MediaMind Technologies Inc. (Nasdaq:MDMD), the leading independent
global provider of integrated digital advertising campaign
management solutions, today reported results for the third quarter
ended September 30, 2010.
For the 2010 third quarter, revenues increased 16.3% to $17.7
million compared to $15.2 million in the prior-year period. For
2010 third quarter, revenues excluding the impact of foreign
currencies were $18.0 million. See the reconciliation between GAAP
and non-GAAP financial measures provided in the financial data
below. Year-over-year revenue growth was attributable to the
addition of new advertising customers and higher volumes of ad
impressions, partially offset by softness in select
markets. Gross profit margin was 94.4% for the 2010 third
quarter compared to 94.6% a year ago. Net income for the
period was $1.0 million, or $0.05 per pro-forma diluted share,
compared to $1.9 million, or $0.14 per pro-forma diluted share, in
the third quarter of 2009. Pro-forma diluted share amounts
give effect to the conversion of all outstanding shares of the
Company's preferred stock into shares of common stock (which
occurred with the Company's initial public offering) as of the
beginning of each period presented. GAAP earnings per diluted share
for the period were $0.04, compared to $0.14 per diluted share in
the third quarter of 2009. Profitability for the fiscal 2010 third
quarter was in-line with the Company's expectations.
Net income for the 2010 third quarter on a non-GAAP basis was
$2.3 million, or $0.12 per pro-forma diluted share, compared to
$2.6 million, or $0.18 per pro-forma diluted share, in the
prior-year period. Non-GAAP net income excludes non-cash
share-based compensation expense, net of taxes, of approximately
$1.3 million and $0.7 million, for the third quarter of 2010 and
2009, respectively. Adjusted EBITDA for the 2010 third quarter
was $2.7 million versus $3.2 million in the prior-year period. See
the reconciliation between GAAP and non-GAAP financial measures
provided in the financial data below.
"We delivered solid revenue growth and profitability in the
third quarter of 2010, which is a seasonally slow period, as we
continued to capitalize on the broader use of digital media by
advertisers," said Gal Trifon, President and CEO of MediaMind.
"During the third quarter, we realized 32% growth in active
advertisers and a significant increase in ad impression volumes
driven by higher utilization rates, as our advertising partners
increasingly rely on our comprehensive set of tools and solutions
to meet their needs throughout the digital media campaign
lifecycle. We also generated a 76% increase in standard
display impressions over the same period last year which is
indicative of our success in building our platform customers who
use MediaMind as an end-to-end solution. Additionally, this
quarter we introduced globally our latest platform iteration,
MediaMind v2.0, which includes three new data driven products, that
we expect to roll out in early 2011."
Mr. Trifon continued, "Our performance in the third quarter
reflected positive overall trends, however, revenue growth for the
period was impacted by market-specific factors in Southern
California and the U.K. Looking ahead, we are off to an
encouraging start in our fourth quarter and remain confident that
our leading technology solutions, diversified client base, and
broad geographic reach will enable us to continue to gain market
share and capitalize on the global growth of digital
advertising."
Mr. Trifon added, "Furthermore, after the completion of our IPO
this quarter, the Company has approximately $100 million in cash
and investments and no debt, and is well positioned to accelerate
its growth and profitability."
For the 2010 fourth quarter, MediaMind expects to generate
revenues in the range of $25 to $26 million. Net income is
expected to be in the range of $5.1 million, or $0.24 per diluted
share, to $5.6 million, or $0.26 per diluted share. Non-GAAP
net income is expected to be in the range of $5.9 million, or $0.27
per non-GAAP diluted share, to $6.4 million, or $0.29 per non-GAAP
diluted share. Adjusted EBITDA is expected to be in the range
of $8.8 million to $9.4 million.
