Wednesday, April 25, 2012

Ancestry.com Inc. Reports Q1 2012 Financial Results

Ancestry.com Subscriber Growth of 16% Year-Over-Year
Q1 Total Revenue $108.5 Million, Up 19% Year-Over-Year
Announces New $100 Million Share Repurchase Authorization

PROVO, Utah, April 25, 2012 (GLOBE NEWSWIRE) -- Ancestry.com Inc. (Nasdaq:ACOM), the world's largest online family history resource, today reported financial results for the first quarter ended March 31, 2012.

"The first quarter marked a strong start to the year. Our key financial metrics, including revenue, adjusted EBITDA and subscribers, all came in above our expectations," said Tim Sullivan, Chief Executive Officer of Ancestry.com. "The April release of the 1940 US census records appears to have driven tremendous interest in family history. We began to benefit during the first quarter with our successful 1930 US census promotion, and we continue to see strong website traffic, underscoring our conviction in the mass market appeal of family history. As 2012 unfolds, we are moving forward on a number of exciting product initiatives, including improved features and tools like our new image viewer and hinting capabilities, and the build-out of our DNA offering."

In addition to the first quarter results announcement, the Company reported that its board of directors has approved a new $100 million common stock repurchase authorization. Also, in a separate press release issued today, Ancestry.com announced it has entered into a definitive agreement to acquire Archives.com, a leading family history website, for approximately $100 million in cash plus assumed liabilities, subject to customary closing conditions including HSR clearance.

Ancestry.com Web Sites Highlights

  • Subscribers totaled 1,870,000 as of March 31, 2012, a 16% increase over the first quarter of 2011 and a 10% increase from the end of the fourth quarter of 2011.
  • Gross subscriber additions were 390,000 in the first quarter of 2012, compared to 425,000 in the first quarter of 2011 and 220,000 in the fourth quarter of 2012.
  • Monthly churn1 was 3.6% in the first quarter of 2012, compared to 3.7% in the first quarter of 2011 and 3.8% in the fourth quarter of 2011.
  • Subscriber acquisition cost2 in the first quarter of 2012 was $88.11, compared to $69.56 in the first quarter of 2011 and $107.88 in the fourth quarter of 2011.
  • Average monthly revenue per subscriber3 in the first quarter of 2012 was $18.49, compared to $18.05 in the first quarter of 2011 and $18.38 in the fourth quarter of 2011.
  • First Quarter 2012 Financial Highlights
  • Total revenue for the first quarter of 2012 was $108.5 million, an increase of 19% over $91.0 million in the first quarter of 2011, driven by growth in the Company's core Ancestry.com Web sites revenues of 22%.
  • Operating income for the first quarter of 2012 was $20.1 million, compared to $14.2 million in the first quarter of 2011.
  • Adjusted EBITDA4 for the first quarter of 2012 was $31.7 million, compared to $25.6 million in the first quarter of 2011. Adjusted EBITDA margin for the first quarter of 2012 was 29.2%, compared to 28.1% in the first quarter of 2011.
  • Net income was $13.5 million, or $0.30 per fully diluted share, for the first quarter of 2012 compared to $9.0 million, or $0.18 per fully diluted share, in the first quarter of 2011.
  • Free cash flow5 totaled $14.7 million for the first quarter of 2012 compared to $18.7 million for the first quarter of 2011.
  • Cash and cash equivalents totaled $48.0 million as of March 31, 2012.
  • Recent Business Highlights
  • The third season of the Who Do You Think You Are? television series premiered on February 3, 2012.
  • The Company ended the quarter with more than 9 billion records; new collections included:
    -- Almost 9 million Massachusetts birth, marriage and death records
    -- Over 7 million records from the Historical Society of Pennsylvania Partnership
    -- 1911 England census indexes
    -- Approximately 139 million records from the London Electoral Registers that detail the names and addresses of registered voters
    -- Nearly 2.6 million Australian convict records from the New South Wales Convict Indents, 1788-1842 and New South Wales Colonial Secretary's Papers, 1788-1856
  • The Company launched a new interactive image viewer that includes "gridline technology," which highlights rows, columns and cells to feature specific ancestors on a record page, provides narrative pop up tips to tell more of the record's story, plus new dynamic viewing controls.
  • The Company upgraded the Ancestry.com Web sites "hinting" capability, which now enables more and better real-time hints, and created an "all-hints" page on the website where users can see and interact with all of their hints in one place.
  • The Company upgraded and made refinements to the Facebook app, including the ability to invite others to the Facebook app, see which of your Facebook friends are using the app, "like" the app and more.
  • The Company introduced upgraded capabilities for the iPhone/iPad and Android mobile apps.

