Marchex Inc. (MCHX, Financial) filed Quarterly Report for the period ended 2012-06-30.
Marchex, Inc. has a market cap of $114.6 million; its shares were traded at around $3.37 with and P/S ratio of 0.8. The dividend yield of Marchex, Inc. stocks is 2.6%.
Sales and marketing expenses increased 29% from $6.6 million for the six months ended June 30, 2011 to $8.5 million in the same period in 2012. As a percentage of revenue, sales and marketing expenses were 10% and 12% for the six months ended June 30, 2011 and 2012, respectively. The increase in dollars and percentage of revenue was related primarily to personnel costs, stock based compensation, travel, and depreciation totaling $2.1 million. This increase was also a result of the April 2011 Jingle acquisition. This increase was partially offset by a decrease in fees paid to outside service providers.
Cash provided by operating activities primarily consists of net income (loss) adjusted for certain non-cash items such as depreciation and amortization, deferred income taxes, stock-based compensation, and accretion of interest, gain on sales and disposals of intangible assets, net and changes in working capital. Cash provided by operating activities for the six months ended June 30, 2012 of approximately $11.9 million consisted primarily of net loss of $319,000 adjusted for non-cash items of $15.9 million, including depreciation, amortization of intangible assets, allowance for doubtful accounts and advertiser credits, stock-based compensation, deferred income taxes and accretion of interest expense, $4.7 million of gain on sales and disposals of intangible assets, net and approximately $1.1 million provided by working capital and other activities. Included in the working capital amount is $349,000 of interest accretion paid as part of the 12-month deferred acquisition payment to Jingle. Cash provided by operating activities for the six months ended June 30, 2011 of approximately $8.2 million consisted primarily of net income of $718,000 adjusted for non-cash items of $13.0 million, including depreciation, amortization of intangible assets, allowance for doubtful accounts and advertiser credits, stock-based compensation, deferred income taxes and accretion of interest expense, $4.6 million of gain on sales and disposals of intangible assets, net and approximately $834,000 used for working capital and other activities.
Cash provided by investing activities for the six months ended June 30, 2012 of approximately $3.2 million was primarily attributable to purchases for property and equipment of $1.5 million which were partially offset by proceeds from the sales of intangible assets of approximately $4.7 million. Cash used in investing activities for the six months ended June 30, 2011 of approximately $13.2 million was primarily attributable to the cash paid at closing of $15.8 million related to the April 2011 Jingle acquisition, and purchases for property and equipment of $2.0 million which were partially offset by proceeds from the sales of intangible assets of approximately $4.7 million.
In November 2006, our Board of Directors authorized a share repurchase program to repurchase up to 3 million shares of our Class B common stock as well as the initiation of a quarterly cash dividend of $0.02 per share for the holders of the Class A common stock and Class B common stock. The Board of Directors have authorized increases in the share repurchase program to provide for the repurchase of up to 13 million shares in the aggregate (less shares previously repurchased under the share repurchase program) of our Class B common stock. Under the revised share repurchase program, repurchases may take place in the open market and in privately negotiated transactions and at times and in such amounts as we deem appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions. This stock repurchase program does not have an expiration date and may be expanded, limited or terminated at any time without prior notice. During the six months ended June 30, 2012, approximately 284,000 shares of Class B common stock were repurchased. For 2011, quarterly dividends were paid on February 15 and May 16 to Class A and Class B common stockholders of record as of the close of business of February 4 and May 6. For 2012, quarterly dividends were paid on February 15 and May 15 to Class A and Class B common stockholders of record as of the close of business of February 3 and May 4. The aggregate quarterly dividends paid in February 2012 and May 2012 were approximately $745,000 and $743,000, respectively. Under Delaware law, dividends to stockholders may be made only from the surplus of a company, or, in certain situations, from the net profits for the current fiscal year before the dividend is declared by the board of directors. In July 2012, our Board of Directors declared a regular quarterly dividend of $0.02 per share on our Class A common stock and Class B common stock. Marchex will pay approximately $755,000 of these dividends on August 15, 2012 to the holders of record as of the close of business on August 3, 2012. In August 2012, our board of directors approved an increase to the quarterly cash dividend to Class A and Class B common stockholder from $0.02 per share to $0.035 per share. The increase in the dividend raises the annual dividend rate to $0.14 per share or $5.3 million. We will pay the incremental $0.015 per share dividends on August 31, 2012 to Class A and Class B stockholders of record as of the close of business of August 16, 2012.
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Marchex, Inc. has a market cap of $114.6 million; its shares were traded at around $3.37 with and P/S ratio of 0.8. The dividend yield of Marchex, Inc. stocks is 2.6%.