Conference Call
The Company will host a conference call today at 4:30 p.m. ET to
discuss third quarter results and its outlook for the fourth
quarter. To access the call, please dial 877-269-7756 (U.S.)
or 201-689-7817 (international) approximately 10 minutes prior to
the start of the call. The teleconference will also be available
via live webcast on the investor relations portion of MediaMind's
website, at http://ir.mediamind.com. If you are unable to
listen to the live teleconference, a replay will be available
through November 15, 2010, and can be accessed by dialing
877-660-6853 (U.S.) or 201-612-7415 (international). Callers will
be prompted for replay account number 379# followed by conference
ID number 360021#. An archived version of the webcast will also be
available under the investor relations section of MediaMind's
website at http://ir.mediamind.com.
About MediaMind
MediaMind is a leading global provider of digital advertising
campaign management solutions to advertising agencies and
advertisers. MediaMind provides media and creative agencies,
advertisers and publishers with an integrated platform to manage
campaigns across digital media channels and a variety of formats,
including rich media, in-stream video, display and search.
Headquartered in New York, MediaMind delivered during 2009
campaigns for approximately 7,000 brand advertisers, servicing
approximately 3,350 media agencies and creative agencies across
approximately 5,150 global web publishers in 55 countries
throughout North America, South America, Europe, Asia Pacific,
Africa and the Middle East. For more information on MediaMind,
visit http://www.MediaMind.com
Use of Non-GAAP Financial Measures
We believe that Pro-forma financial measures can provide useful
information to both management and investors by giving effect to
the conversion of all outstanding shares of preferred stock into
shares of common stock (which occurred upon our initial public
offering) as of the beginning of each period presented. These
measures are non-GAAP and should only be viewed in conjunction with
corresponding GAAP measures.
The reconciliation between GAAP and Pro-forma financial measures
is provided in the financial data below.
We believe that non−GAAP financial measures can provide useful
information to both management and investors by excluding certain
non−cash expenses that are not indicative of our core operating
results. These measures should only be viewed in conjunction with
corresponding GAAP measures.
MediaMind's non−GAAP financial measures exclude the effect of
stock−based compensation and the tax benefit resulting from it as
well as the assumed conversion of shares of preferred stock into
shares of common stock which occurred in connection with our
recently completed initial public offering at the beginning of each
period presented. The reconciliation between GAAP and non−GAAP
financial measures is provided in the financial data below.
Forward-Looking Statements
This press release contains statements that constitute
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. All statements other than
statements of historical facts are forward-looking statements.
These statements include descriptions regarding the intent, belief
or current expectations of the Company or its officers with respect
to the future consolidated results of operations and financial
condition of the Company, the continued global growth of digital
advertising, and the Company's ability to continue to gain market
share and capitalize on the anticipated global growth of digital
advertising. Such forward-looking statements are not guarantees of
future performance and involve known and unknown risks,
uncertainties, and other factors that may cause actual results,
performance or achievements to be materially different from those
expressed or implied in the forward-looking statements as a result
of various factors and assumptions, including factors discussed
under the heading "Risk Factors" in our final prospectus related to
our initial public offering filed on August 12, 2010 and additional
reports we file with the Securities and Exchange Commission.
