Technology media company TechTarget, Inc. (NASDAQ: TTGT) today announced
financial results for the three months and year ended December 31, 2012.
With respect to results for the quarter, total Q4 2012 revenues
decreased 12% to $25.4 million compared to Q4 2011. Q4 2012 online
revenue decreased by 13% to $22.6 million compared to Q4 2011. Online
revenues represented 89% of total Q4 2012 revenues. Q4 2012 events
revenue decreased by 7% to $2.7 million compared to Q4 2011 and
represented 11% of total Q4 2012 revenues. Total 2012 revenues decreased
5% to $100.0 million compared to 2011. Total 2012 online revenue
decreased by 4% to $88.2 million compared to 2011. Online revenues
represented 88% of total 2012 revenues. Total 2012 events revenue
decreased by 11% to $11.8 million compared to 2011 and represented 12%
of total 2012 revenues.
Adjusted EBITDA (earnings before interest, other income and expense,
income taxes, depreciation, and amortization, as further adjusted to
eliminate stock-based compensation) for Q4 2012 decreased 32% to $5.8
million compared to $8.5 million for Q4 2011. Adjusted EBITDA for full
year 2012 decreased 21% to $20.0 million compared to $25.3 million for
the full year 2011.
The Company generated $3.8 million of cash in the quarter and $13.1
million in the year.
Total gross profit margin for Q4 2012 was 74%, compared to 77% for Q4
2011. Online gross profit margin decreased to 75% for Q4 2012, compared
to 79% for Q4 2011. Events gross profit margin increased to 63% for Q4
2012, as compared to 60% for Q4 2011. Total gross profit margin for full
year 2012 was 72%, compared to 74% for full year 2011. Online gross
profit margin decreased to 73% for full year 2012, compared to 76% for
full year 2011. Events gross profit margin remained flat at 64% for full
year 2012.
Net income was $1.0 million for Q4 2012 compared to $2.0 million in Q4
2011. Adjusted net income (net income adjusted to eliminate
amortization, stock-based compensation expense and the related income
tax impact of these charges) for Q4 2012 was $3.1 million compared to
$4.6 million for Q4 2011. Net income per basic share for Q4 2012 was
$0.03 compared to $0.05 for Q4 2011. Adjusted net income per share
(adjusted net income divided by adjusted weighted average diluted shares
outstanding) for Q4 2012 was $0.08 compared to $0.11 for Q4 2011. Net
income was $4.0 million for full year 2012 compared to $4.7 million for
the full year 2011. Adjusted net income for the full year 2012 was $10.1
million compared to $12.9 million for the full year 2011. Net income per
basic share for the full year 2012 was $0.10 compared to $0.12 for the
full year 2011. Adjusted net income per diluted share for the full year
2012 was $0.25 compared to $0.32 for the full year 2011.
The Company’s balance sheet and financial position remain strong. As of
December 31, 2012, the Company’s cash, cash equivalents and investments
totaled $76.3 million, and the Company had no outstanding bank debt.
“The lack of certainty and confidence continues to take a toll on our
customers, who rely on a healthy CAPEX environment for growth. Not
surprisingly, we continue to see cuts to marketing budgets, which
adversely affect us. Despite this challenging environment, we continue
to perform well against our competition”, said Greg Strakosch,
TechTarget Chairman and CEO. “We are especially pleased with the 50%
growth in 2012 in our international business, the initial market
reception to our new product launch, IT Deal Alert™ and our healthy
margins and cash flow”.
Recent Company Highlights
-
Launched IT Deal Alert, a sales intelligence tool that gives sales
teams alerts and insights on active technology deals. It is sold as a
monthly service and has been initially launched in 59 categories in
North America and 47 categories in Europe. This is the first product
in a series of services geared towards our customers’ sales teams that
will be launched.
-
Launched the Company’s first Spanish-language website,
SearchDataCenter en Español, to service the needs of the Latin
American market. This site will help better serve the 400,000
registered members that TechTarget already serves in the region.
TechTarget’s geo-targeted revenues grew more than 50% in 2012 and now
represents over 20% of the Company’s revenues.
-
Acquired E-Magine Medias (known as “LeMagIT”), a leading French IT
Media brand. The company had been a licensing partner with TechTarget
since 2010 and will now operate as TechTarget’s direct office in
France. The management team is staying on to run the operation.
LeMagIT’s popular network includes LeMagIT.fr, StrategiesCloud.fr and
LesSourcesIT.fr and attracts more than 250,000 visits per month.
Financial Guidance
In the first quarter of 2013, the Company expects total revenues to be
within the range of $20.0 million to $21.2 million, online revenues
within the range of $19.0 million to $20.0 million, events revenues
within the range of $1.0 million to $1.2 million, and adjusted EBITDA to
be within the range of $0.1 million to $0.7 million.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference call at
5:00 p.m. (Eastern Time) today (February 13, 2013). Supplemental
financial information and our Chief Executive Officer’s Letter to
Shareholders will be posted to the Investor Information section of our
website simultaneously with this press release.
