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8-K - FORM 8-K - TechTarget Inc | c12805e8vk.htm |
EX-99.2 - EXHIBIT 99.2 - TechTarget Inc | c12805exv99w2.htm |
Exhibit 99.1
FOR IMMEDIATE RELEASE
Contacts: |
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Investor Inquiries
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Media Inquiries | |
Jeff Wakely
|
Marilou Barsam | |
TechTarget
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TechTarget | |
617-431-9458
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617-431-9368 | |
jwakely@techtarget.com
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mbarsam@techtarget.com |
TechTarget Reports Fourth Quarter and Full Year 2010 Financial Results
Company reports record online revenues of $24.3 million, up 21%; Adjusted EBITDA up 73%
Newton, MA February 17, 2011 TechTarget, Inc. (NASDAQ: TTGT) today announced financial
results for the three months and year ended December 31, 2010.
We delivered a quarter with excellent financial results, said Greg Strakosch, CEO of
TechTarget. We are seeing the benefits of the investments we made during the downturn. In
particular, our investments in our Activity Intelligence Platform and our International offerings
are performing especially well.
Total Q4 2010 revenues increased 16% to $26.9 million compared to Q4 2009. Q4 2010 online revenue
increased by 21% to $24.3 million compared to Q4 2009. Online revenues represented 90% of total Q4
2010 revenues. Q4 2010 events revenue decreased by 17% to $2.6 million compared to Q4 2009 and
represented 10% of total Q4 2010 revenues. Total 2010 revenues increased 10% to $95.0 million
compared to 2009. Total 2010 online revenue increased by 14% to $82.3 million compared to 2009.
Online revenues represented 87% of total 2010 revenues. Total 2010 events revenue decreased by 10%
to $12.7 million compared to 2009 and represented 13% of total 2010 revenues.
Total gross profit margin increased for both Q4 2010 and full year 2010 to 78% and 76%,
respectively, compared to 73% and 71% for Q4 2009 and full year 2009, respectively. Online gross
profit margin increased for both Q4 2010 and full year 2010 to 79% and 77%, respectively, compared
to 75% and 73% for Q4 2009 and full year 2009, respectively.
Net income was $1.3 million for Q4 2010 compared to a net loss of $0.8 million in Q4 2009. Adjusted
net income (net income adjusted to eliminate amortization, stock-based compensation expense, and
the related income tax impact of these charges) for Q4 2010 was $3.2 million compared to $2.2
million for Q4 2009. Net income per basic share was $0.03 compared to a net loss per basic share
of $0.02 for Q4 2009. Adjusted net income per share (adjusted net income divided by adjusted
weighted average diluted shares outstanding) for Q4 2010 was $0.07 compared to $0.05 for Q4 2009.
Net loss was $1.2 million for full year 2010 compared to a net loss of $5.1 million for the full
year 2009. Adjusted net income for the full year 2010 was $8.5 million compared to $7.5 million for
the full year 2009. Net loss per basic share was $0.03 compared to a net loss per basic share of
$0.12 for the full year 2009. Adjusted net income per share (adjusted net income divided by
adjusted weighted average diluted shares outstanding) for the full year 2010 was $0.19 compared to
$0.17 for the full year 2009.
Adjusted EBITDA (earnings before interest, other income and expense, taxes, depreciation, and
amortization, as further adjusted to eliminate stock-based compensation expense) for Q4 2010
increased 73% to $7.1 million compared to $4.1 million for Q4 2009. Adjusted EBITDA for full year
2010 increased 42% to $19.8 million compared to $13.9 million for the full year 2009.
The Companys balance sheet and financial position remain strong. As of December 31, 2010, the
Companys cash, cash equivalents and investments totaled $50.1 million, working capital is $61.8
million, and the Company has no outstanding bank debt.
Recent Company Highlights
| On December 10th, the Company completed a self-tender offering resulting in
the Company purchasing 5.9 million shares at $6 per share. 4 million shares were tendered
by Polaris Venture Partners, thus reducing the Companys VC overhang. The Company funded
the self-tender from the Companys cash balance. The tender is accretive to earnings per
share and the Company now has 37.0 million shares outstanding. |
| The Companys international geo-targeted results grew in excess of 50% in both Q4 and
2010. Geo-targeted revenues accounted for approximately 8% of revenues in 2010 versus
approximately 5% of revenues in 2009. The Company now has direct international operations
in Europe, India and China. |
| The Companys investment in its Activity Intelligence Platform continues to pay off.
