[February 13, 2013] |
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j2 Global Reports Q4 and Year End 2012 Results and Provides 2013 Outlook
LOS ANGELES --(Business Wire)--
j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the
fourth quarter and year ended December 31, 2012, provided fiscal 2013
financial estimates and announced that its Board of Directors has
declared an increased quarterly cash dividend of $0.2325 per share.
FOURTH QUARTER 2012 RESULTS
Quarterly revenues increased 19.9% to a record $102 million compared to
$85.1 million for Q4 2011.
Earnings per diluted share for the quarter increased 4.8% to $0.65
compared to $0.62 for Q4 2011. Non-GAAP earnings per diluted share(1)(2)
increased 9.4% to $0.70 compared to $0.64 for Q4 2011.
Quarterly EBITDA(3) increased 13.4% to a record $52.3 million
compared to $46.1 million for Q4 2011.
Q4 2012 free cash flow(4) increased 12.7% to $45.2 million
compared to $40.1 million for Q4 2011.
Cancel rate(5) for the quarter continued to decline to an
all-time record of 2.2%.
j2 ended the quarter with $344 million in cash and investments after
deploying $173.4 million during the quarter for the acquisition of Ziff
Davis, Inc. and j2's regular quarterly dividend.
Key financial results for fourth quarter 2012 versus fourth quarter 2011
are set forth in the following table (in millions, except per
share). Reconciliations of non-GAAP earnings per diluted share, EBITDA
and free cash flow to their nearest comparable GAAP financial measures
are attached to this Press Release.
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Q4 2012
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Q4 2011
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% Change
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Revenues
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$102 million
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$85.1 million
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19.9
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%
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Earnings per Diluted Share(1)
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$
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0.65
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$
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0.62
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4.8
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%
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Non-GAAP Earnings per Diluted Share(1) (2)
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$
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0.70
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$
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0.64
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9.4
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%
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EBITDA(3)
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$52.3 million
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$46.1 million
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13.4
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%
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Free Cash Flow(4)
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$45.2 million
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$40.1 million
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12.7
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%
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FULL YEAR 2012 RESULTS
Annual revenues increased 12.5% to a record $371.4 million compared to
$330.2 million for 2011.
Earnings per diluted share for the year increased 7.4% to a record $2.61
compared to $2.43 for 2011. 2012 Non-GAAP earnings per diluted share(6)(7)
increased 6.3% to a record $2.69 compared to $2.53 for 2011.
Annual EBITDA(3) increased 16.1% to a record $196.0 million
compared to $168.8 million for 2011.
Free cash flow(4) for the year increased 5.4% to a record
$166.0 million compared to $157.5 million for 2011.
Annual cancel rate(5) was an all-time record low of 2.3%.
Key annual financial results for 2012 versus 2011 are set forth in the
following table (in millions, except per share). Reconciliations of
non-GAAP net income per diluted share, EBITDA and free cash flow to
their nearest comparable GAAP financial measures are attached to this
Press Release.
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2012
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2011
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% Change
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Revenues
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$371.4 million
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$330.2 million
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12.5
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%
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Earnings per Diluted Share(6)
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$
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2.61
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$
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2.43
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7.4
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%
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Non-GAAP Earnings per Diluted Share(6) (7)
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$
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2.69
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$
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2.53
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6.3
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%
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EBITDA(3)
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$196.0 million
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$168.8 million
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16.1
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%
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Free Cash Flow(4)
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$166.0 million
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$157.5 million
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5.4
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%
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"I am proud of our accomplishments during 2012 and enthusiastic about
the prospects for our business going forward," said Hemi Zucker, CEO of
j2 Global. "We grew our cloud services business by more than 9% and
decreased our cancel rate to the lowest in the Company's history,
underscoring the value we deliver to our customers. We continue to
pursue larger acquisitions for our cloud business. During 2012 we also
established our digital media business with the acquisition of Ziff
Davis and in 2013 have grown that business with our purchase of IGN,
positioning us for additional acquisitions in the digital media space as
well."
BUSINESS OUTLOOK
For fiscal 2013, the Company estimates that it will achieve revenues
between $500 and $525 million and non-GAAP earnings per diluted share of
between $2.65 and $2.85.
Non-GAAP earnings per diluted share for 2013 excludes
acquisition-related integration costs of approximately $4 million,
share-based compensation of between $11 and $12 million and the impact
of any currently unanticipated items.
It is anticipated that the normalized tax rate for 2013 (exclusive of
the release of reserves for uncertain tax positions) will be between 25%
and 27%.
DIVIDEND
j2's Board of Directors has approved a quarterly cash dividend of
$0.2325 per common share, a 3.3% increase versus last quarter's dividend
and a 10.7% increase versus the dividend paid in Q1 2012. This is j2's
sixth consecutive quarterly dividend increase and represents a 16.25%
increase versus its first quarterly dividend in September, 2011. The
dividend will be paid on March 4, 2013 to all shareholders of record as
of the close of business on February 25, 2013. Future dividends will be
subject to Board approval.
