Achieves Record Quarterly Revenues (up 29.0% to $273.2 million vs. Q2 2016)

Announces Twenty-Fourth Consecutive Quarterly Dividend Increase

LOS ANGELES, CA – August 3, 2017 — /BackupReview.info/ — j2 Global, Inc. (NASDAQ: JCOM) today reported financial results for the second quarter ended June 30, 2017 and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.3850per share.

SECOND QUARTER 2017 RESULTS

  • Q2 2017 quarterly revenues increased 29.0% to an all-time record of $273.2 million compared to $211.8 million for Q2 2016.
  • Net cash provided by operating activities decreased by 10.4% to $60.5 million compared to $67.5 million for Q2 2016. This decrease was driven by a $20.0 million contingent payment for Ookla which was paid during the quarter.
  • Free cash flow(1) for the quarter increased by 12.0% to $71.1 million compared to $63.5 million for Q2 2016 before the effect of the $20.0 million contingent payment for Ookla which was paid during the quarter.
  • GAAP earnings per diluted share(2) decreased 8.7% to $0.63 in Q2 2017 compared to $0.69 for Q2 2016. Adjusted non-GAAP earnings per diluted share(2)(3) for the quarter increased 9.9% to $1.33 compared to $1.21 for Q2 2016.
  • GAAP net income decreased by 7.1% to $31.4 million compared to $33.8 million for Q2 2016.
  • Adjusted EBITDA(4) for the quarter increased 13.0% to $110.2 million compared to $97.5 million for Q2 2016.

j2 ended the quarter with approximately $330.8 million in cash and investments after deploying approximately $52.0 million during the quarter for acquisitions and j2’s regular quarterly dividend.

Key financial results for Q2 2017 versus Q2 2016 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.

Q2 2017 Q2 2016 % Change
Revenues
Cloud Services $143.4 million $141.4 million 1.4%
Digital Media $128.5 million $69.3 million 85.4%
IP Licensing $1.3 million $1.1 million 18.2%
Total Revenue: $273.2 million $211.8 million 29.0%
Operating Income $58.6 million $58.9 million (0.5)%
Net Cash Provided by Operating Activities $60.5 million $67.5 million (10.4)%
Free Cash Flow (1) $71.1 million $63.5 million 12.0%
GAAP Earnings per Diluted Share (2) $0.63 $0.69 (8.7)%
Adjusted Non-GAAP Earnings per Diluted Share (2) (3) $1.33 $1.21 9.9%
GAAP Net Income $31.4 million $33.8 million (7.1)%
Non-GAAP Net Income $64.8 million $59.7 million 8.5%
Adjusted EBITDA (4) $110.2 million $97.5 million 13.0%
Adjusted EBITDA Margin (4) 40.3% 46.0% (5.7)%

“I am very happy to report another quarter of record revenues totaling more than $273 million in the quarter, a 29% increase over the same quarter last year,” said Hemi Zucker, CEO of j2. “In addition, our business was further validated by the debt market as our Cloud Services division issued $650 million of 8-year notes in an oversubscribed offering without guarantees from either our Media division or parent company, j2 Global. The debt raise both lowered our overall long-term cost of capital and increased cash on hand as of today to over $380 million.”

BUSINESS OUTLOOK
For fiscal 2017, the Company reaffirms estimates that it will achieve revenues between $1.130 billion 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 $17 and $19 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 approved a quarterly cash dividend of $0.3850 per common share, a $0.01, or 2.7% increase versus last quarter’s dividend. This is j2’s twenty-fourth consecutive quarterly dividend increase since its first quarterly dividend in September 2011. The dividend will be paid on September 1, 2017 to all shareholders of record as of the close of business on August 14, 2017. Future dividends will be subject to Board approval.

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 22.8% for Q2 2017 and 30.9% for Q2 2016. The estimated Adjusted non-GAAP effective tax rates were approximately 28.5% for Q2 2017 and 29.4% for Q2 2016.
(3) For Q2 2017, 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 expense from prior years and diluted effect of convertible debt, in each case net of tax, totaling $0.70 per diluted share. For Q2 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 $0.53 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.

About j2 Global
j2 Global, Inc. (NASDAQ: JCOM) provides Internet services through two segments: Business Cloud Services and Digital Media. The Business Cloud Services segment offers Internet fax, virtual phone, unified communications, hosted email, email marketing, online backup and CRM solutions. It markets its services principally under the brand names eFax ®, eVoice ®, Onebox ®, FuseMail ®, Campaigner ®, KeepItSafe ®, Livedrive® and LiveVault®, and operates a messaging network spanning 50 countries on six continents. The Digital Media segment offers technology, gaming, lifestyle and healthcare content through its digital properties, which include PCMag, IGN, AskMen, Speedtest, Offers, ExtremeTech, Geek, Toolbox, Techbargains, emedia, Salesify, Everyday Health and others. As of December 31, 2016, j2 had achieved 21 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 2017 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 affecting j2 Global, refer to the 2016 Annual Report on Form 10-K filed by j2 Global on March 1, 2017, 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 2017 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 net income, Adjusted non-GAAP earnings per diluted share, Adjusted 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.

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

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

Source: j2 Global, Inc.

 

 

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