EX-99.1 2 dex991.htm PRESS RELEASE OF MARCHEX, DATED AUGUST 4, 2011 Press Release of Marchex, dated August 4, 2011

Exhibit 99.1

Marchex Reports Second Quarter 2011 Financial Results

Strong Results driven by Momentum and Growth in Digital Call Advertising Products

SEATTLE – August 4, 2011 Marchex, Inc. (NASDAQ: MCHX) today reported its results for the quarter ended June 30, 2011.

Second Quarter 2011 Consolidated Financial Results:

 

   

Revenue was $38.8 million for the second quarter of 2011, compared to $21.4 million for the same period of 2010.

 

   

GAAP net income applicable to common stockholders was $80,000 for the second quarter of 2011 or $0.00 per diluted share. This compares to GAAP net loss applicable to common stockholders of $3.2 million or $0.10 per diluted share for the same period of 2010. The second quarter 2011 results included non-cash stock-based compensation expense of $3.9 million, compared to non-cash stock-based compensation expense of $2.6 million for the same period in 2010.

 

   

As discussed in the summary of the second quarter 2011 consolidated financial results, a reconciliation is provided of GAAP diluted EPS to Adjusted Non-GAAP EPS in the financial tables attached to this press release and we encourage investors to examine the reconciling adjustments between the GAAP and non-GAAP measures. Adjusted non-GAAP EPS for second quarter 2011 was $0.08, compared to a loss of $0.04 for the same period in 2010.

 

   

Adjusted operating income (loss) before amortization was $5.0 million for the second quarter of 2011, compared to ($1.8) million for the same period of 2010. A reconciliation of non-GAAP adjusted operating income before amortization to GAAP operating income is included in the financial tables attached to this release.

 

   

Adjusted EBITDA was $6.0 million in the second quarter of 2011, compared to ($0.5) million for the same period of 2010. A reconciliation of adjusted EBITDA to GAAP net cash provided by operating activities is included in the financial tables attached to this release.

“Our performance in the second quarter represents an initial point of validation for Marchex and for all the hard work our people have poured into our company. It also highlights that the bet we made several years ago to be a leader in Digital Call Advertising is beginning to pay off,” said Russell C. Horowitz, Marchex Chairman and CEO. “While we are pleased with our progress, we also recognize that the digital call advertising industry is in its early stages, and we will need to stay focused on continued execution in driving live connections, new customers and more sales for our call advertisers.”


General Highlights:

 

  1. On April 7, Marchex acquired Jingle Networks, one of the leading providers of mobile voice search performance advertising and technology solutions in North America. With the addition of Jingle Networks, the Marchex Digital Call Marketplace has an annualized reach of hundreds of millions of phone calls across digital media, including mobile. The Marchex Digital Call Marketplace now includes exclusive and preferred relationships with more than one hundred call media sources including: four of the top five U.S. mobile carriers, the leading global VOIP provider (Skype), mobile network operators, and mobile application and directory providers.

 

  2. Publishing: For the second quarter of 2011, revenue from Publishing, which is Marchex's proprietary local and category websites that fulfill advertiser campaigns, was $5.4 million.

 

  3. During the second quarter of 2011, Marchex sold a small number of non-strategic domains that yielded $2.7 million.

 

  4. Marchex also purchased 379,000 shares of its outstanding Class B common stock for a total price of $2.8 million, bringing its total shares repurchased under its stock repurchase program to 10.4 million shares, or 28% of its outstanding common stock.

Marchex Guidance:

The following forward-looking statements reflect Marchex's expectations as of August 4, 2011.

Financial guidance for fiscal year ending December 31, 2011:

 

Revenue:

   $147 million to $149 million

Adjusted Operating

Income Before

Amortization:

   More than $18.5 million
Adjusted EBITDA:    Estimated add-backs of approximately $4.5 million in additional


   depreciation and amortization to adjusted operating income before amortization, implying an adjusted EBITDA of more than $23 million.

Long Term Adjusted

EBITDA Margin Target:

   20% or more

2011 GAAP income (loss) from operations is expected to be ($1.4) million or better, assuming stock-based compensation between $15.0 million and $16.5 million and amortization of intangible assets from acquisitions between $5.5 million and $6.5 million. This estimate excludes any prospective gain or loss on sales and disposals of intangible assets.

