UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
May 15, 2015
Date
of Report (Date of earliest event reported)
LOCAL
CORPORATION
(Exact name of registrant as specified in its charter)
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Delaware |
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001-34197 |
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33-0849123 |
(State or other jurisdiction
of incorporation) |
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(Commission
File Number) |
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(IRS Employer
Identification No.) |
7555 Irvine Center Drive
Irvine, California 92618
(Address of principal executive offices, zip code)
(949) 784-0800
(Registrants telephone number, including area code)
N/A
(Former name or
former address, if changed since last report)
Check the appropriate box below
if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the issuer under any of the following provisions:
¨ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 |
Results of Operations and Financial Condition. |
On May 15, 2015, the Registrant issued a press
release announcing information regarding its financial results for the completed quarter ended March 31, 2015, and will hold a conference call at approximately 8:00 A.M., Pacific Time, on May 15, 2015, to discuss these results. A copy of
the press release is furnished as Exhibit 99.1 to this Current Report.
The information contained in this Current Report, including the accompanying
exhibit, is being furnished and shall not be deemed filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current
Report is not incorporated by reference into any filings of Local Corporation made under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, whether made before or after the date of this Current Report,
regardless of any general incorporation language in the filing unless specifically stated so therein.
The Registrant made reference to non-GAAP financial
information in the press release and included a reconciliation of those non-GAAP financial measures to the comparable GAAP financial measures in the press release as well.
Item 7.01. |
Regulation FD Disclosure. |
On May 15, 2015, the Registrant posted its Q1 2015 Quarterly Earnings
Summary Report on its website available at ir.local.com. A copy of the presentation is attached as Exhibit 99.2.
The information in this Current Report
on Form 8-K and accompanying exhibit is being furnished and shall not be deemed to be filed for the purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of such section, nor shall such information be
deemed incorporated by reference in any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
The presentation materials contain a reference to non-GAAP financial information and include a reconciliation of those non-GAAP financial measures to the
comparable GAAP financial measures.
Item 9.01 |
Financial Statements and Exhibits. |
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Exhibit 99.1 |
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Press Release of Local Corporation dated May 15, 2015. |
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Exhibit 99.2 |
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Local Corporation Q1 2015 Quarter Earnings Summary Report. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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LOCAL CORPORATION |
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Date: May 15, 2015 |
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By: |
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/s/ Kenneth S. Cragun |
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Kenneth S. Cragun |
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Chief Financial Officer |
Exhibit Index
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Exhibit
Number |
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Description |
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99.1 |
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Press Release of Local Corporation dated May 15, 2015. |
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99.2 |
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Local Corporation Q1 2015 Quarter Earnings Summary Report. |
Exhibit 99.1
Local Corporation Reports First Quarter 2015 Financial Results
IRVINE, Calif., May 15, 2015 Local Corporation (NASDAQ: LOCM), a local search and advertising technology company, reported the financial results
for its first quarter ended Mar. 31, 2015.
As we move forward in 2015, we are focused on execution, said Local Corporation chairman and CEO
Fred Thiel. In the first quarter, our revenue per thousand visitors held strong at $186; however, our overall financial results were negatively impacted by several challenges that carried over from the fourth quarter of 2014. We continued to
address these issues and to rebuild our traffic, but we have not progressed as quickly as we had hoped.
Nonetheless, we have made operational
progress and recently signed important agreements across each line of business. Most notably, a major monetization partner renewed our ad agreement for another three years. In addition, we secured relationships with additional mobile search channel
partners, expanding our distribution and entering the Asia-Pacific market.
We also launched programmatic initiatives in partnership with Rocket
Fuel. With the programmatic infrastructure in place, we began running campaigns for our advertisers to further monetize our local search traffic. Based on early successes, we are beginning to shift existing Network advertiser and publisher
relationships to programmatic exchanges. We believe this transition establishes another platform for future growth and operational efficiency.
We
believe our overall product offerings and technology assets are robust and valuable, but recognize the path to growth may be longer than we would like. In light of recent interest, we have engaged an investment banking advisor to explore strategic
alternatives that have the potential to generate increased value for our shareholders.
