Slide 1: Local.com Corporate Presentation August 2010
Local.com Corporate Presentation August 2010
Slide 2: Forward Looking Statements; Non-GAAP Financial Measures
Forward Looking Statements; Non-GAAP Financial Measures 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
Slide 3: What We're Doing
What We're Doing Our Mission Statement: To be the leader at enabling businesses and consumers to find each other and connect. Our Growth Strategy: Reach more consumers via useful products on owned and third-party sites, and monetize those consumers with a range of high-value ad products.
Slide 4: Timeline 1999 - 2004, 2005 - 2010
Timeline 1999 - 2004 2005 - 2010 1
Slide 5: Corporation
Corporation NASDAQ: LOCM A local search business with large search market share ~20 MM MUVs Top 10 US search engine* Largest private label local search network in US** Top 3 fastest-growing in local online advertising*** 2010 guidance: $87-$90 MM, up 57% Operating at ~15% Adjusted Net Income, up ~10
Slide 6: How We Operate
How We Operate Regional Media 'Partner traffic' ~41k sites 30% of revenue Advertisers >70k direct subscribers represent 17% of revenue Ad feeds from partners All numbers as of Q2, 2010 3 Consumers 'Our traffic' About 15MM MUVs 53% of revenue OCTANE360 Managed by SAS Intersects all three businesses
Slide 7: Multiple Products & Revenue Sources
Multiple Products & Revenue Sources 4
Slide 8: Why Local Search?
Why Local Search? * Jupiter Research, Paid Search Through 2009. ** The Kelsey Group The future of search advertising is: Commercial search is inherently local About 80% of our incomes are spent within 25 miles of our homes 38% of searches on the internet today are commercial* 24% of searches are LOC
Slide 9: Experienced Team with Strategy Discipline
Experienced Team with Strategy Discipline Heath Clarke Chairman & CEO 11 years Bruce Crair Pres. & COO 5 years Brenda Agius CFO 1 year Peter Hutto SVP Corp. Dev. 20+ yrs exp VP eCommerce LanguageForce CEO/Founder AFP (Australia) 20+ yrs exp Co-founder/COO ZeroDegrees President Cox/Sprint PCS Preside
Slide 10: Patented Technologies
Patented Technologies 4 patents issued, 10 pending in local, mobile, Octane Lucene core Multiple databases with millions of SMB listings to validate business information We crawl the web and use our proprietary Keyword DNA(tm) + web indexing algorithms to generate all our search results 11 7
Slide 11: O&O - www.local.com
O&O - www.local.com Flagship property About 15MM MUVs Direct subscription advertisers Ad feeds incl. display, performance ads High monetization Local business content Coupons, pictures, video, social ratings & reviews, bookings, special offers 8
Slide 12: O&O - Hyperlocal Sites
O&O - Hyperlocal Sites High-ranking hyperlocal geo-category sites Owned by Local.com but 'leased' to local businesses as advertising High visibility & value to advertiser High relevance & functionality to user High revenue & margin to Local.com 9
Slide 13: O&O - Target Market
O&O - Target Market Over half of our O&O traffic is the 'Soccer Mom' demographic Aged between 25-45 with one child or more at home Controls significant portion of the household purse strings Typically spends 80% of that money within 20 miles of home 89% of in-store purchasers in key categories have
Slide 14: O&O - Growth Strategy
O&O - Growth Strategy A larger ecosystem with greater defensibility and higher margins 11
Slide 15: Network - Three Market Segments
Network - Three Market Segments We distribute our search results and content to other sites and monetize their local search queries with our ads We share in revenue generated from those ads with the sites 12 100+ search engines We monetize their traffic with ads and pay them a revenue share 700+ reg
Slide 16: Network - Growth Strategy
Network - Growth Strategy 13 A larger ecosystem with greater defensibility and higher margins
Slide 17: SAS = Traffic Monetization
SAS = Traffic Monetization >70k direct SMB customers, plus ad feeds from partners Overall average of ~$40 per month subscription Most billed via phone bill - inefficient We recognize what we collect (~50%) as revenue Most customers acquired in one-time 'block transactions' Efficient model with payba
Slide 18: Sales & Ad Services - Growth Strategy
Sales & Ad Services - Growth Strategy Higher monetization allows us to compete for increased distribution Increased distribution attracts more advertisers 'Virtuous cycle' 15
Slide 19: M&A Strategy
M&A Strategy 16 Completed a handful of transactions in the past 18 months Most recent: OCTANE360 All were accretive or near-term accretive We expect more SAS block-transactions Continue to look at new opportunities all the time
Slide 20: Revenues & Adjusted EPS
Revenues & Adjusted EPS Mid-range of Guidance Revenues $mil Adjusted Net Income/share Adjusted Net Income (Loss) = Net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation, warrant revaluation charges, and non-recurring Items 17
Slide 21: P&L Trend and Guidance
P&L Trend and Guidance 18 Adjusted Net Income (Loss) = Net income (loss) before interest, taxes, depreciation, amortization, stock-based compensation, warrant revaluation charges, and non-recurring Items Actual Actual Actual Actual Actual Actual Actual Estimate Description Q1-09 Q2-09 Q3-09 Q4-09 FY
Slide 22: Reconciliation: Adjusted Net Income to GAAP Net Income
Reconciliation: Adjusted Net Income to GAAP Net Income 19 Actual Actual Actual Actual Actual Actual Actual Estimate Description Q1-09 Q2-09 Q3-09 Q4-09 FY-09 Q1-10 Q2-10 Q3-10 Adjusted Net income (loss) (1,189) $ 943 $ 1,317 $ 1,970 $ 3,041 $ 2,575 $ 3,451 $ $3,500-$3,600 Plus interest and other inc
Slide 23: Revenue by Business Unit
Revenue by Business Unit 20 Of the 47% in revenue growth from 2008 to 2009, 36% was organic and 11% via acquisitions Note: Revenue numbers above rounded to the nearest tenth of one million dollars. Revenue by Product Line Q1-09 Q2-09 Q3-09 Q4-09 FY-09 Growth from FY-08 Q1-10 Q2-10 Growth from Prior
Slide 24: Q2 Balance Sheet & Capitalization
Q2 Balance Sheet & Capitalization June 30, 2010 Cash $15,049 $15,049 Accounts Receivable 15,776 15,776 Total Assets 55,797 55,797 Total Debt 3,000 3,000 Total Liabilities 21,456 21,456 Shareholders Equity $34,341 $34,341 June 30, 2010 Common 16,562 Options 1 3,495 Warrants 1 1,334 Fully Diluted 21,3
Slide 25: Thank You
Thank You Heath Clarke - CEO hclarke@local.com Brenda Agius - CFO bagius@local.com 949 784 0800 http://corporate.local.com Local search for business, products & services
Slide 26: Appendix: Key Investment Considerations
Appendix: Key Investment Considerations Attractive Position in Growing Market Attractive Financial Characteristics Strong Operating Model Seasoned Executives & Board Rapidly growing company in a rapidly growing market Beneficiary of secular trend towards online ad spend by SMBs Multiple revenue stre