EX-99.1 2 exh99-1_15890.htm PRESS RELEASE WWW.EXFILE.COM 888.775-4789 --- J2 GLOBAL COMMUNICATIONS, FORM 8K
EXHIBIT 99.1
 
j2 Global Reports Q1 2008 Results
 
Subscriber Revenues Up 14% Versus Q1 2007
Record Quarterly Free Cash Flow of $27 Million
 
 
LOS ANGELES—May 6, 2008—j2 Global Communications, Inc. [NASDAQGS:JCOM] today reported financial results for the first quarter ended March 31, 2008.

FIRST QUARTER 2008 RESULTS

Subscriber revenues for Q1 2008 increased 14% to $57.2 million compared to $50.3 million in Q1 2007.

Total revenues in Q1 2008 increased 8% to $58.6 million compared to $54.1 million in Q1 2007. Net earnings per diluted share for Q1 2008 increased 9% to $0.35 compared to $0.32 in Q1 2007. SFAS 123(R) (expensing for stock-based compensation) expense impacted Q1 2008 earnings and net earnings per diluted share by $1.4 million and $0.03, respectively. Q1 2007 revenues and earnings per diluted share reflect approximately $2.0 million in revenues and associated earnings from a paid up patent license fee. No similar transaction occurred in Q1 2008.

During Q1 2008, the Company repurchased approximately 3.5 million shares under its previously announced five million share repurchase program for approximately $76 million in cash. The Company ended the quarter with 45.2 million shares outstanding and approximately $181 million in cash and investments.

Key financial results for first quarter 2008 versus first quarter 2007 are as follows:

 
Q1 2008
Q1 2007
% Change
Subscriber Revenues
$57.2 million
$50.3 million
14%
Other Revenues (1)
$1.4 million
$3.8 million
(63)%
Total Revenues (1)
$58.6 million
$54.1 million
8%
Net Earnings per Diluted Share (1) (2)
$0.35
$0.32
9%
 
(1) Q1 2007 Other and Total Revenues and Net Earnings per Diluted Share reflect approximately $2.0 million in revenues and associated earnings from a paid up patent license fee. No similar transaction occurred in Q1 2008.
 
(2) The estimated effective tax rate was approximately 30% for Q1 2008 and Q1 2007.


BUSINESS OUTLOOK

“I am particularly gratified that this quarter we were able to grow our top and bottom lines while producing record free cash flow, all in an extremely challenging economic environment,” said Hemi Zucker, co-president and chief operating officer of j2 Global. “We now have more than 1.1 million paid DIDs deployed and our focus on cost discipline resulted in record quarterly free cash flow of approximately $27 million.”

 
 

 
2008 Guidance

The Company reaffirms its previously announced fiscal 2008 revenue guidance of between $240 million and $270 million. The Company also reaffirms its previously announced fiscal 2008 net earnings per diluted share guidance of between $1.45 and $1.65.

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 3,000 cities in 44 countries on five 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 names eFax®, eFax Corporate®, eFax DeveloperTM, Fax.comTM, Send2Fax®, eFax BroadcastTM, jBlast®, jConnect®, Onebox®, Onebox ReceptionistTM, RapidFAXTM, eVoice®, eVoice ReceptionistTM, YAC® and Electric Mail®. As of December 31, 2007, j2 Global had achieved 12 consecutive fiscal years of revenue growth and 6 consecutive fiscal years of positive and growing operating earnings. For more information about j2 Global, please visit www.j2global.com.
 
 
Contact:
Jeff Adelman
j2 Global Communications, Inc.
323-372-3617
press@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 Act of 1995, particularly those contained in the “Business Outlook” portion (and specifically 2008 Guidance). 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: 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 unified messaging and telecommunications, including but not limited to the imposition of additional taxation 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 2007 Annual Report on Form 10-K filed by j2 Global on February 25, 2008, 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 financial estimates provided in the “Business Outlook” portion of this press release (and specifically 2008 Guidance) 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 financial estimates.
 
 
 
 

 
j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED, IN THOUSANDS)
 
 
 
   
MARCH 31,
   
DECEMBER 31,
 
   
2008
   
2007
 
             
ASSETS
           
Cash and cash equivalents
  $ 151,215     $ 154,220  
Short-term investments
    15,597       54,297  
Accounts receivable, net of allowances of $1,658 and $1,378, respectively
    16,336       15,365  
Prepaid expenses and other current assets
    4,750       5,061  
Deferred income taxes
    1,724       1,724  
                 
Total current assets
    189,622       230,667  
                 
Long-term investments
    14,454       21,241  
Property and equipment, net
    22,305       23,511  
Goodwill
    39,718       39,452  
Other purchased intangibles, net
    29,003       29,220  
Deferred income taxes
    6,709       6,113  
Other assets
    159       205  
                 
