IRVINE, CA -- 08/06/07 --
Local.com Corporation (NASDAQ: LOCM), a leading
local search engine, today reported its financial results for the second
quarter 2007.
"Local.com delivered strong financial results for the second quarter and
made considerable progress on our growth strategy. Since our last report,
we completed a strategic acquisition, launched our direct mail and outbound
telesales channels, released two new ad products for small businesses, and
announced two key patents in local Internet and directory assistance
search," said Heath Clarke, CEO, Local.com. "As a result of our recent $13
million financing and the conversion of our debentures, we have no debt and
are in the strongest financial position since 2004. In addition, we believe
our losses peaked during the second quarter. Excluding non-recurring
charges for the debenture conversion, we expect a material improvement in
our financial results in the third and fourth quarters."
Q2 Highlights:
-- Revenue - Second quarter of 2007 revenue of $5.1 million was at the
high range of guidance. This represented growth of 51% over the second
quarter 2006, and growth of 4% over the first quarter 2007.
-- Local Search - Local search revenue was $4.1 million for the second
quarter of 2007, up 147% over the second quarter of 2006.
-- Net Loss - Second quarter of 2007 net loss of $3.15 million was
approximately $150,000, or 5%, better than the best end of our guidance
of $3.3 million, and included non-cash expenses of $1.3 million or
$0.13 per share. Basic and diluted net loss per share was $0.34.
The non-cash expenses of $1.3 million consisted of depreciation and
amortization ($515,000); stock based compensation ($346,000); and
interest expense related to the convertible debentures ($452,000).
-- Increased Monetization - Revenue per thousand visitors (RKV) was $154,
up 170% from $57 in the second quarter of 2006 and up 12% from $137
RKV in the first quarter of 2007.
-- Awarded Patent Number 7,231,405 - We were granted patent number
7,231,405, by the U.S. Patent and Trademark Office for the method of
indexing and retrieving web-documents using geographical location.
-- Awarded Patent Number 7,200,413 - We were granted patent number
7,200,413, by the U.S. Patent and Trademark Office for the method of
responding to enhanced directory assistance inquiries using wireless
messaging protocols such as SMS, MMS and instant messaging.
-- Launched Online Booking Capabilities and Travel Related Content - We
added extensive online booking capabilities and travel related content.
-- Launched Local Mobile™ - We introduced a new ad-supported mobile
search service that allows users to access Local.com from mobile phones
and wireless devices.
-- Launched Local Verified™ and Local Promote Basic™ - We introduced new
advertising programs that offer businesses enhanced listings and
preferred placement in Local.com search results.
-- Upgraded our Mapping and Site Navigation - We improved our mapping
engine and added drill-down search capabilities for our search results
page.
-- Appointed Kim LaFleur as VP Product Management.
Recent Highlights:
-- Completed $13 Million Financing - In August, we announced the sale of
2,356,900 shares of the company's common stock to two institutional
investors in a private placement transaction for $5.50 per share. The gross
proceeds of approximately $13 million are expected to be used for
acquisitions, to expand direct sales channel development, to protect the
company's growing intellectual property portfolio, and for general working
capital.
-- Completed acquisition of PremierGuide, Inc. - In July, we acquired one
of the largest providers of online business directories to regional media
publishers such as newspapers, TV and radio stations, and city portals.
-- Converted all outstanding debentures - All outstanding convertible
notes were converted into 2.0 million shares of common stock in July. The
company currently has no debt.
-- Received $1.5 million in July from the exercise of warrants and
options.
-- Appointed Malcolm Lewis as VP Private Label.
Financial Guidance and Balance Sheet:
The company expects third quarter 2007 revenue of between $5.5 million and
$5.7 million, the mid-range of which is a 10% increase over the second
quarter 2007. We expect the mid-range of local search revenue to be
approximately $4.8 million, an increase of 19% over the second quarter
2007. The company expects net loss for the third quarter 2007 to be between
$9.2 million and $9.3 million, or $0.70 to $0.71 per share, which includes
non-cash expenses of $7.4 million or $0.56 per share. The loss per share
forecast assumes 13.1 million weighted average shares outstanding.
The non-cash expenses of $7.4 million consist of stock based expense of
$308,000; depreciation and amortization of $512,000; and non-cash interest
expense of $6.6 million related to the debenture conversions. Since the
debentures were converted prior to the maturity date, all unamortized
charges were expensed immediately upon conversion.
