Local Corporation Reports First Quarter 2013 Financial Results

  Local Corporation Reports First Quarter 2013 Financial Results

 Company reports positive cash flow from operations one quarter earlier than
                                  forecasted

Business Wire

IRVINE, Calif. -- May 09, 2013

Local Corporation (NASDAQ: LOCM), a leading online local media company, today
reported its financial results for the first quarter 2013.

“As previously announced, we achieved positive cash flow from operations a
quarter ahead of schedule, due to solid gross margin expansion in the first
quarter. We remain on track to grow our revenues sequentially while keeping
operating expenses about flat, resulting in projected sequential adjusted
EBITDA and EPS growth,” said Heath Clarke, Local Corporation chairman and CEO.
“We completed a small financing in order to strengthen our cash position so
that we can focus on specific growth opportunities within our Network
business. Overall, we believe our combination of intellectual property,
experience and know-how, leave us well-positioned to thrive in local search as
well as capitalize on the rapidly emerging mobile local search ecosystem.”

SUMMARY RESULTS
(in thousands, except per share amounts)
                                                                 
                                             Q1 2013    Q4 2012    Q1 2012
Consumer Properties:
Owned & Operated                             $ 12,987    $ 12,450    $ 17,973
Network                                        8,283       7,636       4,214
Business Solutions                            485        812        2,845
Revenue                                      $ 21,755    $ 20,898    $ 25,032
                                                                     
Adjusted EBITDA*                             $ 605       $ (924)     $ 7
Plus interest and other income (expense),      (842)       (100)       (97)
net
Less (provision) benefit for income taxes      (72)        9           (55)
Less non-cash depreciation, amortization
and                                            (1,810)     (2,295)     (2,511)

stock compensation
Less gain (loss) on revaluation of             5           30          (58)
warrants
Less net loss from discontinued operations     -           (201)       (393)
Less LEC reserve                               -           (1,407)     -
Plus gain on sale of Rovion                    -           1,458       -
Less Spreebird impairment charge               -           (4,100)     -
Less finance related charges                   (236)       -           -
Less accrual for lease liability               (256)       -           -
Less severance charges                        (747)      (361)      (95)
GAAP net loss                                $ (3,353)   $ (7,891)   $ (3,202)
                                                                     
Diluted Adjusted EBITDA per share*           $ 0.03      $ (0.04)    $ 0.00
Diluted GAAP net loss per share              $ (0.15)    $ (0.36)    $ (0.14)

Diluted weighted average shares used for       22,687      22,131      22,219
Adjusted EBITDA per share
Diluted weighted average shares used for       22,564      22,131      22,083
GAAP net loss per share
                                                                     
Cash                                         $ 3,067     $ 3,696     $ 6,787

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

First Quarter Results Highlights:

“We were pleased to see revenue growth coupled with margin expansion during
the quarter. Our first quarter gross margin was 28 percent, up four points
from the prior quarter. In addition, we improved our liquidity by returning to
positive cash flow from operations, coupled with a $5 million convertible note
offering that closed in April 2013,” added Ken Cragun, Local Corporation chief
financial officer.

• Revenue – First quarter 2013 revenue of $21.8 million represents an increase
of 4 percent over fourth quarter 2012 revenue of $20.9 million and a 13
percent decrease over first quarter 2012 revenues of $25.0 million.

• GAAP Net Loss – First quarter 2013 GAAP Net Loss was $3.4 million, or
($0.15) per diluted share, compared to a fourth quarter 2012 GAAP Net Loss of
$7.9 million, or ($0.36) per diluted share. The first quarter 2013 GAAP net
loss included a loss on the exchange of warrants of $723,000, finance related
charges of $236,000, an accrual of $256,000 for a lease liability, and
$747,000 in severance related charges.

• Adjusted EBITDA – The company reported positive Adjusted EBITDA for the
first quarter 2013 of $605,000, or $0.03 per diluted share, as compared to
fourth quarter 2012 negative Adjusted EBITDA of ($924,000), or ($0.04) per
diluted share.

Adjusted EBITDA is defined as net income (loss) excluding: provision for
income taxes; interest and other income (expense), net; depreciation;
amortization; stock-based compensation charges; gain or loss on warrant
revaluation; net income (loss) from discontinued operations; gain on sale of
Rovion; impairment charges; LEC receivables reserve; finance related charges;
accrued lease liability; and severance charges.

