LOS ANGELES, Feb. 19, 2009 (GLOBE NEWSWIRE) -- j2 Global Communications, Inc. (Nasdaq:JCOM) today reported financial results for the fourth quarter and year ended December 31, 2008.
ANNUAL RESULTS
Subscriber revenues for fiscal year 2008 increased 12% to $237 million compared to $212 million in fiscal year 2007.
Total revenues for fiscal year 2008 increased 9% to $242 million compared to $221 million in fiscal year 2007. Net earnings per diluted share for 2008 increased 17% to $1.58 compared to $1.35 for 2007. SFAS 123(R) (expensing for stock-based compensation) expense impacted 2008 earnings and net earnings per diluted share by approximately $5.7 million (approximately $8.0 million pre-tax) and $0.12, respectively.
During fiscal year 2008, the Company increased its gross and operating margins to 81% and 41%, respectively, from 80% and 39%, respectively, in fiscal year 2007.
The Company ended the year with approximately $162 million in cash and investments as compared to $230 million as of December 31, 2007. Fiscal year 2008 year-end cash and investments reflect approximately $151 million of cash utilized during 2008 to complete our five million share repurchase program and four acquisitions.
Key financial results for fiscal year 2008 versus fiscal year 2007 are as follows:
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2008 2007 % Change
=====================================================================
Subscriber Revenues $237 million $212 million 12%
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Total Revenues $242 million $221 million 9%
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Net Earnings per
Diluted Share (1) $1.58 $1.35 17%
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(1) For fiscal 2008 and fiscal 2007 the tax rate was approximately
29% and 28%, respectively.
FOURTH QUARTER 2008 RESULTS
Subscriber revenues for Q4 2008 increased 8% to $60 million compared to $55 million in Q4 2007.
Total revenues for Q4 2008 increased 7% to $61 million compared to $57 million in Q4 2007. Net earnings per diluted share for Q4 2008 increased 32% to $0.45 compared to $0.34 in Q4 2007. SFAS 123(R) (expensing for stock-based compensation) expense impacted Q4 2008 earnings and net earnings per diluted share by approximately $1.4 million (approximately $2.0 million pre-tax) and $0.04, respectively.
During Q4 2008, the Company increased its gross and operating margins to 81% and 43%, respectively, from 80% and 37%, respectively, in Q4 2007.
Key financial results for fourth quarter 2008 versus fourth quarter 2007 are as follows:
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Q4 2008 Q4 2007 % Change
=====================================================================
Subscriber Revenues $60 million $55 million 8%
=====================================================================
Total Revenues $61 million $57 million 7%
=====================================================================
Net Earnings per
Diluted Share (1) $0.45 $0.34 32%
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(1) The Q4 2008 and Q4 2007 tax rate was approximately 25% and 28%,
respectively. The Q4 2008 tax rate reflects recognition during
the quarter of $1.8 million in federal and state research and
development tax credits.
"We are pleased with our execution of the three primary goals we articulated going into the year," said Hemi Zucker, j2 Global's chief executive officer. "We improved our margins through continued focus on cost containment, grew our revenue while maintaining our headcount and deployed a portion of our cash more effectively through stock repurchases and acquisitions."
BUSINESS OUTLOOK
For fiscal 2009, j2 Global anticipates modest revenue and earnings growth (net of expenses related to stock-based compensation), inclusive of acquisitions, despite the ongoing global economic crisis. The Company remains well positioned to take advantage of changing customer and market conditions while continuing its focus on efficient marketing, optimizing its cost structure and deploying its cash resources into higher yielding investments such as acquisitions.
About j2 Global Communications
Founded in 1995, j2 Global Communications, Inc. provides outsourced, value-added messaging and communications services to individuals and businesses around the world. j2 Global's network spans more than 3,000 cities in 46 countries on six continents. The Company offers Internet fax, voice and email solutions. j2 Global markets its services principally under the brand names eFax(r), eFax Corporate(r), Onebox(r), eVoice(r) and Electric Mail(r). As of December 31, 2008, j2 Global had achieved 13 consecutive fiscal years of revenue growth and seven consecutive fiscal years of positive and growing operating earnings. For more information about j2 Global, please visit www.j2global.com.
The j2 Global Communications, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3907
"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 Act of 1995, particularly those contained in the "Business Outlook" portion regarding the Company's expected fiscal 2009 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: 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 2007 Annual Report on Form 10-K filed by j2 Global on February 25, 2008, 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 the "Business Outlook" portion regarding the Company's expected fiscal 2009 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.
