TechTarget, Inc. (NASDAQ: TTGT) today announced that it is
delaying its earnings release and investor conference call
previously scheduled for 4:30 p.m. (ET) today. The Company is
delaying its release of fourth quarter and 2008 financial results
in order to finalize its review of the period over which it has
historically recognized revenue from its webcast offerings.
As part of the year-end audit process, the Company has concluded
that its methodology for determining the timing of recognizing
webcast revenues was improper. The Company had been recognizing the
majority of the revenue in the month in which the webcast occurred.
The Company has concluded that the webcast revenues should have
been recognized ratably over the period in which the webcasts were
available on the websites of the Company and its partners, and is
changing its revenue recognition policy accordingly. This
accounting policy change does not increase or decrease the total
amount of revenues to be recognized for any given contract. The
policy change only affects how much of the total contract revenue
is recognized in a particular month. Preliminary analysis indicates
that this change in recognizing webcast revenues does not have a
material effect on revenue or adjusted EBITDA for the years 2008 or
2007, although the Company expects revenue may shift between
quarters. The Company is working to determine whether it is
necessary to restate its financial statements for any prior period
as a result of changes to its revenue recognition policies. It is
estimated that this process will take approximately 90 days.
Estimated Fourth Quarter and 2008 Results
It is important to note that the following amounts are estimated
results for the fourth quarter and 2008, and may change as a result
of the Company�s continued evaluation of the timing of its revenue
recognition as described above, or otherwise as we complete our
2008 audit.
Estimated revenues for the fourth quarter of 2008 are $25.1
million. Estimated online revenues are $18.1 million. Estimated
event revenues are $6.0 million. Estimated print revenues are $1.0
million.
In December 2008, TechTarget incurred a one time restructuring
charge of $1.4 million related to a reduction in workforce of 76
employees, the exiting of certain office space and the closure of
its two print publications. Estimated adjusted EBITDA (earnings
before interest, taxes, depreciation, and amortization, as adjusted
for stock-based compensation and excluding the restructuring
charge) for the fourth quarter of 2008 was $4.6 million.
Total estimated revenues for 2008 are $103.5 million. Estimated
online revenues for 2008 are $76.4 million, and estimated adjusted
EBITDA, excluding the fourth quarter restructuring charge, is $20.2
million.
�Despite the challenging economic conditions, we are adjusted
EBITDA-positive, have a very strong balance sheet and are very
well-positioned for the future. We plan to continue to invest
aggressively during the downturn to take advantage of the shift of
advertising dollars to online marketing that demonstrates ROI,�
said Greg Strakosch, Chairman and CEO of TechTarget.
Recent Company Highlights:
- 7th consecutive year of positive
adjusted EBITDA and 5th consecutive year of being cash flow
positive.
- Online revenues from the 12
largest IT vendors in the market grew by approximately 40% in
Q4.
- The Q4 renewal rate for the
Company�s 100 largest accounts was 94%
- The Company continues to have a
very strong balance sheet. Cash balance on December 31, 2008 was
$69.6 million with total debt of $3 million.
- Acquired The Brian Madden
Company, the leading independent, website and conference to address
the needs of the leading users of desktop and application
virtualization technology.
- Launched
SearchVirtualDesktop.com to address the needs of IT decision makers
who are embarking on desktop and application virtualization
projects.
- Launched SearchCompliance.com to
provide senior IT leadership with strategic direction on managing
information systems to improve compliance processes and results and
to reduce the costs and complexity of supporting business
requirements related to government and industry regulations.
�We recently went through our 2009 budget process. We had two
main objectives. The first is to remain profitable with adjusted
EBITDA margins in the range of 15% to 20%. The second is to
aggressively invest during the downturn to further our lead,� said
Strakosch.
Areas of Investment
- The Company launched about a
dozen new websites in 2008 and plans to launch an additional 6 to
10 new websites in 2009.
- Continue to invest in sales and
product initiatives with the largest IT vendors in the market. Our
online revenues grew by approximately 40% from the 12 largest
vendors in the IT market in 2008. As an online leader in the IT
market, the Company benefits from the continued shift of budgets
from offline to online at these accounts.
- International revenue was
approximately only 4% of our business in 2008 and was one of the
fastest growing areas of the Company. The Company is in the
beginning stages of migrating from a partner model to a direct
model internationally. The three geographies where the Company will
go direct first are the United Kingdom, India and China.
- Continue to be opportunistic
when it comes to acquisitions. Continue to take advantage of our
balance sheet and our strengthening competitive position that will
make us more attractive to companies looking to be acquired.
