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TheStreet Open House

MagicJack VocalTec Reports Record Fourth Quarter And Full Year 2012 Financial Results

Stock quotes in this article: CALL

Fourth Quarter 2012 Financial Highlights:

Net Revenue: Total net revenue was $41.4 million, an increase of 56% on a year-over-year basis. Net revenue from the sales of magicJack and magicJack PLUS, increased 88% to $19.1 million. Access rights renewal revenue was $12.0 million, an increase of 19% on a year-over-year basis, and accounted for 29% of total revenue. Prepaid minute revenue was $3.3 million and access and wholesale charges were $3.4 million during the quarter. Other revenue contributed the remaining $3.6 million of total revenue during the fourth quarter of 2012.

Operating Income (Loss): GAAP operating income for the fourth quarter was $16.2 million, compared to a GAAP operating loss of $6.0 million for the fourth quarter of 2011.

Adjusted EBITDA: Adjusted EBITDA was $18.3 million for the fourth quarter compared to a loss of $0.4 million for the fourth quarter of 2011.

–   Net Income (Loss): GAAP net income for the fourth quarter was $22.3 million, compared to a net loss of $4.7 million for the same period last year. GAAP diluted income per share attributable to ordinary shareholders for the fourth quarter was $1.17, based on 19.0 million weighted-average diluted shares outstanding, compared to a net loss per share attributable to ordinary shareholders of $0.26, based on 21.8 million weighted-average diluted shares outstanding, for the same period last year.

–   Non-GAAP Net Income (Loss): Non-GAAP net income for the fourth quarter was $17.3 million, compared to non-GAAP net loss of $0.9 million for the fourth quarter of 2011. Non-GAAP net income per diluted share for the fourth quarter was $0.91 compared to $0.04 non-GAAP net loss per diluted share for the same period last year.

–   Cash and Free Cash Flow: As of December 31, 2012, magicJack VocalTec had cash, cash equivalents and marketable securities of $38.3 million, an increase of $4.0 million from the end of the prior quarter. During the fourth quarter of 2012, the company generated $20.8 million in free cash flow, which was primarily offset by the use of $13.7 million in net cash for the repurchase of ordinary shares.

Full Year 2012 Financial Highlights:

–   Net Revenue: Total net revenue was $158.4 million, an increase of 43% on a year-over-year basis. Revenues from the sale of magicJack and magicJack PLUS, increased 66% to $73.8 million. Access rights renewal revenue was $43.9 million, an increase of 20% on a year-over-year basis and accounted for 28% of total revenue. Prepaid minute revenue was $15.5 million and access and wholesale charges were $9.1 million compared to $11.6 million and $3.6 million, respectively, for the full year of 2011. Revenues from shipping and handling and other sources contributed the remaining $16.1 million of total revenue during the full year of 2012. 

–   Operating Income (Loss): GAAP operating income for the full year 2012 was $43.6 million, compared to a GAAP operating loss of $4.6 million for 2011. 

–   Adjusted EBITDA: Adjusted EBITDA was $47.1 million compared to $8.7 million for 2011.

–   Net Income (Loss): GAAP net income for the full year 2012 was $55.9 million, compared to a net loss of $0.8 million for 2011. GAAP net income per diluted share attributable to ordinary shareholders was $2.73 based on 20.0 million weighted-average diluted shares outstanding for the full year 2012, compared to a loss of $0.08 per diluted share attributable to ordinary shareholders, based on 23.3 million weighted-average diluted shares outstanding for 2011.

–   Non-GAAP Net Income (Loss): Non-GAAP net income for the full year 2012 was $44.2 million compared to $5.5 million for 2011. Non-GAAP net income per diluted share for 2012 was $2.21 compared to $0.24 for 2011.

–   Total Deferred Revenues: Deferred revenues increased to $125.2 as of December 31, 2012, from $117.8 million as of December 31, 2011.

–   Free Cash Flow: The Company generated $65.0 million in free cash flow during the full year 2012, compared to $24.4 million in 2011, which was primarily offset by the use of $54.3 million in net cash for the repurchase of ordinary shares.

A reconciliation of GAAP to non-GAAP financial measures, as well as the calculation of free cash flow has been provided in the financial statement tables included in this press release. An explanation of these measures is also included below under the heading "Non-GAAP Financial Measures."

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