Marchex Announces Third Quarter 2014 Results and Announces Share Repurchase Program
“While the third quarter came with certain challenges, we continued to
make progress with our customers and products,” said
Q3 2014 Financial Highlights1
-
GAAP revenue was $49.2 million for the third quarter of 2014, compared
to
$40.6 million for the third quarter of 2013. Non-GAAP revenue2, which excludes domain sales recorded in revenue, was$47.6 million for the third quarter of 2014. -
GAAP net loss from continuing operations was
$21.8 million for the third quarter of 2014, which includes the effect of a non-cash charge to income tax expense of$22.3 million for a valuation allowance on our deferred tax assets, compared to GAAP net income from continuing operations of$598,000 for the third quarter of 2013. -
GAAP net loss from continuing operations attributable to common
stockholders per diluted share was
$0.53 for the third quarter of 2014. This compares to GAAP net income from continuing operations attributable to common stockholders per diluted share of$0.02 for the third quarter of 2013.
Q3 2014 | Q3 2013 | |||
GAAP Revenue | $ 49.2 million | $40.6 million | ||
Non-GAAP Results: | ||||
Non-GAAP Revenue 2, 5, 6 | $47.6 million | $39.7 million | ||
Call-Driven and Related Revenue6 | $46.4 million | $35.7 million | ||
Archeo Revenue including domain gains and sales 3, 5 |
$2.8 million | $5.9 million | ||
Archeo Revenue excluding domain gains and sales 3, 5 | $ 1.2 million | $4.0 million | ||
Call-Driven Adjusted OIBA5 | $ 3.3 million | $1.7 million | ||
Call-Driven Adjusted EBITDA5 | $ 4.2 million | $2.6 million | ||
Adjusted OIBA4, 5 | $ 4.2 million | $4.4 million | ||
Adjusted EBITDA4, 5 | $ 5.2 million | $5.3 million | ||
Adjusted OIBA excluding domain gains and sales5 | $ 2.7 million | $2.5 million | ||
Adjusted EBITDA excluding domain gains and sales5 | $ 3.6 million | $3.4 million | ||
-
Adjusted non-GAAP EPS3 from continuing operations for the
third quarter of 2014 was
$0.06 , compared to$0.08 for the third quarter of 2013. Adjusted non-GAAP EPS3 from continuing operations excluding domain gains and sales for the third quarter of 2014 and 2013 were both$0.04 .
1 In
2Excludes domain sales recognized in GAAP revenue.
In
3Includes/excludes domain sales recognized in GAAP revenue and domain sales recognized in gains on sales and disposals of intangible assets.
4 Adjusted OIBA, Adjusted EBITDA and Non-GAAP EPS include the impact of domain gains and sales. Historically, these non-GAAP measures excluded the impact of domain gains and sales.
5 Reconciliations of non-GAAP measures are included in the financial tables attached to this press release and we encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures.
6
-
Revenue. Call-Driven and related revenue was
$46.4 million for the third quarter of 2014 compared to$35.7 million for the third quarter of 2013. -
Products.
Marchex announced the launch of Real Time Call DNA in October. This technology enables advertisers to visually map, analyze, and measure what happens inside a phone conversation after a consumer calls their business – without recording any of the actual dialogue. Real-Time Call DNA is the newest addition toMarchex Call Analytics, the leading enterprise platform for measuring phone calls from advertising.
Archeo Q3 Business Highlights:
-
Revenue. Archeo non-GAAP revenue was
$1.2 million for the third quarter of 2014, which excludes domain sales recognized in GAAP revenue. -
Domains sales. During the third quarter of 2014, domain sales
yielded
$1.6 million . -
During the third quarter of 2014, the company received earn-out
consideration as part of the
July 2013 pay-per-click asset sale transaction and recognized$278,000 of gain on sale, net of tax, on discontinued operations.
Non-Operating Highlights:
-
Share Repurchase Program.
Marchex announced today that the Board of Directors has authorized a new share repurchase program, which supersedes and replaces any prior company repurchase programs. Under the new share repurchase program the Board of Directors has authorized the repurchase of up to 3 million shares of the company’s Class B common stock in the aggregate through open market and privately negotiated transactions at times and in such amounts as the company deems appropriate. Repurchases may also be made under a Rule 10b5-1 plan, which would permit shares to be repurchased when the Company might otherwise be precluded from doing so under insider trading laws. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions. This new share repurchase program does not have an expiration date and may be limited or terminated at any time without prior notice.
