Revenue Growth Accelerates to 103% Year-Over-Year
Platform Efficiencies Drive Record EBITDA and Operating Income
Full Year Revenue and EBITDA Outlook Increased
NEW YORK, Aug. 4, 2010 (GLOBE NEWSWIRE) -- interCLICK, Inc. (Nasdaq:ICLK) announced today its financial results for the second quarter ended June 30, 2010.
| Summary Results | |||
| $ in millions (except per share amounts); Unaudited | |||
| Q2 2010 | Q2 2009 | Growth | |
| Revenue | $ 21.7 | $ 10.6 | 103% |
| Gross profit | $ 9.6 | $ 4.8 | 102% |
| Gross margin | 44.4% | 44.8% | |
| EBITDA | $ 2.4 | $ 0.2 | 1161% |
| Operating income (loss) | $ 1.2 | $ (0.7) | nm |
| Income tax expense | $ (1.2) | $ -- | nm |
| Net loss | $ (0.1) | $ (1.0) | 92% |
| EPS | $ 0.00 | $ (0.05) | nm |
| See reconciliation of non-GAAP measure on attached tables. | |||
Revenue was $21.7 million in Q2 2010, a 103% year-over-year increase, an accelerated rate of growth as compared to the first quarter and continuing at a pace that is far higher than that of the overall online display advertising sector as recently reported by the Interactive Advertising Bureau. Growth was driven by record retention of existing clients and a record number of new client campaigns reflecting increased demand for interCLICK's innovative audience targeting solution.
Gross profit was $9.6 million in Q2 2010, up 102% year-over-year, and a new quarterly high for interCLICK. Gross profit margin was 44.4%, within 40 basis points of the prior year period.
EBITDA, a non-GAAP measure, was $2.4 million in Q2 2010, representing a margin of 11.1%. EBITDA exceeded interCLICK's previous guidance by more than three times due to higher than previously expected revenue, incremental operating efficiencies achieved as a result of interCLICK's platform capabilities, and lower bad debt expense than in prior periods.
Operating income was $1.2 million and pre-tax income was $1.1 million in Q2 2010, both quarterly records for the Company. Net loss was $(0.1 million) and earnings per share was $0.00 in Q2 2010. Operating expenses increased 54% year-over-year to support the growth of interCLICK's business. The Q2 2010 results also included a $0.4 million cease-use charge of a non-recurring nature, as previously disclosed, and income tax expense of $1.2 million based on the Company's effective tax rate for the first half of 2010.
"Our continued investment in Innovation & Development has translated to very meaningful value for our clients and for our shareholders," said Michael Mathews, interCLICK's CEO. "As a result, we have experienced significant revenue growth while also improving operational efficiency as we continue to scale our business. Our outlook as we head into the back half of the year is extremely positive."
interCLICK ended the quarter with $11.2 million in cash and cash equivalents, of which $1.3 million is restricted. As of June 30, 2010, interCLICK had 23.8 million shares outstanding and 30.2 million fully-diluted shares outstanding.
Business Outlook
interCLICK expects Q3 revenue to exceed $23 million, growing year-over-year by at least 60%, and reflecting an increase from previous guidance of $22 million. interCLICK estimates Q3 EBITDA will be approximately $2.5 million, growing year-over-year by approximately 79%. The Company also projects revenue and EBITDA to exceed $90 million and $9 million, respectively, for the full year 2010.
Conference Call
interCLICK will host a conference call to discuss its second quarter financial results and business outlook on Wednesday, August 4, 2010, at 4:30 p.m. (EDT). The conference can be accessed by dialing toll-free (877) 303-6501 (U.S.) or (720) 545-0015 (international). A live audiocast of the conference can be accessed from the Company's website at http://ir.interclick.com/events.cfm. A replay of the audiocast will be available through August 4, 2011.
Reclassifications
Certain amounts in the accompanying financial tables relating to prior periods have been reclassified to conform to the second quarter 2010 presentation.
Non-GAAP Financial Measure
interCLICK uses a non-GAAP financial measure in evaluating its financial and operational decision making and as a means to evaluate period-to period comparison. Management believes that the non-GAAP financial measure provides meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of the performance of our core cash operations. interCLICK believes that both management and investors benefit from referring to this non-GAAP financial measure in assessing our performance and when planning, forecasting and analyzing future periods. interCLICK believes this non-GAAP financial measure is useful to investors because it allows for greater transparency with respect to key metrics used by management.