Over 100 customers took advantage of the product offering in Q4, resulting in market share
gains for the Company. |
Financial Guidance
In the first quarter of 2011, the Company expects total revenues to be within the range of $22.5
million to $23.5 million; online revenues within the range of $20.5 million to $21.3 million;
events revenues within the range of $2.0 million to $2.2 million and adjusted EBITDA to be within
the range of $3.6 million to $4.4 million.
For the full year 2011, the Company expects online revenue to grow approximately 14% and event
revenues to be roughly flat compared to 2010. The Company expects adjusted EBITDA to grow
approximately 33% compared to 2010 and expects adjusted EBITDA margin for 2011 to be approximately
25%.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference call at 5:30 p.m. (Eastern Time)
today (February 17, 2011). 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 TechTargets 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) 680-0865 (US callers) or
617-213-4853 (International callers) ten minutes prior to the call and referencing participant pass
code 20532996 for both domestic and international callers. Participants may pre-register for the
call at: https://www.theconferencingservice.com/prereg/key.process?key= PQJKJ96BF. 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 browsers 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 February 17, 2011 at 9:30 p.m. ET through March 24,
2011 at 11:59 p.m. ET. To listen to the replay, dial 888-286-8010 and use the pass code 82232117.
International callers should dial 617-801-6888 and also use the pass code 82232117 to listen to the
replay. The webcast replay will also be available for replay on http://investor.techtarget.com/
during the same period.
2
Non-GAAP Financial Measures
This release and the accompanying tables include a discussion of adjusted EBITDA, adjusted EBITDA
margin, 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, other income and
expense, income taxes, depreciation and amortization, as further adjusted to exclude stock-based
compensation. The term adjusted EBITDA margin refers to a financial measure which we define as
adjusted EBITDA 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 of the 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, adjusted EBITDA margin, 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, adjusted
EBITDA margin, 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
Companys 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 one of the principal
financial metrics in their annual incentive compensation program. Adjusted EBITDA is also used for
planning purposes and in presentations to our board of directors. 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 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.
3
About TechTarget
TechTarget,
Inc. (www.techtarget.com) (NASDAQ: TTGT) is a leading global technology media company with
more than 90 technology-specific websites, 9 million registered
members, and more than 10 years of
groundbreaking accomplishments. Our extensive editorial and vendor-sponsored content fulfills the
needs of tech pros looking for in-depth coverage of technology topics throughout their buying
process and positions us to meet the needs of technology marketers targeting qualified technology
audiences. Outside of North America, TechTarget runs 23 websites and
has offices in London, Mumbai and Beijing.
(C) 2011 TechTarget, Inc. All rights reserved. TechTarget and the TechTarget logo are registered
trademarks of TechTarget. Activity Intelligence is a trademark of TechTarget. All other trademarks
are the property of their respective owners.
4
TECHTARGET, INC.
Consolidated Statements of Operations
(in $000s, except per share amounts)
Consolidated Statements of Operations
(in $000s, except per share amounts)
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Revenues: |
||||||||||||||||
Online |
$ | 24,265 | $ | 20,071 | $ | 82,330 | $ | 72,345 | ||||||||
Events |
2,627 | 3,161 | 12,679 | 14,152 | ||||||||||||
Total revenues |
26,892 | 23,232 | 95,009 | 86,497 | ||||||||||||
Cost of revenues: |
||||||||||||||||
Online (1) |
5,131 | 4,933 | 19,033 | 19,378 | ||||||||||||
Events (1) |
816 | 1,323 | 4,066 | 5,600 | ||||||||||||
Total cost of revenues |
5,947 | 6,256 | 23,099 | 24,978 | ||||||||||||
Gross profit |
20,945 | 16,976 | 71,910 | 61,519 | ||||||||||||
Operating expenses: |
||||||||||||||||
Selling and marketing (1) |
9,195 | 7,989 | 35,667 | 32,685 | ||||||||||||
