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Local Corporation Reports Second Quarter 2013 Financial Results



  Local Corporation Reports Second Quarter 2013 Financial Results

 Company Increases Annual Financial Guidance; Announces Record Mobile Traffic

Business Wire

IRVINE, Calif. -- August 8, 2013

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

“We are pleased to report another strong quarter with 6 percent sequential
revenue growth, a $2.8 million improvement in loss from continuing operations
and adjusted EBITDA, nearly double that of the first quarter. We raised $5
million during the second quarter to invest in growing our Network business, a
strategy that we believe is paying off as evidenced by the 40 percent increase
in Network revenue from first quarter 2013 to second quarter 2013,” said Heath
Clarke, Local Corporation chairman and CEO. “As a result, we are raising
guidance for 2013 revenue to be between $95 million and $97 million and have
adjusted EBITDA for 2013 to approximately $5.4 million. We remain very excited
about the many growth opportunities in mobile local search and we continue to
make investments in this area. We anticipate the release of a world class
mobile product in the second half of the year.”

“Beyond the strength of our operating business, our ongoing analysis of our
pay-per-call patent portfolio gives us confidence that we own strategic
intellectual property in this rapidly emerging space and we expect that, over
time, we may be able to generate material licensing revenues from these
patents.”

 
SUMMARY RESULTS
(in thousands, except per share amounts)
 
                                  Q2 2013          Q1 2013          Q2 2012
Consumer Properties:                                               
Owned & Operated                  $ 10,917         $ 12,987         $ 20,478
Network                             11,590           8,283            4,114
Business Solutions                  149              194              2,093   
Revenue                           $ 22,656         $ 21,464         $ 26,685  
                                                                     
Adjusted EBITDA*                  $ 1,175          $ 685            $ 462
Plus interest and other income      (420   )         (842   )         (97    )
(expense), net
Less (provision) benefit for        (159   )         (72    )         (44    )
income taxes
Less non-cash depreciation,
amortization and stock              (1,691 )         (1,670 )         (2,148 )
compensation
Plus revaluation of derivatives     638              5                166
Less net loss from discontinued     (3,264 )         (219   )         (7,172 )
operations
Less finance related charges        -                (236   )         -
Plus accrual for lease              155              (256   )         -
(liability)/asset
Less severance charges              (20    )         (747   )         (514   )
GAAP net loss                     $ (3,586 )       $ (3,352 )       $ (9,347 )
                                                                     
Diluted Adjusted EBITDA per       $ 0.05           $ 0.03           $ 0.02
share*
Diluted GAAP net loss per share   $ (0.16  )       $ (0.15  )       $ (0.42  )
 
Diluted weighted average shares
used for Adjusted EBITDA per        23,051           22,687           22,219
share
Diluted weighted average shares
used for GAAP net loss per          22,877           22,564           22,086
share
                                                                     
Cash                              $ 4,806          $ 3,067          $ 7,103
 

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

Second Quarter 2013 Results Highlights:

“We were pleased to see sequential revenue growth in the second quarter 2013,
particularly with our Network business, coupled with improved bottom-line
results. During the quarter, we also improved our working capital and
liquidity position by reducing operating expenses, in addition to closing a $5
million convertible note offering,” added Ken Cragun, Local Corporation chief
financial officer.

• Revenue – Second quarter 2013 revenue of $22.7 million represents an
increase of 6 percent over first quarter 2013 revenue of $21.5 million and a
15 percent decrease from second quarter 2012 revenues of $26.7 million.

• GAAP Net Loss – Second quarter 2013 GAAP Net Loss was $3.6 million, or
($0.16) per diluted share, compared to a first quarter 2013 GAAP Net Loss of
$3.4 million, or ($0.15) per diluted share. The second quarter 2013 GAAP net
loss included a net loss from discontinued operations of $3.3 million as well
as a gain on the revaluation of derivatives of $638,000 and a credit of
$155,000 relating to the sublease of an idle leased property.

• Adjusted EBITDA – The company reported positive Adjusted EBITDA for the
second quarter 2013 of $1.2 million, or $0.05 per diluted share, as compared
to first quarter 2013 positive Adjusted EBITDA of $685,000, or $0.03 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 derivatives’
revaluation; net income (loss) from discontinued operations; impairment
charges; LEC receivables reserve; finance-related charges; accrued lease
liability/asset; 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 a 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 $4.8 million as of June 30, 2013, up
$1.7 million from its March 31, 2013, cash balance.

