Jupitermedia Corporation (Nasdaq: JUPM) today reported results for the
quarter ended September 30, 2007.
Highlights for the third quarter of 2007 include:
Revenues for the third quarter of 2007 were $34.8 million compared to
revenues of $33.8 million for the same period last year. Revenues from
Online Images increased from $26.2 million to $26.8 million, while
revenues from Online Media increased from $7.6 million to $7.9 million.
Loss per diluted share from continuing operations was $0.01 and
included non-cash stock-based compensation expense, one time expenses
related to debt issuance costs and expenses related to canceled
events, which totaled $0.03 per diluted share.
Deferred revenues increased from $14.3 million at June 30, 2007 to
$16.1 million at September 30, 2007 due to the acquisition of
Mediabistro and the increase in bookings for our
JupiterimagesUnlimited high level subscription offering.
"Our Jupiterimages division showed strength in the third quarter and for
the first nine months of 2007. Our Rights Managed category experienced
approximately 30% revenue growth for the first nine months of this year
compared to the same period of 2006. In addition, revenues from our
JupiterimagesUnlimited high level royalty-free subscription offering
grew over 300% for the first nine months of 2007 compared to the same
period last year. Our backlog for JupiterimagesUnlimited increased
sharply during the third quarter which bodes well for revenues in future
quarters. Due to the evolution taking place in the stock photo industry,
we are currently focusing our direct sales team to further emphasize our
strengths: sales of Rights Managed images and our subscription products,
including JupiterimagesUnlimited. In the third quarter we initiated a
rigorous review of our operating expenses that we expect will result in
annual expense reductions of $2.0–$3.0 million
on a prospective basis. Additionally, we have identified opportunities
to streamline various capital projects and content production that we
expect will result in a reduction of over $3.0 million in annual cash
expenditures. Combined, this restructuring is expected to improve our
annual after-tax cash flows by approximately $4.0 million and possibly
more," stated Jupitermedia's Chairman and CEO Alan M. Meckler.
"During the third quarter we continued to make investments in our
JupiterOnlineMedia division, including our acquisition of Mediabistro in
July. Mediabistro, which has a loyal following of media and creative
professionals, provides our JupiterOnlineMedia division with new and
growing revenue streams through its vertical online job board and its
training courses which are offered both online and in-person. We believe
that Mediabistro will benefit from the vast traffic generated from our
Online Media and Jupiterimages properties. Furthermore, Mediabistro has
a wide variety of original content and blogs which will augment our 150
original content sites, and Mediabistro’s
events mesh nicely with Jupitermedia's trade show and Webcast
operations," added Meckler.
Jupitermedia Corporation 3rd Quarter 2007 Financial Results
Conference Call Alert
Jupitermedia Corporation invites you to participate in its conference
call reviewing 2007 third quarter results on Friday, November 9, 2007 at
11:00 am EST.
The conference call number is (888) 737-3616 for domestic participants
and (913) 981-5542 for international participants; confirmation code
"491 4712." 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, November 23, 2007. Replay call numbers are
(888) 203-1112 for domestic participants and (719) 457-0820 for
international participants: confirmation code: "491 4712."
Credit Facility
In July 2007, Jupitermedia announced that it had closed a $115 million
senior credit facility arranged by KeyBanc Capital Markets. Jupitermedia
has initially borrowed $88 million under this credit facility to repay
indebtedness under a previous credit facility with JPMorgan Securities
and to fund the acquisition of Mediabistro.com Inc. in July 2007.
Acquisitions
In July 2007, Jupitermedia announced that it had acquired all of the
shares of Mediabistro.com Inc. (www.mediabistro.com),
the career and community site for media and creative professionals, for
$20.0 million in cash and a two year earn-out that could result in an
additional $3.0 million in cash consideration. Funding for this
acquisition was secured through the $115 million senior credit facility
arranged by KeyBanc Capital Markets.
New Online Images Offerings
Jupitermedia continued to expand and strengthen its world-class
proprietary Jupiterimages offerings with the addition of the following:
In September 2007, Jupitermedia announced that it had entered into an
agreement with Broderbund Software (a division of Riverdeep) to offer
ClickArt Online (clickart.broderbund.com/en/index),
a subscription service offering one million images from Jupiterimages’
(www.jupiterimages.com) to
Broderbund’s database of registered users.
