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Achieves Record First Quarter Revenues (up 24.3% to $201 million vs. Q1 2015), EBITDA (up 25.1% to $87 million vs. Q1 2015), Free Cash Flow (up 38.8% to $61 million vs. Q1 2015) and Adjusted Non-GAAP EPS (up 23.5% vs. Q1 2015)

Announces Nineteenth Consecutive Quarterly Dividend Increase

LOS ANGELES, CA – May 5, 2016 — /BackupReview.info/ — j2 Global, Inc. (NASDAQGS: JCOM) today reported financial results for the first quarter ended March 31, 2016 and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.3350per share.

FIRST QUARTER 2016 RESULTS
Q1 2016 quarterly revenues increased 24.3% to a Q1 record of $200.5 million compared to $161.3 million for Q1 2015.

GAAP earnings per diluted share(1) for the quarter increased 35.6% to $0.61 compared to $0.45 for Q1 2015. Adjusted Non-GAAP earnings per diluted share(1)(2) for the quarter increased 23.5% to a Q1 record $1.05 compared to $0.85 for Q1 2015.

Quarterly EBITDA(3) increased 25.1% to a Q1 record $86.7 million compared to $69.3 million for Q1 2015.

Q1 2016 free cash flow(4) increased to a Q1 record of 38.8% to $60.5 million compared to $43.6 million for Q1 2015.

j2 ended the quarter with approximately $394.5 million in cash and investments after deploying $83.2 million during the quarter for acquisitions and j2′s regular quarterly dividend.

Key financial results for Q1 2016 versus Q1 2015 are set forth in the following table (in millions, except per share amounts). Reconciliations of Adjusted Non-GAAP earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

Q1 2016 Q1 2015 % Change
Revenues
Cloud Services $137.0 million $115.8 million 18.3%
Digital Media $62.3 million $43.2 million 44.2%
IP Licensing $1.2 million $2.3 million (47.8)%
Total: $200.5 million $161.3 million 24.3%
GAAP Net Income $29.9 million $21.9 million 36.5%
GAAP Earnings per Diluted Share (1) $0.61 $0.45 35.6%
Adjusted Non-GAAP Earnings per Diluted Share (1) (2) $1.05 $0.85 23.5%
EBITDA (3) $86.7 million $69.3 million 25.1%
Free Cash Flow (4) $60.5 million $43.6 million 38.8%

“With 24.3% revenue growth and an increase of 25.1% in EBITDA compared to the same quarter year over year, our first quarter represents a strong start to 2016,” said Hemi Zucker, CEO of j2 Global. “Q1 free cash-flow grew by 39% to $60.5M and Non-GAAP EPS grew by 24% year over year. All segments of our business are performing well and we have seen increasing margins both in our Media and Cloud Backup businesses as they both continue to benefit from economies of scale. During the quarter we acquired 6 cloud services businesses, which completed the M&A activity that we planned for with respect to our full year 2016 business outlook. This makes me very optimistic regarding the rest of the year.”

BUSINESS OUTLOOK
For fiscal 2016, the Company estimates that it will achieve revenues between $830 and $860 million and Adjusted Non-GAAP earnings per diluted share of between $4.70 and $5.00.

Adjusted Non-GAAP earnings per diluted share for 2016 excludes share-based compensation of between $12 and $14 million, amortization of acquired intangibles and the impact of any currently unanticipated items, in each case net of tax.

It is anticipated that the Non-GAAP effective tax rate for 2016 (exclusive of the release of reserves for uncertain tax positions) will increase from 28.4% to between 29% and 31%.

DIVIDEND
j2′s Board of Directors has approved a quarterly cash dividend of $0.3350 per common share, a $0.01, or 3.1% increase versus last quarter’s dividend. This is j2′s nineteenth consecutive quarterly dividend increase since its first quarterly dividend inSeptember 2011. The dividend will be paid on June 2, 2016 to all shareholders of record as of the close of business on May 18, 2016. Future dividends will be subject to Board approval.

Notes:

(1) The estimated GAAP effective tax rates were approximately 30.3% for Q1 2016 and 29.4% for Q1 2015. The estimated Adjusted Non-GAAP effective tax rates were approximately 29.1% for Q1 2016 and 28.9% for Q1 2015.
(2) For Q1 2016, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, certain acquisition-related integration costs, interest costs in excess of the coupon rate associated with convertible notes, amortization of acquired intangibles and additional tax expense (benefit) from prior years, in each case net of tax, totaling $0.44 per diluted share. For Q1 2015, Adjusted Non-GAAP earnings per diluted share excludes share-based compensation, certain acquisition-related integration costs, interest costs in excess of the coupon rate associated with convertible notes, certain tax consulting fees, amortization of acquired intangibles and additional tax expense (benefit) from prior years, in each case net of tax, totaling $0.40.
(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 amounts are not meant as a substitute for GAAP, but are solely for informational purposes.

About j2 Global
j2 Global, Inc. (NASDAQ: JCOM) provides Internet services through 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 ®, Livedrive®, Onebox ®, and LiveVault®, and operates a messaging network spanning 50 countries on six continents. The Digital Media Division offers technology, gaming and lifestyle content through its digital properties, which include PCMag.com, IGN.com, AskMen.com, Toolbox.com and others. The Digital Media Division 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, 2015, j2 had achieved 20 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 2016 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: the Company’s ability to grow non-fax revenues, profitability and cash flows; the Company’s ability to identify, close and successfully transition acquisitions; subscriber growth and retention; variability of the Company’s 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, 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 affectingj2 Global, refer to the 2015 Annual Report on Form 10-K filed by j2 Global on February 29, 2016, 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 2016 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.