Business Outlook
The following forward-looking statements reflect
Call-Driven financial guidance for the fiscal year ending December 31, 2014 |
||
Call-Driven Revenue | $167-$169 million | |
Call-Driven Adjusted OIBA 1 | $10.3 million or more | |
Call Driven Adjusted EBITDA 1 | $14 million or more | |
Call-Driven financial guidance for the Fourth Quarter ending December 31, 2014 |
||
Call-Driven Revenue | $29-$31 million | |
Call-Driven Adjusted OIBA 1 | $1.7 million or more | |
Call Driven Adjusted EBITDA 1 | $2.7 million or more | |
1 These non-GAAP Call-Driven measures assign all
Conference Call and Webcast Information
Management will hold a conference call, starting at
About
Please visit www.marchex.com,
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or @marchex
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Forward-Looking Statements:
This press release contains forward-looking statements that involve
substantial risks and uncertainties. All statements, other than
statements of historical facts, included in this press release regarding
our strategy, future operations, future financial position, future
revenues, other financial guidance, acquisitions, projected costs,
prospects, plans and objectives of management are forward-looking
statements. We may not actually achieve the plans, intentions or
expectations disclosed in our forward-looking statements and you should
not place undue reliance on our forward-looking statements. Actual
results or events could differ materially from the plans, intentions and
expectations disclosed in the forward-looking statements we make. There
are a number of important factors that could cause
Non-GAAP Financial Information:
To supplement
OIBA represents income (loss) from
operations plus (1) stock-based compensation expense and (2)
amortization of intangible assets from acquisitions. This measure, among
other things, is one of the primary metrics by which
Non-GAAP Revenue represents GAAP
revenue excluding domain sales sold through Marchex’s Domain
Marketplace, which are recognized in GAAP revenue. Archeo
revenue including or excluding
domain gains and sales represents
GAAP revenue and includes/excludes sales proceeds from the sale of
domains recognized in gain/loss on sales and disposals of intangible
assets and domain sales sold through Marchex’s Domain Marketplace which
are recognized in GAAP revenue. Adjusted OIBA
and EBITDA including or excluding domain gains and sales
includes the above descriptions of Adjusted OIBA and EBITDA and
includes/excludes domain sales contribution and gain/loss on sales and
disposals of intangible assets. Call-Driven
Adjusted OIBA and EBITDA includes the above descriptions of
Adjusted OIBA and EBITDA for the Call-Driven segment. The Call-Driven
Adjusted OIBA and EBITDAassigns all
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Operations | ||||||||||
(in thousands, except per share data) | ||||||||||
(unaudited) | ||||||||||
Three Months Ended | ||||||||||
September 30, | ||||||||||
2013 | 2014 | |||||||||
Revenue | $ | 40,560 | $ | 49,181 | ||||||
Expenses: | ||||||||||
Service costs (1) | 25,293 | 32,055 | ||||||||
Sales and marketing (1) | 2,801 | 2,940 | ||||||||
Product development (1) | 6,833 | 7,581 | ||||||||
General and administrative (1) | 4,679 | 5,380 | ||||||||
Amortization of intangible assets from acquisitions | 709 | - | ||||||||
Acquisition and separation related costs | 286 | - | ||||||||
Total operating expenses | 40,601 | 47,956 | ||||||||
Gain on sales and disposals of intangible assets, net | 1,047 | - | ||||||||
Income from operations | 1,006 | 1,225 | ||||||||
Interest expense and other, net | (19 | ) | (19 | ) | ||||||
Income from continuing operations before provision for income taxes | 987 | 1,206 | ||||||||
Income tax expense | 389 | 22,980 | ||||||||
Net income (loss) from continuing operations | 598 | (21,774 | ) | |||||||
Discontinued operations: | ||||||||||
Loss from discontinued operations, net of tax | (46 | ) | - | |||||||
Gain on sale from discontinued operations, net of tax | 929 | 278 | ||||||||
Discontinued operations, net of tax | 883 | 278 | ||||||||
Net income (loss) | 1,481 | (21,496 | ) | |||||||
Dividends paid to participating securities | - | (29 | ) | |||||||
Net income (loss) applicable to common stockholders | $ | 1,481 | $ | (21,525 | ) | |||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders: | ||||||||||
Continuing operations | $ | 0.02 | $ | (0.53 | ) | |||||
Discontinued operations, net of tax | 0.02 | 0.01 | ||||||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders | $ | 0.04 | $ | (0.52 | ) | |||||
Dividends paid per share | $ | - | $ | 0.02 | ||||||
Shares used to calculate basic net income (loss) per share applicable to common stockholders | ||||||||||
Class A | 8,377 | 5,233 | ||||||||
Class B | 27,308 | 36,041 | ||||||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | ||||||||||
Class A | 8,377 | 5,233 | ||||||||
