Revenue Grows 150% Year-over-Year and 35% Sequentially; Supply Chain Efficiencies Lead to Record Gross Profit and EBITDA; Company Raises 2009 Full-Year Outlook and Issues Preliminary 2010 Guidance
NEW YORK – interCLICK, Inc. (OTCBB: INRK), the leading ad network in data and inventory transparency, announced its results for the quarter ended September 30, 2009. Earlier the Company announced that it has been granted approval to list its common stock on The NASDAQ Capital Market. Effective with the commencement of trading on Thursday, November 5, 2009, interCLICK’s common stock will trade under the NASDAQ ticker symbol “ICLK.”
| Summary Results | ||||||||||
| $ in millions (except per share amounts) | ||||||||||
| Q3 2009 | Q3 2008 | Growth | ||||||||
| Revenue | $ | 14.4 | $ | 5.8 | 150% | |||||
| Gross profit | $ | 7.3 | $ | 1.7 | 315% | |||||
| Gross margin | 50.4 | % | 30.3 | % | ||||||
| EBITDA | $ | 1.4 | $ | (0.8 | ) | nm | ||||
| Free Cash Flow | $ | 1.4 | $ | (1.0 | ) | nm | ||||
| Operating income (loss) | $ | 0.7 | $ | (1.4 | ) | nm | ||||
| Net earnings (loss) | $ | 0.3 | $ | (3.9 | ) | nm | ||||
| EPS | $ | 0.01 | $ | (0.20 | ) | nm | ||||
| See reconciliation of GAAP to non-GAAP measures on attached financial tables. | ||||||||||
Revenue was $14.4 million, up 150% year-over-year and 35% sequentially, an acceleration from 26% sequential growth in the prior period. Growth was driven primarily by increased demand from existing advertisers as well as strong penetration into new key accounts. The Company previously forecasted that revenue would exceed $12.5 million.
Gross profit margin was 50.4%, 20.1 percentage points higher than the year-ago-period and 5.6 percentage points higher sequentially. Gross margin expansion continued to be driven by supply chain management improvements and efficiencies generated through the Company’s advanced proprietary technology platform.
EBITDA, a non-GAAP measure, was $1.4 million, compared to an EBITDA loss of $(0.8) million in the year-ago period and up 637% sequentially compared to $0.2 million. Free Cash Flow was $1.4 million, compared to negative Free Cash Flow of $(1.0) million in the year-earlier period and up 924% sequentially compared to $0.1 million. Growth was driven by improved operating efficiencies leading to a reduction in operating expenses as a percentage of revenue versus the prior year period.
Operating income was $0.7 million, net income was $0.3 million, and EPS was $0.01 per share, compared to losses in the quarters ended September 30, 2008 and June 30, 2009.
“The third quarter was another outstanding quarter for interCLICK,” said Michael Mathews, interCLICK’s CEO. “Our dedication to effective supply chain management continues to drive client satisfaction and differentiate us in the marketplace. We look forward to ending the year strong and heading into 2010 with significant momentum.”
For the nine months ended September 30, 2009, interCLICK had revenue of $33.5 million, an increase of 139% compared to revenue of $14.0 million in the year-earlier period. The Company generated gross profit of $16.0 million, an increase of 336% compared to $3.7 million in the nine months ended September 30, 2008. interCLICK recorded a net loss of $(0.7) million, or $(0.04) per share, compared to a net loss of $(11.4) million, or $(0.62) per share in the same nine months in 2008.
The Company ended the third quarter with cash and cash equivalents of $1.9 million. During the third quarter, the Company increased its credit facility with Crestmark Commercial Capital Lending LLC from $5.5 million to $7.0 million. As part of the amendment to the credit facility, Crestmark also agreed to reduce the monthly servicing fee the Company was previously paying from 0.575% to 0.375%, which translates to a 300 basis point reduction in the Company’s effective annualized cost of capital.
Business Outlook
interCLICK expects fourth quarter revenue to exceed $18 million, which would represent year-over-year growth of 110%, and EBITDA to exceed $1.5 million. The Company raised its full year revenue forecast to more than $51 million, an increase of at least 125% compared to 2008, and full year EBITDA of at least $4 million. Previously, the Company had forecasted that full year revenue would exceed $44 million.
The Company announced preliminary guidance for 2010, including revenue growth of at least 55% to $80 million, and EBITDA of at least $9 million.
Conference Call
The Company will host a conference call to discuss its third quarter financial results and business outlook on Wednesday, November 4, 2009, at 4:30 p.m. (EST). The conference call can be accessed by dialing toll-free (888) 819-8033 (U.S.) or (913) 312-0709 (international). A live audiocast of the conference call can be accessed from the Company’s website at http://www.interclick.com/MarketWatchV2.aspx. A replay of the audiocast will be available through December 3, 2009.
Reclassifications
Certain amounts in the accompanying financial tables have been reclassified to conform to the third quarter 2009 presentation.
Non-GAAP Financial Measures
The Company uses non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to period comparison. Company management believes that the non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of the performance of our core cash operations. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. The Company believes these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key metrics used by management.
EBITDA. As is common in the industry, the Company uses EBITDA as a measure of performance to demonstrate operating income exclusive of interest, taxes, depreciation, and amortization including stock-based compensation. The Company, in its daily management of its business affairs and analysis of its monthly, quarterly and annual performance, makes certain of its decisions based on EBITDA and Free Cash Flow. Since an outside investor may base its evaluation of the Company’s performance on the Company’s net income or loss, there is a limitation to the EBITDA measurement. EBITDA is not, and should not be considered, an alternative to net income or loss, income or loss from operations or any other measure for determining operating performance of liquidity, as determined under GAAP.
Free Cash Flow. Free Cash Flow measures EBITDA less capital expenditures. Management believes that Free Cash Flow provides meaningful information about the Company’s liquidity and future cash availability to fund its operations. A limitation of using Free Cash Flow versus the GAAP measure of net cash provided by operating activities is that the Free Cash Flow does not represent the total increase or decreases in the cash balance from operations for the period.
To comply with Regulation G of the Securities and Exchange Commission, interCLICK, Inc. attaches to this press release and will post to the Company’s website (www.interclick.com) any reconciliations of certain non-GAAP measures to the nearest comparable GAAP measures that are presented in this press release.
About interCLICK
interCLICK, Inc. operates the interCLICK Network, an online advertising platform that combines advanced behavioral targeting with complete data and inventory transparency, allowing advertisers to identify and track their desired audience on an unprecedented level. interCLICK offers advanced proprietary demographic, behavioral, contextual, geographic and retargeting technologies across a network of name brand publishers to ensure the right message is delivered to a precise audience in a brand friendly environment. For more information about the interCLICK Network, visit http://www.interclick.com.
