TechTarget, Inc. (NASDAQ: TTGT) today announced financial
results for the first quarter ended March 31, 2009 and the second
quarter ended June 30, 2009.
“We are pleased that the restatement project is now behind us.
It is important to point out that the restatement involved a change
only in the timing of our recognizing revenue. The validity of our
revenue was never questioned, our total revenue did not change for
any specific customer contract and the aggregate revenue shifted
between the annual periods reviewed was approximately 1%.
Turning to the company’s performance, the market seems to
have stabilized and we are encouraged by our sequential
revenue growth in Q2 and our strong cash flow” said Greg Strakosch,
Chairman and CEO of TechTarget. “Our primary focus continues to be
to take advantage of the downturn by investing and growing market
share, while maintaining healthy profitability.”
Total revenues for the first quarter are as follows:
Three Months Ended March 31, (In $000's,
unaudited) 2009
% ofRevenues
2008
% ofRevenues
%Change2009
vs.2008
Revenues: Online $ 16,282 88 % $ 18,210 78 %
(11 )% Events 2,190 12 % 3,985 17 % (45 )% Print - -
1,068 5 % (100 )% Total revenues 18,472
100 % 23,263 100 % (21 )%
Adjusted EBITDA (earnings before interest, taxes, depreciation,
and amortization, as further adjusted for stock-based compensation)
for the first quarter was $1.6 million compared to $3.0 million for
the comparable prior year quarter. The first quarter of 2009
includes professional fees of $191,000 incurred in connection with
the company’s activities related to the restatement of prior
periods.
Total revenues for the second quarter are as follows:
Three Months Ended June 30, (In $000's,
unaudited)
2009
% ofRevenues
2008
% ofRevenues
%Change2009
vs.2008
Revenues: Online $ 17,801 82 % $ 19,071 69 %
(7 )% Events 3,936 18 % 7,262 26 % (46 )% Print - -
1,282 5 % (100 )% Total revenues 21,737
100 % 27,615 100 % (21 )%
Adjusted EBITDA for the second quarter was $3.9 million compared
to $5.8 million for the comparable prior year quarter. The second
quarter of 2009 includes professional fees of $417,000 incurred in
connection with the company’s activities related to the restatement
of prior periods.
Total Non-GAAP gross profit margin (gross profit
margin less stock-based compensation) increased for both the
first and second quarters to 69% and 72% respectively compared to
68% and 68%, respectively for the comparable prior year quarters.
Online Non-GAAP gross profit margin was 71% for the first quarter
of 2009 compared to 72% for the comparable prior year quarter.
Online Non-GAAP gross profit margin for Q2 2009 increased to 74%
compared to 71% for the comparable prior year quarter.
Net loss for the first quarter of 2009 was $2.3 million compared
to a net loss of $436,000 for the comparable prior year quarter.
Adjusted net income (net income adjusted for amortization and
stock-based compensation, as further adjusted for the related
income tax impact) for the first quarter was $594,000 compared to
$1.6 million for the comparable prior year quarter. Net loss per
basic share for the first quarter was ($0.06) compared to ($0.01)
for the comparable prior year quarter. Adjusted net income per
share (adjusted net income divided by adjusted weighted average
diluted shares outstanding) for the first quarter of 2009 was $0.01
compared to $0.04 for the comparable prior year quarter. Net loss
for the second quarter of 2009 was $543,000 compared to net income
of $1.1 million for the comparable prior year quarter. Adjusted net
income for the second quarter was $2.2 million compared to $3.3
million for the comparable prior year quarter. Net loss per basic
share for the second quarter was ($0.01) compared to net income per
basic share of $0.03 for the comparable prior year quarter.
Adjusted net income per share for the second quarter of 2009 was
$0.05 compared to $0.07 for the comparable prior year quarter.
As of June 30, 2009, TechTarget had $75.7 million of cash,
cash equivalents and short and long-term investments. Outstanding
bank debt was $1.5 million as of June 30, 2009. Our net cash, as
defined as cash, cash equivalents and investments less bank debt
increased by $7.6 million compared to December 31, 2008.