The above guidance does not include any potential amortization of
intangibles from the PremierGuide acquisition.
On June 30, 2007, the Company had $8.7 million in cash and marketable
securities. Subsequently, the Company raised approximately $12 million of
net proceeds in a private placement, received $1.5 million in cash from the
exercise of options and warrants, and spent $2.0 million for the
acquisition of PremierGuide.
On June 30, 2007, the Company had 9.3 million shares of common stock
outstanding. Subsequently, the Company issued 2.0 million shares for the
conversion of debentures; 0.5 million shares for the exercise of options
and warrants; and 2.4 million shares in a private placement. The total
common stock outstanding is now 14.2 million.
Conference Call Information
Chairman and CEO Heath Clarke, President and COO Bruce Crair and CFO Doug
Norman will host a conference call today at 5:00 p.m. ET to discuss the
results and outlook. Investors and analysts can participate in the call by
dialing 1-800-901-5218 or 1-617-786-4511, passcode # 66392642. To listen to
the webcast, or to view the press release, please visit the Investor
Relations section of the Local.com website at: http://ir.local.com. A
replay of the webcast will be available for approximately 90 days at the
company's website, starting approximately one hour after the completion of
the call.
About Local.com
Local.com (NASDAQ: LOCM) is a Top U.S. website attracting approximately 10
million visitors each month seeking information on local businesses,
products, services, and jobs. Local.com is also one of the largest local
search syndication networks, publishing business information on over 400
regional media sites. Powered by the company's patented local web indexing
and Keyword DNA® technologies, Local.com provides users with targeted,
relevant local search results, including special offers from local
businesses, user reviews, local businesses' website links, maps, driving
directions and more. Businesses can advertise on Local.com with
subscription, pay-per-click, banner and pay-per-call ad products. The
site's mobile service, Local Mobile(TM), provides local search results via
mobile phones and devices. Local.com claims U.S. patent numbers 7,231,405
and 7,200,413. For more information visit: www.local.com.
Forward-Looking Statements
All statements other than statements of historical fact included in this
document regarding our anticipated financial position, business strategy
and plans and objectives of our management for future operations, are
forward-looking statements. When used in this report, words such as
'anticipate,' 'believe,' 'estimate,' 'plans,' 'expect,' 'intend' and
similar expressions, as they relate to Local.com or our management,
identify forward-looking statements. Any forward-looking statements are
based on the beliefs of our management as well as assumptions made by and
information currently available to our management. Actual results could
differ materially from those contemplated by the forward-looking statements
as a result of certain factors, including, but not limited to, our ability
to monetize the Local.com domain, incorporate our local-search
technologies, market the Local.com domain as a destination for consumers
seeking local-search results, grow our business by enhancing our
local-search services, expand our Advertiser and Distribution Networks,
expand internationally, integrate and effectively utilize our acquisitions'
technologies, develop our products and sales, marketing, finance and
administrative functions and successfully integrate our expanded
infrastructure, as well as our dependence on major advertisers, competitive
factors and pricing pressures, changes in legal and regulatory
requirements, and general economic conditions. Any forward-looking
statements reflect our current views with respect to future events and are
subject to these and other risks, uncertainties and assumptions relating to
our operations, results of operations, growth strategy and liquidity. All
subsequent written and oral forward-looking statements attributable to us
or persons acting on our behalf are expressly qualified in their entirety
by this paragraph. Unless otherwise stated, all site traffic and usage
statistics are from third-party service providers engaged by the company.
Our Annual Report on Form 10-K, subsequent Quarterly Reports on Form 10-Q,
recent Current Reports on Form 8-K, and other Securities and Exchange
Commission filings discuss the foregoing risks as well as other important
risk factors that could contribute to such differences or otherwise affect
our business, results of operations and financial condition. The
forward-looking statements in this release speak only as of the date they
are made. We undertake no obligation to revise or update publicly any
forward-looking statement for any reason.
