interCLICK Announces Record Results and Accelerated Growth in Q3

interCLICK, Inc. (OTCBB: INRK), the leading ad network in data and inventory transparency, announced today its results for the quarter ended September 30, 2009. Earlier today, the Company announced that it has been granted approval to list its common stock on The NASDAQ Capital Market. Effective with the commencement of trading on Thursday, November 5, 2009, interCLICK’s common stock will trade under the NASDAQ ticker symbol “ICLK.”

Summary Results
$ in millions (except per share amounts)
		Q3 2009				Q3 2008				Growth
Revenue		$	14.4			$	5.8			150%
Gross profit		$	7.3			$	1.7			315%
Gross margin			50.4	%			30.3	%
EBITDA		$	1.4			$	(0.8	)		nm
Free Cash Flow		$	1.4			$	(1.0	)		nm
Operating income (loss)		$	0.7			$	(1.4	)		nm
Net earnings (loss)		$	0.3			$	(3.9	)		nm
EPS		$	0.01			$	(0.20	)		nm
See reconciliation of GAAP to non-GAAP measures on attached financial tables.

Revenue was $14.4 million, up 150% year-over-year and 35% sequentially, an acceleration from 26% sequential growth in the prior period. Growth was driven primarily by increased demand from existing advertisers as well as strong penetration into new key accounts. The Company previously forecasted that revenue would exceed $12.5 million.

Gross profit margin was 50.4%, 20.1 percentage points higher than the year-ago-period and 5.6 percentage points higher sequentially. Gross margin expansion continued to be driven by supply chain management improvements and efficiencies generated through the Company’s advanced proprietary technology platform.

EBITDA, a non-GAAP measure, was $1.4 million, compared to an EBITDA loss of $(0.8) million in the year-ago period and up 637% sequentially compared to $0.2 million. Free Cash Flow was $1.4 million, compared to negative Free Cash Flow of $(1.0) million in the year-earlier period and up 924% sequentially compared to $0.1 million. Growth was driven by improved operating efficiencies leading to a reduction in operating expenses as a percentage of revenue versus the prior year period.

Operating income was $0.7 million, net income was $0.3 million, and EPS was $0.01 per share, compared to losses in the quarters ended September 30, 2008 and June 30, 2009.

“The third quarter was another outstanding quarter for interCLICK,” said Michael Mathews, interCLICK’s CEO. “Our dedication to effective supply chain management continues to drive client satisfaction and differentiate us in the marketplace. We look forward to ending the year strong and heading into 2010 with significant momentum.”

For the nine months ended September 30, 2009, interCLICK had revenue of $33.5 million, an increase of 139% compared to revenue of $14.0 million in the year-earlier period. The Company generated gross profit of $16.0 million, an increase of 336% compared to $3.7 million in the nine months ended September 30, 2008. interCLICK recorded a net loss of $(0.7) million, or $(0.04) per share, compared to a net loss of $(11.4) million, or $(0.62) per share in the same nine months in 2008.

The Company ended the third quarter with cash and cash equivalents of $1.9 million. During the third quarter, the Company increased its credit facility with Crestmark Commercial Capital Lending LLC from $5.5 million to $7.0 million. As part of the amendment to the credit facility, Crestmark also agreed to reduce the monthly servicing fee the Company was previously paying from 0.575% to 0.375%, which translates to a 300 basis point reduction in the Company’s effective annualized cost of capital.

Business Outlook

interCLICK expects fourth quarter revenue to exceed $18 million, which would represent year-over-year growth of 110%, and EBITDA to exceed $1.5 million. The Company raised its full year revenue forecast to more than $51 million, an increase of at least 125% compared to 2008, and full year EBITDA of at least $4 million. Previously, the Company had forecasted that full year revenue would exceed $44 million.

The Company announced preliminary guidance for 2010, including revenue growth of at least 55% to $80 million, and EBITDA of at least $9 million.