Class B | 37,277 | 41,274 | ||||||||
(1 | ) | Includes stock-based compensation allocated as follows: | ||||||||
Service costs | $ | 455 | $ | 373 | ||||||
Sales and marketing | 211 | 226 | ||||||||
Product development | 361 | 666 | ||||||||
General and administrative | 1,338 | 1,759 | ||||||||
Total | $ | 2,365 | $ | 3,024 | ||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Statements of Operations | ||||||||||
(in thousands, except per share data) | ||||||||||
(unaudited) | ||||||||||
Nine Months Ended | ||||||||||
September 30, | ||||||||||
2013 | 2014 | |||||||||
Revenue | $ | 112,870 | $ | 149,353 | ||||||
Expenses: | ||||||||||
Service costs (1) | 68,025 | 96,728 | ||||||||
Sales and marketing (1) | 8,350 | 9,161 | ||||||||
Product development (1) | 20,586 | 22,599 | ||||||||
General and administrative (1) | 15,003 | 16,127 | ||||||||
Amortization of intangible assets from acquisitions | 2,500 | 434 | ||||||||
Acquisition and separation related costs | 940 | (68 | ) | |||||||
Total operating expenses | 115,404 | 144,981 | ||||||||
Gain on sales and disposals of intangible assets, net | 3,739 | - | ||||||||
Income from operations | 1,205 | 4,372 | ||||||||
Interest expense and other, net | (48 | ) | (43 | ) | ||||||
Income from continuing operations before provision for income taxes | 1,157 | 4,329 | ||||||||
Income tax expense | 797 | 24,277 | ||||||||
Net income (loss) from continuing operations | 360 | (19,948 | ) | |||||||
Discontinued operations: | ||||||||||
Income (loss) from discontinued operations, net of tax | (77 | ) | 9 | |||||||
Gain on sale from discontinued operations, net of tax | 929 | 278 | ||||||||
Discontinued operations, net of tax | 852 | 287 | ||||||||
Net income (loss) | 1,212 | (19,661 | ) | |||||||
Dividends paid to participating securities | - | (98 | ) | |||||||
Net income (loss) applicable to common stockholders | $ | 1,212 | $ | (19,759 | ) | |||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders: | ||||||||||
Continuing operations | $ | 0.01 | $ | (0.51 | ) | |||||
Discontinued operations, net of tax | $ | 0.02 | $ | 0.01 | ||||||
Basic and diluted net income (loss) per Class A and Class B share applicable to common stockholders | $ | 0.03 | $ | (0.50 | ) | |||||
Dividends paid per share | $ | - | $ | 0.06 | ||||||
Shares used to calculate basic net income (loss) per share applicable to common stockholders | ||||||||||
Class A | 9,168 | 6,062 | ||||||||
Class B | 26,280 | 33,546 | ||||||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | ||||||||||
Class A | 9,168 | 6,062 | ||||||||
Class B | 36,371 | 39,608 | ||||||||
(1 | ) | Includes stock-based compensation allocated as follows: | ||||||||
Service costs | $ | 818 | $ | 1,017 | ||||||
Sales and marketing | 474 | 663 | ||||||||
Product development | 1,127 | 2,017 | ||||||||
General and administrative | 4,456 | 5,327 | ||||||||
Total | $ | 6,875 | $ | 9,024 | ||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(in thousands) | ||||||||||
(unaudited) | ||||||||||
December 31, | September 30, | |||||||||
Assets | 2013 | 2014 | ||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 30,912 | $ | 80,652 | ||||||
Accounts receivable, net | 30,005 | 33,531 | ||||||||
Prepaid expenses and other current assets | 2,943 | 3,132 | ||||||||
Refundable taxes | 97 | 92 | ||||||||
Deferred tax assets | 1,016 | - | ||||||||
Total current assets | 64,973 | 117,407 | ||||||||
Property and equipment, net | 5,440 | 5,286 | ||||||||
Deferred tax assets | 25,138 | - | ||||||||
Intangibles and other assets, net | 484 | 328 | ||||||||
Goodwill | 65,679 | 65,679 | ||||||||
Intangible assets from acquisitions, net | 434 | - | ||||||||
Total Assets | $ | 162,148 | $ | 188,700 | ||||||
Liabilities and Stockholders' Equity | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 15,922 | $ | 20,620 | ||||||
Accrued expenses and other current liabilities | 7,988 | 8,622 | ||||||||
Deferred revenue | 1,388 | 1,592 | ||||||||
Total current liabilities | 25,298 | 30,834 | ||||||||
Other non-current liabilities | 2,095 | 1,221 | ||||||||
Total Liabilities | 27,393 | 32,055 | ||||||||
Class A common stock | 80 | 55 | ||||||||
Class B common stock | 309 | 376 | ||||||||
Treasury stock | (2 | ) | - | |||||||
Additional paid-in capital | 305,517 | 347,023 | ||||||||
Accumulated deficit | (171,149 | ) | (190,809 | ) | ||||||
Total Stockholders' Equity | 134,755 | 156,645 | ||||||||
Total Liabilities and Stockholders' Equity | $ | 162,148 | $ | 188,700 | ||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||
Reconciliation of GAAP Income from Operations to Operating Income Before Amortization (OIBA) | ||||||||
and Adjusted Operating Income Before Amortization (Adjusted OIBA) | ||||||||
(in thousands) | ||||||||
(unaudited) | ||||||||
Three Months Ended | ||||||||
September 30, | ||||||||
2013 | 2014 | |||||||
Income from operations | $ | 1,006 | $ | 1,225 | ||||
Stock-based compensation | 2,365 | 3,024 | ||||||