LOCAL.COM CORPORATION
CONDENSED BALANCE SHEETS
(in thousands, except share data)
June 30, December 31,
2007 2006
------------ ------------
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $ 6,726 $ 3,264
Restricted cash 29 41
Marketable securities 1,984 1,972
Accounts receivable, net of allowances of
$10 and $9, respectively 3,133 2,091
Prepaid financing costs 880 -
Prepaid expenses and other current assets 177 302
------------ ------------
Total current assets 12,929 7,670
Property and equipment, net 1,799 2,028
Intangible assets, net 2,764 2,813
Goodwill 12,213 12,213
Long-term restricted cash 96 125
Deposits 33 42
------------ ------------
Total assets $ 29,834 $ 24,891
============ ============
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable $ 3,786 $ 2,851
Accrued compensation 388 328
Deferred rent 370 432
Other accrued liabilities 420 374
Notes payable - 63
Deferred revenue 217 245
------------ ------------
Total current liabilities 5,181 4,293
Long-term senior secured convertible notes, net
of debt discount of $5,689 2,311 -
------------ ------------
Total liabilities 7,492 4,293
------------ ------------
Commitments and contingencies
Stockholders’ equity:
Convertible preferred stock, $0.00001 par
value; 10,000,000 shares authorized; none
issued and outstanding for all periods
presented - -
Common stock, $0.00001 par value; 30,000,000
shares authorized; 9,408,884 and 9,297,502
issued and outstanding, respectively - -
Additional paid-in capital 59,627 51,657
Accumulated comprehensive loss (16) (27)
Accumulated deficit (37,269) (31,032)
------------ ------------
Stockholders’ equity 22,342 20,598
------------ ------------
Total liabilities and stockholders’ equity $ 29,834 $ 24,891
============ ============
LOCAL.COM CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(in thousands, except shares and per share amounts)
(Unaudited)
Three months Ended Six months ended
June 30, June 30,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Revenue $ 5,098 $ 3,374 $ 9,979 $ 6,525
--------- --------- --------- ---------
Operating expenses:
Search serving 961 1,381 1,767 2,961
Sales and marketing 4,701 3,146 9,400 5,614
General and administrative 1,178 1,549 2,510 3,352
Research and development 551 618 1,251 1,569
Amortization of intangibles 244 237 481 473
--------- --------- --------- ---------
Total operating expenses 7,635 6,931 15,409 13,969
--------- --------- --------- ---------
Operating loss (2,537) (3,557) (5,430) (7,444)
Interest and other income
(expense), net (614) 83 (806) 188
--------- --------- --------- ---------
Loss before income taxes (3,151) (3,474) (6,236) (7,256)
Provision for income taxes - 1 1 2
--------- --------- --------- ---------
Net loss $ (3,151) $ (3,475) $ (6,237) $ (7,258)
========= ========= ========= =========
Per share data:
Basic net loss per share $ (0.34) $ (0.38) $ (0.67) $ (0.79)
========= ========= ========= =========
Diluted net loss per share $ (0.34) $ (0.38) $ (0.67) $ (0.79)
========= ========= ========= =========
Basic weighted average shares
outstanding 9,325,817 9,233,601 9,312,125 9,222,385
Diluted weighted average shares
outstanding 9,325,817 9,233,601 9,312,125 9,222,385
Supplemental statements of operations information:
Three months ended Six months ended
June 30, June 30,
-------------------- --------------------
2007 2006 2007 2006
--------- --------- --------- ---------
Non-cash stock based
compensation expense:
Sales and marketing $ 93 $ 199 $ 213 $ 370
General and administrative 200 391 492 1,062
Research and development 53 76 132 149
--------- --------- --------- ---------
Total non-cash stock-based
compensation expense $ 346 $ 666 $ 837 $ 1,581
========= ========= ========= =========
Basic and diluted net
compensation expense per share $ 0.04 $ 0.07 $ 0.09 $ 0.17
========= ========= ========= =========
Interest and other income
(expense), net:
Interest income $ 96 $ 89 $ 167 $ 197
Interest expense (258) (1) (361) (3)
Interest expense - non-cash (452) - (612) -
Gain on sale of fixed assets - - - 15
Realized loss on sale of
marketable securities - (5) - (21)
--------- --------- --------- ---------
Total interest and other income
(expense), net $ (614) $ 83 $ (806) $ 188
========= ========= ========= =========
Media Contacts:
Cameron Triebwasser
Local.com
949-789-5223
Email Contact
Tila Pacheco
Madison Alexander PR
714-256-8452
Email Contact
Investor Relations Contact:
John Baldissera
BPC Financial Marketing
800-368-1217