Conference Call

The Company will host a conference call to discuss its third quarter financial results and business outlook on Wednesday, November 4, 2009, at 4:30 p.m. (EST). The conference call can be accessed by dialing toll-free (888) 819-8033 (U.S.) or (913) 312-0709 (international). A live audiocast of the conference call can be accessed from the Company’s website at http://www.interclick.com/MarketWatchV2.aspx. A replay of the audiocast will be available through December 3, 2009.

Reclassifications

Certain amounts in the accompanying financial tables have been reclassified to conform to the third quarter 2009 presentation.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to period comparison. Company management believes that the non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of the performance of our core cash operations. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. The Company believes these non-GAAP financial measures are useful to investors because they allow for greater transparency with respect to key metrics used by management.

EBITDA. As is common in the industry, the Company uses EBITDA as a measure of performance to demonstrate operating income exclusive of interest, taxes, depreciation, and amortization including stock-based compensation. The Company, in its daily management of its business affairs and analysis of its monthly, quarterly and annual performance, makes certain of its decisions based on EBITDA and Free Cash Flow. Since an outside investor may base its evaluation of the Company's performance on the Company's net income or loss, there is a limitation to the EBITDA measurement. EBITDA is not, and should not be considered, an alternative to net income or loss, income or loss from operations or any other measure for determining operating performance of liquidity, as determined under GAAP.

Free Cash Flow. Free Cash Flow measures EBITDA less capital expenditures. Management believes that Free Cash Flow provides meaningful information about the Company’s liquidity and future cash availability to fund its operations. A limitation of using Free Cash Flow versus the GAAP measure of net cash provided by operating activities is that the Free Cash Flow does not represent the total increase or decreases in the cash balance from operations for the period.

To comply with Regulation G of the Securities and Exchange Commission, interCLICK, Inc. attaches to this press release and will post to the Company's website ( www.interclick.com) any reconciliations of certain non-GAAP measures to the nearest comparable GAAP measures that are presented in this press release.

About interCLICK

interCLICK, Inc. operates the interCLICK Network, an online advertising platform that combines advanced behavioral targeting with complete data and inventory transparency, allowing advertisers to identify and track their desired audience on an unprecedented level. interCLICK offers advanced proprietary demographic, behavioral, contextual, geographic and retargeting technologies across a network of name brand publishers to ensure the right message is delivered to a precise audience in a brand friendly environment. For more information about the interCLICK Network, visit http://www.interclick.com.

Safe Harbor

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (the “Act”) including our expectations regarding revenue growth and EBITDA for the fourth quarter and full year 2009, and preliminary guidance for 2010 including revenue growth and EBITDA. Additionally, words such as “seek,” “intend,” “believe,” “plan,” “estimate,” “expect,” “anticipate” and other similar expressions are forward-looking statements within the meaning of the Act. Some or all of the events or results anticipated by these forward-looking statements may not occur. Factors that could cause or contribute to such differences include the impact of intense competition, the continuation or worsening of current economic conditions and the condition of the domestic and global credit and capital markets. Further information on interCLICK’s risk factors is contained in its filings with the Securities and Exchange Commission, including the final prospectus dated August 31, 2009. interCLICK does not undertake any duty nor does it intend to update the results of these forward-looking statements.

