Technology media company TechTarget, Inc. (NASDAQ: TTGT) today announced
financial results for the three months ended March 31, 2013.
Total Q1 2013 revenues decreased 18% to $19.5 million compared to Q1
2012. Q1 2013 online revenue decreased by 16% to $18.5 million compared
to Q1 2012. Online revenues represented 95% of total Q1 2013 revenues.
Q1 2013 events revenue decreased by 35% to $1.1 million compared to Q1
2012.
Adjusted EBITDA (earnings before interest, other income and expense,
income taxes, depreciation, and amortization, as further adjusted to
eliminate stock-based compensation) for Q1 2013 decreased 93% to $0.3
million compared to $3.5 million for Q1 2012.
Total gross profit margin for Q1 2013 was 66%, compared to 71% for Q1
2012. Online gross profit margin decreased to 68% for Q1 2013, compared
to 73% for Q1 2012. Events gross profit margin decreased to 37% for Q1
2013, as compared to 53% for Q1 2012.
Net loss was $1.5 million for Q1 2013 compared to net income of $0.4
million in Q1 2012. Adjusted net loss (net loss adjusted to eliminate
amortization, stock-based compensation expense and the related income
tax impact of these charges) for Q1 2013 was $0.3 million compared to
adjusted net income of $1.7 million in Q1 2012. Net loss per basic share
for Q1 2013 was $0.04 compared to net income per basic share of $0.01
for Q1 2012. Adjusted net loss per share (adjusted net loss divided by
adjusted weighted average diluted shares outstanding) for Q1 2013 was
$0.01 compared to adjusted net income per share of $0.04 for Q1 2012.
The Company’s balance sheet and financial position remain strong. As of
March 31, 2013, the Company’s cash, cash equivalents and investments
totaled $61.9 million, and the Company has no outstanding bank debt.
In the quarter, the company purchased 2,093,551 shares at an average
price of $4.83 on the open market reducing the outstanding share count
to 38,504,216 shares as of March 31, 2013.
“The steep downturn in the IT market is creating challenges for us.
TechTarget is the go-to marketing partner when IT vendors are playing
offense. Many of our customers are in defensive mode as they face weak
demand and declining revenues,” said Greg Strakosch, TechTarget CEO.
“Despite this challenging environment, we are committed to stay the
course and to continue to invest in the business, specifically in our
international operations, our Activity Intelligence platform and by
continuing to introduce innovative new products. Of course, we will
manage expenses carefully during this period and will manage the
business to produce double-digit adjusted EBITDA margins and positive
cash flow in 2013.”
Recent Company Highlights
-
Announced the launch of SearchSDN.com™,
a new website designed to help network professionals make informed
decisions as they transition to software-defined networking.
Software-defined networking (SDN) is a disruptive technology that
promises to revolutionize networking. SearchSDN.com is dedicated to
covering all aspects of software-defined networking to provide more
focused coverage of evolving SDN technology and business issues. It
provides news and technical content on software-defined networking
deployment, building service provider/cloud networks based on SDN, as
well as SDN implementation and management in data centers, remote
branches and in local area networks (LANs).
-
Announced the launch of TechnologyGuide.com™,
a website that focuses on growing trends including consumerization of
IT and "bring your own device" (BYOD). Test centers in Cincinnati and
Boston enable TechnologyGuide’s experienced editorial staff to
carefully evaluate and compare products in a completely controlled
environment. This makes it a must-read resource for technology-savvy
enthusiasts, IT professionals, and other buyers searching for trusted
purchase information.
-
Was recognized by The Boston Business Journal as one of the top 25
large companies to work for in Massachusetts. This is the 6th
time that TechTarget has been named to “The Best Places to Work List”.
Financial Guidance
In the second quarter of 2013, the Company expects total revenues to be
within the range of $22.7 million to $23.9 million, online revenues
within the range of $20.5 million to $21.5 million, events revenues
within the range of $2.2 million to $2.4 million and adjusted EBITDA to
be within the range of $2.5 million to $3.5 million.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference call at
5:00 p.m. (Eastern Time) today (May 8, 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) or 1-412-317-6016 (International callers).
For those investors unable to participate in the live conference call,
replay of the conference call will be available via telephone beginning
May 8, 2013 at 7:00 p.m. ET through June 17, 2013 at 9:00 a.m. ET. To
listen to the replay, for US, dial 1-877-344-7529 and use the passcode
10026502. International callers should dial 1-412-317-0088 and
also use the passcode 10026502. 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.
To learn how you can engage with serious technology buyers worldwide,
visit techtarget.com
and follow us @TechTarget.
