Company News »

j2 Global Reports Q4 and Year End 2014 Results and Provides 2015 Outlook

Business Wire
Share on StockTwits
Published on

j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the fourth quarter and year ended December 31, 2014, provided fiscal 2015 financial estimates and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.2925 per share.

FOURTH QUARTER 2014 RESULTS

Quarterly revenues increased 21.1% to a record $167.1 million compared to $138.0 million for Q4 2013.

Quarterly EBITDA(3) increased 17.2% to a record $76.9 million compared to $65.6 million for Q4 2013.

GAAP earnings per diluted share for the quarter increased 50% to a fourth quarter record of $0.66 compared to $0.44 for Q4 2013. Adjusted Non-GAAP earnings per diluted share(1)(2) increased 7.7% to $0.98 compared to $0.91 for Q4 2013. In Q2 2014, j2 issued $402.5 million in convertible senior notes, which adversely affected Q4 2014 earnings per diluted share by approximately $0.07 and Adjusted Non-GAAP earnings per diluted share by approximately $0.05.

Q4 2014 free cash flow(4) decreased (21.2)% to $39.8 million compared to $50.5 million for Q4 2013 primarily due to the increased billings from the Media business.

j2 ended the quarter with $590 million in cash and investments after deploying $143 million during the quarter for the count of eight acquisitions and the payment of j2’s regular quarterly dividend.

Key financial results for fourth quarter 2014 versus fourth quarter 2013 are set forth in the following table (in millions, except per share). Reconciliations of Adjusted earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

Q4 2014 Q4 2013 % Change
Revenues
Cloud Services $113.0 million $94.6 million 19.5%
Digital Media $52.9 million $41.8 million 26.6%
IP Licensing $1.2 million $1.6 million NM
Total: $167.1 million $138.0 million 21.1%
Earnings per Diluted Share(1) $0.66 $0.44 50%
Adjusted Non-GAAP Earnings per Diluted Share(1) (2) $0.98 $0.91 7.7%
EBITDA(3) $76.9 million $65.6 million 17.2%
Free Cash Flow(4) $39.8 million $50.5 million (21.2)%

FULL YEAR 2014 RESULTS

Annual revenues increased 15.0% to a record $599 million compared to $520.8 million for 2013.

Annual EBITDA (3) increased 19.1% to a record $262.6 million compared to $220.4 million for 2013.

GAAP earnings per diluted share for the year increased 13.2% to $2.58 compared to $2.28 for 2013. 2014 Adjusted Non-GAAP earnings per diluted share(5)(6) increased 11.4% to a record $3.42 compared to $3.07 for 2013. In Q2 2014, j2 issued $402.5 million in convertible senior notes, which adversely affected 2014 earnings per diluted share by approximately $0.15 and Adjusted Non-GAAP earnings per diluted share by approximately $0.10.

Free cash flow(4) for the year increased 14% to a record $171.5 million compared to $150.4 million for 2013.

Key annual financial results for 2014 versus 2013 are set forth in the following table (in millions, except per share). Reconciliations of Adjusted earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

2014 2013 % Change
Revenues
Cloud Services $425.9 million $371.7 million 14.6%
Digital Media $167.6 million $130.7 million 28.2%

IP Licensing(7)

$5.5 million

$18.4 million

(70)%
Total: $599 million $520.8 million 15.0%
Earnings per Diluted Share(5) $2.58 $2.28 13.2%
Adjusted Non-GAAP Earnings per Diluted Share(5) (6) $3.42 $3.07 11.4%
EBITDA(3) $262.6 million $220.4 million 19.1%
Free Cash Flow(4) $171.5 million $150.4 million 14.0%

“2014 was an excellent year for j2 during which we experienced strong growth in all operating lines of business,” said Hemi Zucker, CEO of j2. “Our Cloud Services Segment saw its most significant growth in the Email and Backup businesses, growing both organically and through M&A. We also broadened our Cloud revenue base by expanding into Web Hosting with the acquisition of Web24. The Media Segment scaled exceptionally well in 2014 realizing the operating leverage we expected with more than 60% of incremental revenue flowing through to EBITDA. The Company is well-positioned for continued growth across all our brands in 2015 and beyond. We are forecasting 17% top line growth at the mid-range of our 2015 revenue estimate despite significant foreign exchange headwinds caused by the strong dollar.”

