Marchex (MM) (NASDAQ:MCHXP)
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Marchex, Inc. (NASDAQ:MCHX)(NASDAQ:MCHXP), a local online advertising
company and leading publisher of local content, today reported its
results for the fourth quarter of 2007 and full year ended December 31,
2007.
Fourth Quarter 2007 Consolidated Financial Results:
Revenue was $37.0 million for the fourth quarter of 2007, compared to
$32.6 million for the same period of 2006.
GAAP net loss applicable to common stockholders was $774,000 for the
fourth quarter of 2007 or $0.02 loss per diluted share. This compares
to GAAP net income applicable to common stockholders of $5.0 million
or $0.01 loss per diluted share for the same period of 2006. The GAAP
diluted EPS calculation in 2006 excludes the effect of the non-cash
non-recurring discount on preferred stock redemption of $5.8 million,
net of dividends on the redeemed preferred shares of $197,000. The
fourth quarter 2007 results included non-cash stock-based compensation
expense recorded under the fair value method of $2.1 million, compared
to non-cash stock-based compensation expense of $2.6 million for the
same period in 2006.
We provide a reconciliation of GAAP diluted EPS to Adjusted Non-GAAP
EPS in the financial tables attached to this press release and
encourage investors to examine the reconciling adjustments between the
GAAP and non-GAAP measures. Adjusted non-GAAP EPS for the fourth
quarter of 2007 was $0.08, compared to $0.13 for the same period of
2006. Some Wall Street analysts use non-GAAP measures to analyze our
operating results, which may include adjusted non-GAAP EPS, adjusted
operating income before amortization and adjusted EBITDA. We present
GAAP measures with equal or greater prominence than non-GAAP measures
and such non-GAAP measures should not be considered a substitute for,
or superior to, GAAP results.
Adjusted operating income before amortization was $5.3 million for the
fourth quarter of 2007, compared to $8.3 million for the same period
of 2006. A reconciliation of non-GAAP adjusted operating income before
amortization to GAAP operating income and GAAP net income is included
in the financial tables attached to this release.
Adjusted EBITDA was $7.9 million in the fourth quarter of 2007,
compared to $10.0 million for the same period of 2006. A
reconciliation of operating income before taxes, depreciation,
amortization and gain/loss on sales of intangible assets to GAAP net
cash provided by operating activities is included in the financial
tables attached to this release.
Full Year 2007 Results:
Revenue for the year ended December 31, 2007 was $139.4 million,
compared to $127.8 million for 2006.
GAAP net loss applicable to common stockholders was $1.4 million or
$0.04 loss per diluted share for 2007. This compares to GAAP net
income applicable to common stockholders of $2.8 million or $0.04 loss
per diluted share for the same period of 2006. The GAAP diluted EPS
calculation in 2006 excludes the effect of the non-cash non-recurring
discount on preferred stock redemption of $5.8 million, net of
dividends on the redeemed preferred shares of $197,000.
As discussed in the summary of the fourth quarter 2007 consolidated
financial results, we provide a reconciliation of GAAP diluted EPS to
Adjusted Non-GAAP EPS in the financial tables attached to this press
release and encourage investors to examine the reconciling adjustments
between the GAAP and non-GAAP measures. Adjusted non-GAAP EPS for 2007
was $0.36, compared to $0.47 for 2006.
Adjusted operating income before amortization was $24.0 million for
2007, compared to $33.4 million 2006. A reconciliation of non-GAAP
adjusted operating income before amortization to GAAP operating income
and GAAP net income is included in the financial tables attached to
this release.
Adjusted EBITDA was $33.3 million for 2007, compared to $39.5 million
for 2006. A reconciliation of operating income before taxes,
depreciation, amortization and gain/loss on sales of intangible assets
to GAAP net cash provided by operating activities is included in the
financial tables attached to this release.
“Marchex’s focus on
the local online opportunity led to our positive performance in the
fourth quarter and increased momentum in our business,”
said Russell C. Horowitz, Marchex Chairman and CEO. “Marchex
is achieving leadership in local through two means: first, by building
and delivering the most local-centric advertising platform in the
industry, supporting clicks and calls; and, second, by delivering
unparalleled utility and relevance to local consumers through our
network of proprietary local Web sites. Our success in each of these
areas is already leading Marchex to a point of scale that few companies
in the local online industry possess, and is positioning us to capture
increased market share and see accelerating growth.”