EXTENSION OF SHARE REPURCHASE PROGRAM
The Company has extended its one-year five million share repurchase
program set to expire February 20, 2013 by an additional year.
Approximately 2.9 million shares remain available for purchase under the
program.
Notes:
(1)
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The estimated GAAP effective tax rate was approximately 19.6% for Q4
2012 and 24.3% for Q4 2011. The estimated Non-GAAP effective tax
rate was approximately 19.8% for Q4 2012 and 24.7% for Q4 2011.
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(2)
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For Q4 2012, Non-GAAP earnings per diluted share excludes
share-based compensation and related payroll taxes and certain
acquisition-related integration costs, in each case net of tax,
totaling $0.05. For Q4 2011, Non-GAAP earnings per diluted share
excludes share-based compensation and related payroll taxes, certain
acquisition-related integration costs and gain on sale of auction
rate securities, in each case net of tax, totaling $0.02. Non-GAAP
earnings per diluted share amounts are not meant as a substitute for
GAAP, but are solely for informational purposes.
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(3)
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EBITDA is defined as net income plus fixed charges, income taxes,
depreciation and amortization, share-based compensation, foreign
currency gains and losses and certain acquisition-related
integration costs. EBITDA for Q4 and fiscal 2012 under the Indenture
Agreement relating to the Company's outstanding bonds excludes $4.1
million from Unrestricted Subsidiaries. EBITDA amounts are not meant
as a substitute for GAAP, but are solely for informational purposes.
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(4)
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Free cash flow is defined as net cash provided by operating
activities, less purchases of property, plant and equipment, plus
excess tax benefit from share-based compensation. Free cash flow
amounts are not meant as a substitute for GAAP, but are solely for
informational purposes.
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(5)
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Cancel rate is defined as cancels related to individual customer
DIDs with greater than 4 months of continuous service (continuous
service includes customer DIDs administratively cancelled and
reactivated within the same calendar month), and DIDs related to
enterprise customers beginning with their first day of service. For
the quarter, calculated monthly and expressed here as an average
over the three months of the quarter. For the year, expressed as an
average over the four quarters of the year.
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(6)
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The GAAP effective tax rate was approximately 21.5% for 2012 and
16.3% for 2011. The Non-GAAP effective tax rate was approximately
23.8% for 2012 and 25% for 2011.
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(7)
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For 2012, Non-GAAP earnings per diluted share excludes share-based
compensation and related payroll taxes, domestic production
activities tax deduction from prior years, certain
acquisition-related integration costs, and gain on sale of
investments, in each case net of tax, totaling $0.08. For 2011,
Non-GAAP earnings per diluted share excludes a change in estimate
regarding its remaining service obligations to its annual eFax®
subscribers, share-based compensation and related payroll taxes,
certain acquisition-related integration costs, the sale of a trade
name, the reversal of uncertain income tax positions due to expired
statutes of limitations and gain on sale of auction rate securities,
in each case net of tax, totaling $0.10. Non-GAAP earnings per
diluted share amounts are not meant as a substitute for GAAP, but
are solely for informational purposes.
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About j2 Global
j2 Global (JCOM)
provides Internet services through its two divisions: Business Cloud
Services and Digital Media. The Business Cloud Services Division offers
Internet fax, virtual phone, hosted email, email marketing, online
backup, unified communications and CRM solutions. It markets its
services principally under the brand names eFax®, eVoice®, FuseMail®,
Campaigner®, KeepItSafe® and Onebox® and operates a messaging network
spanning 49 countries on six continents. The Digital Media Division
consists of Ziff Davis Inc., which offers technology, gaming and
lifestyle content through its digital properties which include
PCMag.com, IGN.com, AskMen.com, Toolbox.com and others. Ziff Davis
properties reach over 53 million global unique visitors per month. Ziff
Davis also operates BuyerBase, an advanced digital ad targeting platform
and Ziff Davis B2B, a leading provider of research to enterprise buyers
and leads to IT vendors. As of December 31, 2012, j2 Global had achieved
17 consecutive fiscal years of revenue growth. For more information
about j2 Global, please visit www.j2global.com.