BUSINESS OUTLOOK

For fiscal 2015, the Company estimates that it will achieve revenues between $690 and $710 million and Adjusted Non-GAAP earnings per diluted share of between $3.73 and $3.97.

Adjusted Non-GAAP earnings per diluted share for 2015 excludes share-based compensation of between $9 and $11 million, amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax.

It is anticipated that the normalized tax rate for 2015 (exclusive of the release of reserves for uncertain tax positions) will be between 27% and 29%.

DIVIDEND

j2’s Board of Directors has approved a quarterly cash dividend of $0.2925 per common share, a 2.6% increase versus last quarter’s dividend and a 11.4% increase versus the dividend paid in Q1 2014. This is j2’s 14th consecutive quarterly dividend since its first quarterly dividend in September, 2011. The dividend will be paid on March 9, 2015 to all shareholders of record as of the close of business on February 23, 2015. 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, 2015 by an additional year. Approximately 2.9 million shares remain available for purchase under the program.

APPOINTMENT OF JON MILLER TO j2 BOARD

Jon Miller, an experienced senior executive and investor in both media and technology arenas, was appointed to j2’s board of directors. Currently, a Partner in venture capital firm Advancit Capital, Mr. Miller was previously CEO of NewsCorp Digital Media, Chairman and CEO of AOL, Inc., and CEO and President of Information and Services for USA Interactive (now IAC Corp). Mr. Miller also has held executive posts at Viacom/MTV Networks and the NBA. “It is a great pleasure to welcome such an experienced and accomplished media executive to our board at a time when we are rapidly expanding our digital media business,” said Richard Ressler, Chairman of the board of j2.

Notes:

(1) The estimated GAAP effective tax rate was approximately 23.4% for Q4 2014 and 33.7% for Q4 2013. The estimated Adjusted Non-GAAP effective tax rate was approximately 26.4% for Q4 2014 and 25.9% for Q4 2013.

(2)

For Q4 2014, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, amortization of acquired intangibles, certain acquisition-related integration costs and certain tax consulting fees, in each case net of tax, totaling $0.33. For Q4 2013, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes, amortization of acquired intangibles, certain acquisition-related integration costs and loss on extinguishment of debt and related interest expense, in each case net of tax, totaling $0.47. Adjusted Non-GAAP earnings per diluted share amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

(3)

EBITDA is defined as earnings before interest and other expense, net; income tax expense; depreciation and amortization; and the items used to reconcile EPS to Adjusted Non-GAAP EPS referred to in Note (2) above. EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

(4)

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 for 2013 excludes $27 million received under a Q2 2013 License Agreement. Free cash flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

(5)

The GAAP effective tax rate was approximately 19.2% for 2014 and 24.7% for 2013. The Adjusted Non-GAAP effective tax rate was approximately 26.1% for 2014 and 24.8% for 2013.

(6)

For 2014, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, amortization of acquired intangibles, certain acquisition-related integration costs, certain tax consulting fees and additional tax expense (benefit) from prior years, and adds back the impact of the fair value adjustment to deferred revenues purchased in the Livedrive acquisition, in each case net of tax, totaling $0.86. For 2013, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes, amortization of acquired intangibles, certain acquisition-related integration costs, loss on extinguishment of debt and related interest expense and earnings attributable to a Q2 2013 License Agreement, in each case net of tax, totaling $0.82. Adjusted Non-GAAP earnings per diluted share amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

(7)

Intellectual Property (IP) Licensing revenues for fiscal year 2013 included a $27 million license agreement that increased revenues by $12.6 million from past damages (the “Q2 2013 License Agreement”). For more information on the Q2 2013 License Agreement please refer to j2’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 25, 2013.

