Company Reports Record Call-Driven Revenue
Marchex, Inc. (NASDAQ:MCHX), a mobile advertising
technology company, today announced its financial results for the
second quarter ended June 30, 2014.
“Our ability to deliver strong returns for our customers through
our call advertising products drove another record during the
second quarter,” said Russell Horowitz, Chairman and CEO of
Marchex. “Our focus on our clients’ success is the cornerstone of
our business. Our Call Analytics platform is enabling Marchex to
provide unique intelligence and insight around calls at the same
time mobile and call-based advertising is emerging as a major theme
for advertisers. As a result, we are further integrating with some
of our largest advertisers and landing new customers, many of which
are embracing mobile performance advertising for the first
time.”
Q2 2014 Financial
Highlights1
- GAAP revenue was $49.7
million for the second quarter of 2014, compared to $37.6
million for the second quarter of 2013. Non-GAAP revenue2, which
excludes domain sales recorded in revenue, was $47.4 million for
the second quarter of 2014.
- GAAP net income from continuing
operations was $947,000 for the second quarter of 2014, compared to
a GAAP net loss from continuing operations of $354,000 for the
second quarter of 2013.
- GAAP net income from continuing
operations attributable to common stockholders per diluted share
was $0.02 for the second quarter of 2014. This compares to GAAP net
loss from continuing operations attributable to common stockholders
per diluted share of $0.01 for the second quarter of 2013.
Q2 2014
Q2 2013
GAAP Revenue
$49.7 million $37.6 million
Non-GAAP Results: Non-GAAP
Revenue 2, 5 $47.4 million $37.6 million
Call-Driven
and Related Revenue $45.9 million $33.9 million
Archeo
Revenue including domain gains and sales 3,5 $3.8
million $5.0 million
Archeo Revenue excluding domain gains and
sales 3, 5 $1.5 million $3.7 million
Call-Driven Adjusted OIBA5 $2.9 million $1.5 million
Call-Driven Adjusted EBITDA5 $3.8 million $2.4
million
Adjusted OIBA4, 5 $4.8 million $3.6 million
Adjusted EBITDA4, 5 $5.7 million $4.5 million
Adjusted OIBA excluding domain gains and sales5 $2.6 million $2.2
million Adjusted EBITDA excluding domain gains and sales5 $3.5
million $3.2 million
- Adjusted non-GAAP EPS3 from continuing
operations for the second quarter of 2014 was $0.07, compared to
$0.06 for the second quarter of 2013. Adjusted non-GAAP EPS3 from
continuing operations excluding domain gains and sales for the
second quarter of 2014 and 2013 were both $0.04.
1 In July 2013, certain pay-per-click assets were sold. As a
result, the financial results of these pay-per-click assets are
presented as discontinued operations, net of tax in our condensed
consolidated statements of operations in accordance with GAAP, and
are excluded from all other results unless otherwise noted.
2 Excludes domain sales recognized in GAAP revenue. In September
2013 upon the launch of its domain marketplace, the company
commenced recognizing domain sales as revenue.
3 Includes/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.
Marchex Q2 and Recent Call-Driven
Business Highlights:
- Revenue. Call-Driven and related
revenue was $45.9 million for the second quarter of 2014 – a 35
percent increase compared to $33.9 million for the second quarter
of 2013.
- Strategic Developments. Marchex
raised $32.5 million as part of its secondary offering, which was
completed on April 4th. Marchex intends to use the net proceeds of
the offering for general corporate purposes, which may include
acquisitions or licenses of, or investments in, products, services,
technologies or other businesses.
Archeo Q2 Business
Highlights:
- Revenue. Archeo non-GAAP revenue
was $1.5 million for the second quarter of 2014, which excludes
domain sales recognized in GAAP revenue.
- Domains sales. During the second
quarter of 2014, domain sales yielded $2.2 million.