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

• Cash – The company’s cash balance was $3.1 million as of March 31, 2013,
down $629,000 from Dec. 31, 2012 cash balance. During the first quarter 2013,
the company had positive cash flow from operations of $1.1 million, offset by
cash used for capital expenditures of $635,000 and a $1.0 million repayment of
the line of credit.

• Debt – On March 31, 2013, the company had borrowings of $9.0 million
outstanding under its Square One Bank credit facilities.

First Quarter 2012 Operating Highlights:

• Record Overall, Organic and Mobile Traffic – Overall traffic on the site and
network was a record 106 million monthly unique visitors (MUVs) in the first
quarter 2013, up 6 percent from fourth quarter 2012 traffic, and up 13 percent
from the year ago period. Organic traffic on the site and network was a record
49 million MUVs in the first quarter 2013, up 9 percent from the fourth
quarter 2012, and up 42 percent from the year ago period. Organic traffic is
defined as all non-SEM sourced traffic. Overall mobile traffic was 32 million
MUVs in the first quarter 2013, up 28 percent from the fourth quarter 2012,
and up 167 percent from a year ago period.

• Ceased Direct Sales– In January 2013, the company ceased its direct sales
efforts for its SMB products.

• Warrant Repricing and Exchange – On Feb. 7, 2013, the company repriced
warrants to purchase 615,080 shares of its common stock with an exercise price
of $8.09 per share to an exercise price of $2.10 per share. On Feb. 28, 2013,
the company exchanged the warrants to purchase 615,080 shares of its common
stock for 430,561 shares of its common stock. The warrant exchange resulted in
a non-cash charge of $723,000, included in interest and other income
(expense), net.

• Completed $5.0 Million Convertible Note Financing – On April 11, 2013, the
company completed a $5.0 million convertible note financing with two
investors. The convertible notes bear interest at 7 percent per year and are
convertible into the company’s common stock at $2.01 per share. In connection
with the sale of convertible notes, the company also issued to the investors
warrants to purchase 746,268 shares of common stock at an exercise price of
$2.01 per share. The convertible notes mature on April 11, 2015 and the
warrants are exercisable through April 11, 2018.

Consumer Properties:

Owned & Operated (O&O):

• Revenue – First quarter 2013 total revenue related to the O&O business unit
was $13.0 million, down 28 percent from first quarter 2012 O&O revenue of
$18.0 million, and up 4 percent from fourth quarter 2012 O&O revenue of $12.5
million.

• Monetization of Traffic – Revenue per thousand visitors (RKV) for first
quarter 2013 was $215, down 7 percent from fourth quarter 2012 RKV of $230,
and down 25 percent from first quarter 2012 RKV of $285. This decline was
primarily due to ad policy changes and declining revenue per click trends of a
major ad supplier.

Network:

• Revenue – First quarter 2013 total revenue related to the Network business
unit was $8.3 million, up 9 percent from the $7.6 million Network revenue
recorded in the fourth quarter 2012, and up 98 percent from the $4.2 million
Network revenue recorded in the first quarter 2012.

• Network Revenue ex-TAC – First quarter 2013 total Network revenue ex-TAC was
$ 4.1 million, up 5 percent from the $3.9 million Network revenue ex-TAC
recorded in the fourth quarter 2012, and up 67 percent from the $2.7 million
Network revenue ex-TAC recorded in the first quarter 2012.

Network Revenue ex-TAC is defined as GAAP Network revenue less network traffic
acquisition cost. An explanation of the company’s use of non-GAAP financial
measures, including the limitations of such measures relative to GAAP
measures, is included below, and reconciliation between GAAP and non-GAAP
measures, where appropriate, is included in the financial tables attached to
this release.

• Network Sites – The Network business unit ended the first quarter 2013 with
over 1,200 regional media sites.

Business Solutions:

• Revenue – First quarter 2013 revenue was $485,000, down 40 percent from
fourth quarter 2012 revenue of $812,000 and down 83 percent from first quarter
2012 revenue of $2.8 million. The reduction was primarily due to the phasing
out of LEC billed subscription customers, as well as the company’s decision to
cease its direct sales efforts of its SMB products.