(C) 2013 TechTarget, Inc. All rights reserved. TechTarget and the
TechTarget logo are registered trademarks, and Activity Intelligence,
SearchSDN.com, and TechnologyGuide.com 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)
|
|
|
|
For the Three Months Ended March 31,
|
|
|
2013
|
|
|
2012
|
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
Online
|
|
$
|
18,475
|
|
|
$
|
22,071
|
Events
|
|
|
1,073
|
|
|
|
1,643
|
Total revenues
|
|
|
19,548
|
|
|
|
23,714
|
|
|
|
|
|
|
|
|
Cost of revenues:
|
|
|
|
|
|
|
|
Online (1)
|
|
|
5,928
|
|
|
|
6,041
|
Events (1)
|
|
|
676
|
|
|
|
764
|
Total cost of revenues
|
|
|
6,604
|
|
|
|
6,805
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
12,944
|
|
|
|
16,909
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
Selling and marketing (1)
|
|
|
9,120
|
|
|
|
9,163
|
Product development (1)
|
|
|
1,741
|
|
|
|
1,855
|
General and administrative (1)
|
|
|
3,307
|
|
|
|
3,649
|
Depreciation
|
|
|
872
|
|
|
|
767
|
Amortization of intangible assets
|
|
|
734
|
|
|
|
937
|
Total operating expenses
|
|
|
15,774
|
|
|
|
16,371
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(2,830
|
)
|
|
|
538
|
|
|
|
|
|
|
|
|
Interest income, net
|
|
|
3
|
|
|
|
25
|
|
|
|
|
|
|
|
|
(Loss) income before (benefit from) provision for income taxes
|
|
|
(2,827
|
)
|
|
|
563
|
|
|
|
|
|
|
|
|
(Benefit from) provision for income taxes
|
|
|
(1,285
|
)
|
|
|
198
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1,542
|
)
|
|
$
|
365
|
|
|
|
|
|
|
|
|
Net (loss) income per common share:
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
Basic
|
|
|
40,023
|
|
|
|
39,862
|
Diluted
|
|
|
40,023
|
|
|
|
40,853
|
(1) Amounts included in stock-based compensation as follows:
|
|
|
|
|
|
|
|
Cost of online revenues
|
|
$
|
47
|
|
|
$
|
53
|
Cost of events revenues
|
|
|
4
|
|
|
|
4
|
Selling and marketing
|
|
|
703
|
|
|
|
731
|
Product development
|
|
|
53
|
|
|
|
65
|
General and administrative
|
|
|
624
|
|
|
|
441
|
|
|
|
|
|
|
|
|
TECHTARGET, INC.
Reconciliation of Net (Loss) Income to Adjusted EBITDA
(in $000’s)
|
|
|
|
|
|
|
For the Three Months Ended
March 31,
|
|
|
|
2013
|
|
|
2012
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1,542
|
)
|
|
$
|
365
|
|
Interest income, net
|
|
|
(3
|
)
|
|
|
(25
|
)
|
(Benefit from) provision for income taxes
|
|
|
(1,285
|
)
|
|
|
198
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
872
|
|
|
|
767
|
|
Amortization of purchase price adjustment
|
|
|
48
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
Amortization of intangible assets
|
|
|
734
|
|
|
|
937
|
|
EBITDA
|
|
|
(1,176
|
)
|
|
|
2,242
|
|
Stock-based compensation expense
|
|
|
1,431
|
|
|
|
1,294
|
|
Adjusted EBITDA
|
|
$
|
255
|
|
|
$
|
3,536
|
|
|
|
|
|
|
|
|
|
|
TECHTARGET, INC.
Reconciliation of Net (Loss) Income to Adjusted Net (Loss)
Income and Net (Loss) Income per Diluted Share to
Adjusted Net (Loss) Income per Share
(in $000's, except per share amounts)
|
|
|
|
|
|
For the Three Months Ended
March 31,
|
|
|
2013
|
|
|
2012
|
|
|
Net (loss) income
|
|
$
|
(1,542
|
)
|
|
$
|
365
|
Amortization of intangible assets
|
|
|
734
|
|
|
|
937
|
Stock-based compensation expense
|
|
|
1,431
|
|
|
|
1,294
|
Amortization of purchase price adjustment
|
|
|
48
|
|
|
|
-
|
Impact of income taxes
|
|
|
964
|
|
|
|
945
|
Adjusted net (loss) income
|
|
$
|
(293
|
)
|
|
$
|
1,651
|
|
|
|
|
|
|
|
|
Net (loss) income per diluted share
|
|
$
|
(0.04
|
)
|
|
$
|
0.01
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
40,023
|
|
|
|
40,853
|
|
|
|
|
|
|
|
|
Adjusted net (loss) income per share
|
|
$
|
(0.01
|
)
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
Adjusted weighted average diluted shares outstanding
|
|
|
40,023
|
|
|
|
40,853
|
Options, warrants and restricted stock, treasury method included in
adjusted weighted average diluted shares above
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Weighted average diluted shares outstanding
|
|
|
40,023
|
|
|
|
40,853
|
|
|
|
|
|
|
|
|
TECHTARGET, INC.
|
|
Financial Guidance for the Three Months Ended June 30, 2013
|
|
(in $000's)
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 30, 2013
|
|
|
|
Range
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
22,700
|
|
|
$
|
23,900
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
2,500
|
|
|
$
|
3,500
|
|
Depreciation, amortization and stock-based compensation
|
|
|
2,737
|
|
|
|
2,737
|
|
Interest and other income, net
|
|
|
19
|
|
|
|
21
|
|
Benefit from (provision for) income taxes
|
|
|
22
|
|
|
|
(310
|
)
|
Net (loss) income
|
|
$
|
(196
|
)
|
|
$
|
474
|
|
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