Recent Company Highlights
• Continued the strategy of aggressive new site launches to respond
to areas of opportunity with five new sites launches in 2009:
SearchCloudComputing.com™; SearchVirtualDesktop.com™;
SearchCompliance.com™; SearchEnterpriseWAN.com™; and
SearchMid-MarketSecurity.com™. • Launched operations in India with
government approval of its India branch office, the hire of veteran
IT editor Sandeep Ajgaonkar, formerly of IndiaExpress and CNET
India, as General Manager, and the announcement of plans to launch
three India-focused websites by the end of 2009: SearchCIO.in™,
SearchDataCenter.in™, and SearchSecurity.in™. • Published a new
research report in partnership with Google, examining the buying
process and research of IT buyers across the United Kingdom. The
research was released to customers at an event at Google's UK
Headquarters in London. • Recognized by The Boston Business Journal
as one of the top 20 “Best Places to Work” in the large company
category. This is the 4th time the Company has been named to this
list. • Named to the BtoB magazine “Media Power 50” list of the 50
most powerful business-to-business advertising venues for the ninth
consecutive year - ranked #6 overall. Others in the top 10 included
the Wall Street Journal, Google, the National Football League, and
CNBC’s “Power Lunch.”
Financial Guidance
In the third quarter of 2009, the Company expects total revenues
to be within the range of $21.7 million to $22.7 million and
adjusted EBITDA to be within the range of $4.0 million to $4.8
million.
Compliance Status
TechTarget today filed its Forms 10-Q for the quarters ending
March 31 and June 30, 2009 and the Company believes that it is now
compliant with all of its public filing requirements. With the
filing of our Form 10-K and related amended quarterly filings in
mid-July, we have completed our revenue restatement activities and
do not expect to incur any additional restatement expenses related
to those activities.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference
call at 5:00 pm (Eastern Time) today (August 17, 2009).
Supplemental financial information and prepared remarks for the
conference call will be posted to the investor relations section of
our website simultaneously with this press release.
NOTE: The
prepared remarks will not be read on the conference call. The
conference call will include only brief remarks followed by
questions and answers.
The public is invited to listen to a live webcast of
TechTarget’s conference call, which can be accessed on the Investor
Relations section of our website at http://investor.techtarget.com/. The
conference call can also be heard via telephone by dialing (888)
679-8035 (US callers) or 617-213-4848 (International
callers) ten minutes prior to the call and referencing
participant pass code 80683943 for both domestic and
international callers. Participants may pre-register for the call
at:
https://www.theconferencingservice.com/prereg/key.process?key=PQE4GJH4G. Pre-registrants
will be issued a pin number to use when dialing into the live call
which will provide quick access to the conference by bypassing the
operator upon connection. (Due to the length of the above URL, it
may be necessary to copy and paste it into your Internet browser's
URL address field. You may also need to remove an extra space in
the URL if one exists.)
For those investors unable to participate in the live conference
call, a replay of the conference call will be available via
telephone beginning August 17, 2009 at 7:30 p.m. ET through August
31, 2009 at 11:59pm (ET). To listen to the replay, dial
888-286-8010 and use the pass
code 63031470. International callers should dial
617-801-6888 and also use the pass code 63031470 to listen to the
replay. The webcast replay will also be available for replay on
http://investor.techtarget.com/ during
the same period.
Non-GAAP Financial Measures
This press release and the accompanying tables include a
discussion of adjusted EBITDA, Non-GAAP gross profit, adjusted net
income and adjusted net income per share, all of which are non-GAAP
financial measures which are 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. The
term “Non-GAAP gross profit “ refers to a financial measure which
we define as gross profit less stock-based compensation. The
term “Non-GAAP Gross Profit Margin” refers to a financial measure
which we define as gross profit less stock-based compensation
as a percentage of total revenues. The term “adjusted net income”
refers to a financial measure which we define as net income
adjusted for amortization and stock-based compensation, as further
adjusted for the related income tax impact for the specific
adjustments. The term “adjusted net income per share” refers to a
financial measure which we define as adjusted net income divided by
adjusted weighted average diluted shares outstanding. These
Non-GAAP measures 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, Non-GAAP gross profit, adjusted net
income and adjusted net income per share may not be comparable to
the definitions as reported by other companies. We believe adjusted
EBITDA, Non-GAAP gross profit, adjusted net income and adjusted net
income per share are relevant and useful information because it
provides us and investors with additional measurements to compare
the Company’s operating performance. These measures are 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. Non-GAAP gross profit is useful to us and
investors because it presents an additional measurement of our
financial performance by excluding the impact of certain non-cash
expenses not directly tied to the core operations of our business.