Recent Highlights
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Renewed an ad partnership with a major monetization partner. |
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Signed multiple carriers for nQuery mobile search and added more international reseller partners. The company now has reseller relationships in North and South America, Europe and the Asia- Pacific region.
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Launched programmatic advertiser campaigns and plans to syndicate first party search data through a partnership with Rocket Fuel. |
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Deployed nTegrity traffic quality tool to quickly vet traffic sources, enabling improvement in the quality of the Network feed business. |
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Improved audience engagement with category pages driving more than 10% of Owned & Operated (O&O) traffic. |
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Refinanced the convertible debt and extended the maturity date. |
First Quarter Results: Mar. 31, 2015
compared to Dec. 31, 2014
First quarter 2015 total revenue was $13.1 million. Network revenue was $4.8 million, compared to $7.8 million in the
fourth quarter of 2014, due to softer performance of the feed business as a result of increased traffic quality filtering and a related decrease in overall traffic. O&O revenue was $8.3 million, compared to $8.5 million in the fourth quarter of
2014, indicating this line of
1
business has begun to stabilize as the company addressed the fourth quarter changes in traffic sources and editorial requests from ad partners. At this revenue level, gross margin was 12%, net
loss was $4.6 million and Adjusted EBITDA* loss was $2.2 million.
* |
Adjusted EBITDA is defined as net income (loss) excluding: provision for income taxes; interest and other income (expense), net; depreciation; amortization; stock-based compensation charges; gain or loss on
derivatives revaluation; net income (loss) from discontinued operations; and severance charges. See detailed reconciliation of GAAP to non-GAAP measures in the financial tables attached to this release. |
Ken Cragun, Local Corporation CFO, stated, While we made operational strides related to mobile search and programmatic media buying, we now believe it
will take longer than originally anticipated to drive revenue growth from these new initiatives. We are focused on expanding our margin and improving the bottom line, and we lowered expenses again during the quarter.
Cash Balance
At Mar. 31, 2015, the company had
cash of $2.3 million, compared to $2.4 million at Dec. 31, 2014. The net cash used for operations was $1.8 million in the first quarter. In April 2015, the company engaged Siemer & Associates to help accelerate and explore strategic
alternatives to have the ability to achieve its strategic objectives and improve shareholder value.
On Mar. 9, 2015, the company entered into a
Securities Purchase Agreement relating to the sale and issuance of $9.3 million of Senior Convertible Notes that extended its maturity dates. After repayment the 2013 convertible notes of $6 million, including $1 million pre-payment premium and
expenses, the net proceeds to the company were approximately $3 million. Also in March 2015, the company entered into a new $10 million secured accounts receivable financing agreement that matures in April 2016, replacing its existing credit
facility with Square 1 Bank.
2015 Financial Guidance
In light of a number of factors, including the exploration of strategic alternatives and the revenue growth taking longer than expected, the company has
withdrawn its guidance provided on February 27, 2015.
First Quarter 2015 Metric Review
First quarter 2015 unique visitors were 59 million, compared to 59 million in the fourth quarter of 2014. During the first quarter of 2015, the
average unique visitors per month for nQuery Mobile Search reached 3 million, representing approximately 400,000 daily search queries.
O&O properties, primarily driven by the companys flagship site, Local.com, delivered revenue per thousand visitors of $186, stable compared to $186
in the fourth quarter of 2014.
First Quarter 2015 Conference Call Information
Chairman and CEO Fred Thiel and CFO Ken Cragun will host a conference call and simultaneous webcast to discuss these results:
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Date: |
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Friday, May 15, 2015 |
Time: |
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8:00 a.m. PT (11:00 a.m. ET) |
Listen via the internet: |
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Local Corporation website at: http://ir.local.com |
Access webcast replay: |
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Available for at least 90 days on the companys website |
Participate via phone: |
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1-855-235-8301 or 1-315-625-6982, passcode # 23678071 |
Access phone replay: |
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1-855-859-2056 or 1-404-537-3406, passcode # 23678071, for up to 24 hours starting at 8 p.m. ET the day of the call |
2
About Local Corporation
Local Corporation (NASDAQ:LOCM) is a leading local search and advertising technology company that aggregates and curates the most relevant and rich
personalized content and presents it to millions of consumers wherever and however they search for information, while providing significant reach and value to the companys advertisers and partners. For more information,
visit: http://www.localcorporation.com or visit the companys flagship site: http://www.local.com.
