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NEW YORK, Nov 11, 2009 (BUSINESS WIRE) -- Vertro, Inc. (NASDAQ: VTRO), today reported financial results for the third quarter ended September 30, 2009.
Summary of Third Quarter 2009 Results from Continuing Operations:
"Vertro delivered strong quarter over quarter results, with revenue from continuing operations up 23% and our EBITDA loss from continuing operations more than halved. We executed on our strategy of sustained and focused advertising spend and this enabled us to grow our user base and increase the number of revenue generating events being conducted across our product portfolio. We believe that our improved third quarter performance has laid the foundations required for us to achieve EBITDA profitability from continuing operations in the fourth quarter," commented Peter Corrao, Vertro's President and Chief Executive Officer.
Third Quarter Results from Continuing Operations
Revenue was $7.4 million in Q3 2009, compared to Q2 2009 revenue from continuing operations of $6.0 million.
Gross margins were 94% in Q3 2009, compared to 93% in Q2 2009. Gross margin excludes advertising spend of $6.0 million in Q3 2009 and $5.8 million in Q2 2009, which is included in consolidated operating expenses within the marketing, sales and service category.
Operating expenses were $8.6 million in Q3 2009, compared to $9.0 million in Q2 2009. The operating expenses in Q3 2009 included $0.2 million of non-cash compensation expense; Q2 2009 operating expenses included $0.2 million of non-cash compensation expense and accelerated recognition of $0.6 million of unamortized loan expense relating to our line of credit with Bridge Bank, N.A.
EBITDA was a loss of $1.6 million in Q3 2009, compared to an EBITDA loss of $3.4 million in Q2 2009. Both Q2 and Q3 2009 EBITDA included $0.2 million non-cash compensation expense.
Adjusted EBITDA was a loss of $1.4 million in Q3 2009, compared to Adjusted EBITDA loss of $3.2 million in Q2 2009. Both Q2 and Q3 2009 Adjusted EBITDA excluded $0.2 million non-cash compensation expense.
GAAP net loss from continuing operations of $1.8 million or $(0.05) per basic share in Q3 2009, compared to GAAP net loss from continuing operations of $3.9 million or $(0.11) per basic share in Q2 2009. The $1.8 million GAAP net loss from continuing operations in Q3 2009 was approximately $0.5 million less than the estimated $2.3 million GAAP net loss reported in a press release issued on November 3, 2009. This reduction resulted from a final adjustment to our exchange rate loss during the quarter close.
Adjusted net loss from continuing operations was $1.5 million or $(0.04) per diluted share in Q3 2009, compared to Adjusted net loss from continuing operations of $3.6 million or $(0.11) per diluted share in Q2 2009. Both Q2 and Q3 2009 Adjusted net loss excluded $0.2 million in non-cash compensation expense.
Cash and cash equivalents were $6.3 million at September 30, 2009, a decrease of $2.0 million from June 30, 2009 cash of $8.3 million. The decrease was primarily a result of the net loss in the quarter as well as certain anticipated one-time expenses.
As of September 30, 2009, the Company had an active base of approximately 50 full time employees, which was unchanged from the number reported on June 30, 2009.
Selected quarterly metrics from continuing operations are available on Vertro's investor relations website at: http://ir.vertro.com/results.cfm
Management Conference Call
Management will participate in a conference call to discuss the full results for the Company on November 11, 2009, at approximately 5:00 p.m. ET. Details of the call for interested parties are as follows:
Date: Wednesday, November 11, 2009 |
Time: 5:00 p.m. ET |
Dial-in number: 888-364-3111 / 719-325-2455 (Intl.) |
Live webcast:http://ir.vertro.com/events.cfm |
Conference call replay:http://ir.vertro.com/events.cfm |
Vertro believes that "EBITDA", "Adjusted EBITDA", "Adjusted net income/loss" and "Adjusted net income/loss per share" provide meaningful measures for comparison of the Company's current and projected operating performance with its historical results due to the significant changes in non-cash amortization that began in 2004 primarily due to certain intangible assets resulting from mergers and acquisitions that have since been written off. Vertro defines Adjusted EBITDA as EBITDA (earnings before interest, income taxes, depreciation and amortization) plus non-cash compensation expense and plus or minus certain identified revenues or expenses that are not expected to recur or be representative of future ongoing operation of the business. Vertro uses EBITDA and Adjusted EBITDA as internal measures of its business and believes they are utilized as important measures of performance by the investment community. Vertro sets goals and awards bonuses in part based on performance relative to Adjusted EBITDA. Vertro defines Adjusted net income/loss as net income/loss plus amortization and non-cash compensation expense, plus or minus certain identified revenues or expenses that are not expected to recur or be representative of future ongoing operation of the business, in each case including the tax effects (if any) of the adjustment. Vertro believes the use of these measures does not lessen the importance of GAAP measures.