"Safe Harbor" Statement Under the Private Securities Litigation
Reform Act of 1995: Certain statements in this Press Release are
"forward-looking statements" within the meaning of The Private
Securities Litigation Reform Act of 1995, particularly those contained
in Hemi Zucker's quote and the "Business Outlook" portion regarding the
Company's expected fiscal 2013 financial performance. These
forward-looking statements are based on management's current
expectations or beliefs and are subject to numerous assumptions, risks
and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. These factors
and uncertainties include, among other items: ability to identify and
close large acquisitions in the cloud business space and additional
acquisitions in the digital media space, subscriber growth and
retention; variability of revenue based on changing conditions in
particular industries and the economy generally; protection of the
Company's proprietary technology or infringement by the Company of
intellectual property of others; the risk of adverse changes in the U.S.
or international regulatory environments surrounding messaging and
communications, including but not limited to the imposition or increase
of taxes or regulatory-related fees; and the numerous other factors set
forth in j2 Global's filings with the Securities and Exchange Commission
("SEC"). For a more detailed description of the risk factors and
uncertainties affecting j2 Global, refer to the 2011 Annual Report on
Form 10-K filed by j2 Global on February 28, 2012, and the other reports
filed by j2 Global from time-to-time with the SEC, each of which is
available at www.sec.gov.
The forward-looking statements provided in this press release and
particularly those contained in Hemi Zucker's quote and the "Business
Outlook" portion regarding the Company's expected fiscal 2013 financial
performance are based on limited information available to the Company at
this time, which is subject to change. Although management's
expectations may change after the date of this press release, the
Company undertakes no obligation to revise or update these statements.
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j2 GLOBAL, INC.
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CONDENSED CONSOLIDATED BALANCE SHEETS
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(UNAUDITED, IN THOUSANDS)
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DECEMBER 31,
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DECEMBER 31,
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2012
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2011
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ASSETS
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Cash and cash equivalents
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$
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218,680
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$
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139,359
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Short-term investments
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105,054
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38,513
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Accounts receivable, net of allowances of $3,213 and $3,404,
respectively
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37,285
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|
|
|
|
19,071
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|
Prepaid expenses and other current assets
|
|
|
|
15,388
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|
|
|
|
14,311
|
|
Deferred income taxes
|
|
|
|
1,092
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|
|
|
|
1,643
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|
Total current assets
|
|
|
|
377,499
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|
|
|
|
212,897
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|
|
|
|
|
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Long-term investments
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|
|
|
19,841
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|
|
|
|
43,077
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|
Property and equipment, net
|
|
|
|
19,599
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|
|
|
|
14,438
|
|
Goodwill
|
|
|
|
407,825
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|
|
|
|
279,016
|
|
Other purchased intangibles, net
|
|
|
|
165,316
|
|
|
|
|
98,067
|
|
Deferred income taxes
|
|
|
|
1,852
|
|
|
|
|
3,160
|
|
Other assets
|
|
|
|
3,238
|
|
|
|
|
516
|
|
|
|
|
|
|
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TOTAL ASSETS
|
|
|
$
|
995,170
|
|
|
|
$
|
651,171
|
|
|
|
|
|
|
|
|
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|
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LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
|
|
|
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Accounts payable and accrued expenses
|
|
|
$
|
39,874
|
|
|
|
$
|
24,070
|
|
Income taxes payable
|
|
|
|
3,037
|
|
|
|
|
1,510
|
|
Deferred revenue
|
|
|
|
30,493
|
|
|
|
|
26,695
|
|
Liability for uncertain tax positions
|
|
|
|
5,523
|
|
|
|
|
5,523
|
|
Total current liabilities
|
|
|
|
78,927
|
|
|
|
|
57,798
|
|
|
|
|
|
|
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Long-term debt
|
|
|
|
245,194
|
|
|
|
|
-
|
|
Liability for uncertain tax positions
|
|
|
|
32,155
|
|
|
|
|
24,554
|
|
Deferred income taxes
|
|
|
|
32,393
|
|
|
|
|
12,102
|
|
Mandatorily redeemable financial instrument
|
|
|
|
8,740
|
|
|
|
|
-
|
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Other long-term liabilities
|
|
|
|
3,166
|
|
|
|
|
2,342
|
|
Total liabilities
|
|
|
|
400,575
|
|
|
|
|
96,796
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
|
|
-
|
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
Preferred stock
|
|
|
|
-
|
|
|
|
|
-
|
|
Common stock
|
|
|
|
451
|
|
|
|
|
554
|
|
Additional paid-in capital
|
|
|
|
169,592
|
|
|
|
|
197,374
|
|
Treasury stock
|
|
|
|
-
|
|
|
|
|
(112,671
|
)
|
Retained earnings
|
|
|
|
424,740
|
|
|
|
|
472,595
|
|
Accumulated other comprehensive loss
|
|
|
|
(88
|
)
|
|
|
|
(3,477
|
)
|
Total j2 Global, Inc. stockholder's equity
|
|
|
|
594,695
|
|
|
|
|
554,375
|
|
Noncontrolling interest
|
|
|
|
(100
|
)
|
|
|
|
-
|
|
Total stockholders' equity
|
|
|
|
594,595
|
|
|
|
|
554,375
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
|
|
$
|
995,170
|
|
|
|
$
|
651,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
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j2 GLOBAL, INC.
