Local Corporation announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2013. For the quarter, the company reported revenues of $23,472,000 compared with $24,365,000 for the same period a year ago. Operating loss was $749,000 compared with $3,207,000 for the same period a year ago. Loss from continuing operations before income taxes was $1,699,000 compared with $3,273,000 for the same period a year ago. Net loss from continuing operations was $1,590,000 or $0.07 per basic and diluted share compared with $3,295,000 or $0.15 per basic and diluted share for the same period a year ago. Net loss was $1,744,000 or $0.08 per basic and diluted share compared with $3,802,000 or $0.17 per basic and diluted share for the same period a year ago. Adjusted EBITDA was $1,320,000 or $0.06 per diluted share compared with $211,000 or $0.01 per diluted share for the same period a year ago.

For the nine months, the company reported revenues of $67,591,000 compared with $75,399,000 for the same period a year ago. Operating loss was $3,353,000 compared with $6,756,000 for the same period a year ago. Loss from continuing operations before income taxes was $4,923,000 compared with $6,908,000 for the same period a year ago. Net loss from continuing operations was $5,044,000 or $0.22 per basic and diluted share compared with $7,029,000 or $0.32 per basic and diluted share for the same period a year ago. Net loss was $8,683,000 or $0.38 per basic and diluted share compared with $16,351,000 or $0.74 per basic and diluted share for the same period a year ago. Net cash provided by operating activities was $326,000 compared with net cash used in operating activities of $3,747,000 for the same period a year ago. Capital expenditures were $2,379,000 compared with $2,553,000 for the same period a year ago.

For the quarter, the company reported overall traffic on the site and network was 80 million monthly unique visitors (MUVs), down 14% from second quarter 2013 traffic and down 21% from the year ago period. Organic traffic on the site and network was 35.1 million MUVs in the third quarter of 2013, down 18% from the second quarter of 2013 and down 10% from the year ago period. Overall mobile traffic was 32 million MUVs in the third quarter of 2013, down 6% from the second quarter of 2013 and up 30% from the year ago period. The decrease in traffic during the third quarter of 2013 is due to seasonality and adjustments made to the company's search engine marketing campaigns in response to market conditions.

During the fourth quarter, the company is seeing lower-than-expected RPCs from a large ad partner and slower growth in the Network business, due to its continuing efforts to maintain quality traffic for its advertising partners. As a result, the company is updating its 2013 financial guidance. The company now expects 2013 revenue at the low end of the previously provided guidance of between $95 million and $97 million. Positive adjusted EBITDA for 2013 is now expected to be approximately $4.5 million; interest and other income, net of $2.1 million; depreciation expense of $3.8 million and amortization expense of $1.1 million.

The company expects the gross margin percentage in fourth quarter to be slightly lower as fourth quarter is seasonally strong for the lower margin O&O business and as the third quarter margin also included a one-time benefit from its assertion of certain contractual rights as it relates to its partner agreements.