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j2 Global Reports Q4 and Year End 2012 Results and Provides 2013 Outlook

j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the fourth quarter and year ended December 31, 2012, provided fiscal 2013 financial estimates and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.2325 per share.

FOURTH QUARTER 2012 RESULTS

Quarterly revenues increased 19.9% to a record $102 million compared to $85.1 million for Q4 2011.

Earnings per diluted share for the quarter increased 4.8% to $0.65 compared to $0.62 for Q4 2011. Non-GAAP earnings per diluted share(1)(2) increased 9.4% to $0.70 compared to $0.64 for Q4 2011.

Quarterly EBITDA(3) increased 13.4% to a record $52.3 million compared to $46.1 million for Q4 2011.

Q4 2012 free cash flow(4) increased 12.7% to $45.2 million compared to $40.1 million for Q4 2011.

Cancel rate(5) for the quarter continued to decline to an all-time record of 2.2%.

j2 ended the quarter with $344 million in cash and investments after deploying $173.4 million during the quarter for the acquisition of Ziff Davis, Inc. and j2's regular quarterly dividend.

Key financial results for fourth quarter 2012 versus fourth quarter 2011 are set forth in the following table (in millions, except per share). Reconciliations of non-GAAP earnings per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

                   
      Q4 2012     Q4 2011     % Change  
Revenues     $102 million     $85.1 million     19.9 %
Earnings per Diluted Share(1)     $ 0.65     $ 0.62     4.8 %
Non-GAAP Earnings per Diluted Share(1) (2)     $ 0.70     $ 0.64     9.4 %
EBITDA(3)     $52.3 million     $46.1 million     13.4 %
Free Cash Flow(4)     $45.2 million     $40.1 million     12.7 %
       

FULL YEAR 2012 RESULTS

Annual revenues increased 12.5% to a record $371.4 million compared to $330.2 million for 2011.

Earnings per diluted share for the year increased 7.4% to a record $2.61 compared to $2.43 for 2011. 2012 Non-GAAP earnings per diluted share(6)(7) increased 6.3% to a record $2.69 compared to $2.53 for 2011.

Annual EBITDA(3) increased 16.1% to a record $196.0 million compared to $168.8 million for 2011.

Free cash flow(4) for the year increased 5.4% to a record $166.0 million compared to $157.5 million for 2011.

Annual cancel rate(5) was an all-time record low of 2.3%.

Key annual financial results for 2012 versus 2011 are set forth in the following table (in millions, except per share). Reconciliations of non-GAAP net income per diluted share, EBITDA and free cash flow to their nearest comparable GAAP financial measures are attached to this Press Release.

                 
      2012     2011   % Change
Revenues     $371.4 million     $330.2 million     12.5 %
Earnings per Diluted Share(6)     $ 2.61     $ 2.43     7.4 %
Non-GAAP Earnings per Diluted Share(6) (7)     $ 2.69     $ 2.53     6.3 %
EBITDA(3)     $196.0 million     $168.8 million     16.1 %
Free Cash Flow(4)     $166.0 million     $157.5 million     5.4 %
       

“I am proud of our accomplishments during 2012 and enthusiastic about the prospects for our business going forward,” said Hemi Zucker, CEO of j2 Global. “We grew our cloud services business by more than 9% and decreased our cancel rate to the lowest in the Company’s history, underscoring the value we deliver to our customers. We continue to pursue larger acquisitions for our cloud business. During 2012 we also established our digital media business with the acquisition of Ziff Davis and in 2013 have grown that business with our purchase of IGN, positioning us for additional acquisitions in the digital media space as well.”

BUSINESS OUTLOOK

For fiscal 2013, the Company estimates that it will achieve revenues between $500 and $525 million and non-GAAP earnings per diluted share of between $2.65 and $2.85.

Non-GAAP earnings per diluted share for 2013 excludes acquisition-related integration costs of approximately $4 million, share-based compensation of between $11 and $12 million and the impact of any currently unanticipated items.

It is anticipated that the normalized tax rate for 2013 (exclusive of the release of reserves for uncertain tax positions) will be between 25% and 27%.