About Vertro, Inc.
Vertro, Inc. (NASDAQ:VTRO) is a software and technology company that owns and operates the ALOT product portfolio. ALOT's products are designed to 'Make the Internet Easy' by enhancing the way consumers engage with content online. Through ALOT, Internet users can discover best-of-the-web content and display that content through customizable toolbar, homepage and desktop products. ALOT has millions of live users across its product portfolio. Together these users conduct high-volumes of type-in search queries, which are monetized through third-party search and content agreements.
VTRO-E
Forward-looking Statements
This press release contains certain forward-looking statements that are based upon current expectations and involve certain risks and uncertainties within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Words or expressions such as "anticipate", "plan," "will," "intend," "believe" or "expect'" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties, and other factors, some of which are beyond our control and difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements, including (1) our ability to successfully execute upon our corporate strategies, (2) our ability to distribute and monetize our international products at rates sufficient to meet our expectations, (3) our ability to develop and successfully market new products and services, and (4) the potential acceptance of new products in the market. Additional key risks are described in Vertro's reports filed with the U.S. Securities and Exchange Commission, including the Form 10-Q for Q3 2009.
Non-GAAP Financial Measures
This press release includes discussion of additional financial measures "EBITDA", "Adjusted EBITDA," "Adjusted Net Loss," "Adjusted Net Income," "Adjusted Net Loss Per Share" and "Adjusted Net Income Per Share," which are not considered generally accepted accounting principle (GAAP) measures by the Securities and Exchange Commission, and may differ from non-GAAP financial measures used by other companies. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with GAAP. Vertro provides reconciliations of these two financial measures to GAAP measures in its press releases regarding actual financial results. Reconciliations of net income/loss from continuing operations and net income/loss per share to these financial measures for the three month periods ended September 30, 2009 and 2008, and June 30, 2009, and for the nine month periods ended September 30, 2009 and 2008 are included in this press release as set forth below.
| Vertro, Inc. | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||
| Three Months | Three Months | Nine Months | Nine Months | |||||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||||
| September 30, 2009 | September 30, 2008 | September 30, 2009 | September 30, 2008 | |||||||||||||||
| (unaudited) | (unaudited) | (unaudited) | (unaudited) | |||||||||||||||
| Revenues | $ | 7,389 | $ | 10,367 | $ | 19,625 | $ | 32,741 | ||||||||||
| Cost of services | 479 | 660 | 1,380 | 1,926 | ||||||||||||||
| Gross profit | 6,910 | 9,707 | 18,245 | 30,815 | ||||||||||||||
| Operating expenses | ||||||||||||||||||
| Marketing, sales, and service | 6,350 | 6,882 | 17,246 | 22,653 | ||||||||||||||
| General and administrative | 1,595 | 3,420 | 6,880 | 11,725 | ||||||||||||||