Forward Looking Statements
This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933
and Section 21E of the Securities Exchange Act of 1934. Words or expressions such as anticipate, believe, estimate, plans, expect, intend, project,
forecast, potential, feel and similar expressions and phrases are intended to identify such forward-looking statements. Any forward-looking statements are based on the beliefs of our management as well as
assumptions made by and information currently available to our management. Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors, including, but not limited to, our ability to
continue to fund our current operations, our ability to raise additional capital to operate our business as needed and on terms that are acceptable to us, if at all, our advertising partners paying less revenue per click and revenues to us for our
search results, our ability to purchase advertising from third parties to drive users to our sites and consumers to the sites of our advertisers, including at a profit, our ability to retain a monetization partner for the Local.com domain and other
web properties under our management that allows us to operate profitably, our ability to develop, market and operate our local-search technologies and our Krillion local shopping technologies, our ability to maintain and grow the number of Network
partner sites and the aggregate levels of user traffic from such Network partner sites while also maintaining the quality level of such traffic, our ability to market the Local.com domain as a destination for consumers seeking local-search results,
our ability to adapt to policy and technological changes promulgated by our advertising partners and traffic acquisition partners, if at all, the possibility that the information and estimates used to predict anticipated revenues and expenses
associated with the businesses we acquire are not accurate, difficulties executing integration strategies or achieving planned synergies, the possibility that integration costs and go-forward costs associated with the businesses we acquire will be
higher than anticipated, the possibility of impairment of assets associated with the businesses we have acquired, our ability to successfully expand our sales channels for new and existing products and services, our ability to increase the number of
businesses that purchase our advertising products, our ability to expand our advertiser and distribution networks, our ability to integrate and effectively utilize our acquisitions technologies, our ability to develop our products and sales,
marketing, finance and administrative functions and successfully integrate our expanded infrastructure, as well as our dependence on major advertisers, our ability to successfully assert our intellectual property rights, competitive factors and
pricing pressures, changes in legal and regulatory requirements, and general economic conditions. Any forward-looking statements reflect our current views with respect to future events and are subject to these and other risks, uncertainties and
assumptions relating to our operations, results of operations, growth strategy and liquidity. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by
this paragraph. Unless otherwise stated, all site traffic and usage statistics are from third-party service providers engaged by the company.
Our most
recent Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other Securities and Exchange Commission filings discuss the foregoing risks as well as other important risk factors that could contribute
to such differences or otherwise affect our business, results of operations and financial condition. The forward-looking statements in this release speak only as of the date they are made. We undertake no obligation to revise or update publicly any
forward-looking statement for any reason.
Non-GAAP Financial Measures
This press release includes the non-GAAP financial measure of Adjusted EBITDA which we define as net income (loss) excluding: provision for income
taxes; interest and other income (expense), net; depreciation; amortization; stock based compensation charges; gain or loss on derivatives revaluation; net income (loss) from discontinued operations; and severance charges. Adjusted EBITDA, as
defined above, is not a measurement under GAAP. Adjusted EBITDA is reconciled to net income (loss) which we believe is the most comparable GAAP measure. A reconciliation of net income (loss) to Adjusted EBITDA is set forth at the end of this press
release.
3
Management believes that Adjusted EBITDA provides useful information to investors about the companys
performance because it eliminates the effects of period-to-period changes in income from interest on the companys cash, expense from the companys financing transactions and the costs associated with income tax expense, capital
investments, stock-based compensation expense, net income (loss) from discontinued operations, derivatives revaluation charges and severance charges which are not directly attributable to the underlying performance of the companys
business operations. Management uses Adjusted EBITDA in evaluating the overall performance of the companys business operations.
