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Achieves Record Annual Revenues GAAP Diluted EPS

Provides Fiscal 2017 Financial Estimates

Announces Twenty-Second Consecutive Quarterly Dividend Increase by $0.01 to $0.3650 per Share versus the Prior Quarter

LOS ANGELES, CA – Feb. 09, 2016 — /BackupReview.info/ — j2 Global, Inc. (NASDAQ: JCOM) today reported financial results for the fourth quarter and year ended December 31, 2016, provided fiscal 2017 financial estimates and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.3650 per share.

FOURTH QUARTER 2016 RESULTS

Q4 2016 quarterly revenues increased 22.9% to a Q4 record of $251.8 million compared to $204.8 million for Q4 2015.

Net cash provided by operating activities increased by 11.6% to $89.8 million compared to $80.5 million for Q4 2015. Q4 2016 free cash flow(1) increased by 10.1% to $82.7 million compared to $75.1 million for Q4 2015.

GAAP earnings per diluted share(2) increased 23.6% to $0.89 in Q4 2016 compared to $0.72 for Q4 2015. Adjusted non-GAAP earnings per diluted share(2)(3) for the quarter increased 15.5% to $1.49 compared to $1.29 for Q4 2015.

GAAP net income increased by 21.7% to $43.2 million compared to $35.5 million for Q4 2015.

Quarterly Adjusted EBITDA(4) increased 16.4% to $116.5 million compared to $100.1 million for Q4 2015.

j2 ended the quarter with approximately $124.0 million in cash and investments after deploying approximately $508.2 million during the quarter for acquisitions and the payment of j2′s regular quarterly dividend.

Key financial results for Q4 2016 versus Q4 2015 are set forth in the following table (in millions, except per share amounts). Reconciliations of Adjusted non-GAAP earnings per diluted share, Adjusted EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

Q4 2016 Q4 2015 % Change
Revenues
Cloud Services $141.8 million $133.8 million 6.0%
Digital Media $108.8 million $69.9 million 55.7%
IP Licensing $1.2 million $1.1 million 9.1%
Total Revenue: $251.8 million $204.8 million 22.9%
Operating Income $68.2 million $53.1 million 28.4%
Net Cash Provided by Operating Activities $89.8 million $80.5 million 11.6%
Free Cash Flow (1) $82.7 million $75.1 million 10.1%
GAAP Earnings per Diluted Share (2) $0.89 $0.72 23.6%
Adjusted Non-GAAP Earnings per Diluted Share (2) (3) $1.49 $1.29 15.5%
GAAP Net Income $43.2 million $35.5 million 21.7%
Non-GAAP Net Income $72.2 million $63.1 million 14.4%
Adjusted EBITDA (4) $116.5 million $100.1 million 16.4%
Adjusted EBITDA Margin (4) 46.3% 48.9% (2.6)%

FULL YEAR 2016 RESULTS

2016 revenues increased 21.3% to a record of $874.3 million compared to $720.8 million for 2015.

Net cash provided by operating activities increased by 23.3% to $282.4 million compared to $229.1 million for 2015. 2016 free cash flow(1) increased by 16.4% to $259.9 million compared to $223.2 million for 2015.

GAAP earnings per diluted share(5) increased 14.7% to $3.13 in 2016 compared to $2.73 for 2015. Adjusted non-GAAP earnings per diluted share(5)(6) for the year increased 19.7% to $4.99 compared to $4.17 for 2015.

GAAP net income increased by 14.1% to $152.4 million compared to $133.6 million for 2015.

Annual Adjusted EBITDA(4) increased 18.8% to $396.1 million compared to $333.3 million for 2015.

j2 ended the year with approximately $124.0 million in cash and investments after deploying approximately $719.4 million during the year with respect to the repurchase of approximately 935,000 shares of j2 common stock, twenty-two acquisitions and j2′s regular quarterly dividends.