| Product development | 596 | 861 | 1,927 | 2,703 | ||||||||||||||
| Amortization | 106 | 411 | 146 | 1,364 | ||||||||||||||
| Restructuring Charges | - | 110 | (15 | ) | 661 | |||||||||||||
| Total operating expenses | 8,647 | 11,684 | 26,184 | 39,106 | ||||||||||||||
| Loss from operations | (1,737 | ) | (1,977 | ) | (7,939 | ) | (8,291 | ) | ||||||||||
| Interest (expense), net | (2 | ) | 29 | (75 | ) | 182 | ||||||||||||
| Exchange rate gain (loss) | (89 | ) | - | (487 | ) | - | ||||||||||||
| Loss before provision for income taxes | (1,828 | ) | (1,948 | ) | (8,501 | ) | (8,109 | ) | ||||||||||
| Income tax expense (benefit) | - | (18 | ) | 27 | 67 | |||||||||||||
| Loss from continuing operations | $ | (1,828 | ) | $ | (1,930 | ) | $ | (8,528 | ) | $ | (8,176 | ) | ||||||
| Income/(loss) from discontinued operations | $ | 1,184 | $ | (8,596 | ) | $ | (3,483 | ) | $ | (13,942 | ) | |||||||
| Gain on sale of discontinued operations | 0 | - | 7,139 | - | ||||||||||||||
| Net loss | $ | (644 | ) | $ | (10,526 | ) | $ | (4,872 | ) | $ | (22,118 | ) | ||||||
| Basic earnings (loss) per share | ||||||||||||||||||
| Continuing operations | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.25 | ) | $ | (0.25 | ) | ||||||
| Discontinued operations | $ | 0.04 | $ | (0.26 | ) | $ | 0.11 | $ | (0.43 | ) | ||||||||
| Diluted earnings (loss) per share | ||||||||||||||||||
| Continuing operations | $ | (0.05 | ) | $ | (0.06 | ) | $ | (0.25 | ) | $ | (0.25 | ) | ||||||
| Discontinued operations | $ | 0.04 | $ | (0.26 | ) | $ | 0.11 | $ | (0.43 | ) | ||||||||
| Weighted-average number of common | ||||||||||||||||||
| shares outstanding | ||||||||||||||||||
| Basic | 33,784 | 32,641 | 33,564 | 32,596 | ||||||||||||||
| Diluted | 33,784 | 32,641 | 33,564 | 32,596 | ||||||||||||||
| Vertro, Inc. | ||||||||||
| Consolidated Statements of Operations | ||||||||||
| (in thousands, except per share data) | ||||||||||
| Three Months | Three Months | |||||||||
| Ended | Ended | |||||||||
| September 30, 2009 | June 30, 2009 | |||||||||
| (unaudited) | (unaudited) | |||||||||
| Revenues | $ | 7,389 | $ | 6,002 | ||||||
| Cost of services | 479 | 445 | ||||||||
| Gross profit | 6,910 | 5,557 | ||||||||
| Operating expenses | ||||||||||
| Marketing, sales, and service | 6,350 | 6,143 | ||||||||
| General and administrative | 1,595 | 2,193 | ||||||||
| Product development | 596 | 633 | ||||||||
| Amortization | 106 | 40 | ||||||||
| Restructuring Charges | - | - | ||||||||
| Total operating expenses | 8,647 | 9,009 | ||||||||
| Loss from operations | (1,737 | ) | (3,452 | ) | ||||||
| Interest income, net | (2 | ) | 9 | |||||||
| Exchange rate gain (loss) | (89 | ) | (398 | ) | ||||||
| Loss before provision for income taxes | (1,828 | ) | (3,841 | ) | ||||||
| Income tax expense | - | 14 | ||||||||
| Loss from continuing operations | $ | (1,828 | ) | $ | (3,855 | ) | ||||
| Income/(loss) from discontinued operations | $ | 1,184 | 491 | |||||||
| Gain on sale of discontinued operations | 0 | 213 | ||||||||
| Net loss | $ | (644 | ) | $ | (3,151 | ) | ||||
| Basic earnings (loss) per share | ||||||||||
| Continuing operations | $ | (0.05 | ) | $ | (0.11 | ) | ||||
| Discontinued operations | $ | 0.04 | $ | 0.02 | ||||||
| Diluted earnings (loss) per share | ||||||||||