EBITDA. As is common in the industry, interCLICK uses EBITDA as a measure of performance to demonstrate operating income exclusive of interest, taxes, depreciation, and amortization (including stock-based compensation). interCLICK, in its daily management of its business affairs and analysis of its monthly, quarterly and annual performance, makes certain of its decisions based on EBITDA. Since an outside investor may base its evaluation of interCLICK's performance on interCLICK's net income or loss, there is a limitation to the EBITDA measurement. EBITDA is not, and should not be considered, an alternative to net income or loss, income or loss from operations or any other measure for determining operating performance or liquidity, as determined under GAAP.
To comply with Regulation G of the Securities and Exchange Commission, interCLICK attached to this press release, and will post to its website at http://ir.interclick.com/index.cfm, a reconciliation of the non-GAAP measure to the nearest comparable GAAP measure that is presented in this release.
About interCLICK
interCLICK is an audience intelligence and targeting company, developing and executing data-driven campaign strategies for major digital agencies and marketers. Fueled by its proprietary software and sophisticated approach to managing its supply chain, interCLICK empowers its clients to reach desirable audiences efficiently, in brand-safe environments, and at tremendous scale. For more information, visit http://www.interclick.com.
Cautionary Note Regarding Forward Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including third quarter and 2010 revenue and EBITDA outlook and growth. Forward-looking statements can be identified by words such as "anticipates," "intends," "plans," "seeks," "believes," "estimates," "expects" and similar references to future periods.
Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. We caution you therefore against relying on any of these forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements include the impact of intense competition, the continuation or worsening of current economic conditions, a potential decrease in corporate advertising spending, a potential decrease in consumer spending and the condition of the domestic and global credit and capital markets.
Further information on our risk factors is contained in our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2009. Any forward-looking statement speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
| interCLICK, Inc. and Subsidiary | For the Three | For the Three | For the Six | For the Six |
| Condensed Consolidated Statements of Operations |
Months Ended |
Months Ended |
Months Ended |
Months Ended |
| Unaudited | June 30, 2010 | June 30, 2009 | June 30, 2010 | June 30, 2009 |
| Revenues | $ 21,659,883 | $ 10,648,686 | $ 35,861,740 | $ 19,071,977 |
| Cost of revenues | 12,034,487 | 5,882,655 | 19,853,668 | 10,356,934 |
| Gross profit | 9,625,396 | 4,766,031 | 16,008,072 | 8,715,043 |
| Operating expenses: | ||||
| General and administrative | 3,873,745 | 2,895,717 | 7,104,273 | 4,573,382 |
| Sales and marketing | 3,087,183 | 1,734,921 | 5,203,897 | 3,151,443 |
| Technology support | 1,419,362 | 797,552 | 2,758,940 | 1,381,883 |
| Amortization of intangible assets | 39,500 | 49,760 | 79,000 | 99,520 |
| Total operating expenses | 8,419,790 | 5,477,950 | 15,146,110 | 9,206,228 |
| Operating income (loss) from continuing operations | 1,205,606 | (711,919) | 861,962 | (491,185) |
| Other income (expense): | ||||
| Interest income | 8,151 | -- | 17,019 | 12 |
| Loss on sale of available-for-sale securities | -- | (36,349) | -- | (36,349) |
| Other than temporary impairment of available-for-sale securities | -- | -- | (458,538) | -- |
| Warrant derivative liability income (expense) | (272) | (159,294) | 21,413 | (232,061) |
