2005 Press
JUPITERMEDIA CORPORATION REPORTS RECORD RESULTS FOR ITS THIRD QUARTER ENDED SEPTEMBER 30, 2005
(New York, NY - November 1, 2005) - Jupitermedia Corporation (Nasdaq: JUPM) today reported results for the quarter ended September 30, 2005.Highlights for the third quarter include:
- Operating income before depreciation and amortization grew 124% to $10.5 million
- Overall gross margins improved to 67%, with gross margins for Online Images improving to 70%
- Operating margins for Online Images, excluding depreciation and amortization, grew to 43%
Revenues for the third quarter of 2005 were $34.4 million compared to revenues of $15.8 million for the same period last year, an increase of 118%. Net income for the third quarter was $60.4 million, or $1.62 per diluted share, compared to net income of $5.1 million, or $0.15 per diluted share, for the same period last year. Net income for the third quarter of 2005 included a gain of $29.1 million, net of income taxes, related to the sale of Jupitermedia's Search Engine Strategies events and ClickZ.com Network, as well as a $23.5 million benefit from the reversal of the valuation allowance related to deferred income tax assets.
As a result of the sale of the Search Engine Strategies events, these financial results reflect Jupitermedia's Events segment as a discontinued operation in accordance with Statement of Financial Accounting Standards No. 144. Prior year financial results have been presented to reflect Jupitermedia's Events segment as a discontinued operation.
"Our financial results for the third quarter included record revenues, operating income and net income," stated Jupitermedia's Chairman and CEO Alan M. Meckler. "We have been emphasizing the development of our JupiterImages division and the third quarter illustrates continued organic and overall growth in the sales and distribution of commercial images. The acquisitions of PictureArts in July and BananaStock in October further solidifies JupiterImages' position as a leader in stock imagery. We have made eight major images acquisitions since June 2003: ArtToday, Comstock, Thinkstock, Hemera, Dynamic Graphics, Goodshoot, PictureArts and BananaStock. We plan to continue our acquisitions program in the coming months. Our employees are working hard to shape and integrate these acquisitions so that Jupitermedia continues to grow as a powerful creator and distributor of a wide range of commercial images. The full benefit of this integration will be more apparent in future quarters. In the meantime we continue to evolve as a company making positive financial progress not only with JupiterImages, but with our JupiterWeb and JupiterResearch divisions as well," added Meckler.
Jupitermedia Corporation 3rd Quarter 2005 Financial Results Conference Call Alert
Jupitermedia Corporation invites you to participate in its conference call reviewing 2005 third quarter results, scheduled for Wednesday, November 2, 2005 at 11:00 am EST.
The conference call number is (800) 289-0518 for domestic participants and (913) 981-5532 for international participants; pass code "883 4011." Please call five minutes in advance to ensure that you are connected prior to the presentation. The conference call replay will be available until Tuesday, November 15, 2005. Replay call numbers are (888) 203-1112 for domestic participants and (719) 457-0820 for international participants: pass code: "883 4011."
Acquisitions
- In July, Jupitermedia acquired PictureArts Corporation (www.picturearts.com) for $63.2 million in cash, subject to certain post-closing adjustments. The acquisition includes PictureArts' quality brands: Brand X Pictures, FoodPix, Botanica and Nonstock, as well as its image distribution business.
- In October, Jupitermedia acquired all of the shares of BananaStock Limited (www.bananastock.com) for approximately U.S. $19.0 million in cash, subject to certain post-closing adjustments. BananaStock, based in Oxfordshire, United Kingdom, is a leading resource for royalty free digital images for business users and creative professionals.
Online Image Offerings
In July, Jupitermedia announced an agreement with Corbis (www.corbis.com), a leading media services company, to distribute its Comstock Images and Thinkstock Images collections. Under the terms of the agreement, Corbis started distributing select Comstock and Thinkstock images worldwide through its Web site www.corbis.com in September.
In August, Jupitermedia announced the launch of JupiterImages Unlimited (www.jiunlimited.com), the first subscription service that allows unlimited access, at multiple resolutions, to over 330,000 of JupiterImages' highest quality wholly owned stock photos. JupiterImages' brands included in this new offering are Brand X, Comstock Images, Creatas Images, Goodshoot, IT Stock Free, Thinkstock Images, Photos.com, AbleStock.com and PhotoObjects.net.
