ReachLocal, Inc. (NASDAQ:RLOC), a leader in powering online
marketing for local businesses, today reported financial results
for the second quarter of 2016.
On June 27, 2016, Gannett Co., Inc. and
ReachLocal, Inc. announced the execution of a definitive merger
agreement and on July 11, 2016, Gannett launched a cash tender
offer for all of the Company’s outstanding stock at $4.60 per
share. The tender offer will be open until August 5, 2016
unless earlier terminated or extended. The parties have
received early termination of the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
and expect the transaction to be completed during the third
quarter.
“ReachLocal returned to sequential revenue
growth and delivered reduced operating losses and increased
Adjusted EBITDA in the second quarter," said Sharon Rowlands,
chief executive officer. “We look forward to continuing to
make progress toward our goal of providing local businesses with
the best and most complete digital marketing solution in the market
as part of Gannett following the merger.”
|
|
|
|
|
|
|
Quarterly
Results at a Glance |
|
|
|
|
|
|
(Table amounts in
000’s except key metrics and per share amounts) |
|
|
|
Q2 2016 |
|
|
Q2
2015 |
Revenue |
|
$ |
81,460 |
|
|
$ |
98,776 |
|
Net Loss |
|
$ |
(4,237 |
) |
|
$ |
(10,593 |
) |
Net Loss per
Diluted Share |
|
$ |
(0.14 |
) |
|
$ |
(0.36 |
) |
Non-GAAP Net
Loss |
|
$ |
(1,476 |
) |
|
$ |
(6,890 |
) |
Non-GAAP Net Loss
per Diluted Share |
|
$ |
(0.05 |
) |
|
$ |
(0.24 |
) |
Adjusted
EBITDA |
|
$ |
5,533 |
|
|
$ |
715 |
|
Cash Flow from
Operating Activities, Continuing Operations |
|
$ |
3,990 |
|
|
$ |
(8,460 |
) |
Cash Flow from
Operating Activities |
|
$ |
3,983 |
|
|
$ |
(8,461 |
) |
|
|
|
|
|
|
|
|
|
Revenue by Channel
(North America): |
Direct
Local |
|
$ |
43,943 |
|
|
$ |
46,189 |
|
National Brands,
Agencies and Resellers (NBAR) |
|
$ |
15,546 |
|
|
$ |
17,787 |
|
|
|
Revenue by Channel
(International): |
|
Direct
Local |
|
$ |
18,511 |
|
|
$ |
31,085 |
|
National Brands,
Agencies and Resellers (NBAR) |
|
$ |
3,460 |
|
|
$ |
3,715 |
|
|
|
|
|
|
|
|
|
|
Key Metrics (at
Period End): |
|
|
|
|
|
|
|
|
Active Clients |
|
|
16,000 |
|
|
|
19,500 |
|
Active Product
Units |
|
|
27,700 |
|
|
|
29,600 |
|
|
|
|
|
|
|
|
|
|
Use of Non-GAAP Measures
ReachLocal management evaluates and makes
operating decisions using various financial and operational
metrics. In addition to the Company’s GAAP results,
management also considers non-GAAP measures of non-GAAP net income
(loss), non-GAAP net income (loss) per share, and Adjusted
EBITDA. Management believes that these non-GAAP measures
provide useful information about the Company’s core operating
results and thus are appropriate to enhance the overall
understanding of the Company’s past financial performance and its
prospects for the future. The attached tables provide a
reconciliation of these non-GAAP financial measures with the most
directly comparable GAAP financial measures. Management also
tracks and reports Active Clients and Active Product Units, as
management believes that these metrics are important gauges of the
progress of the Company’s performance.
Non-GAAP net income is defined as net income
(loss) from continuing operations before (a) stock-based
compensation related expense (including the related adjustment to
amortization of capitalized software development costs) and (b)
acquisition related costs. Adjusted EBITDA is defined as net
income (loss) from continuing operations before interest, income
taxes, depreciation and amortization expenses, excluding, when
applicable, stock-based compensation, the effects of accounting for
business combinations (including any impairment of acquired
intangibles and goodwill), restructuring charges, and other
non-operating income or expense.
Acquisition Related Costs: Acquisition
related costs, including the amortization and any impairment of
acquired intangibles and goodwill and the deferred cash
consideration for the SMB:LIVE acquisition, are excluded from the
non-GAAP operating results as these are non-recurring charges which
the Company would not have incurred as part of continuing
operations.