About j2 Global

j2 Global, Inc. (NASDAQ:JCOM) and its affiliates provide Internet services through their 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(R), eVoice(R), FuseMail(R), Campaigner(R), KeepItSafe(R) and Onebox(R) and operates a messaging network spanning 50 countries on six continents. The Digital Media Division consists of Ziff Davis, LLC, 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 also operates NetShelter Powered by 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, 2014, j2 had achieved 19 consecutive fiscal years of revenue growth. For more information about j2, 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 2015 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 grow non-fax revenues, profitability and cash flows; ability to identify and close acquisitions; 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 2013 Annual Report on Form 10-K filed by j2 Global on March 3, 2014, 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 2015 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, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
DECEMBER 31, DECEMBER 31,
2014 2013
ASSETS
Cash and cash equivalents $ 433,663 $ 207,801
Short-term investments 96,206 90,789

Accounts receivable, net of allowances of $3,685 and $4,105, respectively

91,699 67,245
Prepaid expenses and other current assets 22,602 20,064
Deferred income taxes 2,402 3,126
Total current assets 646,572 389,025
Long-term investments 60,508 47,351
Property and equipment, net 38,217 31,200
Goodwill 635,675 457,422
Other purchased intangibles, net 311,800 223,533
Deferred income taxes 1,845
Other assets 12,819 3,413
TOTAL ASSETS $ 1,705,591 $ 1,153,789
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses $ 95,310 $ 69,570
Income taxes payable 1,569
Deferred revenue 63,457 36,326
Liability for uncertain tax positions 5,535
Deferred income taxes 342 1,892
Other current liabilities 258
Total current liabilities 159,367 114,892
Long-term debt 593,350 245,670
Liability for uncertain tax positions 37,551 38,329
Deferred income taxes 57,957 35,833
Deferred revenue 10,182 11,189
Other long-term liabilities 22,557 1,458
Mandatorily redeemable financial instrument
Total liabilities 880,964 447,371
Commitments and contingencies
Stockholders’ Equity:
Preferred stock
Common stock 474 461
Additional paid-in capital 273,304 216,872
Retained earnings 553,584 484,850
Accumulated other comprehensive income (loss) (2,735 ) 4,235
Total j2 Global, Inc. stockholder’s equity 824,627 706,418
Noncontrolling interest
Total stockholders’ equity 824,627 706,418
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,705,591 $ 1,153,789
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
THREE MONTHS ENDED TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2014 2013 2014 2013
Revenues $ 167,145 $ 138,035 $ 599,030 $ 520,801
Cost of revenues (including share-based compensation of $83 and $346 for the three and twelve months of 2014, respectively, and $175 and $756 for the three and twelve months of 2013, respectively) 28,999 22,178 105,989 86,893
Gross profit 138,146 115,857 493,041 433,908
Operating expenses:
Sales and marketing (including share-based compensation of $584 and $1,944 for the three and twelve months of 2014, respectively, and $540 and $1,855 for the three and twelve months of 2013, respectively) 36,633 31,679 141,967 131,317
Research, development and engineering (including share-based compensation of $184 and $721 for the three and twelve months of 2014, respectively, and $123 and $434 for the three and twelve months of 2013, respectively) 8,228 6,351 30,680 25,485
General and administrative (including share-based compensation of $1,520 and $5,898 for the three and twelve months of 2014, respectively, and $1,774 and $6,675 for the three and twelve months of 2013, respectively) 39,979 27,306 134,188 101,683
Total operating expenses 84,840 65,336 306,835 258,485
Income from operations 53,306 50,521 186,206 175,423
Other expense (income), net 89 12,071 (165 ) 11,472
Interest expense (income), net 10,451 6,546 31,204 21,254
Income before income taxes 42,766 31,904 155,167 142,697
Income tax expense 10,012 10,747 29,840 35,175
Net income 32,754 21,157 125,327 107,522
Less net income attributable to noncontrolling interest 403
Less extinguishment of Series A Preferred Stock (991 ) (991 )
Net income attributable to j2 Global, Inc. common stockholders $ 31,763 $ 20,754 $ 124,336 $ 107,522
Basic net income per common share:
Net income attributable to j2 Global, Inc. common stockholders $ 0.66 $ 0.45 $ 2.60 $ 2.31
Diluted net income per common share:
Net income attributable to j2 Global, Inc. common stockholders $ 0.66 $ 0.44 $ 2.58 $ 2.28
Basic weighted average shares outstanding 47,146,503 45,867,769 46,778,015 45,548,767
Diluted weighted average shares outstanding 47,468,841 46,382,363 47,106,538 46,140,019
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
TWELVE MONTHS ENDED DECEMBER 31,
2014 2013
Cash flows from operating activities:
Net income $ 125,327 $ 107,522