Amortization of intangible assets from acquisitions | 709 | - | ||||||
Operating income before amortization (OIBA) | 4,080 | 4,249 | ||||||
Acquisition and separation related costs | 286 | - | ||||||
Adjusted operating income before amortization (Adjusted OIBA) | $ | 4,366 | $ | 4,249 | ||||
Domain sales contribution | (839 | ) | (1,552 | ) | ||||
Gain on sales and disposals of intangible assets, net | (1,047 | ) | - | |||||
Adjusted OIBA excluding domain gains and sales | $ | 2,480 | $ | 2,697 | ||||
Nine Months Ended | ||||||||
September 30, | ||||||||
2013 | 2014 | |||||||
Income from operations | $ | 1,205 | $ | 4,372 | ||||
Stock-based compensation | 6,875 | 9,024 | ||||||
Amortization of intangible assets from acquisitions | 2,500 | 434 | ||||||
Operating income before amortization (OIBA) | 10,580 | 13,830 | ||||||
Acquisition and separation related costs | 940 | (68 | ) | |||||
Adjusted operating income before amortization (Adjusted OIBA) | $ | 11,520 | $ | 13,762 | ||||
Domain sales contribution | (839 | ) | (5,662 | ) | ||||
Gain on sales and disposals of intangible assets, net | (3,739 | ) | - | |||||
Adjusted OIBA excluding domain gains and sales | $ | 6,942 | $ | 8,100 | ||||
Certain reclassifications have been made to prior periods to conform to current presentation. | ||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||
Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA | |||||||||
(in thousands) | |||||||||
(unaudited) | |||||||||
Three Months Ended | |||||||||
September 30, | |||||||||
2013 | 2014 | ||||||||
Net cash provided by operating activities | $ | 4,332 | $ | 6,750 | |||||
Changes in assets and liabilities | (1,374 | ) | (24,736 | ) | |||||
Income tax expense | 389 | 22,980 | |||||||
Acquisition and separation related costs | 286 | - | |||||||
Interest expense and other, net | 15 | 18 | |||||||
Gain on sales and disposals of intangible assets, net | 1,047 | - | |||||||
Loss on discontinued operations, net of tax | 43 | - | |||||||
Tax effect on gain on sale of discontinued operations | 563 | 143 | |||||||
Excess tax benefits related to stock compensation | 13 | - | |||||||
Adjusted EBITDA | $ | 5,314 | $ | 5,155 | |||||
Domain sales contribution | (839 | ) | (1,552 | ) | |||||
Gain on sales and disposals of intangible assets, net | (1,047 | ) | - | ||||||
Adjusted EBITDA excluding domain gains and sales | $ | 3,428 | $ | 3,603 | |||||
Net cash provided by (used in) investing activities | $ | 1,235 | $ | (826 | ) | ||||
Net cash provided by (used in) financing activities | $ | 842 | $ | (222 | ) | ||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2013 | 2014 | ||||||||
Net cash provided by operating activities | $ | 7,487 | $ | 18,117 | |||||
Changes in asset and liabilities | 482 | (26,048 | ) | ||||||
Income tax expense | 797 | 24,277 | |||||||
Acquisition and separation related costs | 940 | - | |||||||
Interest expense and other, net | 44 | 43 | |||||||
Gain on sales and disposals of intangible assets, net | 3,739 | - | |||||||
(Income) loss on discontinued operations, net of tax | 49 | (9 | ) | ||||||
Tax effect on gain on sale of discontinued operations | 563 | 143 | |||||||
Excess tax benefits related to stock compensation | 209 | - | |||||||
Adjusted EBITDA | $ | 14,310 | $ | 16,523 | |||||
Domain sales contribution | (839 | ) | (5,662 | ) | |||||
Gain on sales and disposals of intangible assets, net | (3,739 | ) | - | ||||||
Adjusted EBITDA excluding domain gains and sales | $ | 9,732 | $ | 10,861 | |||||
Net cash provided by (used in) investing activities | $ | 2,197 | $ | (2,178 | ) | ||||
Net cash provided by (used in) financing activities | $ | (463 | ) | $ | 33,801 | ||||
Certain reclassifications have been made to prior periods to conform to current presentation. | |||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||
Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS | |||||||||||
(in thousands, except per share data) | |||||||||||
(unaudited) | |||||||||||
Three Months Ended | |||||||||||
September 30, | |||||||||||
2013 | 2014 | ||||||||||
Adjusted Non-GAAP EPS from continuing operations | $ | 0.08 | $ | 0.06 | |||||||
Net income (loss) applicable to common stockholders - diluted (GAAP EPS) | $ | 0.02 | $ | (0.53 | ) | ||||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | 37,277 | 41,274 | |||||||||
Net income (loss) applicable to common stockholders | $ | 1,481 | $ | (21,525 | ) | ||||||
Stock-based compensation | 2,365 | 3,024 | |||||||||
Acquisition and separation related costs | 286 | - | |||||||||
Amortization of intangible assets from acquisitions | 709 | - | |||||||||
Interest expense and other, net | 19 | 19 | |||||||||
Dividends paid to participating securities | - | 29 | |||||||||
Tax valuation allowance | - | 22,345 | |||||||||
Discontinued operations, net of tax | (883 | ) | (278 | ) | |||||||
Estimated impact of income taxes | (1,155 | ) | (855 | ) | |||||||