Each of these non-GAAP measures, while having
utility, also has limitations as an analytical tool, and should not
be considered in isolation or as a substitute for analysis of the
Company’s results as reported under GAAP. Some of these limitations
are:
- Adjusted EBITDA does not reflect the Company’s cash
expenditures for capital equipment or other contractual
commitments;
- Although depreciation and amortization are non-cash charges,
the assets being depreciated and amortized may have to be replaced
in the future, and Adjusted EBITDA does not reflect capital
expenditure requirements for such replacements;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, the Company’s working capital needs;
- Adjusted EBITDA and non-GAAP net income (loss) do not consider
the potentially dilutive impact of issuing equity-based
compensation to the Company’s management and other employees;
- Adjusted EBITDA does not reflect the potentially significant
interest expense or the cash requirements necessary to service
interest or principal payments on indebtedness that the Company may
incur in the future;
- Adjusted EBITDA does not reflect income and expense items that
relate to the Company’s financing and investing activities, any of
which could significantly affect the Company’s results of
operations or be a significant use of cash;
- Adjusted EBITDA and non-GAAP net income (loss) do not reflect
costs or expenses associated with accounting for business
combinations;
- Adjusted EBITDA does not reflect certain tax payments that may
represent a reduction in cash available to the Company; and
- Other companies, including companies in the same industry,
calculate Adjusted EBITDA and non-GAAP net income (loss) measures
differently, which reduces their usefulness as a comparative
measure.
Adjusted EBITDA is not intended to replace
operating income (loss), net income (loss) and other measures of
financial performance reported in accordance with GAAP. Rather,
Adjusted EBITDA is a measure of operating performance that may be
considered in addition to those measures. Because of these
limitations, Adjusted EBITDA should not be considered as a measure
of discretionary cash available to the Company to invest in the
growth of the business.
Active Clients is a number the Company
calculates to approximate the number of clients directly served
through our Direct Local channel as well as clients served through
our National Brands, Agencies and Resellers channel. We calculate
Active Clients by adjusting the number of Active Product Units to
combine clients with more than one Active Product Unit as a single
Active Client. Clients with more than one location are generally
reflected as multiple Active Clients. Because this number includes
clients served through the National Brands, Agencies and Resellers
channel, Active Clients includes entities with which we do not have
a direct client relationship. Numbers are rounded to the nearest
hundred.
Active Product Units is a number we calculate to
approximate the number of individual products, licenses or services
we are providing to Active Clients. For example, if we were
performing both ReachSearch and ReachDisplay campaigns for a client
who also licenses ReachEdge, we consider that three Active Product
Units. Similarly, if a client purchases ReachSearch campaigns for
two different products or purposes, we consider that two Active
Product Units. Numbers are rounded to the nearest hundred.
Notice to Investors
The above is not an offer to buy nor a
solicitation of an offer to sell any of ReachLocal’s (the
“Company”) securities. The solicitation and the offer to buy the
Company shares have only been made pursuant to a tender offer
statement on Schedule TO, including an offer to purchase, a letter
of transmittal and other related materials that Gannett Co., Inc.
(“Parent”) and its affiliate, Raptor Merger Sub, Inc.
(“Purchaser”), have filed with the SEC. In addition, the Company
has filed with the SEC a Solicitation/Recommendation Statement on
Schedule 14D-9 with respect to the tender offer. Investors are able
to obtain the tender offer statement on Schedule TO, the offer to
purchase, the Company’s Solicitation/Recommendation Statement on
Schedule 14D-9 and related materials with respect to the tender
offer and the merger free of charge at the website of the SEC at
www.sec.gov, and from the information agent named in the tender
offer materials. Investors may also obtain, at no charge, any such
documents filed with or furnished to the SEC by the Company under
the “Investors” section of the Company’s website at
http://investors.reachlocal.com/. INVESTORS AND SECURITY HOLDERS
ARE ADVISED TO READ THESE DOCUMENTS, INCLUDING THE
SOLICITATION/RECOMMENDATION STATEMENT OF THE COMPANY AND ANY
AMENDMENTS THERETO, AS WELL AS ANY OTHER DOCUMENTS RELATING TO THE
TENDER OFFER AND THE MERGER THAT ARE FILED WITH THE SEC, CAREFULLY
AND IN THEIR ENTIRETY PRIOR TO MAKING ANY DECISIONS WITH RESPECT TO
WHETHER TO TENDER THEIR SHARES PURSUANT TO THE TENDER OFFER BECAUSE
THEY CONTAIN IMPORTANT INFORMATION, INCLUDING THE TERMS AND
CONDITIONS OF THE TENDER OFFER.
