Exclusive: RetailMeNot's CFO Talks Share Buybacks, Recent Acquisitions

RetailMeNot Inc SALE operates a mobile and digital destination that connects consumers with retailers, restaurants and brands. The company's platform also allows the opportunity for users to search for, discover and redeem compelling offers and coupons.

Earlier this week, the company reported Q2 EPS of $0.10 vs. $0.04 estimates, on revenue of $64.2 million vs. $62.9 million estimates.

Benzinga recently had the opportunity to chat with RetailMeNot's Chief Financial Officer, Scott Di Valerio.

Acquisitions

RetailMeNot's most recent acquisition was a company called Gift Card Zen, which is a secondary gift card marketplace. The acquisition will be integrated into RetailMeNot's app and website in Q4 and Di Valerio expects to operate the new business at a margin rate of at least 5 percent.

The executive noted some research reports peg the amount of unused gift cards at $40 billion, so there is a "huge amount of opportunity" to monetize the product and pass on savings to consumers in the form of a discounted gift card.

"One of the real intriguing things about this secondary gift card market and the overall gift card market is it allows us to present to our consumers that every time they come to our sites, one of our properties, that we're able to provide a discount, whether it be a discounted gift card, a coupon, or a sale,' said Di Valerio. "So it really lets us have kind of an always on opportunity to discount card consumers which we think will drive additional frequency back through because now you don't have to say, oh geez, I wonder if there's a sale."

In other words, the acquisition of Gift Card Zen now gives RetailMeNot's platform an "always on offer" and even if a store doesn't have an ongoing sale or relevant coupon, there could be a gift card option.

"We think that's a huge value," he added.

Stock Buybacks

RetailMeNot's balance sheet is "very strong" with a net cash position of around $188 to $190 million. As such, the company has been very active in stock buybacks and bought $22 to $23 million worth of its own shares in Q1.

In Q2, the company bought Gift Card Zen. Di Valerio emphasized the fact that the company has overseen around 15 acquisitions and it won't necessarily shy away from being active on the M&A front.

"We really do take a look at what kind of opportunities the acquisitions present to advance the business quicker and to bring more savings to our consumers and better deliver of consumers to our retailers," Di Valerio emphasized.

Check back soon to read what the CFO had to say about the Brexit impact and the company's drop in desktop usage.

Shares of RetailMeNot were trading higher by 3 percent Wednesday, but are higher by just 1.72 percent year-to-date.