Adjusted net income is useful to us and investors because it
presents an additional measurement of our financial performance,
taking into account depreciation, which we believe is an ongoing
cost of doing business, but excluding the impact of certain
non-cash expenses and items not directly tied to the core
operations of our business. Furthermore, we intend to provide these
non-GAAP financial measures as part of our future earnings
discussions and, therefore, the inclusion of these non-GAAP
financial measures will provide consistency in our financial
reporting. A reconciliation of these non-GAAP measures to GAAP is
provided in the accompanying tables.
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: 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:
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/A 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 technology media company, gives
technology providers ROI-focused marketing programs to generate
leads, shorten sales cycles, and grow revenues. With its network of
more than 60 technology-specific websites and more than 7.5 million
registered members, TechTarget is a primary Web destination for
technology professionals researching 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 webcasts, podcasts, videos and virtual trade shows for
the technology market. Its websites are complemented by numerous
invitation-only events. TechTarget provides proven lead generation
and branding programs to top 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
SearchCloudComputing.com; SearchVirtualDesktop.com;
SearchCompliance.com; SearchEnterpriseWAN.com;
SearchMid-MarketSecurity.com and SearchCIO.in™,
SearchDataCenter.in™, and SearchSecurity.in™ are trademarks, of
TechTarget. All other trademarks are the property of their
respective owners.
TECHTARGET, INC. Consolidated Balance Sheets (in
$000's)
March 31, 2009
December 31,2008
Assets (Unaudited) Current assets: Cash and cash
equivalents $ 22,948 $ 24,130 Short-term investments 41,114 42,863
Accounts receivable, net of allowance for doubtful accounts 13,684
17,622 Prepaid expenses and other current assets 7,072 6,251
Deferred tax assets 2,836 2,959 Total current assets
87,654 93,825 Property and equipment, net 3,710 3,904
Long-term investments 6,619 2,575 Goodwill 88,958 88,958 Intangible
assets, net of accumulated amortization 16,027 17,242 Deferred tax
assets 3,545 3,369 Other assets 132 139 Total
assets $ 206,645 $ 210,012
Liabilities and Stockholders'
Equity Current liabilities: Current portion of bank term loan
payable $ 2,250 $ 3,000 Accounts payable 2,232 3,404 Accrued
expenses and other current liabilities 2,260 2,908 Accrued
compensation expenses 788 702 Deferred revenue 7,910
8,749 Total current liabilities 15,440 18,763 Long-term
liabilities: Other liabilities 244 312 Total
liabilities 15,684 19,075 Commitments - -
Stockholders' equity: Preferred stock - - Common stock 42 42
Additional paid-in capital 223,746 221,597 Warrants 2 2 Accumulated
other comprehensive loss 106 (77 ) Accumulated deficit
(32,935 ) (30,627 ) Total stockholders' equity 190,961
190,937 Total liabilities and stockholders' equity $ 206,645
$ 210,012
TECHTARGET, INC. Consolidated Balance
Sheets (in $000's) June
30, 2009
December 31,2008
Assets (Unaudited) Current assets: Cash and cash
equivalents $ 33,408 $ 24,130 Short-term investments 36,075 42,863
Accounts receivable, net of allowance for doubtful accounts 14,116
17,622 Prepaid expenses and other current assets 5,319 6,251
Deferred tax assets 2,876 2,959 Total current assets
91,794 93,825 Property and equipment, net 3,449 3,904
Long-term investments 6,209 2,575 Goodwill 88,958 88,958 Intangible
assets, net of accumulated amortization 14,846 17,242 Deferred tax
assets 3,518 3,369 Other assets 88 139 Total
assets $ 208,862 $ 210,012
Liabilities and Stockholders'
Equity Current liabilities: Current portion of bank term loan