interCLICK, Inc.		For the Three				For the Three				For the Three				For the Three				For the Three				For the Three				For the Three
(formerly Customer Acquisition Network Holdings, Inc.)		Months Ended				Months Ended				Months Ended				Months Ended				Months Ended				Months Ended				Months Ended
Quarterly Consolidated Statements of Operations: 1Q08 to 3Q09		Sept. 30, 2009				June 30, 2009				March 31, 2009				Dec. 31, 2008				Sept. 30, 2008				June 30, 2008				March 31, 2008
Revenues		$	14,395,236			$	10,648,686			$	8,423,291			$	8,460,030			$	5,756,707			$	4,673,629			$	3,561,967
Cost of revenue			7,141,926				5,882,655				4,474,279				5,304,078				4,011,020				3,488,190				2,830,807
Gross profit			7,253,310				4,766,031				3,949,012				3,155,952				1,745,687				1,185,439				731,160
Operating expenses:
Sales and marketing			2,317,245				1,734,354				1,416,522				892,187				886,511				1,127,515				429,749
General and administrative			3,383,752				2,928,162				1,709,193				2,366,567				1,881,513				2,010,278				2,221,568
Technology support			830,626				765,674				552,803				336,836				294,559				246,769				298,252
Amortization of intangible assets			49,760				49,760				49,760				104,570				104,571				104,630				104,738
Total operating expenses			6,581,383				5,477,950				3,728,278				3,700,160				3,167,153				3,489,192				3,054,308
Operating income/(loss) from continuing operations			671,927				(711,919	)			220,734				(544,208	)			(1,421,466	)			(2,303,753	)			(2,323,148	)
Other income (expense):
Interest income			-				-				12				2,192				8,140				3,329				3,433
Loss on settlement of debt			-				-				-				-				-				(20,121	)			-
Loss on sale of available-for-sale securities			-				(36,349	)			-				-				(116,454	)			-				-
Loss on disposal of fixed assets			-				-				-				1,750				(15,385	)			-				-
Loss on change in warrant derivative liability			(124,211	)			(159,294	)			(72,767	)			-				-				-				-
Interest expense			(245,854	)			(126,681	)			(113,592	)			(103,413	)			(189,382	)			(534,887	)			(698,616	)
Total other income (expense)			(370,065	)			(322,324	)			(186,347	)			(99,471	)			(313,081	)			(551,679	)			(695,183	)
Income/(loss) from continuing operations before income taxes			301,862				(1,034,243	)			34,387				(643,679	)			(1,734,547	)			(2,855,432	)			(3,018,331	)
Income tax benefit			-				-				-				1,687,305				-				-				-
Equity in investee's loss, net of taxes			-				-				-				-				(404,103	)			(249,128	)			-
Income/(loss) from continuing operations			301,862				(1,034,243	)			34,387				1,043,626				(2,138,650	)			(3,104,560	)			(3,018,331	)
Discontinued operations:
Loss from discontinued operations, net of tax			-				-				-				752,292				(1,053,059	)			(218,187	)			(716,986	)
Loss on sale of discontinued operations, net of tax			-				-				(1,220	)			(2,448,147	)			(498,554	)			(624,981	)			-
Net loss from discontinued operations			-				-				(1,220	)			(1,695,855	)			(1,551,613	)			(843,168	)			(716,986	)
Net income/(loss)			301,862				(1,034,243	)			33,167				(652,229	)			(3,690,263	)			(3,947,728	)			(3,735,317	)
Other comprehensive loss:
Loss on sale of available-for-sale securities			-				-				-				-				(197,704	)			-				-
Net loss from discontinued operations			-				-				-				-				(197,704	)			-				-
Comprehensive income/(loss)		$	301,862			$	(1,034,243	)		$	33,167			$	(652,229	)		$	(3,887,967	)		$	(3,947,728	)		$	(3,735,317	)
Loss per share from continuing operations - basic and diluted		$	0.01			$	(0.05	)		$	-			$	0.06			$	(0.12	)		$	(0.17	)		$	(0.17	)
Loss per share from discontinued operations - basic and diluted		$	-			$	-			$	-			$	(0.09	)		$	(0.08	)		$	(0.04	)		$	(0.04	)
Net loss per share - basic and diluted		$	0.01			$	(0.05	)		$	-			$	(0.03	)		$	(0.20	)		$	(0.21	)		$	(0.21	)
Weighted average shares outstanding - basic			20,628,033				19,164,938				18,922,584				18,922,584				18,904,109				18,470,345				17,973,167
Weighted average shares outstanding - diluted			22,399,838				19,164,938				18,969,631				18,922,584				18,904,109				18,470,345				17,973,167
Reconciliation of non-GAAP results of operations measures to nearest comparable GAAP measures.
Operating income/(loss) from continuing operations			671,927				(711,919	)			220,734				(544,208	)			(1,421,466	)			(2,303,753	)			(2,323,148	)
Stock-based compensation			600,141				777,173				576,570				524,160				439,768				503,090				474,173
Amortization of intangible assets			49,760				49,760				49,760				104,570				104,571				104,630				104,738
Depreciation			77,917				74,978				72,386				72,817				66,448				49,476				56,747
EBITDA			1,399,745				189,992				919,450				157,339				(810,679	)			(1,646,556	)			(1,687,490	)
Capital expenditures			(12,968	)			(54,620	)			(19,263	)			(34,458	)			(151,398	)			(42,589	)			(128,561	)
Free Cash Flow			1,386,777				135,372				900,187				122,881				(962,077	)			(1,689,145	)			(1,816,051	)