Business Outlook
The following forward-looking statements reflect Marchex's
expectations as of August 5, 2014 and exclude any contribution from
Archeo operations, domain sales and discontinued operations.
Archeo operating results would be incremental and additive to
our Call-Driven revenue, profitability, and other measures
below:
Call-Driven
financial guidance for the fiscal year ending December 31,
2014
Call-Driven Revenue $178 million or more Call-Driven
Adjusted OIBA 1 $10 million or more Call Driven Adjusted
EBITDA 1 $14 million or more
Call-Driven
financial guidance for the Third Quarter ending September 30,
2014
Call-Driven Revenue
$46 million or more
Call-Driven Adjusted OIBA 1
$2.5-$3 million
Call-Driven Adjusted EBITDA 1
$3.5-$4 million
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 Tuesday, August 5, 2014 to discuss its second quarter ended June
30, 2014 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 technology company. The company
provides a suite of products and services for businesses that
depend on consumer phone calls to drive sales. Marchex’s mobile
advertising platform delivers new customer phone calls to
businesses, while its technology analyzes the data in these calls
to help maximize ad campaign results. Marchex disrupts traditional
advertising models by giving businesses full transparency into
their ad campaign performance and charging them based on new
customer acquisition.
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,
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
August 5, 2014 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, Revenue including and excluding domain gains and sales,
Adjusted OIBA, EBITDA including and excluding domain gains and
sales and Adjusted non-GAAP EPS including and excluding domain
gains and sales. Marchex also provides Call-Driven Adjusted OIBA
and EBITDA.
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 separation 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 separation related costs. Adjusted EBITDA represents income before interest,
income taxes, depreciation, amortization, stock compensation
expense and acquisition and separation 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. Historically, these
Non-GAAP measures excluded gain/loss on sales and disposals of
intangible assets for each asset and any domain sales
contribution.
Non-GAAP Revenue represents GAAP
revenue excludes 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 EBITDA assigns all
Marchex general corporate overhead costs to the Call-Driven
results. Financial analysts and investors may use the non-GAAP
historical Revenue including/excluding domain gains and sales and
Adjusted OIBA and EBITDA including/excluding domain gains and sales
to help with comparative financial evaluation to make informed
investment decisions. 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 separation related costs, (4)
interest and other income (expense), (5) discontinued operations,
net of tax and (6) dividends paid to participating securities, and
also excludes the effect of any tax valuation allowance. 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. Adjusted Non-GAAP EPS excluding domain gains and
sales includes the above description of Adjusted non-GAAP
EPS and excludes domain sales contribution and gain/loss on sales
and disposals of intangible assets.
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.
MARCHEX, INC. AND SUBSIDIARIESCondensed
Consolidated Statements of Operations(in thousands, except
per share data)(unaudited) Three Months
EndedJune 30, 2013 2014 Revenue $
37,578 $ 49,676 Expenses: Service costs (1) 22,584
32,319 Sales and marketing (1) 2,906 2,839 Product development (1)