payable $ 1,500 $ 3,000 Accounts payable 3,153 3,404 Accrued
expenses and other current liabilities 1,843 2,908 Accrued
compensation expenses 790 702 Deferred revenue 8,432
8,749 Total current liabilities 15,718 18,763 Long-term
liabilities: Other liabilities 181 312 Total
liabilities 15,899 19,075 Commitments - -
Stockholders' equity: Preferred stock - - Common stock 42 42
Additional paid-in capital 226,330 221,597 Warrants 2 2 Accumulated
other comprehensive loss 67 (77 ) Accumulated deficit
(33,478 ) (30,627 ) Total stockholders' equity 192,963
190,937 Total liabilities and stockholders' equity $ 208,862
$ 210,012
TECHTARGET, INC. Consolidated Statements of
Operations (in $000's, except share and per share
amounts) Three Months Ended
March 31, 2009 2008 (Unaudited) Revenues:
Online $ 16,282 $ 18,210 Events 2,190 3,985 Print -
1,068 Total revenues 18,472 23,263 Cost of
revenues: Online (1) 4,880 5,169 Events (1) 1,081 1,827 Print
- 546 Total cost of revenues 5,961
7,542 Gross profit 12,511 15,721 Operating expenses:
Selling and marketing (1) 7,516 8,444 Product development (1) 2,081
2,762 General and administrative (1) 3,919 3,795 Depreciation 536
724 Amortization of intangible assets 1,215 1,480
Total operating expenses 15,267 17,205
Operating loss (2,756 ) (1,484 ) Interest income (expense),
net (110 ) 418 Loss before benefit from income
taxes (2,866 ) (1,066 ) Benefit from income taxes
(558 ) (630 ) Net loss $ (2,308 ) $ (436 ) Net
loss per common share: Basic and diluted $ (0.06 ) $ (0.01 )
Weighted average common shares outstanding: Basic and diluted
41,754,131 41,158,418 (1) Amounts
include stock-based compensation expense as follows: Cost of online
revenue $ 234 $ 98 Cost of events revenue 17 22 Selling and
marketing 1,328 1,392 Product development 131 140 General and
administrative 893 601
TECHTARGET, INC. Consolidated
Statements of Operations (in $000's, except share and per
share amounts)
Three Months Ended June 30, Six Months Ended June
30, 2009 2008 2009 2008
(Unaudited) Revenues: Online $ 17,801 $ 19,071 $ 34,083 $
37,281 Events 3,936 7,262 6,126 11,247 Print - 1,282
- 2,350 Total revenues 21,737 27,615
40,209 50,878 Cost of revenues: Online (1)
4,776 5,481 9,656 10,650 Events (1) 1,455 2,923 2,536 4,750 Print
- 632 - 1,178 Total cost of revenues
6,231 9,036 12,192 16,578 Gross
profit 15,506 18,579 28,017 34,300 Operating expenses:
Selling and marketing (1) 8,023 8,885 15,539 17,329 Product
development (1) 2,194 2,890 4,275 5,652 General and administrative
(1) 4,064 3,459 7,983 7,254 Depreciation 498 581 1,034 1,305
Amortization of intangible assets 1,181 1,332
2,396 2,812 Total operating expenses 15,960
17,147 31,227 34,352 Operating income (loss)
(454 ) 1,432 (3,210 ) (52 )
Interest income (expense), net 174
268 64 686 Income (loss) before
provision for (benefit from) income taxes (280 ) 1,700 (3,146 ) 634
Provision for (benefit from) income taxes 263
648 (295 ) 18 Net income (loss) $ (543 ) $
1,052 $ (2,851 ) $ 616 Net income (loss) per common share:
Basic $ (0.01 ) $ 0.03 $ (0.07 ) $ 0.01 Diluted $ (0.01 ) $ 0.02 $
(0.07 ) $ 0.01 Weighted average common shares outstanding:
Basic 41,759,506 41,375,997 41,756,818
41,267,207 Diluted 41,759,506 43,598,364
41,756,818 43,531,804 (1) Amounts include
stock-based compensation expense as follows: Cost of online revenue
$ 78 $ 43 $ 312 $ 141 Cost of events revenue 36 25 53 47 Selling
and marketing 1,478 1,347 2,806 2,739 Product development 132 140
263 280 General and administrative 917 858 1,810 1,459
TECHTARGET, INC. Reconciliation of Net Income (Loss) to
Adjusted EBITDA (in $000's)
Three Months Ended March 31, 2009 2008
(Unaudited) Net loss $
(2,308 ) $ (436 ) Interest
income (expense), net (110 ) 418 Benefit from income taxes (558 )
(630 ) Depreciation 536 724 Amortization of intangible assets
1,215 1,480
EBITDA (1,005
) 720 Stock-based compensation expense
2,603 2,253
