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JUPITERMEDIA CORPORATION REPORTS RESULTS FOR ITS FOURTH QUARTER ENDED DECEMBER 31, 2006
(New York, NY - March 14, 2007) - Jupitermedia Corporation (Nasdaq: JUPM) today reported results for the quarter ended December 31, 2006.Highlights for the year 2006 include:
- Revenues grew 21% to $137.5 million.
- Net income was $13.1 million, or $0.36 per diluted share. Net income for 2006 included a gain of $5.6 million, net of income taxes, related to the sale of Jupitermedia's research business.
- Earnings per diluted share from continuing operations were $0.21 and included non-cash stock-based compensation expense of $0.06.
Highlights for the fourth quarter of 2006 include:
- Revenues for the fourth quarter of 2006 were $34.8 million compared to revenues of $33.2 million for the same period last year, an increase of 5%.
- Earnings per diluted share from continuing operations were $0.02 and included non-cash stock-based compensation expense, legal and other fees associated with discussions with Getty Images, Inc. regarding a potential transaction which were terminated on March 7, 2007 and one-time charges for severance, legal fees, non-cash venture investment writedowns and professional fees associated with abandoned potential acquisitions which totaled $0.03 per diluted share.
"Our financial results for the year ended December 31, 2006 included record revenues. We have been emphasizing the development of our Jupiterimages division and have made significant investments in our image production, technology platforms and direct sales teams during the year," stated Jupitermedia's Chairman and CEO Alan M. Meckler. "At the same time, we have made progress in integrating our many recent image acquisitions. In addition to the expansion of our image offerings, we have continued to increase our wholly-owned royalty-free music offerings. In the fourth quarter we started making investments in our Media business, with the launch of several new IT Web sites and companion trade shows. In addition, we recently announced the acquisition of the remaining 50.1% interest in the ISPCON trade shows and the acquisition of JustTechJobs.com, which is a natural e-commerce offering for our Online Media business audience of over 20 million unique users," added Meckler.
Jupitermedia Corporation 4th Quarter 2006 Financial Results Conference Call Alert
Jupitermedia Corporation invites you to participate in its conference call reviewing 2006 fourth quarter results on Thursday, March 15, 2007 at 11:00 am EST.
The conference call number is (800) 378-9344 for domestic participants and (913) 643-4204 for international participants; pass code "289 1428." Please call five minutes in advance to ensure that you are connected prior to the presentation. The conference call replay will be available until Friday, March 23, 2007. Replay call numbers are (888) 203-1112 for domestic participants and (719) 457-0820 for international participants: pass code: "289 1428."
Acquisitions
- In October 2006, Jupitermedia announced that its Jupiterimages division acquired all of the shares of Cover - Imagen y Publicaciones, S.L. (www.cover.es). With offices in Barcelona and Madrid, Cover Images is a leading agency focused on the distribution of local and international rights-managed images. Terms of this acquisition were not disclosed.
- In December 2006, Jupitermedia announced the acquisition of controlling ownership in HAAP Media Ltd. having increased its ownership position from an initial 49.7% equity investment made in January 2006 to 90% in HAAP Media Ltd. Based in Budapest, Hungary, HAAP Media operates Stockxpert.com (www.stockxpert.com), a micropayment stock photo Web site, and Stock.xchng (www.sxc.hu), a stock photo community Web site. Financial terms of this transaction were not disclosed.
- In December 2006, Jupitermedia announced the acquisition of JustTechJobs.com (www.justtechjobs.com/), an online tech job site. JustTechJobs.com has selected the leading technologies in the IT industry and has created separate vertically focused Web sites dedicated exclusively to each. This niched approach gives JustTechJobs.com the unique ability to get the right job postings directly to the right technology professionals. Terms of this acquisition were not disclosed.
- In January 2007, Jupitermedia announced that its Jupiterimages division acquired the assets of StudioCutz.com (www.studiocutz.com) and BlueFuseMusic.com (www.bluefusemusic.com) from Mediatone Music, Inc. Also included in the transaction were the assets of NoiseFuel.com (imaging elements & sound effects, www.noisefuel.com) and MediaMusicLoops.com (www.mediamusicloops.com). These sites include a music library of over 2,600 wholly-owned tracks of high quality royalty free music and 5,500 sound effects. Terms of this acquisition were not disclosed.
- In January 2007, Jupitermedia announced that it acquired the remaining 50.1% interest in the two annual ISPCON trade shows as well as 100% of the INBOX trade shows from The Golden Group I, Inc. Jupitermedia now owns 100% of these properties, up from the 49.9% interest in ISPCON held prior to the transaction. Financial terms of this transaction were not disclosed.
