Acquisition further extends Marchex’s market penetration and adds to
the scale of the Company’s conversational data assets
SEATTLE--(BUSINESS WIRE)--Nov. 5, 2018--
Marchex,
Inc. (NASDAQ:MCHX), a leading provider of call analytics that drive,
measure, and convert callers into customers, today announced the
acquisition of Telmetrics, an enterprise call and text tracking and
analytics company, for consideration of up to $13.1 million in cash.
Telmetrics specializes in providing call analytics to enterprise
customers in a variety of vertical categories such as auto, local
aggregators, digital agencies and online directories. In addition, the
company’s Smart Number product enables enterprises to capture and
analyze SMS/text interactions as part of its real-time media call
analytics solutions. Telmetrics processed more than 100 million minutes
of conversation between businesses and consumers so far this year.
“Our vision is to create the leading conversational analytics company,
including voice and text solutions. With the addition of Telmetrics,
Marchex has increased our footprint of opportunities, expedited our
growing text communications product initiatives, and captured additional
scale and efficiencies with our call analytics business,” said Russell
Horowitz, Executive Director and Member of the Office of the CEO. “With
a significant, growing list of enterprise brands utilizing Marchex’s
AI-powered conversation analytics solutions, we believe we have enhanced
our opportunity to deepen relationships and open up new customer
segments.”
“We are excited to combine our product capabilities and customer
conversational data with one of the largest conversational data sets in
the world. Customer conversational data is a transformative asset in
applying AI and machine learning to unlock the valuable insights needed
to build new analytics solutions for customer conversations across
communication channels,” said Andrew Osmak, CEO of Telmetrics. “I’m very
proud of the accomplishments of our devoted staff and we look forward to
joining forces with Marchex to leverage our collective capabilities to
unlock the value of every conversation, across voice and
text, for brands of global scale to local SMB’s across the United States
and abroad.”
Strategic Rationale
Faster Innovation. By combining resources, the companies expect
to leverage machine learning and AI-driven capabilities across one of
the largest conversational data sets in the industry to deliver unique,
personalized, sales enhancing solutions for customers across
communication channels, including voice and text.
Expanded Enterprise Solutions. The combined company will give a
unified view of customer communications across voice and text channels
to surface critical insights and create actionable solutions. These
expanded capabilities will help companies find, engage and nurture their
most valuable customers across two of the most important communication
channels, voice and text.
A Higher ROI for Advertisers. By understanding which customers
are interacting with brands across all digital marketing channels
through voice and text-based communications, the combined company can
solve the attribution gap for brands when consumers go “offline” in
their path to purchase.
Additional Scale and Efficiencies. The combination and scale of
the joint company enables Marchex to accelerate sales efforts and
realize operational efficiencies. These efficiencies are expected to be
recognized starting in mid-2019 and beyond.
Transaction Details and Financial Considerations
-
Total Cash Consideration up to $13.1 million, with $10.1 million paid
at close and contingent payments of up to $3 million, subject to
achieving certain growth targets consisting of both revenue and OIBA
components over two years. In addition, Marchex will issue restricted
stock units up to $0.5 million and options to certain employees of
Telmetrics subject to vesting over three and four years, respectively.
-
We expect amortization of intangible assets from acquisition will
impact GAAP results. For the remainder of 2018 and for 2019, we expect
the acquisition to be accretive on a non-GAAP basis.
Additional financial details will be provided on the Company’s third
quarter earnings release and conference call on November 5.
About Marchex
Marchex
understands the best customers are those who call your company - they
convert faster, buy more, and churn less. Marchex provides solutions
that help companies drive more calls, understand what happens on those
calls, and convert more of those callers into customers. Our actionable
intelligence strengthens the connection between companies and their
customers, bridging the physical and digital world, to help brands
maximize their marketing investments and operating efficiencies to
acquire the best customers.
Please visit http://www.marchex.com, www.marchex.com/blog or @marchex on
Twitter (Twitter.com/Marchex), where Marchex discloses material
information from time to time about the company, its financial
information, and its business.