Recent News Highlights:

• Mobile Pay-Per-Call Patent Granted – On Jan. 22, 2013, the company was
granted a patent which covers a mobile pay-per-call Enhanced Directory
Assistance (EDA) method or system. This is the company’s third issued
EDA-related patent. The patent describes an EDA method and/or system that uses
wireless messaging protocols to receive keyword search data associated with a
directory service request and matches it with a relevant advertiser associated
with the keyword search. The company continues to develop its patent
monetization strategy.

• Launch of Fusion by Local – During the first quarter, the company launched
“Fusion by Local” a new premium ad network for advertisers and brand marketers
seeking to engage with targeted local audiences in markets across the United
States.

• Record First Quarter Organic and Mobile Traffic - The company reached record
organic traffic of 49 million MUVs and record mobile traffic of 32 million
MUVs during the first quarter.

• “Best Mobile App” Award – The company’s Local.com mobile app for iOS® and
Android™ enabled devices won a 2013 Internet Advertising Competition “Best
Mobile App” Award.

Fiscal 2013 Financial Guidance:

The company reiterates its previous financial guidance.

Revenue - The company expects 2013 revenue of between $93 million and $95
million, which at the mid-point, is an increase of 12 percent, over the fourth
quarter 2012 exit run rate.

Adjusted EBITDA – Positive Adjusted EBITDA for 2013 is expected to be at least
$5 million an increase from the ($553,000) negative Adjusted EBITDA in 2012.

Projected 2013 Adjusted EBITDA Factors:

  *Interest and Other Income (Expense), net of $1.1 million
  *Income Tax Provision of $200,000
  *Depreciation Expense of $4.5 million
  *Amortization Expense of $1.3 million
  *Stock Compensation Expense of $3.8 million
  *Severance and Non-Recurring Charges of $1.2 million
  *Warrant Revaluation Expense and Other items are undeterminable, but may be
    significant non-cash gains or losses**

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

As previously announced, the company will no longer provide quarterly
guidance.

Conference Call Information:

Chairman and CEO Heath Clarke and CFO Ken Cragun will host a conference call
today at 5 p.m. ET to discuss the results and outlook. Investors and analysts
can participate in the call by dialing 1-877-454-9136 or 1-617-826-1724,
passcode # 52776249. To listen to the webcast, or to view the press release,
please visit the Investor Relations section of the Local Corporation website
at: http://ir.local.com. Institutional investors can access the call via
Thomson/CCBN's password-protected event management site, StreetEvents, at:
www.streetevents.com.

The replay can be accessed for approximately one week starting at 7:30 p.m. ET
the day of the call by dialing 1-800-585-8367 or 1-404-537-3406, passcode #
52776249. A replay of the webcast will be available for approximately 90 days
on the company's website, starting approximately one hour after the completion
of the call.

Android is a trademark of Google, Inc.

IOS is a trademark or registered trademark of Cisco in the U.S. and other
countries and is used under license.

About Local Corporation

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

Forward Looking Statements

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

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

Non-GAAP Financial Measures

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

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
marketable securities, expense from the company’s financing transactions and
the costs associated with income tax expense, capital investments, stock-based
compensation expense, LEC receivables reserve, warrant revaluation charges;
finance related charges; accrued lease liability; and severance charges 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.

A limitation of non-GAAP Adjusted EBITDA is that it excludes items that often
have a material effect on the company’s net income and earnings per common
share calculated in accordance with GAAP. Therefore, management compensates
for this limitation by using Adjusted EBITDA in conjunction with net income
(loss) and net income (loss) per 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 as a base-line for assessing the future earnings
potential of the company. While the GAAP results are more complete, the
company prefers to allow investors to have this supplemental metric since,
with reconciliation to GAAP; it may provide greater insight into the company’s
financial results. The non-GAAP measures should be viewed as a supplement to,
and not as a substitute for, or superior to, GAAP net income (loss) or
earnings (loss) per share.

This press release also includes the non-GAAP measure of “Network revenue
ex-TAC” which we define as GAAP network revenue less traffic acquisition cost.
Network revenue ex-TAC, as defined above, is not a measurement under GAAP.
Network revenue ex-TAC is reconciled to GAAP network revenue which we believe
is the most comparable GAAP measure. A reconciliation of GAAP network revenue
to Network revenue ex-TAC is set forth at the end of this press release.