| Interest expense | (74,537) | (126,681) | (176,946) | (240,273) |
| Total other expense | (66,658) | (322,324) | (597,052) | (508,671) |
| Income (loss) from continuing operations before income taxes | 1,138,948 | (1,034,243) | 264,910 | (999,856) |
| Income tax expense | (1,218,234) | -- | (139,126) | -- |
| Income (loss) from continuing operations | (79,286) | (1,034,243) | 125,784 | (999,856) |
| Loss from discontinued operations | -- | -- | -- | (1,220) |
| Net income (loss) | $ (79,286) | $ (1,034,243) | $ 125,784 | $ (1,001,076) |
| Other comprehensive loss: | ||||
| Unrealized losses on securities: | ||||
| Unrealized loss on available-for-sale-securities | (20,427) | (899,999) | (20,427) | (899,999) |
| Reclassification adjustments for losses included in net income (loss) | -- | 36,349 | -- | 36,349 |
| Total other comprehensive loss | (20,427) | (863,650) | (20,427) | (863,650) |
| Comprehensive income (loss) | $ (99,713) | $ (1,897,893) | $ 105,357 | $ (1,864,726) |
| Basic earnings (loss) per share: | ||||
| Continuing operations | $ -- | $ (0.05) | $ 0.01 | $ (0.05) |
| Discontinued operations | $ -- | $ -- | $ -- | $ -- |
| Net income | $ -- | $ (0.05) | $ 0.01 | $ (0.05) |
| Diluted earnings (loss) per share: | ||||
| Continuing operations | $ -- | $ (0.05) | $ -- | $ (0.05) |
| Discontinued operations | $ -- | $ -- | $ -- | $ -- |
| Net income | $ -- | $ (0.05) | $ -- | $ (0.05) |
| Weighted average shares: | ||||
| Basic | 23,683,252 | 19,164,350 | 23,646,178 | 19,044,443 |
| Diluted | 23,683,252 | 19,164,350 | 25,731,080 | 19,044,443 |
| Reconciliation of GAAP measure to non-GAAP measure: | ||||
| Operating income (loss) from continuing operations | $ 1,205,606 | $ (711,919) | $ 861,962 | $ (491,185) |
| Stock-based compensation | 972,488 | 777,173 | 1,822,070 | 1,353,743 |
| Amortization of intangible assets | 39,500 | 49,760 | 79,000 | 99,520 |
| Depreciation | 177,394 | 74,978 | 320,356 | 147,364 |
| EBITDA | $ 2,394,988 | $ 189,992 | $ 3,083,387 | $ 1,109,442 |
| interCLICK, Inc. and Subsidiary | ||
| Condensed Consolidated Balance Sheets | ||
| Unaudited | June 30, 2010 | December 31, 2009 |
| Current assets: | ||
| Cash and cash equivalents | $ 9,922,770 | $ 12,653,958 |
| Restricted cash | 997,390 | -- |
| Accounts receivable, net of allowance | 21,806,995 | 21,631,305 |
| Credit facility reserve | 556,889 | 1,052,167 |
| Deferred taxes, current portion | 936,649 | 955,471 |
| Income tax receivable | 497,798 | -- |
| Prepaid expenses and other current assets | 321,781 | 367,183 |
| Total current assets | 35,040,272 | 36,660,084 |
| Restricted cash | 295,570 | -- |
| Property and equipment, net | 1,821,142 | 988,899 |
| Intangible assets, net | 342,333 | 421,333 |
| Goodwill | 7,909,571 | 7,909,571 |
| Investment in available-for-sale securities | 225,394 | 715,608 |
| Deferred debt issue costs, net | -- | 4,972 |
| Deferred taxes, net of current portion | 2,695,009 | 2,579,568 |
| Other assets | 207,573 | 192,179 |
| Total assets | $ 48,536,864 | $ 49,472,214 |
| Current liabilities: | ||
| Accounts payable | $ 10,492,210 | $ 10,934,236 |
| Accrued expenses | 2,946,145 | 3,164,044 |
| Credit facility payable | 2,784,443 | 5,260,834 |
| Obligations under capital leases, current portion | 331,909 | 161,940 |
| Deferred rent, current portion | 10,208 | 3,508 |
| Income taxes payable | -- | 515,306 |
| Warrant derivative liability | -- | 69,258 |
| Total current liabilities | 16,564,915 | 20,109,126 |
| Obligations under capital leases, net of current portion | 595,886 | 338,562 |
| Deferred rent | 231,355 | 83,823 |
| Total liabilities | 17,392,156 | 20,531,511 |
| Stockholders' equity: | ||
| Preferred stock, $0.001 par value | -- | -- |
| Common stock, $0.001 par value | 23,799 | 23,633 |
| Additional paid-in capital | 44,327,775 | 42,229,293 |
| Accumulated other comprehensive loss | (20,427) | -- |