Forward-Looking Statements
Statements included in this report that are not
a description of historical facts are forward-looking statements.
Words or phrases such as “believe,” “may,” “could,” “will,”
“estimate,” “continue,” “anticipate,” “intend,” “seek,” “plan,”
“expect,” “should,” “would” or similar expressions are intended to
identify forward-looking statements, and are based on the Company’s
current beliefs and expectations. These forward-looking statements
include without limitation statements regarding the planned
completion of the tender offer and the merger. The Company’s actual
future results may differ materially from the Company’s current
expectations due to the risks and uncertainties inherent in its
business. These risks include, but are not limited to:
uncertainties as to the timing of the tender offer and the merger;
uncertainties as to the percentage of the Company’s stockholders
tendering their shares in the tender offer; the possibility that
competing offers will be made; the possibility that various closing
conditions for the tender offer or the merger may not be satisfied
or waived, including that a governmental entity may prohibit, delay
or refuse to grant approval for the consummation of the merger; the
effects of disruption caused by the transaction making it more
difficult to maintain relationships with employees, collaborators,
vendors and other business partners; the risk that stockholder
litigation in connection with the tender offer or the merger may
result in significant costs of defense, indemnification and
liability; and risks and uncertainties pertaining to the Company’s
business, including those detailed under “Risk Factors” and
elsewhere in the Company’s public periodic filings with the SEC, as
well as the tender offer materials filed by Parent and Purchaser
and the Solicitation/Recommendation Statement filed by the Company
in connection with the tender offer.
The reader is cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date hereof. All forward-looking statements are qualified in
their entirety by this cautionary statement and the date hereof.
All forward-looking statements are qualified in their entirety by
this cautionary statement and the Company undertakes no obligation
to revise or update this report to reflect events or circumstances
after the date hereof, except as required by law.
About ReachLocal, Inc.
ReachLocal, Inc. (NASDAQ:RLOC) helps local
businesses grow and operate their business better with leading
technology and expert service for our clients’ lead generation and
conversion. ReachLocal is headquartered in Woodland
Hills, Calif. and operates in four
regions: Asia-Pacific, Europe, Latin
America and North America.
For more information please visit ReachLocal at
www.reachlocal.com, follow us at www.reachlocal.com/social or
email info@reachlocal.com.
Investor
Relations:Alex WellinsThe Blueshirt Group(415)
217-5861alex@blueshirtgroup.com |
Media
Contact: Jeff FoxThe Blueshirt Group(415)
828-8298jeff@blueshirtgroup.com |
REACHLOCAL,
INC. |
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED BALANCE SHEETS |
|
|
|
(in thousands, except
per share data) |
