Attached files
| file | filename |
|---|---|
| 8-K - 8-K - LOCAL Corp | d632246d8k.htm |
| EX-99.1 - EX-99.1 - LOCAL Corp | d632246dex991.htm |
 CORPORATE OVERVIEW | 4Q2013
1
…………………………..…………………………………….
Local Corporation
We connect local businesses with online consumers
Corporate Overview: 4Q2013
Exhibit 99.2 |
 CORPORATE OVERVIEW | 4Q2013
2
………………..…………………………………….
Forward looking statements
Certain
matters
being
discussed
by
Local
Corporation’s
management
today
include
forward
looking
statements
which
are
made
pursuant
to
the
Safe
Harbor
provisions
of
section
21-E
of
the
Securities
Exchange
Act
of
1934.
Investors
are
cautioned
that
statements
which
are
not
strictly
historical
statements,
including
statements
concerning
future
expected
financial
performance,
management
objectives
and
plans
for
future
operations,
our
relationships
with
strategic
or
other
partners,
the
release
of
new
products
or
services
or
enhancements
to
existing
products
or
services,
our
expectations
regarding
potential
acquisitions
and
the
future
performance
of
past
acquisitions
including
our
ability
to
realize
expected
synergies,
trends
in
the
market
for
our
current
or
planned
products
or
services,
and
market
acceptance
of
our
products
or
services,
constitute
forward
looking statements.
The
forward
looking
statements
include,
but
are
not
limited
to,
any
statements
containing
the
words
“expect”,
“anticipate”,
“estimates”,
“believes”,
“should”,
“could”,
“may”,
“possibly”,
and
similar
expressions
and
the
negatives
thereof.
These
forward
looking
statements
involve
a
number
of
risks
and
uncertainties
that
could
cause
actual
results
to
differ
materially
from
the
forward
looking
statements.
Those
risks
and
uncertainties
are
detailed
in
the
company’s
filings
from
time
to
time
with
the
Securities
and
Exchange
Commission.
The
information
contained
in
the
forward
looking
statements
is
provided
as
of
the
date
of
such
oral
statements
and
the
company
disclaims
any
obligation
to
update
such
statements.
Adjusted
EBITDA
is
defined
as
net
income
(loss)
excluding:
provision
for
income
taxes;
interest
and
other
income
(expense),
net;
depreciation;
amortization;
stock-based
compensation
charges;
gain
or
loss
on
derivatives’
revaluation;
net
income
(loss)
from
discontinued
operations;
LEC
receivables
reserve;
finance-related
charges;
accrued
lease
liability/asset;
severance
charges;
and
an
expense
related
to
a
settlement
accrual.
Adjusted
EBITDA,
as
defined
above,
is
not
a
measurement
under
GAAP.
Adjusted
EBITDA
is
reconciled
to
net
loss
and
loss
per
share,
which
we
believe
are
the
most
comparable
GAAP
measures,
at
the
end
of
this
presentation.
Management
believes
that
Adjusted
EBITDA
provides
useful
information
to
investors
about
the
company’s
performance
because
it
eliminates
the
effects
of
period-to-period
changes
in
income
from
interest
on
the
company’s
cash
and
marketable
securities,
expense
from
the
company’s
financing
transactions
and
the
costs
associated
with
income
tax
expense,
capital
investments,
stock-based
compensation
expense,
warrant
revaluation
charges,
and
non-recurring
charges
which
are
not
directly
attributable
to
the
underlying
performance
of
the
company’s
business
operations.
Management
uses
Adjusted
EBITDA
in
evaluating
the
overall
performance
of
the
company’s
business
operations.
A
limitation
of
non-GAAP
Adjusted
EBITDA
is
that
it
excludes
items
that
often
have
a
material
effect
on
the
company’s
net
income
and
earnings
per
common
share
calculated
in
accordance
with
GAAP.
Therefore,
management
compensates
for
this
limitation
by
using
Adjusted
EBITDA
in
conjunction
with
GAAP
net
loss
and
loss
per
share
measures.
The
company
believes
that
Adjusted
EBITDA
provides
investors
with
an
additional
tool
for
evaluating
the
company’s
core
performance,
which
management
uses
in
its
own
evaluation
of
overall
performance,
and
as
a base-
line
for
assessing
the
future
earnings
potential
of
the
company.