6,944 7,458 General and administrative (1) 5,526 5,386 Amortization
of intangible assets from acquisitions 736 31 Acquisition and
separation related costs 309 (68 )
Total operating expenses
39,005 47,965 Gain on sales and disposals of intangible assets, net
1,329 - Income (loss) from
operations (98 ) 1,711 Interest expense and other, net (12 )
(22 ) Income (loss) from continuing operations before
provision for income taxes (110 ) 1,689 Income tax expense
244 709 Net income (loss) from
continuing operations (354 ) 980 Discontinued operations, net of
tax 0 - Net income (loss) (354 )
980 Dividends paid to participating securities -
(33 ) Net income (loss) applicable to common
stockholders $ (354 ) $ 947 Basic and diluted
net income (loss) per Class A and Class B share applicable to
common stockholders: Continuing operations $ (0.01 ) $ 0.02
Discontinued operations, net of tax 0.00
- Basic and diluted net income (loss) per Class A and
Class B share applicable to common stockholders $ (0.01 ) $ 0.02
Dividends paid per share $ - $ 0.02 Shares used to calculate basic
net income (loss) per share applicable to common stockholders Class
A 9,570 5,243 Class B 25,853 35,441 Shares used to calculate
diluted net income (loss) per share applicable to common
stockholders Class A 9,570 5,243 Class B 35,423 43,453
(1) Includes stock-based compensation
allocated as follows:
Service costs $ 183 $ 362 Sales and marketing 202 233 Product
development 394 692 General and administrative 1,824
1,830 Total $ 2,603 $ 3,117
MARCHEX, INC. AND
SUBSIDIARIESCondensed Consolidated Statements of
Operations(in thousands, except per share
data)(unaudited) Six Months
EndedJune 30, 2013 2014 Revenue $
72,310 $ 100,172 Expenses: Service costs (1) 42,732
64,673 Sales and marketing (1) 5,550 6,221 Product development (1)
13,752 15,018 General and administrative (1) 10,323 10,747
Amortization of intangible assets from acquisitions 1,791 434
Acquisition and separation related costs 654
(68 ) Total operating expenses 74,802 97,025 Gain on sales
and disposals of intangible assets, net 2,691
- Income from operations 199 3,147 Interest expense
and other, net (29 ) (24 ) Income from
continuing operations before provision for income taxes 170 3,123
Income tax expense 408 1,297 Net
income (loss) from continuing operations (238 ) 1,826 Discontinued
operations, net of tax (31 ) 9 Net
income (loss) (269 ) 1,835 Dividends paid to participating
securities - (69 ) Net income (loss)
applicable to common stockholders $ (269 ) $ 1,766
Basic and diluted net income (loss) per Class A and Class B
share applicable to common stockholders: Continuing operations $
(0.01 ) $ 0.05 Discontinued operations, net of tax $ (0.00 )
$ 0.00 Basic and diluted net income (loss) per Class A and
Class B share applicable to common stockholders $ (0.01 ) $ 0.05
Dividends paid per share $ - $ 0.04 Shares used to calculate basic
net income (loss) per share applicable to common stockholders Class
A 9,570 6,483 Class B 25,720 32,277 Shares used to calculate
diluted net income (loss) per share applicable to common
stockholders Class A 9,570 6,483 Class B 35,290 41,658
(1) Includes stock-based compensation
allocated as follows:
Service costs $ 363 $ 644 Sales and marketing 262 437 Product
development 766 1,351 General and administrative 3,119
3,568 Total $ 4,510 $
6,000
MARCHEX, INC. AND
SUBSIDIARIESCondensed Consolidated Balance Sheets(in
thousands)(unaudited) Assets
December 31,2013 June 30,2014
Current assets: Cash and cash equivalents $ 30,912 $ 74,950
Accounts receivable, net 30,005 34,700 Prepaid expenses and other
current assets 2,943 3,429 Refundable taxes 97 96 Deferred tax
assets 1,016 1,251 Total current