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
2016 |
|
|
|
2015 |
|
Assets |
|
|
|
Current
Assets: |
|
|
|
Cash and cash
equivalents |
$ |
15,171 |
|
|
$ |
18,833 |
|
Short-term investments |
|
274 |
|
|
|
359 |
|
Accounts receivable, net |
|
7,137 |
|
|
|
6,278 |
|
Prepaid expenses and other current
assets |
|
6,748 |
|
|
|
8,296 |
|
Total current assets |
|
29,330 |
|
|
|
33,766 |
|
|
|
|
|
Property
and equipment, net |
|
10,763 |
|
|
|
13,550 |
|
Capitalized
software development costs, net |
|
19,559 |
|
|
|
20,691 |
|
Restricted
cash- term loan |
|
12,500 |
|
|
|
15,000 |
|
Restricted
cash |
|
3,451 |
|
|
|
3,502 |
|
Intangible
assets, net |
|
3,543 |
|
|
|
4,011 |
|
Non-marketable investments |
|
9,000 |
|
|
|
9,000 |
|
Other
assets |
|
2,557 |
|
|
|
2,547 |
|
Goodwill |
|
20,200 |
|
|
|
20,129 |
|
Total assets |
$ |
110,903 |
|
|
$ |
122,196 |
|
|
|
|
|
Liabilities and Stockholders’ Equity |
|
|
|
Current
Liabilities: |
|
|
|
Accounts payable |
$ |
32,036 |
|
|
$ |
33,581 |
|
Accrued compensation and
benefits |
|
12,739 |
|
|
|
14,478 |
|
Deferred revenue |
|
22,566 |
|
|
|
22,985 |
|
Accrued restructuring |
|
3,389 |
|
|
|
3,329 |
|
Term loan |
|
13,296 |
|
|
|
8,352 |
|
Capital lease |
|
707 |
|
|
|
698 |
|
Other current liabilities |
|
9,256 |
|
|
|
10,166 |
|
Liabilities of discontinued
operations |
|
798 |
|
|
|
804 |
|
Total current
liabilities |
|
94,787 |
|
|
|
94,393 |
|
|
|
|
|
Term loan |
|
11,758 |
|
|
|
16,194 |
|
Convertible notes – related
party |
|
5,000 |
|
|
|
5,000 |
|
Capital lease |
|
131 |
|
|
|
484 |
|
Deferred rent and other
liabilities |
|
8,031 |
|
|
|
8,111 |
|
Total liabilities |
|
119,707 |
|
|
|
124,182 |
|
|
|
|
|
Stockholders’ Deficit: |
|
|
|
Receivable from
stockholder |
|
(57 |
) |
|
|
(55 |
) |
Additional paid-in capital |
|
143,512 |
|
|
|
140,398 |
|
Accumulated deficit |
|
(146,473 |
) |
|
|
(136,084 |
) |
Accumulated other comprehensive
loss |
|
(5,786 |
) |
|
|
(6,245 |
) |
Total stockholders’ deficit |
|
(8,804 |
) |
|
|
(1,986 |
) |
Total liabilities and stockholders’
deficit |
$ |
110,903 |
|
|
$ |
122,196 |
|
REACHLOCAL,
INC. |
|
|
|
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|
|
|
|
|
|
|
(in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Revenue |
$ |
81,460 |
|
|
$ |
98,776 |
|
|
$ |
160,169 |
|
|
$ |
198,339 |
|
Cost of
revenue |
|
45,591 |
|
|
|
55,390 |
|
|
|
89,442 |
|
|
|
111,607 |
|
Operating
expenses: |
|
|
|
|
|
|
|
Selling and marketing |
|
22,975 |
|
|
|
33,046 |
|
|
|
46,099 |
|
|
|
69,329 |
|
Product and technology |
|
6,063 |
|
|
|
7,082 |
|
|
|
12,149 |
|
|
|
14,504 |
|
General and administrative |
|
9,536 |
|
|
|
9,910 |
|
|
|
17,414 |
|
|
|
20,623 |
|
Restructuring charges |
|
233 |
|
|
|
3,133 |
|
|
|
2,689 |
|
|
|
4,588 |
|
Total operating expenses |
|
38,807 |
|
|
|
53,171 |
|
|
|
78,351 |
|
|
|
109,044 |
|
|
|
|
|
|
|
|
|
Operating
loss |
|
(2,938 |
) |
|
|
(9,785 |
) |
|
|
(7,624 |
) |
|
|
(22,312 |
) |
Loss on deconsolidation of
subsidiaries, net |
|
(99 |
) |
|
|
- |
|
|
|
(171 |
) |
|
|
- |
|
Interest expense |
|
(1,115 |
) |
|
|
(713 |
) |
|
|
(2,230 |
) |
|
|
(788 |
) |
Other income (expense),
net |
|
90 |
|
|
|
(135 |
) |
|
|
78 |
|
|
|
(216 |