| Accumulated deficit | (13,186,439) | (13,312,223) |
| Total stockholders' equity | 31,144,708 | 28,940,703 |
| Total liabilities and stockholders' equity | $ 48,536,864 | $ 49,472,214 |
| interCLICK, Inc. and Subsidiary | For the Six | For the Six |
| Condensed Consolidated Statements of Cash Flows | Months Ended |
Months Ended |
| Unaudited |
June 30, 2010 |
June 30, 2009 |
| Cash flows from operating activities: | ||
| Net income (loss) | $ 125,784 | $ (1,001,076) |
| Add back loss from discontinued operations | -- | 1,220 |
| Income (loss) from continuing operations | 125,784 | (999,856) |
| Adjustments to reconcile income from continuing operations to net cash provided by (used in) operating activities: | ||
| Changes in deferred tax assets | (1,109,723) | -- |
| Stock-based compensation | 1,822,070 | 1,353,743 |
| Other than temporary impairment of available-for-sale securities | 458,538 | -- |
| Depreciation of property and equipment | 320,356 | 147,364 |
| Amortization of intangible assets | 79,000 | 99,520 |
| Amortization of debt issue costs | 4,972 | 21,583 |
| Amortization of debt discount | -- | 500 |
| Provision for bad debts | (140,077) | (160,392) |
| Change in warrant derivative liability | (21,413) | 232,061 |
| Loss on sale of available-for-sale securities | -- | 36,349 |
| Changes in operating assets and liabilities: | ||
| Increase in accounts receivable | (35,613) | (2,968,432) |
| Decrease (increase) in prepaid expenses and other current assets | 45,402 | (107,523) |
| Increase in other assets | (15,394) | 1,346 |
| (Decrease) increase in accounts payable | (442,026) | 1,083,434 |
| (Decrease) increase in accrued expenses | (217,899) | 426,392 |
| Increase in deferred rent | 71,162 | 11,257 |
| Net cash provided by (used in) operating activities | 945,139 | (822,654) |
| Cash flows from investing activities: | ||
| Proceeds from sale of available-for-sale securities | 11,250 | 21,429 |
| Increase in restricted cash | (1,292,960) | -- |
| Purchases of property and equipment | (573,929) | (73,883) |
| Net cash used in investing activities | (1,855,639) | (52,454) |
| Cash flows from financing activities: | ||
| Proceeds from stock options and warrants exercised | 228,732 | -- |
| (Repayments to) proceeds from credit facility, net | (1,981,113) | 1,574,859 |
| Principal payments on capital leases | (68,307) | (5,636) |
| Proceeds from issuance of notes payable | -- | -- |
| Principal payments on notes payable | -- | (100,000) |
| Proceeds from common stock and warrants issued for cash | -- | 2,257,000 |
| Proceeds from public offering, net of offering costs | ||
| Net cash (used in) provided by financing activities | (1,820,688) | 3,726,223 |
| Net cash used in discontinued operations | -- | (250,000) |
| Net (decrease) increase in cash and cash equivalents | (2,731,188) | 2,601,115 |
| Cash and cash equivalents at beginning of period | 12,653,958 | 183,871 |
| Cash and cash equivalents at end of period | $ 9,922,770 | $ 2,784,986 |
| Supplemental disclosure of cash flow information: | ||
| Interest paid | $ 203,191 | $ 192,267 |
| Income taxes paid | $ 1,219,583 | $ -- |
| Non-cash investing and financing activities: | ||
| Property and equipment acquired through capital leases | $ 495,600 | $ -- |
| Leasehold improvements increased for deferred rent | $ 83,070 | $ -- |
| Reclassification of warrant derivative liability to equity upon expiration of price protection | $ 47,846 | $ -- |
| Unrealized loss on available-for-sale-securities | $ 20,427 | $ 863,650 |
| Issuance of common stock to eliminate or modify price protection for warrants | $ -- | $ 508,497 |
| Issuance of common stock for services rendered or to be rendered | $ -- | $ 170,500 |
| Issuance of common stock to pay accrued interest payable | $ -- | $ 13,266 |
| Issuance of common stock to extend debt maturity date | $ -- | $ 12,000 |