A limitation of
non-GAAP Adjusted EBITDA is that it excludes items that often have a material effect on the companys net income (loss) and earnings per common share calculated in accordance with GAAP. Therefore, management compensates for this limitation by
using Adjusted EBITDA in conjunction with net income (loss) and net income (loss) per share measures. The company believes that Adjusted EBITDA provides investors with an additional tool for evaluating the companys core performance, which
management uses in its own evaluation of overall performance, and as a base-line for assessing the future earnings potential of the company. While the GAAP results are more complete, the company prefers to allow investors to have this supplemental
metric since, with reconciliation to GAAP; it may provide greater insight into the companys financial results. The non-GAAP measures should be viewed as a supplement to, and not as a substitute for, or superior to, GAAP net income (loss) or
earnings (loss) per share.
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Investor Relations Contact: |
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Media Relations Contact: |
Kirsten Chapman |
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Cameron Triebwasser |
LHA |
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Local Corporation |
415-433-3777 |
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949-789-5223 |
local@lhai.com |
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ctriebwasser@local.com |
4
LOCAL CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
(Unaudited)
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March 31, 2015 |
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December 31, 2014 |
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ASSETS |
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Current assets: |
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Cash |
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$ |
2,288 |
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$ |
2,438 |
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Accounts receivable, net of allowances of $589 and $508, respectively |
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7,400 |
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8,426 |
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Prepaid expenses and other current assets |
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952 |
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449 |
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Total current assets |
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10,640 |
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11,313 |
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Property and equipment, net |
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5,196 |
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5,650 |
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Goodwill |
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19,281 |
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19,281 |
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Intangible assets, net |
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1,643 |
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1,752 |
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Long-term receivable, net of allowances of $3,431 and $3,431, respectively |
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Deposits |
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64 |
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72 |
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Total assets |
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$ |
36,824 |
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$ |
38,068 |
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
11,006 |
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$ |
9,669 |
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Accrued compensation |
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814 |
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940 |
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Deferred rent |
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63 |
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116 |
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Other accrued liabilities |
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1,044 |
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1,474 |
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Short-term portion of senior secured convertible notes |
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2,433 |
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Revolving line of credit |
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3,184 |
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4,883 |
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Deferred revenue |
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142 |
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109 |
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Total current liabilities |
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18,686 |
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17,191 |
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Senior secured convertible notes, net of discount of $3,832 and $383 respectively |
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4,754 |
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4,630 |
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Warrant liability |
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1,752 |
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156 |
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Deferred income taxes |
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|
480 |
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480 |
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Total liabilities |