interCLICK, Inc.
(formerly Customer Acquisition Network Holdings, Inc.)
Consolidated Balance Sheet: 1Q08 to 3Q09		Sept. 30, 2009				Jun. 30, 2009				Mar. 31, 2009				Dec. 31, 2008				Sep. 30, 2008				Jun. 30, 2008				Mar. 31, 2008
Assets
Current assets:
Cash and cash equivalents		$	1,929,094			$	2,784,986			$	191,002			$	183,871			$	611,189			$	448,024			$	1,142,369
Accounts receivable, gross			14,734,371				10,434,167				8,651,433				7,545,311				5,049,037				3,625,713				2,549,594
Allowance for doubtful accounts			(258,100	)			(185,032	)			(216,532	)			(425,000	)			(345,208	)			(201,248	)			(150,000	)
Accounts receivable, net of allowance			14,476,271				10,249,135				8,434,901				7,120,311				4,703,829				3,424,465				2,399,594
Note receivable			-				-				-				-				-				1,000,000				-
Due from factor			1,114,698				1,034,712				798,424				637,705				-				-				-
Prepaid expenses and other current assets			373,505				372,187				186,851				94,164				205,796				43,291				78,329
Total current assets			17,893,568				14,441,020				9,611,178				8,036,051				5,520,814				4,915,780				3,620,292
Property and equipment, net			458,483				523,432				543,790				596,913				633,523				570,799				583,845
Intangible assets, net			460,833				510,593				560,353				610,113				714,683				819,254				923,883
Goodwill			7,909,571				7,909,571				7,909,571				7,909,571				7,909,571				7,909,571				7,909,571
Investment in OPMG			728,572				728,572				1,650,000				1,650,000				1,694,000				3,500,872				-
Deferred deferred debt issue costs, gross			40,000				40,000				40,000				40,000				-				-				91,437
Accumulated amortization			(31,639	)			(28,250	)			(21,111	)			(6,667	)			-				-				(60,959	)
Deferred debt issue costs, net			8,361				11,750				18,889				33,333				-				-				30,478
Deferred acquisition costs			-				-				-				-				-				-				-
Other assets			192,179				191,664				191,664				191,664				211,943				105,602				66,937
Assets held for sale - discontinued operations			-				-				-				-				-				-				8,302,381
Total assets		$	27,651,567			$	24,316,602			$	20,485,445			$	19,027,645			$	16,684,534			$	17,821,878			$	21,437,387
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	7,508,531			$	6,372,241			$	5,123,171			$	5,288,807			$	3,937,095			$	2,711,468			$	2,434,127
Line of credit			5,559,011				5,160,291				3,992,119				3,188,425				-				-				-
Senior secured notes payable, net of debt discount			-				-				-				-				-				1,652,754				4,549,164
Note Payable, current portion			-				288,500				400,000				400,000				1,300,000				-				-
Settlement payable			-				-				-				248,780				1,090,230				-				-
Accrued expenses			1,688,013				603,501				599,915				310,685				610,390				1,602,154				1,137,981
Warrant derivative liability			267,789				143,578				492,781				-				-				-				-
Deferred Revenue			151,465				143,548				95,098				9,972				100,935				83				-
Accrued interest expense			6,296				5,028				22,866				16,948				1,068				121,964				101,470
Capital lease obligation, current portion			10,239				10,098				9,959				10,615				10,319				10,319				9,290
Deferred rent, current portion			3,207				2,906				2,605				-				-				-				-
Total current liabilities			15,194,551				12,729,691				10,738,514				9,474,232				7,050,037				6,098,742				8,232,032
Deferred rent			83,062				81,047				79,033				-				-				-				-
Capital lease obligation			1,763				4,376				6,953				82,191				10,286				14,474				17,791
Deferred tax liability			-				-				-				-				-				-				-
Liabilities held for sale - discontinued operations			-				-				-				-				-				-				768,631
Total liabilities			15,279,376				12,815,114				10,824,500				9,556,423				7,060,323				6,113,216				9,018,454
Stockholders’ equity (deficit)
Common Stock, $0.001 par value			20,645				20,611				18,923				18,923				18,923				18,823				18,090
Additional paid-in capital			27,926,168				27,357,362				23,620,613				24,908,509				24,409,269				22,756,772				19,468,803
Accumulated other comprehensive loss			(1,061,354	)			(1,061,354	)			(197,704	)			(197,704	)			(197,704	)			-				-
Deferred equity-based expense			-				-				-				-				-				(150,919	)			(99,676	)
Accumulated deficit			(14,513,268	)			(14,815,130	)			(13,780,887	)			(15,258,506	)			(14,606,277	)			(10,916,014	)			(6,968,284	)
Total stockholders’ equity			12,372,191				11,501,488				9,660,945				9,471,222				9,624,211				11,708,662				12,418,933
Total liabilities and stockholders’ equity		$	27,651,567			$	24,316,602			$	20,485,445			$	19,027,645			$	16,684,534			$	17,821,878			$	21,437,387