) |
Loss before
income taxes |
|
(4,062 |
) |
|
|
(10,633 |
) |
|
|
(9,947 |
) |
|
|
(23,316 |
) |
Income tax provision (benefit) |
|
175 |
|
|
|
(40 |
) |
|
|
442 |
|
|
|
59 |
|
Net
loss |
$ |
(4,237 |
) |
|
$ |
(10,593 |
) |
|
$ |
(10,389 |
) |
|
$ |
(23,375 |
) |
|
|
|
|
|
|
|
|
Net loss
per share: |
|
|
|
|
|
|
|
Net loss per share, basic and
diluted |
$ |
(0.14 |
) |
|
$ |
(0.36 |
) |
|
$ |
(0.35 |
) |
|
$ |
(0.80 |
) |
|
|
|
|
|
|
|
|
Weighted
average common shares used in the computation of net loss per
share: |
|
|
|
|
|
|
|
Basic and diluted |
|
29,840 |
|
|
|
29,097 |
|
|
|
29,824 |
|
|
|
29,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation, net of capitalization, and
depreciation and amortization included in above line items: |
|
|
|
|
|
|
|
|
Stock-based
compensation: |
|
|
|
|
|
|
|
Cost of revenue |
$ |
59 |
|
|
$ |
134 |
|
|
$ |
109 |
|
|
$ |
290 |
|
Selling and
marketing |
|
207 |
|
|
|
424 |
|
|
|
408 |
|
|
|
906 |
|
Product and
technology |
|
178 |
|
|
|
126 |
|
|
|
240 |
|
|
|
294 |
|
General and
administrative |
|
953 |
|
|
|
1,530 |
|
|
|
1,780 |
|
|
|
2,870 |
|
|
$ |
1,397 |
|
|
$ |
2,214 |
|
|
$ |
2,537 |
|
|
$ |
4,360 |
|
|
|
|
|
|
|
|
|
Depreciation and amortization: |
|
|
|
|
|
|
|
Cost of revenue |
$ |
166 |
|
|
$ |
219 |
|
|
$ |
325 |
|
|
$ |
351 |
|
Selling and
marketing |
|
504 |
|
|
|
824 |
|
|
|
1,067 |
|
|
|
1,657 |
|
Product and
technology |
|
3,259 |
|
|
|
3,591 |
|
|
|
6,533 |
|
|
|
7,298 |
|
General and
administrative |
|
503 |
|
|
|
515 |
|
|
|
1,040 |
|
|
|
977 |
|
|
$ |
4,432 |
|
|
$ |
5,149 |
|
|
$ |
8,965 |
|
|
$ |
10,283 |
|
REACHLOCAL,
INC. |
|
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
(in thousands, except
per share data) |
|
|
|
|
|
Six Months Ended
June 30, |
|
|
|
|
|
2016 |
|
|
|
2015 |
|
|
Cash flows
from operating activities: |
|
|
|
|
Loss from continuing
operations |
$ |
(10,389 |
) |
|
$ |
(23,375 |
) |
|
Adjustments to reconcile loss from
continuing operations to net cash provided by (used in) operating
activities: |
|
|
|
|
Depreciation and
amortization |
|
8,965 |
|
|
|
10,283 |
|
|
Stock-based compensation |
|
2,537 |
|
|
|
4,360 |
|
|
Restructuring charges |
|
2,689 |
|
|
|
4,588 |
|
|
Loss on deconsolidation of
subsidiary |
|
171 |
|
|
|
- |
|
|
(Gain) loss on disposal of fixed
assets |
|
(9 |
) |
|
|
135 |
|
|
Provision for doubtful
accounts |
|
396 |
|
|
|
66 |
|
|
Non-cash interest expense, net |
|
558 |
|
|
|
173 |
|
|
Changes in operating assets and
liabilities: |
|
|
|
|
Accounts receivable |
|
(1,103 |
) |
|
|
1,859 |
|
|
Prepaid expenses and other current
assets |
|
1,419 |
|
|
|
2,229 |
|
|
Restricted cash |
|
(249 |
) |
|
|
- |
|
|
Other assets |
|
55 |
|
|
|
(264 |
) |
|
Accounts payable |
|
(1,894 |
) |
|
|
(8,475 |
) |
|
Accrued compensation and
benefits |
|
(648 |
) |
|
|
(823 |
) |
|
Deferred revenue |
|
(598 |
) |
|
|
(1,259 |
) |
|
Accrued restructuring |
|
(1,280 |
) |
|
|
(2,358 |
) |
|
Deferred rent and other
liabilities |
|
(29 |
) |
|
|
(129 |
) |
|
Net cash provided by (used in)
operating activities, continuing operations |
|
591 |
|
|
|
(12,990 |
) |
|
Net cash used in operating
activities, discontinued operations |
|
(7 |
