News Release Details

SEATTLE--(BUSINESS WIRE)--May 6, 2015-- Marchex, Inc. (NASDAQ:MCHX), a mobile advertising analytics company, today announced its financial results for the first quarter ended March 31, 2015.

“Massive mobile adoption is driving increased offline sales, including phone calls from consumers to businesses. This is creating an increasing gap for enterprise marketers whose top priority is understanding mobile return on ad spend,” said Pete Christothoulou, Chief Executive Officer. “The need for technology solutions to bridge this gap validates our investment in establishing Marchex as the world’s leading mobile advertising analytics company.”

Q1 2015 Financial Highlights

• GAAP revenue was $42.6 million for the first quarter of 2015, compared to $50.5 million for the first quarter of 2014.

• GAAP net income from continuing operations was $4.6 million for the first quarter of 2015, compared to GAAP net income from continuing operations of $846,000 for the first quarter of 2014.
• GAAP net income from continuing operations attributable to common stockholders per diluted share was $0.11 for the first quarter of 2015. This compares to GAAP net income from continuing operations attributable to common stockholders per diluted share of $0.02 for the first quarter of 2014.

• Adjusted non-GAAP EPS¹ from continuing operations for the first quarter of 2015 was $0.12, compared to $0.08 for the first quarter of 2014.

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¹ 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.

² Includes domain sales recognized in GAAP revenue.

Marchex Q1 2015 and Recent Call-Driven Business Highlights:

• Revenue. Call-Driven and related revenue was $35.0 million for the first quarter of 2015 compared to $45.5 million for the first quarter of 2014.

Non-Operating Q1 2015 Highlights:

• Business Update. On April 22, 2015, the Company announced the sale of the bulk of its domain portfolio for aggregate proceeds of $34.8 million, which includes a sale to GoDaddy Inc. for $28.1 million paid in cash at closing plus additional earn-out payments subject to certain sales targets, as well as $6.7 million in direct domain sales by Marchex since January 2015.
• Dividend Update. Following the previously announced payment of the May 18, 2015 dividend, and with the April sale of the domain assets, the Company is prospectively discontinuing the dividend and intends to use any future cash generated to support strategic flexibility.
• During the first quarter, Marchex purchased 225,000 shares of its outstanding Class B common stock for a total price of $931,000. This brings Marchex’s total shares repurchased under its November 2014 share repurchase program to 893,000 shares or 2% of its outstanding Class B common stock.

Business Outlook

The following forward-looking statements reflect Marchex's expectations as of May 6, 2015, and exclude any contribution from Archeo operations, including domain sales, and discontinued operations. Archeo operating results would be additive to our Call-Driven revenue, profitability, and other measures below:

¹ These non-GAAP Call-Driven measures assign all Marchex corporate overhead costs to the Call-Driven results. 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.

Conference Call and Webcast Information

Management will hold a conference call, starting at 5:00 p.m. ET on Wednesday, May 6, 2015, to discuss its first quarter ended March 31, 2015, financial results, and other company updates. Access to the live webcast of the conference call will be available online from the Investors section of Marchex’s website at www.marchex.com. An archived version of the webcast will also be available at the same location, beginning two hours after completion of the call.

About Marchex

Marchex is a mobile advertising analytics company that connects online behavior to real-world, offline actions. By linking critical touchpoints in the customer journey, Marchex’s products enable a 360-degree view of marketing effectiveness. Brands and agencies utilize Marchex’s products to transform business performance.

Please visit www.marchex.com, blog.marchex.com 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.

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 which are described 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 May 6, 2015 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 OIBA, Adjusted OIBA, Adjusted EBITDA, Adjusted non-GAAP EPS and Call-Driven and Archeo Adjusted OIBA and EBITDA. In conjunction with the sale of the bulk of Marchex’s domain portfolio and certain related assets in April 2015 (”Divested Assets”), Marchex has also presented Revenue from Divested Assets, Adjusted OIBA and EBITDA from Divested Assets and Archeo Revenue, Adjusted OIBA and EBITDA excluding Divested Assets.

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 Marchex evaluates the performance of its business. Additionally, Marchex's management uses Adjusted OIBA, which excludes acquisition and disposition related costs, as this item is not indicative of Marchex’s recurring core operating results. 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 and disposition related costs. Adjusted EBITDA represents income before interest, income taxes, depreciation, amortization, stock compensation expense, and acquisition and disposition related cost. Marchex believes that Adjusted EBITDA is another alternative measure of liquidity to GAAP net cash provided by 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.

Call-Driven Adjusted OIBA and EBITDA include the above descriptions of Adjusted OIBA and EBITDA for the Call-Driven segment. The Call-Driven Adjusted OIBA and EBITDAassign all Marchex general corporate overhead costs to the Call-Driven results. Archeo Adjusted OIBA and EBITDA include the above descriptions of Adjusted OIBA and EBITDA for the Archeo segment. Financial analysts and investors may use Adjusted OIBA and EBITDA to help with comparative financial evaluation to make informed investment decisions. Revenue from Divested Assets and Adjusted OIBA and EBITDA from Divested Assets include preliminary estimates of revenue and adjusted OIBA and EBITDA contributed by the Divested Assets. Archeo Revenue, Adjusted OIBA and EBITDA excluding Divested Assets exclude preliminary estimates of revenue and adjusted OIBA and EBITDA contributed by the Divested Assets. Adjusted non-GAAP EPS represents Adjusted non-GAAP net income applicable to common stockholders divided by GAAP diluted shares outstanding. Adjusted non-GAAP net income applicable to common stockholders 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 applicable to common stockholders plus the net of tax effects of: (1) stock-based compensation expense, (2) amortization of intangible assets from acquisitions, (3) acquisition and disposition related costs, (4) interest and other income (expense), (5) discontinued operations, net of tax and (6) dividends paid to participating securities. Financial analysts and investors may use Adjusted non-GAAP EPS 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.

Source: Marchex, Inc.

Marchex, Inc.
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Trevor Caldwell, 206-331-3600
ir(at)marchex.com
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