interCLICK, Inc.
(formerly Customer Acquisition Network Holdings, Inc.)		For the				For the				For the				For the				For the				For the				For the
Consolidated Statement of Cash Flows: 1Q08 to 3Q09		Nine Months Ended				Six Months Ended				Three Months Ended				Year Ended				Nine Months Ended				Six Months Ended				Three Months Ended
		Sept. 30, 2009				Jun. 30. 2009				Mar. 31, 2009				Dec. 31, 2008				Sep. 30, 2008				Jun. 30, 2008				Mar. 31, 2008
Cash flows from operating activities:
Net income (loss)		$	(699,214	)		$	(1,001,076	)		$	33,167			$	(12,025,539	)		$	(11,373,310	)		$	(7,683,047	)		$	(3,735,317	)
Add back loss from discontinued operations			1,220				1,220				1,220				4,807,622				3,111,767				1,560,154				716,986
Income (loss) from continuing operations			(697,994	)			(999,856	)			34,387				(7,217,917	)			(8,261,543	)			(6,122,893	)			(3,018,331	)
Adjustments to reconcile income (loss) from continuing
operations to net cash used in operating activities:
Stock-based compensation			1,953,884				1,353,743				576,570				3,063,009				1,441,240				976,553				474,174
Change in fair value of warrant derivative liability			356,272				232,061				72,767				-				-				-				-
Amortization of debt discount			12,000				500				-				1,239,061				1,239,061				1,118,242				676,248
Equity method pick up from investment			-				-				-				653,231				653,231				249,128				-
Amortization of intangible assets			149,280				99,520				49,760				418,508				313,938				209,367				104,738
Provision for bad debts			(87,084	)			(160,392	)			(207,767	)			414,737				252,236				102,236				4,800
Depreciation			225,282				147,364				72,386				245,489				172,671				106,223				53,461
Common stock issued for services			-				-				-				-				-				-				-
Amortization of deferred equity based expense			-				-				-				-				-				-				-
Loss on sale of marketable securities			36,349				36,349				-				116,454				116,454				-				-
Write off of deferred acquisition costs			-				-				-				96,954				96,954				96,954				96,954
Amortization of debt issue costs			24,972				21,583				14,444				44,172				77,505				77,505				47,027
Loss on settlement of debt			-				-				-				20,121				20,121				20,121				-
Loss on disposal of property and equipment			-				-				-				13,635				15,385				-				-
Changes in operating assets and liabilities:
Accounts receivable			(7,268,876	)			(2,968,432	)			(1,106,823	)			(4,144,746	)			(1,565,763	)			(136,399	)			985,908
Prepaid expenses and other current assets			(155,341	)			(107,523	)			(92,687	)			(38,414	)			(150,046	)			12,459				(22,579	)
Other assets			(515	)			-				-				(124,727	)			(145,006	)			(38,665	)			-
Accounts payable			2,219,724				1,083,434				(165,636	)			2,843,814				1,492,102				211,864				(65,477	)
Accrued expenses			1,377,328				292,816				289,230				(736,034	)			(436,329	)			53,989				(188,441	)
Accrued interest			2,614				1,346				5,918				(19,225	)			(35,105	)			85,791				65,297
