TechTarget Reports First and Second Quarter 2009 Financial Results

NEEDHAM, Mass.--(Business Wire)--
TechTarget, Inc. (NASDAQ: TTGT) today announced financial results for the first
quarter ended March 31, 2009 and the second quarter ended June 30, 2009.

"We are pleased that the restatement project is now behind us. It is important
to point out that the restatement involved a change only in the timing of our
recognizing revenue. The validity of our revenue was never questioned, our total
revenue did not change for any specific customer contract and the aggregate
revenue shifted between the annual periods reviewed was approximately 1%.
Turning to the company`s performance, the market seems to have stabilized and we
are encouraged by our sequential revenue growth in Q2 and our strong cash flow"
said Greg Strakosch, Chairman and CEO of TechTarget. "Our primary focus
continues to be to take advantage of the downturn by investing and growing
market share, while maintaining healthy profitability."

Total revenues for the first quarter are as follows:

Three Months Ended March 31,
(In $000's, unaudited) 2009 % of 2008 % of %
Revenues Revenues Change
2009 vs.
2008
Revenues:
Online $ 16,282 88 % $ 18,210 78 % (11 )%
Events 2,190 12 % 3,985 17 % (45 )%
Print - - 1,068 5 % (100 )%
Total revenues 18,472 100 % 23,263 100 % (21 )%

Adjusted EBITDA (earnings before interest, taxes, depreciation, and
amortization, as further adjusted for stock-based compensation) for the first
quarter was $1.6 million compared to $3.0 million for the comparable prior year
quarter. The first quarter of 2009 includes professional fees of $191,000
incurred in connection with the company`s activities related to the restatement
of prior periods.

Total revenues for the second quarter are as follows:

Three Months Ended June 30,
(In $000's, unaudited) 2009 % of 2008 % of %
Revenues Revenues Change
2009 vs.
2008
Revenues:
Online $ 17,801 82 % $ 19,071 69 % (7 )%
Events 3,936 18 % 7,262 26 % (46 )%
Print - - 1,282 5 % (100 )%
Total revenues 21,737 100 % 27,615 100 % (21 )%

Adjusted EBITDA for the second quarter was $3.9 million compared to $5.8 million
for the comparable prior year quarter. The second quarter of 2009 includes
professional fees of $417,000 incurred in connection with the company`s
activities related to the restatement of prior periods.

Total Non-GAAP gross profit margin (gross profit margin less stock-based
compensation) increased for both the first and second quarters to 69% and 72%
respectively compared to 68% and 68%, respectively for the comparable prior year
quarters. Online Non-GAAP gross profit margin was 71% for the first quarter of
2009 compared to 72% for the comparable prior year quarter. Online Non-GAAP
gross profit margin for Q2 2009 increased to 74% compared to 71% for the
comparable prior year quarter.

Net loss for the first quarter of 2009 was $2.3 million compared to a net loss
of $436,000 for the comparable prior year quarter. Adjusted net income (net
income adjusted for amortization and stock-based compensation, as further
adjusted for the related income tax impact) for the first quarter was $594,000
compared to $1.6 million for the comparable prior year quarter. Net loss per
basic share for the first quarter was ($0.06) compared to ($0.01) for the
comparable prior year quarter. Adjusted net income per share (adjusted net
income divided by adjusted weighted average diluted shares outstanding) for the
first quarter of 2009 was $0.01 compared to $0.04 for the comparable prior year
quarter. Net loss for the second quarter of 2009 was $543,000 compared to net
income of $1.1 million for the comparable prior year quarter. Adjusted net
income for the second quarter was $2.2 million compared to $3.3 million for the
comparable prior year quarter. Net loss per basic share for the second quarter
was ($0.01) compared to net income per basic share of $0.03 for the comparable
prior year quarter. Adjusted net income per share for the second quarter of 2009
was $0.05 compared to $0.07 for the comparable prior year quarter.

As of June 30, 2009, TechTarget had $75.7 million of cash, cash equivalents and
short and long-term investments. Outstanding bank debt was $1.5 million as of
June 30, 2009. Our net cash, as defined as cash, cash equivalents and
investments less bank debt increased by $7.6 million compared to December 31,
2008.

