ValueClick Announces First Quarter 2013 Results

  ValueClick Announces First Quarter 2013 Results

Business Wire

WESTLAKE VILLAGE, Calif. -- May 07, 2013

ValueClick, Inc. (NASDAQ: VCLK) today reported financial results for the first
quarter ended March 31, 2013. Revenue was within its guidance range, while
adjusted-EBITDA^1, GAAP net income from continuing operations per diluted
share, and non-GAAP net income^2 per diluted share exceeded the high-end of
their respective guidance ranges.

“2013 is a transformational year for ValueClick, as we raise our long-term
growth potential by integrating our multiple offerings and leveraging our core
strengths in data, personalization and cross-device targeting,” said John
Giuliani, president and chief executive officer of ValueClick. “As we
mentioned during our recent analyst day, short-term disruptions will occur as
we integrate multiple offerings and geographies. We are confident that our
strategic initiatives will best serve the long-term interests of our
advertisers and shareholders.”

Mr. Giuliani continued, “In addition to integration initiatives, we are
focused today on capitalizing on the unprecedented short-term opportunity in
affiliate marketing. Google's recent decision to exit this market is a seismic
shift in the competitive landscape, and we are prioritizing resources to take
full advantage. The affiliate marketing industry and its customers are at an
inflection point, and ValueClick stands alone as the company with affiliate
marketing at its core.”

Highlights from the first quarter of 2013 include:

  *Revenue increased 13 percent from the first quarter of 2012 (Q1 2012) to
    $165.4 million;
  *Adjusted-EBITDA increased 21 percent from Q1 2012 to $56.3 million;
  *Adjusted-EBITDA margin increased to 34.0 percent from 31.7 percent in Q1
    2012;
  *Income from operations increased 45 percent from Q1 2012 to $41.8 million;
  *Non-GAAP diluted net income of $0.42 per common share versus $0.36 in Q1
    2012;
  *GAAP diluted income from continuing operations of $0.34 per common share
    versus $0.25 in Q1 2012; and
  *Free cash flow (defined as cash from operations less capital expenditures)
    for the three-month period ended March 31, 2013, of $48.1 million.

The consolidated balance sheet as of March 31, 2013 included approximately
$129.1 million in cash and cash equivalents, and $80.0 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, and stock-based compensation. 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 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 income
from continuing operations to non-GAAP diluted net income per common share.

Share Repurchase Program Authorization Increased to $150 Million

Today, ValueClick also announced that its board of directors has authorized an
increase to the Company's share repurchase program of approximately $61
million, raising the Company's total authorization to $150 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. No
shares were repurchased in the three-month period ended March 31, 2013.

Business Outlook

Today, ValueClick is providing guidance for the second quarter of 2013:

                                                  Q2 Guidance
          Revenue                                       $164-$168 million
          Adjusted-EBITDA                               $52-$54 million
          Mid-Point Adjusted-EBITDA Margin              31.9%
          Non-GAAP diluted net income per common        $0.38-0.40
          share
          Impact of stock-based compensation and        $(0.09) - $(0.10)
          amortization of intangibles, net of tax
          GAAP diluted net income per common share      $0.29-$0.30
                                                       

The consolidated revenue guidance mid-point is based on the following
segment-level assumptions for revenue growth rates expressed as a percentage
change from second quarter 2012 reported revenue levels:

   •  Affiliate Marketing:   Up high single-digits
      •   Media:                   Up high single-digits
      •   Owned & Operated:        Up mid single-digits
                                   

Second quarter 2013 guidance assumes: stock-based compensation of $5.5
million; amortization of intangible assets of $6.5 million ($2.5 million of
which will be classified in Cost of revenue); net interest and other income of
zero; a 39 percent effective tax rate; and 78 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 first quarter during a conference
call and Webcast at 4:30 p.m. ET today. The live conference call can be
accessed by dialing (888) 329-8893 or (719) 325-2494. Please dial in
approximately ten minutes prior to the start time and provide the operator
with the pass code 2102101. A replay of the conference call will be available
from Tuesday, May 7, at 7:30 p.m. ET through Tuesday, May 14, at 7:30 p.m. ET
at (888) 203-1112 and (719) 457-0820 (pass code: 2102101). The live and
archived Webcast of the conference call will be available at
http://ir.valueclick.com.

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 27, 2013;
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)
                                                                  
                                                                  
                                                  March 31,       December 31,
                                                  2013            2012
                                                  (Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents                         $ 129,134       $   136,638
Accounts receivable, net                          123,017         147,487
Other current assets                              26,284         27,136
Total current assets                              278,435         311,261
                                                                  
Note receivable, less current portion             27,117          27,615
Property and equipment, net                       29,429          29,014
Goodwill                                          434,265         434,507
Intangible assets, net                            75,346          81,822
Other assets                                      13,778         15,477
TOTAL ASSETS                                      $ 858,370      $   899,696
                                                                  
LIABILITIES AND STOCKHOLDERS' EQUITY
Borrowings under credit facility, current         $ 10,000        $   10,000
Other current liabilities                         115,826         132,401
Borrowings under credit facility, less            70,000          132,500
current portion
Other non-current liabilities                     35,546         34,090
Total liabilities                                 231,372         308,991
Total stockholders' equity                        626,998        590,705
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY        $ 858,370      $   899,696
                                                                      
                                                                      

                                                 
                                                     
VALUECLICK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)
                                                     