Financial guidance for the third quarter of 2011:

 

Revenue:

   $39 million – $40 million
Adjusted Operating Income Before Amortization:    $5.1 million or more

Adjusted EBITDA:

   Estimated add-backs of approximately $1.0 million in additional depreciation and amortization to adjusted operating income before amortization, implying an adjusted EBITDA of $6.1 million or more.

Third quarter GAAP income (loss) from operations is expected to be ($1.9) million or better, assuming stock-based compensation between $3.7 million and $4.5 million and amortization of intangible assets from acquisitions between $1.7 million and $2.5 million. This estimate excludes any gain or loss on sales and disposals of intangible assets.

“For the third quarter of 2011, even with our focus on investing our current revenue growth back into hiring and market leadership opportunities, we expect adjusted operating income before amortization and EBITDA to be sequentially higher than in the second quarter,” said Michael Arends, Marchex Chief Financial Officer.


Conference Call and Webcast Information

Management will hold a conference call, starting at 5:00 p.m. ET on Thursday, August 4, 2011 to discuss its second quarter ended June 30, 2011 financial results, and other company updates. To access the call by live webcast, please log onto the Investor Relations section of the Marchex website (www.marchex.com/earnings-releases). An archived version of the webcast will also be available at the same location, beginning two hours after completion of the call.

About Marchex

Marchex’s mission is to unlock local commerce globally by helping advertisers reach customers through the phone when they are ready to buy.

Our performance-based call advertising products, Marchex Call Connect and Marchex Call Analytics, are reinventing how businesses acquire and upsell new customers through phone calls. Our award-winning Small Business Solutions products empower businesses to efficiently monitor their online presence, communicate with their customers, and acquire new ones. Every day, our products support hundreds of thousands of advertisers and partners, ranging from global enterprises to local businesses.

For more information about Marchex (NASDAQ: MCHX), please visit www.marchex.com.

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. 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 Marchex’s actual results to differ materially from those indicated by such forward-looking statements which are described in the “Risk Factors” section of our most recent periodic report and registration statement filed with the SEC. All of the information provided in this release is as of August 4, 2011 and Marchex undertakes no duty to update the information provided herein.

Non-GAAP Financial Information:

To supplement Marchex's consolidated financial statements presented in accordance with GAAP and to provide clarity internally and externally, Marchex uses certain non-GAAP


measures of financial performance and liquidity, including OIBA, Adjusted OIBA, Adjusted EBITDA and Adjusted non-GAAP EPS.

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 Marchex evaluates the performance of its business. Additionally, Marchex’s management uses Adjusted OIBA, which excludes any gain/loss on sales and disposals of intangible assets for each asset and acquisition related costs as these items are not indicative of Marchex’s recurring core operating results. Adjusted OIBA is the basis on which Marchex’s internal budgets are based and by which Marchex’s management is currently evaluated. Marchex believes these measures are useful to investors because they represent Marchex’s consolidated operating results, taking into account depreciation and other intangible amortization, which Marchex believes is an ongoing cost of doing business, but excluding the effects of certain other expenses or gain/loss such as stock-based compensation, amortization of intangible assets from acquisitions, acquisition related costs and gain/loss on sales and disposals of intangible assets. Adjusted EBITDA represents income (loss) before interest, income taxes, depreciation, amortization, stock compensation expense, acquisition related costs and gain/loss on sales and disposals of intangible assets. Marchex believes that Adjusted EBITDA is another alternative measure of liquidity to GAAP net cash provided by operating activities that provides meaningful supplemental information regarding liquidity and is used by Marchex’s management to measure its ability to fund operations and its financing obligations.

Adjusted non-GAAP EPS represents Adjusted non-GAAP Net Income (loss) applicable to common stockholders divided by GAAP diluted shares outstanding. Prior to 2011, Marchex computed shares outstanding for the Non-GAAP EPS calculation to include dilution from options and warrants, exercise prices per the treasury stock method provided market conditions had been met and included the weighted average number of all potential common shares relating to restricted stock and restricted stock units, provided market conditions had been met. Non-GAAP shares historically were greater than shares outstanding for GAAP EPS purposes. 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 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’s financial performance since these groups have historically used EPS related measures, along with other measures, to estimate the value of a company, to make informed investment decisions, and to evaluate a company’s operating performance compared to that of other companies in its


industry.