DIVIDEND

j2’s Board of Directors has approved a quarterly cash dividend of $0.2325 per common share, a 3.3% increase versus last quarter's dividend and a 10.7% increase versus the dividend paid in Q1 2012. This is j2’s sixth consecutive quarterly dividend increase and represents a 16.25% increase versus its first quarterly dividend in September, 2011. The dividend will be paid on March 4, 2013 to all shareholders of record as of the close of business on February 25, 2013. 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, 2013 by an additional year. Approximately 2.9 million shares remain available for purchase under the program.

Notes:

(1)   The estimated GAAP effective tax rate was approximately 19.6% for Q4 2012 and 24.3% for Q4 2011. The estimated Non-GAAP effective tax rate was approximately 19.8% for Q4 2012 and 24.7% for Q4 2011.
 
(2) For Q4 2012, Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes and certain acquisition-related integration costs, in each case net of tax, totaling $0.05. For Q4 2011, Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes, certain acquisition-related integration costs and gain on sale of auction rate securities, in each case net of tax, totaling $0.02. 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 net income plus fixed charges, income taxes, depreciation and amortization, share-based compensation, foreign currency gains and losses and certain acquisition-related integration costs. EBITDA for Q4 and fiscal 2012 under the Indenture Agreement relating to the Company’s outstanding bonds excludes $4.1 million from Unrestricted Subsidiaries. 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.
 
(5) Cancel rate is defined as cancels related to individual customer DIDs with greater than 4 months of continuous service (continuous service includes customer DIDs administratively cancelled and reactivated within the same calendar month), and DIDs related to enterprise customers beginning with their first day of service. For the quarter, calculated monthly and expressed here as an average over the three months of the quarter. For the year, expressed as an average over the four quarters of the year.
 
(6) The GAAP effective tax rate was approximately 21.5% for 2012 and 16.3% for 2011. The Non-GAAP effective tax rate was approximately 23.8% for 2012 and 25% for 2011.
 
(7) For 2012, Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes, domestic production activities tax deduction from prior years, certain acquisition-related integration costs, and gain on sale of investments, in each case net of tax, totaling $0.08. For 2011, Non-GAAP earnings per diluted share excludes a change in estimate regarding its remaining service obligations to its annual eFax® subscribers, share-based compensation and related payroll taxes, certain acquisition-related integration costs, the sale of a trade name, the reversal of uncertain income tax positions due to expired statutes of limitations and gain on sale of auction rate securities, in each case net of tax, totaling $0.10. Non-GAAP earnings per diluted share amounts are not meant as a substitute for GAAP, but are solely for informational purposes.
 

About j2 Global

j2 Global (JCOM) provides Internet services through its 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® and Onebox® and operates a messaging network spanning 49 countries on six continents. The Digital Media Division consists of Ziff Davis Inc., 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 properties reach over 53 million global unique visitors per month. Ziff Davis also operates 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, 2012, j2 Global had achieved 17 consecutive fiscal years of revenue growth. For more information about j2 Global, 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 2013 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 identify and close large acquisitions in the cloud business space and additional acquisitions in the digital media space, 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 2011 Annual Report on Form 10-K filed by j2 Global on February 28, 2012, 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 2013 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,
2012 2011
 
ASSETS
Cash and cash equivalents $ 218,680 $ 139,359
Short-term investments 105,054 38,513

Accounts receivable, net of allowances of $3,213 and $3,404, respectively

37,285 19,071
Prepaid expenses and other current assets 15,388 14,311
Deferred income taxes   1,092     1,643  
Total current assets 377,499 212,897
 
Long-term investments 19,841 43,077
Property and equipment, net 19,599 14,438
Goodwill 407,825 279,016
Other purchased intangibles, net 165,316 98,067
Deferred income taxes 1,852 3,160
Other assets   3,238     516  
 
TOTAL ASSETS $ 995,170   $ 651,171  
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 39,874 $ 24,070
Income taxes payable 3,037 1,510
Deferred revenue 30,493 26,695
Liability for uncertain tax positions   5,523     5,523  
Total current liabilities 78,927 57,798
 
