Marchex Announces Intent to Separate Its Business into Two Public Companies
SEATTLE--(BUSINESS WIRE)--Nov. 1, 2012--
Upon completion of the spin-off transaction,
Archeo intends to develop the industry’s most dynamic domain and advertising marketplace. The domain marketplace intends to pursue a build, buy, sell and partner strategy. The advertising marketplace will continue to place national and local pay-per-click advertisers on premium publishers, and will pursue new advertising types that drive incremental advertiser value. Upon completion of the spin-off transaction, Archeo would be comprised of Marchex’s portfolio of more than 200,000 highly unique and valuable web domains and its vertical pay-per-click network.
“We are excited about the strategic and operational clarity this separation provides,” said
- Enhance its ability to support customers and deliver innovative products in a rapidly-evolving and competitive industry.
- Focus on the priorities and operational opportunities that would maximize its long-term potential.
- Benefit from greater financial and operational flexibility.
- Customize its capital structure, and deploy resources in a manner consistent with the business goals that best enhance value for its respective shareholder group.
Transaction Specifics
It is anticipated that the transaction would be structured as a tax-free pro rata distribution to all shareholders of
Given the anticipated cash-generation from Archeo, it is expected that the current
Upon closing of the transaction,
Executing the transaction requires further work on structure, management, governance, and other significant matters. Within the next number of months, Marchex’s management will develop detailed plans for the Board's further consideration and final approval.
The completion of the spin-off is subject to a number of conditions, including final approval of the transaction by Marchex’s Board, receipt of regulatory approvals, favorable tax rulings and or opinions regarding the tax-free nature of the transaction to
Additional financial information is attached.
Conference Call and Webcast Information
Management will hold a conference call, starting at
About
Marchex is based in
To learn more about this transaction, please visit www.marchex.com/archeo.
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. In addition, there are certain risks and uncertainties relating to our spin-off transaction, including, but not limited to, the impact and possible disruption to our operations, the timing and certainty of completing the transaction, the high costs in connection with the spin-off which we would not be able to recoup if the spin-off is not consummated, the expectation that the spin-off will be tax-free, revenue and growth expectations for the two independent companies following the spin-off, unanticipated developments that may delay or negatively impact the spin-off, and the ability of each business to operate as an independent entity upon completion of the spin-off. 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
Non-GAAP Financial Information
To supplement
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
Adjusted non-GAAP EPS represents adjusted non-GAAP Net Income applicable to common stockholders divided by GAAP diluted shares outstanding. Adjusted non-GAAP Net Income applicable to common stockholders generally captures those items on the statement of operations that have been, or ultimately will be, settled in cash exclusive of certain items that are not indicative of Marchex’s recurring core operating results and represents net income (loss) applicable to common stockholders plus the net of tax effects of: (1) stock-based compensation expense, (2) amortization of intangible assets from acquisitions, (3) gain/loss on sales and disposals of intangible assets, (4) acquisition and separation related costs, (5) interest and other income (expense), and (6) dividends paid to participating securities. Financial analysts and investors may use Adjusted non-GAAP EPS to analyze