• Debt – On June 30, 2013, the company had borrowings of $8.7 million
outstanding under its Square 1 Bank credit facility and $5.0 million due
related to senior secured convertible notes.

Second Quarter 2013 Operating Highlights:

• Overall, Organic and Mobile Traffic – Overall traffic on the site and
network was 93 million monthly unique visitors (MUVs) in the second quarter
2013, down 12 percent from first quarter 2013 traffic and down 8 percent from
the year ago period. Organic traffic on the site and network was 43 million
MUVs in the second quarter 2013, down 12 percent from the first quarter 2013
and up 10 percent from the year ago period. Organic traffic is defined as all
non-SEM sourced traffic. Overall mobile traffic was a record 34 million MUVs
in the second quarter 2013, up 6 percent from the first quarter 2013 and up 79
percent from the year ago period. The decrease in traffic is due to
adjustments made to our search engine marketing campaigns in response to
platform changes by a major traffic partner.

• Ceased Spreebird Business and Sold Assets – In the second quarter 2013, the
company made the decision to cease its Spreebird business operations. As part
of this decision, the company announced in July 2013 that it sold the assets
relating to Spreebird for a minimum price of $210,000. The divestiture of
Spreebird is in furtherance of Local Corporation’s exit from the direct SMB
sales market announced earlier this year and is expected to result in an
annualized improvement in earnings and cash flow for the company of
approximately $600,000. The improvements to earnings and cash flow for the
second half of the year were taken into account as part of the company’s
annual guidance.

• 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 the 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 – Second quarter 2013 total revenue related to the O&O business unit
was $10.9 million, down 16 percent from first quarter 2013 O&O revenue of
$13.0 million and down 47 percent from second quarter 2012 O&O revenue of
$20.5 million. The decline in O&O revenues are due to a decline in overall
traffic coupled with lower monetization.

• Monetization of Traffic – Revenue per thousand visitors (RKV) for second
quarter 2013 was $199, down 7 percent from first quarter 2013 RKV of $215 and
down 33 percent from second quarter 2012 RKV of $299. This decline was
primarily due to ad policy changes and declining revenue per click trends of a
major ad supplier.

Network:

• Revenue – Second quarter 2013 total revenue related to the Network business
unit was $11.6 million, up 40 percent from the $8.3 million Network revenue
recorded in the first quarter 2013 and up 182 percent from the $4.1 million
Network revenue recorded in the second quarter 2012. The increase in Network
revenue is mainly due to the increase in the number of Network sites during
the quarter from over 1,200 in the first quarter 2013, to nearly 1,600 for the
second quarter 2013.

• Network Revenue ex-TAC – Second quarter 2013 total Network revenue ex-TAC
was $ 4.8 million, up 17 percent from the $4.1 million Network revenue ex-TAC
recorded in the first quarter 2013 and up 118 percent from the $2.2 million
Network revenue ex-TAC recorded in the second 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 a 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 second quarter 2013 with
nearly 1,600 Network partner sites.

Business Solutions:

• Revenue – Second quarter 2013 revenue was $149,000, down 23 percent from
first quarter 2013 revenue of $194,000 and down 93 percent from second quarter
2012 revenue of $2.1 million. The reduction was primarily due to the phasing
out of LEC billed subscription customers and the company’s decision to cease
its direct sales efforts.

Fiscal 2013 Financial Guidance:

The company is increasing its financial guidance for full year 2013.

Revenue - The company now expects 2013 revenue of between $95 million and $97
million.

Adjusted EBITDA – Positive Adjusted EBITDA for 2013 is expected to be
approximately $5.4 million.**

Projected 2013 Adjusted EBITDA Factors:

  * Interest and other income (expense), net of $2.1 million;
  * Income tax provision of $200,000;
  * Depreciation expense of $3.8 million;
  * Amortization expense of $1.1 million;
  * Stock compensation expense of $1.7 million;
  * Severance and non-recurring charges of $1.2 million;
  * Loss from discontinued operations of $3.5 million; and
  * Warrant and conversion option revaluation expense items are
    undeterminable, but may be significant non-cash gains or losses**

** The valuation of the warrant liability and the conversion option 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 the conversion
option, 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 #  20674882. 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.
Eastern Time the day of the call by dialing 1-800-585-8367 or 1-404-537-3406,
passcode # 20674882. 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.

