Vocus Announces Results for Second Quarter 2013

Vocus Announces Results for Second Quarter 2013

Strong Demand for the Marketing Suite and Higher Average Selling Prices Result
in Better EPS in Q2 and Higher Earnings Outlook for the Full Year

BELTSVILLE, Md., July 23, 2013 (GLOBE NEWSWIRE) -- Via PRWEB -- Vocus, Inc.
(Nasdaq:VOCS), a leading marketing cloud provider, announced today financial
results for the second quarter ended June 30, 2013.

"Q2 was highlighted by a number of exciting results including continued rapid
bookings growth for the marketing suite and better than expected earnings,"
said Rick Rudman, President and CEO of Vocus, Inc. "We are also excited about
our move up-market and the new pricing and packaging introduced in Q2 which
resulted in notably higher selling prices on fewer net new subscription
customers. This shift to larger subscriptions will provide better unit
economics and more profitable growth for Vocus going forward."

Financial Highlights

  *GAAP revenue for the second quarter of 2013 was $46.6 million, a 7%
    increase over the comparable period in 2012.
  *GAAP loss from operations for the second quarter of 2013 was $(5.4)
    million, compared to $(4.8) million for the comparable period in 2012.
  *Non-GAAP income from operations for the second quarter of 2013 was
    $594,000, compared to $2.9 million for the comparable period in 2012.
  *GAAP net loss for the second quarter of 2013 was $(5.9) million or $(0.29)
    per diluted share, compared to $(5.2) million or $(0.27) per diluted share
    for the comparable period in 2012.
  *Non-GAAP net income for the second quarter of 2013 was $139,000 or $0.01
    per diluted share, compared to $2.5 million or $0.11 per diluted share for
    the comparable period in 2012.
  *Total deferred revenue as of June 30, 2013 was $78.5 million compared to
    $68.1 million at June 30, 2012.

Business Highlights

  *Added 479 net new annual subscription customers during the second quarter
    of 2013 compared to 1,013 net new annual subscription customers added
    during the comparable period in 2012 and ended the quarter with 17,801
    total active annual subscription customers.
  *Signed subscription agreements with new and existing customers including
    Ann Inc., Avaya, Centegra Health Systems, Comscore, Datex, Cosmopolit
    Home, J. Reneé, Hyatt Regency Paris Etoile, Lehigh University, Nexcom,
    Organic Valley, Resource One Credit Union, Thompson Creek Windows and
    Troon Golf.
  *Introduced new email features to the Vocus Marketing Suite that enhance
    the experience and functionality for our customers who wish to do more
    sophisticated marketing.
  *Released major updates to PRWeb which focus on streamlining and
    modernizing issuer identity and new, innovative independent social
    authentication.
  *Held our Demand Success 2013 Marketing Conference where over 700 attendees
    gathered with thought leaders and industry experts to share digital
    marketing best practices and network.

Guidance

Vocus is providing, for the first time, guidance for the third quarter and
revising guidance for the full year 2013 based on information as of July 23,
2013:

  *For the third quarter of 2013, revenue is expected to be in the range of
    approximately $46.5 million to $46.8 million. Non-GAAP EPS is expected to
    be in the range of $0.03 to $0.04 assuming an estimated non-GAAP weighted
    average 24.4 million diluted shares outstanding and an estimated tax
    provision of $400,000. The estimated non-GAAP weighted average diluted
    shares outstanding assume 3.0 million common shares from the conversion of
    the Series A redeemable convertible preferred stock. Non-GAAP adjustments
    are expected to be $0.29 per share. GAAP EPS is expected to be in the
    range of $(0.26) to $(0.25) 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 $0.18 to $0.21 assuming an estimated non-GAAP weighted
    average 24.4 million diluted shares outstanding and an estimated tax
    provision of $1.7 million.The estimated non-GAAP weighted average diluted
    shares outstanding assume 3.0 million common shares from the conversion of
    the Series A redeemable convertible preferred stock..The Non-GAAP
    adjustments are expected to be $1.35 per share.GAAP EPS is expected to be
    in the range of $(1.17) to $(1.14) assuming an estimated weighted average
    20.1 million basic and diluted shares outstanding.Free cash flow is
    expected to range from $11.0 million to $12.0 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."

Disclosure Using Social Media Channels

Given Vocus' role as a leading marketing cloud provider, Vocus believes that
in today's evolving digital environment those interested in our company look
to various communication channels for information about the company. Vocus
announces material information using its websites, filings with the US
Securities and Exchange Commission, press releases, public conference calls
and webcasts. Vocus also uses social media and other internet sources to
communicate with its customers and the public about the company, its services
and other issues. Given the recent SEC guidance regarding the use of social
media channels to announce material information, Vocus is notifying investors,
the media, its customers and others interested in the company that it may
communicate material, non-public information through social media or other
internet sources or that information that it posts on social media or other
internet sources may be deemed to be material, non-public information. Vocus
encourages investors, the media, its customers and others interested in our
company to review the information that we post on the social media channels
and internet sources listed below. Any changes to the list of social media
channels and internet sources that Vocus may use to announce material,
non-public information will be posted in the Investor Relations section of its
website.