Financial Guidance�for the First Quarter of
2009
In the first quarter of 2009, the Company expects total revenues
to be within the range of $17 million to $18 million and adjusted
EBITDA to be within the range of negative $700,000 to positive
$200,000.
Non-GAAP Financial Measures
This press release include a discussion of adjusted EBITDA,
which is a non-GAAP financial measures which is provided as a
complement to results provided in accordance with accounting
principles generally accepted in the United States of America
("GAAP"). The term "adjusted EBITDA" refers to a financial measure
that we define as earnings before net interest, income taxes,
depreciation, and amortization, as further adjusted for stock-based
compensation and to exclude restructuring charges. This Non-GAAP
measure should be considered in addition to results prepared in
accordance with GAAP, but should not be considered a substitute
for, or superior to, GAAP results. In addition, our definition of
adjusted EBITDA may not be comparable to the definitions as
reported by other companies. We believe adjusted EBITDA is relevant
and useful information because it provides us and investors with
additional measurements to compare the Company�s operating
performance. This measure is part of our internal management
reporting and planning process and are primary measures used by our
management to evaluate the operating performance of our business,
as well as potential acquisitions. The components of adjusted
EBITDA include the key revenue and expense items for which our
operating managers are responsible and upon which we evaluate their
performance. In the case of senior management, adjusted EBITDA is
used as the principal financial metric in their annual incentive
compensation program. Adjusted EBITDA is also used for planning
purposes and in presentations to our board of directors.
Furthermore, we intend to provide this non-GAAP financial measure
as part of our future earnings discussions and, therefore, the
inclusion of this non-GAAP financial measures will provide
consistency in our financial reporting.
Forward Looking Statements
Certain matters included in this press release may be considered
to be "forward-looking statements" within the meaning of the
Securities Act of 1933 and the Securities Exchange Act of 1934, as
amended by the Private Securities Litigation Reform Act of 1995.
Those statements include statements regarding the intent, belief or
current expectations of the company and members of our management
team. All statements contained in this press release, other than
statements of historical fact, are forward-looking statements,
including those regarding: our estimated resulted for the fourth
quarter of 2008 and the full 2008 fiscal year, guidance on our
future financial results and other projections or measures of our
future performance; our expectations concerning market
opportunities and our ability to capitalize on them; and the amount
and timing of the benefits expected from acquisitions, from new
products or services and from other potential sources of additional
revenue. Investors and prospective investors are cautioned that any
such forward-looking statements are not guarantees of future
performance and involve risks and uncertainties, and that actual
results may differ materially from those contemplated by such
forward-looking statements. These statements speak only as of the
date of this press release and are based on our current plans and
expectations, and they involve risks and uncertainties that could
cause actual future events or results to be different than those
described in or implied by such forward-looking statements. These
risks and uncertainties include, but are not limited to, those
relating to: finalization of our 2008 audit and our review of the
timing of historical revenue recognition, market acceptance of our
products and services; relationships with customers, strategic
partners and our employees; difficulties in integrating acquired
businesses; and changes in economic or regulatory conditions or
other trends affecting the Internet, Internet advertising and
information technology industries. These and other important risk
factors are discussed or referenced in our Annual Report on Form
10-K filed with the Securities and Exchange Commission, under the
heading "Risk Factors" and elsewhere, and any subsequent periodic
or current reports filed by us with the SEC. Except as required by
applicable law or regulation, we do not undertake any obligation to
update our forward-looking statements to reflect future events or
circumstances.
About TechTarget
TechTarget, a leading online Information Technology (IT) media
company, provides IT companies with ROI-focused marketing programs
to generate leads, shorten sales cycles, and grow revenues. With
its network of more than 50 technology-specific Web sites and over
6.6 million registered members, TechTarget is a primary Web
destination for IT professionals researching which products to
purchase. The company is also a leading provider of independent,
peer and vendor content, a leading distributor of white papers, and
a leading producer of vendor-sponsored Webcasts and Podcasts for
the IT market. Its Web sites are complemented by numerous
invitation-only events. TechTarget provides proven lead generation
and branding programs to over 1,100 advertisers including Cisco,
Dell, EMC, HP, IBM, Intel, Microsoft, SAP and Symantec.
(C) 2009 TechTarget, Inc. All rights reserved. TechTarget and
the TechTarget logo are registered trademarks and The IT Media ROI
Experts are trademarks, of TechTarget, Inc. All other trademarks
are the property of their respective owners.
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