Company Updates Call-Driven Revenue Guidance
for the Full Year 2014 based on Revised Fourth Quarter Customer
Commitment; Also Updates Third Quarter Guidance
Marchex, Inc. (NASDAQ:MCHX), a mobile advertising
technology company, today announced it is updating its outlook for
the remainder of 2014.
As a result of revised commitments from Allstate in the fourth
quarter, Marchex is lowering its 2014 call-driven revenue outlook.
However, given the growth and progress with its other customers,
such as Time Warner, Bridgestone, Dish Networks, and T-Mobile, the
company is reiterating its prior outlook for 2014 call-driven
adjusted EBITDA. The Company is also increasing its third quarter
call-driven financial outlook.
While Marchex’s technology has allowed it to exceed customer set
goals and metrics on a pay for call basis, leading to accelerated
spending of their planned commitments for the year and indications
of increases for the fourth quarter, Allstate has now indicated its
desire to move to a fixed fee model going forward. Under this
proposed model, Marchex’s economic upside would have been limited,
while financial exposure to Marchex would have remained. Marchex
does not believe it is in its best long-term interest to work under
such an arrangement. Marchex will continue to work with Allstate as
an integration partner utilizing its call analytics technology.
Marchex expects this will be a relatively small financial
contributor.
“This outcome is disappointing, as we believe that a
performance-based model is the way most companies are progressing.
This is the trend we are seeing with our customer base,” said
Russell Horowitz, Chairman and CEO. "Beyond Allstate, we continue
to experience growth in our customer base for call-driven
advertising products and believe we are early in the customer
adoption phase of mobile and call-driven advertising. We will
continue to focus on advancing our products and technology,
investing in our existing customers and winning new ones.”
Business Outlook
The following forward-looking statements reflect Marchex's
expectations as of September 18, 2014 and exclude any contribution
from Archeo operations, domain sales and discontinued operations.
Archeo operating results would be additive to Call-Driven
revenue, profitability, and other measures below:
Call-Driven
financial guidance for the Third Quarter ending September 30,
2014
Call-Driven Revenue2
$47.5-$48.5 million or more Call-Driven Adjusted OIBA1
$2.8-$3.3 million Call Driven Adjusted
EBITDA1 $3.8-$4.3 million
Call-Driven
financial guidance for the fiscal year ending December 31,
2014
Call-Driven Revenue3
$170-$172 million or more Call-Driven Adjusted OIBA1
$10 million or more Call-Driven Adjusted
EBITDA1 $14 million or more
1 These non-GAAP Call-Driven measures assign all Marchex
corporate overhead costs to the Call-Driven results.2 For the third
quarter, the Company expects Allstate will contribute between
$17-$17.5 million in revenue and revenues less distribution partner
costs (a component of service costs) are anticipated to range
between $1.5-$2 million.3 For the six months ended June 30, 2014
Allstate contributed $33.4 million in revenue.
Conference Call and Webcast
Information
Management will hold a conference call, starting at 8:00 a.m. ET
on Thursday, September 18, 2014 to discuss its revised outlook for
2014, and other company updates. Access to the live webcast of the
conference call will be available online from the Investors section
of Marchex’s website at www.marchex.com. An archived version of the
webcast will also be available at the same location, beginning two
hours after completion of the call.
About Marchex
Marchex is a mobile advertising technology company. The company
provides a suite of products and services for businesses that
depend on consumer phone calls to drive sales. Marchex’s mobile
advertising platform delivers new customer phone calls to
businesses, while its technology analyzes the data in these calls
to help maximize ad campaign results. Marchex disrupts traditional
advertising models by giving businesses full transparency into
their ad campaign performance and charging them based on new
customer acquisition.
Please visit www.marchex.com, blog.marchex.com or @marchex on
Twitter (Twitter.com/Marchex), where Marchex discloses material
information from time to time about the company, its financial
information, and its business.