Highlight of Business Operations:
Sales and Marketing. Sales and marketing expenses increased 17%, from $3.9 million for the three months ended June 30, 2011 to $4.6 million in the same period in 2012. The increase was attributable to a $1.3 million increase in stock based compensation related to the acceleration of certain restricted shares as part of a separation agreement. This increase was partially offset by a decrease in personnel costs and online and outside marketing activities. As a percentage of revenue, sales and marketing expenses were 10% and 13% for the three months ended June 30, 2011 and 2012, respectively. The 2012 increase as a percentage of revenue in sales and marketing expenses was primarily a result of stock based compensation. We expect some volatility in sales and marketing expenses in the near term based on the timing of marketing initiatives but expect sales and marketing expenses in the near term to be relatively stable in absolute dollars excluding the effect of stock based compensation. We expect stock based compensation to be lower compared to the three months ended June 30, 2012.Sales and marketing expenses increased 29% from $6.6 million for the six months ended June 30, 2011 to $8.5 million in the same period in 2012. As a percentage of revenue, sales and marketing expenses were 10% and 12% for the six months ended June 30, 2011 and 2012, respectively. The increase in dollars and percentage of revenue was related primarily to personnel costs, stock based compensation, travel, and depreciation totaling $2.1 million. This increase was also a result of the April 2011 Jingle acquisition. This increase was partially offset by a decrease in fees paid to outside service providers.
Cash provided by operating activities primarily consists of net income (loss) adjusted for certain non-cash items such as depreciation and amortization, deferred income taxes, stock-based compensation, and accretion of interest, gain on sales and disposals of intangible assets, net and changes in working capital. Cash provided by operating activities for the six months ended June 30, 2012 of approximately $11.9 million consisted primarily of net loss of $319,000 adjusted for non-cash items of $15.9 million, including depreciation, amortization of intangible assets, allowance for doubtful accounts and advertiser credits, stock-based compensation, deferred income taxes and accretion of interest expense, $4.7 million of gain on sales and disposals of intangible assets, net and approximately $1.1 million provided by working capital and other activities. Included in the working capital amount is $349,000 of interest accretion paid as part of the 12-month deferred acquisition payment to Jingle. Cash provided by operating activities for the six months ended June 30, 2011 of approximately $8.2 million consisted primarily of net income of $718,000 adjusted for non-cash items of $13.0 million, including depreciation, amortization of intangible assets, allowance for doubtful accounts and advertiser credits, stock-based compensation, deferred income taxes and accretion of interest expense, $4.6 million of gain on sales and disposals of intangible assets, net and approximately $834,000 used for working capital and other activities.
Cash provided by investing activities for the six months ended June 30, 2012 of approximately $3.2 million was primarily attributable to purchases for property and equipment of $1.5 million which were partially offset by proceeds from the sales of intangible assets of approximately $4.7 million. Cash used in investing activities for the six months ended June 30, 2011 of approximately $13.2 million was primarily attributable to the cash paid at closing of $15.8 million related to the April 2011 Jingle acquisition, and purchases for property and equipment of $2.0 million which were partially offset by proceeds from the sales of intangible assets of approximately $4.7 million.
In November 2006, our Board of Directors authorized a share repurchase program to repurchase up to 3 million shares of our Class B common stock as well as the initiation of a quarterly cash dividend of $0.02 per share for the holders of the Class A common stock and Class B common stock. The Board of Directors have authorized increases in the share repurchase program to provide for the repurchase of up to 13 million shares in the aggregate (less shares previously repurchased under the share repurchase program) of our Class B common stock. Under the revised share repurchase program, repurchases may take place in the open market and in privately negotiated transactions and at times and in such amounts as we deem appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions. This stock repurchase program does not have an expiration date and may be expanded, limited or terminated at any time without prior notice. During the six months ended June 30, 2012, approximately 284,000 shares of Class B common stock were repurchased. For 2011, quarterly dividends were paid on February 15 and May 16 to Class A and Class B common stockholders of record as of the close of business of February 4 and May 6. For 2012, quarterly dividends were paid on February 15 and May 15 to Class A and Class B common stockholders of record as of the close of business of February 3 and May 4. The aggregate quarterly dividends paid in February 2012 and May 2012 were approximately $745,000 and $743,000, respectively. Under Delaware law, dividends to stockholders may be made only from the surplus of a company, or, in certain situations, from the net profits for the current fiscal year before the dividend is declared by the board of directors. In July 2012, our Board of Directors declared a regular quarterly dividend of $0.02 per share on our Class A common stock and Class B common stock. Marchex will pay approximately $755,000 of these dividends on August 15, 2012 to the holders of record as of the close of business on August 3, 2012. In August 2012, our board of directors approved an increase to the quarterly cash dividend to Class A and Class B common stockholder from $0.02 per share to $0.035 per share. The increase in the dividend raises the annual dividend rate to $0.14 per share or $5.3 million. We will pay the incremental $0.015 per share dividends on August 31, 2012 to Class A and Class B stockholders of record as of the close of business of August 16, 2012.
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