j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
2008 2007
------------ ------------
ASSETS
Cash and cash equivalents $ 150,780 $ 154,220
Short-term investments 14 54,297
Accounts receivable, net of allowances of
$2,896 and $1,378, respectively 14,083 15,365
Prepaid expenses and other current assets 6,683 5,061
Deferred income taxes 2,958 1,724
------------ ------------
Total current assets 174,518 230,667
Long-term investments 11,081 21,241
Property and equipment, net 18,938 23,511
Goodwill 72,783 39,452
Other purchased intangibles, net 36,791 29,220
Deferred income taxes 7,787 6,113
Other assets 142 205
------------ ------------
TOTAL ASSETS $ 322,040 $ 350,409
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 16,915 $ 17,516
Income taxes payable 1,800 4,649
Deferred revenue 13,680 14,708
------------ ------------
Total current liabilities 32,395 36,873
Accrued income tax liability 38,643 30,863
Other long-term liabilities 1,022 59
------------ ------------
Total liabilities 72,060 67,795
Commitments and contingencies -- --
Stockholders' Equity:
Preferred stock -- --
Common stock 523 543
Additional paid-in capital 131,185 121,503
Treasury stock (112,671) (4,662)
Retained earnings 234,843 162,281
Accumulated other comprehensive income
(loss) (3,900) 2,949
------------ ------------
Total stockholders' equity 249,980 282,614
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 322,040 $ 350,409
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j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
---------------------- ----------------------
2008 2007 2008 2007
---------- ---------- ---------- ----------
(UNAUDITED) (UNAUDITED)
Revenues
Subscriber $ 59,622 $ 55,394 $ 236,841 $ 212,329
Other 1,014 1,436 4,672 8,368
---------- ---------- ---------- ----------
Total revenue 60,636 56,830 241,513 220,697
Cost of revenues
(including share-based
compensation of $255
and $901 for the three
and twelve months of
2008, respectively,
and $177 and $668 for
the three and twelve
months of 2007,
respectively) 11,224 11,597 46,250 43,987
---------- ---------- ---------- ----------
Gross profit 49,412 45,233 195,263 176,710
Operating expenses:
Sales and marketing
(including share-
based compensation of
$313 and $1,268 for
the three and twelve
months of 2008,
respectively, and
$342 and $1,187 for
the three and twelve
months of 2007,
respectively) 9,683 10,098 41,270 38,768
Research, development
and engineering
(including share-
based compensation of
$183 and $803 for the
three and twelve
months of 2008,
respectively, and
$228 and $771 for the
three and twelve
months of 2007,
respectively) 2,851 3,099 12,031 11,833
General and
administrative
(including share-
based compensation of
$1,243 and $5,014 for
the three and twelve
months of 2008,
respectively, and
$1,368 and $4,788 for
the three and twelve
months of 2007,
respectively) 10,668 10,866 44,028 39,683
---------- ---------- ---------- ----------
Total operating
expenses 23,202 24,063 97,329 90,284
---------- ---------- ---------- ----------
Operating earnings 26,210 21,170 97,934 86,426
Interest and other
income, net 673 2,314 4,219 9,035
---------- ---------- ---------- ----------
Earnings before income
taxes 26,883 23,484 102,153 95,461
Income tax expense 6,607 6,628 29,591 27,000
---------- ---------- ---------- ----------
Net earnings $ 20,276 $ 16,856 $ 72,562 $ 68,461
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Basic net earnings per
common share $ 0.47 $ 0.35 $ 1.63 $ 1.40
========== ========== ========== ==========
Diluted net earnings
per common share $ 0.45 $ 0.34 $ 1.58 $ 1.35
========== ========== ========== ==========
Basic weighted average
shares outstanding 43,578,619 48,652,001 44,609,174 48,953,483
========== ========== ========== ==========
Diluted weighted
average shares
outstanding 44,717,716 50,268,781 45,937,506 50,762,007
========== ========== ========== ==========
j2 GLOBAL COMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
FOR THE YEAR ENDED
DECEMBER 31,
----------------------
2008 2007
---------- ----------
Cash flows from operating activities:
Net earnings $ 72,562 $ 68,461
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 13,177 10,134
Share-based compensation 7,986 7,414
Tax benefit of vested restricted stock 720 673
Tax benefit of stock option exercises 1,309 5,654
Excess tax benefits from share-based
compensation (1,565) (4,731)
Provision for doubtful accounts 2,815 780
Deferred income taxes (2,908) 212
(Gain) loss on disposal of fixed assets (6) 229
Changes in assets and liabilities, net of
effects of business combinations:
Decrease (increase) in:
Accounts receivable (1,809) (3,886)
Prepaid expenses and other current assets 1,821 (133)
Other assets 46 (201)
Increase (decrease) in:
Accounts payable and accrued expenses (994) (2,580)
Income taxes payable (7,662) 3,345
Deferred revenue (2,118) 2,991
Accrued income tax liability 7,399 5,898
Other (57) (53)
---------- ----------
Net cash provided by operating activities 90,716 94,207
---------- ----------
Cash flows from investing activities:
Net purchases of available-for-sale
investments -- (311,003)
Sales of available-for-sale investments 36,170 279,088
Purchases of held-to-maturity investments -- (26,498)
Redemptions/Sales of held-to-maturity
investments 27,881 78,954
Purchases of property and equipment (2,507) (10,315)
Acquisition of businesses, net of cash
received (42,825) (11,165)
Purchases of intangible assets (3,818) (6,038)
Proceeds from sale of property and equipment 25 --
---------- ----------
Net cash provided by (used in) investing
activities 14,926 (6,977)
---------- ----------
Cash flows from financing activities:
Repurchases of common stock and restricted
stock (108,492) (42,427)
Issuance of common stock under employee
stock purchase plan 183 266
Exercise of stock options 1,829 7,700
Excess tax benefits from share-based
compensation 1,565 4,731
Repayments of long-term debt -- (153)
---------- ----------
Net cash used in financing activities (104,915) (29,883)
---------- ----------
Effect of exchange rate changes on cash and
cash equivalents (4,167) 1,268
---------- ----------
Net (decrease) increase in cash and cash
equivalents (3,440) 58,615
Cash and cash equivalents, beginning of year 154,220 95,605
---------- ----------
Cash and cash equivalents, end of year $ 150,780 $ 154,220
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