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 62,953 39,788
Accretion and amortization of discount and premium of investments 1,334 1,796
Amortization of financing costs and discounts 5,045 613
Share-based compensation 8,908 9,720
Excess tax benefit from share-based compensation (6,839 ) (2,695 )
Provision for doubtful accounts 4,702 3,135
Deferred income taxes (10,033 ) 1,202
Loss on extinguishment of debt and related interest expense 0 14,437
Loss on sale of available-for-sale investment (90 )
Decrease (increase) in:
Accounts receivable (11,078 ) (9,588 )
Prepaid expenses and other current assets (3,212 ) 149
Other assets (42 ) 242
(Decrease) increase in:
Accounts payable and accrued expenses (5,447 ) 9,126
Income taxes payable 10,797 (285 )
Deferred revenue (711 ) 12,368
Liability for uncertain tax positions (6,313 ) 6,186
Other liabilities 603 (392 )
Net cash provided by operating activities 175,904 193,324
Cash flows from investing activities:
Maturity of certificate of deposit 14,520 42,615
Purchase of certificates of deposit (65 ) (22,071 )
Sales of available-for-sale investments 110,363 140,126
Purchases of available-for-sale investments (138,452 ) (168,901 )
Purchases of property and equipment (11,221 ) (18,626 )
Purchases of intangible assets (5,336 ) (14,200 )
Acquisition of businesses, net of cash received (245,278 ) (126,341 )
Net cash used in investing activities (275,469 ) (167,398 )
Cash flows from financing activities:
Issuance of long-term debt 402,500
Debt issuance costs (12,924 ) (47 )
Repurchases of stock (5,663 ) (4,587 )
Issuance of stock, net of costs 6,886 13,865
Excess tax benefit from share-based compensation 6,839 2,695
Mandatorily redeemable financial instrument
Dividends paid (52,269 ) (45,134 )
Other (16,512 ) (2,485 )
Net cash (used in) provided by financing activities 328,857 (35,693 )
Effect of exchange rate changes on cash and cash equivalents (3,430 ) (1,112 )
Net (decrease) increase in cash and cash equivalents 225,862 (10,879 )
Cash and cash equivalents at beginning of period 207,801 218,680
Cash and cash equivalents at end of period $ 433,663 $ 207,801
j2 GLOBAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
THREE MONTHS ENDED DECEMBER 31, 2014 AND 2013
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition-related integration costs and the impact of fair value adjustments to deferred revenue purchased in the Livedrive acquisition; (3) IRS consulting fee; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of loss on extinguishment of debt and related interest expense associated with acquiring shares of Ziff Davis, Inc. that the company did not already own and (6) elimination of income tax provision associated with the noted modifications.

