Local,inc. · TSE:470A
Local,inc — Local.com — Investor Day (October 2009)
24 slides from Local,inc's investor day presentation, Oct 8, 2009
Slide 1: Local.com Analyst Day Presentation October 2009
Local.com Analyst Day Presentation October 2009
Slide 2: Forward Looking Statements
Forward Looking Statements 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. W
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures This document includes the non-GAAP financial measure of “Adjusted Net Income/Loss” which we define as net income/loss excluding: provision for income taxes; interest and other income (expense), net; depreciation; amortization; stock based compensation charges and non-rec
Slide 4: Who We Are
Who We Are NASDAQ: Local.com IPO Q3 2004 Website launched Q3 ’05 Today, >$50MM business Flagship www.local.com local search engine, plus business directories on 700+ regional sites Patented local search technologies ~37% YOY revenue growth with adjusted earn. Large market share Growing organic traff
Slide 5: Why Local Search?
Why Local Search? Forecast Effect of Credit Crisis on Paid Search Ad Sales, 2004-09 ($mil) Consumer search is ‘LOCAL’ • About 80% of our income is spent within about 25 miles of our homes • 38% of all searches today are commercial 1 • 24% of all searches today are local AND commercial Local searcher
Slide 6: A Massive Change is Well Underway
A Massive Change is Well Underway “Over the next five years... 39% ($ 5.1 billion) of the ad spending on print yellow pages WILL VANISH as small businesses shift marketing budgets online.” “Say Goodbye to Yellow Pages” A Borrell Associates report published July 2008
Slide 7: Top in Search August 2009
Top 10 in Search August 2009 Ranked by Searches (U.S.) Searches M-O-M % Share of Provider (000) Growth Searches Total 10,812,734 2.9% 100.0% Google Search 6,986,580 2.6% 64.6% Yahoo! Search 1,726,060 -4.2% 16.0% MSN/Windows Live/Bing Search 1,156,415 22.1% 10.7% AOL Search 333,231 1.8% 3.1% Ask.com
Slide 8: Rapidly Growing Market Share
Rapidly Growing Market Share 2008 Online Revenue Growth Rates for Local Media Companies Company Growth Company Growth Yodle.com* ^ 700.0% McClatchy Corp. 10.6% Yellow Book/Yellowbook.com 112.9% Journal Communications (Newspapers) ^ 9.7% Nexstar Broadcasting ^ 100.0% New York Times Co. 8.7% Local.com
Slide 9: Revenue is from Advertisers
Revenue is from Advertisers Drive organic and to our site and and monetize with SEM search traffic network relevant ads
Slide 10: Local: The Crown Jewel of Search
Local: The Crown Jewel of Search National and Local Keyword Top Bids on Yahoo! Local consumers are the most desirable searchers • They have an explicit need – here and now So, local consumers convert into buying customers more often • 89% of in-store purchasers in key categories have conducted onlin
Slide 11: Search Traffic Monetization Growth
Search Traffic Monetization Growth Monetization of Traffic RKV — Revenue per ‘000 Visitors RKV influenced by page optimization, increased click values, more favorable revenue share, direct advertisers, more targeted SEM/SEO Q2 2009 RKV at record level; expect continued future growth
Slide 12: Value Creator #1: [Organic] Traffic
Value Creator #1: [Organic] Traffic Fiction: Local.com’s traffic is all SEM and we’re just an arbitrage play FACT: Our organic traffic has grown from only a few million MUVs/Q to nearly 30 millions MUVs/Q, and organic traffic represents the MAJORITY of our traffic growth since Q3 ’07! Site & Network
Slide 13: Value Creator #1: [Repeat] Traffic