In August, Jupitermedia announced that Adobe® Stock Photos, a stock photography service that offers designers one-stop shopping for high-quality, royalty-free images for layout and design, added Creatas Images (www.creatas.com), Goodshoot (www.goodshoot.com), IT Stock Images (www.itstockfree.com) and Thinkstock Images (www.thinkstock.com) to its collection. This is in addition to Comstock Images (www.comstock.com), which was one of the five premier collections that was part of Adobe® Stock Photos when it was launched with Adobe Creative Suite 2 in April.
In October, Jupitermedia announced a new image collection entitled (re)view. An archive of retro, rights-managed imagery, (re)view will launch in December 2005 with 4,000 select images at www.jupiterimages.com.
In October, Jupitermedia announced an exclusive worldwide partnership with Photographic Youth Music Culture Archive (PYMCA), a rights-managed image company based in London, U.K. The PYMCA collection is scheduled to launch in early 2006 at www.jupiterimages.com.
Online Media Offerings
In September, Jupitermedia announced the launch of "Adobe® LiveCycle Developer Source" (www.devx.com/Adobe), to assist application development professionals in creating applications for Adobe LiveCycle™, a key component of the Adobe Intelligent Document platform.
Research Services
In September, Jupitermedia announced the appointment of Oren Web Marketing to provide research sales and support in the Israeli market. Oren Web Marketing is headed by Haim Oren. Together with his Israeli team of experienced research sales professionals, Oren will be responsible for providing sales and sales support to JupiterResearch media, telecommunications, financial and other industry clients in Israel.
Conferences and Trade Shows
In August, Jupitermedia announced that it closed the sale of its Search Engine Strategies trade shows and its ClickZ.com Network of Web sites for $43 million in cash, subject to certain post-closing adjustments. The purchaser is London Stock Exchange listed media company Incisive Media plc (INM.L). As a result of the sale of the Search Engine Strategies events, Jupitermedia's Events segment is now being presented as a discontinued operation in accordance with Statement of Financial Accounting Standards No. 144.
Jupitermedia Corporation
Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2004 and 2005
(unaudited)
(in thousands, except per share amounts)
|
Three Months Ended |
Nine Months Ended |
|||
|
2004 |
2005 |
2004 |
2005 |
|
| Revenues |
$15,779 |
$34,351 |
$43,815 |
$88,493 |
| Cost of revenues |
$5,377 |
$11,478 |
$15,479 |
$30,973 |
| Gross Profit |
$10,402 |
$22,873 |
$28,336 |
$57,520 |
| Operating expenses: | ||||
| Advertising, promotion and selling |
$3,031 |
$7,035 |
$9,529 |
$17,603 |
| General and administrative |
$2,668 |
$5,320 |
$7,263 |
$13,160 |
| Depreciation |
$129 |
$656 |
$594 |
$1,366 |
| Amortization |
$360 |
$1,239 |
$1,477 |
$2,944 |
| Total operating expenses |
$6,188 |
$14,250 |
$18,863 |
$35,073 |
| Operating income |
$4,214 |
$8,623 |
$9,473 |
$22,447 |
| Gain on sale of assets, net |
$5 |
$13,265 |
$124 |
$13,224 |
| Interest income |
$55 |
$74 |
$82 |
$288 |
| Interest expense |
$(39) |
$(677) |
$(101) |
$(965) |
| Income before taxes, minority interests and equity income (loss) from investments, net |
$4,235 |
$21,285 |
$9,578 |
34,994 |
| Provision (benefit) for income taxes |
5 |
(22,153) |
145 |
(20,541) |
| Minority interests |
(20) |
(18) |
(57) |
(49) |
| Equity income (loss) from investments, net |
(108) |
- |
(117) |
132 |
| Income from continuing operations |
4,102 |
43,420 |
9,259 |
55,618 |
| Income from discontinued operations, net of taxes |
957 |
1,104 |
946 |
1,488 |
| Gain on sale of discontinued operations, net of taxes |
- |
$15,854 |
- |
15,854 |
| Net income |
$5,059 |
$60,378 |
$10,205 |
$72,960 |