assets 64,973 114,426 Property and equipment, net 5,440
5,042 Deferred tax assets 25,138 23,012 Intangibles and other
assets, net 484 422 Goodwill 65,679 65,679 Intangible assets from
acquisitions, net 434 - Total
Assets $ 162,148 $ 208,581
Liabilities and Stockholders' Equity Current
liabilities: Accounts payable $ 15,922 $ 20,179 Accrued expenses
and other current liabilities 7,988 8,395 Deferred revenue
1,388 2,188 Total current liabilities
25,298 30,762 Other non-current liabilities 2,095
1,322 Total Liabilities 27,393 32,084
Class A common stock 80 55 Class B common stock 309
375 Treasury stock (2 ) (1 ) Additional paid-in capital 305,517
345,382 Accumulated deficit (171,149 )
(169,314 ) Total Stockholders' Equity 134,755
176,497 Total Liabilities and Stockholders' Equity $
162,148 $ 208,581
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
EndedJune 30, 2013 2014 Income
(loss) from operations $ (98 ) $ 1,711 Stock-based
compensation 2,603 3,117 Amortization of intangible assets from
acquisitions 736 31 Operating
income before amortization (OIBA) 3,241 4,859 Acquisition and
separation related costs 309 (68 )
Adjusted operating income before amortization (Adjusted
OIBA) $ 3,550 $ 4,791 Domain sales
contribution - (2,217 ) Gain on sales and disposals of intangible
assets, net (1,329 ) - Adjusted
OIBA excluding domain gains and sales $ 2,221 $ 2,574
Six Months EndedJune 30,
2013 2014 Income from operations $ 199
$ 3,147 Stock-based compensation 4,510 6,000 Amortization of
intangible assets from acquisitions 1,791
434 Operating income before amortization (OIBA) 6,500
9,581 Acquisition and separation related costs 654
(68 )
Adjusted operating income before
amortization (Adjusted OIBA) $ 7,154 $
9,513 Domain sales contribution - (4,110 ) Gain on sales and
disposals of intangible assets, net (2,691 ) -
Adjusted OIBA excluding domain gains and sales $
4,463 $ 5,403 Certain
reclassifications have been made to prior periods to conform to
current presentation.
MARCHEX, INC. AND
SUBSIDIARIESReconciliation from Net Cash provided by
Operating Activities to Adjusted EBITDA(in
thousands)(unaudited) Three Months
EndedJune 30, 2013 2014 Net
cash provided by operating activities $ 1,014 $ 3,289 Changes in
assets and liabilities 1,393 1,672 Income tax expense 244 709
Acquisition and separation related costs 309 - Interest expense and
other, net 12 22 Gain on sales and disposals of intangible assets,
net 1,329 - Discontinued operations, net of tax (11 ) - Excess tax
benefits related to stock compensation 189
-
Adjusted EBITDA $ 4,479
$ 5,692 Domain sales contribution - (2,217 ) Gain on
sales and disposals of intangible assets, net (1,329 )
- Adjusted EBITDA excluding domain gains and
sales $ 3,150 $ 3,475 Net
cash provided by (used in) investing activities $ 449
$ (545 ) Net cash provided by financing
activities $ 179 $ 33,680
Six Months EndedJune 30, 2013
2014 Net cash provided by operating activities $
3,155 $ 11,367 Changes in asset and liabilities 1,856 (1,312 )
Income tax expense 408 1,297 Acquisition and separation related
costs 654 - Interest expense and other, net 29 24 Gain on sales and
disposals of intangible assets, net 2,691 - Discontinued
operations, net of tax 6 (9 ) Excess tax benefits related to stock
compensation 196 -
Adjusted EBITDA $ 8,995 $ 11,367
Domain sales contribution - (4,110 ) Gain on sales and disposals of
intangible assets, net (2,691 ) -
Adjusted EBITDA excluding domain gains and sales $ 6,304
$ 7,257 Net cash provided by
(used in) investing activities $ 961 $ (1,352 )
Net cash provided by (used in) financing
activities $ (1,304 ) $ 34,023 Certain
reclassifications have been made to prior periods to conform to
current presentation.
