Provides Update on Third Quarter Outlook, Adjusted for Divestiture
WESTLAKE VILLAGE, Calif. - ValueClick, Inc. (NASDAQ: VCLK) today announced the divestiture of Search123, its self-service paid search business operating in Europe.
“Search123 has been a small business for us and does not fit with our long-term strategy. Its divestiture allows us to focus on our significant growth initiatives as we build out an integrated solution to help digital marketers drive multi-channel brand engagement and customer acquisition through one strategic partner,” said James R. Zarley, chief executive officer of ValueClick. “As our updated third quarter outlook illustrates, we expect another solid quarter of financial performance, with all segments generating growth in-line with our prior expectations.”
Operating in Europe, Search123 is a self-service offering that generates search traffic through relationships with third-party content websites. Search123’s revenue is generated on a cost-per-click basis through a relationship with a major search engine provider. The business was previously included in the Company’s Owned & Operated Websites segment.
The Company is selling Search123 to Carl White, the former executive in charge of the Company’s European operations. The terms of the transaction, which are not material to the Company’s financial position, consist of future contingent payments based upon the performance of the business over the next four years. In accordance with applicable accounting standards, ValueClick anticipates presenting the Search123 business as a discontinued operation and restating the Company’s historical financial statements and segment operating results to reflect this change. The transaction is expected to close by the end of September.
Search123 generated revenue of $31.4 million in fiscal year 2011 with the first, second, third, and fourth quarters contributing revenue of $7.7 million, $8.5 million, $8.1 million, and $7.1 million, respectively. In the first two quarters of 2012, Search123 generated revenue of $6.4 million and $7.0 million, respectively, representing approximately four percent of the Company’s total consolidated revenue in each period.
Updated Third Quarter 2012 Outlook
Today, ValueClick provided an update on expected results for the third quarter ended September 30, 2012. The Company currently expects third quarter revenue and adjusted-EBITDA from continuing operations (excluding Search123) to be near the high-end of the respective guidance ranges provided on August 2, adjusted to exclude Search123. ValueClick’s third quarter and fourth quarter 2012 guidance assumed that Search123 would contribute revenue in the range of $6.0 million to $6.5 million each quarter with operating income margins of approximately 25 percent.
The Company anticipates releasing third quarter 2012 financial results on Thursday, November 1.
ValueClick, Inc. (NASDAQ: VCLK) is one of the world’s largest digital marketing companies. Through a unique combination of data, technology and services, ValueClick increases brand awareness and drives customer acquisition at scale for the world’s largest advertisers, and maximizes advertising revenue for tens of thousands of online and mobile publishers. ValueClick’s brands include Commission Junction, ValueClick Media, Dotomi, Greystripe, Mediaplex, Smarter.com, CouponMountain.com, Investopedia.com, and PriceRunner. The Company is based in Westlake Village, California, and has offices in major advertising markets worldwide. For more information, please visit www.valueclick.com.