| Earnings per share: | ||||
| Basic |
||||
| Continuing operations |
$0.13 |
$1.25 |
$0.33 |
$1.64 |
| Discontinued operations |
$0.03 |
$0.49 |
$0.03 |
$0.51 |
|
$0.16 |
$1.74 |
$0.36 |
$2.15 |
|
| Diluted |
||||
| Continuing operations |
$0.12 |
$1.16 |
$0.30 |
$1.52 |
| Discontinued operations |
$0.03 |
$0.46 |
$0.03 |
$0.48 |
|
$0.15 |
$1.62 |
$0.33 |
$2.00 |
|
| Shares used in computing earnings per share: |
||||
| Basic |
31,382 |
34,749 |
28,448 |
33,936 |
| Diluted |
34,141 |
37,323 |
30,815 |
36,401 |
Segment Information
| (unaudited) (in thousands) |
Three Months Ended |
Nine Months Ended |
||
|
2004 |
2005 |
2004 |
2005 |
|
| Revenues | ||||
| Online Images |
$6,797 |
$24,011 |
$15,045 |
$55,905 |
| Online Media |
$6,692 |
$7,775 |
$21,913 |
$24,651 |
| Research |
$2,279 |
$2,557 |
$6,822 |
$7,913 |
| Other |
$11 |
$8 |
$35 |
$24 |
|
$15,779 |
$34,351 |
$43,815 |
$88,493 |
|
| Cost of Revenues: | ||||
| Online Images |
$1,250 |
$7,277 |
$3,028 |
$17,397 |
| Online media |
$2,781 |
$2,917 |
$8,551 |
$9,443 |
| Research |
$1,346 |
$1,284 |
$3,900 |
$4,133 |
|
$5,377 |
$11,478 |
$15,479 |
$30,973 |
|
| Gross Profit: | ||||
| Online Images |
$5,547 |
$16,734 |
$12,017 |
$38,508 |
| Online Media |
$3,911 |
4,858 |
$13,362 |
15,208 |
| Research |
933 |
1,273 |
2,922 |
3,780 |
| Other |
11 |
8 |
35 |
24 |
|
10,402 |
22,873 |
28,336 |
57,520 |
|
| Advertising, promotion and selling: | ||||
| Online Images |
$694 |
$4,550 |
$2,250 |
$9,709 |
| Online media |
$1,602 |
$1,703 |
$5,046 |
$5,411 |
| Research |
$735 |
$782 |
$2,233 |
$2,483 |
|
$3,031 |
$7,035 |
$9,529 |
$17,603 |
|
| General and administrative: | ||||
| Online Images |
$288 |
$1,913 |
$805 |
$3,594 |
| Online media |
$(12) |
$(149) |
$222 |
$195 |
| Research |
$104 |
$173 |
$478 |
$580 |
| Other |
$2,288 |
$3,383 |
$5,758 |
$8,791 |
|
$2,668 |
$5,320 |
$7,263 |
$13,160 |
|
| Depreciation |
$129 |
$656 |
$594 |
$1,366 |
| Amortization |
$360 |
$1,239 |
$1,477 |
$2,944 |
| Operating income: | ||||
| Online Images |
$4,565 |
$10,271 |
$8,962 |
$25,205 |
| Online media |
$2,321 |
$3,304 |
$8,094 |
$9,602 |
| Research |
$94 |
$318 |
$211 |
$717 |
| Other |
$(2,766) |
$(5,270) |
$(7,794) |
$(13,077) |
|
$4,214 |
$8,623 |
$9,473 |
$22,447 |
|
Jupitermedia Corporation
Consolidated Balance Sheets
December 31, 2004 and September 30, 2005
(in thousands, except per share amounts)
|
December 31 |
September 30, |
|
| ASSETS | ||
| Current Assets: | ||
| Cash and cash equivalents |
$30,179 |
$20,247 |
| Accounts receivable, net of allowances of $966 and $1,562, respectively |
$13,724 |
$23,692 |
| Unbilled accounts receivable |
$1,530 |
$1,531 |
| Prepaid expenses and other |
$2,633 |
$4,216 |
| Assets of discontinued operations |
$1,789 |
---- |
| Total current assets |
$49,855 |
$49,686 |
| Property and equipment, net of accumulated depreciation of $9,256 and $10,780, respectively |
$2,339 |
$10,045 |
| Intangible assets, net of accumulated amortization of $5,371 and $8,309, respectively |
$20,939 |
$42,968 |
| Goodwill |
$41,967 |
$158,781 |
| Deferred income taxes |
- |
$11,014 |
| Investments and other assets |
$1,197 |
$2,000 |
| Total assets |
$116,297 |
$274,494 |
| LIABILITIES AND STOCKHOLDERS' EQUITY: | ||
| Current Liabilities: | ||
| Accounts payable |
$2,060 |
$5,071 |
| Accrued payroll and related expenses |
1,666 |
3,115 |
| Accrued expenses and other |
4,642 |
13,352 |
| Current portion of long-term debt |
--- |
10,000 |
| Deferred revenues |
12,023 |
15,568 |
| Liabilities of discontinued operations |
2,891 |
---- |
| Total current liabilities |
23,282 |
47,106 |
| Long-term debt |
--- |
26,322 |
| Deferred revenues |
510 |
616 |
| Deferred income tax liabilities |
121 |
--- |
| Other long-term liabilities |
225 |
--- |
| Total liabilities |
24,138 |
74,044 |
| Stockholders' equity | ||