Product development (1) |
1,950 | 2,113 | 8,103 | 8,664 | ||||||||||||
General and administrative (1) |
4,494 | 5,888 | 19,328 | 18,844 | ||||||||||||
Depreciation |
630 | 675 | 2,389 | 2,219 | ||||||||||||
Amortization of intangible assets |
1,122 | 1,152 | 4,523 | 4,714 | ||||||||||||
Total operating expenses |
17,391 | 17,817 | 70,010 | 67,126 | ||||||||||||
Operating income (loss) |
3,554 | (841 | ) | 1,900 | (5,607 | ) | ||||||||||
Interest income, net |
52 | 73 | 322 | 267 | ||||||||||||
Other expense, net |
(146 | ) | | (146 | ) | | ||||||||||
Income (loss) before provision for
(benefit from) income taxes |
3,460 | (768 | ) | 2,076 | (5,340 | ) | ||||||||||
Provision for (benefit from) income taxes |
2,136 | 59 | 3,258 | (224 | ) | |||||||||||
Net income (loss) |
$ | 1,324 | $ | (827 | ) | $ | (1,182 | ) | $ | (5,116 | ) | |||||
Net income (loss) per common share: |
||||||||||||||||
Basic |
$ | 0.03 | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.12 | ) | |||||
Diluted |
$ | 0.03 | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.12 | ) | |||||
Weighted average common shares outstanding: |
||||||||||||||||
Basic |
42,450 | 42,134 | 42,771 | 41,865 | ||||||||||||
Diluted |
44,935 | 42,134 | 42,771 | 41,865 | ||||||||||||
(1) Amounts include stock-based compensation expense as follows: | ||||||||||||||||
Cost of online revenues |
$ | 37 | $ | 47 | $ | 173 | $ | 454 | ||||||||
Cost of events revenues |
18 | (23 | ) | 87 | 94 | |||||||||||
Selling and marketing |
1,208 | 1,227 | 6,380 | 6,025 | ||||||||||||
Product development |
100 | 183 | 520 | 535 | ||||||||||||
General and administrative |
472 | 1,697 | 3,841 | 5,515 |
5
TECHTARGET, INC.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(in $000s)
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(in $000s)
For the Three Months Ended | For the Years Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Net income (loss) |
$ | 1,324 | $ | (827 | ) | $ | (1,182 | ) | $ | (5,116 | ) | |||||
Interest income, net |
52 | 73 | 322 | 267 | ||||||||||||
Other expense, net |
146 | | 146 | | ||||||||||||
Provision for (benefit from) income taxes |
2,136 | 59 | 3,258 | (224 | ) | |||||||||||
Depreciation |
630 | 675 | 2,389 | 2,219 | ||||||||||||
Amortization of intangible assets |
1,122 | 1,152 | 4,523 | 4,714 | ||||||||||||
EBITDA |
5,306 | 986 | 8,812 | 1,326 | ||||||||||||
Stock-based compensation expense |
1,835 | 3,131 | 11,001 | 12,623 | ||||||||||||
Adjusted EBITDA |
$ | 7,141 | $ | 4,117 | $ | 19,813 | $ | 13,949 | ||||||||
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 $000s, except per share amounts)
Reconciliation of Net Income (Loss) to Adjusted Net Income and Net Income (Loss) per Diluted Share to
Adjusted Net Income per Share
(in $000s, except per share amounts)
For the Three Months Ended | For the Twelve Months Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
(unaudited) | (unaudited) | |||||||||||||||
Net income (loss) |
$ | 1,324 | $ | (827 | ) | $ | (1,182 | ) | $ | (5,116 | ) | |||||
Amortization of intangible assets |
1,122 | 1,152 | 4,523 | 4,714 | ||||||||||||
Stock-based compensation expense |
1,835 | 3,131 | 11,001 | 12,623 | ||||||||||||
Impact of income taxes |
1,034 | 1,250 | 5,806 | 4,693 | ||||||||||||
Adjusted net income |
$ | 3,247 | $ | 2,206 | $ | 8,536 | $ | 7,528 | ||||||||
Net income (loss) per diluted share |
$ | 0.03 | $ | (0.02 | ) | $ | (0.03 | ) | $ | (0.12 | ) | |||||
Weighted average diluted shares outstanding |
44,935 | 42,134 | 42,771 | 41,865 | ||||||||||||
Adjusted net income per share |
$ | 0.07 | $ | 0.05 | $ | 0.19 | $ | 0.17 | ||||||||
Adjusted weighted average diluted shares
outstanding |
44,935 | 43,945 | 45,005 | 43,191 | ||||||||||||
Options, warrants and restricted stock,
treasury method included in adjusted
weighted average diluted shares above |
| 1,812 | 2,234 | 1,326 | ||||||||||||
Weighted average diluted shares outstanding |
44,935 | 42,134 | 42,771 | 41,865 | ||||||||||||
6
TECHTARGET, INC.
Financial Guidance for the Three Months Ended March 31, 2011
(in $000s)
Financial Guidance for the Three Months Ended March 31, 2011
(in $000s)
For the Three Months | ||||||||
Ended March 31, 2011 | ||||||||
Range | ||||||||
Revenues |
$ | 22,500 | $ | 23,500 | ||||
Adjusted EBITDA |
$ | 3,600 | $ | 4,400 | ||||
Depreciation, amortization and stock-based compensation |
3,845 | 3,845 | ||||||
Interest and other income, net |
25 | 25 | ||||||
Provision for income taxes |
250 | 600 | ||||||
Net loss |
$ | (470 | ) | $ | (20 | ) | ||
7