Broderbund offers this subscription via their Web store.
In September 2007, Jupitermedia announced a new channel of distribution
to its Stockxpert (www.stockxpert.com)
community with an on-ramp program to submit images to Jupiterimages.
Jupiterimages now accepts image submissions from the ‘Xpert’
community to be sold under the Dynamic Graphics brand on its Web site
and through its worldwide network of agents.
In October 2007, Jupitermedia announced Stockxpert.com's (www.stockxpert.com) subscription
service which provides access to its library of user-contributed
microstock images. Subscriptions are available for one month, three
months and one year, and allow subscribers to download up to 25 images
per day at resolutions up to 50MB. The Stockxpert.com subscription
service was launched to serve the needs of high volume microstock image
buyers. Stockxpert.com now enables image buyers to purchase the images
they need for their creative projects either by single image download or
by subscription from its ever-growing library.
Jupitermedia Corporation
Unaudited Consolidated Condensed Statements of Operations
For the Three and Nine Months Ended September 30, 2006 and 2007 (in thousands, except per share amounts)
Three Months EndedSeptember 30,
Nine Months EndedSeptember 30, 2006
2007 2006
2007
Revenues
$
33,784
$
34,766
$
102,751
$
104,206
Cost of revenues (exclusive of items shown separately below)
12,115
14,524
36,752
43,825
Advertising, promotion and selling
7,120
7,168
22,161
21,534
General and administrative
7,259
6,511
20,626
21,221
Depreciation
996
1,128
2,498
3,353
Amortization
2,637
3,381
7,003
9,669
Total operating expenses
30,127
32,712
89,040
99,602
Operating income
3,657
2,054
13,711
4,604
Income (loss) on investments and other, net
(79
)
15
58
(34
)
Interest income
99
62
380
140
Interest expense
(1,395
)
(2,328
)
(4,107
)
(5,232
)
Income (loss) before income taxes, minority interests and equity
income from investments, net
2,282
(197
)
10,042
(522
)
Provision for income taxes
1,326
307
3,129
325
Minority interests
(32
)
(30
)
(67
)
(109
)
Equity income from investments, net
86
—
136
—
Income (loss) from continuing operations
1,010
(534
)
6,982
(956
)
Income from discontinued operations, net of taxes
— —
67
—
Gain on sale of discontinued operations, net of taxes
—
—
5,573
—
Net income (loss)
$
1,010
$
(534
)
$
12,622
$
(956
)
Earnings (loss) per share:
Basic
Income (loss) from continuing operations
$
0.03
$
(0.01
)
$
0.20
$
(0.03
)
Net (loss) income
$
0.03
$
(0.01
)
$
0.36
$
(0.03
)
Diluted
Income (loss) from continuing operations
$
0.03
$
(0.01
)
$
0.19
$
(0.03
)
Net income (loss)
$
0.03
$
(0.01
)
$
0.35
$
(0.03
)
Shares used in computing earnings (loss) per share:
Basic
35,517
35,990
35,322
35,921
Diluted
35,777
35,990
36,109
35,921
Segment Information
The following tables summarize the results of the segments of
Jupitermedia for the three and nine months ended September 30, 2006 and
2007. 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, Polka Dot Images, Stock
Image, Pixland, Photos.com, Ablestock.com, PhotoObjects.net,
Clipart.com, JupiterGreetings.com, AnimationFactory.com,
RoyaltyFreeMusic.com, StudioCutz.com and Stockxpert.com. Online media
includes the internet.com, EarthWeb.com, DevX.com, Mediabistro.com and
Graphics.com Networks. Other includes corporate overhead, depreciation
and amortization.
Three Months EndedSeptember 30,
Nine Months Ended September 30, 2006
2007 2006
2007
Revenues:
Online images
$
26,177
$
26,824
$
79,549
$
82,121
Online media
7,607
7,942
23,196
22,085
Other
—
—
6
—
33,784
34,766
102,751
104,206
Cost of revenues and operating expenses: (A)
Online images
16,975
17,992
50,944
55,445
Online media
4,616
6,390
15,254
16,795
Depreciation and amortization
3,633
4,509
9,501
13,022
Other (C)
4,903
3,821
13,341
14,340
30,127
32,712
89,040
99,602
Operating income (loss):
Online images
9,202
8,832
28,605
26,676
Online media
2,991
1,552
7,942
5,290
Other (B) (C)
(8,536
)
(8,330
)
(22,836
)
(27,362
)
$
3,657
$
2,054
$
13,711
$
4,604
(A) Cost of revenues and operating expenses include non-cash,
stock-based compensation expense of $1.2 million and $2.9 million,
respectively, for the three and nine months ended September 30, 2006,
and $652,000 and $2.4 million, respectively, for the three and nine
months ended September 30, 2007.
