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J2 Global Reports Third Quarter 2012 Results

j2 Global, Inc. (NASDAQGS:JCOM) today reported financial results for the third quarter ended September 30, 2012, announced that it is increasing its fiscal 2012 non-GAAP EPS estimate and announced that its Board of Directors has declared an increased quarterly cash dividend of $0.225 per share.

j2 achieved several quarterly records, including the following:

  • Revenues of $93.2 million
  • Earnings per Diluted Share of $0.69
  • EBITDA (4) of $50.5 million
  • Cancel rate (6) of less than 2.3%

THIRD QUARTER 2012 RESULTS

Revenues increased 8.4% to a quarterly record $93.2 million compared to $86.0 million for Q3 2011.

Earnings per diluted share increased 27.8% to a quarterly record $0.69 compared to $0.54 for Q3 2011.

Non-GAAP earnings per diluted share (2) (3) increased 1.6% to $0.65 compared to $0.64 for Q3 2011.

EBITDA (4) increased to a record $50.5 million compared to $43.9 million for Q3 2011.

j2 ended the quarter with $470 million in cash and investments.

Key financial results for third quarter 2012 versus third 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.

  Q3 2012   Q3 2011   % Change
Revenues $93.2   $86.0   8.4%
Earnings per Diluted Share (1) $0.69   $0.54   27.8%
Non-GAAP Earnings per Diluted Share (2) (3) $0.65   $0.64   1.6%
EBITDA (4) $50.5   $43.9   15.0%
Free Cash Flow (5) $37.1   $37.2   (0.3)%
   
(1)   The estimated effective tax rate was approximately 19.9% for Q3 2012 and approximately 30.6% for Q3 2011.
 
(2) For Q3 2012, Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes, and additional income tax benefit from prior years, in each case net of tax. For Q3 2011, Non-GAAP earnings per diluted share excludes share-based compensation and related payroll taxes, certain transition-related costs, taxes associated with the sale of a trade name and the reversal of uncertain tax positions due to expired statutes of limitations, in each case net of tax.
 
(3) The estimated Non-GAAP effective tax rate was approximately 28.1% for Q3 2012 and approximately 23.4% for Q3 2011.
 
(4) EBITDA (earnings before interest, taxes, depreciation and amortization) as defined in the Indenture Agreement filed with the SEC as Exhibit 4.1 to a Current Report on Form 8-K dated July 26, 2012.
 
(5) Free cash flow is defined as net cash provided by operating activities less purchases of property, plant and equipment, plus excess tax benefit (deficiency) from share-based compensation.
 
(6) Cancel Rate is defined as cancels related to individual customer DIDs with greater than 4 months of continuous service (continuous service includes customer DIDs which are administratively cancelled and reactivated within the same calendar month), and DIDs related to enterprise customers beginning with their first day of service. Calculated monthly and expressed here as an average over the three months of the quarter.
 

“I’m very pleased with our continued high level of execution, both operationally and financially, as demonstrated by record low cancel rate and record Q3 quarterly revenues, earnings per share and EBITDA,” said Hemi Zucker, j2 Global’s chief executive officer. “Also, during Q3 we completed a $250 million debt offering and now have approximately $470 million of cash and investments available to support the growth of our business. Our focus on operational excellence has allowed us to continue to achieve record results even in the face of current economic conditions. As such, we are increasing our non-GAAP EPS guidance for the full year notwithstanding the increased interest expense associated with the Q3 debt issuance.”

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