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THIRD QUARTER 2009 RESULTS
Subscriber revenues for Q3 2009 increased to $61.0 million compared to $60.5 million in Q3 2008.
Total revenues for Q3 2009 increased to $61.8 million compared to $61.6 million in Q3 2008.
During Q3 2009, the Company improved its gross margin to 81.8% from 81.0% in Q3 2008 and its operating margin to 43.1% from 40.9% in Q3 2008. Both margins are a record for a fiscal third quarter and a nine month period.
Net earnings per diluted share for Q3 2009 increased to $0.43 compared to $0.42 in Q3 2008.
Free cash flows for Q3 2009 increased 74% to $26.1 million compared to $15.0 million in Q3 2008.
The Company ended the quarter with approximately $222.5 million in cash and investments.
Key financial results for third quarter 2009 versus third quarter 2008 are as follows:
==============================
Q3 2009 Q3 2008
==================================================================
Subscriber Revenues $61.0 million $60.5 million
==================================================================
Total Revenues $61.8 million $61.6 million
==================================================================
Net Earnings $19.3 million $18.8 million
==================================================================
Net Earnings per Diluted Share (1) $0.43 $0.42
==================================================================
Free Cash Flows $26.1 million $15.0 million
==================================================================
(1) The estimated effective tax rate was approximately 28% and
30% for Q3 2009 and Q3 2008, respectively.
"In Q3, we continued to successfully execute our 2009 plan to improve margins while maintaining modest growth in this difficult economy," said Scott Turicchi, j2 Global's President. "I am pleased that this disciplined approach to cost-management has yielded record free cash flow and margins for a fiscal third quarter and a nine month period."
"As we enter 2010, we look forward to turning our attention to new initiatives which we have put on hold pending the economic recovery," said Hemi Zucker, j2 Global's chief executive officer. "Our planed initiatives include additional marketing programs, new product development, M&A and geographic expansion in our voice, email and fax service areas."
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 3,500 cities in 46 countries on six continents. The Company offers faxing and voicemail solutions, document management solutions, Web-initiated conference calling, and unified-messaging and communications services. j2 Global markets its services principally under the brand 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 Mr. Zucker's quote. 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: our ability to launch additional marketing programs and the success of those programs, our ability to release new products and the success of those products, our ability to expand our network and services into new geographic regions, 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 2008 Annual Report on Form 10-K filed by j2 Global on February 25, 2009, and the other reports filed by j2 Global from time-to-time with the SEC, each of which is available at www.sec.gov. Although management's expectations may change after the date of this press release, the Company undertakes no obligation to revise or update these expectations.
j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
SEPT. 30, DEC. 31,
2009 2008
--------- ---------
ASSETS
Cash and cash equivalents $ 188,350 $ 150,780
Short-term investments 31,165 14
Accounts receivable,
net of allowances of $3,031 and $2,896,
respectively 13,435 14,083
Prepaid expenses and other current assets 10,995 6,683
Deferred income taxes 2,958 2,958
--------- ---------
Total current assets 246,903 174,518
Long-term investments 2,950 11,081
Property and equipment, net 15,805 18,938
Goodwill 81,070 72,783
Other purchased intangibles, net 37,357 36,791
Deferred income taxes 8,711 7,787
Other assets 262 142
--------- ---------
TOTAL ASSETS $ 393,058 $ 322,040
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 16,723 $ 16,915
Income taxes payable 1,408 1,800
Deferred revenue 11,936 13,680
--------- ---------
Total current liabilities 30,067 32,395
Accrued income tax liability 44,419 38,643
Other long-term liabilities 3,210 1,022
--------- ---------
Total liabilities 77,696 72,060
Commitments and contingencies -- --
Total stockholders' equity 315,362 249,980
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 393,058 $ 322,040
========= =========
j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
----------------------- -----------------------
2009 2008 2009 2008
----------- ----------- ----------- -----------
Revenues
Subscriber $ 61,045 $ 60,466 $ 181,734 $ 177,218
Other 756 1,086 2,922 3,659
----------- ----------- ----------- -----------
Total revenue 61,801 61,552 184,656 180,877
Cost of revenues
(including share-
based compensation
of $323 and $935 for
the three and nine
months of 2009,
respectively, and
$259 and $646 for
the three and nine
months of 2008,
respectively) 11,258 11,670 34,250 35,026
----------- ----------- ----------- -----------
Gross profit 50,543 49,882 150,406 145,851
----------- ----------- ----------- -----------
Operating expenses:
Sales and marketing
(including share-
based compensation
of $477 and $1,338
for the three and
nine months of
2009, respectively,
and $289 and $955
for the three and
nine months of
2008, respectively) 9,347 10,788 27,443 31,587
Research,
development and
engineering
(including share-
based compensation
of $217 and $634
for the three and
nine months of
2009, respectively,
and $215 and $620
for the three and
nine months of 2008,
respectively) 2,862 3,022 8,685 9,180
General and
administrative
(including share-
based compensation
of $1,877 and
$5,188 for the
three and nine
months of 2009,
respectively, and
$1,228 and $3,771
for the three and
nine months of 2008,
respectively) 11,667 10,911 33,582 33,360
----------- ----------- ----------- -----------
Total operating
expenses 23,876 24,721 69,710 74,127
----------- ----------- ----------- -----------
Operating earnings 26,667 25,161 80,696 71,724
Other-than-temporary
impairment losses -- -- (9,193) --
Interest and other
income, net 20 1,655 477 3,546
----------- ----------- ----------- -----------
Earnings before
income taxes 26,687 26,816 71,980 75,270
Income tax expense 7,353 8,054 22,857 22,984
----------- ----------- ----------- -----------
Net earnings $ 19,334 $ 18,762 $ 49,123 $ 52,286
=========== =========== =========== ===========
Basic net earnings
per common share $ 0.44 $ 0.43 $ 1.12 $ 1.16
=========== =========== =========== ===========
Diluted net earnings
per common share $ 0.43 $ 0.42 $ 1.09 $ 1.13
=========== =========== =========== ===========
Basic weighted
average shares
outstanding 44,126,038 43,479,943 43,840,308 44,955,199
=========== =========== =========== ===========
Diluted weighted
average shares
outstanding 45,296,147 45,077,671 44,985,160 46,431,507
=========== =========== =========== ===========
j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
NINE MONTHS ENDED
SEPTEMBER 30,
2009 2008
--------- ---------
Cash flows from operating activities:
Net earnings $ 49,123 $ 52,286
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 10,990 9,678
Share-based compensation 8,095 5,992
Excess tax benefits from share-based
compensation (3,126) (655)
Provision for doubtful accounts 1,710 2,967
Deferred income taxes (924) (1,729)
Loss on disposal of fixed assets 15 20
Other-than-temporary impairment losses 9,193 --
Decrease (increase) in:
Accounts receivable (803) (2,983)
Prepaid expenses and other current assets (737) 1,452
Other assets (123) 26
(Decrease) increase in:
Accounts payable and accrued expenses (723) 1,324
Income taxes payable (724) (5,299)
Deferred revenue 219 (1,305)
Accrued income tax liability 5,776 5,196
Other 22 (43)
--------- ---------
Net cash provided by operating activities 77,983 66,927
--------- ---------
Cash flows from investing activities:
Sales of available-for-sale investments -- 36,170
Redemptions/Sales of held-to-maturity
investments -- 27,883
Purchase of certificates of deposit (31,150) --
Purchases of property and equipment (1,704) (2,202)
Acquisition of businesses, net of cash
received (11,915) (32,435)
Proceeds from sale of assets 1,340 --
Purchases of intangible assets (3,146) (2,320)
--------- ---------
Net cash (used in) provided by investing
activities (46,575) 27,096
--------- ---------
Cash flows from financing activities:
Repurchases of common stock -- (108,028)
Repurchase of restricted stock (441) (417)
Issuance of common stock under employee
stock purchase plan 89 153
Exercise of stock options 2,638 1,468
Excess tax benefits from share-based
compensation 3,126 655
--------- ---------
Net cash provided by (used in) financing
activities 5,412 (106,169)
--------- ---------
Effect of exchange rate changes on cash and
cash equivalents 750 (1,353)
--------- ---------
Net increase (decrease) in cash and cash
equivalents 37,570 (13,499)
Cash and cash equivalents at beginning of
period 150,780 154,220
--------- ---------
Cash and cash equivalents at end of period $ 188,350 $ 140,721
========= =========
j2 Global Communications, Inc.
Free Cash Flows
Q1 Q2 Q3 Q4 YTD
-- -- -- -- ---
2009
-----
Net cash provided by
operating activities 31,152 20,362 26,469 77,983
Less: Purchases of property
and equipment (721) (217) (767) (1,705)
Add: Excess tax benefit from
share-based compensation 5 2,718 403 3,126
----------------------------------------
30,436 22,863 26,105 -- 79,404
----------------------------------------
2008
----
Net cash provided by
operating activities 27,411 23,840 15,676 23,789 90,716
Less: Purchases of property
and equipment (469) (796) (937) (305) (2,507)
Add: Excess tax benefit from
share-based compensation 239 204 212 910 1,565
----------------------------------------
27,181 23,248 14,951 24,394 89,774
----------------------------------------
2007
----
Net cash provided by
operating activities 26,659 23,113 18,656 25,779 94,207
Less: Purchases of property
and equipment (529) (2,506) (2,940) (4,340)(10,315)
Add: Excess tax benefit from
share-based compensation 2,163 780 517 1,271 4,731
----------------------------------------
28,293 21,387 16,233 22,710 88,623
----------------------------------------
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: j2 Global Communications, Inc.
CONTACT: j2 Global Communications, Inc. Jeff Adelman 323-372-3617 press@j2global.com
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