Divestiture and Discontinued Operations
In March 2006, Jupitermedia sold its JupiterResearch division for $10.1 million in cash and the assumption of certain liabilities by the purchaser, subject to certain post-closing adjustments. The purchaser is JupiterResearch, LLC a subsidiary of JupiterKagan, Inc., which is a portfolio company of MCG Capital Corporation (Nasdaq: MCGC). As a result of this sale, Jupitermedia's Research segment is now being presented as a discontinued operation in accordance with Statement of Financial Accounting Standards No. 144.
New Online Images Offerings
Jupitermedia continued to expand and strengthen its world-class proprietary Jupiterimages offerings with the addition of the following:
In October 2006, Jupitermedia announced the launch of JupiterGreetings.com, a new paid subscription service for animated online greeting cards, 3D films and cartoons, online photo albums and more. By combining some of the 400,000 high-quality 3D animations and movies from Animation Factory (www.animationfactory.com) with music and sound effects from RoyaltyFreeMusic.com (www.royaltyfreemusic.com), Jupiterimages has efficiently and rapidly created a new line of business.
In February 2007, Jupitermedia announced the launch of RoyaltyFreeMusic.com's (www.royaltyfreemusic.com) subscription service, which provides subscribers with access to its entire wholly-owned library of over 6,000 music tracks and more than 10,000 sound effects. Subscriptions are available for one month and one year, allowing subscribers to download up to 90 tracks and 300 sound effects per month. Benefits to subscribers include access to brand new tracks and sound effects added monthly, and the convenience of never having to deal with ongoing licensing fees for their projects.
New Online Media Offerings
Jupitermedia continued to expand and strengthen its world-class proprietary content and advertising opportunities with the addition of the following:
In October 2006, Jupitermedia announced the launch of internetnews.com podcasts (www.internetnews.com/podcasts), a series of Web-based audio "newscasts" covering the hottest stories in the enterprise IT and Internet technology sectors. Weekly topics include breaking news on: Linux and Open Source; Enterprise Software; Chips, Processors and Hardware; Storage; and leading IT companies such as Microsoft, Sun, Oracle and Google, as reported by internetnews.com's beat reporters and experts. The podcasts are free of charge.
In December 2006, Jupitermedia announced the launch of bITaPlanet.com (www.bitaplanet.com) and a related conference dedicated to business IT alignment. bITaPlanet.com and the bITa USA 2007 conference (www.bitausa.com) cover the emerging field of business IT alignment to help senior IT managers keep their technology working toward their company's business objectives covering: compliance, Sarbanes-Oxley, IT governance, ITIL (IT Infrastructure Library) and business optimization. The bITa USA 2007 Conference (to be held in Boston in May 2007) is being produced by Jupitermedia in conjunction with the bITa Center, an international organization that produces conferences on business IT alignment.
In February 2007, Jupitermedia announced its new Web Video Summit tradeshow (www.webvideosummit.com) will be held June 27-28, 2007 at the San Jose Marriott in San Jose, California. The conference will serve those who create and distribute video over the Web, with industry expert Dave Burstein chairing the program.
In March 2007, Jupitermedia announced the launch of WebVideoUniverse.com (www.webvideouniverse.com), a Web site focused on shooting, editing and distributing video over the Web. WebVideoUniverse.com includes comprehensive coverage of this emerging vertical market with sections including: Filming, Editing/Encoding, Distributing, Marketing/Promotion, Resources and Discussion, and is part of internet.com's IT channel.