Long-term debt 245,194
Liability for uncertain tax positions 32,155 24,554
Deferred income taxes 32,393 12,102
Mandatorily redeemable financial instrument 8,740
Other long-term liabilities   3,166     2,342  
Total liabilities 400,575 96,796
 
Commitments and contingencies
 
Stockholders' Equity:
Preferred stock
Common stock 451 554
Additional paid-in capital 169,592 197,374
Treasury stock (112,671 )
Retained earnings 424,740 472,595
Accumulated other comprehensive loss   (88 )   (3,477 )
Total j2 Global, Inc. stockholder's equity 594,695 554,375
Noncontrolling interest   (100 )    
Total stockholders' equity   594,595     554,375  
 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 995,170   $ 651,171  
 
 
 
 
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
         
 
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
2012 2011 2012 2011
 
Revenues 102,033 85,072 371,396 330,159
 
Cost of revenues (including share-based compensation of $211 and $844 for the three and twelve months of 2012, respectively, and $246 and $982 for the three and twelve months of 2011, respectively)   18,659     14,661   67,013     60,613
Gross profit   83,374     70,411   304,383     269,546
 
Operating expenses:
 
Sales and marketing (including share-based compensation of $426 and $1,543 for the three and twelve months of 2012, respectively, and $382 and $1,431 for the three and twelve months of 2011, respectively) 18,915 14,137 62,825 59,066
 
Research, development and engineering (including share-based compensation of $115 and $459 for the three and twelve months of 2012, respectively, and $110 and $477 for the three and twelve months of 2011, respectively) 4,826 3,659 18,624 16,373
 
General and administrative (including share-based compensation of $1,529 and $6,286 for the three and twelve months of 2012, respectively, and $1,571 and $6,103 for the three and twelve months of 2011, respectively) 17,385 14,120 60,772 58,157
       
Total operating expenses   41,126     31,916   142,221     133,596
 
Income from operations 42,248 38,495 162,162 135,950
Interest and other income (expense), net   (4,583 )   904   (7,240 )   1,166
Income before income taxes 37,665 39,399 154,922 137,116
Provision for income taxes   7,379     9,580   33,259     22,350
Net income 30,286 29,819 121,663 114,766
Less net income attributable to noncontrolling interest   83       83    
Net income attributable to j2 Global, Inc. common stockholders $ 30,203   $ 29,819 $ 121,580   $ 114,766
 
Basic net income per common share:
Net income attributable to j2 Global, Inc. common stockholders $ 0.66   $ 0.63 $ 2.63   $ 2.46
 
Diluted net income per common share:
Net income attributable to j2 Global, Inc. common stockholders $ 0.65   $ 0.62 $ 2.61   $ 2.43
 
 
Basic weighted average shares outstanding   45,071,204     46,692,364   45,459,712     45,799,615
 
Diluted weighted average shares outstanding   45,423,502     46,989,376   45,781,658     46,384,848
 
 
       
 
j2 GLOBAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
 
 
TWELVE MONTHS ENDED DECEMBER 31,
2012 2011
 
Cash flows from operating activities:
Net income $ 121,663 $ 114,766

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

Depreciation and amortization 22,164 19,756
Accretion and amortization of discount and premium of investments 1,603 941
Amortization of financing costs and discounts 249
Share-based compensation 9,083 8,968
Excess tax benefit from share-based compensation (961 ) (13,561 )
Provision for doubtful accounts 4,289 6,900
Deferred income taxes 1,150 6,822
Gain on sale of available-for-sale investment (266 ) (552 )
Decrease (increase) in:
Accounts receivable (5,417 ) (9,509 )
Prepaid expenses and other current assets (2,028 ) 4,261
Other assets (189 ) 321
(Decrease) increase in:
Accounts payable and accrued expenses 5,138 847
Income taxes payable 4,188 9,679
Deferred revenue 1,612 8,664
Liability for uncertain tax positions 7,601 (7,786 )
Other liabilities   32     231  
Net cash provided by operating activities   169,911     150,748  
 