About Telmetrics
Telmetrics is a call and text tracking and analytics company that
enables, tracks and analyzes offline interactions to increase engagement
and return on advertising spend. At the core of our solutions are
millions of unique local and toll-free phone numbers that can be placed
in any online, or offline ad. By tracking consumer voice and text
response to each number, our clients can pinpoint which lead sources,
media channels, and keyword buys are yielding the most success and can
measure the quality of those leads. Our response and conversation
analytics are available in real-time, easy to understand and give
businesses the insights they need to lift your advertising ROI.
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, dispositions,
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 Marchex's actual results to differ materially from those indicated
by such forward-looking statements including but not limited to product
demand, order cancellations and delays, competition and general economic
conditions. These factors are described in greater detail in the "Risk
Factors" section of our most recent periodic report and registration
statement filed with the SEC. All of the information provided in this
release is as of November 5, 2018 and Marchex undertakes no duty to
update the information provided herein.
Non-GAAP Financial Information
To supplement Marchex's consolidated financial statements presented in
accordance with GAAP and to provide clarity internally and externally,
Marchex uses certain non-GAAP measures of financial performance and
liquidity, including Adjusted OIBA, Adjusted EBITDA, and Adjusted
non-GAAP income (loss) per share.
Adjusted OIBA represents income
(loss) from operations excluding stock-based compensation expense,
amortization of intangible assets from acquisitions, and acquisition
related costs. This measure, among other things, is one of the primary
metrics by which Marchex evaluates the performance of its business.
Adjusted OIBA is the basis on which Marchex's internal budgets are based
and by which Marchex's management is currently evaluated. Marchex
believes these measures are useful to investors because they represent
Marchex's consolidated operating results, taking into account
depreciation and other intangible amortization, which Marchex believes
is an ongoing cost of doing business, but excluding the effects of
certain other expenses such as stock-based compensation, amortization of
intangible assets from acquisitions, and acquisition related costs. Adjusted
EBITDA represents income (loss) before interest, income
taxes, depreciation, amortization, acquisition related costs and
stock-based compensation. Marchex believes that Adjusted EBITDA is
another alternative measure of liquidity to GAAP net cash provided by
(used in) operating activities that provides meaningful supplemental
information regarding liquidity and is used by Marchex's management to
measure its ability to fund operations and its financing obligations.
Financial analysts and investors may use Adjusted OIBA and EBITDA to
help with comparative financial evaluation to make informed investment
decisions. Adjusted non-GAAP income (loss) per
share represents Adjusted non-GAAP income (loss) divided by
GAAP diluted shares outstanding. Adjusted non-GAAP income (loss)
generally captures those items on the statement of operations that have
been, or ultimately will be, settled in cash exclusive of certain items
that are not indicative of Marchex’s recurring core operating results
and represents net income (loss) applicable to common stockholders plus
the net of tax effects of: (1) stock-based compensation; (2) interest
income and other, net, (3) amortization of intangible assets from
acquisition; and (4) acquisition related costs. Financial analysts and
investors may use Adjusted non-GAAP income (loss) per share to analyze
Marchex's financial performance since these groups have historically
used EPS related measures, along with other measures, to estimate the
value of a company, to make informed investment decisions, and to
evaluate a company's operating performance compared to that of other
companies in its industry.
Marchex's management believes that investors should have access to, and
Marchex is obligated to provide, the same set of tools that management
uses in analyzing the company's results. These non-GAAP measures should
be considered in addition to results prepared in accordance with GAAP,
and should not be considered in isolation, as a substitute for, or
superior to, GAAP results. Marchex’s non-GAAP financial measures may be
defined differently from time to time and may be defined differently
than similar titled terms used by other companies, and accordingly, care
should be exercised in understanding how Marchex defines its non-GAAP
financial measures in this release. Marchex endeavors to compensate for
the limitations of the non-GAAP measures presented by providing the
comparable GAAP measure with equal or greater prominence, GAAP financial
statements, and detailed descriptions of the reconciling items and
adjustments, including quantifying such items, to derive the non-GAAP
measure.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181105005761/en/
Source: Marchex, Inc.
Marchex Investor Relations
Trevor Caldwell, 206-331-3600
ir@marchex.com
Or
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Marchex Corporate Communications
206-331-3434
marchex@edelman.com