) |
|
|
(60 |
) |
|
Net cash provided by (used in)
operating activities |
|
584 |
|
|
|
(13,050 |
) |
|
|
|
|
|
|
Cash flows
from investing activities: |
|
|
|
|
Additions to property, equipment
and software |
|
(5,257 |
) |
|
|
(7,748 |
) |
|
Proceeds from sales of property and
equipment |
|
348 |
|
|
|
- |
|
|
Changes in restricted cash due to
certificates of deposits |
|
360 |
|
|
|
50 |
|
|
Maturities of certificates of
deposits and short-term investments |
|
145 |
|
|
|
796 |
|
|
Net cash used in investing
activities |
|
(4,404 |
) |
|
|
(6,902 |
) |
|
|
|
|
|
|
Cash flows
from financing activities: |
|
|
|
|
Proceeds from term loan, net |
|
- |
|
|
|
24,700 |
|
|
Changes in restricted cash- term
loan |
|
2,500 |
|
|
|
(17,500 |
) |
|
Payment of deferred and contingent
consideration |
|
(1,346 |
) |
|
|
(434 |
) |
|
Proceeds from exercise of stock
options |
|
5 |
|
|
|
6 |
|
|
Principal payments on capital lease
obligations |
|
(385 |
) |
|
|
(443 |
) |
|
Term loan costs |
|
- |
|
|
|
(194 |
) |
|
Common stock repurchases |
|
(492 |
) |
|
|
(5 |
) |
|
Net cash provided by financing
activities |
|
282 |
|
|
|
6,130 |
|
|
|
|
|
|
|
Effect of
exchange rate changes on cash and cash equivalents |
|
(124 |
) |
|
|
(1,274 |
) |
|
|
|
|
|
|
Net change
in cash and cash equivalents |
|
(3,662 |
) |
|
|
(15,096 |
) |
|
Cash and
cash equivalents—beginning of period |
|
18,833 |
|
|
|
43,720 |
|
|
Cash and
cash equivalents—end of period |
$ |
15,171 |
|
|
$ |
28,624 |
|
|
REACHLOCAL,
INC. |
|
|
|
|
|
|
|
Reconciliation
of Adjusted EBITDA to Net Loss |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(4,237 |
) |
|
$ |
(10,593 |
) |
|
$ |
(10,389 |
) |
|
$ |
(23,375 |
) |
Add (subtract): |
|
|
|
|
|
|
|
Income tax provision (benefit) |
|
175 |
|
|
|
(40 |
) |
|
|
442 |
|
|
|
59 |
|
Other income (expense),
net |
|
(90 |
) |
|
|
135 |
|
|
|
(78 |
) |
|
|
216 |
|
Interest expense |
|
1,115 |
|
|
|
713 |
|
|
|
2,230 |
|
|
|
788 |
|
Loss on deconsolidation of
subsidiaries, net |
|
99 |
|
|
|
- |
|
|
|
171 |
|
|
|
- |
|
Operating loss |
|
(2,938 |
) |
|
|
(9,785 |
) |
|
|
(7,624 |
) |
|
|
(22,312 |
) |
Add: |
|
|
|
|
|
|
|
Depreciation and
amortization |
|
4,432 |
|
|
|
5,149 |
|
|
|
8,965 |
|
|
|
10,283 |
|
Stock-based compensation |
|
1,397 |
|
|
|
2,214 |
|
|
|
2,537 |
|
|
|
4,360 |
|
Acquisition and integration
costs |
|
2,409 |
|
|
|
4 |
|
|
|
2,419 |
|
|
|
11 |
|
Restructuring charges |
|
233 |
|
|
|
3,133 |
|
|
|
2,689 |
|
|
|
4,588 |
|
Adjusted EBITDA (1) |
$ |
5,533 |
|
|
$ |
715 |
|
|
$ |
8,986 |
|
|
$ |
(3,070 |
) |
REACHLOCAL, Inc. |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Operating Results for
Three Months Ended June 30, 2016 and 2015 |
|
|
|
|
(in
thousands, except per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, 2016 |
|
Three Months Ended June 30, 2015 |
|
|
Adjustments: |
|
|
|
Adjustments: |
|
|
|
Stock-based |
|
|
|
|
|
Stock-based |
|
|
|
|
GAAP |
Compensation |
Acquisition |
Restructuring |
Non-GAAP |
|
GAAP |
Compensation |
Acquisition |
Restructuring |
Non-GAAP |
|
Operating Results |
Related |
Related |
Related |
Operating |
|
Operating Results |
Related |
Related |
Related |
Operating |
|