Adjusted EBITDA $ 1,598
$ 2,973 Three Months Ended June
30, Six Months Ended June 30, 2009
2008 2009 2008 (Unaudited)
Net income (loss) $
(543 ) $ 1,052 $ (2,851
) $ 616 Interest income, net 174 268 64 686
Provision for (benefit from) income taxes 263 648 (295 ) 18
Depreciation 498 581 1,034 1,305 Amortization of intangible assets
1,181 1,332 2,396 2,812
EBITDA
1,225 3,345 220
4,065 Stock-based compensation expense 2,641
2,413 5,244 4,666
Adjusted EBITDA $
3,866 $ 5,758 $ 5,464 $
8,731 TECHTARGET, INC. Reconciliation of Net
Income (Loss) to Adjusted Net Income and Net Income (Loss)
per Diluted Share to Adjusted Net Income per Share (in
$000's, except share and per share amounts)
Three Months Ended March 31, 2009 2008
(Unaudited) Net loss $
(2,308 ) $ (436 ) Amortization
of intangible assets 1,215 1,480 Stock-based compensation expense
2,603 2,253 Impact of income taxes 916 1,662
Adjusted net income $ 594 $
1,635
Net loss per diluted share $ (0.06 )
$ (0.01 ) Weighted average diluted shares
outstanding 41,754,131 41,158,418
Adjusted net income per
share $ 0.01 $ 0.04 Adjusted
weighted average diluted shares outstanding
42,522,199 43,465,245 Options, warrants and
restricted stock, treasury method included in adjusted weighted
average diluted shares above 768,068 2,306,827
Weighted average diluted shares outstanding
41,754,131 41,158,418 Three
Months Ended June 30, Six Months Ended June
30, 2009 2008 2009
2008 (Unaudited)
Net income (loss) $ (543 ) $
1,052 $ (2,851 ) $ 616
Amortization of intangible assets 1,181 1,332 2,396 2,812
Stock-based compensation expense 2,641 2,413 5,244 4,666 Impact of
income taxes 1,096 1,528 2,019 3,223
Adjusted net income $ 2,183 $
3,269 $ 2,770 $ 4,871
Net income (loss) per diluted share $
(0.01 ) $ 0.02 $ (0.07
) $ 0.01 Weighted average diluted shares
outstanding 41,759,506 43,598,364
41,756,818 43,531,804
Adjusted net
income per share $ 0.05 $ 0.07
$ 0.06 $ 0.11 Adjusted weighted
average diluted shares outstanding 42,763,961
43,598,364 42,643,080
43,531,804 Options, warrants and restricted stock, treasury
method included in adjusted weighted average diluted shares above
1,004,455 - 886,262 -
Weighted
average diluted shares outstanding 41,759,506
43,598,364 41,756,818
43,531,804 TECHTARGET, INC. Reconciliation of
Total Gross Profit Margin to Total Non-GAAP Gross Profit
Margin (in $000's)
Three Months Ended March 31, 2009
2008 (Unaudited)
Total gross profit margin $ 12,511
68 % $ 15,721 68 %
Stock-based compensation expense 251
120
Total non-GAAP gross profit margin
$ 12,762 69 % $
15,841 68 % Three
Months Ended June 30, Six Months Ended June
30, 2009 2008 2009
2008 (Unaudited)
Total gross profit margin
$ 15,506 71 % $
18,579 67 % $ 28,017
70 % $ 34,300 67
% Stock-based compensation expense 114
68 365 188
Total non-GAAP gross profit margin $
15,620 72 % $ 18,647
68 % $ 28,382 71
% $ 34,488 68 %
TECHTARGET, INC. Reconciliation of Online Gross Profit
Margin to Online Non-GAAP Gross Profit Margin (in
$000's)
Three Months Ended March 31, 2009 2008
(Unaudited) Online
gross profit margin $ 11,402 70
% $ 13,041 72 %
Stock-based compensation expense 234 98
Online non-GAAP gross profit margin $
11,636 71 % $ 13,139
72 % Three Months Ended June
30, Six Months Ended June 30, 2009
2008 2009 2008
(Unaudited)
Online gross profit margin $ 13,025
73 % $ 13,590 71
% $ 24,427 72 % $
26,631 71 % Stock-based compensation
expense 78 43 312
141
Online non-GAAP gross
profit margin $ 13,103 74 %
$ 13,633 71 % $
24,739 73 % $ 26,772
72 % TECHTARGET, INC. Financial
Guidance for the Three Months Ended September 30, 2009 (in
$000's)
For the Three Months
EndedSeptember 30, 2009
Range Revenues $
21,700 $ 22,700
Adjusted EBITDA $ 4,000 $
4,800 Depreciation, amortization and stock-based
compensation 4,520 4,520 Interest income, net 190 190 Provision for
income taxes 370 700
Net income $
(700 ) $ (230 )
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