) first quarter 2012 adjusted loss per share of 16 cents was better
than the Zacks Consensus Estimate of a loss per share of 17 cents.
Despite the loss, shares jumped 6.57% in the after-hour trade due
to favorable second quarter guidance and raised fiscal 2012
The adjusted earnings figure excludes amortization of intangible
assets, fair value adjustments to deferred revenue and
acquisition-related expenses, but includes stock-based compensation
Revenue of $34.9 million in the first quarter increased 29.1%
from $27.0 million generated a year ago. The top line was almost in
line the company's guided range of $34.7 million to $35.0 million
as well as Zacks Consensus Estimate of $35.0 million. The favorable
outcome was backed by customer additions and improved product
Management believes that Vocus' continuous investing activity
and a new product launch targeting the small and mid-sized
organizations have boosted the quarter's results.
Vocus added 1,196 new subscribers during the first quarter,
compared with 682 in the year-earlier quarter. Total active
subscribers were 13,103 at quarter end. A healthy mix of customers
across organizations, geographic areas and industries was also
The company signed a host of subscription agreements with new
and existing customers. Notable among these are Bose Corporation,
British Gymnastics, Browse and Pick Corporation, The Canary Party,
Cincinnati Children's Hospital, Clio, Empire Today, LivingWorks
Education, Mairie de Marseille, Mary Kay, Sleep Restfully,
Smartlogic, Toledo Symphony,
Under Armour Inc.
Gross margin was 79.0%, down from 79.8% in the year-ago quarter.
Operating loss was $10.4 million compared to $3.1 million in the
year-ago quarter. The operating loss can be attributed to a 54.1%
year-over-year rise in operating expenses, which outpaced the 29.1%
Net loss on a GAAP basis was $10.8 million or 57 cent per share,
compared with $1.9 million or 10 cents in the first quarter of
2011. Excluding one-time items, but including stock-based
compensation expense, net loss was $3.5 million or 16 cents per
share, compared with $795,000 or 4 cents in the year-earlier
Balance Sheet & Cash Flow
Vocus exited the quarter with $25.8 million in cash and
short-term investments versus $108.2 million in the previous
quarter. Accounts receivables were $19.8 million. The company
generated $3.5 million in cash from operations versus $6.3 million
in the previous quarter. Capital expenditure was $0.2 million.
Apart from these, the company repurchased its outstanding common
shares worth $3.0 million.
For the second quarter of 2012, non-GAAP revenue is expected in
the range of $43.5 million to $43.80 million, while GAAP revenue is
expected in the range of $42.8 million to $43.1 million. Non-GAAP
EPS is expected in the range of 8-9 cents assuming an estimated
non-GAAP weighted average diluted share count of 24.2 million. GAAP
loss per share is expected in the range of 30-29 cents assuming an
estimated GAAP weighted average diluted share count of 19.5
Vocus raised its fiscal 2012 guidance. For full-year 2012,
non-GAAP revenue is forecast between $171.3 million and $172.5
million (previously $169.9 million and $171.4 million). Non-GAAP
EPS is expected in the range of 38 cents to 40 cents (previously 35
cents to 37 cents) assuming an estimated non-GAAP weighted average,
diluted share count of 24.5 million shares (previously 24.0 million
shares). On a GAAP basis, total revenue will be between $169.1
million and $170.3 million, loss per share will be between $1.25
and $1.23, and the GAAP weighted average diluted share count is
projected at 19.5 million.
Vocus expects free cash flow in the range of $15.5 million to
$16.5 million (previously $15.0 million to $16.0 million) and
capital expenditure to remain $4.0 million.
The above guidance includes expected contribution from the
recently acquired iContact.
Vocus posted loss in the first quarter, but the result was
better than the Zacks Consensus Estimate. On the other hand, Vocus
generated solid revenue growth and was just $100,000 short of our
estimate. But the company provided better sequential guidance and
raised the fiscal guidance for revenue and earnings on its growth
momentum reflected by continuous customer wins and synergies from
Vocus vies in a nascent market and anticipates good growth
prospects. In the absence of any real competition, the company has
been able to steadily expand its customer base. The company has
also successfully capitalized on strategic acquisitions. We believe
that the complete integration of iContact (in February 2012) will
further boost product adoption.
By leveraging iContact's capabilities and increasing the sales
team to target SMBs, Vocus is eyeing the cloud-space opportunities
in the SMBs. But there remains a concern related to margin
contraction based on higher investments in sales and marketing as
well as acquisitions.
Currently, Vocus has a Zacks #3 Rank, which translates into a
short-term Hold recommendation.
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