| Continuing operations | $ | (0.05 | ) | $ | (0.11 | ) | ||||
| Discontinued operations | $ | 0.04 | $ | 0.02 | ||||||
| Weighted-average number of common | ||||||||||
| shares outstanding | ||||||||||
| Basic | 33,784 | 33,707 | ||||||||
| Diluted | 33,784 | 33,707 | ||||||||
| Vertro, Inc. | ||||||||||||||||
| Reconciliations to Consolidated Statements of Operations | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| (unaudited) | ||||||||||||||||
| Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
| Additional information: | Ended | Ended | Ended | Ended | ||||||||||||
| September 30, 2009 | September 30, 2008 | September 30, 2009 | September 30, 2008 | |||||||||||||
| Adjusted EBITDA | $ | (1,365 | ) | $ | (304 | ) | $ | (6,811 | ) | $ | (3,716 | ) | ||||
| Adjusted net loss | $ | (1,486 | ) | $ | (394 | ) | $ | (7,480 | ) | $ | (4,052 | ) | ||||
| Adjusted net loss per share | $ | (0.04 | ) | $ | (0.01 | ) | $ | (0.22 | ) | $ | (0.12 | ) | ||||
| Three Months | Three Months | |||||||||||||||
| Additional information: | Ended | Ended | ||||||||||||||
| September 30, 2009 | June 30, 2009 | |||||||||||||||
| Adjusted EBITDA | $ | (1,365 | ) | $ | (3,166 | ) | ||||||||||
| Adjusted net loss | $ | (1,486 | ) | $ | (3,593 | ) | ||||||||||
| Adjusted net loss per share | $ | (0.04 | ) | $ | (0.11 | ) | ||||||||||
| Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| Reconciliation of Net Loss to Adjusted EBITDA | September 30, 2009 | September 30, 2008 | September 30, 2009 | September 30, 2008 | ||||||||||||
| Loss from continuing operations | $ | (1,828 | ) | $ | (1,930 | ) | $ | (8,528 | ) | $ | (8,176 | ) | ||||
| Interest income (expense), net and exchange rate loss | 91 | (29 | ) | 562 | (182 | ) | ||||||||||
| Income tax expense (benefit) | - | (18 | ) | 27 | 67 | |||||||||||
| Depreciation | 30 | 137 | 80 | 451 | ||||||||||||
| Amortization | 106 | 411 | 146 | 1,364 | ||||||||||||
| EBITDA | (1,601 | ) | (1,429 | ) | (7,713 | ) | (6,476 | ) | ||||||||
| Restructuring Charges | - | 110 | (15 | ) | 661 | |||||||||||
| Non cash compensation charge | 236 | 1,015 | 917 | 2,099 | ||||||||||||
| Adjusted EBITDA | $ | (1,365 | ) | $ | (304 | ) | $ | (6,811 | ) | $ | (3,716 | ) | ||||
| Three Months | Three Months | |||||||||||||||
| Ended | Ended | |||||||||||||||
| Reconciliation of Net Loss to Adjusted EBITDA | September 30, 2009 | June 30, 2009 | ||||||||||||||
| Loss from continuing operations | $ | (1,828 | ) | $ | (3,855 | ) | ||||||||||
| Interest income (expense), net and exchange rate loss | 91 | 389 | ||||||||||||||
| Income tax expense | - | 14 | ||||||||||||||
| Depreciation | 30 | 24 | ||||||||||||||
| Amortization | 106 | 40 | ||||||||||||||
| EBITDA | (1,601 | ) | (3,388 | ) | ||||||||||||
| Non cash compensation charge | 236 | 222 | ||||||||||||||
| Restructuring charges | - | - | ||||||||||||||
| Adjusted EBITDA | $ | (1,365 | ) | $ | (3,166 | ) | ||||||||||
| Three Months | Three Months | Nine Months | Nine Months | |||||||||||||
| Ended | Ended | Ended | Ended | |||||||||||||
| Reconciliation of Net Loss to Adjusted Net Loss | September 30, 2009 | September 30, 2008 | September 30, 2009 | September 30, 2008 | ||||||||||||
| Loss from continuing operations | $ | (1,828 | ) | $ | (1,930 | ) | $ | (8,528 | ) | $ | (8,176 | ) | ||||
| Amortization | 106 | 411 | 146 | 1,364 | ||||||||||||