Recent Company Highlights

• Continued the strategy of aggressive new site launches to respond to areas of opportunity with five new sites launches in 2009: SearchCloudComputing.com; SearchVirtualDesktop.com; SearchCompliance.com; SearchEnterpriseWAN.com; and SearchMid-MarketSecurity.com.
• Launched operations in India with government approval of its India branch office, the hire of veteran IT editor Sandeep Ajgaonkar, formerly of IndiaExpress and CNET India, as General Manager, and the announcement of plans to launch three India-focused websites by the end of 2009: SearchCIO.in, SearchDataCenter.in, and SearchSecurity.in.
• Published a new research report in partnership with Google, examining the buying process and research of IT buyers across the United Kingdom. The research was released to customers at an event at Google's UK Headquarters in London.
• Recognized by The Boston Business Journal as one of the top 20 "Best Places to Work" in the large company category. This is the 4th time the Company has been named to this list.
• Named to the BtoB magazine "Media Power 50" list of the 50 most powerful business-to-business advertising venues for the ninth consecutive year - ranked #6 overall. Others in the top 10 included the Wall Street Journal, Google, the National Football League, and CNBC`s "Power Lunch."

Financial Guidance

In the third quarter of 2009, the Company expects total revenues to be within
the range of $21.7 million to $22.7 million and adjusted EBITDA to be within the
range of $4.0 million to $4.8 million.

Compliance Status

TechTarget today filed its Forms 10-Q for the quarters ending March 31 and June
30, 2009 and the Company believes that it is now compliant with all of its
public filing requirements. With the filing of our Form 10-K and related amended
quarterly filings in mid-July, we have completed our revenue restatement
activities and do not expect to incur any additional restatement expenses
related to those activities.

Conference Call and Webcast

TechTarget will discuss these financial results in a conference call at 5:00 pm
(Eastern Time) today (August 17, 2009). Supplemental financial information and
prepared remarks for the conference call will be posted to the investor
relations section of our website simultaneously with this press release.

NOTE: The prepared remarks will not be read on the conference call. The
conference call will include only brief remarks followed by questions and
answers.

The public is invited to listen to a live webcast of TechTarget`s conference
call, which can be accessed on the Investor Relations section of our website at
http://investor.techtarget.com/. The conference call can also be heard via
telephone by dialing (888) 679-8035 (US callers) or 617-213-4848 (International
callers) ten minutes prior to the call and referencing participant pass code
80683943 for both domestic and international callers. Participants may
pre-register for the call at:
https://www.theconferencingservice.com/prereg/key.process?key=PQE4GJH4G.
Pre-registrants will be issued a pin number to use when dialing into the live
call which will provide quick access to the conference by bypassing the operator
upon connection. (Due to the length of the above URL, it may be necessary to
copy and paste it into your Internet browser's URL address field. You may also
need to remove an extra space in the URL if one exists.)

For those investors unable to participate in the live conference call, a replay
of the conference call will be available via telephone beginning August 17, 2009
at 7:30 p.m. ET through August 31, 2009 at 11:59pm (ET). To listen to the
replay, dial 888-286-8010 and use the pass code 63031470. International callers
should dial 617-801-6888 and also use the pass code 63031470 to listen to the
replay. The webcast replay will also be available for replay on
http://investor.techtarget.com/ during the same period.