Value Creator #1: [Repeat] Traffic Fiction: Local.com has low repeat traffic FACT: 2.5MM MUVs in September visited Local.com in the prior month, up from 1.2MM in March 2009 Repeat MUVs 2009
Slide 14: Value Creator #2: Technology
Value Creator #2: Technology Patents issued in local and mobile search Patents pending in local and mobile search Companies licensing our technologies
Slide 15: Strategy Discipline Through 2010
Strategy Discipline Through 2010 Grow Organic Traffic on Local.com Enhanced content around ‘Neighborhood Knowledge’ concept A local data slice... News, Events/Activities, Beauty, Shopping, Education, Business Services, Auto etc Improved user experience – less ads on new NK areas of the site Site mem
Slide 16: Focused on Execution
Focused on Execution Heath Clarke Bruce Crair Brenda Agius Michael Plonski Peter Hutto Chairman & CEO Pres. & COO CFO CTO SVP, BD & Sales 20 yrs exp 20+ yrs exp 15+ yrs exp 15+ yrs exp 20+ yrs exp 10 yrs as CEO 4 yrs as Pres/COO Joined as CFO Joined as CTO 4 yrs as VP/SVP Chairman LOCM of LOCM Feb’0
Slide 17: P&L Trend and Forward-looking Guidance
P&L Trend and Forward-looking Guidance Actual Actual Actual Estimate Description Q4- 08 Q1- 09 Q2- 09 Q3- 09 Revenue $ 9,573 $ 11,064 $ 13,726 $14,800 $ — 15,100 Operating expenses: Search serving 1,186 1,109 1,011 Sales and marketing 8,233 9,250 9,153 General and administrative 1,427 2,352 2,437 Re
Slide 18: Revenues & Adjusted EPS (with Q3 2009 Guidance)
Revenues & Adjusted EPS (with Q3 2009 Guidance) Mid- range of Guidance Adjusted Net Income (Loss) = Net Income (loss) before Interest, Taxes, Depreciation, Amortization, Stock-based compensation and Non-recurring Items
Slide 19: Revenue by Product Line
Revenue by Product Line Revenue by Product Line Q1- 09 Q2- 09 Q3- 09E Local.com $ 8.2M $ 9.1M $ 9.8M Network 1.6M 2.3M 3.2M Acquired subscription 0.7M 1.4M 1.2M Other subscription 0.6M 0.9M 0.8M Total revenue $ 11.1M $ 13.7M $ 15.0M Total revenue sequential growth 16% 23% 9% “Same Store” revenue (ex
Slide 20: Operating Expenses as a Percent of Revenue
Operating Expenses as a Percent of Revenue Percent of Revenue Description Q1 — 09 Q2 — 09 Q3 - - 09E Q4 — 09E 2009E 2008 Revenue 100% 100% 100% 100% 100% 100% Operating expenses: Search serving 10% 7% 9% 11% 9% 14% Sales and marketing 84% 67% 68% 67% 71% 84% General and administrative 21% 18% 14% 12
Slide 21: Financial Performance Versus Guidance
Financial Performance Versus Guidance Local.com Actual Reported Q1 2009 Guidance 2/19/2009 Performance 5/6/2009 Revenue $10,600,000 — $10,800,000 $11,100,000 Adjusted Net Income ($1,600,000) ($1,200,000) Adjusted EPS ($0.11) ($0.08) Local.com Actual Reported Q2 2009 Guidance 5/6/2009 Performance 7/3
Slide 22: Q2 Balance Sheet & Capitalization
Q2 Balance Sheet & Capitalization Key Balance Sheet Items Capitalization (in thousands) (in thousands) June 30, June 30, 2009 2009 Cash $6,726 Common 14,329 Accounts Receivable 7,619 Options 1 3,681 Total Assets 34,588 Warrants 1 3,340 Total Liabilities 9,692 Fully Diluted 21,350 Shareholders Equity
Slide 23: Key Investment Considerations
Key Investment Considerations Attractive Position Rapidly growing company in a rapidly growing market in Growing Market Direct beneficiary of secular trends in small biz ad spend from offline to local online Largest local search network in the US 1 with >20 MUVs Strong Operating Model Adjusted earni
Slide 24: Thank You
Local search for business, products & services Thank You Heath Clarke – CEO hclarke@local.com 949 784 0800 http://corporate.local.com