NOTE: Our Chief Executive
Officer’s Letter to Shareholders 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 Information
section of our website at http://investor.techtarget.com/.
The conference call can also be heard via telephone by dialing
1-888-317-6016 (US callers), 1-855-669-9657 (Canadian callers) or
1-412-317-6016 (International callers).
For those investors unable to participate in the live conference call, a
replay of the conference call will be available via telephone beginning
February 13, 2013 at 7:00 p.m. ET through March 15, 2013 at 9:00 a.m.
ET. To listen to the replay, for US, dial 1-877-344-7529 and use the
conference number 10023465. International callers should dial
1-412-317-0088 and also use the conference number 10023465. The webcast
replay will also be available for replay on http://investor.techtarget.com/
during the same period.
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 and restructuring
charges, if any. 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, stock-based
compensation and restructuring charges, if any, 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 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 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.
About TechTarget
TechTarget
(NASDAQ: TTGT) is the online intersection of serious technology buyers,
targeted technical content and technology providers worldwide. Our
extensive network of online and social media, powered by TechTarget’s
Activity Intelligence™ platform, redefines how technology marketers view
and engage technology buyers based on their active projects, specific
technical priorities and business needs. With more than 100
technology-specific websites and a wide selection of custom advertising,
branding, and lead generation solutions, TechTarget delivers
unparalleled reach and innovative opportunities to drive technology
marketing success around the world.
TechTarget has offices in Atlanta, Beijing, Boston, Cincinnati, London,
Paris, San Francisco, Singapore and Sydney.
(C) 2013 TechTarget, Inc. All rights reserved. TechTarget and the
TechTarget logo are registered trademarks, and Activity Intelligence and
IT Deal Alert are trademarks of TechTarget. All other trademarks are the
property of their respective owners.
|
TECHTARGET, INC.
|
Consolidated Statements of Operations
|
(in $000's, except per share amounts)
|
|
|
|
Three Months Ended December 31,
|
|
|
Twelve Months Ended December 31,
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Online
|
|
$
|
22,636
|
|
|
$
|
26,009
|
|
|
$
|
88,192
|
|
|
$
|
92,303
|
Events
|
|
|
2,723
|
|
|
|
2,929
|
|
|
|
11,799
|
|
|
|
13,195
|
Total revenues
|
|
|
25,359
|
|
|
|
28,938
|
|
|
|
99,991
|
|
|
|
105,498
|
Cost of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Online(1)
|
|
|
5,695
|
|
|
|
5,500
|
|
|
|
23,513
|
|
|
|
22,373
|
Events(1)
|
|
|
1,012
|
|
|
|
1,158
|
|
|
|
4,301
|
|
|
|
4,765
|
Total cost of revenues
|
|
|
6,707
|
|
|
|
6,658
|
|
|
|
27,814
|
|
|
|
27,138
|
Gross profit
|
|
|
18,652
|
|
|
|
22,280
|
|
|
|
72,177
|
|
|
|
78,360
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing(1)
|
|
|
9,246
|
|
|
|
10,589
|
|
|
|
36,718
|
|
|
|
39,586
|
Product development(1)
|
|
|
1,866
|
|
|
|
1,998
|
|
|
|
7,521
|
|
|
|
7,688
|
General and administrative(1)
|
|
|
3,145
|
|
|
|
3,319
|
|
|
|
13,206
|
|
|
|
13,680
|
Restructuring charge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
384
|
Depreciation
|
|
|
851
|
|
|
|
758
|
|
|
|
3,279
|
|
|
|
2,759
|
Amortization of intangible assets
|
|
|
697
|
|
|
|
946
|
|
|
|
3,351
|
|
|
|
3,976
|
Total operating expenses
|
|
|
15,805
|
|
|
|
17,610
|
|
|
|
64,075
|
|
|
|
68,073
|
Operating income
|
|
|
2,847
|
|
|
|
4,670
|
|
|
|
8,102
|
|
|
|
10,287
|
Interest income, net
|
|
|
22
|
|
|
|
25
|
|
|
|
107
|
|
|
|
57
|
Income before provision for income taxes
|
|
|
2,869
|
|
|
|
4,695
|
|
|
|
8,209
|
|
|
|
10,344
|
Provision for income taxes
|
|
|
1,847
|
|
|
|
2,713
|
|
|
|
4,185
|
|
|
|
5,655
|
Net income
|
|
$
|
1,022
|
|
|
$
|
1,982
|
|
|
$
|
4,024
|
|
|
$
|
4,689
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.03
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.12
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.02
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.12
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
40,469
|
|
|
|
39,344
|
|
|
|
40,211
|
|
|
|
38,532
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
40,956
|
|
|
|
40,536
|
|
|
|
40,910
|
|
|
|
40,567
|
(1) Amounts include stock-based compensation expense as follows:
|
|
|
|
|
Cost of online revenues
|
|
$
|
52
|
|
|
$
|
76
|
|
|
$
|
202
|
|
|
$
|
273
|
Cost of events revenues
|
|
|
6
|
|
|
|
27
|
|
|
|
18
|
|
|
|
91
|
Selling and marketing
|
|
|
675
|
|
|
|
1,324
|
|
|
|
2,888
|
|
|
|
4,713
|
Product development
|
|
|
71
|
|
|
|
126
|
|
|
|
265
|
|
|
|
443
|
General and administrative
|
|
|
553
|
|
|
|
262
|
|
|
|
1,894
|
|
|
|
1,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TECHTARGET, INC.