Non-GAAP Financial Measures

This press release and the accompanying tables include a discussion of adjusted
EBITDA, Non-GAAP gross profit, adjusted net income and adjusted net income per
share, all of which are non-GAAP financial measures which are provided as a
complement to results provided in accordance with accounting principles
generally accepted in the United States of America ("GAAP"). The term "adjusted
EBITDA" refers to a financial measure that we define as earnings before net
interest, income taxes, depreciation, and amortization, as further adjusted for
stock-based compensation. The term "Non-GAAP gross profit " refers to a
financial measure which we define as gross profit less stock-based compensation.
The term "Non-GAAP Gross Profit Margin" refers to a financial measure which we
define as gross profit less stock-based compensation as a percentage of total
revenues. The term "adjusted net income" refers to a financial measure which we
define as net income adjusted for amortization and stock-based compensation, as
further adjusted for the related income tax impact for the specific adjustments.
The term "adjusted net income per share" refers to a financial measure which we
define as adjusted net income divided by adjusted weighted average diluted
shares outstanding. These Non-GAAP measures should be considered in addition to
results prepared in accordance with GAAP, but should not be considered a
substitute for, or superior to, GAAP results. In addition, our definition of
adjusted EBITDA, Non-GAAP gross profit, adjusted net income and adjusted net
income per share may not be comparable to the definitions as reported by other
companies. We believe adjusted EBITDA, Non-GAAP gross profit, adjusted net
income and adjusted net income per share are relevant and useful information
because it provides us and investors with additional measurements to compare the
Company`s operating performance. These measures are part of our internal
management reporting and planning process and are primary measures used by our
management to evaluate the operating performance of our business, as well as
potential acquisitions. The components of adjusted EBITDA include the key
revenue and expense items for which our operating managers are responsible and
upon which we evaluate their performance. In the case of senior management,
adjusted EBITDA is used as the principal financial metric in their annual
incentive compensation program. Adjusted EBITDA is also used for planning
purposes and in presentations to our board of directors. Non-GAAP gross profit
is useful to us and investors because it presents an additional measurement of
our financial performance by excluding the impact of certain non-cash expenses
not directly tied to the core operations of our business. Adjusted net income is
useful to us and investors because it presents an additional measurement of our
financial performance, taking into account depreciation, which we believe is an
ongoing cost of doing business, but excluding the impact of certain non-cash
expenses and items not directly tied to the core operations of our business.
Furthermore, we intend to provide these non-GAAP financial measures as part of
our future earnings discussions and, therefore, the inclusion of these non-GAAP
financial measures will provide consistency in our financial reporting. A
reconciliation of these non-GAAP measures to GAAP is provided in the
accompanying tables.

Forward Looking Statements

Certain matters included in this press release may be considered to be
"forward-looking statements" within the meaning of the Securities Act of 1933
and the Securities Exchange Act of 1934, as amended by the Private Securities
Litigation Reform Act of 1995. Those statements include statements regarding the
intent, belief or current expectations of the company and members of our
management team. All statements contained in this press release, other than
statements of historical fact, are forward-looking statements, including those
regarding: guidance on our future financial results and other projections or
measures of our future performance; our expectations concerning market
opportunities and our ability to capitalize on them; and the amount and timing
of the benefits expected from acquisitions, from new products or services and
from other potential sources of additional revenue. Investors and prospective
investors are cautioned that any such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties, and that
actual results may differ materially from those contemplated by such
forward-looking statements. These statements speak only as of the date of this
press release and are based on our current plans and expectations, and they
involve risks and uncertainties that could cause actual future events or results
to be different than those described in or implied by such forward-looking
statements. These risks and uncertainties include, but are not limited to, those
relating to: market acceptance of our products and services; relationships with
customers, strategic partners and our employees; difficulties in integrating
acquired businesses; and changes in economic or regulatory conditions or other
trends affecting the Internet, Internet advertising and information technology
industries. These and other important risk factors are discussed or referenced
in our Annual Report on Form 10-K/A filed with the Securities and Exchange
Commission, under the heading "Risk Factors" and elsewhere, and any subsequent
periodic or current reports filed by us with the SEC. Except as required by
applicable law or regulation, we do not undertake any obligation to update our
forward-looking statements to reflect future events or circumstances.

About TechTarget

TechTarget, a leading online technology media company, gives technology
providers ROI-focused marketing programs to generate leads, shorten sales
cycles, and grow revenues. With its network of more than 60 technology-specific
websites and more than 7.5 million registered members, TechTarget is a primary
Web destination for technology professionals researching products to purchase.
The company is also a leading provider of independent, peer and vendor content,
a leading distributor of white papers, and a leading producer of webcasts,
podcasts, videos and virtual trade shows for the technology market. Its websites
are complemented by numerous invitation-only events. TechTarget provides proven
lead generation and branding programs to top advertisers including Cisco, Dell,
EMC, HP, IBM, Intel, Microsoft, SAP and Symantec.