"As Reported" |
Expense (2) |
Costs (3) |
Costs (4) |
Results |
|
"As Reported" |
Expense (2) |
Costs (3) |
Costs (4) |
Results |
Income (loss) before
income taxes |
$ |
(4,062 |
) |
$ |
1,534 |
|
$ |
2,651 |
|
$ |
233 |
|
$ |
356 |
|
|
$ |
(10,633 |
) |
$ |
2,331 |
|
$ |
460 |
|
$ |
3,133 |
|
$ |
(4,709 |
) |
Income tax
provision (5) |
|
175 |
|
|
576 |
|
|
994 |
|
|
87 |
|
|
1,832 |
|
|
|
(40 |
) |
|
874 |
|
|
172 |
|
|
1,175 |
|
|
2,181 |
|
Net Income (loss) |
$ |
(4,237 |
) |
$ |
958 |
|
$ |
1,657 |
|
$ |
146 |
|
$ |
(1,476 |
) |
|
$ |
(10,593 |
) |
$ |
1,457 |
|
$ |
288 |
|
$ |
1,958 |
|
$ |
(6,890 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic
and diluted |
$ |
(0.14 |
) |
|
|
|
$ |
(0.05 |
) |
|
$ |
(0.36 |
) |
|
|
|
$ |
(0.24 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
29,840 |
|
|
|
|
|
29,840 |
|
|
|
29,097 |
|
|
|
|
|
29,097 |
|
REACHLOCAL, Inc. |
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of GAAP to Non-GAAP Operating Results for
Six Months Ended June 30, 2016 and 2015 |
|
|
|
|
(in thousands, except
per share amounts) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, 2016 |
|
Six Months Ended June 30, 2015 |
|
|
Adjustments: |
|
|
|
Adjustments: |
|
|
|
Stock-based |
|
|
|
|
|
Stock-based |
|
|
|
|
GAAP |
Compensation |
Acquisition |
Restructuring |
Non-GAAP |
|
GAAP |
Compensation |
Acquisition |
Restructuring |
Non-GAAP |
|
Operating Results |
Related |
Related |
Related |
Operating |
|
Operating Results |
Related |
Related |
Related |
Operating |
|
"As Reported" |
Expense (2) |
Costs (3) |
Costs (4) |
Results |
|
"As Reported" |
Expense (2) |
Costs (3) |
Costs (4) |
Results |
Income (loss) from
continuing operations before incometaxes |
$ |
(9,947 |
) |
$ |
2,808 |
|
$ |
2,901 |
|
$ |
2,689 |
|
$ |
(1,549 |
) |
|
$ |
(23,316 |
) |
$ |
4,593 |
|
$ |
932 |
|
$ |
4,588 |
|
$ |
(13,203 |
) |
Income tax
provision (benefit) (5) |
|
442 |
|
|
1,053 |
|
|
1,088 |
|
|
1,008 |
|
|
3,591 |
|
|
|
59 |
|
|
1,722 |
|
|
350 |
|
|
1,721 |
|
|
3,851 |
|
Income (loss) from
continuing operations |
$ |
(10,389 |
) |
$ |
1,755 |
|
$ |
1,813 |
|
$ |
1,681 |
|
$ |
(5,140 |
) |
|
$ |
(23,375 |
) |
$ |
2,871 |
|
$ |
582 |
|
$ |
2,867 |
|
$ |
(17,054 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share: |
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic
and diluted |
$ |
(0.35 |
) |
|
|
|
$ |
(0.17 |
) |
|
$ |
(0.80 |
) |
|
|
|
$ |
(0.59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
|
|
|
Basic and
diluted |
|
29,824 |
|
|
|
|
|
29,824 |
|
|
|
29,083 |
|
|
|
|
|
29,083 |
|
REACHLOCAL,
INC. |
|
|
|
|
|
|
|
Reconciliation
of GAAP to Constant Currency Revenue |
|
|
|
|
|
|
|
(in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
June 30, |
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
North American GAAP
Revenue |
$ |
59,489 |
|
|
$ |
63,976 |
|
|
$ |
115,062 |
|
|
$ |
127,475 |
|
Constant Currency
Adjustment |
|
131 |
|
|
|
- |
|
|
|
384 |
|
|
|
- |
|
North American Revenue at
Constant Currency (6) |
$ |
59,620 |
|
|
$ |
63,976 |
|
|
$ |
115,446 |
|
|
$ |
127,475 |
|
|
|
|
|
|
|
|
|
As Reported Growth
Rates |
|
(7.0 |
%) |
|
|
(16.9 |
%) |
|
|
(9.7 |
%) |
|
|
(17.2 |
%) |