MEDIAMIND TECHNOLOGIES
INC. |
UNAUDITED GAAP
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
(in thousands except share and
per share data) |
|
|
|
|
|
|
Three months
ended September 30, |
Nine months ended
September 30, |
|
2009 |
2010 |
2009 |
2010 |
|
|
|
|
|
Revenues |
$15,231 |
$17,721 |
$42,643 |
$54,946 |
Cost of revenues |
819 |
1,000 |
2,468 |
2,942 |
|
|
|
|
|
Gross profit |
14,412 |
16,721 |
40,175 |
52,004 |
|
|
|
|
|
Operating expenses: |
|
|
|
|
Research and development |
1,795 |
2,373 |
5,084 |
6,871 |
Selling and marketing |
9,134 |
11,281 |
25,197 |
32,883 |
General and administrative |
1,448 |
2,359 |
4,587 |
6,215 |
|
|
|
|
|
Total operating expenses |
12,377 |
16,013 |
34,868 |
45,969 |
|
|
|
|
|
Operating income |
2,035 |
708 |
5,307 |
6,035 |
Financial income (expenses), net |
528 |
771 |
(86) |
294 |
|
|
|
|
|
Income before income taxes |
2,563 |
1,479 |
5,221 |
6,329 |
Income taxes |
618 |
491 |
1,371 |
1,906 |
|
|
|
|
|
Net income |
1,945 |
988 |
3,850 |
4,423 |
|
|
|
|
|
Accretion of Preferred stock dividend
preference |
(483) |
(243) |
(1,126) |
(1,292) |
|
|
|
|
|
Net income attributable to Common
stockholders |
$1,462 |
$745 |
$2,724 |
$3,131 |
|
|
|
|
|
Net earnings per share: |
|
|
|
|
Basic |
0.17 |
0.05 |
0.32 |
0.30 |
Diluted |
0.14 |
0.04 |
0.27 |
0.23 |
|
|
|
|
|
Weighted average number of shares of Common
stock used in computing net earnings per share (in thousands): |
|
|
|
|
Basic |
8,398 |
13,923 |
8,394 |
10,322 |
Diluted |
14,192 |
17,018 |
14,199 |
13,587 |
|
MEDIAMIND TECHNOLOGIES
INC. |
UNAUDITED GAAP
CONDENSED CONSOLIDATED BALANCE SHEETS |
(in thousands) |
|
|
|
|
December 31,
2009 |
September 30,
2010 |
ASSETS |
|
|
|
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
$15,363 |
$48,231 |
Short-term deposit |
18,357 |
45,590 |
Restricted cash |
769 |
1,516 |
Trade receivables |
22,104 |
21,428 |
Other accounts receivable, prepaid
expenses |
1,972 |
3,729 |
|
|
|
Total current assets |
58,565 |
120,494 |
|
|
|
LONG-TERM ASSETS: |
|
|
Marketable securities |
2,077 |
2,051 |
Deferred taxes, net |
1,289 |
2,040 |
Severance pay fund |
1,517 |
2,040 |
Other long-term assets |
1,015 |
740 |
|
|
|
Total long-term assets |
5,898 |
6,871 |
|
|
|
PROPERTY AND EQUIPMENT, NET |
2,427 |
4,555 |
|
|
|
Total assets |
$66,890 |
$131,920 |
|
|
|
|
December 31,
2009 |
September 30,
2010 |
LIABILITIES AND STOCKHOLDERS'
EQUITY |
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
Trade payables |
$1,001 |
$1,527 |
Employees and payroll accruals |
4,686 |
4,101 |
Other accounts payable |
4,053 |
3,183 |
|
|
|
Total current liabilities |
9,740 |
8,811 |
|
|
|
LONG-TERM LIABILITIES: |
|
|
Accrued severance pay and other employee
accruals |
2,335 |
3,199 |
|
|
|
Total long-term liabilities |
2,335 |
3,199 |
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
STOCKHOLDERS' EQUITY |
|
|
Stock capital: |
|
|
Common stock |
12 |
22 |
Series A-1 Convertible Preferred
stock |
2 |
-- |
Additional paid-in capital |
48,450 |
108,808 |
Treasury stock at cost |
(23,213) |
(23,213) |
Accumulated other comprehensive loss |
(558) |
(252) |
Retained earnings |
30,122 |
34,545 |
|
|
|
Total stockholders' equity |
54,815 |
119,910 |
|
|
|
Total liabilities and stockholders'
equity |
$66,890 |
$131,920 |
Non-GAAP Financial
Measures |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
Reconciliation of Pro-Forma Financial Information |
(in thousands, except
per share data) |
|
|
|
|
|
|
|
|
Three months
ended September 30, |
Nine months ended
September 30, |
Three months
ended December 31, |
|
2009 |
2010 |
2009 |
2010 |
2010 |
2010 |
|
|
|
|
|
Min |
Max |
Net income attributable to Common
stockholders |