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Jupitermedia Corporation Unaudited Consolidated Condensed Statements of Operations For the Three Months and Years Ended December 31, 2005 and 2006 (in thousands, except per share amounts) |
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Three Months Ended December 31, |
Year Ended December 31, |
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| 2005 | 2006 | 2005 | 2006 | ||||||
| Revenues | $ | 33,174 | $ | 34,779 | $ | 113,754 | $ | 137,530 | |
| Cost of revenues (exclusive of items shown separately below) | 10,001 | 13,931 | 36,841 | 50,683 | |||||
| Advertising, promotion and selling | 5,886 | 7,571 | 21,006 | 29,732 | |||||
| General and administrative | 6,585 | 6,754 | 19,164 | 27,380 | |||||
| Depreciation | 397 | 975 | 1,754 | 3,473 | |||||
| Amortization | 1,872 | 2,910 | 4,816 | 9,913 | |||||
| Gain on sale of assets, net | --- | --- | 13,259 | --- | |||||
| Total operating expenses | 24,741 | 32,141 | 70,322 | 121,181 | |||||
| Operating income | 8,433 | 2,638 | 43,432 | 16,349 | |||||
| Income (loss) on investments and other, net | 35 | (366) | --- | (308) | |||||
| Interest income | 104 | 66 | 392 | 446 | |||||
| Interest expense | (2,543) | (1,437) | (3,508) | (5,544) | |||||
| Income before income taxes, minority interests and equity income from investments, net | 6,029 | 901 | 40,316 | 10,943 | |||||
| Provision (benefit) for income taxes | 1,398 | 496 | (19,143) | 3,625 | |||||
| Minority interests | 3 | 33 | (46) | (34) | |||||
| Equity income from investments, net | 138 | 120 | 270 | 256 | |||||
| Income from continuing operations | 4,772 | 558 | 59,683 | 7,540 | |||||
| Income (loss) from discontinued operations, net of taxes | 677 | (56) | 2,872 | 11 | |||||
| Gain (loss) on sale of discontinued operations, net of taxes | (10) | — | 15,844 | 5,573 | |||||
| Net income | $ | 5,439 | $ | 502 | $ | 78,399 | $ | 13,124 | |
| Earnings per share: | |||||||||
| Basic | |||||||||
| Income from continuing operations | $ | 0.14 | $ | 0.02 | $ | 1.75 | $ | 0.21 | |
| Net income | $ | 0.16 | $ | 0.01 | $ | 2.29 | $ | 0.37 | |
| Diluted | |||||||||
| Income from continuing operations | $ | 0.13 | $ | 0.02 | $ | 1.63 | $ | 0.21 | |
| Net income | $ | 0.15 | $ | 0.01 | $ | 2.15 | $ | 0.36 | |
| Shares used in computing earnings per share: | |||||||||
| Basic | 34,847 | 35,643 | 34,166 | 35,403 | |||||
| Diluted | 37,129 | 35,875 | 36,498 | 36,093 | |||||
Segment Information
The following tables summarize the results of the segments of Jupitermedia for the three months and years ended December 31, 2005 and 2006. Online images consists of the Jupiterimages business that includes: BananaStock, Workbook Stock, Brand X Pictures, FoodPix, Botanica, Nonstock, The Beauty Archive, IFA Bilderteam, Comstock Images, Creatas Images, PictureQuest, Liquid Library, Thinkstock Images, Thinkstock Footage, Bigshot Media, Goodshoot, ITStockFree, Stock Image, Pixland, Photos.com, Ablestock.com, Clipart.com, PhotoObjects.net, FlashFoundry.com, AnimationFactory.com, RoyaltyFreeMusic.com, Stockxpert.com and JupiterGreetings.com. Online media consists of the internet.com online division that includes the internet.com, EarthWeb.com, DevX.com and Graphics.com Networks. Other includes corporate overhead, depreciation and amortization.
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Three Months Ended December 31, |
Year Ended December 31, |
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| 2005 | 2006 | 2005 | 2006 | ||||||
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(unaudited) (in thousands) |
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| Revenues: | |||||||||
| Online images | $ | 24,753 | $ | 27,087 | $ | 80,658 | $ | 106,636 | |
| Online media (A) | 8,415 | 7,692 | 33,066 | 30,888 | |||||
| Other | 6 | — | 30 | 6 | |||||
| 33,174 | 34,779 | 113,754 | 137,530 | ||||||
| Cost of revenues and operating expenses:(B) | |||||||||
| Online images | 13,634 | 19,354 | 44,490 | 70,298 | |||||
| Online media | 4,305 | 4,483 | 19,556 | 19,737 | |||||
| Gain on sale of assets, net (C) | --- | --- | (13,259) | --- | |||||
| Depreciation and amortization | 2,269 | 3,885 | 6,570 | 13,386 | |||||
| Other | 4,533 | 4,419 | 12,965 | 17,760 | |||||
| 24,741 | 32,141 | 70,322 | 121,181 | ||||||
| Operating income (loss): | |||||||||
| Online images | 11,119 | 7,733 | 36,168 | 36,338 | |||||
| Online media | 4,110 | 3,209 | 13,510 | 11,151 | |||||
| Gain on sale of assets, net (C) | --- | --- | 13,259 | --- | |||||
| Other (D) | (6,796) | (8,304) | (19,505) | (31,140) | |||||
| $ | 8,433 | $ | 2,638 | $ | 43,432 | $ | 16,349 | ||
(A) Jupitermedia sold its ClickZ.com Network on August 5, 2005. Online media revenues include $1.8 million for the year ended December 31, 2005, from the ClickZ.com Network.
(B) Cost of revenues and operating expenses include non-cash, stock-based compensation expense of $801,000 and $3.7 million, respectively, for the three months and year ended December 31, 2006.
(C) Represents gain on sale of ClickZ.com Network of $13.3 million.
(D) Includes depreciation and amortization expense.