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
|
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
|
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|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED DECEMBER 31,
|
|
|
TWELVE MONTHS ENDED DECEMBER 31,
|
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
102,033
|
|
|
|
85,072
|
|
|
|
371,396
|
|
|
|
330,159
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues (including share-based compensation of $211 and
$844 for the three and twelve months of 2012, respectively, and $246
and $982 for the three and twelve months of 2011, respectively)
|
|
|
|
18,659
|
|
|
|
14,661
|
|
|
|
67,013
|
|
|
|
60,613
|
Gross profit
|
|
|
|
83,374
|
|
|
|
70,411
|
|
|
|
304,383
|
|
|
|
269,546
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing (including share-based compensation of $426 and
$1,543 for the three and twelve months of 2012, respectively, and
$382 and $1,431 for the three and twelve months of 2011,
respectively)
|
|
|
|
18,915
|
|
|
|
14,137
|
|
|
|
62,825
|
|
|
|
59,066
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research, development and engineering (including share-based
compensation of $115 and $459 for the three and twelve months of
2012, respectively, and $110 and $477 for the three and twelve
months of 2011, respectively)
|
|
|
|
4,826
|
|
|
|
3,659
|
|
|
|
18,624
|
|
|
|
16,373
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative (including share-based compensation of
$1,529 and $6,286 for the three and twelve months of 2012,
respectively, and $1,571 and $6,103 for the three and twelve months
of 2011, respectively)
|
|
|
|
17,385
|
|
|
|
14,120
|
|
|
|
60,772
|
|
|
|
58,157
|
|
|
|
|
|
|
|
|
|
|
|
Total operating expenses
|
|
|
|
41,126
|
|
|
|
31,916
|
|
|
|
142,221
|
|
|
|
133,596
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
|
42,248
|
|
|
|
38,495
|
|
|
|
162,162
|
|
|
|
135,950
|
Interest and other income (expense), net
|
|
|
|
(4,583
|
)
|
|
|
904
|
|
|
|
(7,240
|
)
|
|
|
1,166
|
Income before income taxes
|
|
|
|
37,665
|
|
|
|
39,399
|
|
|
|
154,922
|
|
|
|
137,116
|
Provision for income taxes
|
|
|
|
7,379
|
|
|
|
9,580
|
|
|
|
33,259
|
|
|
|
22,350
|
Net income
|
|
|
|
30,286
|
|
|
|
29,819
|
|
|
|
121,663
|
|
|
|
114,766
|
Less net income attributable to noncontrolling interest
|
|
|
|
83
|
|
|
|
-
|
|
|
|
83
|
|
|
|
-
|
Net income attributable to j2 Global, Inc. common stockholders
|
|
|
$
|
30,203
|
|
|
$
|
29,819
|
|
|
$
|
121,580
|
|
|
$
|
114,766
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income per common share:
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to j2 Global, Inc. common stockholders
|
|
|
$
|
0.66
|
|
|
$
|
0.63
|
|
|
$
|
2.63
|
|
|
$
|
2.46
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income per common share:
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to j2 Global, Inc. common stockholders
|
|
|
$
|
0.65
|
|
|
$
|
0.62
|
|
|
$
|
2.61
|
|
|
$
|
2.43
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic weighted average shares outstanding
|
|
|
|
45,071,204
|
|
|
|
46,692,364
|
|
|
|
45,459,712
|
|
|
|
45,799,615
|
|
|
|
|
|
|
|
|
|
|
|
Diluted weighted average shares outstanding
|
|
|
|
45,423,502
|
|
|
|
46,989,376
|
|
|
|
45,781,658
|
|
|
|
46,384,848
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
j2 GLOBAL, INC.