MARCHEX, INC. AND
SUBSIDIARIESReconciliation of GAAP EPS to Adjusted Non-GAAP
EPS(in thousands, except per share
data)(unaudited) Three Months
EndedJune 30, 2013 2014 Adjusted
Non-GAAP EPS from continuing operations $ 0.06 $ 0.07
Net income (loss) applicable to common stockholders -
diluted (GAAP EPS) $ (0.01 ) $ 0.02
Shares used to calculate diluted net
income (loss) per share applicable to common stockholders
35,423 43,453 Net income (loss) applicable to common
stockholders $ (354 ) $ 947 Stock-based compensation 2,603 3,117
Acquisition and separation related costs 309 (68 ) Amortization of
intangible assets from acquisitions 736 31 Interest expense and
other, net 12 22 Dividends paid to participating securities - 33
Tax valuation allowance 225 - Estimated impact of income taxes
(1,219 ) (973 )
Adjusted Non-GAAP
net income from continuing operations $ 2,312
$ 3,109 Domain sales contribution - (2,217 ) Gain on
sales and disposals of intangible assets, net (1,329 ) - Estimated
impact of income taxes on domain gains and sales 463
785 Adjusted Non-GAAP net income
excluding domain gains and sales $ 1,446 $ 1,677
Adjusted Non-GAAP EPS from continuing
operations $ 0.06 $
0.07 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)
35,423 43,453 Weighted average stock options and common
shares subject to purchase or cancellation (if applicable)
790 - Diluted shares used to calculate
Adjusted Non-GAAP EPS (1) 36,213 43,453
(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 SUBSIDIARIESReconciliation of GAAP EPS
to Adjusted Non-GAAP EPS(in thousands, except per share
data)(unaudited) Six Months
EndedJune 30, 2013 2014 Adjusted
Non-GAAP EPS from continuing operations $ 0.13 $ 0.15
Net income (loss) from continuing operations
applicable to common stockholders - diluted (GAAP EPS) $ (0.01 ) $
0.02 Shares used to calculate diluted net income (loss) per share
applicable to common stockholders 35,290 41,658 Net income
(loss) applicable to common stockholders $ (269 ) $ 1,766
Stock-based compensation 4,510 6,000 Acquisition and separation
related costs 654 (68 ) Amortization of intangible assets from
acquisitions 1,791 434 Interest expense and other, net 29 24
Dividends paid to participating securities - 69 Tax valuation
allowance 651 - Discontinued operations, net of tax 31 (9 )
Estimated impact of income taxes (2,743 )
(2,041 )
Adjusted Non-GAAP net income from continuing
operations $ 4,654 $ 6,175 Domain
sales contribution - (4,110 ) Gain on sales and disposals of
intangible assets, net (2,691 ) - Estimated impact of income taxes
on domain gains and sales 940 1,449
Adjusted Non-GAAP net income from continuing
operations excluding domain gains and sales $ 2,903 $
3,514
Adjusted Non-GAAP EPS from continuing
operations $ 0.13 $
0.15 Adjusted Non-GAAP EPS from continuing
operations excluding domain gains and sales $ 0.08 $
0.08
Shares used to calculate diluted net
income (loss) per share applicable to common stockholders
(GAAP)
35,290 41,658 Weighted average stock options and common
shares subject to purchase or cancellation (if applicable)
592 - Diluted shares used to calculate
Adjusted Non-GAAP EPS (1) 35,882 41,658
(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)
Three months ended
Six months ended
3/31/2013 6/30/2013 9/30/2013
12/31/2013 3/31/2014
6/30/2014 6/30/2013 6/30/2014
Income (loss) from operations $