| Preferred stock, $.01 par value, million shares authorized, no shares issued and outstanding |
--- |
--- |
| Common stock, $.01 par value, shares authorized, and 32,378,130 and 34,881,241 shares issued at December 31, 2004 and September 30, 2005, respectively |
324 |
349 |
| Additional paid-in capital |
$215,648 |
251,532 |
| Accumulated deficit |
$(123,690) |
(50,730) |
| Treasury stock, 65,000 shares, at cost |
$(106) |
(106) |
| Accumulated other comprehensive income |
$(17) |
$(595) |
| Total stockholders' equity |
$92,159 |
$200,450 |
| Total liabilities and stockholders' equity |
$116,297 |
$274,494 |
Jupitermedia Corporation
|
|
|||
|
2004 |
2005 |
||
|
Cash flows from operating activities: |
|||
|
Income from continuing operations |
$9,259 |
$55,618 |
|
|
Adjustments to reconcile income from continuing operations to net cash provided by operating activities: |
|||
|
Depreciation and amortization |
2,071 |
4,310 |
|
|
Provision (benefit) for losses on accounts receivable |
(388) |
(267) |
|
|
Minority interests |
57 |
49 |
|
|
Equity (income) loss from venture fund investments |
117 |
(132) |
|
|
Gain on sale of assets, net |
(124) |
(13,224 |
|
|
Deferred income taxes |
--- |
(24,084) |
|
|
Cash flows from discontinued operations |
1,075 |
631 |
|
|
Changes in current assets and liabilities, (net of businesses acquired): |
|||
|
Accounts receivable |
2,116 |
(2,661) |
|
|
Unbilled accounts receivable |
(173) |
(1) |
|
|
Prepaid expenses and other |
278 |
(1,105) |
|
|
Accounts payable and accrued expenses |
(184) |
(1,524) |
|
|
Deferred revenues |
790 |
(587) |
|
|
Net cash provided by operating activities |
14,894 |
17,023 |
|
|
Cash flows from investing activities: |
|||
|
Additions to property and equipment |
(269) |
(2,316) |
|
|
Acquisitions of businesses and other |
(27,233) |
(111,358) |
|
|
Proceeds from sales of assets and other |
191 |
42,940 |
|
|
Distribution from internet.com venture funds |
148 |
--- |
|
|
Net cash used in investing activities |
(27,163) |
(70,734) |
|
|
Cash flows from financing activities: |
|||
|
Proceeds from issuance of common stock, net |
30,340 |
--- |
|
|
Borrowings under credit facilities |
13,000 |
87,998 |
|
|
Debt issuance costs |
--- |
(257) |
|
|
Repayment of borrowings under credit facility |
(13,000) |
(51,677) |
|
|
Proceeds from exercise of stock options |
5,069 |
7,715 |
|
|
Net cash provided by financing activities |
35,409 |
43,779 |
|
|
Net increase (decrease) in cash and cash equivalents |
23,140 |
(9,932) |
|
|
Cash and cash equivalents, beginning of period |
9,567 |
30,179 |
|
|
Cash and cash equivalents, end of period |
$32,707 |
$20,247 |
|
|
Supplemental disclosures of cash flow: |
|||
|
Cash paid for income taxes |
$--- |
$806 |
|
|
Cash paid for interest |
$13 |
$245 |
|
|
Non-cash investing activities: |
|||
|
Common stock issued for acquisitions |
$541 |
$21,611 |
|
Business Outlook
Jupitermedia's financial guidance is prepared in accordance with accounting principles generally accepted in the United States of America. 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 of Thinkstock Images, Megapixel.net, Hemera Technologies Inc., Creatas, L.L.C., the parent company of Dynamic Graphics, Inc., GraphicDesignForum.com, JGuru.com, Goodshoot S.A.S, PictureArts Corporation and BananaStock Ltd., and are subject to change pending a final allocation of these amounts. The following forward looking-statements reflect Jupitermedia's expectations as of November 1, 2005. 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
|
Actual Q1 2005 (A) |
Actual Q2 2005 (A) |
Actual Q3 2005 (A) |
Q4 2005 |
Total 2005 |
Total 2006 |
||||||
| (in millions, except for earnings per diluted share) | |||||||||||
|
Revenues |
$22.3 |
$31.9 |
$34.4 |
$35.5-36.5 |
$124.1-125.1 |
$163.0-165.0 |
|||||
|
Cost of revenues, advertising, promotion & selling, and G & A expenses |
$15.4 |
$22.6 |
$23.8 |
$23.3-24.3 |