|
Reconciliation of Net Income to Adjusted EBITDA
|
(in $000’s)
|
|
|
|
For the Three Months Ended December 31,
|
|
|
For the Twelve Months Ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,022
|
|
|
$
|
1,982
|
|
|
$
|
4,024
|
|
|
$
|
4,689
|
|
Interest income, net
|
|
|
(22
|
)
|
|
|
(25
|
)
|
|
|
(107
|
)
|
|
|
(57
|
)
|
Provision for income taxes
|
|
|
1,847
|
|
|
|
2,713
|
|
|
|
4,185
|
|
|
|
5,655
|
|
Restructuring charge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
384
|
|
Depreciation
|
|
|
851
|
|
|
|
758
|
|
|
|
3,279
|
|
|
|
2,759
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
697
|
|
|
|
946
|
|
|
|
3,351
|
|
|
|
3,976
|
|
Amortization of purchase price adjustment
|
|
|
—
|
|
|
|
323
|
|
|
|
—
|
|
|
|
398
|
|
EBITDA
|
|
|
4,395
|
|
|
|
6,697
|
|
|
|
14,732
|
|
|
|
17,804
|
|
Stock-based compensation expense
|
|
|
1,357
|
|
|
|
1,815
|
|
|
|
5,267
|
|
|
|
7,469
|
|
Adjusted EBITDA
|
|
$
|
5,752
|
|
|
$
|
8,512
|
|
|
$
|
19,999
|
|
|
$
|
25,273
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TECHTARGET, INC.
|
Reconciliation of Net Income to Adjusted Net Income and Net
Income per Diluted Share to
|
Adjusted Net Income per Share
|
(in $000's, except per share amounts)
|
|
|
|
For the Three Months Ended December 31,
|
|
|
For the Twelve Months Ended December 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,022
|
|
|
$
|
1,982
|
|
|
$
|
4,024
|
|
|
$
|
4,689
|
|
Amortization of intangible assets
|
|
|
697
|
|
|
|
946
|
|
|
|
3,351
|
|
|
|
3,976
|
|
Restructuring charge
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
384
|
|
Stock-based compensation expense
|
|
|
1,357
|
|
|
|
1,815
|
|
|
|
5,267
|
|
|
|
7,469
|
|
Amortization of purchase price adjustment
|
|
|
—
|
|
|
|
323
|
|
|
|
—
|
|
|
|
398
|
|
Impact of income taxes
|
|
|
29
|
|
|
|
(490
|
)
|
|
|
(2,579
|
)
|
|
|
(4,003
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
$
|
3,105
|
|
|
$
|
4,576
|
|
|
$
|
10,063
|
|
|
$
|
12,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per diluted share
|
|
$
|
0.02
|
|
|
$
|
0.05
|
|
|
$
|
0.10
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
40,956
|
|
|
|
40,536
|
|
|
|
40,910
|
|
|
|
40,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted net income per share
|
|
$
|
0.08
|
|
|
$
|
0.11
|
|
|
$
|
0.25
|
|
|
$
|
0.32
|
|
Adjusted weighted average diluted shares outstanding
|
|
|
40,956
|
|
|
|
40,536
|
|
|
|
40,910
|
|
|
|
40,567
|
|
Options, warrants and restricted stock, treasury method included
in adjusted weighted average diluted shares above
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
40,956
|
|
|
|
40,536
|
|
|
|
40,910
|
|
|
|
40,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TECHTARGET, INC.
|
Financial Guidance for the Three Months Ended March 31, 2013
|
(in $000's)
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2013
|
|
|
|
Range
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
20,000
|
|
|
$
|
21,200
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
43
|
|
|
$
|
743
|
|
Depreciation, amortization and stock-based compensation
|
|
|
3,093
|
|
|
|
3,093
|
|
Interest and other income, net
|
|
|
19
|
|
|
|
21
|
|
Benefit from income taxes
|
|
|
1,364
|
|
|
|
1,048
|
|
Net loss
|
|
$
|
(1,667
|
)
|
|
$
|
(1,281
|
)
|
![](http://cts.businesswire.com/ct/CT?id=bwnews&sty=20130213006373r1&sid=ntxv4&distro=nx)