IncrediMail Announces Strong Second Quarter And First Six Months Of 2011 Financial Results

IncrediMail Ltd. (NASDAQ: MAIL), a digital media company that builds downloadable consumer products, today announced financial results for the second quarter and six month period ended June 30, 2011.

Second Quarter Financial Highlights

• Q2 revenues were $8.1 million, reflecting 12% year-over-year growth;
• Q2 customer acquisition costs increased to $1.7 million;
• Net income was $2.2 million for the quarter; and
• Cash flow from operations in Q2 was $2.0 million.

Six-Month Financial Highlights

• Revenues for the first six months increased 18% year-over-year, to a record $16.7 million;
• Net income increased 23% year-over-year to $5.5 million, or $0.54 per diluted share; and
• Cash flow from operations almost tripled year-over-year, to over $4.1 million.

Commenting on the results, Josef Mandelbaum, IncrediMail’s CEO, said, “We significantly improved our top line growth in the first half of 2011, as our year-over-year organic growth continued in the second quarter primarily driven by an increase in search revenues, which was a result of our successful execution of certain changes required by our search partner. Additionally, to further accelerate future growth, we increased our customer acquisition costs in a meaningful way. This is consistent with the strategy discussed in previous quarters, to ramp up our investment in organic growth, while maintaining a high level of profitability.”

Gross profits for the second quarter were $7.6 million, up 11% from $6.8 million in the second quarter of 2010. For the first six months of 2011 gross profits reached $15.9 million, increasing 18% compared to the first half of 2010.

Research and Development expenses in the second quarter of 2011 decreased year-over-year and, as a percentage of sales, R&D expenses were 18% in the second quarter of 2011, compared to 21% in the same period of last year.

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