Marchex’s management believes that investors should have access to, and Marchex is obligated to provide, the same set of tools that management uses in analyzing the company’s results. These non-GAAP measures should be considered in addition to results prepared in accordance with GAAP, and should not be considered in isolation, as a substitute for, or superior to, GAAP results. Marchex’s non-GAAP financial measures may be defined differently from time to time and may be defined differently than similar titled terms used by other companies, and accordingly, care should be exercised in understanding how Marchex defines its non-GAAP financial measures in this release. Marchex endeavors to compensate for the limitations of the non-GAAP measures presented by providing the comparable GAAP measure with equal or greater prominence, GAAP financial statements, and detailed descriptions of the reconciling items and adjustments, including quantifying such items, to derive the non-GAAP measure.

For further information, contact:

Trevor Caldwell

Marchex Investor Relations

Telephone: 206.331.3600

Email: ir(at)marchex.com

Or

MEDIA INQUIRIES

Jim Cullinan

Telephone: 206.331.3523

Email: jcullinan(at)marchex.com


MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)

 

     Three Months Ended
June 30,
 
     2010     2011  

Revenue

   $ 21,393,353      $ 38,760,783   
  

 

 

   

 

 

 

Expenses:

    

Service costs (1)

     13,655,544        21,700,459   

Sales and marketing (1)

     3,511,375        3,933,920   

Product development (1)

     4,326,330        5,937,336   

General and administrative (1)

     4,289,559        6,138,665   

Amortization of intangible assets from acquisitions

     710,907        1,619,593   

Acquisition related costs

     —          1,049,117   
  

 

 

   

 

 

 

Total operating expenses

     26,493,715        40,379,090   
  

 

 

   

 

 

 

Gain on sales and disposals of intangible assets, net

     690,244        2,712,762   
  

 

 

   

 

 

 

Income (loss) from operations

     (4,410,118     1,094,455   

Interest income (expense) and other, net

     36,945        (174,492
  

 

 

   

 

 

 

Income (loss) before provision for income taxes

     (4,373,173     919,963   

Income tax expense (benefit)

     (1,245,557     778,567   
  

 

 

   

 

 

 

Net income (loss)

     (3,127,616     141,396   

Dividends paid to participating securities

     (48,115     (61,233
  

 

 

   

 

 

 

Net income (loss) applicable to common stockholders

   $ (3,175,731   $ 80,163   
  

 

 

   

 

 

 

Basic and diluted net income (loss) per share applicable to Class A and Class B common stockholders

   $ (0.10   $ 0.00   

Dividends paid per share

   $ 0.02      $ 0.02   

Shares used to calculate basic net income (loss) per share applicable to common stockholders

    

Class A

     10,786,403        9,999,605   

Class B

     21,995,133        23,523,112   

Shares used to calculate diluted net income (loss) per share applicable to common stockholders

    

Class A

     10,786,403        9,999,605   

Class B

     32,781,536        35,045,334   

(1) Includes stock-based compensation allocated as follows:

    

Service costs

   $ 205,149      $ 313,968   

Sales and marketing

     214,437        420,311   

Product development

     251,971        390,556   

General and administrative

     1,922,140        2,820,570   
  

 

 

   

 

 

 

Total

   $ 2,593,697      $ 3,945,405   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(unaudited)

 

     Six Months Ended
June 30,
 
     2010     2011  

Revenue

   $ 45,395,334      $ 67,840,638   
  

 

 

   

 

 

 

Expenses:

    

Service costs (1)

     26,305,045        38,372,841   

Sales and marketing (1)

     7,422,083        6,627,648   

Product development (1)

     8,288,614        10,826,446   

General and administrative (1)

     8,125,820        11,294,100   

Amortization of intangible assets from acquisitions

     1,415,373        2,083,795   

Acquisition related costs

     —          1,451,240   
  

 

 

   

 

 

 

Total operating expenses

     51,556,935        70,656,070   
  

 

 

   

 

 

 

Gain on sales and disposals of intangible assets, net

     2,017,548        4,625,436   
  

 

 

   

 

 

 

Income (loss) from operations

     (4,144,053     1,810,004   

Interest income (expense) and other, net

     31,285        (71,607
  

 

 

   