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
(UNAUDITED, IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS ENDED DECEMBER 31,
|
|
|
|
2012
|
|
|
2011
|
|
|
|
|
|
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
Net income
|
|
|
$
|
121,663
|
|
|
|
$
|
114,766
|
|
Adjustments to reconcile net income to net cash provided by
operating activities:
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
22,164
|
|
|
|
|
19,756
|
|
Accretion and amortization of discount and premium of investments
|
|
|
|
1,603
|
|
|
|
|
941
|
|
Amortization of financing costs and discounts
|
|
|
|
249
|
|
|
|
|
-
|
|
Share-based compensation
|
|
|
|
9,083
|
|
|
|
|
8,968
|
|
Excess tax benefit from share-based compensation
|
|
|
|
(961
|
)
|
|
|
|
(13,561
|
)
|
Provision for doubtful accounts
|
|
|
|
4,289
|
|
|
|
|
6,900
|
|
Deferred income taxes
|
|
|
|
1,150
|
|
|
|
|
6,822
|
|
Gain on sale of available-for-sale investment
|
|
|
|
(266
|
)
|
|
|
|
(552
|
)
|
Decrease (increase) in:
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
(5,417
|
)
|
|
|
|
(9,509
|
)
|
Prepaid expenses and other current assets
|
|
|
|
(2,028
|
)
|
|
|
|
4,261
|
|
Other assets
|
|
|
|
(189
|
)
|
|
|
|
321
|
|
(Decrease) increase in:
|
|
|
|
|
|
|
Accounts payable and accrued expenses
|
|
|
|
5,138
|
|
|
|
|
847
|
|
Income taxes payable
|
|
|
|
4,188
|
|
|
|
|
9,679
|
|
Deferred revenue
|
|
|
|
1,612
|
|
|
|
|
8,664
|
|
Liability for uncertain tax positions
|
|
|
|
7,601
|
|
|
|
|
(7,786
|
)
|
Other liabilities
|
|
|
|
32
|
|
|
|
|
231
|
|
Net cash provided by operating activities
|
|
|
|
169,911
|
|
|
|
|
150,748
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
Maturity of certificate of deposit
|
|
|
|
8,000
|
|
|
|
|
-
|
|
Purchase of certificates of deposit
|
|
|
|
(34,673
|
)
|
|
|
|
(8,000
|
)
|
Sales of available-for-sale investments
|
|
|
|
138,709
|
|
|
|
|
29,777
|
|
Purchases of available-for-sale investments
|
|
|
|
(151,989
|
)
|
|
|
|
(82,879
|
)
|
Purchases of property and equipment
|
|
|
|
(4,905
|
)
|
|
|
|
(6,840
|
)
|
Purchases of intangible assets
|
|
|
|
(6,295
|
)
|
|
|
|
(4,312
|
)
|
Acquisition of businesses, net of cash received
|
|
|
|
(198,341
|
)
|
|
|
|
(3,926
|
)
|
Net cash used in investing activities
|
|
|
|
(249,494
|
)
|
|
|
|
(76,180
|
)
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
Issuance of long-term debt
|
|
|
|
245,000
|
|
|
|
|
-
|
|
Debt issuance costs
|
|
|
|
(1,384
|
)
|
|
|
|
-
|
|
Repurchases of common stock and restricted stock
|
|
|
|
(60,282
|
)
|
|
|
|
(1,281
|
)
|
Issuance of common stock under employee stock purchase plan
|
|
|
|
157
|
|
|
|
|
142
|
|
Exercise of stock options
|
|
|
|
5,646
|
|
|
|
|
7,090
|
|
Excess tax benefit from share-based compensation
|
|
|
|
961
|
|
|
|
|
13,561
|
|
Mandatorily redeemable financial instrument
|
|
|
|
8,557
|
|
|
|
|
-
|
|
Dividends paid
|
|
|
|
(40,263
|
)
|
|
|
|
(19,174
|
)
|
Net cash provided by financing activities
|
|
|
|
158,392
|
|
|
|
|
338
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents
|
|
|
|
512
|
|
|
|
|
(299
|
)
|
|
|
|
|
|
|
|
Net increase in cash and cash equivalents
|
|
|
|
79,321
|
|
|
|
|
74,607
|
|
Cash and cash equivalents at beginning of period
|
|
|
|
139,359
|
|
|
|
|
64,752
|
|
Cash and cash equivalents at end of period
|
|
|
$
|
218,680
|
|
|
|
$
|
139,359
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
j2 GLOBAL, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011
|
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income are GAAP net income with the following
modifications: (1) elimination of share-based compensation expense
and the associated payroll taxes; (2) elimination of certain
acquisition and related exit costs; (3) elimination of gain on
sale of certain investments and (4) elimination of income tax
provision associated with share-based compensation and associated
payroll taxes, certain acquisition and related exit costs and gain
on sale of certain investment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED DECEMBER 31, 2012
|
|
|
THREE MONTHS ENDED DECEMBER 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
|
|
|
|
|
|
(2)
|
|
(3)
|
|
|
|
|
|
|
|
(1)
|
|
Acquisition
|
|
|
|
|
|
|
(1)
|
|
Acquisition
|
|
Gain on
|
|
|
|
|
|
|
|
Share-based
|
|
and Exit
|
|
|
|
|
|
|
Share-based
|
|
and Exit
|
|
Sale of
|
|
|
|
|
|
GAAP
|
|
Compensation
|
|
Costs
|
|
Non-GAAP
|
|
|
GAAP
|