Operating Highlights:
Local Advertiser Growth: In the fourth quarter, Marchex added more than
5,000 new advertisers through its aggregator partnerships and direct
sales channel. Marchex now has more than 55,000 advertisers using its
products and services and, based on current growth rates, anticipates it
will have more than 80,000 advertisers using its products and services
by the end of 2009.
Local Advertising Services: For the fourth quarter of 2007, revenue from
local advertising services was $25.6 million compared to $19.5 million
in 2006. One of the primary factors driving growth for the quarter was
the continued increase in the number of new advertisers using Marchex
products and services.
Local Content Network (proprietary traffic sources): Marchex’s
Local Content Network is comprised of two areas: (1) Local Reference Web
sites, and (2) community content and features. Local Reference Web sites
are those sites within Marchex’s network that
help consumers find local businesses and services, and include sites
such as www.OpenList.com, www.Yellow.com,
and www.ChicagoDoctors.com.
For the fourth quarter of 2007, revenue from proprietary traffic sources
was $11.4 million. Additionally, Marchex attracted more than 26 million
unique visitors for the month of December 2007 and delivered more than
50 million revenue-generating events and referrals in the fourth
quarter. Unique visitor statistics are based on internal traffic logs,
which calculate unique IP (Internet protocol) addresses on an
unduplicated basis during a given month.
Stock Repurchase Program:
Marchex today announced that it is revising its stock repurchase program
to increase the amount of shares available for purchase to up to a total
of 5 million shares from 3 million shares previously authorized, less
shares repurchased to date.
During the fourth quarter of 2007, Marchex purchased 770,000 shares of
its outstanding Class B common stock for a total price of $8.5 million,
bringing its total shares repurchased in 2007 to 2.2 million shares, or
5% of its outstanding common stock. Under the revised program, an
additional 2.8 million shares remain available for repurchase.
Marchex Financial Guidance:
The following forward-looking statements reflect Marchex's expectations
as of February 14, 2008:
Guidance for fiscal year 2008 (Year ending December 31, 2008):
Revenue estimate:
More than $150 million
Adjusted operating income before amortization estimate:
More than $21 million
Adjusted EBITDA: For adjusted EBITDA, Marchex anticipates
add-backs of approximately $9 million in additional depreciation and
amortization to its adjusted operating income before amortization range,
implying an adjusted EBITDA of more than $30 million for 2008.
Guidance for first quarter 2008:
Revenue estimate:
More than $35.5 million
Adjusted operating income before amortization estimate:
More than $4.5 million
Adjusted EBITDA: For adjusted EBITDA, Marchex anticipates
add-backs of approximately $2.3 million in additional depreciation and
amortization to its adjusted operating income before amortization range,
implying an adjusted EBITDA of more than $6.8 million for the first
quarter of 2008.
For color on guidance for the first quarter of 2008, while Marchex
anticipates continued momentum in its Local Advertising Services
business, the company does expect a seasonal impact from advertisers
lowering their budgets relative to the seasonally high fourth quarter.
Additionally, Marchex expects revenue from proprietary traffic sources
to be in a similar range to or slightly better than the fourth quarter
of 2007. This is based on anticipated increases in consumer usage on
Marchex’s Local Content Network and increased
amounts from third parties, with certain offsets from the company’s
ongoing efforts to increase direct sales of advertising inventory and
lower sales and marketing expenses on a year-over-year basis.
Conference Call and Webcast Information:
Management will hold a conference call, starting at 5:00 p.m. EDT on
Thursday, February 14, 2008 to discuss its fourth quarter and year ended
December 31, 2007 financial results and other company updates. To access
the call by live Webcast, please log onto the Investor Relations section
of the Marchex Web site (www.marchex.com/investors).
An archived version of the Webcast will also be available, beginning two
hours after completion of the call, at the same location.
About Marchex, Inc.