TOTAL ASSETS
  $ 301,970     $ 350,409  
                 
                 
LIABILITIES AND STOCKHOLDERS' EQUITY
               
Accounts payable and accrued expenses
  $ 18,344     $ 17,516  
Income taxes payable
    8,935       4,649  
Deferred revenue
    14,589       14,708  
                 
Total current liabilities
    41,868       36,873  
                 
Accrued income tax liability
    32,659       30,863  
Other
    44       59  
                 
Total liabilities
    74,571       67,795  
                 
Commitments and contingencies
           
                 
Total stockholders' equity
    227,399       282,614  
                 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  $ 301,970     $ 350,409  
 
 
 
 
 

 
j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED, IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
 
 
   
THREE MONTHS ENDED MARCH 31,
 
   
2008
   
2007
 
             
Revenues
           
Subscriber
  $ 57,215     $ 50,293  
Other
    1,433       3,848  
                 
Total revenue
    58,648       54,141  
                 
Cost of revenues (including share-based compensation of $175 and $182 for the three months of  2008 and 2007, respectively)
    11,631       10,990  
                 
Gross profit
    47,017       43,151  
                 
Operating expenses:
               
                 
Sales and marketing (including share-based compensation of $338 and $278 for the three months of 2008 and 2007, respectively)
    10,214       8,780  
                 
Research, development and engineering (including share-based compensation of $214 and $173 for the three months of 2008 and 2007, respectively)
    3,147       2,713  
                 
General and administrative (including share-based compensation of $1,300 and $1,097 for the three months of 2008 and 2007, respectively)
    11,157       9,825  
                 
Total operating expenses
    24,518       21,318  
                 
Operating earnings
    22,499       21,833  
                 
Interest and other income, net
    1,328       1,725  
                 
Earnings before income taxes
    23,827       23,558  
                 
Income tax expense
    7,033       7,119  
                 
Net earnings
  $ 16,794     $ 16,439  
                 
                 
Basic net earnings per common share
  $ 0.36     $ 0.34  
                 
Diluted net earnings per common share
  $ 0.35     $ 0.32  
                 
                 
Basic weighted average shares outstanding
    47,259,118       48,822,735  
                 
Diluted weighted average shares outstanding
    48,330,042       50,680,093  
 
 
 
 
 
 

 
j2 GLOBAL COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED, IN THOUSANDS)
 
 
   
THREE MONTHS ENDED MARCH 31,
 
   
2008
   
2007
 
             
Cash flows from operating activities:
           
          Net earnings
  $ 16,794     $ 16,439  
     Adjustments to reconcile net earnings to net cash
               
      provided by operating activities:
               
          Depreciation and amortization
    3,108       2,164  
          Share-based compensation
    2,027       1,698  
          Tax benefit of vested restricted stock
          5  
          Tax benefit of stock option exercises
          2,823  
          Excess tax benefits from share-based compensation
    (239 )     (2,163 )
          Deferred income taxes
    (596 )     (31 )
          Loss on disposal of fixed assets
    26       104  
     Decrease (increase) in:
               
          Accounts receivable
    (701 )     257  
          Prepaid expenses and other current assets
    651       1,756  
          Other assets
    43       62  
     (Decrease) increase in:
               
          Accounts payable and accrued expenses
    704       (2,130 )
          Income taxes payable
    4,392       3,157  
          Deferred revenue
    (200 )     2,528  
          Accrued income tax liability
    1,416        
          Other
    (14 )     (10 )
                 
          Net cash provided by operating activities
    27,411       26,659  
                 
Cash flows from investing activities:
               
          Net purchases of available-for-sale investments
          (21,660 )
          Sales of available-for-sale investments
    36,170        
          Purchases of held-to-maturity investments
    (475 )      
          Redemptions/Sales of held-to-maturity investments
    9,607       11,254  
          Purchases of property and equipment
    (469 )     (529 )
          Acquisition of business, net of cash received
    (64 )     (4 )
          Purchase of intangible assets
    (1,044 )     (1,995 )
                 
          Net cash provided by (used in) investing activities
    43,725       (12,934 )
                 
Cash flows from financing activities:
               
          Repurchases of common stock
    (75,987 )     (10,184 )
          Issuance of common stock under employee stock purchase plan
    59       62  
          Exercise of stock options
    97       2,529  
          Excess tax benefits from share-based compensation
    239       2,163  
          Repayment of long-term debt
          (132 )
                 
          Net cash used in financing activities
    (75,592 )     (5,562 )
                 
Effect of exchange rate changes on cash and cash equivalents
    1,451       115  
                 
Net Increase (decrease) in cash and cash equivalents
    (3,005 )     8,278  
                 
Cash and cash equivalents, beginning of period
    154,220       95,605  
                 
Cash and cash equivalents, end of period
  $ 151,215     $ 103,883