|
Compensation
|
|
Costs
|
|
Investment
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
18,659
|
|
|
(211
|
)
|
|
-
|
|
|
|
18,448
|
|
|
|
|
14,661
|
|
(246
|
)
|
|
167
|
|
|
-
|
|
|
|
14,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
18,915
|
|
|
(426
|
)
|
|
-
|
|
|
|
18,489
|
|
|
|
|
14,137
|
|
(382
|
)
|
|
-
|
|
|
-
|
|
|
|
13,755
|
Research, development and engineering
|
|
|
|
4,826
|
|
|
(115
|
)
|
|
-
|
|
|
|
4,711
|
|
|
|
|
3,659
|
|
(110
|
)
|
|
379
|
|
|
-
|
|
|
|
3,928
|
General and administrative
|
|
|
|
17,385
|
|
|
(1,535
|
)
|
|
(585
|
)
|
|
|
15,265
|
|
|
|
|
14,120
|
|
(1,572
|
)
|
|
-
|
|
|
-
|
|
|
|
12,548
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income (expense)
|
|
|
|
(4,583
|
)
|
|
-
|
|
|
-
|
|
|
|
(4,583
|
)
|
|
|
|
904
|
|
-
|
|
|
-
|
|
|
(554
|
)
|
|
|
350
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (4)
|
|
|
$
|
7,379
|
|
|
548
|
|
|
115
|
|
|
$
|
8,042
|
|
|
|
$
|
9,580
|
|
717
|
|
|
(133
|
)
|
|
(122
|
)
|
|
|
10,042
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to j2 Global, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
common stockholders
|
|
|
$
|
30,203
|
|
|
1,739
|
|
|
470
|
|
|
$
|
32,412
|
|
|
|
$
|
29,819
|
|
1,593
|
|
|
(413
|
)
|
|
(432
|
)
|
|
$
|
30,567
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to j2 Global, Inc. common
stockholders*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
$
|
0.66
|
|
|
0.04
|
|
|
0.01
|
|
|
$
|
0.71
|
|
|
|
$
|
0.63
|
|
0.03
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
$
|
0.64
|
Diluted
|
|
|
$
|
0.65
|
|
|
0.04
|
|
|
0.01
|
|
|
$
|
0.70
|
|
|
|
$
|
0.62
|
|
0.03
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
$
|
0.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The reconciliation of Net income per share from GAAP to Non-GAAP
may not foot since each is calculated independently.
|
|
|
|
The Company discloses non-GAAP Earnings Per Share (EPS) as
supplemental non-GAAP financial performance measure, as it
believes it is useful metric by which to compare the performance
of its business from period to period. The Company also
understands that this non-GAAP measure is broadly used by
analysts, rating agencies and investors in assessing the Company's
performance. Accordingly, the Company believes that the
presentation of this non-GAAP financial measure provides useful
information to investors.
|
|
|
|
Non-GAAP EPS is not in accordance with, or an alternative to, Net
income per share and may be different from non-GAAP measures with
similar or even identical names used by other companies. In
addition, this non-GAAP measure is not based on any comprehensive
set of accounting rules or principles. This non-GAAP measure has
limitations in that they do not reflect all of the amounts
associated with the Company's results of operations determined in
accordance with GAAP.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
j2 GLOBAL, INC.
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
|
TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
|
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income are GAAP net income with the following
modifications: (1) elimination of the impact to revenues resulting
from a change in estimate of deferred revenue; (2) elimination of
share-based compensation expense and the associated payroll taxes;
(3) elimination of certain acquisition and related exit costs; (4)
elimination of gain on sale of certain investment; (5) elimination
of additional income tax benefit from prior years; (6) elimination
of a change to our liability of uncertain tax position due to
expiration of statues of limitations; (7) elimination of taxes
related to trade name sale and (8) elimination of income tax
provision associated with the change in estimate of deferred
revenue, share-based compensation and associated payroll taxes,
certain acquisition and related exit costs and gain on sale of
certain investment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TWELVE MONTHS ENDED DECEMBER 31, 2012
|
|
|
TWELVE MONTHS ENDED DECEMBER 31, 2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(5)
|
|
|
|
|
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3)
|
|
(4)
|
|
Additional
|
|
|
|
|
|
|
Change in
|
|
|
(3)
|
|
(4)
|
|
(6)
|
|
(7)
|
|
|
|
|
|
|
|
|
|
|
(2)
|
|
Acquisition
|
|
Gain on
|
|
Income Tax
|
|
|
|
|
|
|
Estimate of
|
|
(2)
|
|
Acquisition
|
|
Gain on
|
|