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Jupitermedia Corporation Unaudited Consolidated Condensed Balance Sheets December 31, 2005 and 2006 (in thousands, except share and per share amounts) |
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December 31, 2005 |
December 31,
2006 |
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| ASSETS | |||||
| Current assets: | |||||
| Cash and cash equivalents | $ | 18,546 | $ | 8,891 | |
| Accounts receivable, net of allowances of $1,935 and $2,114, respectively | 20,640 | 25,013 | |||
| Prepaid expenses and other | 3,517 | 2,601 | |||
| Deferred income taxes | 425 | 3,350 | |||
| Assets of discontinued operations | 8,763 | — | |||
| Total current assets | 51,891 | 39,855 | |||
| Property and equipment, net | 9,807 | 11,691 | |||
| Intangible assets, net | 66,799 | 76,839 | |||
| Goodwill | 169,960 | 200,094 | |||
| Deferred income taxes | 8,690 | 2,147 | |||
| Investments and other assets | 1,766 | 1,281 | |||
| Total assets | $ | 308,913 | $ | 331,907 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||
| Current liabilities: | |||||
| Accounts payable | $ | 6,552 | $ | 5,269 | |
| Accrued payroll and related expenses | 2,390 | 3,188 | |||
| Accrued expenses and other | 13,287 | 14,186 | |||
| Current portion of long-term debt | 16,000 | 16,000 | |||
| Deferred revenues | 11,743 | 13,362 | |||
| Liabilities of discontinued operations | 7,211 | — | |||
| Total current liabilities | 57,183 | 52,005 | |||
| Long-term debt | 46,214 | 49,899 | |||
| Deferred revenues | 156 | 181 | |||
| Total liabilities | 103,553 | 102,085 | |||
| Commitments and contingencies: | |||||
| Stockholders’ equity: | |||||
| Preferred stock, $.01 par value, 4,000,000 shares authorized, no shares issued and outstanding | — | — | |||
| Common stock, $.01 par value, 75,000,000 shares authorized, 34,937,025 and 35,713,327 shares issued at December 31, 2005 and 2006, respectively | 349 | 357 | |||
| Additional paid-in capital | 251,919 | 259,945 | |||
| Accumulated deficit | (45,291) | (32,167) | |||
| Treasury stock, 65,000 shares at cost | (106) | (106) | |||
| Accumulated other comprehensive income (loss) | (1,511) | 1,793 | |||
| Total stockholders’ equity | 205,360 | 229,822 | |||
| Total liabilities and stockholders’ equity | $ | 308,913 | $ | 331,907 | |
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Jupitermedia Corporation Unaudited Consolidated Condensed Statements of Cash Flows For the Years Ended December 31, 2005 and 2006 (in thousands) |
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Year Ended
December 31, |
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| 2005 | 2006 | |||
| Cash flows from operating activities: | ||||
| Income from continuing operations | $ | 59,683 | $ | 7,540 |
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||||
| Depreciation and amortization | 6,570 | 13,386 | ||
| Stock-based compensation | — | 3,695 | ||
| Provision (benefit) for losses on accounts receivable | (4) | 557 | ||
| Minority interests | 46 | 34 | ||
| Equity (income) loss from investments, net | (270) | (256) | ||
| Gain on sale of assets, net | (13,259) | __ | ||
| Income on investments and other, net | -- | 308 | ||
| Deferred income taxes | (24,549) | 1,665 | ||
| Excess tax benefit from stock-based compensation | — | (1,273) | ||
| Changes in current assets and liabilities (net of businesses acquired): | ||||
| Accounts receivable, net | (606) | (3,370) | ||
| Prepaid expenses and other | 1,230 | 14 | ||
| Accounts payable and accrued expenses | (4,451) | (11,570) | ||
| Deferred revenues | 101 | 1,644 | ||
| Discontinued operations | 1,836 | 1,054 | ||
| Net cash provided by operating activities | 26,327 | 13,428 | ||
| Cash flows from investing activities: | ||||
| Purchases of property and equipment | (2,225) | (3,255) | ||
| Acquisitions of businesses and other | (146,799) | (37,758) | ||
| Proceeds from sales of assets and other | 14,911 | 368 | ||
| Proceeds from sale of discontinued operations | 28,135 | 9,600 | ||
| Distribution from internet.com venture funds | 105 | --- | ||
| Discontinued operations | — | — | ||
| Net cash used in investing activities | (105,873) | (31,045) | ||
| Cash flows from financing activities: | ||||
| Borrowings under credit facilities | 150,212 | 24,650 | ||
| Debt issuance costs | (2,030) | (136) | ||
| Repayment of borrowings under credit facilities | (87,999) | (20,965) | ||
| Proceeds from exercise of stock options | 7,953 | 2,890 | ||
| Excess benefit from stock-based compensation | — | 1,273 | ||
| Discontinued operations | — | — | ||
| Net cash provided by financing activities | 68,136 | 7,712 | ||
| Effects of exchange rates on cash | (223) | |||