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
Financial Summary | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Quarter Ended | 9 months ended | |||||||||||||||||||||
9/30/2011 | 12/31/2011 | 3/31/2012 | 6/30/2012 | 9/30/2012 | 9/30/2011 | 9/30/2012 | ||||||||||||||||
Marchex - Consolidated | ||||||||||||||||||||||
Revenue | $ | 39,862 | $ | 39,023 | $ | 35,481 | $ | 34,013 | $ | 34,822 | $ | 107,703 | $ | 104,316 | ||||||||
Revenue with Domain Sales | $ | 42,359 | $ | 41,344 | $ | 36,955 | $ | 37,282 | $ | 35,535 | $ | 114,856 | $ | 109,772 | ||||||||
Adjusted OIBA |
$ | 5,427 | $ | 5,494 | $ | 3,252 | $ | 3,728 | $ | 3,861 | $ | 13,603 | $ | 10,841 | ||||||||
Adjusted EBITDA | $ | 6,418 | $ | 6,464 | $ | 4,292 | $ | 4,604 | $ | 4,766 | $ | 16,644 | $ | 13,662 | ||||||||
Adjusted OIBA with Domain Sales |
$ | 7,913 | $ | 7,803 | $ | 4,715 | $ | 6,986 | $ | 4,574 | $ | 20,715 | $ | 16,275 | ||||||||
Adjusted EBITDA with Domain Sales | $ | 8,904 | $ | 8,773 | $ | 5,755 | $ | 7,862 | $ | 5,479 | $ | 23,756 | $ | 19,096 | ||||||||
Call-Driven and Other (1) | ||||||||||||||||||||||
Revenue | $ | 28,555 | $ | 28,313 | $ | 26,655 | $ | 27,481 | $ | 29,263 | $ | 73,517 | $ | 83,399 | ||||||||
Adjusted OIBA | $ | 2,731 | $ | 2,379 | $ | 878 | $ | 2,265 | $ | 2,839 | $ | 5,468 | $ | 5,982 | ||||||||
Adjusted EBITDA | $ | 3,359 | $ | 2,998 | $ | 1,578 | $ | 2,968 | $ | 3,604 | $ | 7,322 | $ | 8,150 | ||||||||
Archeo (1) | ||||||||||||||||||||||
Revenue | $ | 11,307 | $ | 10,710 | $ | 8,826 | $ | 6,532 | $ | 5,559 | $ | 34,186 | $ | 20,917 | ||||||||
Revenue with Domain Sales | $ | 13,804 | $ | 13,031 | $ | 10,300 | $ | 9,801 | $ | 6,272 | $ | 41,339 | $ | 26,373 | ||||||||
Adjusted OIBA |
$ | 2,696 | $ | 3,115 | $ | 2,374 | $ | 1,463 | $ | 1,022 | $ | 8,135 | $ | 4,859 | ||||||||
Adjusted EBITDA | $ | 3,059 | $ | 3,466 | $ | 2,714 | $ | 1,636 | $ | 1,162 | $ | 9,322 | $ | 5,512 | ||||||||
Adjusted OIBA with Domain Sales |
$ | 5,182 | $ | 5,424 | $ | 3,837 | $ | 4,721 | $ | 1,735 | $ | 15,247 | $ | 10,293 | ||||||||
Adjusted EBITDA with Domain Sales | $ | 5,545 | $ | 5,775 | $ | 4,177 | $ | 4,894 | $ | 1,875 | $ | 16,434 | $ | 10,946 | ||||||||
1 | The financial results for Call-Driven and Archeo are preliminary and have been derived from the unaudited consolidated financial statements of Marchex, Inc. for all periods presented. The unaudited Call-Driven and Archeo financial results include certain expenses of Marchex which were allocated for certain functions, including general corporate expenses related to finance, legal, information technology, human resources, compliance, shared services, insurance, and employee benefits and incentives. However, these allocations may not be indicative of the actual expenses that would have incurred as two separate stand-alone entities or of the costs expected to be incurred in the future. As such, the financial results included herein may not necessarily reflect the results of operations or cash flows in the future or what the results of operations or cash flows would have been had Archeo been an independent company during the periods presented. | |||||||||||||||||||||
MARCHEX, INC. AND SUBSIDIARIES | ||||||||||||||||||||||
Reconciliation to Reported Financial and Non-GAAP Information | ||||||||||||||||||||||
(in thousands) | ||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||