297 $ (98 ) $ 1,006 $ 1,544 $ 1,436 $ 1,711 $ 199 $ 3,147
Stock-based compensation 1,907 2,603 2,365 2,362 2,883 3,117 4,510
6,000 Amortization of intangible assets from acquisitions
1,055 736 709
426 403 31
1,791 434 Operating
income before amortization (OIBA) 3,259 3,241 4,080 4,332 4,722
4,859 6,500 9,581 Acquisition and separation related costs
345 309 286
(62 ) - (68 ) 654
(68 )
Adjusted operating income before
amortization (Adjusted OIBA) $ 3,604 $
3,550 $ 4,366 $ 4,270 $
4,722 $ 4,791 $ 7,154 $
9,513 Domain sales contribution - - (839 ) (1,549 ) (1,893 )
(2,217 ) - (4,110 ) Gain on sales and disposals of intangible
assets, net (1,362 ) (1,329 )
(1,047 ) (35 ) - -
(2,691 ) - Adjusted OIBA
excluding domain gains and sales $ 2,242 $ 2,221
$ 2,480 $ 2,686 $ 2,829
$ 2,574 4,463
5,403
Reconciliation from Net Cash provided
by Operating Activities to Adjusted EBITDA
Three months ended
Six months ended
3/31/2013 6/30/2013 9/30/2013
12/31/2013 3/31/2014
6/30/2014 6/30/2013 6/30/2014
Net cash provided by operating activities $ 2,141 $ 1,014 $ 4,332 $
6,109 $ 8,078 $ 3,289 $ 3,155 $ 11,367 Changes in assets and
liabilities 463 1,393 (1,374 ) (1,636 ) (2,984 ) 1,672 1,856 (1,312
) Income tax expense 164 244 389 958 588 709 408 1,297 Acquisition
and separation related costs 345 309 286 - - - 654 - Gain on sales
and disposals of intangible assets, net 1,362 1,329 1,047 35 - -
2,691 - Discontinued operations, net of tax 17 (11 ) 43 (7 ) (9 ) -
6 (9 ) Tax effect of gain on sale of discontinued operations - -
563 - - - - - Interest expense and other, net 17 12 15 (14 ) 2 22
29 24 Excess tax benefits related to stock compensation 7
189 13
(209 ) - -
196 -
Adjusted EBITDA $
4,516 $ 4,479 $ 5,314 $
5,236 $ 5,675 $ 5,692
$
8,995
$
11,367
Domain sales contribution - - (839 ) (1,549 ) (1,893 ) (2,217 ) -
(4,110 ) Gain on sales and disposals of intangible assets, net $
(1,362 ) $ (1,329 ) $ (1,047 ) $ (35 )
$ - $ - $ (2,691 ) $ - Adjusted
EBITDA excluding domain gains and sales $ 3,154 $
3,150 $ 3,428 $ 3,652 $
3,782 $ 3,475 $ 6,304 $ 7,257
Net cash provided by (used in) investing activities $
512 $ 449 $ 1,235 $ (549
) $ (807 ) $ (545 ) $ 961 $ (1,352 )
Net cash provided by (used in) financing activities $ (1,483 )
$ 179 $ 842 $ 202
$ 343 $ 33,680 $ (1,304 ) $ 34,023
Due to rounding, the sum of quarterly amounts
may not equal amounts reported for year-to-date periods.
MARCHEX, INC. AND SUBSIDIARIESQuarterly Financial
Summary Information(in thousands)
NON-GAAP MEASURESAmounts below exclude Discontinued
Operations
CONSOLIDATED Q113
Q213 Q313 Q413
Q114 Q214 GAAP Revenue $
34,732 $ 37,578 $
40,560 $ 39,680 $
50,496 $ 49,676 Adjusted OIBA
$ 3,604 $ 3,550 $ 4,366
$ 4,270 $ 4,722 $ 4,791
Adjusted EBITDA $ 4,516 $
4,479 $ 5,314 $
5,236 $ 5,675 $
5,692
CALL-DRIVEN AND
RELATED Q113 Q213
Q313 Q413 Q114
Q214 GAAP Revenue $ 31,108 $
33,893 $ 35,668 $ 34,457
$ 45,492 $ 45,857 Adjusted OIBA
$ 1,371 $ 1,509 $ 1,693
$ 1,725 $ 2,411 $ 2,897
Adjusted EBITDA $ 2,246 $
2,401 $ 2,598 $
2,618 $ 3,312 $
3,764
ARCHEO
Q113 Q213 Q313
Q413 Q114 Q214 GAAP
Revenue $ 3,624 $ 3,685 $
4,892 $ 5,223 $ 5,004 $
3,819 Adjusted OIBA $ 2,233 $
2,041 $ 2,673 $ 2,545 $
2,311 $ 1,894 Adjusted EBITDA
$ 2,270 $ 2,078 $
2,716 $ 2,618 $
2,363 $ 1,928 Due to
rounding, the sum of quarterly amounts may not equal amounts
reported for year-to-date periods.