(B) Includes depreciation and amortization expense.
(C) The nine months ended September 30, 2007 include $1.9 million in
legal and other fees associated with discussions with Getty Images, Inc.
regarding a potential transaction which were terminated on March 7, 2007.
Jupitermedia Corporation
Unaudited Consolidated Condensed Balance Sheets
December 31, 2006 and September 30, 2007 (in thousands, except share and per share amounts)
December 31, 2006 September 30, 2007 ASSETS
Current assets:
Cash and cash equivalents
$
8,891
$
7,433
Accounts receivable, net of allowances of $2,114 and $2,211,
respectively
25,296
27,176
Prepaid expenses and other
2,601
7,096
Deferred income taxes
3,350
3,304
Total current assets
40,138
45,009
Property and equipment, net of accumulated depreciation of $13,996
and $17,051, respectively
11,691
12,586
Intangible assets, net
77,923
73,681
Goodwill
199,010
229,379
Deferred income taxes
2,147
2,016
Investments and other assets
1,281
2,440
Total assets
$
332,190
$
365,111
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
5,269
$
7,563
Accrued payroll and related expenses
3,188
3,791
Accrued expenses and other
14,469
11,591
Current portion of long-term debt
16,000
750
Deferred revenues
13,362
15,657
Total current liabilities
52,288
39,352
Long-term debt
49,899
87,063
Deferred revenues
181
456
Other long-term liabilities
—
1,852
Total liabilities
102,368
128,723
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.01 par value, 4,000,000 shares authorized, no
shares issued
— —
Common stock, $.01 par value, 75,000,000 shares authorized,
35,713,327 and 36,001,732 shares issued, respectively
357
360
Additional paid-in capital
261,666
265,873
Accumulated deficit
(33,888
)
(34,844
)
Treasury stock, 65,000 shares at cost
(106
)
(106
)
Accumulated other comprehensive income
1,793
5,105
Total stockholders’ equity
229,822
236,388
Total liabilities and stockholders’ equity
$
332,190
$
365,111
Jupitermedia Corporation
Unaudited Consolidated Condensed Statements of Cash Flows
Nine Months Ended September 30, 2006 and 2007 (in thousands)
Nine Months EndedSeptember 30, 2006 2007
Cash flows from operating activities:
Income (loss) from continuing operations
$
6,982
$
(956
)
Adjustments to reconcile income (loss) from continuing operations to
net cash provided by operating activities:
Depreciation and amortization
9,501
13,022
Stock-based compensation
2,894
2,363
Provision for losses on accounts receivable
361
62
Minority interests
67
109
Equity income from investments, net
(136
)
—
(Income) loss on investments and other, net
(58
)
34
Deferred income taxes
1,885
288
Excess tax benefit from stock-based compensation
(3,014
)
(785
)
Changes in operating assets and liabilities (net of businesses
acquired):
Accounts receivable
(4,300
)
(1,587
)
Prepaid expenses and other
(2,189
)
(3,781
)
Accounts payable and accrued expenses and other
(9,078
)
(197
)
Deferred revenues
1,423
1,563
Discontinued operations
1,110
—
Net cash provided by operating activities
5,448
10,135
Cash flows from investing activities:
Purchases of property and equipment
(2,302
)
(4,003
)
Acquisitions of businesses, images and other
(29,162
)
(30,281
)
Proceeds from sales of assets and other
368
142
Proceeds from sale of discontinued operations
9,600
—
Discontinued operations
—
—
Net cash used in investing activities
(21,496
)
(34,142
)
Cash flows from financing activities:
Borrowings under credit facilities
19,000
94,900
Debt issuance costs
(38
)
(1,537
)
Repayment of borrowings under credit facilities
(16,965
)
(72,986
)
Proceeds from exercise of stock options
2,647
1,115
Excess tax benefit from stock-based compensation
3,014
785
Discontinued operations
—
—
Net cash provided by financing activities
7,658
22,277
Effects of exchange rates on cash and cash equivalents
108
272
Net decrease in cash and cash equivalents
(8,282
)
(1,458
)
Cash and cash equivalents, beginning of period
18,546
8,891
Cash and cash equivalents, end of period
$
10,264
$
7,433
Supplemental disclosures of cash flow:
Cash paid for income taxes
$
7,818
$
2,846
Cash paid for interest
$
2,854
$
4,988
Business Outlook
Jupitermedia's financial guidance is prepared in accordance with
accounting principles generally accepted in the United States of
America, except as noted below. Historical results below have been
adjusted to conform to this presentation. The amounts below reflect the
preliminary allocation of the purchase prices paid by Jupitermedia in
connection with its recent acquisitions and are subject to change
pending a final allocation of these amounts. The following
forward-looking statements reflect Jupitermedia's expectations as of
November 8, 2007. Due to potential changes in general economic
conditions and the various other risk factors discussed below and in
Jupitermedia's reports filed with the Securities and Exchange Commission
from time to time, actual results may differ materially. Jupitermedia
intends to continue its practice of not updating forward-looking
statements until its next quarterly results announcement, other than in
publicly available statements.
