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  company logo  
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