Share Repurchase Program

Ancestry.com reported that its board of directors has authorized the repurchase of up to $100 million of its outstanding common stock. Shares may be repurchased from time to time through March 31, 2013 in the open market or in privately negotiated transactions. The Company expects to fund any repurchases using cash on hand or draws on a credit facility. The amount and timing of specific repurchases, if any, will depend on market conditions, stock price, and other factors. As of March 31, 2012, Ancestry.com had 42.6 million shares of common stock outstanding.

Business Outlook

The Company's financial and operating expectations for the second quarter and full year 2012 are as follows:

Second Quarter 2012

  • Revenue in the range of $115 to $117 million
  • Adjusted EBITDA excluding DNA investment6 of $43 to $45 million
  • DNA investment of $2 to $3 million
  • Adjusted EBITDA in the range of $40.5 to $42.5 million
  • Ending subscribers in the range of 1,965,000 to 1,980,000

Full Year 2012

  • Revenue in the range of $460 to $470 million
  • Adjusted EBITDA excluding DNA investment6 of $167.5 to $177.5 million
  • DNA investment of $10 to $15 million
  • Adjusted EBITDA in the range of $155 to $165 million
  • Ending subscribers of approximately 1,965,000 to 1,985,000

Conference Call & Webcast

Ancestry.com will host a conference call with analysts and investors today at 3:00 p.m. MT (5:00 p.m. ET). An accompanying slide presentation and a live webcast of the conference call will be available at the investor relations section of the Ancestry.com Web site, http://ir.ancestry.com/. Participants can also access the conference call by dialing 719-325-2212 approximately ten minutes prior to the start time.
A replay of the call will be available approximately two hours after the call has ended and will be available through Wednesday, May 4, 2012. To access the replay, dial 719-457-0820 and enter the replay passcode 9248042. The webcast replay will also be available for 12 months on the investor relations section of the Ancestry.com Web site, http://ir.ancestry.com/, under Events and Presentations.

Use of Non-GAAP Measures

The Company believes that adjusted EBITDA and free cash flow are useful measures of operating performance because they exclude items that the Company does not consider indicative of its core performance. In the case of adjusted EBITDA, net income is adjusted for such expenses as interest, income taxes, stock-based compensation and certain non-cash and non-recurring items. Free cash flow subtracts from adjusted EBITDA the capitalization of content databases, purchases of property and equipment and cash paid for income taxes and interest. However, these non-GAAP measures should be considered in addition to, not as a substitute for or superior to, net income and net cash provided by operating activities, or other financial measures prepared in accordance with GAAP. A reconciliation to the GAAP equivalents of these non-GAAP measures is contained in tabular form in the attached unaudited summary financial statements.

The Company uses adjusted EBITDA and free cash flow as measures of operating performance; for planning purposes, including the preparation of the annual operating budget; to allocate resources to enhance the financial performance of its business; to evaluate the effectiveness of its business strategies; to provide consistency and comparability with past financial performance; to facilitate a comparison of its results with those of other companies; and in communications with its board of directors concerning its financial performance. The Company also uses adjusted EBITDA and have used free cash flow as factors when determining the incentive compensation pool.

About Ancestry.com

Ancestry.com Inc. (Nasdaq:ACOM) is the world's largest online family history resource, with over 1.8 million paying subscribers. More than 9 billion records have been added to the site in the past 15 years. Ancestry users have created more than 34 million family trees containing approximately 4 billion profiles. In addition to its flagship site, Ancestry.com offers several localized Web sites designed to empower people to discover, preserve and share their family history.