Uncertain
|
|
Trade
|
|
|
|
|
|
|
|
|
|
|
Share-based
|
|
and Exit
|
|
Sale of
|
|
Benefit from
|
|
|
|
|
|
|
Deferred
|
|
Share-based
|
|
and Exit
|
|
Sale of
|
|
Tax
|
|
Name
|
|
|
|
|
|
|
|
|
GAAP
|
|
Compensation
|
|
Costs
|
|
Investment
|
|
Prior Years
|
|
Non-GAAP
|
|
|
GAAP
|
|
Revenue
|
|
Compensation
|
|
Costs
|
|
Investment
|
|
Position
|
|
Sale
|
|
Non-GAAP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
$
|
371,396
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
$
|
371,396
|
|
|
|
$
|
330,159
|
|
$
|
10,325
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
$
|
340,484
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues
|
|
|
|
67,013
|
|
|
(844
|
)
|
|
(6
|
)
|
|
-
|
|
|
-
|
|
|
|
66,163
|
|
|
|
|
60,613
|
|
|
-
|
|
|
(988
|
)
|
|
(199
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
59,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing
|
|
|
|
62,825
|
|
|
(1,543
|
)
|
|
(90
|
)
|
|
-
|
|
|
-
|
|
|
|
61,192
|
|
|
|
|
59,066
|
|
|
-
|
|
|
(1,437
|
)
|
|
(764
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
56,865
|
|
Research, development and engineering
|
|
|
18,624
|
|
|
(459
|
)
|
|
(5
|
)
|
|
-
|
|
|
-
|
|
|
|
18,160
|
|
|
|
|
16,373
|
|
|
-
|
|
|
(482
|
)
|
|
(352
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
15,539
|
|
General and administrative
|
|
|
60,772
|
|
|
(6,382
|
)
|
|
(633
|
)
|
|
-
|
|
|
-
|
|
|
|
53,757
|
|
|
|
|
58,157
|
|
|
-
|
|
|
(6,264
|
)
|
|
(1,421
|
)
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
50,472
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income (expense)
|
|
|
(7,240
|
)
|
|
-
|
|
|
-
|
|
|
(180
|
)
|
|
-
|
|
|
|
(7,420
|
)
|
|
|
|
1,166
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(554
|
)
|
|
-
|
|
|
-
|
|
|
|
612
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision (8)
|
|
|
33,259
|
|
|
2,823
|
|
|
149
|
|
|
(43
|
)
|
|
3,066
|
|
|
|
39,254
|
|
|
|
|
22,350
|
|
|
2,707
|
|
|
2,823
|
|
|
717
|
|
|
(122
|
)
|
|
15,128
|
|
|
(3,892
|
)
|
|
|
39,711
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to j2 Global, Inc. common stockholders
|
|
|
$
|
121,580
|
|
|
6,405
|
|
|
585
|
|
|
(137
|
)
|
|
(3,066
|
)
|
|
$
|
125,367
|
|
|
|
$
|
114,766
|
|
|
7,618
|
|
|
6,348
|
|
|
2,019
|
|
|
(432
|
)
|
|
(15,128
|
)
|
|
3,892
|
|
|
$
|
119,083
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income per share attributable to j2 Global, Inc. common
stockholders*:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
$
|
2.63
|
|
|
0.14
|
|
|
0.02
|
|
|
(0.01
|
)
|
|
(0.07
|
)
|
|
$
|
2.71
|
|
|
|
$
|
2.46
|
|
|
0.16
|
|
|
0.14
|
|
|
0.04
|
|
|
(0.01
|
)
|
|
(0.32
|
)
|
|
0.08
|
|
|
$
|
2.56
|
|
Diluted
|
|
|
|
|
$
|
2.61
|
|
|
0.14
|
|
|
0.02
|
|
|
(0.01
|
)
|
|
(0.07
|
)
|
|
$
|
2.69
|
|
|
|
$
|
2.43
|
|
|
0.16
|
|
|
0.14
|
|
|
0.04
|
|
|
(0.01
|
)
|
|
(0.32
|
)
|
|
0.08
|
|
|
$
|
2.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
* The reconciliation of Net income per share from GAAP to Non-GAAP
may not foot since each is calculated independently.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company discloses non-GAAP Earnings Per Share (EPS) as
supplemental non-GAAP financial performance measure, as it
believes it is useful metric by which to compare the performance
of its business from period to period. The Company also
understands that this non-GAAP measure is broadly used by
analysts, rating agencies and investors in assessing the Company's
performance. Accordingly, the Company believes that the
presentation of this non-GAAP financial measure provides useful
information to investors.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP EPS is not in accordance with, or an alternative to, Net
income per share and may be different from non-GAAP measures with
similar or even identical names used by other companies. In
addition, this non-GAAP measure is not based on any comprehensive
set of accounting rules or principles. This non-GAAP measure has
limitations in that they do not reflect all of the amounts
associated with the Company's results of operations determined in
accordance with GAAP.
|
|
|
|
j2 GLOBAL, INC.
|
NET INCOME TO EBITDA RECONCILIATION
|
THREE MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
|
(UNAUDITED, IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table sets forth a reconciliation of EBITDA to net
income, the most directly comparable GAAP financial measure.