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25,672 |
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22,457 |
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Stockholders equity (deficit): |
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Convertible preferred stock, $0.00001 par value; 10,000 shares authorized; none issued and outstanding for all periods
presented |
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Common stock, $0.00001 par value; 65,000 shares authorized; issued and outstanding 23,306 and 23,294 at March 31, 2015 and
December 31, 2014, respectively |
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Additional paid-in capital |
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125,197 |
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125,076 |
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Accumulated deficit |
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(114,045 |
) |
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(109,465 |
) |
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Stockholders equity |
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11,152 |
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15,611 |
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Total liabilities and stockholders equity |
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$ |
36,824 |
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$ |
38,068 |
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5
LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
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Three Months Ended March 31, |
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2015 |
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2014 |
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Revenue |
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$ |
13,087 |
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$ |
26,180 |
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Operating Expenses: |
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Cost of revenues |
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11,563 |
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20,405 |
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Sales and marketing |
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1,687 |
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2,350 |
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General and administrative |
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1,998 |
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3,318 |
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Research and development |
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1,257 |
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1,559 |
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Amortization of intangibles |
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114 |
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225 |
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Total operating expenses |
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16,619 |
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27,857 |
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Operating loss |
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(3,532 |
) |
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(1,677 |
) |
Interest and other income (expense), net |
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(3,616 |
) |
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(543 |
) |
Change in fair value of derivative liabilities |
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2,568 |
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(334 |
) |
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Loss before income taxes |
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(4,580 |
) |
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(2,554 |
) |
Provision for income taxes |
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|
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274 |
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Net loss |
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$ |
(4,580 |
) |
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$ |
(2,828 |
) |
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Per share data: |
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Basic net loss per share |
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$ |
(0.20 |
) |
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$ |
(0.12 |
) |
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Diluted net loss per share |
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$ |
(0.20 |
) |
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$ |
(0.12 |
) |
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|
|
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Basic weighted average shares outstanding |
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23,305 |
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23,225 |
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Diluted weighted average shares outstanding |
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23,305 |
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23,225 |
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6
LOCAL CORPORATION
Supplemental Consolidated Statements of Operations Information
Revenue Breakdown
(in
thousands)
(Unaudited)
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For the three months ended March 31, |
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For the three months ended December 31, |
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2015 |
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2014 |
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2014 |
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Owned & Operated |
|
$ |
8,279 |
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$ |
11,418 |
|
|