While
the
GAAP
results
are
more
complete,
the
company
prefers
to
allow
investors
to
have
this
supplemental
metric
since,
with
reconciliation
to
GAAP
(as
noted
above),
it
may
provide
greater
insight
into
the
company’s
financial
results.
The
non-GAAP
measures
should
be
viewed
as
a
supplement
to,
and
not
as
a
substitute
for,
or
superior
to,
GAAP
net
income
or
earnings
per
share. |
 CORPORATE OVERVIEW | 4Q2013
3
………………………………………………..
Local Corporation Overview
REVENUE IN MILLIONS
Founded/IPO
Ticker
Reach
Flagship Site
Network
Patents
Headquarters
Employees
1999/2004
LOCM (NASDAQ)
~1 million consumers/day
Local.com –
Top US Site
Approximately 2,100 sites
12 issued + 7 pending
Irvine, CA
~90
KEY FACTS
*Midrange of guidance reported as of November 7, 2013
* |
 CORPORATE OVERVIEW | 4Q2013
4
………………………………........………………..….
Local searchers are often further along in the buying process,
so they tend to convert to buyers at a higher rate.
Higher conversion rates means businesses will often
pay a premium
to advertise to local searchers.
Pay-per-click rates for local versus national keyword terms…
What is ‘Local Search’?
Implicit
No location, but local
Explicit
Actual location
A search for a product or service, somewhere:
Local searchers are worth more! |
 CORPORATE OVERVIEW | 4Q2013
5
…………………………...………………………………………….
The Opportunity
Offline is going digital, and digital is going local
We have assets in all areas
Source: BIA/Kelsey, April 2013 |
 CORPORATE OVERVIEW | 4Q2013
6
……………………………………………………………….....…….……….
Our Model
We aggregate local business, product and service
content and publish it across approximately 2,100 sites.
Search engines index this content and show those sites
in their search results, driving local search traffic to us.
We monetize that traffic with various ad units from ad
partners, and we keep most of the revenue generated.
Traffic
‘Consumer Properties’
Traffic x Monetization = Revenue
|
 CORPORATE OVERVIEW | 4Q2013
7
…………………………………………………………….
Consumer Properties
Business directories powered by Local Corporation include…
A private label local business directory provided to regional
media sites nationwide –
typically local newspapers
Network
Local.com
Our flagship
property
+
Arizona Daily Star
Boston Herald
Canton Rep
Daily Herald -
Utah
Daily Princetonian
Daily Tarheel
East Valley Tribune
Honolulu Star Advertiser
Journal Star
Knoxville News Sentinel
LaCrosse Tribune
Naples News
Observer-Reporter
Pittsburgh Post-Gazette
Santa Ynez Valley News
St. Louis Post-Dispatch
Star Banner
The Arizona Republic
The Commercial Appeal
The Dispatch
The Gazette
The Record Searchlight
The State Journal-Register
Treasure Coast
Triangle411
Ventura County Star
Vermont Today
Washington Post |
 CORPORATE OVERVIEW | 4Q2013
8
………………………...………………………..
Local Search is Going Mobile
And we’re ready!
•
Within 5 years, 80% of local searches will be done on a mobile device*
•
Monetization is a big challenge in mobile, and we believe pay per call is a natural
solution. We have five pay per call patents.
»
First one filed in 2002
*Source: Borrell Associates 2013 |
 CORPORATE OVERVIEW | 4Q2013
9
•
Multi-year traffic growth
•
Organic traffic is low cost/high margin –
at record levels
•
Mobile traffic at record levels –
monetization improving, and we think we have key IP
………….................................……………………………….
Great Momentum |
 CORPORATE OVERVIEW | 4Q2013
10
…………………………………………...………………………..
IP & Technology
•
Proprietary platform and know-how
»
Real time business, product and services data integration
»
Large scale local/commercial content production and syndication
»
Very large scale CPC ad-serving and distribution
»
Web indexing and local search relevance
»
Very large scale SEO, SEM campaign expertise
»
Local display ad production and syndication
»
Web hosting and local/commercial domain name acquisition
•
12 patents issued, 7 pending
»
Key patents
–
Local web indexing (for indexing local web sites across the web)
–
Pay per call for local and commercial searches via a mobile device (multiple
patents) •
The billion dollar industry question: How do we monetize mobile?
–
Dynamic cascading menu search (for product search on tablets and
smart phones)
–
Bulk domain registration and content management (for very large scale SEO)
|
 CORPORATE OVERVIEW | 4Q2013
11
……………………..…………...……….