 

 

 

Income (loss) before provision for income taxes

     (4,112,768     1,738,397   

Income tax expense (benefit)

     (917,378     1,020,563   
  

 

 

   

 

 

 

Net income (loss)

     (3,195,390     717,834   

Dividends paid to participating securities

     (91,689     (124,738
  

 

 

   

 

 

 

Net income (loss) applicable to common stockholders

   $ (3,287,079   $ 593,096   
  

 

 

   

 

 

 

Basic and diluted net income (loss) per share applicable to Class A and Class B common stockholders

   $ (0.10   $ 0.02   

Dividends paid per share

   $ 0.04      $ 0.04   

Shares used to calculate basic net income (loss) applicable to common stockholders

    

Class A

     10,810,901        10,117,082   

Class B

     22,077,331        22,850,262   

Shares used to calculate diluted net income (loss) applicable to common stockholders

    

Class A

     10,810,901        10,117,082   

Class B

     32,888,232        34,674,941   

(1) Includes stock-based compensation allocated as follows:

    

Service costs

   $ 384,632      $ 598,946   

Sales and marketing

     381,094        639,152   

Product development

     460,176        704,572   

General and administrative

     3,755,118        5,513,779   
  

 

 

   

 

 

 

Total

   $ 4,981,020      $ 7,456,449   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(unaudited)

 

     December 31,
2010
    June 30,
2011
 
Assets     

Current assets:

    

Cash and cash equivalents

   $ 37,328,052      $ 28,332,606   

Accounts receivable, net

     20,213,886        29,712,121   

Prepaid expenses and other current assets

     3,567,504        3,236,986   

Refundable taxes

     3,248,908        2,029,371   

Deferred tax assets

     868,629        1,159,456   
  

 

 

   

 

 

 

Total current assets

     65,226,979        64,470,540   

Property and equipment, net

     4,709,907        5,523,137   

Deferred tax assets

     50,768,525        46,312,192   

Intangibles and other assets, net

     2,070,217        1,676,810   

Goodwill

     35,337,428        85,337,482   

Intangible assets from acquisitions, net

     1,576,687        11,458,361   
  

 

 

   

 

 

 

Total assets

   $ 159,689,743      $ 214,778,522   
  

 

 

   

 

 

 
Liabilities and Stockholders’ Equity     

Current liabilities:

    

Accounts payable

   $ 11,165,616      $ 15,971,307   

Accrued expenses and other current liabilities

     5,106,021        8,630,684   

Deferred acquisition payment

     —          17,307,828   

Deferred revenue

     1,649,851        1,801,270   
  

 

 

   

 

 

 

Total current liabilities

     17,921,488        43,711,089   

Deferred acquisition payment

     —          17,549,384   

Other non-current liabilities

     2,076,332        2,081,735   
  

 

 

   

 

 

 

Total liabilities

     19,997,820        63,342,208   

Stockholders’ equity:

    

Class A common stock

     105,006        102,544   

Class B common stock

     254,802        273,473   

Treasury stock

     (1,360,238     (2,847,026

Additional paid-in capital

     281,421,696        293,918,830   

Accumulated deficit

     (140,729,343     (140,011,507
  

 

 

   

 

 

 

Total stockholders’ equity

     139,691,923        151,436,314   
  

 

 

   

 

 

 

Total liabilities and stockholders’ equity

   $ 159,689,743      $ 214,778,522   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation of GAAP Income (Loss) from Operations to Operating Income (Loss) Before Amortization (OIBA) and

Adjusted Operating Income (Loss) Before Amortization (Adjusted OIBA)

(unaudited)

 

     Three Months Ended
June 30,
 
     2010     2011  

Income (loss) from operations

   $ (4,410,118   $ 1,094,455   

Stock-based compensation

     2,593,697        3,945,405   

Amortization of intangible assets from acquisitions

     710,907        1,619,593   
  

 

 

   

 

 

 

Operating income (loss) before amortization (OIBA)

     (1,105,514     6,659,453   

Acquisition related costs

     —          1,049,117   

Gain on sales and disposals of intangible assets, net

     (690,244     (2,712,762
  

 

 

   

 

 

 

Adjusted operating income (loss) before amortization (Adjusted OIBA)