Cash flows from investing activities:
Maturity of certificate of deposit 8,000
Purchase of certificates of deposit (34,673 ) (8,000 )
Sales of available-for-sale investments 138,709 29,777
Purchases of available-for-sale investments (151,989 ) (82,879 )
Purchases of property and equipment (4,905 ) (6,840 )
Purchases of intangible assets (6,295 ) (4,312 )
Acquisition of businesses, net of cash received   (198,341 )   (3,926 )
Net cash used in investing activities   (249,494 )   (76,180 )
 
Cash flows from financing activities:
Issuance of long-term debt 245,000
Debt issuance costs (1,384 )
Repurchases of common stock and restricted stock (60,282 ) (1,281 )
Issuance of common stock under employee stock purchase plan 157 142
Exercise of stock options 5,646 7,090
Excess tax benefit from share-based compensation 961 13,561
Mandatorily redeemable financial instrument 8,557
Dividends paid   (40,263 )   (19,174 )
Net cash provided by financing activities   158,392     338  
 
Effect of exchange rate changes on cash and cash equivalents   512     (299 )
 
Net increase in cash and cash equivalents 79,321 74,607
Cash and cash equivalents at beginning of period   139,359     64,752  
Cash and cash equivalents at end of period $ 218,680   $ 139,359  
 
 
 
 
j2 GLOBAL, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
THREE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                     
 

Non-GAAP net income are GAAP net income with the following modifications: (1) elimination of share-based compensation expense and the associated payroll taxes; (2) elimination of certain acquisition and related exit costs; (3) elimination of gain on sale of certain investments and (4) elimination of income tax provision associated with share-based compensation and associated payroll taxes, certain acquisition and related exit costs and gain on sale of certain investment.

 
 
 
THREE MONTHS ENDED DECEMBER 31, 2012 THREE MONTHS ENDED DECEMBER 31, 2011
 
(2) (2) (3)
(1) Acquisition (1) Acquisition Gain on
Share-based and Exit Share-based and Exit Sale of

GAAP

Compensation

Costs

Non-GAAP

GAAP

Compensation

Costs

Investment

Non-GAAP

 
Cost of revenues 18,659 (211 ) 18,448 14,661 (246 ) 167 14,582
 
Operating expenses:
Sales and marketing 18,915 (426 ) 18,489 14,137 (382 ) 13,755
Research, development and engineering 4,826 (115 ) 4,711 3,659 (110 ) 379 3,928
General and administrative 17,385 (1,535 ) (585 ) 15,265 14,120 (1,572 ) 12,548
 
Interest and other income (expense) (4,583 ) (4,583 ) 904 (554 ) 350
 
Income tax provision (4) $ 7,379 548 115 $ 8,042 $ 9,580 717 (133 ) (122 ) 10,042
 
Net income attributable to j2 Global, Inc.
common stockholders $ 30,203 1,739 470 $ 32,412 $ 29,819 1,593 (413 ) (432 ) $ 30,567
 

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

Basic $ 0.66 0.04 0.01 $ 0.71 $ 0.63 0.03 (0.01 ) (0.01 ) $ 0.64
Diluted $ 0.65 0.04 0.01 $ 0.70 $ 0.62 0.03 (0.01 ) (0.01 ) $ 0.64
 
 
 
* 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 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 they do 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, 2012 AND 2011
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
                               
 

Non-GAAP net income are GAAP net income with the following modifications: (1) elimination of the impact to revenues resulting from a change in estimate of deferred revenue; (2) elimination of share-based compensation expense and the associated payroll taxes; (3) elimination of certain acquisition and related exit costs; (4) elimination of gain on sale of certain investment; (5) elimination of additional income tax benefit from prior years; (6) elimination of a change to our liability of uncertain tax position due to expiration of statues of limitations; (7) elimination of taxes related to trade name sale and (8) elimination of income tax provision associated with the change in estimate of deferred revenue, share-based compensation and associated payroll taxes, certain acquisition and related exit costs and gain on sale of certain investment.