Constant Currency
Growth Rates |
|
(6.8 |
%) |
|
|
(16.5 |
%) |
|
|
(9.4 |
%) |
|
|
(16.8 |
%) |
|
|
|
|
|
|
|
|
International GAAP
Revenue |
$ |
21,971 |
|
|
$ |
34,800 |
|
|
$ |
45,107 |
|
|
$ |
70,864 |
|
Constant Currency
Adjustment |
|
370 |
|
|
|
- |
|
|
|
2,259 |
|
|
|
- |
|
International Revenue at
Constant Currency (6) |
$ |
22,341 |
|
|
$ |
34,800 |
|
|
$ |
47,366 |
|
|
$ |
70,864 |
|
|
|
|
|
|
|
|
|
As Reported Growth
Rates |
|
(36.9 |
%) |
|
|
(25.3 |
%) |
|
|
(36.3 |
%) |
|
|
(24.8 |
%) |
Constant Currency
Growth Rates |
|
(35.8 |
%) |
|
|
(11.4 |
%) |
|
|
(33.2 |
%) |
|
|
(12.6 |
%) |
|
|
|
|
|
|
|
|
Consolidated GAAP
Revenue |
$ |
81,460 |
|
|
$ |
98,776 |
|
|
$ |
160,169 |
|
|
$ |
198,339 |
|
Constant Currency
Adjustment |
|
501 |
|
|
|
- |
|
|
|
2,643 |
|
|
|
- |
|
Consolidated Revenue at
Constant Currency (6) |
$ |
81,961 |
|
|
$ |
98,776 |
|
|
$ |
162,812 |
|
|
$ |
198,339 |
|
|
|
|
|
|
|
|
|
As Reported Growth
Rates |
|
(17.5 |
%) |
|
|
(20.1 |
%) |
|
|
(19.2 |
%) |
|
|
(20.1 |
%) |
Constant Currency
Growth Rates |
|
(17.0 |
%) |
|
|
(14.7 |
%) |
|
|
(17.9 |
%) |
|
|
(15.4 |
%) |
Footnotes |
|
(1)
Adjusted EBITDA is defined as net income (loss) from continuing
operations before interest, income taxes, depreciation and
amortization expenses, excluding, when applicable, stock-based
compensation, the effects of accounting for business combinations
(including any impairment of acquired intangibles and goodwill),
restructuring charges, and other non-operating income or
expense. |
|
(2)
Stock-based Compensation Related Expense: Includes stock-based
compensation expense and the related adjustment to amortization of
capitalized software development costs. |
|
(3)
Acquisition Related Costs, including the amortization and any
impairment of acquired intangibles and goodwill, are excluded from
the non-GAAP operating results as these are non-recurring charges
which the Company would not have incurred as part of continuing
operations. |
|
(4)
Restructuring Related Costs are excluded from the non-GAAP
operating results as these are non-recurring charges which the
Company would not have incurred as part of continuing
operations. |
|
(5) The income tax provision (benefit) for the Non-GAAP
adjustments is estimated using the effective statutory rate for
those jurisdictions. |
|
(6)
Constant currency revenues are determined by recalculating net
revenues denominated in currencies other than U.S. Dollars in the
current fiscal period using average exchange rates for that
particular currency during the corresponding financial period of
the prior year. The company uses this non-GAAP measure to evaluate
performance on a comparable basis excluding the impact of foreign
currency fluctuations. Where constant currency revenue is presented
for a period longer than one fiscal quarter, it is computed as the
sum of the amount separately calculated for each quarter during
that period. |
|
Investor Relations:
Alex Wellins
The Blueshirt Group
(415) 217-5861
alex@blueshirtgroup.com
Media Contact:
Jeff Fox
The Blueshirt Group
(415) 828-8298
jeff@blueshirtgroup.com
Reachlocal, Inc. (MM) (NASDAQ:RLOC)
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