Future Expectations
(In millions except for earnings per diluted share)
Q4 2007(A)
Revenues
$35.0–36.0
Cost of revenues, advertising, promotion & selling, and general &
administrative expenses
$27.5–28.5
EBITDA (Earnings before interest, taxes, depreciation and
amortization)
$7.3
Depreciation and amortization
$4.6
Interest expense, net
$1.8
Provision for income taxes
$0.3
Net income
$0.6
Diluted share count
36.1
Earnings per diluted share
$0.02
Notes:
(A) This financial guidance does not include estimated non-cash
stock-based compensation expense relating to employee stock options in
the amount of $0.01 per share for Q4 2007.
About Jupitermedia Corporation
Jupitermedia Corporation (Nasdaq: JUPM, http://www.jupitermedia.com),
headquartered in Darien, CT, is a leading global provider of images,
news and original information, career Web sites and events for
information technology, business, media and creative professionals.
Jupitermedia includes Jupiterimages, one of the leading images companies
in the world with over 7.0 million images online serving creative
professionals with brands like 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, Polka Dot Images, Stock Image, Pixland, Photos.com,
Ablestock.com, PhotoObjects.net, Clipart.com, JupiterGreetings.com,
AnimationFactory.com, RoyaltyFreeMusic.com, StudioCutz.com and
Stockxpert.com. The JupiterOnlineMedia division of Jupitermedia consists
of five distinct online networks: internet.com and EarthWeb.com for IT
and business professionals; DevX.com for developers; and Mediabistro.com
and Graphics.com for media and creative professionals. These networks
include more than 150 Web sites and over 150 e-mail newsletters that are
viewed by over 20 million users and generate over 400 million page views
monthly. JupiterOnlineMedia also includes specialized career Web sites
for select professional communities which can be found on
Mediabistro.com and JustTechJobs.com. In addition, JupiterOnlineMedia
includes JupiterEvents and Mediabistro’s
media-related events, which produce offline conferences and trade
shows focused on IT and business-specific topics including ISPCON and
Web Video Summit.
"Safe Harbor" Statement under the Private Securities Litigation
Reform Act of 1995: Statements in this press release which are not
historical facts are "forward-looking statements" that are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Such forward-looking statements involve risks and
uncertainties that could cause actual results to differ materially from
those described in the forward-looking statements. The potential risks
and uncertainties address a variety of subjects including, for example,
the competitive environment in which Jupitermedia competes; the
unpredictability of Jupitermedia's future revenues, expenses, cash flows
and stock price; Jupitermedia's ability to integrate acquired
businesses, products and personnel into its existing businesses;
Jupitermedia's ability to protect its intellectual property; and
Jupitermedia's dependence on a limited number of advertisers. For a more
detailed discussion of such risks and uncertainties, refer to
Jupitermedia's reports filed with the Securities and Exchange Commission
pursuant to the Securities Exchange Act of 1934. The forward-looking
statements included herein are made as of the date of this press
release, and Jupitermedia assumes no obligation to update the
forward-looking statements after the date hereof. All current Jupitermedia press releases can be found online at www.jupitermedia.com/corporate/press.html.
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