Deferred rent			13,573				11,257				8,942				72,696				-				-				-
Deferred revenue			141,493				133,576				85,126				9,972				100,935				83				-
Net cash used in operating activities			(1,697,039	)			(822,654	)			(363,383	)			(3,029,210	)			(4,601,959	)			(2,977,442	)			(786,221	)
Cash flows from investing activities:
Purchases of property & equipment			(86,852	)			(73,883	)			(19,263	)			(357,006	)			(322,548	)			(177,991	)			(138,275	)
Proceeds from sales of property & equipment			-				-				-				13,000				13,000				13,000				13,000
Acquisition of business, net of cash acquired			-				-				-				-				-				-				-
Proceeds from sales of marketable securities			21,429				21,429				-				1,078,000				1,034,000				-				-
Deferred acquisition costs			-				-				-				(10,619	)			(10,619	)			(10,619	)			(10,619	)
Net cash provided by investing activities			(65,423	)			(52,454	)			(19,263	)			723,375				713,833				(175,610	)			(135,894	)
Cash flows from financing activities:
Proceeds from issuance of notes payable			-				-				-				1,300,000				1,300,000				-				-
Principal payments on notes payable			(400,000	)			(100,000	)			-				(5,423,573	)			(4,523,573	)			(2,750,000	)			-
Proceeds from common stock and warrants issued for cash			2,257,000				2,257,000				-				2,912,500				2,912,500				2,536,500				475,000
Proceeds from line of credit, net			1,893,593				1,574,859				642,975				2,550,720				-				-				-
Debt issue costs			-				-				-				-				-				-				-
Proceeds from convertible promissory notes			-				-				-				-				-				-				-
Proceeds from issuance of common stock to founders			-				-				-				-				-				-				-
Proceeds from exercise of options and warrants			15,200				-				-				-				-				-				-
Principal payments on capital leases			(8,108	)			(5,636	)			(3,198	)			(8,497	)			(8,002	)			(3,814	)			(1,526	)
Net cash provided by financing activities			3,757,685				3,726,223				639,777				1,331,150				(319,075	)			(217,314	)			473,474
Cash flows from discontinued operations:
Cash flows from operating activities			-				-				-				(1,933,382	)			(1,563,145	)			(1,251,172	)			(435,553	)
Cash flows from investing activities-acquisition			-				-				-				(1,885,624	)			(1,885,624	)			(1,605,921	)			(1,648,920	)
Cash flows from investing activities-divestiture			(250,000	)			(250,000	)			(250,000	)			1,302,079				4,591,676				3,000,000				-
Net cash used in discontinued operations			(250,000	)			(250,000	)			(250,000	)			(2,516,927	)			1,142,907				142,907				(2,084,473	)
Net (decrease) increase in cash and cash equivalents			1,745,223				2,601,115				7,131				(3,491,612	)			(3,064,294	)			(3,227,459	)			(2,533,114	)
Cash and cash equivalents at beginning of period			183,871				183,871				183,871				3,675,483				3,675,483				3,675,483				3,675,483
Cash and cash equivalents at end of period		$	1,929,094			$	2,784,986			$	191,002			$	183,871			$	611,189			$	448,024			$	1,142,369