Management believes that Network revenue ex-TAC provides useful information to
investors about the company’s performance because it eliminates the costs
associated with acquiring traffic to our Network websites, which we pay to our
Network publisher partners and which can vary, as new partners are added or as
we experience attrition in our partners. Management uses Network revenue
ex-TAC as a means of evaluating the overall performance of the company’s
Network business.

A limitation of non-GAAP Network revenue ex-TAC is that it excludes a portion
of our Revenue that is material to the calculation of the Company’s overall
Revenue. Therefore, management compensates for this limitation by using
Network revenue ex-TAC in conjunction with GAAP network revenue. The company
believes that Network revenue ex-TAC provides investors with an additional
tool for evaluating core performance of the company’s Network business, which
management uses in its own evaluation of Network’s performance. While the GAAP
results are more complete, the company prefers to allow investors to have this
supplemental metric since, with reconciliation to GAAP; it may provide greater
insight into the company’s financial results. The non-GAAP measures should be
viewed as a supplement to, and not as a substitute for, or superior to GAAP
network revenue.

                                                              
LOCAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
                                                                  
                                                     March 31,    December 31,
                                                     2013         2012
ASSETS
Current assets:
  Cash                                               $ 3,067      $  3,696
  Restricted cash                                      42            42
  Accounts receivable, net of allowances of $64 and    10,716        10,618
  $250, respectively
  Note receivable                                      269           319
  Prepaid expenses and other current assets           1,007        648
               Total current assets                    15,101        15,323
                                                                  
Property and equipment, net                            6,462         6,769
Goodwill                                               21,850        21,850
Intangible assets, net                                 3,607         3,932
Long term receivable, net of allowances of $1,710      1,579         1,585
and 1,710, respectively
Escrow receivable                                      390           390
Deposits                                              68           58
Total assets                                         $ 49,057     $  49,907
                                                                  
                                                                  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
  Accounts payable                                   $ 9,684      $  8,367
  Accrued compensation                                 1,332         829
  Deferred rent                                        642           452
  Warrant liability                                    -             5
  Other accrued liabilities                            1,558         1,315
  Revolving line of credit                             9,042         10,000
  Deferred revenue                                    243          203
               Total current liabilities              22,501       21,171
Deferred income taxes                                 302          302
Total liabilities                                     22,803       21,473
                                                                  
Commitments and contingencies
                                                                  
Stockholders’ equity:
  Convertible preferred stock, $0.00001 par value;
  10,000 shares authorized; none issued and            -             -
  outstanding for all periods presented
  Common stock, $0.00001 par value; 65,000 shares
  authorized; 22,844 and 22,172 issued and             -             -
  outstanding, respectively
  Additional paid-in capital                           123,209       122,036
  Accumulated deficit                                 (96,955)     (93,602)
               Stockholders’ equity                   26,254       28,434
Total liabilities and stockholders’ equity           $ 49,057     $  49,907
                                                                     

LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
                                                    
                                                         Three Months Ended

                                                         March 31,
                                                         2013       2012
Revenue                                                  $ 21,755    $ 25,032
Costs and expenses:
      Cost of revenues                                     15,631      17,345
      Sales and marketing                                  3,577       5,795
      General and administrative                           2,947       2,385
      Research and development                             1,719       1,182
      Amortization of intangibles                         325        924
                                                                     
                   Total operating expenses               24,199     27,631
                                                                     
Operating loss                                             (2,444)     (2,599)
                                                                     
      Interest and other income (expense), net             (842)       (97)
      Change in fair value of warrant liability           5          (58)
                                                                     
Loss from continuing operations before income taxes        (3,281)     (2,754)
                                                                     
      Provision for income taxes                          72         55
                                                                     
Net loss from continuing operations                        (3,353)     (2,809)
Income (loss) from discontinued operations (net of        -          (393)
taxes)
Net loss                                                 $ (3,353)   $ (3,202)
                                                                     
Per share data:
Basic net loss per share from continuing operations      $ (0.15)    $ (0.13)
Basic net income (loss) per share from discontinued      $ -         $ (0.02)
operations
Basic net loss per share                                 $ (0.15)    $ (0.14)
                                                                     
Diluted net loss per share from continuing               $ (0.15)    $ (0.13)
operations
Diluted net income (loss) per share from                 $ -         $ (0.02)
discontinued operations
Diluted net loss per share                               $ (0.15)    $ (0.14)
                                                                     