Marchex (www.marchex.com) is a
local online advertising company and leading publisher of local content.
Marchex's innovative advertising platform delivers search- and
call-based marketing products and services for local and national
advertisers. Marchex's local content network, one of the largest online,
helps consumers make better, more informed local decisions through its
network of content-rich Web sites that reach tens of millions of unique
visitors each month.
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, 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 February 14, 2008 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 Adjusted
non-GAAP EPS. Marchex also provides Pro Forma Revenue information for
the three months and years ended December 31, 2006 and 2007 as if the
AreaConnect and Open List asset acquisitions in 2006 and the VoiceStar
acquisition in 2007 occurred as of January 1, 2006, and the VoiceStar
acquisition in 2007 occurred as of January 1, 2007.
OIBA represents income (loss) from operations plus (1) stock-based
compensation expense and (2) amortization of acquired intangible assets.
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 (1) any gain/loss
on sales and disposals of intangible assets and (2) facility relocation
as these are viewed as non-recurring in nature. 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 non-cash
and non-recurring expenses. Adjusted EBITDA represents income before
interest, income taxes, depreciation, amortization, stock compensation
expense, and gain/loss on sales of intangible assets. 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.
Adjusted non-GAAP EPS represents Adjusted Net Income divided by weighted
average fully diluted shares outstanding for Adjusted non-GAAP EPS
purposes. Adjusted Net Income generally captures those items on the
statement of operations that have been, or ultimately will be, settled
in cash exclusive of certain non-recurring items and represents net
income (loss) available to common stockholders plus: (1) stock based
compensation expense, (2) amortization of acquired intangible assets,
(3) gain/loss on sales and disposals of intangible assets, (4) other
income (expense), (5) the cumulative effect of changes in accounting
principles, (6) facility relocation and less (7) discount on preferred
stock redemption. Adjusted non-GAAP EPS includes dilution from options
and warrants per the treasury stock method, includes the weighted
average number of all potential common shares relating to convertible
preferred stock and restricted stock and excludes the weighted average
common share equivalents for redeemed preferred shares. Shares
outstanding for Adjusted non-GAAP EPS purposes are therefore higher than
shares outstanding for GAAP EPS purposes. Financial analysts and
investors may use Adjusted non-GAAP EPS to analyze Marchex's financial
performance since these groups have historically used EPS related
measures, along with other measures, to estimate the value of a company,
to make informed investment decisions and to evaluate a company's
operating performance compared to that of other companies in its
industry.
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. These non-GAAP terms, as defined by Marchex,
may not be comparable to similarly titled measures used by other
companies. 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.
MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
Three Months Ended
December 31,
2006
2007
Revenue
$
32,606,314
$
37,008,033
Expenses:
Service costs (1)
15,377,218
20,079,692
Sales and marketing (1)
5,814,305
5,311,134
Product development (1)
2,624,636
3,454,849
General and administrative (1)
3,168,286
4,986,514
Amortization of intangible assets from acquisitions
5,121,162
4,325,618
Total operating expenses
32,105,607
38,157,807
Gain on sales and disposals of intangible assets, net
85,194
997
Income (loss) from operations
585,901
(1,148,777
)
Interest income and other, net
835,992
370,827
Income (loss) before provision for income taxes
1,421,893
(777,950
)
Income tax expense (benefit)
1,984,954
(21,676
)
Net loss
(563,061
)
(756,274
)
Convertible preferred stock dividends and discount on preferred
stock redemption
(5,535,570
)
17,891
Net income (loss) applicable to common stockholders
$
4,972,509
$
(774,165
)
Basic net income (loss) applicable to common stockholders
$
0.13
$
(0.02
)
Diluted net loss applicable to common stock holders
$
(0.01
)
(2)
$
(0.02
)
Shares used to calculate basic net income (loss) per share
applicable to common stockholders
38,845,086
37,735,790
Shares used to calculate diluted net loss per share applicable to
common stockholders
39,745,623
(2)
37,735,790
(1) Includes stock-based compensation allocated as follows:
Service costs
$
417,166
$
(16,737
)
Sales and marketing
160,102
(271,161
)
Product development
831,983
189,863
General and administrative
1,224,911
2,191,320
Total
$
2,634,162
$
2,093,285
(2) Calculation of the 2006 diluted net loss per share applicable
to common stockholders excludes the effect of the discount on
preferred stock redemption of $5.8 million, net of dividends on
the redeemed preferred shares of $197,000. The shares used to
calculate the 2006 diluted net loss per share applicable to common
stockholders includes the weighted average common share
equivalents for the redeemed preferred shares.
MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
Year Ended
December 31,
2006
2007
Revenue
$
127,759,475
$
139,390,659
Expenses:
Service costs (1)
60,433,611
70,901,141
Sales and marketing (1)
23,050,654
24,962,682
Product development (1)
10,094,967
12,018,010
General and administrative (1)
13,533,215
17,777,790
Amortization of intangible assets from acquisitions
20,465,128
16,930,348
Facility relocation
-
121,124
Total operating expenses
127,577,575
142,711,095
Gain on sales and disposals of intangible assets, net
369,960
283,076
Loss from operations
551,860
(3,037,360
)
Interest income and other, net
3,143,363
2,492,493
Income (loss) before provision for income taxes
3,695,223
(544,867
)
Income tax expense
4,290,201
960,401
Loss before cumulative effect of a change in accounting principle
(594,978
)
(1,505,268
)
Cumulative effect of a change in accounting principle, net of tax (2)
151,341
-
Net loss
(443,637
)
(1,505,268
)
Convertible preferred stock dividends, conversion payment and
discount on preferred stock redemption, net
(3,197,341
)
(95,148
)
Net income (loss) applicable to common stockholders
$
2,753,704
$
(1,410,120
)
Basic net income (loss) per share applicable to common stockholders
$
0.07
$
(0.04
)
Diluted net loss per share applicable to common stockholders
$
(0.04
)
(3)
$
(0.04
)
Basic net income (loss) applicable to common stockholders
38,261,884
38,937,697
Diluted net loss applicable to common stock holders
39,500,123
(3)
38,937,697
(1) Includes stock-based compensation allocated as follows:
Service costs
$
1,177,773
$
285,329
Sales and marketing
2,996,945
565,445
Product development
3,278,513
1,732,880
General and administrative
5,338,287
7,725,515
Total
$
12,791,518
$
10,309,169
(2) As a result of the adoption of SFAS 123R, Marchex recorded an
amount from the cumulative impact of the accounting change.
(3) Calculation of the 2006 diluted net loss per share applicable
to common stockholders excludes the effect of the discount on
preferred stock redemption of $5.8 million, net of dividends on
the redeemed preferred shares of $197,000. The shares used to
calculate the 2006 diluted net loss per share applicable to common
stockholders includes the weighted average common share
equivalents for the redeemed preferred shares.
MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
December 31,
December 31,
Assets
2006
2007
Current assets:
Cash and cash equivalents
$
46,105,827
$
36,456,307
Trade accounts receivable, net
22,035,343
18,307,386
Prepaid expenses and other current assets
2,221,550
2,118,390
Refundable taxes
1,837,166
1,693,695
Deferred tax assets
670,624
867,465
Total current assets
72,870,510
59,443,243
Property and equipment, net
7,280,075
7,357,903
Deferred tax assets
2,444,782
7,447,315
Intangibles and other assets, net
13,318,801
17,381,827
Goodwill
200,738,098
204,766,826
Intangible assets from acquisitions, net
36,735,570
23,797,231
Total assets
$
333,387,836
$
320,194,345
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
$
10,739,231
$
11,625,779
Accrued expenses and other current liabilities
2,913,152
3,668,342
Deferred revenue
2,430,644
2,906,379
Total current liabilities
16,083,027
18,200,500
Other non-current liabilities
91,907
105,368
Total liabilities
16,174,934
