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MagicJack Reports Third Quarter 2013 Financial Results

  • Total net revenues of $35.5 million
  • Access rights renewal revenues were $14.6 million, up 34% year-over-year
  • GAAP operating income of $12.7 million, adjusted EBITDA of $14.8 million
  • GAAP diluted EPS of $0.48, non-GAAP diluted EPS of $0.75
  • Seventh consecutive quarter of GAAP profitability
  • Generated $10.4 million in operating cash flow during Q3
  • Cash and cash equivalents of $53.0 million and no debt
  • Activations totaled 273,534 subscribers, a 21% quarter over quarter increase

WEST PALM BEACH, Fla. and JERUSALEM, Nov. 12, 2013 (GLOBE NEWSWIRE) -- magicJack VocalTec Ltd. (Nasdaq:CALL), a leading cloud communications company, today announced financial results for the third quarter ended September 30, 2013.

"Our business continued to generate strong operating cash flow during the third quarter. We were pleased with the ongoing market response of the New magicJack Plus and our ability to increase activations by 21% quarter-over-quarter," said magicJack VocalTec President and CEO Gerald Vento. "We expect to achieve double digit revenue growth in 2014 driven by our brand refresh including new packaging and TV campaigns, an updated website, and expanded retail and digital distribution channels. Our strong balance sheet, nationally recognized brand, established customer base, high visibility distribution channels and low cost technology platform position us well for the next phase of growth."

Third Quarter 2013 Financial Highlights:

  • Net revenues: Total net revenues were $35.5 million. Net revenues from the sales of magicJack and magicJack PLUS were $13.2 million and access rights renewal revenues were $14.6 million, an increase of 34% on a year-over-year basis, and accounted for 41% of total net revenues. Prepaid minute revenues were $3.2 million and access and wholesale charges were $1.4 million during the quarter. Other revenue contributed the remaining $3.2 million of total net revenues during the third quarter of 2013.
  • Operating income: GAAP operating income for the third quarter of 2013 was $12.7 million, compared to $11.2 million for the third quarter of 2012.
  • Adjusted EBITDA: Adjusted EBITDA was $14.8 million for the third quarter of 2013 compared to $14.0 million for the third quarter of 2012.
  • Net income: GAAP net income for the third quarter of 2013 was $8.9 million, compared to $15.1 million for the same period last year. GAAP diluted income per share for the third quarter was $0.48, based on 18.6 million weighted-average diluted shares outstanding, compared to $0.77, based on 19.5 million weighted-average diluted shares outstanding, for the same period last year. GAAP net income during the third quarter of 2013 includes $3.7 million in tax expense compared to $29,000 during the third quarter of 2012, which reflects the company's current projected effective 2013 tax rate of approximately 32.9%.
  • Non-GAAP net income: Non-GAAP net income for the third quarter of 2013 was $13.9 million, compared to $13.1 million for the third quarter of 2012. Non-GAAP net income per diluted share for the third quarter was $0.75, based on 18.6 million weighted-average diluted shares outstanding, compared to $0.67 per diluted share, based on 19.5 million weighted-average diluted shares outstanding, for the same period last year.
  • Cash and operating cash flow: As of September 30, 2013, magicJack VocalTec had cash and cash equivalents of $53.0 million. During the third quarter of 2013, the Company generated $10.4 million in free cash flow, an increase of 24% compared to $8.4 million during the third quarter of 2012.

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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