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 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 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, our
ability to successfully assert our intellectual property rights, 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 derivatives’ revaluation;
net income (loss) from discontinued operations; impairment charges; LEC
receivables reserve; finance related charges; accrued lease liability/asset;
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,
expense from the company’s financing transactions and the costs associated
with income tax expense, capital investments, stock-based compensation
expense, net income (loss) from discontinued operations, LEC receivables
reserve, derivatives’ revaluation charges; finance related charges; accrued
lease liability/asset; 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)
 
                                                   June 30,       December 31,
                                                   2013           2012
ASSETS
Current assets:
Cash                                               $ 4,806        $  3,696
Restricted cash                                      -               42
Accounts receivable, net of allowances of $307       13,430          10,618
and $250, respectively
Note receivable                                      218             319
Prepaid expenses and other current assets            1,386           648
Assets held for sale                                 210             3,452    
Total current assets                                 20,050          18,775
                                                                   
Property and equipment, net                          5,948           6,467
Goodwill                                             19,281          19,281
Intangible assets, net                               2,889           3,351
Long term receivable, net of allowances of           1,722           1,585
$1,710 and 1,710, respectively
Escrow receivable                                    390             390
Deposits                                             72              58       
Total assets                                       $ 50,352       $  49,907   
                                                                   
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable                                   $ 9,756        $  8,367
Accrued compensation                                 1,437           829
Deferred rent                                        424             452
Warrant liability                                    573             5
Conversion option liability                          971             -
Other accrued liabilities                            1,816           1,315
Revolving line of credit                             6,042           10,000
Current portion of term loan                         1,500           -
Deferred revenue                                     194             203      
Total current liabilities                            22,713          21,171
                                                                   
Long-term portion of term loan                       1,125           -
Senior secured convertible notes, net of debt        3,004           -
discount of $1,996
Deferred income taxes                                302             302      
Total liabilities                                    27,144          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; 22,877 and 22,172 issued and             -               -
outstanding, respectively
Additional paid-in capital                           123,749         122,036
Accumulated deficit                                  (100,541 )      (93,602 )
Stockholders’ equity                                 23,208          28,434   
Total liabilities and stockholders’ equity         $ 50,352       $  49,907   
 

 
LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
 
                            Three Months Ended        Six Months Ended
                            June 30,                  June 30,
                            2013         2012         2013         2012
Revenue                     $ 22,656     $ 26,685     $ 44,120     $ 51,034   
Costs and expenses:
Cost of revenues              16,452       19,944       32,046       37,225
Sales and marketing           2,009        4,222        5,189        8,290
General and                   2,845        2,799        5,791        5,185
administrative
Research and development      1,500        1,244        3,236        2,425
Amortization of               231          676          462          1,457    
intangibles
                                                                    
Total operating expenses      23,037       28,885       46,724       54,582   
                                                                    
Operating income (loss)       (381   )     (2,200 )     (2,604 )     (3,548  )
                                                                    
Interest and other income     (420   )     (97    )     (1,262 )     (194    )
(expense), net
Change in fair value of
conversion option and         638          166          642          108      
warrant liability
                                                                    
Income (loss) from
continuing operations         (163   )     (2,131 )     (3,224 )     (3,634  )
before income taxes
                                                                    
Provision for income          159          44           230          99       
taxes
                                                                    
Net income (loss) from        (322   )     (2,175 )     (3,454 )     (3,733  )
continuing operations
Income (loss) from
discontinued operations       (3,264 )     (7,172 )     (3,485 )     (8,816  )
(net of taxes)
Net Income (loss)           $ (3,586 )   $ (9,347 )   $ (6,939 )   $ (12,549 )
                                                                    
Per share data:
                                                                    
Basic and diluted net
income (loss) per share     $ (0.01  )   $ (0.10  )   $ (0.15  )   $ (0.17   )
from continuing
operations
Basic and diluted net
income (loss) per share     $ (0.14  )   $ (0.32  )   $ (0.15  )   $ (0.40   )
from discontinued
operations
Basic net income (loss)     $ (0.16  )   $ (0.42  )   $ (0.31  )   $ (0.57   )
per share
                                                                    
                                                                    
Basic weighted average        22,877       22,086       22,721       22,084
shares outstanding
Diluted weighted average      22,877       22,086       22,721       22,084
shares outstanding
 

 
LOCAL CORPORATION
SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS INFORMATION
STOCK-BASED COMPENSATION EXPENSE
(in thousands, except per share data)
 
                                        Three Months Ended   Six Months Ended
                                        June 30,             June 30,
                                        2013        2012     2013      2012
Cost of revenues                        $  31       $ 18     $ 59      $ 39
Sales and marketing                        116        212      250       451
General and administrative                 306        332      596       668
Research and development                   73         48       156       100
Total stock-based compensation          $  526      $ 610    $ 1,061   $ 1,258
expense*
                                                                        
Basic and diluted net stock-based       $  0.02     $ 0.03   $ 0.05    $ 0.06
compensation expense per share
 

                *- Excludes impact of discontinued operations.