(C) 2009 TechTarget, Inc. All rights reserved. TechTarget and the TechTarget
logo are registered trademarks, and SearchCloudComputing.com;
SearchVirtualDesktop.com; SearchCompliance.com; SearchEnterpriseWAN.com;
SearchMid-MarketSecurity.com and SearchCIO.in, SearchDataCenter.in, and
SearchSecurity.in are trademarks, of TechTarget. All other trademarks are the
property of their respective owners.

TECHTARGET, INC.
Consolidated Balance Sheets
(in $000's)

March 31, 2009 December 31,
2008
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 22,948 $ 24,130
Short-term investments 41,114 42,863
Accounts receivable, net of allowance for doubtful accounts 13,684 17,622
Prepaid expenses and other current assets 7,072 6,251
Deferred tax assets 2,836 2,959
Total current assets 87,654 93,825

Property and equipment, net 3,710 3,904
Long-term investments 6,619 2,575
Goodwill 88,958 88,958
Intangible assets, net of accumulated amortization 16,027 17,242
Deferred tax assets 3,545 3,369
Other assets 132 139

Total assets $ 206,645 $ 210,012

Liabilities and Stockholders' Equity
Current liabilities:
Current portion of bank term loan payable $ 2,250 $ 3,000
Accounts payable 2,232 3,404
Accrued expenses and other current liabilities 2,260 2,908
Accrued compensation expenses 788 702
Deferred revenue 7,910 8,749
Total current liabilities 15,440 18,763

Long-term liabilities:
Other liabilities 244 312
Total liabilities 15,684 19,075

Commitments - -

Stockholders' equity:
Preferred stock - -
Common stock 42 42
Additional paid-in capital 223,746 221,597
Warrants 2 2
Accumulated other comprehensive loss 106 (77 )
Accumulated deficit (32,935 ) (30,627 )
Total stockholders' equity 190,961 190,937

Total liabilities and stockholders' equity $ 206,645 $ 210,012

TECHTARGET, INC.
Consolidated Balance Sheets
(in $000's)

June 30, 2009 December 31,
2008
Assets (Unaudited)
Current assets:
Cash and cash equivalents $ 33,408 $ 24,130
Short-term investments 36,075 42,863
Accounts receivable, net of allowance for doubtful accounts 14,116 17,622
Prepaid expenses and other current assets 5,319 6,251
Deferred tax assets 2,876 2,959
Total current assets 91,794 93,825

Property and equipment, net 3,449 3,904
Long-term investments 6,209 2,575
Goodwill 88,958 88,958
Intangible assets, net of accumulated amortization 14,846 17,242
Deferred tax assets 3,518 3,369
Other assets 88 139

Total assets $ 208,862 $ 210,012

Liabilities and Stockholders' Equity
Current liabilities:
Current portion of bank term loan payable $ 1,500 $ 3,000
Accounts payable 3,153 3,404
Accrued expenses and other current liabilities 1,843 2,908
Accrued compensation expenses 790 702
Deferred revenue 8,432 8,749
Total current liabilities 15,718 18,763

Long-term liabilities:
Other liabilities 181 312
Total liabilities 15,899 19,075

Commitments - -

Stockholders' equity:
Preferred stock - -
Common stock 42 42
Additional paid-in capital 226,330 221,597
Warrants 2 2
Accumulated other comprehensive loss 67 (77 )
Accumulated deficit (33,478 ) (30,627 )
Total stockholders' equity 192,963 190,937

Total liabilities and stockholders' equity $ 208,862 $ 210,012

TECHTARGET, INC.
Consolidated Statements of Operations
(in $000's, except share and per share amounts)

Three Months Ended March 31,
2009 2008
(Unaudited)
Revenues:
Online $ 16,282 $ 18,210
Events 2,190 3,985
Print - 1,068
Total revenues 18,472 23,263

Cost of revenues:
Online (1) 4,880 5,169
Events (1) 1,081 1,827
Print - 546
Total cost of revenues 5,961 7,542