$ |
8,446 |
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Network |
|
|
4,808 |
|
|
|
14,762 |
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|
|
7,839 |
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|
|
|
|
|
|
|
|
|
|
|
|
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Revenue |
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$ |
13,087 |
|
|
$ |
26,180 |
|
|
$ |
16,285 |
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LOCAL CORPORATION
Supplemental Consolidated Statements of Operations Information
Stock-based Compensation Expense *
(in thousands, except per share data)
(Unaudited)
|
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|
|
|
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Three Months ended March 31, |
|
|
|
2015 |
|
|
2014 |
|
Cost of revenues |
|
$ |
9 |
|
|
$ |
12 |
|
Sales and marketing |
|
|
12 |
|
|
|
29 |
|
General and administrative |
|
|
87 |
|
|
|
195 |
|
Research and development |
|
|
17 |
|
|
|
17 |
|
|
|
|
|
|
|
|
|
|
Total stock-based compensation expense |
|
$ |
125 |
|
|
$ |
253 |
|
|
|
|
|
|
|
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7
LOCAL CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
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Three Months Ended March 31, |
|
|
|
2015 |
|
|
2014 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4,580 |
) |
|
$ |
(2,828 |
) |
Adjustments to reconcile net loss to cash used in operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,041 |
|
|
|
1,104 |
|
Provision for doubtful accounts |
|
|
115 |
|
|
|
150 |
|
Stock-based compensation expense |
|
|
125 |
|
|
|
253 |
|
Change in fair value of derivative liabilities |
|
|
(2,568 |
) |
|
|
334 |
|
Non-cash interest expense |
|
|
2,403 |
|
|
|
257 |
|
Deferred income taxes |
|
|
|
|
|
|
274 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
911 |
|
|
|
(1,071 |
) |
Prepaid expenses and other |
|
|
(16 |
) |
|
|
256 |
|
Other non-current assets |
|
|
8 |
|
|
|
|
|
Accounts payable and accrued liabilities |
|
|
728 |
|
|
|
551 |
|
Deferred revenue |
|
|
33 |
|
|
|
(7 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
|
(1,800 |
) |
|
|
(727 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(478 |
) |
|
|
(940 |
) |
|
|
|
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(478 |
) |
|
|
(940 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
Repayment of senior secured convertible notes |
|
|
(5,000 |
) |
|
|
|
|
Proceeds from the issuance of senior secured convertible notes and warrants |
|
|
9,318 |
|
|
|
|
|
Proceeds from (payments of) revolving credit facility, net |
|
|
(1,699 |
) |
|
|
2,225 |
|
Payment of term loan |
|
|
|
|
|
|
(1,875 |
) |
Payment of financing related costs |
|
|
(491 |
) |
|
|
(41 |
) |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
2,128 |
|
|
|
309 |
|
|
|
|
|
|
|
|
|
|
Net decrease in cash |
|
|
(150 |
) |
|
|
(1,358 |
) |
Cash, beginning of period |
|
|
2,438 |
|
|
|
5,069 |
|
|
|
|
|
|
|
|
|
|
Cash, end of period |
|
$ |
2,288 |
|
|
$ |
3,711 |
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
140 |
|
|
$ |
202 |
|
|
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash financing activities: |
|
|
|
|
|
|
|
|
Debt discount recorded in connection with the issuance of senior secured convertible notes |
|
$ |
3,893 |
|
|
$ |
|
|
|
|
|
|
|
|
|
|
|
8
LOCAL CORPORATION
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(in thousands, except per share amounts)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3 Months ended March 31, 2015 |
|
|
3 Months ended March 31, 2014 |
|
|
3 Months ended December 31, 2014 |
|
Net loss |
|
$ |
(4,580 |
) |
|
$ |
(2,828 |
) |
|
$ |
(35 |
) |
Plus interest and other income (expense), net |
|
|
3,616 |
|
|
|
543 |
|
|
|
537 |
|
Plus provision for income taxes |
|
|
|
|
|
|
274 |
|
|
|
32 |
|
Plus amortization of intangibles |
|
|
114 |
|
|
|
225 |
|
|
|
119 |
|
Plus depreciation |
|
|
926 |
|
|
|
879 |
|
|
|
957 |
|
Plus stock-based compensation |
|
|
125 |
|
|
|
253 |
|
|
|
133 |
|
Less revaluation of derivatives |
|
|
(2,568 |
) |
|
|
334 |
|
|
|
(1,030 |
) |
Plus net (income) loss from discontinued operations |
|
|
|
|
|
|
|
|
|
|
(710 |
) |
Plus severance charges |
|
|
149 |
|
|
|
1,032 |
|
|
|
235 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
(2,218 |
) |
|
$ |
712 |
|
|
$ |
238 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Adjusted EBITDA per share |
|
$ |
(0.10 |
) |
|
$ |
0.03 |
|
|
$ |
0.01 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares |
|
|
23,305 |
|
|
|
23,254 |
|
|
|
23,308 |
|
LOCAL CORPORATION
OPERATING HIGHLIGHTS
|
|
|
|
|
|
|
|
|
|
|
|
|
Monthly Unique Visitors (MUVs, millions) |
|
For the three months ended March 31, |
|
|
For the three months ended December 31, |
|
|
|
2015 |
|
|
2014 |
|
|
2014 |
|
Overall traffic |
|
|
59 |
|
|
|
72 |
|
|
|
59 |
|
Organic traffic |
|
|
20 |
|
|
|
17 |
|
|
|
18 |
|
Mobile traffic |
|
|
23 |
|
|
|
23 |
|
|
|
21 |
|
Revenue per thousand visitors (RKV) |
|
$ |
186 |
|
|
$ |
189 |
|
|
$ |
186 |
|
9
|
Quarterly Earnings
Summary
Q1 -
2015
Exhibit 99.2 |
|
2
Quarterly earnings summary: Q1 2015
statements. Those risks and uncertainties are detailed in the
companys filings from time to time with the Securities and
Exchange Commission. The information contained in the
forward looking statements is provided as of the date first set
forth above and the company disclaims any obligation to
update such statements.
The forward looking statements include, but are not limited to, any
statements containing the words expect, anticipate,
estimates, believes, should,
could, may, possibly, and similar
expressions and the negatives thereof. These forward looking
statements involve a number of risks and uncertainties that could
cause actual results to differ materially from the forward looking
This document includes the non-GAAP financial measure of
Adjusted EBITDA
.
See page 12 for a note regarding the
Companys use of Non-GAAP financial measures and slide
10 for a reconciliation of GAAP to non-GAAP.