$85.1-86.1 |
$109.0-111.0 |
|||||
|
EBITDA (Earnings before interest, |
$6.9 |
$9.3 |
$10.6 |
$12.2 |
$39.0 |
$53.0-55.0 |
|||||
|
Depreciation and amortization |
$1.1 |
$1.3 |
$1.9 |
$2.3 |
$6.6 |
$10.0 |
|||||
|
Gain on sale of assets, net (B) |
$- |
$- |
$13.3 |
$- |
$13.3 |
$- |
|||||
|
Interest expense, net |
$- |
$0.1 |
$0.6 |
$0.6 |
$1.3 |
$2.0 |
|||||
|
Provision (benefit) for Income taxes (C) |
$0.7 |
$0.9 |
$(22.2) |
$3.7 |
$(16.9) |
$16.5-17.5 |
|||||
|
Equity income |
$-- |
$0.1 |
$-- |
$-- |
$0.1 |
$-- |
|||||
|
Income from continuing operations |
$5.1 |
$7.1 |
$43.4 |
$5.6 |
$61.4 |
$24.0-26.0 |
|||||
|
Income (loss) from discontinued operations, net of taxes (A) |
$0.4 |
$(0.1) |
$1.1 |
$-- |
$1.4 |
$-- |
|||||
|
Gain of sale of discontinued operations, net of taxes (B) |
$-- |
$-- |
$15.9 |
$-- |
$15.9 |
$-- |
|||||
|
Net income |
$5.5 |
$7.0 |
$60.4 |
$5.6 |
$78.2-79.2 |
$24.0-26.0 |
|||||
|
Diluted share count |
$35.7 |
$36.8 |
$37.3 |
$37.4 |
$36.8 |
$37.6 |
|||||
|
Earnings per Diluted share: | |||||||||||
|
Continuing operations |
$0.15 |
$0.19 |
$1.16 |
$0.15 |
$1.66-1.68 |
$0.64-0.69 |
|||||
|
Discontinued operations |
$0.01 |
$-- |
$0.46 |
$-- |
$0.47 |
$-- |
|||||
|
Net income |
$0.16 |
$0.19 |
$1.62 |
$0.15 |
$2.13-2.15 |
$0.64-0.69 |
|||||
| NOTES: (A) The results of our Events segment have been presented as part of discontinued operations in accordance with Statement of Financial Accounting Standards No. 144. (B) The total gain related to the sale of our Search Engine Strategies Events and ClickZ.com Network was $29.1 million, net of income taxes. The gain related to the ClickZ.com portion of the sale was recorded as part of continuing operations. The gain related to the Search Engine Strategies Events portion of the sale was recorded net of income taxes and is included as part of our discontinued operations. (C) Jupitermedia recorded a benefit for income taxes of $23.5 million from the reversal of the valuation allowance related to deferred income tax assets consisting primarily of goodwill related to Jupitermedia's Online Media business, which had previously been expensed for book purposes. | |||||||||||
About Jupitermedia Corporation
Jupitermedia Corporation (Nasdaq: JUPM), (www.jupitermedia.com),
headquartered in Darien, CT, is a leading global provider of original information, images and research for information technology, business 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, Brand X, FoodPix, Botanica, Nonstock, Comstock Images, Creatas Images, PictureQuest, Liquid Library, Thinkstock Images, Thinkstock Footage, Goodshoot, Photos.com, Ablestock.com, PhotoObjects.net, Clipart.com and Animations.com; and JupiterWeb, the online media division of Jupitermedia which operates four distinct online networks: internet.com and EarthWeb.com for IT and business professionals; DevX.com for developers; and Graphics.com for creative professionals. JupiterWeb properties include more than 150 Web sites and over 150 e-mail newsletters that are viewed by over 18 million users and generate over 300 million page views monthly. Jupitermedia also includes: JupiterResearch, a leading international research advisory organization specializing in business and technology market research in 18 business areas and 14 vertical markets.
"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 dependence on a limited number of advertisers; and Jupitermedia's ability to protect its intellectual property. 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 Corporation press releases can be found on the World Wide Web at www.jupitermedia.com/corporate/press.html
CONTACT:
Lisa DiGiacomo
Marketing & Public Relations Associate
Jupitermedia Corporation
212-547-7939
[email protected]
All current Jupiter Research press releases can be found online at www.jupitermedia.com/corporate/press.html.