18,305,868
Stockholders' equity:
Convertible preferred stock
2,342,884
1,446,649
Class A common stock
119,217
113,717
Class B common stock
276,361
298,164
Treasury stock
-
(22,116,275
)
Additional paid-in capital
320,607,113
329,858,427
Accumulated deficit
(6,132,673
)
(7,712,205
)
Total stockholders' equity
317,212,902
301,888,477
Total liabilities and stockholders' equity
$
333,387,836
$
320,194,345
MARCHEX, INC. AND SUBSIDIARIES
Reconciliation of Revenue to Pro Forma Revenue
(unaudited)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2006
2007
2006
2007
Revenue, as reported
$
32,606,314
$
37,008,033
$
127,759,475
$
139,390,659
AreaConnect pro forma revenue
-
-
649,675
-
Open List pro forma revenue
-
-
156,511
-
VoiceStar pro forma revenue
310,654
-
772,971
1,675,712
Pro forma eliminations
-
-
(22,259
)
-
Pro forma Revenue
$
32,916,968
$
37,008,033
$
129,316,373
$
141,066,371
MARCHEX, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Income (Loss) to Operating Income
Before Amortization (OIBA) and Adjusted Operating Income Before
Amortization (Adjusted OIBA)
(unaudited)
Three Months Ended
December 31,
2006
2007
Net income (loss) applicable to common stockholders
$
4,972,509
$
(774,165
)
Convertible preferred stock dividends and discount on preferred
stock redemption
(5,535,570
)
17,891
Net loss
(563,061
)
(756,274
)
Income tax expense (benefit)
1,984,954
(21,676
)
Income (loss) before provision for income taxes
1,421,893
(777,950
)
Interest income and other, net
(835,992
)
(370,827
)
Income (loss) from operations
585,901
(1,148,777
)
Stock-based compensation
2,634,162
2,093,285
Amortization of intangible assets from acquisitions
5,121,162
4,325,618
Operating income before amortization (OIBA)
8,341,225
5,270,126
Gain on sales and disposals of intangible assets, net
(85,194
)
(997
)
Adjusted operating income before amortization (Adjusted OIBA)
$
8,256,031
$
5,269,129
MARCHEX, INC. AND SUBSIDIARIES
Reconciliation of GAAP Net Income (Loss) to Operating Income
Before Amortization (OIBA) and Adjusted Operating Income Before
Amortization (Adjusted OIBA)
(unaudited)
Year Ended
December 31,
2006
2007
Net income (loss) applicable to common stockholders
$
2,753,704
$
(1,410,120
)
Convertible preferred stock dividends, conversion payment and
discount on preferred stock redemption, net
(3,197,341
)
(95,148
)
Net loss
(443,637
)
(1,505,268
)
Cumulative effect of a change in accounting principle, net of tax (1)
151,341
-
Loss before cumulative effect of a change in accounting principle
(594,978
)
(1,505,268
)
Income tax expense
4,290,201
960,401
Income (loss) before provision for income taxes
3,695,223
(544,867
)
Interest income and other, net
(3,143,363
)
(2,492,493
)
Income (loss) from operations
551,860
(3,037,360
)
Stock-based compensation
12,791,518
10,309,169
Amortization of intangible assets from acquisitions
20,465,128
16,930,348
Operating income before amortization (OIBA)
33,808,506
24,202,157
Facility relocation
-
121,124
Gain on sales and disposals of intangible assets, net
(369,960
)
(283,076
)
Adjusted operating income before amortization (Adjusted OIBA)
$
33,438,546
$
24,040,205
(1) As a result of the adoption of SFAS 123R, Marchex recorded an
amount from the cumulative impact of the accounting change.