$1,462 |
$745 |
$2,724 |
$3,131 |
$5,100 |
$5,600 |
Accretion of Preferred stock
dividend preference |
483 |
243 |
1,126 |
1,292 |
-- |
-- |
Pro-forma net income |
$1,945 |
$988 |
$3,850 |
$4,423 |
$5,100 |
$5,600 |
|
|
|
|
|
|
|
Shares used in computing GAAP basic earnings
per share |
8,398 |
13,923 |
8,394 |
10,322 |
18,600 |
18,600 |
Weighted average effect of the assumed
conversion of convertible preferred stock as of the beginning of
the period |
4,359 |
1,943 |
4,359 |
3,542 |
-- |
-- |
Shares used in computing Pro-forma basic
earnings per share |
12,757 |
15,866 |
12,753 |
13,864 |
18,600 |
18,600 |
Shares used in computing GAAP diluted
earnings per share |
14,192 |
17,018 |
14,199 |
13,587 |
21,700 |
21,700 |
Weighted average effect of the assumed
conversion of convertible preferred stock as of the beginning of
period |
-- |
1,943 |
-- |
3,542 |
-- |
-- |
Shares used in computing non−GAAP diluted
earnings per share |
14,192 |
18,961 |
14,199 |
17,129 |
21,700 |
21,700 |
|
|
|
|
|
|
|
Pro-forma basic earnings per share |
0.15 |
0.06 |
0.30 |
0.32 |
0.27 |
0.30 |
Pro-forma diluted earnings per share |
0.14 |
0.05 |
0.27 |
0.26 |
0.24 |
0.26 |
Note 1 -Use of Pro-forma Earnings per Share
To supplement our unaudited condensed consolidated financial
statements presented on a basis consistent with GAAP, we disclose
Pro-forma earnings per share. The shares used to compute Pro-forma
basic and diluted earnings per share include the assumed conversion
of all outstanding shares of preferred stock into shares of common
stock as of the beginning of each period presented. In August 2010,
in connection with the closing of our initial public offering, all
of our outstanding preferred stock was converted into common stock.
These Pro-forma measures are not in accordance with and do not
serve as an alternative for GAAP.
Unaudited
Reconciliation of Non-GAAP Net Income to Non-GAAP Earnings Per
Share (Note 2) |
(in thousands, except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended September 30, |
Nine months ended
September 30, |
Three months
ended December 31, |
|
2009 |
2010 |
2009 |
2010 |
2010 |
2010 |
|
|
|
|
|
Min |
Max |
GAAP net income |
$1,945 |
$988 |
$3,850 |
$4,423 |
$5,100 |
$5,600 |
Stock Based Compensation |
822 |
1,527 |
2,356 |
3,480 |
1,000 |
1,000 |
Tax benefit resulting from Stock Based
Compensation |
(149) |
(263) |
(416) |
(608) |
(200) |
(200) |
Non−GAAP net income |
$2,618 |
$2,252 |
$5,790 |
$7,295 |
$5,900 |
$6,400 |
Pro-forma shares used in computing non−GAAP
basic earnings per share |
12,757 |
15,866 |
12,753 |
13,864 |
18,600 |
18,600 |
Pro-forma shares used in computing non−GAAP
diluted earnings per share |
14,192 |
18,961 |
14,199 |
17,129 |
21,700 |
21,700 |
Non−GAAP basic earnings per pro-forma
share |
0.21 |
0.14 |
0.45 |
0.53 |
0.32 |
0.34 |
Non−GAAP diluted earnings per pro-forma
share |
0.18 |
0.12 |
0.41 |
0.43 |
0.27 |
0.29 |
Note 2 -Use of Non-GAAP Net Income and Non-GAAP Earnings Per
Share
To supplement our unaudited condensed consolidated financial
statements presented on a basis consistent with GAAP, we disclose
non−GAAP net income and non−GAAP earnings per share. These
supplemental measures exclude (i) stock−based compensation net of
resulting taxes, and (ii) give effect to the conversion of all
outstanding shares of preferred stock into shares of common stock
using the as−if converted method as of the beginning of each period
presented. In August 2010, in connection with the closing of our
initial public offering, all of our outstanding preferred stock was
converted into common stock. These non−GAAP measures are not in
accordance with and do not serve as an alternative for GAAP.
