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Local Corp (LOCM) Provides Prelim. FY12 Expectations; Guides FY13 EPS, Net Income

January 24, 2013 7:37 AM EST Send to a Friend
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Local Corporation (Nasdaq: LOCM) reported preliminary unaudited fourth quarter and full year 2012 financial results, and provided financial guidance for full year 2013.

The company previously provided 2012 revenue guidance of between $99 million and $100 million. Fourth quarter 2012 revenue guidance was between $22 million and $23 million, and Adjusted Net Income guidance was approximately breakeven, or $0.00 per diluted share, assuming 23 million diluted shares outstanding.

*** The Street sees a loss of 80 cents and revs of $99.8 million.

Based on preliminary unaudited results, the company expects record revenue for full year 2012 of approximately $98 million, about 25 percent higher than 2011. The increase was due primarily to growth in the company’s Owned & Operated (O&O) and Network businesses, offset by a decline in legacy subscription advertiser revenues in the company’s Sales & Ad Services (SAS) business. The company estimates preliminary unaudited fourth quarter revenue of approximately $20.9 million, and unaudited GAAP net loss of approximately $4 million or $(0.18) per diluted share. Unaudited Adjusted Net Loss for the fourth quarter 2012 is expected to be approximately $900,000 or $(0.04) per diluted share, based on 22.1 million diluted shares outstanding. Preliminary fourth quarter revenue is approximately $1.6 million below the mid-point of prior guidance, primarily as a result of lower than expected monetization of traffic from the company’s main advertising partner.

Adjusted Net Income is defined as net income (loss) excluding: provision for income taxes; interest and other income (expense), net; depreciation; amortization; stock based compensation charges; gain or loss on warrant revaluation; net income (loss) from discontinued operations; gain on sale of Rovion; impairment charges; LEC receivables reserve and severance charges. An explanation of the company’s use of non-GAAP financial measures, including the limitations of such measures, relative to GAAP measures is included below and reconciliation between GAAP and non-GAAP measures, where appropriate, is included in the financial table attached to this release.

During the fourth quarter, the company undertook a strategic review of operations and for 2013 intends to focus on expanding margins in O&O, the company’s largest business by revenue, and on growing the Network business, which is the company’s most profitable business. Due to the significant financial commitment required to successfully scale a direct sales model, the company intends to instead focus on channel sales development for its ‘Launch by Local’ SMB solution, which the company expects to provide annual cost savings of approximately $4.6 million, starting immediately.

For FY13:

Revenue - The company expects 2013 revenue to be between $93 million and $95 million, which at the mid-point is an increase of 12% compared to the fourth quarter 2012 exit run rate. The Street sees $114.3 million.

Adjusted Net Income – Adjusted Net Income for 2013 is expected to be at least $5 million.




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