                                                                     
Basic weighted average shares outstanding                  22,564      22,083
Diluted weighted average shares outstanding                22,564      22,083
                                                                       

LOCAL CORPORATION
Supplemental Consolidated Statements of Operations Information
Stock-based Compensation Expense*
(in thousands, except per share data)
(Unaudited)
                                                          
                                                            Three Months Ended

                                                            March 31,
                                                            2013       2012
Cost of revenues                                            $  28       $ 20
Sales and marketing                                            143        318
General and administrative                                     290        336
Research and development                                      82        53
                                                                        
Total stock-based compensation expense                      $  543      $ 727
Basic and diluted net stock-based compensation expense      $  0.02     $ 0.03
per share

                *- Excludes impact of discontinued operations.

                                            
LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
                                                  
                                                  Three Months Ended March 31,
                                                  2013            2012
Cash flows from operating activities:
  Net loss                                        $   (3,353)      $  (3,202)
  Adjustments to reconcile net loss to cash
  (used in) provided by operating activities:
       Depreciation and amortization                  1,267           1,925
       Stock-based compensation expense               543             771
       Loss on exchange of warrants                   723             -
       Revaluation of warrants                        (5)             58
       Changes in operating assets and
       liabilities:
             Accounts receivable                      (98)            (864)
             Long term receivable                     6               (50)
             Note receivable                          50              62
             Prepaid expenses and other               (359)           (10)
             Other non-current assets                 (10)            -
             Accounts payable and accrued             2,253           (1,226)
             liabilities
             Deferred revenue                        40             (59)
                      Net cash (used in)
                      provided by operating          1,057          (2,595)
                      activities
                                                                   
Cash flows from investing activities:
  Capital expenditures                                (635)           (972)
  Restricted Cash                                    -              (42)
                      Net cash used in               (635)          (1,014)
                      investing activities
                                                                   
Cash flows from financing activities:
  Proceeds from exercise of options                   1               2
  Payment of financing related cost                   (94)            -
  Payment of revolving credit facility               (958)          -
                      Net cash (used in)
                      provided by financing          (1,051)        2
                      activities
Net (decrease) increase in cash                       (629)           (3,607)
Cash, beginning of period                            3,696          10,394
Cash, end of period                               $   3,067        $  6,787
                                                                   
Supplemental Cash Flow Information:
  Interest paid                                   $   118          $  142
  Income taxes paid                               $   -            $  7
                                                                      

LOCAL CORPORATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(in thousands, except per share amounts)
(Unaudited)
                                                             
                                                                  Three Months
                                   Three Months Ended March 31,   Ended
                                                                  December 31,
                                   2013            2012          2012
Net loss                           $   (3,353)      $  (3,202)    $   (7,891)
                                                                  
Less interest and other income         842             97             100
(expense), net
Plus provision (benefit) for           72              55             (9)
income taxes
Plus amortization of intangibles       324             924            494
Plus depreciation                      943             860            1,100
Plus stock-based compensation          543             727            701
Less revaluation of warrants           (5)             58             (30)
Plus net loss from discontinued        -               393            201
operations
Plus LEC reserve                       -               -              1,407
Less gain on sale of Rovion            -               -              (1,458)
Plus Spreebird impairment charge       -               -              4,100
Plus finance related charges           236             -              -
Plus accrual for lease liability       256             -              -
Plus severance charges                747            95            361
                                                                  
Adjusted EBITDA                    $   605          $  7          $   (924)
                                                                  
Diluted Adjusted EBITDA per        $   0.03         $  0.00       $   (0.04)
share
                                                                  
Diluted weighted average shares        22,687          22,219         22,131
outstanding
                                                                      

RECONCILIATION OF GAAP REVENUE TO REVENUE EX-TAC
(in thousands)
(Unaudited)
                                                          
                                                               Three Months
                                Three Months Ended March 31,   Ended
                                                               December 31,
                                2013            2012          2012
Network GAAP Revenue            $    8,283       $   4,214     $    7,636
Less Traffic Acquisition Cost       4,208          1,556         3,738
                                                               
Network Revenue ex-TAC          $    4,075       $   2,658     $    3,898

Contact:

Local Corporation
Cameron Triebwasser
949-789-5223
ctriebwasser@local.com