This Q1-2015 Quarterly Earnings Summary contains forward
looking statements which are made pursuant to the Safe Harbor
provisions of section 21-E of the Securities Exchange Act of
1934. Investors are cautioned that statements which are not
strictly historical statements, including statements concerning
future expected financial performance. |
|
3
Quarterly earnings summary: Q1 2015
$ in Millions2
Q1-15
Q4-14
Q1-14
GAAP Revenue
$ 13.1
$ 16.3
$ 26.2
Adjusted EBITDA
$ (2.2)
$ 0.2
$ 0.7
Net Loss
$ (4.6)
$ (0.0)
$ (2.8)
Diluted Adjusted EBITDA per share
$ (0.10)
$ 0.01
$ 0.03
Diluted GAAP net loss per share
$ (0.20)
$ (0.00)
$ (0.12)
Diluted weighted avg shares used for Adj EBITDA per share
23,305
23,308
23,254
Diluted weighted avg shares used for GAAP net loss per share
23,305
23,287
23,225
Cash
$ 2.29
$ 2.44
$ 3.71
Ending Employees
58
70
81
Note: An explanation of the Companys use of Non-GAAP measures is set
forth on Slide 12 |
|
4
Quarterly earnings summary: Q1 2015
Local.com
106.2
$215
93.4
$199.5
80.0
$180.3
80.4
$178
$189.3
71.6
$203.8
72.6
$201.1
65.5
58.7
$186.4
58.9
$185.9 |
|
5
Quarterly earnings summary: Q1 2015
21.5
37%
31.9
33.7
32.0
31.0
23.1
20.6
16.6
30%
36%
40%
39%
32%
28%
25%
23.4
40% |
|
6
Quarterly earnings summary: Q1 2015
8.3
11.6
14.5
16.1
14.8
9.9
6.4
7.8
4.8 |
|
7
Quarterly earnings summary: Q1 2015
% of Total Revenue by Business Unit
37%
63%
39%
61%
51%
49%
Quarterly Revenues by Business Unit
$4.8
$8.3
$8.3
$13.2
$11.6
$11.1
$ in Millions
Q1-13
Q2-13
Q3-13
Q4-13
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Network
$ 8.3
$ 11.6
$ 14.5
$ 16.1
$ 14.8
$ 9.9
$ 6.4
$ 7.8
$ 4.8
O&O
$ 13.2
$ 11.1
$ 8.9
$ 10.7
$ 11.4
$ 12.6
$ 11.7
$ 8.5
$ 8.3
Consolidated Revenue
$ 21.5
$ 22.7
$ 23.5
$ 26.8
$ 26.2
$ 22.5
$ 18.1
$ 16.3
$ 13.1
$14.5
$8.9
62%
38%
60%
40%
$16.1
$10.7
$13.1
$21.5
$22.7
$23.5
$26.8
$14.8
$11.4
$26.2
56%
44%
$22.5
$9.9
$12.6
44%
56%
$18.1
$6.4
$11.7
36%
64%
$16.3
$7.8
$8.5
48%
52% |
|
8
Quarterly earnings summary: Q1 2015
Description
FY-09
FY-10
FY-11
FY-12
FY-13
FY-14
Q1-15
Adjusted EBITDA
$3,041
$13,775
$3,247
$777
$4,533
$2,363
$(2,218)
Less interest and other income (expense), net
(27)
(275)
(413)
(425)
(2,321)
(2,183)
(3,616)
Less provision for income taxes
(158)
(102)
(178)
(111)
(139)
(129)
-
Less amortization of intangibles
(2,524)
(5,734)
(4,864)
(3,611)
(912)
(687)
(114)
Less depreciation
(734)
(1,418)
(3,182)
(3,658)
(3,896)
(3,885)
(926)
Less stock-based compensation
(2,364)
(2,911)
(3,442)
(2,533)
(1,619)
(767)
(125)
Less LEC receivable reserve
-
-
-
(1,407)
-
-
Less net loss from discontinued operations
-
-
(6,899)
(14,250)
(3,729)
710
Plus gain on sale of Rovion
-
-
-
1,458
-
-
Plus revaluation of warrants
(2,981)
887
2,633
202
1,100
918
2,568
Less Geo-Tag settlement
-
-
-
-
(550)
-
Less non-recurring charges
(520)
-
(1,461)
(684)
(2,829)
(1,841)
(149)
GAAP Net income (loss)
$(6,267)
$4,222
$(14,559)
$(24,242)
$(10,362)
$(5,501)
$(4,580)
Note: Since we cannot predict the valuation of the warrant liability and the
conversion option liability, we cannot reasonably project our GAAP net income (loss).