MARCHEX, INC.
AND SUBSIDIARIESQuarterly Financial Summary
Information(in thousands) NON-GAAP
MEASURESAmounts below exclude Domain Gains and Sales and
Discontinued Operations
CONSOLIDATED
Q113 Q213 Q313
Q413 Q114 Q214 Non-GAAP
Revenue $ 34,732 $
37,578 $ 39,661 $
38,124 $ 48,598 $
47,430 Adjusted OIBA $ 2,242 $
2,221 $ 2,480 $ 2,686 $
2,829 $ 2,574 Adjusted EBITDA
$ 3,154 $ 3,150 $
3,428 $ 3,652 $
3,782 $ 3,475
CALL-DRIVEN AND RELATED Q113
Q213 Q313 Q413
Q114 Q214 GAAP Revenue $
31,108 $ 33,893 $ 35,668
$ 34,457 $ 45,492 $
45,857 Adjusted OIBA $ 1,371 $
1,509 $ 1,693 $ 1,725 $
2,411 $ 2,897 Adjusted EBITDA
$ 2,246 $ 2,401 $
2,598 $ 2,618 $
3,312 $ 3,764
ARCHEO Q113 Q213
Q313 Q413 Q114
Q214 Non-GAAP Revenue $ 3,624 $
3,685 $ 3,993 $ 3,667 $
3,106 $ 1,574 Adjusted OIBA $
871 $ 712 $ 787 $
961 $ 418 $ (323 )
Adjusted EBITDA $ 908 $
749 $ 830 $ 1,034
$ 470 $ (289 )
Due to rounding, the sum of quarterly amounts may not
equal amounts reported for year-to-date periods.
MARCHEX, INC. AND SUBSIDIARIESFinancial Summary by
Segment(in thousands)(unaudited)
Three months ended
Six months ended 3/31/2013
6/30/2013 9/30/2013 12/31/2013
3/31/2014 6/30/2014 6/30/2013
6/30/2014 Marchex - Consolidated5
Revenue -
GAAP2 $ 34,732 $
37,578 $ 40,560 $
39,680 $ 50,496 $
49,676 $ 72,310 $
100,172 Revenue including domain gains3 $ 36,094
$ 38,908 $ 41,607 $ 39,715 $ 50,496
$ 49,676 $ 75,002 $ 100,172
Adjusted OIBA including domain gains
and sales4
$ 3,604 $ 3,550
$ 4,366 $ 4,270 $
4,722 $ 4,791
$ 7,154 $ 9,513 Adjusted OIBA
excluding domain gains and sales4 $ 2,242 $ 2,221
$ 2,480 $ 2,686 $ 2,829 $ 2,574
$ 4,463 $ 5,403
Adjusted EBITDA including domain
gains and sales4 $ 4,516
$ 4,479 $ 5,314 $
5,236 $ 5,675 $
5,692
$ 8,995 $ 11,367 Adjusted EBITDA
excluding domain gains and sales4 $ 3,154 $ 3,150 $
3,428 $ 3,652 $ 3,782 $ 3,475 $ 6,304 $
7,257
Call-Driven and Related1 Revenue - GAAP
$ 31,108 $ 33,893 $ 35,668 $ 34,457 $ 45,492 $ 45,857 $ 65,001 $
91,349 Adjusted OIBA $ 1,371 $ 1,509 $ 1,693 $ 1,725 $ 2,411 $
2,897 $ 2,880 $ 5,308 Adjusted EBITDA $ 2,246 $ 2,401 $ 2,598 $
2,618 $ 3,312 $ 3,764 $ 4,647 $ 7,076
Archeo1,5 Revenue - GAAP2 $ 3,624 $ 3,685 $ 4,892 $
5,223 $ 5,004 $ 3,819 $ 7,309 $ 8,823 Revenue including domain
gains3 $ 4,986 $ 5,015 $ 5,939 $ 5,258 $ 5,004 $ 3,819
$ 10,002 $ 8,824 Adjusted OIBA including domain gains and sales4 $