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

2016 2015 % Change
Revenues
Cloud Services $562.4 million $498.9 million 12.7%
Digital Media $307.3 million $216.1 million 42.2%
IP Licensing $4.6 million $5.8 million (20.7)%
Total Revenue: $874.3 million $720.8 million 21.3%
Operating Income $242.6 million $199.4 million 21.7%
Net Cash Provided by Operating Activities $282.4 million $229.1 million 23.3%
Free Cash Flow (1) $259.9 million $223.2 million 16.4%
GAAP Earnings per Diluted Share (5) $3.13 $2.73 14.7%
Adjusted Non-GAAP Earnings per Diluted Share (5) (6) $4.99 $4.17 19.7%
GAAP Net Income $152.4 million $133.6 million 14.1%
Non-GAAP Net Income $243.9 million $203.0 million 20.1%
Adjusted EBITDA (4) $396.1 million $333.3 million 18.8%
Adjusted EBITDA Margin (4) 45.3% 46.2% (0.9)%

“2016 was a remarkable year,” said Hemi Zucker, CEO of j2 Global. ”We exceeded our revenue expectations and achieved the high end of our EPS range. Fueled by our acquisition of Everyday Health, our largest ever, we are forecasting more than $1.1 billion in revenue, balanced between our Cloud and Media segments for this year. We are very excited about 2017 and are focused on our execution strength and planning for continued growth.”

BUSINESS OUTLOOK

For fiscal 2017, the Company estimates that it will achieve revenues between $1.130 and $1.170 billion and Adjusted non-GAAP earnings per diluted share of between $5.60 and $6.00.

Adjusted non-GAAP earnings per diluted share for 2017 excludes share-based compensation of between $14 and $16 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 2017 (exclusive of the release of reserves for uncertain tax positions) will be between 28.5% and 30.5%.

The Company has not reconciled the Adjusted non-GAAP earnings per diluted share and tax rate guidance included in this release to the most directly comparable GAAP measure because this cannot be done without unreasonable effort due to the variability with respect to costs related to acquisitions and taxation, which are potential adjustments to future earnings. We expect the variability of these items to have a potentially unpredictable and significant impact on our future GAAP financial results.

DIVIDEND

j2′s Board of Directors has approved a quarterly cash dividend of $0.3650 per common share, a $0.01, or 2.8% increase versus last quarter’s dividend. This is j2′s twenty-second consecutive quarterly dividend increase since its first quarterly dividend in September 2011. The dividend will be paid on March 9, 2017 to all shareholders of record as of the close of business on February 22, 2017. 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, 2017 by an additional year. Approximately 1.9 million shares remain available for purchase under the program.

Notes:

(1) 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.
(2) The estimated GAAP effective tax rates were approximately 25.8% for Q4 2016 and 16.4% for Q4 2015. The estimated Adjusted non-GAAP effective tax rates were approximately 29.0% for Q4 2016 and 27.6% for Q4 2015.
(3) For Q4 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, additional tax benefit from prior years and diluted effect of convertible debt, in each case net of tax, totaling $0.61 per diluted share. For Q4 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, amortization of acquired intangibles, additional tax benefit from prior years and dilutive effect of convertible debt, in each case net of tax, totaling $0.60 per diluted share.
(4) Adjusted 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 (3) above. Adjusted EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes.
(5) The estimated GAAP effective tax rates were approximately 27.9% for 2016 and 14.8% for 2015. The estimated Adjusted non-GAAP effective tax rates were approximately 28.8% for 2016 and 28.4% for 2015.
(6) For 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, additional tax benefit from prior years, sale of investments and diluted effect of convertible debt, in each case net of tax, totaling $1.92 per diluted share. For 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, amortization of acquired intangibles, additional tax benefit from prior years, certain tax consulting fees and diluted effect of convertible debt, in each case net of tax, totaling $1.46 per diluted share.

For more detailed financial report, visit: https://goo.gl/HSwsvE

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

Source: j2 Global, Inc.

 

 

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