, integration related
professional services, severance costs and retention payments incurred during
the reporting period in connection with our acquired businesses.  Management
believes these non-GAAP measures allow management and investors to make
meaningful comparisons between our operating results and those of the other
companies, as well as provide a consistent comparison of our relative
historical financial performance. 

We have not presented the tax impact of non-GAAP adjustments in the
calculation of non-GAAP net income as a result of the valuation allowance in
nearly all of our taxing jurisdictions.  The tax impact of the non-GAAP
adjustments would have resulted in an annual effective tax rate of 43% and 39%
and non-GAAP diluted net income per share of $0.02 and $0.06 for the three
months ended March 31, 2012 and 2013, respectively.

We define free cash flow as cash flow from operations less net capital
expenditures and capitalized software development costs plus the excess tax
benefits from equity awards and payments of contingent consideration for
business acquisitions in excess of fair value on acquisition date. Management
considers free cash flow to be a liquidity measure which provides useful
information to management and investors regarding our ability to generate cash
from operations that is available for acquisitions and other investments. Our
definition of free cash flow may be different from definitions used by other
companies.

Management uses non-GAAP revenue, non-GAAP income from operations, non-GAAP
net income and free cash flow to evaluate operating performance, determine
incentive compensation and to prepare operating budgets and determine the
appropriate levels of capital investments. However, management believes that
the use of non-GAAP measures is subject to material limitations since they may
not be indicative of ongoing operating results. Management compensates for the
limitations in the use of non-GAAP measures by also utilizing GAAP financial
measures and by providing investors with a detailed reconciliation between our
GAAP and non-GAAP financial results. Investors are advised to carefully review
and consider this information as well as the GAAP financial results that are
disclosed in our SEC filings.

                                                                    
Vocus, Inc. and Subsidiaries                                        
Reconciliation of Non-GAAP Measures                                 
(dollars in thousands, except per share data)                       
                                                                    
                                                       Three Months Ended
                                                       March 31,
                                                       2012        2013
                                                       (unaudited) (unaudited)
Reconciliation of GAAP revenue to non-GAAP revenue:                 
GAAP revenue                                            $ 34,853    $ 46,247
Fair value adjustment to deferred revenue              671         44
Non-GAAP revenue                                        $ 35,524    $ 46,291
                                                                    
Reconciliation of GAAP loss from operations to                      
non-GAAP income from operations:
Loss from operations                                    $ (10,441)  $ (7,691)
Stock-based compensation                               3,984       3,663
Amortization of intangible assets                      1,608       3,070
Fair value adjustment to deferred revenue              671         44
Fair value adjustments to contingent consideration     232         3,453
Acquisition-related expenses                           4,800       --
Non-GAAP income from operations                         $ 854       $ 2,539
                                                                    
Reconciliation of GAAP net loss to non-GAAP net                     
income:
Net loss                                                $ (10,825)  $ (8,125)
Stock-based compensation                               3,984       3,663
Amortization of intangible assets                      1,608       3,070
Fair value adjustment to deferred revenue              671         44
Fair value adjustments to contingent consideration     214         3,453
including effects of foreign currency
Acquisition-related expenses                           4,800       --
Non-GAAP net income                                     $ 452       $ 2,105
                                                                    
Non-GAAP diluted net income per share                   $ 0.02      $ 0.09
                                                                    
Non-GAAP diluted weighted average shares used in       21,659,426  24,202,458
computing per share amounts
                                                                    
Reconciliation of GAAP diluted weighted average shares
outstanding to non-GAAP diluted weighted average                    
shares outstanding:
GAAP diluted weighted average shares outstanding       19,042,761  19,790,692
Dilutive effect of outstanding equity securities       2,616,665   4,411,766
Non-GAAP diluted weighted average shares outstanding   21,659,426  24,202,458
                                                                    
Supplemental information of acquisition-related                     
expenses included in:
Cost of revenues                                        $ 52        $ -- 
Sales and marketing                                    691         --
Research and development                               637         --
General and administrative                             3,420       --
Total acquisition-related expenses                      $ 4,800     $ -- 
                                                                    
Supplemental information of stock-based compensation                
included in:
Cost of revenues                                        $ 499       $ 468
Sales and marketing                                    1,172       934
Research and development                               504         623
General and administrative                             1,809       1,638
Total stock-based compensation                          $ 3,984     $ 3,663
                                                                    
Reconciliation of cash flow from operations to free                 
cash flow:
Net cash provided by operating activities               $ 3,519     $ 10,823
Purchases of property, equipment and software, net     (227)       (2,211)
Software development costs                             (198)       (129)
Payments of contingent consideration for business
acquisition in excess of fair value on acquisition     494         --
date
Free cash flow                                          $ 3,588     $ 8,483

                                                             
Vocus, Inc. and Subsidiaries                                 
Reconciliation of 2013 Guidance                              
GAAP EPS to Non-GAAP Diluted EPS                             
                                                             
                                         Q2 2013            Full Year 2013
                                         (unaudited)        (unaudited)
                                                             
GAAP EPS                                 $ (0.35) to (0.34) $ (1.23) to (1.20)
Effect of non-GAAP adjustments           0.32               1.59
Dilutive effect of outstanding equity    --                 (0.21)
securities
Non-GAAP diluted EPS                     $ (0.03) to (0.02) $ 0.15 to 0.18

CONTACT: Investor Relations
         investorrelations@vocus.com
         301-459-2590

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