 
 
 
TWELVE MONTHS ENDED DECEMBER 31, 2012 TWELVE MONTHS ENDED DECEMBER 31, 2011
(5) (1)
(3) (4) Additional Change in (3) (4) (6) (7)
(2) Acquisition Gain on Income Tax Estimate of (2) Acquisition Gain on Uncertain Trade

Share-based

and Exit Sale of Benefit from Deferred Share-based and Exit Sale of Tax Name
GAAP Compensation Costs Investment Prior Years Non-GAAP   GAAP Revenue Compensation Costs Investment Position Sale Non-GAAP
 
Revenues: $ 371,396 $ 371,396 $ 330,159 $ 10,325 $ 340,484
 
Cost of revenues 67,013 (844 ) (6 ) 66,163 60,613 (988 ) (199 ) 59,426
 
Operating expenses:
Sales and marketing 62,825 (1,543 ) (90 ) 61,192 59,066 (1,437 ) (764 ) 56,865
Research, development and engineering 18,624 (459 ) (5 ) 18,160 16,373 (482 ) (352 ) 15,539
General and administrative 60,772 (6,382 ) (633 ) 53,757 58,157 (6,264 ) (1,421 ) 50,472
 
Interest and other income (expense) (7,240 ) (180 ) (7,420 ) 1,166 (554 ) 612
 
Income tax provision (8) 33,259 2,823 149 (43 ) 3,066 39,254 22,350 2,707 2,823 717 (122 ) 15,128 (3,892 ) 39,711
 

Net income attributable to j2 Global, Inc. common stockholders

$ 121,580 6,405 585 (137 ) (3,066 ) $ 125,367 $ 114,766 7,618 6,348 2,019 (432 ) (15,128 ) 3,892 $ 119,083
 

 

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

Basic $ 2.63 0.14 0.02 (0.01 ) (0.07 ) $ 2.71 $ 2.46 0.16 0.14 0.04 (0.01 ) (0.32 ) 0.08 $ 2.56
Diluted $ 2.61 0.14 0.02 (0.01 ) (0.07 ) $ 2.69 $ 2.43 0.16 0.14 0.04 (0.01 ) (0.32 ) 0.08 $ 2.53
 
 
 
* 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 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 they do 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 MONTHS AND TWELVE MONTHS ENDED DECEMBER 31, 2012 AND 2011
(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 DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31,
2012 2011   2012 2011
 
Net income $ 30,286 $ 29,819 $ 121,663 $ 114,766
Fixed charges 5,197 41 9,045 147
Provision for income taxes 7,379 9,580 33,259 22,350
Depreciation and amortization and other non-cash items (1) 8,901 7,170 31,284 28,750
Non-recurring (gains) losses 519 (556 ) 785 2,778
       
EBITDA $ 52,282 $ 46,054 $ 196,036 $ 168,791
 
(1) Other non-cash items currently represent share-based compensation.
 
 
 

EBITDA as calculated above represents earnings before fixed charges, taxes, depreciation and amortization and all other non-cash items and all non-recurring gains and losses. EBITDA is defined in the Indenture Agreement as Consolidated Net Income of the Company and its Restricted Subsidiaries before fixed charges, taxes, depreciation and amortization and all other non-cash items and all non-recurring gains and losses. The EBITDA calculations above for the three months and the twelve months ended December 31, 2012 include $4.1 million related to Unrestricted Subsidiaries that are excluded from EBITDA as defined in the Indenture Agreement. 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

2012

Net cash provided by operating activities $ 38,942 $ 46,382 $ 38,193 $ 46,394 $ 169,911
Less: Purchases of property and equipment (1,159 ) (1,631 ) (956 ) (1,159 ) (4,905 )
Add: Excess tax benefit (deficit) from share-based compensation   286       821       (91 )     (55 )     961  
Free cash flows $ 38,069     $ 45,572     $ 37,146     $ 45,180     $ 165,967  
 
 

2011

Net cash provided by operating activities $ 38,153 $ 42,398 $ 28,682 $ 41,515 $ 150,748
Less: Purchases of property and equipment (625 ) (1,860 ) (2,590 ) (1,769 ) (6,844 )
Add: Excess tax benefit from share-based compensation   679       1,443       11,124       315       13,561  
Free cash flows $ 38,207     $ 41,981     $ 37,216     $ 40,061     $ 157,465  

 

 

The Company discloses non-GAAP 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 do not reflect all of the amounts associated with the Company's results of operations determined in accordance with GAAP.