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED DECEMBER 31,
|
|
TWELVE MONTHS ENDED DECEMBER 31,
|
|
|
2012
|
|
2011
|
|
|
2012
|
|
2011
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
30,286
|
|
$
|
29,819
|
|
|
$
|
121,663
|
|
$
|
114,766
|
Fixed charges
|
|
|
5,197
|
|
|
41
|
|
|
|
9,045
|
|
|
147
|
Provision for income taxes
|
|
|
7,379
|
|
|
9,580
|
|
|
|
33,259
|
|
|
22,350
|
Depreciation and amortization and other non-cash items (1)
|
|
|
8,901
|
|
|
7,170
|
|
|
|
31,284
|
|
|
28,750
|
Non-recurring (gains) losses
|
|
|
519
|
|
|
(556
|
)
|
|
|
785
|
|
|
2,778
|
|
|
|
|
|
|
|
|
|
EBITDA
|
|
$
|
52,282
|
|
$
|
46,054
|
|
|
$
|
196,036
|
|
$
|
168,791
|
|
|
|
|
|
|
|
|
|
(1) Other non-cash items currently represent share-based
compensation.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA as calculated above represents earnings before fixed
charges, taxes, depreciation and amortization and all other
non-cash items and all non-recurring gains and losses. EBITDA is
defined in the Indenture Agreement as Consolidated Net Income of
the Company and its Restricted Subsidiaries before fixed charges,
taxes, depreciation and amortization and all other non-cash items
and all non-recurring gains and losses. The EBITDA calculations
above for the three months and the twelve months ended December
31, 2012 include $4.1 million related to Unrestricted Subsidiaries
that are excluded from EBITDA as defined in the Indenture
Agreement. We disclose EBITDA as a supplemental non-GAAP financial
performance measure, as we believe it is a useful metric by which
to compare the performance of our business from period to period.
We understand that measures similar to EBITDA are broadly used by
analysts, rating agencies and investors in assessing our
performance. Accordingly, we believe that the presentation of
EBITDA provides useful information to investors.
|
|
|
|
|
|
|
|
|
|
EBITDA is not in accordance with, or an alternative to, Net
income, and may be different from non-GAAP measures used by other
companies. In addition, EBITDA is not based on any comprehensive
set of accounting rules or principles. This non-GAAP measure has
limitations in that it does not reflect all of the amounts
associated with the company's results of operations determined in
accordance with GAAP.
|
|
|
|
j2 GLOBAL, INC.
|
NON-GAAP FINANCIAL MEASURES
|
(UNAUDITED, IN THOUSANDS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
Q2
|
|
Q3
|
|
Q4
|
|
YTD
|
2012
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
38,942
|
|
|
$
|
46,382
|
|
|
$
|
38,193
|
|
|
$
|
46,394
|
|
|
$
|
169,911
|
|
Less: Purchases of property and equipment
|
|
|
(1,159
|
)
|
|
|
(1,631
|
)
|
|
|
(956
|
)
|
|
|
(1,159
|
)
|
|
|
(4,905
|
)
|
Add: Excess tax benefit (deficit) from share-based compensation
|
|
|
286
|
|
|
|
821
|
|
|
|
(91
|
)
|
|
|
(55
|
)
|
|
|
961
|
|
Free cash flows
|
|
$
|
38,069
|
|
|
$
|
45,572
|
|
|
$
|
37,146
|
|
|
$
|
45,180
|
|
|
$
|
165,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
$
|
38,153
|
|
|
$
|
42,398
|
|
|
$
|
28,682
|
|
|
$
|
41,515
|
|
|
$
|
150,748
|
|
Less: Purchases of property and equipment
|
|
|
(625
|
)
|
|
|
(1,860
|
)
|
|
|
(2,590
|
)
|
|
|
(1,769
|
)
|
|
|
(6,844
|
)
|
Add: Excess tax benefit from share-based compensation
|
|
|
679
|
|
|
|
1,443
|
|
|
|
11,124
|
|
|
|
315
|
|
|
|
13,561
|
|
Free cash flows
|
|
$
|
38,207
|
|
|
$
|
41,981
|
|
|
$
|
37,216
|
|
|
$
|
40,061
|
|
|
$
|
157,465
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company discloses non-GAAP Free Cash Flows as supplemental
non-GAAP financial performance measure, as it believes it is a
useful metrics by which to compare the performance of its business
from period to period. The Company also understands that this
non-GAAP measure is broadly used by analysts, rating agencies and
investors in assessing the Company's performance. Accordingly, the
Company believes that the presentation of this non-GAAP financial
measure provides useful information to investors.
|
|
Free Cash Flows is not in accordance with, or an alternative to,
Cash Flows from Operating Activities, and may be different from
non-GAAP measures with similar or even identical names used by
other companies. In addition, the non-GAAP measure is not based on
any comprehensive set of accounting rules or principles. This
non-GAAP measure has limitations in that it do not reflect all of
the amounts associated with the Company's results of operations
determined in accordance with GAAP.
|
|
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|