Technology media company TechTarget, Inc. (NASDAQ: TTGT) today announced
financial results for the three months ended September 30, 2012.
Additionally, the Company announced that it has appointed Bob Burke,
former CEO of Art Technology Group (ATG (News - Alert)), to its Board of Directors.
"Despite the continued weakness in the IT market, we continue to make
good progress with our Activity Intelligence™ product roll-out and
international expansion, which we are optimistic will result in a return
to growth in 2013," said Greg Strakosch, TechTarget Chairman and CEO.
"We continue to manage expenses carefully as evidenced by our healthy
margins and cash flow."
With respect to results for the quarter, total Q3 2012 revenues
decreased 5% to $24.5 million compared to Q3 2011. Q3 2012 online
revenue decreased by 6% to $20.4 million compared to Q3 2011. Online
revenues represented 83% of total Q3 2012 revenues. Q3 2012 events
revenue decreased by 1% to $4.1 million compared to Q3 2011 and
represented 17% of total Q3 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 Q3 2012 decreased 19% to $4.4
million compared to $5.4 million for Q3 2011.
The Company generated $6.0 million of cash in the quarter.
Total gross profit margin for Q3 2012 was 71%, compared to 73% for Q3
2011. Online gross profit margin decreased to 71% for Q3 2012, compared
to 75% for Q3 2011. Events gross profit margin increased to 67% for Q3
2012, as compared to 64% for Q3 2011.
Net income was $0.7 million for Q3 2012 compared to $1.0 million in Q3
2011. Adjusted net income (net income adjusted to eliminate
amortization, stock-based compensation expense and the related income
tax impact of these charges) for Q3 2012 was $2.0 million compared to
$2.6 million for Q3 2011. Net income per basic share was $0.02 for Q3
2012 compared to $0.03 in Q3 2011. Adjusted net income per share
(adjusted net income divided by adjusted weighted average diluted shares
outstanding) for Q3 2012 was $0.05 compared to $0.06 for Q3 2011.
The Company's balance sheet and financial position remain strong. As of
September 30, 2012, the Company's cash, cash equivalents and investments
totaled $72.6 million, and the Company had no outstanding bank debt.
Recent Company Highlights
In the fourth quarter of 2012, the Company expects total revenues to be
within the range of $24.5 million to $25.7 million, online revenues
within the range of $22.0 million to $23.0 million, events revenues
within the range of $2.5 million to $2.7 million, and adjusted EBITDA to
be within the range of $4.7 million to $5.4 million.
Conference Call and Webcast
TechTarget will discuss these financial results in a conference call at
5:00 p.m. (Eastern Time) today (November 7, 2012). 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
1-877-317-6789 (US callers), 1-866-605-3852 (Canadian callers) or
1-412-317-6789 (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
November 7, 2012 at 7:00 p.m. ET through December 10, 2012 at 9:00 a.m.
ET. To listen to the replay, for US, dial 1-877-344-7529 and use the
conference number 10019305. International callers should dial
1-412-317-0088 and also use the conference number 10019305. 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 (News - Alert). 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.
(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,
Mumbai, San Francisco, Singapore and Sydney.
(C) 2012 TechTarget, Inc. All rights reserved. TechTarget and the
TechTarget logo are registered trademarks, and Activity Intelligence and
Nurture and Notify 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)
Cost of revenues:
Provision for income taxes
(1) Amounts include stock-based compensation expense as follows:
Reconciliation of Net Income to Adjusted EBITDA
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)
Options, warrants and restricted stock, treasury
method included in adjusted weighted average
diluted shares above
Ended December 31, 2012
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