 
LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
 
                                                     Six Months Ended June 30,
                                                     2013          2012
Cash flows from operating activities:
Net loss                                             $  (6,939 )   $ (12,549 )
Adjustments to reconcile net loss to cash (used
in) provided by operating activities:
Depreciation and amortization                           2,569        3,782
Provision for doubtful accounts                         350          38
Stock-based compensation expense                        1,077        1,473
Non-cash interest expense                               186          -
Loss on exchange of warrants                            723          -
Change in fair value of conversion option and           (642   )     (108    )
warrant liability
Impairment of goodwill and intangible assets            3,051        6,451
Changes in operating assets and liabilities:
Accounts receivable                                     (3,162 )     (963    )
Long term receivable                                    (137   )     (843    )
Note receivable                                         101          128
Prepaid expenses and other                              (752   )     122
Accounts payable and accrued liabilities                2,469        1,081
Deferred revenue                                        (9     )     (93     )
Net cash used in operating activities                   (1,115 )     (1,481  )
                                                                    
Cash flows from investing activities:
Capital expenditures                                    (1,397 )     (1,784  )
Restricted cash                                         42           (32     )
Net cash used in investing activities                   (1,355 )     (1,816  )
                                                                    
Cash flows from financing activities:
Proceeds from exercise of options                       21           11
Proceeds from issuance of senior secured                5,000        -
convertible notes
Payment of financing related costs                      (108   )     (5      )
Payment of revolving credit facility and term loan      (1,333 )     -        
Net cash (used in) provided by financing                3,580        6        
activities
Net (decrease) increase in cash                         1,110        (3,291  )
Cash, beginning of period                               3,696        10,394   
Cash, end of period                                  $  4,806      $ 7,103    
                                                                    
Supplemental Cash Flow Information:
Interest paid                                        $  247        $ 212      
Income taxes paid                                    $  2          $ 7        
Non-cash financing activities:
Derivative liabilities recorded in connection with   $  2,182      $ -        
the issuance of senior secured convertible notes
 

 
LOCAL CORPORATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(in thousands, except per share amounts)
(Unaudited)
 
                                                               Three Months
                                 Three Months Ended June 30,   Ended March 31,
                                 2013             2012         2013
Net loss                         $  (3,586  )     $ (9,347 )   $   (3,352   )
                                                                
Plus interest and other income      420             97             842
(expense), net
Plus provision (benefit) for        159             44             72
income taxes
Plus amortization of                231             676            231
intangibles
Plus depreciation                   934             862            905
Plus stock-based compensation       526             610            534
Less revaluation of                 (638    )       (166   )       (5       )
derivatives
Plus net loss from                  3,264           7,172          219
discontinued operations
Plus finance related charges        -               -              236
Plus accrual for lease              (155    )       -              256
liability/(asset)
Plus severance charges              20              514            747       
                                                                
Adjusted EBITDA                  $  1,175         $ 462        $   685       
                                                                
Diluted Adjusted EBITDA per      $  0.05          $ 0.02       $   0.03      
share
                                                                
Diluted weighted average            23,051          22,219         22,687
shares outstanding
 

 
RECONCILIATION OF NETWORK GAAP REVENUE TO NETWORK REVENUE EX-TAC
(in thousands)
(Unaudited)
 
                                                              Three Months
                                Three Months Ended June 30,   Ended March 31,
                                2013             2012         2013
Network GAAP Revenue            $   11,590       $   4,114    $      8,283
Less Traffic Acquisition Cost       6,811            1,954           4,208
                                                               
Network Revenue ex-TAC          $   4,779        $   2,160    $      4,075
 

Contact:

Investor Relations and Media Relations Contact:
Local Corporation
Cameron Triebwasser
949-789-5223
ctriebwasser@local.com
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