Quarter Ended | 9 months ended | |||||||||||||||||||||
9/30/2011 | 12/31/2011 | 3/31/2012 | 6/30/2012 | 9/30/2012 | 9/30/2011 | 9/30/2012 | ||||||||||||||||
Revenue | ||||||||||||||||||||||
Consolidated - as reported | $ | 39,862 | $ | 39,023 | $ | 35,481 | $ | 34,013 | $ | 34,822 | $ 107,703 | $ | 104,316 | |||||||||
Add: Domain Sales | 2,497 | 2,321 | 1,474 | 3,269 | 713 | 7,153 | 5,456 | |||||||||||||||
Consolidated with Domain Sales (1) | 42,359 | 41,344 | 36,955 | 37,282 | 35,535 | 114,856 | 109,772 | |||||||||||||||
Less: Archeo with Domain Sales (3) | 13,804 | 13,031 | 10,300 | 9,801 | 6,272 | 41,339 | 26,373 | |||||||||||||||
Other | - | - | 182 | 158 | 165 | - | 505 | |||||||||||||||
Call-Driven (3) | $ | 28,555 | $ | 28,313 | $ | 26,473 | $ | 27,323 | $ | 29,098 | $ 73,517 | $ | 82,894 | |||||||||
Adjusted OIBA | ||||||||||||||||||||||
Consolidated - as reported | $ | 5,427 | $ | 5,494 | $ | 3,252 | $ | 3,728 | $ | 3,861 | $ 13,603 | $ | 10,841 | |||||||||
Add: Gain on Domain Sales | 2,486 | 2,309 | 1,463 | 3,258 | 713 | 7,112 | 5,434 | |||||||||||||||
Consolidated with Domain Sales (2) | 7,913 | 7,803 | 4,715 | 6,986 | 4,574 | 20,715 | 16,275 | |||||||||||||||
Less: Archeo with Domain Sales (2) | 5,182 | 5,424 | 3,837 | 4,721 | 1,735 | 15,247 | 10,293 | |||||||||||||||
Other | - | - | 72 | 99 | 95 | - | 266 | |||||||||||||||
Call-Driven (3) | $ | 2,731 | $ | 2,379 | $ | 806 | $ | 2,166 | $ | 2,744 | $ 5,468 | $ | 5,716 | |||||||||
Adjusted EBITDA | ||||||||||||||||||||||
Consolidated - as reported | $ | 6,418 | $ | 6,464 | $ | 4,292 | $ | 4,604 | $ | 4,766 | $ 16,644 | $ | 13,662 | |||||||||
Add: Gain on Domain Sales | 2,486 | 2,309 | 1,463 | 3,258 | 713 | 7,112 | 5,434 | |||||||||||||||
Consolidated with Domain Sales (2) | 8,904 | 8,773 | 5,755 | 7,862 | 5,479 | 23,756 | 19,096 | |||||||||||||||
Less: Archeo with Domain Sales (2) | 5,545 | 5,775 | 4,177 | 4,894 | 1,875 | 16,434 | 10,946 | |||||||||||||||
Other | - | - | 72 | 99 | 95 | - | 266 | |||||||||||||||
Call-Driven (3) | $ | 3,359 | $ | 2,998 | $ | 1,506 | $ | 2,869 | $ | 3,509 | $ 7,322 | $ | 7,884 | |||||||||
1 | Consolidated revenue with Domain Sales is a non-GAAP measure of financial results and includes sales proceeds from sales of intangible domain assets. | |||||||||||||||||||||
2 | Adjusted OIBA and EBITDA and each with Domain Sales, are non-GAAP measures of operating results and liquidity. Adjusted OIBA and EBITDA with Domain Sales include net gains from the sales of intangible assets. | |||||||||||||||||||||
3 | The financial results for Call-Driven and Archeo are preliminary and have been derived from the unaudited consolidated financial statements of Marchex, Inc. for all periods presented. The unaudited Call-Driven and Archeo financial results include certain expenses of Marchex which were allocated for certain functions, including general corporate expenses related to finance, legal, information technology, human resources, compliance, shared services, insurance, and employee benefits and incentives. However, these allocations may not be indicative of the actual expenses that would have incurred as two separate stand-alone entities or of the costs expected to be incurred in the future. As such, the financial results included herein may not necessarily reflect the results of operations or cash flows in the future or what the results of operations or cash flows would have been had Archeo been an independent company during the periods presented. |
Source:
Marchex, Inc.
Marchex Investor Relations
Trevor Caldwell, 206-331-3600
Email: ir(at)marchex.com
Or
MEDIA INQUIRIES
Marchex Public Relations
Sonia Krishnan, 206-331-3434
Email: skrishnan(at)marchex.com