Vocus' Facebook Page (https://www.facebook.com/vocus)

Vocus' Twitter Feed (https://twitter.com/vocus)

Vocus' LinkedIn Page (http://www.linkedin.com/company/vocus)

Vocus' Google+ Page (https://plus.google.com/+vocus)

Vocus' Blog (http://vocus.com/blog)

Our CEO, Rick Rudman's Twitter Feed (https://twitter.com/vocuschairman)

Conference Call Information

Vocus will discuss the financial results and business highlights of the second
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
July 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 73930336.

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, June 30,
                                                     2012         2013
                                                                 (unaudited)
Assets                                                            
Current assets:                                                   
Cash and cash equivalents                             $32,107      $36,283
Short-term investments                                662          --
Accounts receivable, net                              29,841       21,987
Deferred income taxes                                 1,478        1,098
Prepaid expenses and other current assets             2,933        3,056
Total current assets                                  67,021       62,424
Long-term investments                                 1,322        --
Property, equipment and software, net                 20,068       21,562
Intangible assets, net                                26,751       20,582
Goodwill                                              177,011      176,926
Other assets                                          641          653
Total assets                                          $292,814     $282,147
Liabilities, Series A redeemable convertible                      
preferred stock and stockholders' equity
Current liabilities:                                              
Accounts payable and accrued expenses                 $21,701      $20,540
Notes payable and capital lease obligations           854          163
Deferred revenue                                      77,098       76,333
Total current liabilities                             99,653       97,036
Notes payable and capital lease obligations, net of   751          763
current portion
Other liabilities                                     6,786        6,559
Deferred income taxes, net of current portion         5,120        5,134
Deferred revenue, net of current portion              2,235        2,181
Total liabilities                                     114,545      111,673
Series A redeemable convertible preferred stock       77,490       77,490
Stockholders' equity:                                             
Common stock                                          219          219
Additional paid-in capital                            215,226      221,968
Treasury stock                                        (41,909)     (42,300)
Accumulated other comprehensive loss                  (426)        (555)
Accumulated deficit                                   (72,331)     (86,348)
Total stockholders' equity                            100,779      92,984
Total liabilities, Series A redeemable convertible    $292,814     $282,147
preferred stock and stockholders' equity
                                                                 

Vocus, Inc. and Subsidiaries
Consolidated Statements of Operations
(dollars in thousands, except per share data)
                              Three Months Ended      Six Months Ended
                              June 30,                June 30,
                              2012        2013        2012        2013
                              (unaudited) (unaudited) (unaudited) (unaudited)
Revenues                       $43,620     $46,617     $78,473     $92,864
Cost of revenues               8,700       9,804       16,014      19,556
Gross profit                   34,920      36,813      62,459      73,308
Operating expenses:                                             
Sales and marketing            24,014      27,620      44,845      54,455
Research and development       3,303       2,725       6,959       5,723
General and administrative     10,364      9,891       22,757      22,224
Amortization of intangible     2,020       2,014       3,120       4,034
assets
Total operating expenses       39,701      42,250      77,681      86,436
Loss from operations           (4,781)     (5,437)     (15,222)    (13,128)
Other income (expense)         (65)        (141)       (123)       (136)
Loss before provision for      (4,846)     (5,578)     (15,345)    (13,264)
income taxes
Provision for income taxes     343         314         669         753
Net loss                       $(5,189)    $(5,892)    $(16,014)   $(14,017)
Net loss per share:                                             
Basic and diluted              $(0.27)     $(0.29)     $(0.83)     $(0.70)
Weighted average shares
outstanding used in computing                                   
per share amounts:
Basic and diluted              19,540,700  20,099,700  19,291,730  19,946,050
                                                               

Vocus, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(dollars in thousands)
                              Three Months Ended      Six Months Ended
                              June 30,                June 30,
                              2012        2013        2012        2013
                              (unaudited) (unaudited) (unaudited) (unaudited)
Cash flows from operating                                       
activities:
Net loss                       $(5,189)    $(5,892)    $(16,014)   $(14,017)
Adjustments to reconcile net
loss to net cash provided by                                    
(used in) operating
activities:
Depreciation and amortization  4,309       4,444       6,901       8,741
Other non-cash charges, net    5,290       3,377       9,813       10,901
Payments of contingent
consideration for business     --          (4,560)     (494)       (4,560)
acquisition in excess of fair
value on acquisition date
Changes in operating assets    (922)       (364)       6,793       6,760
and liabilities
Net cash provided by (used in) 3,488       (2,995)     6,999       7,825
operating activities
Cash flows from investing                                       
activities:
Business acquisition, net of   --          --          (79,649)    --
cash acquired
Net change in                  (496)       651         6,279       1,979
available-for-sale securities
Purchases of property,         (1,206)     (1,780)     (1,433)     (3,991)
equipment and software, net
Software development costs     --          (87)        (198)       (216)
Net cash used in investing     (1,702)     (1,216)     (75,001)    (2,228)
activities
Cash flows from financing                                       
activities:
Purchases of common stock      (31)        (44)        (3,002)     (457)
Proceeds from exercises of     1           --          15          --
stock options
Payments of contingent
consideration for business     --          --          (3,112)     --
acquisitions
Net proceeds from (payments
on) notes payable and capital  (83)        50          (132)       (679)
lease obligations
Net cash provided by (used in) (113)       6           (6,231)     (1,136)
financing activities
Effect of exchange rate
changes on cash and cash       (258)       156         (23)        (285)
equivalents
Net increase (decrease) in     1,415       (4,049)     (74,256)    4,176
cash and cash equivalents
Cash and cash equivalents,     22,613      40,332      98,284      32,107
beginning of period
Cash and cash equivalents, end $24,028     $36,283     $24,028     $36,283
of period