THREE MONTHS ENDED DECEMBER 31, 2014 THREE MONTHS ENDED DECEMBER 31, 2013
(5)
Loss on
(2) (2) Extinguishment
Acquisition- (3) Acquisition- of Debt and

(1)

related IRS (1) related Related
Share-based Integration Consulting (4) Adjusted Share-based Integration (4) Interest Adjusted
GAAP Compensation Costs Fee Amortization Non-GAAP GAAP Compensation Costs Amortization Expense Non-GAAP
Revenues $ 167,145 336 $ 167,481 $ 138,035 (8 ) $ 138,027
Cost of revenues 28,999 (82 ) (668 ) 28,249 22,178 (175 ) 22,003
Operating expenses:
Sales and marketing 36,633 (584 ) (25 ) 36,024 31,679 (540 ) (189 ) 30,950
Research, development and engineering 8,228 (184 ) (2 ) 8,042 6,351 (123 ) (13 ) 6,215
General and administrative 39,979 (1,520 ) (589 ) (650 ) (15,134 ) 22,086 27,306 (1,691 ) (1,012 ) (8,583 ) 16,020
Other expense (income), net 89 89 12,071 (12,865 ) (794 )
Interest expense (income), net 10,451 (2,124 ) 8,327 6,546 (1,572 ) 4,974
Income tax provision (6) 10,012 789 1,123 176 4,959 17,059 10,747 879 520 3,047 15,193
Net Income $ 32,754 1,581 1,953 474 10,843 $ 47,605 $ 21,157 1,650 686 5,536 14,437 $ 43,466
Extinguishment of Series A Preferred Stock (991 ) 991

Net income attributable to j2 Global, Inc. common stockholders

$ 31,763 $ 1,581 $ 2,944 $ 474 $ 10,843 $ 47,605 $ 20,754 $ 1,650 $ 686 $ 5,536 $ 14,437 $ 43,063

Net income per share attributable to j2 Global, Inc. common stockholders*:

Basic $ 0.66 0.03 0.06 0.01 0.23 $ 0.99 $ 0.45 0.04 0.02 0.12 0.31 $ 0.92
Diluted $ 0.66 0.03 0.06 0.01 0.23 $ 0.98 $ 0.44 0.04 0.02 0.12 0.31 $ 0.91

* 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 a 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 it does 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, 2014 AND 2013
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)

Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition-related integration costs and the impact of fair value adjustments to deferred revenue purchased in the Livedrive acquisition; (3) IRS consulting fee; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of additional income tax benefit from prior years; (6) elimination of loss on extinguishment of debt and related interest expense associated with acquiring shares of Ziff Davis, Inc. that the company did not already own; (7) elimination of revenue associated with past damages under a single $27 million license agreement; and (8) elimination of income tax provision associated with the noted modifications.

TWELVE MONTHS ENDED DECEMBER 31, 2014 TWELVE MONTHS ENDED DECEMBER 31, 2013
(5) (6)
Additional Loss on
(2) Tax (2) Extinguishment
Acquisition- (3) Expense Acquisition- of Debt and
(1) related IRS (Benefit) (1) related Related (7)
Share-based Integration Consulting (4) from Adjusted Share-based Integration (4) Interest Patent Adjusted
GAAP Compensation Costs Fee Amortization Prior Years Non-GAAP GAAP Compensation Costs Amortization Expense Settlement Non-GAAP
Revenues $ 599,030 2,075 $ 601,105 $ 520,801 (2,214 ) (12,572 ) $ 506,015
Cost of revenues 105,989 (345 ) (57 ) (2,462 ) 103,125 86,893 (756 ) (88 ) 86,049
Operating expenses:
Sales and marketing 141,967 (1,944 ) (125 ) 139,898 131,317 (1,855 ) (4,621 ) 124,841
Research, development and engineering 30,680 (721 ) (34 ) 29,925 25,485 (434 ) (592 ) 24,459
General and administrative 134,188 (5,898 ) (144 ) (1,423 ) (47,247 ) (713 ) 78,763 101,683 (6,592 ) (5,134 ) (30,022 ) 59,935
Other expense (income), net (165 ) (165 ) 11,472 (12,865 ) (1,393 )
Interest expense (income), net 31,204 (4,082 ) 27,122 21,254 (1,572 ) 19,682
Income tax provision (8) 29,840 3,115 2,148 369 16,092 6,435 57,999 35,175 3,263 3,529 10,435 (4,614 ) 47,788
Net Income $ 125,327 5,793 4,369 1,054 33,617 (5,722 ) $ 164,438 $ 107,522 6,374 4,692 19,587 14,437 (7,958 ) $ 144,654
Extinguishment of Series A Preferred Stock (991 ) 991