| Restructuring Charges | - | 110 | (15 | ) | 661 | |||||||||||
| Non cash compensation charges | 236 | 1,015 | 917 | 2,099 | ||||||||||||
| Adjusted net loss | $ | (1,486 | ) | $ | (394 | ) | $ | (7,480 | ) | $ | (4,052 | ) | ||||
| Adjusted net loss per share | (0.04 | ) | (0.01 | ) | (0.22 | ) | (0.12 | ) | ||||||||
| Shares used in per share calculation - basic / diluted | 33,784 | 32,641 | 33,564 | 32,596 | ||||||||||||
| Three Months | Three Months | |||||||||||||||
| Ended | Ended | |||||||||||||||
| September 30, 2009 | June 30, 2009 | |||||||||||||||
| Reconciliation of Net Loss to Adjusted Net Loss | ||||||||||||||||
| Loss from continuing operations | $ | (1,828 | ) | $ | (3,855 | ) | ||||||||||
| Amortization | 106 | 40 | ||||||||||||||
| Non cash compensation charges | 236 | 222 | ||||||||||||||
| Adjusted net loss | $ | (1,486 | ) | $ | (3,593 | ) | ||||||||||
| Adjusted net loss per share | $ | (0.04 | ) | $ | (0.11 | ) | ||||||||||
| Shares used in per share calculation - basic | 33,784 | 33,707 | ||||||||||||||
| Vertro, Inc. | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (in thousands, except par values) | |||||||||
| September 30, | December 31, | ||||||||
| ASSETS | 2009 | 2008 | |||||||
| (Unaudited) | |||||||||
| CURRENT ASSETS | |||||||||
| Cash and Cash Equivalents | $ | 6,330 | $ | 6,699 | |||||
| Accounts receivable, less allowances of $891 and $1,242 | |||||||||
| at September 30, 2009 and December 31, 2008. | 2,741 | 11,204 | |||||||
| Deferred tax assets | 167 | 167 | |||||||
| Income tax receivable | 114 | 247 | |||||||
| Prepaid expenses and other current assets | 265 | 1,584 | |||||||
| TOTAL CURRENT ASSETS | 9,617 | 19,901 | |||||||
| Property and equipment, net | 53 | 4,975 | |||||||
| Restricted cash | 550 | 2,000 | |||||||
| Other assets | 500 | 703 | |||||||
| TOTAL ASSETS | $ | 10,720 | $ | 27,579 | |||||
| LIABILITIES AND (CAPITAL DEFICIT) STOCKHOLDERS' EQUITY | |||||||||
| CURRENT LIABILITIES | |||||||||
| Accounts payable | $ | 5,152 | $ | 6,609 | |||||
| Accrued expenses | 4,129 | 11,534 | |||||||
| Other Current Liabilities | 41 | 783 | |||||||
| TOTAL CURRENT LIABILITIES | 9,322 | 18,926 | |||||||
| Deferred tax liabilities long-term | 167 | 167 | |||||||
| Long-term debt | - | 4,595 | |||||||
| Other long-term liabilities | 1,382 | 1,305 | |||||||
| TOTAL LIABILITIES | 10,871 | 24,993 | |||||||
| (CAPITAL DEFICIT) STOCKHOLDERS' EQUITY | |||||||||
| Preferred stock, $.001 par value; authorized, | |||||||||
| 500 shares; none issued and outstanding | - | - | |||||||
| Common stock, $.001 par value; authorized, 200,000 | |||||||||
| shares; issued 35,552 and 34,480, respectively; | |||||||||
| outstanding 33,786 and 32,731, respectively | 35 | 34 | |||||||
| Additional paid-in capital | 270,457 | 268,841 | |||||||
| Treasury stock; 1,766 and 1,749 shares at cost, respectively | (6,722 | ) | (6,719 | ) | |||||
| Accumulated other comprehensive income | 12,914 | 12,393 | |||||||
| Accumulated Deficit | (276,835 | ) | (271,963 | ) | |||||
| TOTAL (CAPITAL DEFICIT) STOCKHOLDERS' EQUITY | (151 | ) | 2,586 | ||||||
| TOTAL LIABILITIES AND (CAPITAL DEFICIT) STOCKHOLDERS' EQUITY | $ | 10,720 | $ | 27,579 | |||||
SOURCE: Vertro, Inc.
Vertro, Inc.
Peter Corrao, 212-231-2000
President & CEO
Peter.Corrao@vertro.com
Copyright Business Wire 2009