MARCHEX, INC. AND SUBSIDIARIES
Reconciliation from Net Cash provided by Operating Activities to
Adjusted EBITDA
(unaudited)
Three Months Ended
December 31,
2006
2007
Net cash provided by operating activities
$
3,974,053
$
9,496,441
Changes in asset and liabilities, net of effects of acquisitions
4,444,289
(1,298,969
)
Provision for income taxes
1,984,954
(21,676
)
Other item - facility relocation
(10,932
)
4,533
Interest income and other, net
(835,592
)
(370,721
)
Income and excess tax benefits related to stock options
437,667
87,330
Adjusted EBITDA
$
9,994,439
$
7,896,938
Year Ended
December 31,
2006
2007
Net cash provided by operating activities
$
30,807,871
$
37,068,910
Changes in asset and liabilities, net of effects of acquisitions
5,069,636
(4,816,666
)
Provision for income taxes
4,290,201
960,401
Other item - facility relocation
32,499
12,614
Interest income and other, net
(3,152,727
)
(2,495,630
)
Income and excess tax benefits related to stock options
2,463,018
2,550,308
Adjusted EBITDA
$
39,510,498
$
33,279,937
MARCHEX, INC. AND SUBSIDIARIES
Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS
(unaudited)
Three Months Ended
December 31,
2006
2007
Adjusted Non-GAAP EPS
$
0.13
$
0.08
Net loss per share applicable to common stockholders - diluted (GAAP
EPS)
$
(0.01
)
$
(0.02
)
Shares used to calculate diluted net loss per share applicable to
common stockholders
39,745,623
37,735,790
Net income (loss) applicable to common stockholders
$
4,972,509
$
(774,165
)
Discount on preferred stock redemption
(5,761,134
)
-
Stock-based compensation
2,634,162
2,093,285
Amortization of intangible assets from acquisitions
5,121,162
4,325,618
Gain on sales and disposals of intangible assets, net
(85,194
)
(997
)
Interest income and other, net
(835,992
)
(370,827
)
Estimated impact of income taxes
(975,429
)
(1,880,951
)
Adjusted Non-GAAP net income applicable to common stockholders
$
5,070,084
$
3,391,963
Adjusted Non-GAAP EPS
$
0.13
$
0.08
Shares used to calculate diluted net loss per share applicable to
common stockholders
39,745,623
37,735,790
Weighted average common share equivalents for redeemed preferred
shares
(900,537
)
-
Weighted average stock options and warrants and common shares
subject to repurchase or cancellation (if applicable)
1,591,877
3,747,029
Shares used to calculate Adjusted Non-GAAP EPS
40,436,963
41,482,819
For Adjusted Non-GAAP EPS, the impact of restricted stock (common
shares subject to repurchase or cancellation) is based on the
weighted average of restricted stock outstanding as compared with
diluted shares for GAAP purposes, which included restricted stock
on a treasury stock method basis.
MARCHEX, INC. AND SUBSIDIARIES
Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS
(unaudited)
Year Ended
December 31,
2006
2007
Adjusted Non-GAAP EPS
$
0.47
$
0.36
Net loss per share applicable to common stockholders - diluted (GAAP
EPS)
$
(0.04
)
$
(0.04
)
Shares used to calculate diluted net loss per share applicable to
common stockholders
39,500,123
38,937,697
Net income (loss) applicable to common stockholders
$
2,753,704
$
(1,410,120
)
Discount on preferred stock redemption
(5,761,134
)
(163,867
)
Stock-based compensation
12,791,518
10,309,169
Facility relocation
-
121,124
Amortization of intangible assets from acquisitions
20,465,128
16,930,348
Gain on sales and disposals of intangible assets, net
(369,960
)
(283,076
)
Cumulative effect of a change in accounting principle, net of tax (1)
(151,341
)
-
Interest income and other, net
(3,143,363
)
(2,492,493
)
Estimated impact of income taxes
(7,730,395
)
(7,734,810
)
Adjusted Non-GAAP net income applicable to common stockholders
$
18,854,157
$
15,276,275
Adjusted Non-GAAP EPS
$
0.47
$
0.36
Shares used to calculate diluted net loss per share applicable to
common stockholders
39,500,123
38,937,697
Weighted average common share equivalents for redeemed preferred
shares
(1,238,239
)
-
Weighted average stock options and warrants and common shares
subject to repurchase or cancellation (if applicable)
2,090,623
3,382,111
Shares used to calculate Adjusted Non-GAAP EPS
40,352,507
42,319,808
For Adjusted Non-GAAP EPS, the impact of restricted stock (common
shares subject to repurchase or cancellation) is based on the
weighted average of restricted stock outstanding as compared with
diluted shares for GAAP purposes, which included restricted stock
on a treasury stock method basis.
(1) As a result of the adoption of SFAS 123R, Marchex recorded an
amount from the cumulative impact of the accounting change.