Adjusted Non-GAAP net income from continuing operations | $ | 2,822 | $ | 2,759 | |||||||
Domain sales contribution | (839 | ) | (1,552 | ) | |||||||
Gain on sales and disposals of intangible assets, net | (1,047 | ) | - | ||||||||
Estimated impact of income taxes on domain gains and sales | 667 | 551 | |||||||||
Adjusted Non-GAAP net income excluding domain gains and sales | $ | 1,603 | $ | 1,758 | |||||||
Adjusted Non-GAAP EPS from continuing operations | $ | 0.08 | $ | 0.06 | |||||||
Adjusted Non-GAAP EPS excluding domain gains and sales | $ | 0.04 | $ | 0.04 | |||||||
Shares used to calculate diluted net income (loss) per share applicable | |||||||||||
to common stockholders (GAAP) | 37,277 | 41,274 | |||||||||
Weighted average stock options and common shares subject to purchase or cancellation (if applicable) | - | 2,286 | |||||||||
Diluted shares used to calculate Adjusted Non-GAAP EPS (1) | 37,277 | 43,560 | |||||||||
(1) | For the purpose of computing the number of diluted shares for Adjusted Non-GAAP EPS, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP EPS. | ||||||||||
Certain reclassifications have been made to prior periods to conform to current presentation. | |||||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||
Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS | |||||||||
(in thousands, except per share data) | |||||||||
(unaudited) | |||||||||
Nine Months Ended | |||||||||
September 30, | |||||||||
2013 | 2014 | ||||||||
Adjusted Non-GAAP EPS from continuing operations | $ | 0.21 | $ | 0.21 | |||||
Net income (loss) from continuing operations applicable to common stockholders - diluted (GAAP EPS) | $ | 0.01 | $ | (0.51 | ) | ||||
Shares used to calculate diluted net income (loss) per share applicable to common stockholders | 36,371 | 39,608 | |||||||
Net income (loss) applicable to common stockholders | $ | 1,212 | $ | (19,759 | ) | ||||
Stock-based compensation | 6,875 | 9,024 | |||||||
Acquisition and separation related costs | 940 | (68 | ) | ||||||
Amortization of intangible assets from acquisitions | 2,500 | 434 | |||||||
Interest expense and other, net | 48 | 43 | |||||||
Dividends paid to participating securities | - | 98 | |||||||
Tax valuation allowance | 651 | 22,345 | |||||||
Discontinued operations, net of tax | (852 | ) | (287 | ) | |||||
Estimated impact of income taxes | (3,898 | ) | (2,897 | ) | |||||
Adjusted Non-GAAP net income from continuing operations | $ | 7,476 | $ | 8,933 | |||||
Domain sales contribution | (839 | ) | (5,662 | ) | |||||
Gain on sales and disposals of intangible assets, net | (3,739 | ) | - | ||||||
Estimated impact of income taxes on domain gains and sales | 1,607 | 2,001 | |||||||
Adjusted Non-GAAP net income from continuing operations excluding domain gains and sales | $ | 4,505 | $ | 5,272 | |||||
Adjusted Non-GAAP EPS from continuing operations | $ | 0.21 | $ | 0.21 | |||||
Adjusted Non-GAAP EPS from continuing operations excluding domain gains and sales | $ | 0.12 | $ | 0.12 | |||||
Shares used to calculate diluted net income (loss) per share applicable | |||||||||
to common stockholders (GAAP) | 36,371 | 39,608 | |||||||
Weighted average stock options and common shares subject to purchase or cancellation (if applicable) | - | 2,698 | |||||||
Diluted shares used to calculate Adjusted Non-GAAP EPS (1) | 36,371 | 42,306 | |||||||
(1) For the purpose of computing the number of diluted shares for Adjusted Non-GAAP EPS, Marchex uses the accounting guidance that would be applicable for computing the number of diluted shares for GAAP EPS. |
|||||||||
Certain reclassifications have been made to prior periods to conform to current presentation. | |||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||||
Reconciliation of GAAP Income (Loss) from Operations to Operating Income before Amortization (OIBA) | |||||||||||||||||||||||||||||
and Adjusted Operating Income Before Amortization (Adjusted OIBA) | |||||||||||||||||||||||||||||
3 Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||||
9/30/2013 | 12/31/2013 | 3/31/2014 | 6/30/2014 | 9/30/2014 | 9/30/2013 | 9/30/2014 | |||||||||||||||||||||||
Income from operations | $ | 1,006 | $ | 1,544 | $ | 1,436 | $ | 1,711 | $ | 1,225 | $ | 1,205 | $ | 4,372 | |||||||||||||||
Stock-based compensation | 2,365 | 2,362 | 2,883 | 3,117 | 3,024 | 6,875 | 9,024 | ||||||||||||||||||||||
Amortization of intangible assets from acquisitions | 709 | 426 | 403 | 31 | - | 2,500 | 434 | ||||||||||||||||||||||
Operating income before amortization (OIBA) | 4,080 | 4,332 | 4,722 | 4,859 | 4,249 | 10,580 | 13,830 | ||||||||||||||||||||||
Acquisition and separation related costs | 286 | (62 | ) | - | (68 | ) | - | 940 | (68 | ) | |||||||||||||||||||
Adjusted operating income before amortization (Adjusted OIBA) | $ | 4,366 | $ | 4,270 | $ | 4,722 | $ | 4,791 | $ | 4,249 | $ | 11,520 | $ | 13,762 | |||||||||||||||
Domain sales contribution | (839 | ) | (1,549 | ) | (1,893 | ) | (2,217 | ) | (1,552 | ) | (839 | ) | (5,662 | ) | |||||||||||||||
