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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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Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
Cloud and datacenter migration innovator AppZero has joined the Microsoft Enterprise Cloud Alliance Program. AppZero is a fast, flexible way to move Windows Server applications from any source machine – physical or virtual – to any destination server, in any cloud or datacenter, using its patented container technology. AppZero’s container is also called a Virtual Application Appliance (VAA). To facilitate Microsoft Azure onboarding, AppZero has two purpose-built offerings: AppZero SP for Azure,...
WSM International, the pioneer and leader in server migration services, has announced an agreement with WHOA.com, a leader in providing secure public, private and hybrid cloud computing services. Under terms of the agreement, WSM will provide migration services to WHOA.com customers to relocate some or all of their applications, digital assets, and other computing workloads to WHOA.com enterprise-class, secure cloud infrastructure. The migration services include detailed evaluation and planning...
This Enterprise Strategy Group lab validation report of the NEC Express5800/R320 server with Intel® Xeon® processor presents the benefits of 99.999% uptime NEC fault-tolerant servers that lower overall virtualized server total cost of ownership. This report also includes survey data on the significant costs associated with system outages impacting enterprise and web applications. Click Here to Download Report Now!
IBM’s Blue Box Cloud, powered by OpenStack, is now available in any of IBM’s globally integrated cloud data centers running SoftLayer infrastructure. Less than 90 days after its acquisition of Blue Box, IBM has integrated its Blue Box Cloud Dedicated private-cloud-as-a-service into its broader portfolio of OpenStack® based solutions. The announcement, made today at the OpenStack Silicon Valley event, further highlights IBM’s continued support to deliver OpenStack solutions across all cloud depl...
SYS-CON Events announced today that Pythian, a global IT services company specializing in helping companies leverage disruptive technologies to optimize revenue-generating systems, has been named “Bronze Sponsor” of SYS-CON's 17th Cloud Expo, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Founded in 1997, Pythian is a global IT services company that helps companies compete by adopting disruptive technologies such as cloud, Big Data, advance...
SYS-CON Events announced today that HPM Networks will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. For 20 years, HPM Networks has been integrating technology solutions that solve complex business challenges. HPM Networks has designed solutions for both SMB and enterprise customers throughout the San Francisco Bay Area.
SYS-CON Events announced today that G2G3 will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based on a collective appreciation for user experience, design, and technology, G2G3 is uniquely qualified and motivated to redefine how organizations and people engage in an increasingly digital world.
SYS-CON Events announced today the Containers & Microservices Bootcamp, being held November 3-4, 2015, in conjunction with 17th Cloud Expo, @ThingsExpo, and @DevOpsSummit at the Santa Clara Convention Center in Santa Clara, CA. This is your chance to get started with the latest technology in the industry. Combined with real-world scenarios and use cases, the Containers and Microservices Bootcamp, led by Janakiram MSV, a Microsoft Regional Director, will include presentations as well as hands-on...
SYS-CON Events announced today that Micron Technology, Inc., a global leader in advanced semiconductor systems, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Micron’s broad portfolio of high-performance memory technologies – including DRAM, NAND and NOR Flash – is the basis for solid state drives, modules, multichip packages and other system solutions. Backed by more than 35 years of tech...
Through WebRTC, audio and video communications are being embedded more easily than ever into applications, helping carriers, enterprises and independent software vendors deliver greater functionality to their end users. With today’s business world increasingly focused on outcomes, users’ growing calls for ease of use, and businesses craving smarter, tighter integration, what’s the next step in delivering a richer, more immersive experience? That richer, more fully integrated experience comes ab...
In today's digital world, change is the one constant. Disruptive innovations like cloud, mobility, social media, and the Internet of Things have reshaped the market and set new standards in customer expectations. To remain competitive, businesses must tap the potential of emerging technologies and markets through the rapid release of new products and services. However, the rigid and siloed structures of traditional IT platforms and processes are slowing them down – resulting in lengthy delivery ...
U.S. companies are desperately trying to recruit and hire skilled software engineers and developers, but there is simply not enough quality talent to go around. Tiempo Development is a nearshore software development company. Our headquarters are in AZ, but we are a pioneer and leader in outsourcing to Mexico, based on our three software development centers there. We have a proven process and we are experts at providing our customers with powerful solutions. We transform ideas into reality.
Any Ops team trying to support a company in today’s cloud-connected world knows that a new way of thinking is required – one just as dramatic than the shift from Ops to DevOps. The diversity of modern operations requires teams to focus their impact on breadth vs. depth. In his session at DevOps Summit, Adam Serediuk, Director of Operations at xMatters, Inc., will discuss the strategic requirements of evolving from Ops to DevOps, and why modern Operations has begun leveraging the “NoOps” approa...
Organizations from small to large are increasingly adopting cloud solutions to deliver essential business services at a much lower cost. According to cyber security experts, the frequency and severity of cyber-attacks are on the rise, causing alarm to businesses and customers across a variety of industries. To defend against exploits like these, a company must adopt a comprehensive security defense strategy that is designed for their business. In 2015, organizations such as United Airlines, Sony...
Red Hat is investing in Tesora, the number one contributor to OpenStack Trove Database as a Service (DBaaS) also ranked among the top 20 companies contributing to OpenStack overall. Tesora, the company bringing OpenStack Trove Database as a Service (DBaaS) to the enterprise, has announced that Red Hat and others have invested in the company as a part of Tesora's latest funding round. The funding agreement expands on the ongoing collaboration between Tesora and Red Hat, which dates back to Febr...
As more and more data is generated from a variety of connected devices, the need to get insights from this data and predict future behavior and trends is increasingly essential for businesses. Real-time stream processing is needed in a variety of different industries such as Manufacturing, Oil and Gas, Automobile, Finance, Online Retail, Smart Grids, and Healthcare. Azure Stream Analytics is a fully managed distributed stream computation service that provides low latency, scalable processing of ...
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome,” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
With the proliferation of connected devices underpinning new Internet of Things systems, Brandon Schulz, Director of Luxoft IoT – Retail, will be looking at the transformation of the retail customer experience in brick and mortar stores in his session at @ThingsExpo. Questions he will address include: Will beacons drop to the wayside like QR codes, or be a proximity-based profit driver? How will the customer experience change in stores of all types when everything can be instrumented and a...
SYS-CON Events announced today that DataClear Inc. will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. The DataClear ‘BlackBox’ is the only solution that moves your PC, browsing and data out of the United States and away from prying (and spying) eyes. Its solution automatically builds you a clean, on-demand, virus free, new virtual cloud based PC outside of the United States, and wipes it clean...