Experience with Strategy Discipline
Heath Clarke
Founder, Chairman & CEO
20+ yrs exp
Founded Local in ’99
VP eCommerce LanguageForce
CEO/Founder AFP (Australia)
Ken Cragun
CFO
20+ yrs exp
CFO Modtech
SVP MIVA
CFO ImproveNet
CPA; Big 4 Exp.
Mike Sawtell
President & COO
20+ yrs exp
Chairman & CEO, DigitalPost Interactive
Pres. & COO , Interchange Corp. (now Local
Corporation) COO & VP of Sales, Informative Research
Carlos Caponera
VP, Consumer Properties
Product Marketing Director,
Debtmerica LLC
Product Marketing Director,
Get Lower Inc.
Product Manager,
Experian Consumer Direct
Lori Chavez
VP, Marketing
Marketing Consultant, Westfield
Marketing, Accenture
VP, Marketing, Jones Lang LaSalle
Director, Marketing, Equity Office
Rob Luskey
VP, Business Development
Director, Business Development,
go2 Systems, Inc.
Senior Manager, Internet Products
and Services, United Yellow Pages
Owner & Publisher, Local Impact
Publishing
Eric Orrantia
VP, Sales
Director, West Coast Sales,
Advertising.com (AOL)
Director Business Development,
Mediaplex
Director, West Coast Sales,
InStream
Joe Lindsay
VP, Technology
VP, Engineering, Brand Affinity
Technologies
VP, Technology, Autobytel
Founder, eBuilt, Inc.
Exec. Director, Adforce, Inc. |
 CORPORATE OVERVIEW | 4Q2013
12
..…………………………………………………..……….………….
Growth Strategy
•
Grow margins in O&O business (largest revenue stream)
»
Margin optimization via new SEM tools
»
Gradually ramping in the UK
•
Grow revenues in Network (highest gross margin revenues)
»
Expand number of sites via business development team (more traffic)
»
New products planned including world-class local shopping channel
»
Optimize monetization leveraging new testing platform
•
Developing opportunities
»
Local display network –
leveraging our existing Network
»
Microsites (insurance, HVAC, alarm systems and more) –
leveraging our platform
»
Improved monetization via lead generation –
monetization improvements
»
Mobile –
leveraging our platform |
 CORPORATE OVERVIEW | 4Q2013
13
……………………………………..
We Believe the Inflection Point is Now
Note: See reconciliation of Adjusted EBITDA to GAAP net income at presentation
end. •
Five material challenges in
24 months withstood
»
Significant cost to the
company in revenue and
earnings
•
Highest revenue per
employee ever
»
Projected growth to about
$1M per employee EOY
»
Running lean!
•
Returning to profit
»
Significant cost savings in
the first half of 2013
»
Positive and growing
Adjusted EBITDA 1Q13
through 3Q13
Material challenges over past 2 years
*Losses not to scale |
 CORPORATE OVERVIEW | 4Q2013
14
………………………………...……….
3Q13 Balance Sheet & Cap. Table
Additional
Data:
I.
$12 million credit facility. Interest rate approximately 5%
II.
Total authorized shares 65,000,000 common and 10,000,000 preferred
III.
In April 2013, the company closed $5 million in convertible notes. Interest rate of 7%.
Conversion price of $2.01. Included 746,000 of warrants with $2.01 exercise price. |
 CORPORATE OVERVIEW | 4Q2013
15
…………………………..…….……….
Why Invest in Local Corporation?
•
Multi-year track record of 31% CAGR
•
Management are buyers!
»
Senior execs have exchanged bonuses for 235,000 shares in the last 18
months! •
Proprietary platform and great IP
•
Many growth opportunities in a rapidly changing space
•
Returning to profitability –
we believe the inflection point is NOW |
 CORPORATE OVERVIEW | 4Q2013
16
Thank You
Heath Clarke
Founder, Chairman & Chief Executive Officer
hclarke@local.com
Ken Cragun
Chief Financial Officer
kcragun@local.com
949.784.0800
http://www.localcorporation.com |
 CORPORATE OVERVIEW | 4Q2013
17
………………………………………………………
Digital Media Landscape
*Partners |
 CORPORATE OVERVIEW | 4Q2013
18
………….….
Reconciliation: Adjusted EBITDA to GAAP Net Income |
 CORPORATE OVERVIEW | 4Q2013
19
………………………………………………………………………………….….….
Video
Watch our video
to learn more about what we do |