2,233 $ 2,041 $ 2,673 $ 2,545 $ 2,311 $ 1,894 $ 4,274 $ 4,205
Adjusted OIBA excluding domain gains and sales4 $ 871 $ 712 $ 787 $
961 $ 418 $ (323 ) $ 1,583 $ 95 Adjusted EBITDA including domain
gains and sales4 $ 2,270 $ 2,078 $ 2,716 $ 2,618 $ 2,363 $ 1,928 $
4,348 $ 4,291 Adjusted EBITDA excluding domain gains and sales4 $
908 $ 749 $ 830 $ 1,034 $ 470 $ (289 ) $ 1,657 $ 181
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 SUBSIDIARIESReconciliation to Reported
Financial and Non-GAAP Information(in
thousands)(unaudited)
Three months ended
Six months ended
3/31/2013 6/30/2013 9/30/2013
12/31/2013 3/31/2014
6/30/2014 6/30/2013 6/30/2014 Revenue6
Consolidated -
GAAP1 $ 34,732 $ 37,578
$ 40,560 $ 39,680 $
50,496 $ 49,676 $ 72,310
$ 100,172 Add: Domain Gains2 1,362
1,330 1,047 35 -
- 2,692 - Consolidated including
Domain Gains and Sales3 36,094 38,908 41,607 39,715 50,496 49,676
75,002 100,172 Less: Archeo including Domain Gains and Sales3,4
4,986 5,015 5,939
5,258 5,004 3,819 10,001
8,823 Call-Driven4 and related $ 31,108 $ 33,893
$ 35,668 $ 34,457 $ 45,492 $ 45,857 $
65,001 $ 91,349 Adjusted operating income6
Consolidated excluding Domain Gains and Sales5 $ 2,242 $ 2,221 $
2,480 $ 2,686 $ 2,829 $ 2,574 $ 4,463 $ 5,403 Add: Domain Gains and
Sales5 1,362 1,329 1,886
1,584 1,893 2,217 2,691
4,110
Consolidated including Domain Gains and
Sales 3,604 3,550 4,366 4,270
4,722 4,791
7,154
9,513
Less: Archeo including Domain Gains and Sales4,5 2,233
2,041 2,673 2,545
2,311 1,894 4,274 4,205
Call-Driven4 and related $ 1,371 $ 1,509 $ 1,693
$ 1,725 $ 2,411 $ 2,897 $ 2,880 $ 5,308
Adjusted EBITDA6 Consolidated excluding Domain Gains and
Sales5 $ 3,154 $ 3,150 $ 3,428 $ 3,652 $ 3,782 $ 3,475 $ 6,304 $
7,257 Add: Domain Gains and Sales5 1,362 1,329
1,886 1,584 1,893
2,217 2,691 4,110
Consolidated
including Domain Gains and Sales 4,516 4,479
5,314 5,236 5,675 5,692
8,995
11,367
Less: Archeo including Domain Gains and Sales4,5 2,270
2,078 2,716 2,618
2,363 1,928 4,348 4,291
Call-Driven4 and related $ 2,246 $ 2,401 $ 2,598
$ 2,618 $ 3,312 $ 3,764 $ 4,647 $ 7,076
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.
Marchex Investor RelationsTrevor Caldwell,
206-331-3600ir(at)marchex.comorMedia InquiriesMarchex
Corporate CommunicationsSonia Krishnan,
206-331-3434skrishnan(at)marchex.com
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