Gain on sales and disposals of intangible assets, net | (1,047 | ) | (35 | ) | - | - | - | (3,739 | ) | - | |||||||||||||||||||
Adjusted OIBA excluding domain gains and sales | $ | 2,480 | $ | 2,686 | $ | 2,829 | $ | 2,574 | $ | 2,697 | 6,942 | 8,100 | |||||||||||||||||
Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA | |||||||||||||||||||||||||||||
3 Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||||
9/30/2013 | 12/31/2013 | 3/31/2014 | 6/30/2014 | 9/30/2014 | 9/30/2013 | 9/30/2014 | |||||||||||||||||||||||
Net cash provided by operating activities | $ | 4,332 | $ | 6,109 | $ | 8,078 | $ | 3,289 | $ | 6,750 | $ | 7,487 | $ | 18,117 | |||||||||||||||
Changes in assets and liabilities | (1,374 | ) | (1,636 | ) | (2,984 | ) | 1,672 | (24,736 | ) | 482 | (26,048 | ) | |||||||||||||||||
Income tax expense | 389 | 958 | 588 | 709 | 22,980 | 797 | 24,277 | ||||||||||||||||||||||
Acquisition and separation related costs | 286 | - | - | - | - | 940 | - | ||||||||||||||||||||||
Gain on sales and disposals of intangible assets, net | 1,047 | 35 | - | - | - | 3,739 | - | ||||||||||||||||||||||
Discontinued operations, net of tax | 43 | (7 | ) | (9 | ) | - | - | 49 | (9 | ) | |||||||||||||||||||
Tax effect of gain on sale of discontinued operations | 563 | - | - | - | 143 | 563 | 143 | ||||||||||||||||||||||
Interest expense and other, net | 15 | (14 | ) | 2 | 22 | 18 | 44 |
43 |
|||||||||||||||||||||
Excess tax benefits related to stock compensation | 13 | (209 | ) | - | - | - | 209 | - | |||||||||||||||||||||
Adjusted EBITDA | $ | 5,314 | $ | 5,236 | $ | 5,675 | $ | 5,692 | $ | 5,155 | $ |
14,310 |
$ |
16,523 |
|||||||||||||||
Domain sales contribution | (839 | ) | (1,549 | ) | (1,893 | ) | (2,217 | ) | (1,552 | ) | (839 | ) | (5,662 | ) | |||||||||||||||
Gain on sales and disposals of intangible assets, net | $ | (1,047 | ) | $ | (35 | ) | $ | - | $ | - | $ | - | $ | (3,739 | ) | $ | - | ||||||||||||
Adjusted EBITDA excluding domain gains and sales | $ | 3,428 | $ | 3,652 | $ | 3,782 | $ | 3,475 | $ | 3,603 | $ | 9,732 | $ |
10,861 |
|||||||||||||||
Net cash provided by (used in) investing activities | $ | 1,235 | $ | (549 | ) | $ | (807 | ) | $ | (545 | ) | $ | (826 | ) | $ | 2,197 | $ | (2,178 | ) | ||||||||||
Net cash provided by (used in) financing activities | $ | 842 | $ | 202 | $ | 343 | $ | 33,680 | $ | (222 | ) | $ | (463 | ) | $ | 33,801 | |||||||||||||
Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods. | |||||||||||||||||||||||||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||||||||||||
Quarterly Financial Summary Information | ||||||||||||||||||||
(in thousands) | ||||||||||||||||||||
NON-GAAP MEASURES | ||||||||||||||||||||
Amounts below exclude Discontinued Operations | ||||||||||||||||||||
CONSOLIDATED | Q113 | Q213 | Q313 | Q413 | Q114 | Q214 | Q314 | |||||||||||||
GAAP Revenue | $ | 34,732 | $ | 37,578 | $ | 40,560 | $ | 39,680 | $ | 50,496 | $ | 49,676 | $ | 49,181 | ||||||
Adjusted OIBA | $ | 3,604 | $ | 3,550 | $ | 4,366 | $ | 4,270 | $ | 4,722 | $ | 4,791 | $ | 4,249 | ||||||
Adjusted EBITDA | $ | 4,516 | $ | 4,480 | $ | 5,314 | $ | 5,236 | $ | 5,675 | $ | 5,692 | $ | 5,155 | ||||||
CALL-DRIVEN AND RELATED | Q113 | Q213 | Q313 | Q413 | Q114 | Q214 | Q314 | |||||||||||||
GAAP Revenue | $ | 31,107 | $ | 33,893 | $ | 35,668 | $ | 34,457 | $ | 45,492 | $ | 45,857 | $ | 46,379 | ||||||
Adjusted OIBA | $ | 1,371 | $ | 1,508 | $ | 1,693 | $ | 1,725 | $ | 2,411 | $ | 2,897 | $ | 3,279 | ||||||
Adjusted EBITDA | $ | 2,246 | $ | 2,401 | $ | 2,598 | $ | 2,618 | $ | 3,312 | $ | 3,764 | $ | 4,170 | ||||||
ARCHEO | Q113 | Q213 | Q313 | Q413 | Q114 | Q214 | Q314 | |||||||||||||
GAAP Revenue | $ | 3,625 | $ | 3,685 | $ | 4,892 | $ | 5,223 | $ | 5,004 | $ | 3,819 | $ | 2,802 | ||||||
Adjusted OIBA | $ | 2,233 | $ | 2,042 | $ | 2,673 | $ | 2,545 | $ | 2,311 | $ | 1,894 | $ | 970 | ||||||
Adjusted EBITDA | $ | 2,270 | $ | 2,079 | $ | 2,716 | $ | 2,618 | $ | 2,363 | $ | 1,928 | $ | 985 | ||||||
Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods. | ||||||||||||||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||||||||
Quarterly Financial Summary Information | |||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||
NON-GAAP MEASURES | |||||||||||||||||||||||
Amounts below exclude Domain Gains and Sales and Discontinued Operations | |||||||||||||||||||||||
CONSOLIDATED | Q113 | Q213 | Q313 | Q413 | Q114 | Q214 | Q314 | ||||||||||||||||
Non-GAAP Revenue | $ | 34,732 | $ | 37,578 | $ | 39,661 | $ | 38,124 | $ | 48,598 | $ | 47,430 | $ | 47,610 | |||||||||
Adjusted OIBA | $ | 2,242 | $ | 2,220 | $ | 2,480 | $ | 2,686 | $ | 2,829 | $ | 2,574 | $ | 2,697 | |||||||||
Adjusted EBITDA |
$ |
3,154 |
$ | 3,150 | $ | 3,428 | $ | 3,652 | $ | 3,782 | $ | 3,475 | $ | 3,603 | |||||||||
CALL-DRIVEN AND RELATED | Q113 | Q213 | Q313 | Q413 | Q114 | Q214 | Q314 | ||||||||||||||||