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 42%
for the three and six months ended June 30, 2012 and 2013, respectively, and
non-GAAP diluted net income per share of $0.07 and $0.01 for the three months
ended June 30, 2012 and 2013, respectively, and $0.09 and $0.07 for the six
months ended June 30, 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      Six Months Ended
                              June 30,                June 30,
                              2012        2013        2012        2013
                              (unaudited) (unaudited) (unaudited) (unaudited)
Reconciliation of GAAP revenue                                  
to non-GAAP revenue:
GAAP revenue                   $43,620     $46,617     $78,473     $92,864
Fair value adjustment to       729         --          1,400       44
deferred revenue
Non-GAAP revenue               $44,349     $46,617     $79,873     $92,908
                                                               
Reconciliation of GAAP loss
from operations to non-GAAP                                     
income from operations:
Loss from operations           $(4,781)    $(5,437)    $(15,222)   $(13,128)
Stock-based compensation       3,474       2,970       7,458       6,633
Amortization of intangible     3,133       3,061       4,741       6,131
assets
Fair value adjustment to       729         --          1,400       44
deferred revenue
Fair value adjustments to      232         --          464         3,453
contingent consideration
Acquisition-related expenses   157         --          4,957       --
Non-GAAP income from           $2,944      $594        $3,798      $3,133
operations
                                                               
Reconciliation of GAAP net                                      
loss to non-GAAP net income:
Net loss                       $(5,189)    $(5,892)    $(16,014)   $(14,017)
Stock-based compensation       3,474       2,970       7,458       6,633
Amortization of intangible     3,133       3,061       4,741       6,131
assets
Fair value adjustment to       729         --          1,400       44
deferred revenue
Fair value adjustments to
contingent consideration       232         --          446         3,453
including effects of foreign
currency
Acquisition-related expenses   157         --          4,957       --
Non-GAAP net income            $2,536      $139        $2,988      $2,244
                                                               
Non-GAAP diluted net income    $0.11       $0.01       $0.13       $0.09
per share
                                                               
Non-GAAP diluted weighted
average shares used in         23,965,235  24,188,135  22,854,023  24,131,857
computing per share amounts
                                                               
Reconciliation of GAAP diluted
weighted average shares
outstanding to non-GAAP                                         
diluted weighted average
shares outstanding:
GAAP diluted weighted average  19,540,700  20,099,700  19,291,730  19,946,050
shares outstanding
Dilutive effect of outstanding 4,424,535   4,088,435   3,562,293   4,185,807
equity securities
Non-GAAP diluted weighted      23,965,235  24,188,135  22,854,023  24,131,857
average shares outstanding
                                                               
Supplemental information of
stock-based compensation                                        
included in:
Cost of revenues               $326        $322        $825        $790
Sales and marketing            973         801         2,145       1,735
Research and development       643         458         1,147       1,081
General and administrative     1,532       1,389       3,341       3,027
Total stock-based compensation $3,474      $2,970      $7,458      $6,633
                                                               
Reconciliation of cash flow
from operations to free cash                                    
flow:
Net cash provided by (used in) $3,488      $(2,995)    $6,999      $7,825
operating activities
Purchases of property,         (1,206)     (1,780)     (1,433)     (3,991)
equipment and software, net
Software development costs     --          (87)        (198)       (216)
Payments of contingent
consideration for business     --          4,560       494         4,560
acquisition in excess of fair
value on acquisition date
Free cash flow                 $2,282      $(302)      $5,862      $8,178
                                                               

Vocus, Inc. and Subsidiaries
Reconciliation of 2013 Guidance
GAAP EPS to Non-GAAP Diluted EPS
                                          Q3 2013           Full Year 2013
                                          (unaudited)       (unaudited)
                                                           
GAAP EPS                                   $(0.26) to (0.25) $(1.17) to (1.14)
Effect of non-GAAP adjustments             0.34              1.56
Dilutive effect of outstanding equity      (0.05)            (0.21)
securities
Non-GAAP diluted EPS                       $0.03 to 0.04     $0.18 to 0.21

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

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