Acquisition further extends Marchex’s market
penetration and adds to the scale of the Company’s conversational
data assets
Marchex, Inc. (NASDAQ:MCHX), a leading provider of call
analytics that drive, measure, and convert callers into customers,
today announced the acquisition of Telmetrics, an enterprise call
and text tracking and analytics company, for consideration of up to
$13.1 million in cash.
Telmetrics specializes in providing call analytics to enterprise
customers in a variety of vertical categories such as auto, local
aggregators, digital agencies and online directories. In addition,
the company’s Smart Number product enables enterprises to capture
and analyze SMS/text interactions as part of its real-time media
call analytics solutions. Telmetrics processed more than 100
million minutes of conversation between businesses and consumers so
far this year.
“Our vision is to create the leading conversational analytics
company, including voice and text solutions. With the addition of
Telmetrics, Marchex has increased our footprint of opportunities,
expedited our growing text communications product initiatives, and
captured additional scale and efficiencies with our call analytics
business,” said Russell Horowitz, Executive Director and Member of
the Office of the CEO. “With a significant, growing list of
enterprise brands utilizing Marchex’s AI-powered conversation
analytics solutions, we believe we have enhanced our opportunity to
deepen relationships and open up new customer segments.”
“We are excited to combine our product capabilities and customer
conversational data with one of the largest conversational data
sets in the world. Customer conversational data is a transformative
asset in applying AI and machine learning to unlock the valuable
insights needed to build new analytics solutions for customer
conversations across communication channels,” said Andrew Osmak,
CEO of Telmetrics. “I’m very proud of the accomplishments of our
devoted staff and we look forward to joining forces with
Marchex to leverage our collective capabilities to unlock the
value of every conversation, across voice and
text, for brands of global scale to local SMB’s across
the United States and abroad.”
Strategic Rationale
Faster Innovation. By combining resources, the companies
expect to leverage machine learning and AI-driven capabilities
across one of the largest conversational data sets in the industry
to deliver unique, personalized, sales enhancing solutions for
customers across communication channels, including voice and
text.
Expanded Enterprise Solutions. The combined company will
give a unified view of customer communications across voice and
text channels to surface critical insights and create actionable
solutions. These expanded capabilities will help companies find,
engage and nurture their most valuable customers across two of the
most important communication channels, voice and text.
A Higher ROI for Advertisers. By understanding which
customers are interacting with brands across all digital marketing
channels through voice and text-based communications, the combined
company can solve the attribution gap for brands when consumers go
“offline” in their path to purchase.
Additional Scale and Efficiencies. The combination and
scale of the joint company enables Marchex to accelerate sales
efforts and realize operational efficiencies. These efficiencies
are expected to be recognized starting in mid-2019 and beyond.
Transaction Details and Financial
Considerations
- Total Cash Consideration up to $13.1
million, with $10.1 million paid at close and contingent payments
of up to $3 million, subject to achieving certain growth targets
consisting of both revenue and OIBA components over two years. In
addition, Marchex will issue restricted stock units up to $0.5
million and options to certain employees of Telmetrics subject to
vesting over three and four years, respectively.
- We expect amortization of intangible
assets from acquisition will impact GAAP results. For the remainder
of 2018 and for 2019, we expect the acquisition to be accretive on
a non-GAAP basis.
Additional financial details will be provided on the Company’s
third quarter earnings release and conference call on November
5.
About Marchex
Marchex understands the best customers are those who call your
company - they convert faster, buy more, and churn less. Marchex
provides solutions that help companies drive more calls, understand
what happens on those calls, and convert more of those callers into
customers. Our actionable intelligence strengthens the connection
between companies and their customers, bridging the physical and
digital world, to help brands maximize their marketing investments
and operating efficiencies to acquire the best customers.
Please
visit http://www.marchex.com, www.marchex.com/blog 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.
About Telmetrics
Telmetrics is a call and text tracking and analytics company
that enables, tracks and analyzes offline interactions to increase
engagement and return on advertising spend. At the core of our
solutions are millions of unique local and toll-free phone numbers
that can be placed in any online, or offline ad. By tracking
consumer voice and text response to each number, our clients can
pinpoint which lead sources, media channels, and keyword buys are
yielding the most success and can measure the quality of those
leads. Our response and conversation analytics are available in
real-time, easy to understand and give businesses the insights they
need to lift your advertising ROI.
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,
dispositions, 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 including but not limited to product
demand, order cancellations and delays, competition and general
economic conditions. These factors are described in greater detail
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, 2018 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 Adjusted OIBA, Adjusted
EBITDA, and Adjusted non-GAAP income (loss) per share.
Adjusted OIBA represents
income (loss) from operations excluding stock-based compensation
expense, amortization of intangible assets from acquisitions, and
acquisition related costs. This measure, among other things, is one
of the primary metrics by which Marchex evaluates the performance
of its business. 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 related costs. Adjusted EBITDA represents income (loss)
before interest, income taxes, depreciation, amortization,
acquisition related costs and stock-based compensation. Marchex
believes that Adjusted EBITDA is another alternative measure of
liquidity to GAAP net cash provided by (used in) 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.
Financial analysts and investors may use Adjusted OIBA and EBITDA
to help with comparative financial evaluation to make informed
investment decisions. Adjusted non-GAAP
income (loss) per share represents Adjusted non-GAAP
income (loss) divided by GAAP diluted shares outstanding. Adjusted
non-GAAP income (loss) 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 (loss) applicable to common stockholders plus the net of tax
effects of: (1) stock-based compensation; (2) interest income and
other, net, (3) amortization of intangible assets from acquisition;
and (4) acquisition related costs. Financial analysts and
investors may use Adjusted non-GAAP income (loss) per share 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.
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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version on businesswire.com: https://www.businesswire.com/news/home/20181105005761/en/
Marchex Investor RelationsTrevor Caldwell,
206-331-3600ir@marchex.comOrMEDIA INQUIRIESMarchex Corporate
Communications206-331-3434marchex@edelman.com
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