GAAP Revenue | $ | 31,107 | $ | 33,893 | $ | 35,668 | $ | 34,457 | $ | 45,492 | $ | 45,857 | $ | 46,379 | |||||||||
Adjusted OIBA | $ | 1,371 | $ | 1,508 | $ | 1,693 | $ | 1,725 | $ | 2,411 | $ | 2,897 | $ | 3,279 | |||||||||
Adjusted EBITDA | $ | 2,246 | $ | 2,401 | $ | 2,598 | $ | 2,618 | $ | 3,312 | $ | 3,764 | $ | 4,170 | |||||||||
ARCHEO | Q113 | Q213 | Q313 | Q413 | Q114 | Q214 | Q314 | ||||||||||||||||
Non-GAAP Revenue | $ | 3,624 | $ | 3,685 | $ | 3,993 | $ | 3,667 | $ | 3,106 | $ | 1,573 | $ | 1,231 | |||||||||
Adjusted OIBA | $ | 871 | $ | 712 | $ | 787 | $ | 961 | $ | 418 | $ | (323 | ) | $ | (582 | ) | |||||||
Adjusted EBITDA | $ | 908 | $ | 749 | $ | 830 | $ | 1,034 | $ | 470 | $ | (289 | ) | $ | (567 | ) | |||||||
Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods. | |||||||||||||||||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||||
Financial Summary by Segment | |||||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||||
9/30/2013 | 12/31/2013 | 3/31/2014 | 6/30/2014 | 9/30/2014 | 9/30/2013 | 9/30/2014 | |||||||||||||||||||||
Marchex - Consolidated5 | |||||||||||||||||||||||||||
Revenue - GAAP2 | $ | 40,560 | $ | 39,680 | $ | 50,496 | $ | 49,676 | $ | 49,181 | $ | 112,870 | $ | 149,353 | |||||||||||||
Revenue including domain gains3 | $ | 41,607 | $ | 39,715 | $ | 50,496 | $ | 49,676 | $ | 49,181 | $ | 116,609 | $ | 149,353 | |||||||||||||
Adjusted OIBA including domain gains and sales4 | $ | 4,366 | $ | 4,270 | $ | 4,722 | $ | 4,791 | $ | 4,249 |
|
$ | 11,520 | $ | 13,762 | ||||||||||||
Adjusted OIBA excluding domain gains and sales4 | $ | 2,480 | $ | 2,686 | $ | 2,829 | $ | 2,574 | $ | 2,697 | $ | 6,942 | $ | 8,100 | |||||||||||||
Adjusted EBITDA including domain gains and sales4 | $ | 5,314 | $ | 5,236 | $ | 5,675 | $ | 5,692 | $ | 5,155 |
|
$ | 14,310 | $ |
16,523 |
||||||||||||
Adjusted EBITDA excluding domain gains and sales4 | $ | 3,428 | $ | 3,652 | $ | 3,782 | $ | 3,475 | $ | 3,603 | $ | 9,732 | $ |
10,861 |
|||||||||||||
Call-Driven and Related1 | |||||||||||||||||||||||||||
Revenue - GAAP | $ | 35,668 | $ | 34,457 | $ | 45,492 | $ | 45,857 | $ | 46,379 | $ | 100,668 | $ | 137,728 | |||||||||||||
Adjusted OIBA | $ | 1,693 | $ | 1,725 | $ | 2,411 | $ | 2,897 | $ | 3,279 | $ | 4,572 | $ | 8,587 | |||||||||||||
Adjusted EBITDA | $ | 2,598 | $ | 2,618 | $ | 3,312 | $ | 3,764 | $ | 4,170 | $ | 7,245 | $ |
11,247 |
|||||||||||||
Archeo1,5 | |||||||||||||||||||||||||||
Revenue - GAAP2 | $ | 4,892 | $ | 5,223 | $ | 5,004 | $ | 3,819 | $ | 2,802 | $ | 12,202 | $ | 11,625 | |||||||||||||
Revenue including domain gains3 | $ | 5,939 | $ | 5,258 | $ | 5,004 | $ | 3,819 | $ | 2,802 |
|
$ | 15,941 | $ |
11,625 |
||||||||||||
Adjusted OIBA including domain gains and sales4 | $ | 2,673 | $ | 2,545 | $ | 2,311 | $ | 1,894 | $ | 970 | $ | 6,948 | $ | 5,175 | |||||||||||||
Adjusted OIBA excluding domain gains and sales4 | $ | 787 | $ | 961 | $ | 418 | $ | (323 | ) | $ | (582 | ) | $ | 2,370 | $ | (487 | ) | ||||||||||
Adjusted EBITDA including domain gains and sales4 | $ | 2,716 | $ | 2,618 | $ | 2,363 | $ | 1,928 | $ | 985 | $ | 7,065 | $ | 5,276 | |||||||||||||
Adjusted EBITDA excluding domain gains and sales4 | $ | 830 | $ | 1,034 | $ | 470 | $ | (289 | ) | $ | (567 | ) | $ | 2,487 | $ | (386 | ) | ||||||||||
1 | The financial results for Call-Driven and Archeo are preliminary and have been derived from the unaudited condensed consolidated financial statements of | ||||||||||||||||||||||||||
Marchex, Inc. for all periods presented. | |||||||||||||||||||||||||||
The unaudited Call-Driven financial results include certain direct operating expenses and general corporate overhead expenses in all periods presented. | |||||||||||||||||||||||||||
The unaudited Archeo financial results include direct operating expenses for all periods presented. | |||||||||||||||||||||||||||
2 | In September 2013, Marchex announced and launched its Domains Marketplace and through it, commenced buying and selling of domains. | ||||||||||||||||||||||||||
Domain sales occurring after this date are included in GAAP revenue and related cost in service cost. Prior to this date, domain sales were recognized | |||||||||||||||||||||||||||
in gain on sales and disposals of intangible assets in the unaudited condensed consolidated financial statements. | |||||||||||||||||||||||||||
3 | Domain sales recognized in gain on sales and disposals of intangible assets, net. | ||||||||||||||||||||||||||
4 | Domain sales recognized in either gain on sales and disposals of intangible assets, net or in revenue and service costs in the unaudited condensed | ||||||||||||||||||||||||||
consolidated financial statements for each applicable period. | |||||||||||||||||||||||||||
5 | Amounts presented exclude results of discontinued operations. Operating results of discontinued operations relate to certain | ||||||||||||||||||||||||||
pay-per-click assets sold in July 2013 and are included in discontinued operations, net of tax in the unaudited condensed consolidated financial statements. | |||||||||||||||||||||||||||
Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods. | |||||||||||||||||||||||||||
MARCHEX, INC. AND SUBSIDIARIES | |||||||||||||||||||||||||
Reconciliation to Reported Financial and Non-GAAP Information | |||||||||||||||||||||||||
(in thousands) | |||||||||||||||||||||||||
(unaudited) | |||||||||||||||||||||||||
Three Months Ended |
Nine Months Ended |
||||||||||||||||||||||||
9/30/2013 | 12/31/2013 | 3/31/2014 | 6/30/2014 | 9/30/2014 | 9/30/2013 | 9/30/2014 | |||||||||||||||||||
Revenue6 | |||||||||||||||||||||||||
Consolidated - GAAP1 | $ | 40,560 | $ | 39,680 | $ | 50,496 | $ | 49,676 | $ | 49,181 | $ | 112,870 | $ | 149,353 | |||||||||||
Add: Domain Gains2 | 1,047 | 35 | - | - | - | 3,739 | - | ||||||||||||||||||
Consolidated including Domain Gains and Sales3 | 41,607 | 39,715 | 50,496 | 49,676 | 49,181 | 116,609 | 149,353 | ||||||||||||||||||
Less: Archeo including Domain Gains and Sales3,4 | 5,939 | 5,258 | 5,004 | 3,819 | 2,802 | 15,941 | 11,625 | ||||||||||||||||||
Call-Driven4 and related | $ | 35,668 | $ | 34,457 | $ | 45,492 | $ | 45,857 | $ | 46,379 | $ | 100,668 | $ | 137,728 | |||||||||||
Adjusted operating income6 | |||||||||||||||||||||||||
Consolidated excluding Domain Gains and Sales5 | $ | 2,480 | $ | 2,686 | $ | 2,829 | $ | 2,574 | $ | 2,697 | $ | 6,942 | $ | 8,100 | |||||||||||
Add: Domain Gains and Sales5 | 1,886 | 1,584 | 1,893 | 2,217 | 1,552 | 4,578 | 5,662 | ||||||||||||||||||
Consolidated including Domain Gains and Sales | 4,366 | 4,270 | 4,722 | 4,791 | 4,249 |
11,520 |
13,762 |
||||||||||||||||||
Less: Archeo including Domain Gains and Sales4,5 | 2,673 | 2,545 | 2,311 | 1,894 | 970 | 6,948 | 5,175 | ||||||||||||||||||
Call-Driven4 and related | $ | 1,693 | $ | 1,725 | $ | 2,411 | $ | 2,897 | $ | 3,279 | $ | 4,572 | $ | 8,587 | |||||||||||
Adjusted EBITDA6 | |||||||||||||||||||||||||
Consolidated excluding Domain Gains and Sales5 | $ | 3,428 | $ | 3,652 | $ | 3,782 | $ | 3,475 | $ | 3,603 | $ | 9,732 | $ |
10,861 |
|||||||||||
Add: Domain Gains and Sales5 | 1,886 | 1,584 | 1,893 | 2,217 | 1,552 | 4,578 | 5,662 | ||||||||||||||||||
Consolidated including Domain Gains and Sales | 5,314 | 5,236 | 5,675 | 5,692 | 5,155 |
14,310 |
16,523 |
||||||||||||||||||
Less: Archeo including Domain Gains and Sales4,5 | 2,716 | 2,618 | 2,363 | 1,928 | 985 | 7,065 | 5,276 | ||||||||||||||||||
Call-Driven4 and related | $ | 2,598 | $ | 2,618 | $ | 3,312 | $ | 3,764 | $ | 4,170 | $ | 7,245 | $ |
11,247 |
|||||||||||
1 | In September 2013, Marchex announced and launched its Domains Marketplace and through it, commenced buying and selling of domains. | ||||||||||||||||||||||||
Domain sales occurring after this date are included in GAAP revenue and related cost in service cost. Prior to this date, domain sales were recognized | |||||||||||||||||||||||||
in gain on sales and disposals of intangible assets in the unaudited condensed consolidated financial statements. | |||||||||||||||||||||||||
2 | Domain sales recognized in gain on sales and disposals of intangible assets, net in the unaudited consolidated financial statements. | ||||||||||||||||||||||||
3 | Domain sales recognized in either gain on sales and disposals of intangible assets or in revenue and service costs in the unaudited | ||||||||||||||||||||||||
condensed consolidated financial statements for each applicable period. | |||||||||||||||||||||||||
4 | The financial results for Call-Driven and Archeo are preliminary and have been derived from the unaudited condensed consolidated financial statements of | ||||||||||||||||||||||||
Marchex, Inc. for all periods presented. | |||||||||||||||||||||||||
The unaudited Call-Driven financial results include certain direct operating expenses and general corporate overhead expenses in all periods presented. | |||||||||||||||||||||||||
The unaudited Archeo financial results include direct operating expenses for all periods presented. | |||||||||||||||||||||||||
5 | These are non-GAAP measures of operating results and liquidity. These non-GAAP measures are adjusted for net gains from sales of intangible assets, | ||||||||||||||||||||||||
direct contribution of domain sales sold through Marchex's Domains Marketplace. | |||||||||||||||||||||||||
6 | Amounts presented exclude results of discontinued operations. Financial results of discontinued operations related to certain | ||||||||||||||||||||||||
pay-per-click assets sold in July 2013 and are included in discontinued operations, net of tax in the unaudited consolidated condensed financial statements. | |||||||||||||||||||||||||
Due to rounding, the sum of quarterly amounts may not equal amounts reported for year-to-date periods. |
Source:
Marchex Investor Relations
Trevor Caldwell, 206-331-3600
Email:
ir(at)marchex.com
or
MEDIA INQUIRIES
Marchex
Corporate Communications
Sonia Krishnan, 206-331-3434
Email:
skrishnan(at)marchex.com