Forward-Looking
Statements:
This press release contains forward-looking statements that
involve substantial risks and uncertainties. All statements, other
than statements of historical facts, included in this press release
regarding our strategy, future operations, future financial
position, future revenues, other financial guidance, acquisitions,
projected costs, prospects, plans and objectives of management are
forward-looking statements. We may not actually achieve the plans,
intentions or expectations disclosed in our forward-looking
statements and you should not place undue reliance on our
forward-looking statements. Actual results or events could differ
materially from the plans, intentions and expectations disclosed in
the forward-looking statements we make. There are a number of
important factors that could cause Marchex's actual results to
differ materially from those indicated by such forward-looking
statements which are described in the "Risk Factors" section of our
most recent periodic report and registration statement filed with
the SEC. All of the information provided in this release is as of
September 18, 2014 and Marchex undertakes no duty to update the
information provided herein.
Non-GAAP Financial
Information:
To supplement Marchex's consolidated financial statements
presented in accordance with GAAP and to provide clarity internally
and externally, Marchex uses certain non-GAAP measures of financial
performance and liquidity, including OIBA, Adjusted OIBA, Adjusted
EBITDA, and Call-Driven Adjusted OIBA and EBITDA. This press
release includes estimated ranges of Call-Driven Adjusted OIBA and
EBITDA for the third quarter of 2014 and the fiscal year ending
December 31, 2014.
OIBA represents income (loss) from
operations plus (1) stock-based compensation expense and (2)
amortization of intangible assets from acquisitions. This measure,
among other things, is one of the primary metrics by which Marchex
evaluates the performance of its business. Additionally, Marchex's
management uses Adjusted OIBA, which
excludes acquisition and separation related costs, as this item is
not indicative of Marchex’s recurring core operating results.
Adjusted OIBA is the basis on which Marchex's internal budgets are
based and by which Marchex's management is currently evaluated.
Marchex believes these measures are useful to investors because
they represent Marchex's consolidated operating results, taking
into account depreciation and other intangible amortization, which
Marchex believes is an ongoing cost of doing business, but
excluding the effects of certain other expenses such as stock-based
compensation, amortization of intangible assets from acquisitions
and acquisition and separation related costs. Adjusted EBITDA represents income before interest,
income taxes, depreciation, amortization, stock compensation
expense and acquisition and separation related cost. Marchex
believes that Adjusted EBITDA is another alternative measure of
liquidity to GAAP net cash provided by operating activities that
provides meaningful supplemental information regarding liquidity
and is used by Marchex's management to measure its ability to fund
operations and its financing obligations. Historically, these
Non-GAAP measures excluded gain/loss on sales and disposals of
intangible assets for each asset and any domain sales
contribution.
Call-Driven Adjusted OIBA and
EBITDA includes the above descriptions of Adjusted OIBA and
EBITDA for the Call-Driven segment. The Call-Driven Adjusted OIBA
and EBITDA assign all Marchex general corporate overhead costs to
the Call-Driven results.
Marchex's management believes that investors should have access
to, and Marchex is obligated to provide, the same set of tools that
management uses in analyzing the company's results. These non-GAAP
measures should be considered in addition to results prepared in
accordance with GAAP, and should not be considered in isolation, as
a substitute for, or superior to, GAAP results. Marchex’s non-GAAP
financial measures may be defined differently from time to time and
may be defined differently than similar titled terms used by other
companies, and accordingly, care should be exercised in
understanding how Marchex defines its non-GAAP financial measures
in this release. Marchex endeavors to compensate for the
limitations of the non-GAAP measures presented by providing the
comparable GAAP measure with equal or greater prominence, GAAP
financial statements, and detailed descriptions of the reconciling
items and adjustments, including quantifying such items, to derive
the non-GAAP measure.
For further information, contact:Trevor CaldwellMarchex Investor
RelationsTelephone: 206.331.3600Email: ir(at)marchex.comOrMEDIA
INQUIRIESSonia KrishnanMarchex Corporate
CommunicationsTelephone: 206.331.3434Email:
skrishnan(at)marchex.com
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