                                                     
                                                     Three-month Period
                                                     Ended March 31,
                                                     2013          2012
                                                     (Unaudited)
Revenue                                              $ 165,438       $ 146,432
Cost of revenue                                      62,355         54,685
Gross profit                                         103,083         91,747
Operating expenses:
Sales and marketing (Note 1)                         22,465          20,927
General and administrative (Note 1)                  18,213          19,572
Technology (Note 1)                                  16,700          16,080
Amortization of intangible assets acquired in        3,923          6,324
business combinations
Total operating expenses                             61,301         62,903
Income from operations                               41,782          28,844
Interest and other (expense) income, net             (595      )     229
Income before income taxes                           41,187          29,073
Income tax expense                                   14,904         8,875
Net income from continuing operations                26,283          20,198
Net income from discontinued operations              —              1,373
Net income                                           $ 26,283       $ 21,571
                                                                     
Basic income from continuing operations per          $ 0.35         $ 0.25
common share
Diluted income from continuing operations per        $ 0.34         $ 0.25
common share
Basic net income per common share                    $ 0.35         $ 0.27
Diluted net income per common share                  $ 0.34         $ 0.26
Weighted-average shares used to compute basic        75,648         80,339
net income per common share
Weighted-average shares used to compute              77,567         82,106
diluted net income per common share
                                                                     
                                                                     
Note 1 - Includes stock-based compensation as
follows:
                                                     Three-month Period
                                                     Ended March 31,
                                                     2013            2012
                                                     (Unaudited)
Sales and marketing                                  $ 1,174         $ 1,654
General and administrative                           2,439           3,026
Technology                                           1,184          1,406
Total stock-based compensation                       $ 4,797        $ 6,086
                                                                       
                                                                       

                                                 
                                                     
VALUECLICK, INC.

RECONCILIATION OF NET INCOME FROM CONTINUING OPERATIONS

TO ADJUSTED-EBITDA (Note 1)

(In thousands)
                                                     
                                                     
                                                     Three-month Period
                                                     Ended March 31,
                                                     2013         2012
                                                     (Unaudited)
Net income from continuing operations                $ 26,283       $ 20,198
Interest and other expense (income), net             595            (229     )
Income tax expense                                   14,904         8,875
Amortization of acquired intangible assets           2,494          2,493
included in cost of revenue
Amortization of acquired intangible assets           3,923          6,324
included in operating expenses
Depreciation and leasehold amortization              3,292          2,614
Stock-based compensation                             4,797         6,086    
Adjusted-EBITDA                                      $ 56,288      $ 46,361 
                                                                             

Note 1 - “Adjusted-EBITDA” (GAAP net income from continuing operations before
interest, income taxes, depreciation, amortization, and stock-based
compensation) included in this press release is a non-GAAP financial measure.

Adjusted-EBITDA, as defined above, may not be similar to adjusted-EBITDA
measures used by other companies and is not a measurement under GAAP.
Management believes that adjusted-EBITDA provides useful information to
investors about the Company's performance because it eliminates the effects of
period-to-period changes in income from interest on the Company's cash and
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 March 31,
                                                     2013         2012
                                                     (Unaudited)
Net income from continuing operations                $ 26,283       $ 20,198
Stock-based compensation                             4,797          6,086
Amortization of acquired intangible assets           2,494          2,493
included in cost of revenue
Amortization of acquired intangible assets           3,923          6,324
included in operating expenses
Tax impact of above items                            (4,784   )     (5,250   )
Non-GAAP net income                                  $ 32,713      $ 29,851 
Non-GAAP diluted net income per common share         $ 0.42        $ 0.36   
Weighted-average shares used to compute              77,567        82,106   
non-GAAP 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 intangible assets) 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
                                                   Ended March 31,
                                                   2013          2012
                                                   (Unaudited)
Affiliate Marketing:
Revenue                                            $ 38,311        $ 37,107
Cost of revenue                                    4,562          4,176     
Gross profit                                       33,749          32,931
Operating expenses                                 10,824         9,993     
Segment income from operations                     $ 22,925       $ 22,938  
                                                                   
Media:
Revenue                                            $ 96,256        $ 80,749
Cost of revenue                                    35,839         30,603    
Gross profit                                       60,417          50,146
Operating expenses                                 29,094         27,742    
Segment income from operations                     $ 31,323       $ 22,404  
                                                                   
Owned & Operated Websites:
Revenue                                            $ 30,955        $ 28,675
Cost of revenue                                    19,516         17,457    
Gross profit                                       11,439          11,218
Operating expenses                                 5,819          5,885     
Segment income from operations                     $ 5,620        $ 5,333   
                                                                   
Reconciliation of segment income from
operations to consolidated income from
operations:
Total segment income from operations               $ 59,868        $ 50,675
Corporate expenses                                 (6,872    )     (6,928    )
Stock-based compensation                           (4,797    )     (6,086    )
Amortization of acquired intangible assets         (2,494    )     (2,493    )
included in cost of revenue
Amortization of acquired intangible assets         (3,923    )     (6,324    )
included in operating expenses
Consolidated income from operations                $ 41,782       $ 28,844  
                                                                   
Reconciliation of segment revenue to
consolidated revenue:
Affiliate Marketing                                $ 38,311        $ 37,107
Media                                              96,256          80,749
Owned & Operated Websites                          30,955          28,675
Inter-segment eliminations                         (84       )     (99       )
Consolidated revenue                               $ 165,438      $ 146,432 
                                                                             

Contact:

ValueClick, Inc.
Gary J. Fuges, CFA
1.818.575.4677
 
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