 

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You think you know what’s in your data. But do you? Most organizations are now aware of the business intelligence represented by their data. Data science stands to take this to a level you never thought of – literally. The techniques of data science, when used with the capabilities of Big Data technologies, can make connections you had not yet imagined, helping you discover new insights and ask new questions of your data. In his session at @ThingsExpo, Sarbjit Sarkaria, data science team lead ...
Extracting business value from Internet of Things (IoT) data doesn’t happen overnight. There are several requirements that must be satisfied, including IoT device enablement, data analysis, real-time detection of complex events and automated orchestration of actions. Unfortunately, too many companies fall short in achieving their business goals by implementing incomplete solutions or not focusing on tangible use cases. In his general session at @ThingsExpo, Dave McCarthy, Director of Products...
Ask someone to architect an Internet of Things (IoT) solution and you are guaranteed to see a reference to the cloud. This would lead you to believe that IoT requires the cloud to exist. However, there are many IoT use cases where the cloud is not feasible or desirable. In his session at @ThingsExpo, Dave McCarthy, Director of Products at Bsquare Corporation, will discuss the strategies that exist to extend intelligence directly to IoT devices and sensors, freeing them from the constraints of ...
WebRTC is bringing significant change to the communications landscape that will bridge the worlds of web and telephony, making the Internet the new standard for communications. Cloud9 took the road less traveled and used WebRTC to create a downloadable enterprise-grade communications platform that is changing the communication dynamic in the financial sector. In his session at @ThingsExpo, Leo Papadopoulos, CTO of Cloud9, discussed the importance of WebRTC and how it enables companies to focus...
The best-practices for building IoT applications with Go Code that attendees can use to build their own IoT applications. In his session at @ThingsExpo, Indraneel Mitra, Senior Solutions Architect & Technology Evangelist at Cognizant, provided valuable information and resources for both novice and experienced developers on how to get started with IoT and Golang in a day. He also provided information on how to use Intel Arduino Kit, Go Robotics API and AWS IoT stack to build an application tha...
With an estimated 50 billion devices connected to the Internet by 2020, several industries will begin to expand their capabilities for retaining end point data at the edge to better utilize the range of data types and sheer volume of M2M data generated by the Internet of Things. In his session at @ThingsExpo, Don DeLoach, CEO and President of Infobright, discussed the infrastructures businesses will need to implement to handle this explosion of data by providing specific use cases for filterin...
Is your aging software platform suffering from technical debt while the market changes and demands new solutions at a faster clip? It’s a bold move, but you might consider walking away from your core platform and starting fresh. ReadyTalk did exactly that. In his General Session at 19th Cloud Expo, Michael Chambliss, Head of Engineering at ReadyTalk, will discuss why and how ReadyTalk diverted from healthy revenue and over a decade of audio conferencing product development to start an innovati...
Early adopters of IoT viewed it mainly as a different term for machine-to-machine connectivity or M2M. This is understandable since a prerequisite for any IoT solution is the ability to collect and aggregate device data, which is most often presented in a dashboard. The problem is that viewing data in a dashboard requires a human to interpret the results and take manual action, which doesn’t scale to the needs of IoT.
So, you bought into the current machine learning craze and went on to collect millions/billions of records from this promising new data source. Now, what do you do with them? Too often, the abundance of data quickly turns into an abundance of problems. How do you extract that "magic essence" from your data without falling into the common pitfalls? In her session at @ThingsExpo, Natalia Ponomareva, Software Engineer at Google, provided tips on how to be successful in large scale machine learning...