   $ (1,795,758   $ 4,995,808   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation of GAAP Income (Loss) from Operations to Operating Income Before Amortization (OIBA) and

Adjusted Operating Income Before Amortization (Adjusted OIBA)

(unaudited)

 

     Six Months Ended
June 30,
 
     2010     2011  

Income (loss) from operations

   $ (4,144,053   $ 1,810,004   

Stock-based compensation

     4,981,020        7,456,449   

Amortization of intangible assets from acquisitions

     1,415,373        2,083,795   
  

 

 

   

 

 

 

Operating income before amortization (OIBA)

     2,252,340        11,350,248   

Acquisition related costs

     —          1,451,240   

Gain on sales and disposals of intangible assets, net

     (2,017,548     (4,625,436
  

 

 

   

 

 

 

Adjusted operating income before amortization (Adjusted OIBA)

   $ 234,792      $ 8,176,052   
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation from Net Cash provided by Operating Activities to Adjusted EBITDA

(unaudited)

 

     Three Months Ended
June 30,
 
     2010     2011  

Net cash provided by operating activities

   $ 1,251,289      $ 5,704,627   

Changes in asset and liabilities, net of acquisitions

     (510,617     (1,540,631

Income tax expense (benefit)

     (1,245,557     778,567   

Acquisition related costs

     —          1,049,117   

Interest (income) expense and other, net

     (36,945     14,325   
  

 

 

   

 

 

 

Adjusted EBITDA

   $ (541,830)      $ 6,006,005   
  

 

 

   

 

 

 

Net cash used in investing activities

   $ (9,447   $ (14,120,185
  

 

 

   

 

 

 

Net cash used in financing activities

   $ (2,176,681   $ (3,300,904
  

 

 

   

 

 

 
     Six Months Ended
June 30,
 
     2010     2011  

Net cash provided by operating activities

   $ 4,270,333      $ 8,223,681   

Changes in asset and liabilities, net of acquisitions

     (448,136     (379,487

Income tax expense (benefit)

     (917,378     1,020,563   

Acquisition related costs

     —          1,451,240   

Interest (income) expense and other, net

     (31,267     (90,184
  

 

 

   

 

 

 

Adjusted EBITDA

   $ 2,873,552      $ 10,225,813   
  

 

 

   

 

 

 

Net cash provided by (used in) investing activities

   $ 31,713      $ (13,189,134
  

 

 

   

 

 

 

Net cash used in financing activities

   $ (5,036,576   $ (4,029,993
  

 

 

   

 

 

 


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS

(unaudited)

 

     Three Months Ended
June 30,
 
     2010     2011  

Adjusted Non-GAAP EPS

   $ (0.04   $ 0.08   
  

 

 

   

 

 

 

Net income (loss) per Class B share applicable to common stockholders - diluted (GAAP EPS)

   $ (0.10   $ 0.00   

Shares used to calculate diluted net income (loss) per Class B share applicable to common stockholders

     32,781,536        35,045,334   

Net income (loss) applicable to common stockholders

   $ (3,175,731   $ 80,163   

Stock-based compensation

     2,593,697        3,945,405   

Acquisition related costs

     —          1,049,117   

Amortization of intangible assets from acquisitions

     710,907        1,619,593   

Gain on sales and disposals of intangible assets, net

     (690,244     (2,712,762

Interest (income) expense and other, net

     (36,945     174,492   

Dividends paid to participating securities

     48,115        61,233   

Estimated impact of income taxes

     (610,138     (997,687
  

 

 

   

 

 

 

Adjusted Non-GAAP net income (loss) applicable to common stockholders

   $ (1,160,339   $ 3,219,554   
  

 

 

   

 

 

 

Adjusted Non-GAAP EPS

   $ (0.04   $ 0.08   
  

 

 

   

 

 

 

Shares used to calculate diluted net income (loss) per Class B share applicable to common stockholders

     32,781,536        35,045,334   

Weighted average common shares related to deferred acquisition payments (1)

     —          3,889,912   
  

 

 

   

 

 

 

Diluted shares used to calculate Adjusted Non-GAAP EPS (2)

     32,781,536        38,935,246   
  

 

 

   

 

 

 

 

(1) For the three months ended June 30, 2011, these shares were excluded from the computation of diluted net income per share as their effect would be anti-dilutive.
(2) Marchex calculates diluted shares in accordance with GAAP in the computation of Non-GAAP EPS. Marchex had previously calculated diluted shares using the following methodology as calculated and described below.