Gross profit 12,511 15,721

Operating expenses:
Selling and marketing (1) 7,516 8,444
Product development (1) 2,081 2,762
General and administrative (1) 3,919 3,795
Depreciation 536 724
Amortization of intangible assets 1,215 1,480
Total operating expenses 15,267 17,205

Operating loss (2,756 ) (1,484 )

Interest income (expense), net (110 ) 418

Loss before benefit from income taxes (2,866 ) (1,066 )

Benefit from income taxes (558 ) (630 )

Net loss $ (2,308 ) $ (436 )

Net loss per common share:
Basic and diluted $ (0.06 ) $ (0.01 )

Weighted average common shares outstanding:
Basic and diluted 41,754,131 41,158,418

(1) Amounts include stock-based compensation expense as follows:
Cost of online revenue $ 234 $ 98
Cost of events revenue 17 22
Selling and marketing 1,328 1,392
Product development 131 140
General and administrative 893 601

TECHTARGET, INC.
Consolidated Statements of Operations
(in $000's, except share and per share
amounts)

Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
(Unaudited)
Revenues:
Online $ 17,801 $ 19,071 $ 34,083 $ 37,281
Events 3,936 7,262 6,126 11,247
Print - 1,282 - 2,350
Total revenues 21,737 27,615 40,209 50,878

Cost of revenues:
Online (1) 4,776 5,481 9,656 10,650
Events (1) 1,455 2,923 2,536 4,750
Print - 632 - 1,178
Total cost of revenues 6,231 9,036 12,192 16,578

Gross profit 15,506 18,579 28,017 34,300

Operating expenses:
Selling and marketing (1) 8,023 8,885 15,539 17,329
Product development (1) 2,194 2,890 4,275 5,652
General and administrative (1) 4,064 3,459 7,983 7,254
Depreciation 498 581 1,034 1,305
Amortization of intangible assets 1,181 1,332 2,396 2,812
Total operating expenses 15,960 17,147 31,227 34,352

Operating income (loss) (454 ) 1,432 (3,210 ) (52 )

Interest income (expense), net 174 268 64 686

Income (loss) before provision for (benefit from) income taxes (280 ) 1,700 (3,146 ) 634

Provision for (benefit from) income taxes 263 648 (295 ) 18

Net income (loss) $ (543 ) $ 1,052 $ (2,851 ) $ 616

Net income (loss) per common share:
Basic $ (0.01 ) $ 0.03 $ (0.07 ) $ 0.01
Diluted $ (0.01 ) $ 0.02 $ (0.07 ) $ 0.01

Weighted average common shares outstanding:
Basic 41,759,506 41,375,997 41,756,818 41,267,207
Diluted 41,759,506 43,598,364 41,756,818 43,531,804

(1) Amounts include stock-based compensation expense as follows:
Cost of online revenue $ 78 $ 43 $ 312 $ 141
Cost of events revenue 36 25 53 47
Selling and marketing 1,478 1,347 2,806 2,739
Product development 132 140 263 280
General and administrative 917 858 1,810 1,459

TECHTARGET, INC.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
(in $000's)

Three Months Ended March 31,
2009 2008
(Unaudited)

Net loss $ (2,308 ) $ (436 )
Interest income (expense), net (110 ) 418
Benefit from income taxes (558 ) (630 )
Depreciation 536 724
Amortization of intangible assets 1,215 1,480
EBITDA (1,005 ) 720
Stock-based compensation expense 2,603 2,253
Adjusted EBITDA $ 1,598 $ 2,973

Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
(Unaudited)

Net income (loss) $ (543 ) $ 1,052 $ (2,851 ) $ 616
Interest income, net 174 268 64 686
Provision for (benefit from) income taxes 263 648 (295 ) 18
Depreciation 498 581 1,034 1,305
Amortization of intangible assets 1,181 1,332 2,396 2,812
EBITDA 1,225 3,345 220 4,065
Stock-based compensation expense 2,641 2,413 5,244 4,666
Adjusted EBITDA $ 3,866 $ 5,758 $ 5,464 $ 8,731

TECHTARGET, INC.
Reconciliation of Net Income (Loss) to Adjusted Net Income and
Net Income (Loss) per Diluted Share to Adjusted Net Income per Share
(in $000's, except share and per share amounts)