What does it look like when you have access to cloud infrastructure and platform under the same roof? Let’s talk about the different layers of Technology as a Service: who cares, what runs where, and how does it all fit together. In his session at 18th Cloud Expo, Phil Jackson, Lead Technology Evangelist at SoftLayer, an IBM company, spoke about the picture being painted by IBM Cloud and how the tools being crafted can help fill the gaps in your IT infrastructure.
"delaPlex is a software development company. We do team-based outsourcing development," explained Mark Rivers, COO and Co-founder of delaPlex Software, in this SYS-CON.tv interview at 18th Cloud Expo, held June 7-9, 2016, at the Javits Center in New York City, NY.
"C2M is our digital transformation and IoT platform. We've had C2M on the market for almost three years now and it has a comprehensive set of functionalities that it brings to the market," explained Mahesh Ramu, Vice President, IoT Strategy and Operations at Plasma, in this SYS-CON.tv interview at @ThingsExpo, held June 7-9, 2016, at the Javits Center in New York City, NY.
Traditional IT, great for stable systems of record, is struggling to cope with newer, agile systems of engagement requirements coming straight from the business. In his session at 18th Cloud Expo, William Morrish, General Manager of Product Sales at Interoute, outlined ways of exploiting new architectures to enable both systems and building them to support your existing platforms, with an eye for the future. Technologies such as Docker and the hyper-convergence of computing, networking and sto...
Whether your IoT service is connecting cars, homes, appliances, wearable, cameras or other devices, one question hangs in the balance – how do you actually make money from this service? The ability to turn your IoT service into profit requires the ability to create a monetization strategy that is flexible, scalable and working for you in real-time. It must be a transparent, smoothly implemented strategy that all stakeholders – from customers to the board – will be able to understand and comprehe...
SYS-CON Events announced today that LeaseWeb USA, a cloud Infrastructure-as-a-Service (IaaS) provider, will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LeaseWeb is one of the world's largest hosting brands. The company helps customers define, develop and deploy IT infrastructure tailored to their exact business needs, by combining various kinds cloud solutions.
The cloud market growth today is largely in public clouds. While there is a lot of spend in IT departments in virtualization, these aren’t yet translating into a true “cloud” experience within the enterprise. What is stopping the growth of the “private cloud” market? In his general session at 18th Cloud Expo, Nara Rajagopalan, CEO of Accelerite, explored the challenges in deploying, managing, and getting adoption for a private cloud within an enterprise. What are the key differences between wh...
It’s 2016: buildings are smart, connected and the IoT is fundamentally altering how control and operating systems work and speak to each other. Platforms across the enterprise are networked via inexpensive sensors to collect massive amounts of data for analytics, information management, and insights that can be used to continuously improve operations. In his session at @ThingsExpo, Brian Chemel, Co-Founder and CTO of Digital Lumens, will explore: The benefits sensor-networked systems bring to ...
Large scale deployments present unique planning challenges, system commissioning hurdles between IT and OT and demand careful system hand-off orchestration. In his session at @ThingsExpo, Jeff Smith, Senior Director and a founding member of Incenergy, will discuss some of the key tactics to ensure delivery success based on his experience of the last two years deploying Industrial IoT systems across four continents.
Much of IT terminology is often misused and misapplied. Modernization and transformation are two such terms. They are often used interchangeably even though they mean different things and have very different connotations. Indeed, it is somewhat safe to assume that in IT any transformative effort is likely to also have a modernizing effect, and thus, we can see these as levels of improvement efforts. However, many businesses are being led to believe if they don’t transform now they risk becoming ...
SYS-CON Events announced today the Enterprise IoT Bootcamp, being held November 1-2, 2016, in conjunction with 19th Cloud Expo | @ThingsExpo at the Santa Clara Convention Center in Santa Clara, CA. Combined with real-world scenarios and use cases, the Enterprise IoT Bootcamp is not just based on presentations but with hands-on demos and detailed walkthroughs. We will introduce you to a variety of real world use cases prototyped using Arduino, Raspberry Pi, BeagleBone, Spark, and Intel Edison. Y...