 

Shares used to calculate diluted net income (loss) per Class B share applicable to common stockholders

     32,781,536        35,045,334   

Weighted average stock options and common shares subject to repurchase or cancellation (a)

     2,828,781        3,422,270   

Weighted average common shares related to deferred acquisition payments

     —          3,889,912   
  

 

 

   

 

 

 

Non-GAAP shares used to calculate Adjusted Non-GAAP EPS

     35,610,317        42,357,516   
  

 

 

   

 

 

 

Adjusted Non-GAAP EPS (computed using Non-GAAP shares)

   $ (0.03   $ 0.08   
  

 

 

   

 

 

 

 

(a) The impact of restricted stock (common shares subject to repurchase or cancellation) is based on the weighted average of restricted stock outstanding as compared with diluted shares for GAAP purposes, which included restricted stock using the treasury stock method in periods with income. The impact of restricted stock units and options subject to market conditions have or will be included once the market conditions have been met.


MARCHEX, INC. AND SUBSIDIARIES

Reconciliation of GAAP EPS to Adjusted Non-GAAP EPS

(unaudited)

 

     Six Months Ended
June 30,
 
     2010     2011  

Adjusted Non-GAAP EPS

   $ 0.00      $ 0.14   
  

 

 

   

 

 

 

Net income (loss) per Class B share applicable to common stockholders - diluted (GAAP EPS)

   $ (0.10   $ 0.02   

Shares used to calculate diluted net income (loss) per Class B share applicable to common stockholders

     32,888,232        34,674,941   

Net income (loss) applicable to common stockholders

   $ (3,287,079   $ 593,096   

Stock-based compensation

     4,981,020        7,456,449   

Acquisition related costs

     —          1,451,240   

Amortization of intangible assets from acquisitions

     1,415,373        2,083,795   

Gain on sales and disposals of intangible assets, net

     (2,017,548     (4,625,436

Interest (income) expense and other, net

     (31,285     71,607   

Dividends paid to participating securities

     91,689        124,738   

Estimated impact of income taxes

     (1,001,363     (1,876,380
  

 

 

   

 

 

 

Adjusted Non-GAAP net income (loss) applicable to common stockholders

   $ 150,807      $ 5,279,109   
  

 

 

   

 

 

 

Adjusted Non-GAAP EPS

   $ 0.00      $ 0.14   
  

 

 

   

 

 

 

Shares used to calculate diluted net income (loss) per Class B share applicable to common stockholders

     32,888,232        34,674,941   

Weighted average stock options and common shares subject to repurchase or cancellation (if applicable) (1)

     419,028        —     

Weighted average common shares related to deferred acquisition payments (1)

     —          1,955,701   
  

 

 

   

 

 

 

Diluted shares used to calculate Adjusted Non-GAAP EPS (2)

     33,307,260        36,630,642   
  

 

 

   

 

 

 

 

(1) For the six months ended June 30, 2010 and 2011, these shares were excluded from the computation of diluted net income (loss) per share as their effect would be anti-dilutive.
(2) Marchex calculates diluted shares in accordance with GAAP in the computation of Non-GAAP EPS. Marchex had previously calculated diluted shares using the following methodology as calculated and described below.

 

Shares used to calculate diluted net income (loss) per Class B share applicable to common stockholders

     32,888,232         34,674,941   

Weighted average stock options and common shares subject to repurchase or cancellation (a)

     2,738,314         3,236,924   

Weighted average common shares related to deferred acquisition payments

     —           1,955,701   
  

 

 

    

 

 

 

Non-GAAP shares used to calculate Adjusted Non-GAAP EPS

     35,626,546         39,867,566   
  

 

 

    

 

 

 

Adjusted Non-GAAP EPS (computed using Non-GAAP shares)

   $ 0.00       $ 0.13   
  

 

 

    

 

 

 

 

(a) The impact of restricted stock (common shares subject to repurchase or cancellation) is based on the weighted average of restricted stock outstanding as compared with diluted shares for GAAP purposes, which included restricted stock using the treasury stock method in periods with income. The impact of restricted stock units and options subject to market conditions have or will be included once the market conditions have been met.