Three Months Ended March 31,
2009 2008
(Unaudited)

Net loss $ (2,308 ) $ (436 )
Amortization of intangible assets 1,215 1,480
Stock-based compensation expense 2,603 2,253
Impact of income taxes 916 1,662
Adjusted net income $ 594 $ 1,635

Net loss per diluted share $ (0.06 ) $ (0.01 )
Weighted average diluted shares outstanding 41,754,131 41,158,418

Adjusted net income per share $ 0.01 $ 0.04
Adjusted weighted average diluted shares outstanding 42,522,199 43,465,245
Options, warrants and restricted stock, treasury method included in adjusted weighted average diluted shares above 768,068 2,306,827
Weighted average diluted shares outstanding 41,754,131 41,158,418

Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
(Unaudited)

Net income (loss) $ (543 ) $ 1,052 $ (2,851 ) $ 616
Amortization of intangible assets 1,181 1,332 2,396 2,812
Stock-based compensation expense 2,641 2,413 5,244 4,666
Impact of income taxes 1,096 1,528 2,019 3,223
Adjusted net income $ 2,183 $ 3,269 $ 2,770 $ 4,871

Net income (loss) per diluted share $ (0.01 ) $ 0.02 $ (0.07 ) $ 0.01
Weighted average diluted shares outstanding 41,759,506 43,598,364 41,756,818 43,531,804

Adjusted net income per share $ 0.05 $ 0.07 $ 0.06 $ 0.11
Adjusted weighted average diluted shares outstanding 42,763,961 43,598,364 42,643,080 43,531,804
Options, warrants and restricted stock, treasury method included in adjusted weighted average diluted shares above 1,004,455 - 886,262 -
Weighted average diluted shares outstanding 41,759,506 43,598,364 41,756,818 43,531,804

TECHTARGET, INC.
Reconciliation of Total Gross Profit Margin to
Total Non-GAAP Gross Profit Margin
(in $000's)

Three Months Ended March 31,
2009 2008
(Unaudited)

Total gross profit margin $ 12,511 68 % $ 15,721 68 %
Stock-based compensation expense 251 120
Total non-GAAP gross profit margin $ 12,762 69 % $ 15,841 68 %

Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
(Unaudited)

Total gross profit margin $ 15,506 71 % $ 18,579 67 % $ 28,017 70 % $ 34,300 67 %
Stock-based compensation expense 114 68 365 188
Total non-GAAP gross profit margin $ 15,620 72 % $ 18,647 68 % $ 28,382 71 % $ 34,488 68 %

TECHTARGET, INC.
Reconciliation of Online Gross Profit Margin to
Online Non-GAAP Gross Profit Margin
(in $000's)

Three Months Ended March 31,
2009 2008
(Unaudited)

Online gross profit margin $ 11,402 70 % $ 13,041 72 %
Stock-based compensation expense 234 98
Online non-GAAP gross profit margin $ 11,636 71 % $ 13,139 72 %

Three Months Ended June 30, Six Months Ended June 30,
2009 2008 2009 2008
(Unaudited)

Online gross profit margin $ 13,025 73 % $ 13,590 71 % $ 24,427 72 % $ 26,631 71 %
Stock-based compensation expense 78 43 312 141
Online non-GAAP gross profit margin $ 13,103 74 % $ 13,633 71 % $ 24,739 73 % $ 26,772 72 %

TECHTARGET, INC.
Financial Guidance for the Three Months Ended September 30, 2009
(in $000's)

For the Three Months Ended
September 30, 2009
Range

Revenues $ 21,700 $ 22,700

Adjusted EBITDA $ 4,000 $ 4,800
Depreciation, amortization and stock-based compensation 4,520 4,520
Interest income, net 190 190
Provision for income taxes 370 700
Net income $ (700 ) $ (230 )

Investor Inquiries:
TechTarget
Eric Sockol, 781-657-1515
esockol@techtarget.com
or
Media Inquiries:
TechTarget
Marilou Barsam, 781-657-1525
mbarsam@techtarget.com

Copyright Business Wire 2009

http://www.businesswire.com/news/home/20090817006037/en