We believe that these non−GAAP measures have limitations in that
they do not reflect all of the amounts associated with our GAAP
results of operations. These non−GAAP measures should only be
viewed in conjunction with corresponding GAAP measures. We
compensate for the limitations of non−GAAP financial measures by
relying upon GAAP results to gain a complete picture of our
performance.
We believe that non−GAAP financial measures can provide useful
information to both management and investors by excluding certain
non−cash expenses that are not indicative of our core operating
results. Among other uses, our management uses non−GAAP measures to
compare our performance relative to forecasts and to benchmark our
performance externally against competitors.
Adjusted EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Unaudited
Reconciliation of GAAP Net Income to Adjusted EBITDA (Note
3) |
(in
thousands) |
|
|
|
|
|
|
|
|
Three months
ended September 30, |
Nine months ended
September 30, |
Three months
ended December 31, |
|
2009 |
2010 |
2009 |
2010 |
2010 |
2010 |
|
|
|
|
|
Min |
Max |
GAAP net income |
$1,945 |
$988 |
$3,850 |
$4,423 |
$5,100 |
$5,600 |
Financial income, net |
(528) |
(771) |
86 |
(294) |
(200) |
(200) |
Income taxes |
618 |
491 |
1,371 |
1,906 |
2,400 |
2,500 |
Depreciation |
319 |
508 |
896 |
1,350 |
500 |
500 |
Stock Based Compensation |
822 |
1,527 |
2,356 |
3,480 |
1,000 |
1,000 |
Adjusted EBITDA |
$3,176 |
$2,743 |
$8,559 |
$10,865 |
$8,800 |
$9,400 |
Note 3 - Use of Adjusted EBITDA
Adjusted EBITDA is a metric used by management to measure
operating performance. EBITDA represents net income before
financial income, net, income tax expense and depreciation. We do
not have any amortization expense. Adjusted EBITDA represents
EBITDA excluding non-cash stock-based compensation expense. We
present Adjusted EBITDA as a supplemental performance measure
because we believe it facilitates operating performance comparisons
from period to period and company to company by backing out
potential differences caused by variations in capital structures
(affecting financial income, net), tax positions (such as the
impact on periods or companies of changes in effective tax rates),
the age and book depreciation of fixed assets (affecting relative
depreciation expense), and the impact of non-cash stock-based
compensation expense. Because Adjusted EBITDA facilitates internal
comparisons of operating performance on a more consistent basis, we
also use Adjusted EBITDA in measuring our performance relative to
that of our competitors. Adjusted EBITDA is not a measurement of
our financial performance under GAAP and should not be considered
as an alternative to net income, operating income or any other
performance measures derived in accordance with GAAP or as an
alternative to cash flow from operating activities as a measure of
our profitability or liquidity. We understand that although
Adjusted EBITDA is frequently used by securities analysts, lenders
and others in their evaluation of companies, Adjusted EBITDA has
limitations as an analytical tool, and you should not consider it
in isolation, or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:
- Adjusted EBITDA does not reflect our cash expenditures or
future requirements for capital expenditures or contractual
commitments;
- Adjusted EBITDA does not reflect changes in, or cash
requirements for, our working capital needs;
- Although depreciation is a non-cash charge, the assets being
depreciated will often have to be replaced in the future, and
Adjusted EBITDA does not reflect any cash requirements for such
replacements; and
- Other companies in our industry may calculate Adjusted EBITDA
differently than we do, limiting its usefulness as a comparative
measure.
Note 4 - Revenues excluding the impact of foreign currencies
Revenues excluding the impact of foreign currencies is a metric
used by management to compare performance over periods. In order to
compare 2010 third quarter revenue to prior period, we calculated
2010 revenue on an as-if basis, using 2009 exchange rates. The
foreign currency impact for 2010 third quarter totaled to $0.3
million.
Management believes the presentation of revenues excluding the
impact of foreign currencies indicates underlying business
performance before taking into account currency exchange
fluctuations.
CONTACT: The Blueshirt Group
Investor Contacts:
Brinlea Johnson
Jonathan Schaffer
212.551.1453
ir@mediamind.com
Media Contact:
Alex Wellins
415.217.5861
ir@mediamind.com
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