Net income attributable to j2 Global, Inc. common stockholders

$ 124,336 $ 5,793 $ 5,360 $ 1,054 $ 33,617 $ (5,722 ) $ 164,438 $ 107,522 $ 6,374 $ 4,692 $ 19,587 $ 14,437 $ (7,958 ) $ 144,654

Net income per share attributable to j2 Global, Inc. common stockholders*:

Basic $ 2.60 0.13 0.12 0.02 0.72 (0.12 ) $ 3.44 $ 2.31 0.15 0.11 0.43 0.32 (0.17 ) $ 3.18
Diluted $ 2.58 0.13 0.12 0.02 0.71 (0.12 ) $ 3.42 $ 2.28 0.14 0.11 0.42 0.31 (0.17 ) $ 3.07

* 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 a 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 it does 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 AND TWELVE MONTHS ENDED DECEMBER 31, 2014 AND 2013
(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 TWELVE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
2014 2013 2014 2013
Net income $ 32,754 $ 21,157 $ 125,327 $ 107,522
Plus:
Other expense (income), net 89 12,071 (165 ) 11,472
Interest expense (income), net 10,451 6,546 31,204 21,254
Income tax expense 10,012 10,747 29,840 35,175
Depreciation and amortization 19,646 11,311 62,953 39,737
Reconciliation of GAAP to Non-GAAP financial measures:
Patent Settlement (12,572 )
Share-based compensation and the associated payroll tax expense 2,370 2,529 8,908 9,637
Acquisition-related integration costs 952 1,206 2,435 8,221
Additional indirect tax expense from prior years 713
Fees associated with prior year tax audits 650 1,423
EBITDA $ 76,924 $ 65,567 $ 262,638 $ 220,446

EBITDA is defined as earnings before interest and other expense, net; income tax expense; depreciation and amortization; and the items used to reconcile EPS to Adjusted Non-GAAP EPS. EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes. 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

2014

Net cash provided by operating activities $ 37,294 $ 54,512 $ 40,315 $ 43,783 $ 175,904
Less: Purchases of property and equipment (2,936 ) (1,087 ) (3,124 ) (4,074 ) (11,221 )
Add: Excess tax benefit from share-based compensation 4,082 721 1,925 111 6,839
Free cash flows $ 38,440 $ 54,146 $ 39,116 $ 39,820 $ 171,522

Q1

Q2

Q3

Q4

YTD

2013

Net cash provided by operating activities $ 40,048 $ 68,973 $ 25,859 $ 58,444 $ 193,324
Less: Purchases of property and equipment (1,933 ) (4,056 ) (5,126 ) (7,511 ) (18,626 )
Add: Excess tax benefit (deficit) from share-based compensation 280 1,301 1,590 (476 ) 2,695
Less: Patent Settlement (27,000 ) (27,000 )
Free cash flows $ 38,395 $ 39,218 $ 22,323 $ 50,457 $ 150,393

The Company discloses 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 does not reflect all of the amounts associated with the Company’s results of operations determined in accordance with GAAP.

Share on StockTwits

What others are reading on Finances

Sorry. No data so far.


Iron FX 1.11156/1.11128 2.8
XM Markets 1.09948/1.09928 2
FxPro 1.10184/1.10171 1.3
FXCM 1.13943/1.13912 3.1