About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following Adjusted Non-GAAP financial measures: Adjusted Non-GAAP earnings per diluted share, EBITDA and free cash flow. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use these Adjusted Non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. Our management believes that these Adjusted Non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain expenses and expenditures that may not be indicative of our recurring core business operating results. We believe that both management and investors benefit from referring to these Adjusted Non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These Adjusted Non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance and liquidity. We believe these Adjusted Non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.

For more information on these Adjusted Non-GAAP financial measures, please see the appropriate GAAP to Adjusted Non-GAAP reconciliation tables included within the attached Exhibit to this release.

j2 GLOBAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
MARCH 31,
2016
DECEMBER 31,
2015
ASSETS
Cash and cash equivalents $ 242,755 $ 255,530
Short-term investments 69,821 79,655
Accounts receivable, net of allowances of $5,267 and $4,261, respectively 98,329 114,680
Prepaid expenses and other current assets 19,706 25,722
Deferred income taxes, current 7,218
Total current assets 430,611 482,805
Long-term investments 81,896 78,563
Property and equipment, net 56,370 57,442
Goodwill 829,012 807,661
Other purchased intangibles, net 362,689 352,641
Deferred income taxes, non-current 5,884
Other assets 5,372 4,607
TOTAL ASSETS $ 1,771,834 $ 1,783,719
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable and accrued expenses $ 82,813 $ 114,384
Income taxes payable 5,729 5,589
Deferred revenue, current 78,975 76,104
Capital lease, current 198 214
Deferred income taxes, current 363
Total current liabilities 167,715 196,654
Long-term debt 594,406 592,037
Deferred revenue, non-current 5,688 6,538
Capital lease, non-current 139 148
Liability for uncertain tax positions 37,658 35,917
Deferred income taxes, non-current 40,637 43,989
Other long-term liabilities 17,547 18,228
Total liabilities 863,790 893,511
Commitments and contingencies
Stockholders’ Equity
Preferred stock
Common stock 480 479
Additional paid-in capital 295,633 292,064
Retained earnings 640,001 626,789
Accumulated other comprehensive loss (28,070 ) (29,124 )
908,044 890,208
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 1,771,834 $ 1,783,719
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS)
THREE MONTHS ENDED MARCH 31,
2016 2015
Revenues $ 200,502 $ 161,253
Cost of revenues (1) 34,288 28,186
Gross profit 166,214 133,067
Operating expenses:
Sales and marketing (1) 48,112 37,590
Research, development and engineering (1) 8,988 8,447
General and administrative (1) 55,776 46,500
Total operating expenses 112,876 92,537
Income from operations 53,338 40,530
Interest expense, net 10,233 10,313
Other expense (income), net 126 (784 )
Income before income taxes 42,979 31,001
Income tax expense 13,036 9,124
Net income $ 29,943 $ 21,877
Basic net income per common share:
Net income attributable to j2 Global, Inc. common shareholders $ 0.62 $ 0.45
Diluted net income per common share:
Net income attributable to j2 Global, Inc. common shareholders $ 0.61 $ 0.45
Basic weighted average shares outstanding 47,966,718 47,422,396
Diluted weighted average shares outstanding 48,238,098 47,766,088
(1) Includes share-based compensation expense as follows:
Cost of revenues $ 95 $ 83
Sales and marketing 531 584
Research, development and engineering 207 194
General and administrative 1,976 2,143
Total $ 2,809 $ 3,004
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
THREE MONTHS ENDED MARCH 31,
2016 2015
Cash flows from operating activities:
Net income $ 29,943 $ 21,877
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 27,174 21,287
Accretion and amortization of discount and premium of investments 331 273
Amortization of financing costs and discounts 2,370 2,222
Share-based compensation 2,809 3,004
Excess tax benefits from share-based compensation (264 ) (334 )
Provision for doubtful accounts 2,825 1,610
Deferred income taxes, net (3,101 ) (494 )
Loss on disposal of fixed assets 12
Gain on sale of available-for-sale investments 182 (24 )
Decrease (increase) in:
Accounts receivable 15,773 9,254
Prepaid expenses and other current assets 370 (4 )
Other assets (727 ) 25
(Decrease) increase in:
Accounts payable and accrued expenses (23,797 ) (12,902 )
Income taxes payable 6,360 (1,283 )
Deferred revenue 1,250 (1,340 )
Liability for uncertain tax positions 1,742 2,595
Other long-term liabilities 1,272 (50 )
Net cash provided by operating activities 64,524 45,716
Cash flows from investing activities:
Maturity of available-for-sale investments 26,224 28,994
Purchase of available-for-sale investments (21,402 ) (19,819 )
Purchases of property and equipment (4,321 ) (2,956 )
Purchases of intangible assets (316 ) (327 )
Acquisition of businesses, net of cash received (47,989 ) (72,215 )
Net cash used in investing activities (47,804 ) (66,323 )
Cash flows from financing activities:
Repurchases of common and restricted stock (1,786 ) (705 )
Issuance of stock, net of costs 1,370 126
Excess tax benefits from stock-based compensation 264 334
Dividends paid (15,817 ) (14,110 )
Acquisition of business (14,386 ) (2,356 )
Other (25 ) (50 )
Net cash (used in) provided by financing activities (30,380 ) (16,761 )
Effect of exchange rate changes on cash and cash equivalents 885 (4,278 )
Net change in cash and cash equivalents (12,775 ) (41,646 )
Cash and cash equivalents at beginning of period 255,530 433,663
Cash and cash equivalents at end of period $ 242,755 $ 392,017

For detailed financial report, visit: http://goo.gl/muquXZ

Contact:
j2 Global, Inc.
Laura Hinson
800-577-1790
press@j2.com

Source: j2 Global, Inc.

 

 

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