[November 05, 2014] |
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Marchex Announces Third Quarter 2014 Results and Announces Share Repurchase Program
SEATTLE --(Business Wire)--
Marchex,
Inc. (NASDAQ:MCHX), a mobile advertising technology company, today
announced its financial results for the third quarter ended September
30, 2014.
"While the third quarter came with certain challenges, we continued to
make progress with our customers and products," said Russell Horowitz,
Chairman and CEO of Marchex. "More and more consumers are searching for
products and services on their smartphones and clicking to call
businesses. This trend is accelerating demand for Marchex's technology,
which provides unique intelligence for advertisers that need to drive
and measure the growing volume of over-the-phone sales."
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 $0.02 for the
third quarter of 2013.
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Q3 2014
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Q3 2013
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GAAP Revenue
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$ 49.2 million
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$40.6 million
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Non-GAAP Results:
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Non-GAAP Revenue 2, 5, 6
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$47.6 million
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$39.7 million
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Call-Driven and Related Revenue6
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$46.4 million
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$35.7 million
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Archeo Revenue including domain gains and sales 3, 5
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$2.8 million
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$5.9 million
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Archeo Revenue excluding domain gains and sales 3, 5
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$ 1.2 million
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$4.0 million
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Call-Driven Adjusted OIBA5
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$ 3.3 million
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$1.7 million
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Call-Driven Adjusted EBITDA5
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$ 4.2 million
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$2.6 million
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Adjusted OIBA4, 5
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$ 4.2 million
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$4.4 million
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Adjusted EBITDA4, 5
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$ 5.2 million
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$5.3 million
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Adjusted OIBA excluding domain gains and sales5
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$ 2.7 million
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$2.5 million
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Adjusted EBITDA excluding domain gains and sales5
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$ 3.6 million
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$3.4 million
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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 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.
2Excludes domain sales recognized in GAAP revenue.
In September 2013 upon the launch of its domain marketplace, the Company
commenced recognizing domain sales as revenue.
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 Allstate contributed revenue of $15.4 million and
the related distribution partner costs (a component of service costs)
were $13.7 million resulting in a difference of $1.7 million in the
third quarter of 2014.
Marchex Q3 and Recent Call-Driven Business
Highlights:
-
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 to Marchex
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 Marchex's expectations
as of November 5, 2014 and exclude any contribution from Archeo
operations, domain sales and discontinued operations. Archeo
operating results would be additive to our Call-Driven revenue,
profitability, and other measures below:
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Call-Driven financial guidance for the
fiscal year ending December 31, 2014
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Call-Driven Revenue
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$167-$169 million
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Call-Driven Adjusted OIBA 1
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$10.3 million or more
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Call Driven Adjusted EBITDA 1
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$14 million or more
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Call-Driven financial guidance for the
Fourth Quarter ending December 31, 2014
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Call-Driven Revenue
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$29-$31 million
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Call-Driven Adjusted OIBA 1
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$1.7 million or more
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Call Driven Adjusted EBITDA 1
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$2.7 million or more
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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, November 5, 2014 to discuss its third quarter ended September
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 November 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 and 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 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 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 (7) 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.
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MARCHEX, INC. AND SUBSIDIARIES
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Condensed Consolidated Statements of Operations
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(in thousands, except per share data)
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(unaudited)
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Three Months Ended
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September 30,
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2013
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2014
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Revenue
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$
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40,560
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$
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49,181
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Expenses:
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Service costs (1)
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25,293
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32,055
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Sales and marketing (1)
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2,801
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2,940
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Product development (1)
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6,833
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7,581
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General and administrative (1)
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4,679
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5,380
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Amortization of intangible assets from acquisitions
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709
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-
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Acquisition and separation related costs
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286
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-
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Total operating expenses
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40,601
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47,956
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Gain on sales and disposals of intangible assets, net
|
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1,047
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-
|
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Income from operations
|
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|
1,006
|
|
|
|
1,225
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Interest expense and other, net
|
|
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(19
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)
|
|
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(19
|
)
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Income from continuing operations before provision for income taxes
|
|
|
987
|
|
|
|
1,206
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|
Income tax expense
|
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|
389
|
|
|
|
22,980
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Net income (loss) from continuing operations
|
|
|
598
|
|
|
|
(21,774
|
)
|
Discontinued operations:
|
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|
|
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Loss from discontinued operations, net of tax
|
|
|
(46
|
)
|
|
|
-
|
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|
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
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|
$
|
1,481
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|
|
$
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(21,525
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)
|
|
|
|
|
|
|
Basic and diluted net income (loss) per Class A and Class B share
applicable to common stockholders:
|
|
|
|
Continuing operations
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$
|
0.02
|
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|
$
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(0.53
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)
|
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Discontinued operations, net of tax
|
|
|
0.02
|
|
|
|
0.01
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Basic and diluted net income (loss) per Class A and Class B share
applicable to common stockholders
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$
|
0.04
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|
$
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(0.52
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)
|
Dividends paid per share
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|
$
|
-
|
|
|
$
|
0.02
|
|
Shares used to calculate basic net income (loss) per share
applicable to common stockholders
|
|
|
|
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Class A
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|
|
8,377
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|
|
|
5,233
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|
|
Class B
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|
|
27,308
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|
|
|
36,041
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|
Shares used to calculate diluted net income (loss) per share
applicable to common stockholders
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|
|
|
|
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Class A
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|
|
8,377
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|
|
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5,233
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|
|
Class B
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37,277
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|
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41,274
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(1
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)
|
Includes stock-based compensation allocated as follows:
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Service costs
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$
|
455
|
|
|
$
|
373
|
|
|
Sales and marketing
|
|
|
211
|
|
|
|
226
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|
|
Product development
|
|
|
361
|
|
|
|
666
|
|
|
General and administrative
|
|
|
1,338
|
|
|
|
1,759
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Total
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$
|
2,365
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|
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$
|
3,024
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|
|
|
|
|
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MARCHEX, INC. AND SUBSIDIARIES
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Condensed Consolidated Statements of Operations
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(in thousands, except per share data)
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(unaudited)
|
|
|
|
|
|
|
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Nine Months Ended
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September 30,
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2013
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2014
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Revenue
|
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$
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112,870
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|
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$
|
149,353
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|
|
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Expenses:
|
|
|
|
|
|
Service costs (1)
|
|
|
68,025
|
|
|
|
96,728
|
|
|
Sales and marketing (1)
|
|
|
8,350
|
|
|
|
9,161
|
|
|
Product development (1)
|
|
|
20,586
|
|
|
|
22,599
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|
|
General and administrative (1)
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|
|
15,003
|
|
|
|
16,127
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|
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Amortization of intangible assets from acquisitions
|
|
|
2,500
|
|
|
|
434
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|
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Acquisition and separation related costs
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|
940
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|
|
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(68
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)
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Total operating expenses
|
|
|
115,404
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|
|
|
144,981
|
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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.
|
[ Back To Homepage ]
|