We, therefore, cannot provide GAAP guidance, but we do report GAAP results. An
explanation of the Companys use of Non-GAAP measures is set forth on Slide 12
*As of May 2015 |
|
9
Quarterly earnings summary: Q1 2015
$ in Millions
Q1-14
Q2-14
Q3-14
Q4-14
Q1-15
Assets
Cash & marketable debt securities
$ 3.7
$ 6.7
$ 4.3
$ 2.4
$ 2.3
Accounts receivable, net
18.2
12.8
8.1
8.4
7.4
Total Assets
50.7
47.7
40.1
38.1
36.8
Liabilities and Equity
Total Debt
14.3
12.3
11.3
9.5
10.4
Total Liabilities
32.8
31.2
24.7
22.4
24.7
Total Liabilities & Equity
$ 50.7
$ 47.7
$ 40.1
$ 38.1
$ 36.8 |
|
10
Quarterly earnings summary: Q1 2015
This press release includes the non-GAAP financial measures of Adjusted EBITDA and
free cash flow. Adjusted EBITDA is defined as net income (loss) excluding: provision
for income taxes; interest and other income (expense), net; depreciation; amortization; stock
based compensation charges; gain or loss on derivatives revaluation; net income (loss)
from discontinued operations; accrued lease liability/asset; and severance charges.
Adjusted EBITDA is reconciled to net income (loss) which we believe is the most
comparable GAAP measure. Free cash flow is defined as net cash provided by operating
activities less capital expenditures. Free cash flow is reconciled to net cash provided by
operating activities which we believe is the most comparable GAAP measure. Adjusted
EBITDA and free cash flow, as defined above, are not measurements under GAAP. A
reconciliation of net income (loss) to Adjusted EBITDA and free cash flow to net cash
provided by operating activities is set forth at the end of this press release.
Management believes that Adjusted EBITDA provides useful information to investors about
the companys performance because it eliminates the effects of period-to-period
changes in income from interest on the companys cash, expense from the companys
financing transactions and the costs associated with income tax expense, capital investments,
stock- based compensation expense, net income (loss) from discontinued operations,
derivatives revaluation charges; accrued lease liability/asset; and severance charges
which are not directly attributable to the underlying performance of the companys
business operations. Management uses Adjusted EBITDA in evaluating the overall performance of
the companys business operations.
Management also believes free cash flow to be a liquidity measure that provides useful
information to management and investors about the amount of cash generated by the
business that, after the acquisition of property and equipment, including information
technology infrastructure and land and buildings, can be used for strategic opportunities,
including investing in our business, making strategic acquisitions, and strengthening the
balance sheet. Analysis of free cash flow also facilitates management's comparisons of our
operating results to competitors' operating results.
A limitation of non-GAAP Adjusted EBITDA is that it excludes items that often have a
material effect on the companys net income (loss) and earnings per common share
calculated in accordance with GAAP. Therefore, management compensates for this
limitation by using Adjusted EBITDA in conjunction with net income (loss) and net income
(loss) per share measures. The company believes that Adjusted EBITDA provides
investors with an additional tool for evaluating the companys core performance, which
management uses in its own evaluation of overall performance, and as a base-line for
assessing the future earnings potential of the company.
A limitation of using free cash flow versus the GAAP measure of net cash provided by
operating activities as a means for evaluating the company is that free cash flow does not
represent the total increase or decrease in the cash balance from operations for the
period because it excludes cash used for capital expenditures during the period. The
company believes that free cash flow provides investors with an additional tool in
evaluating the companys liquidity.
While the GAAP results are more complete, the company prefers to allow investors to
have this supplemental metric since, with reconciliation to GAAP, it may provide greater
insight into the companys financial results. The non-GAAP measures should be viewed
as a supplement to, and not as a substitute for, or superior to the GAAP
measures. |
|
Ken
Cragun CFO
kcragun@local.com
Fred Thiel
Chairman & CEO
fred@local.com
Local
Corporation
|
7555
Irvine
Center
Drive
|
Irvine
CA
92618
|
949.784.0800
|
www.localcorporation.com
Quarterly earnings summary: Q1 2015
11 |
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