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Jupitermedia 10-Q filing

Online images. The decrease in revenues during the three and six months ended June 30, 2008 is due primarily to declines in direct sales of royalty-free single images and CD-ROMs and in sales from third party distributors, partially offset by an increase in subscription revenues. [...]

Online media. The increase in revenues during the three and six months ended June 30, 2008 was due to the acquisition of Mediabistro which added $2.3 million and $4.4 million in revenues, respectively. This was partially offset by a reduction in advertising revenues due to a decline in advertising spending by technology companies.

(Full quartery report here/Rafat Ali takes a deeper look at MediaBistro)

Jupitermedia posts Q2/2008 results

• Y-o-Y down: -$1.293 million.
• Q-o-Q down: -$52.000.
• Net loss: $3.286 million.
• Q3/2008 business outlook: $33.5 million - $34.5 million.
  • Previous Q2/2008 outlook: $35.0 million - $36.0 million.
• Shares closed yesterday at $1.30.
• More details in the press release.

Jupiterimages´Q2 revenues ($26.090 million) were again the lowest in the last two years.

(1) JI Rev.  (2) JUPM Rev.  (3) JI Rev. in % of JUPM Rev.

Y	Q2/06	Q3/06	Q4/06	2006	Q1/07	Q2/07	Q3/07	Q4/07	2007	Q1/08	Q2/08
1	26.807	26.177	27.087	106.64	27.914	27.383	26.824	26.783	108.904	26.142	26.090
2	35.026	33.784	34.779	137.53	34.771	34.699	34.766	36.128	140.334	34.546	35.000
3	76.53%	77.48%	77.88%	77.54%	80.28%	78.92%	77.16%	74.13%	77.60%	75.67%	74.54%

 

Correction on Getty Q2/2008 revenues

The previous chart "Getty Images Q2/2008 Numbers (Ultra-Light Version)", as of July 16, 2008, based on a SPI story, is no longer online. It was incorrect.

Getty said that:

Since we are no longer a publicly traded company, we have not issued a press announcement regarding our revenue earnings for the second quarter of 2008.

The number posted in your story of $218 [million] is in fact the revenue generated during our fourth quarter of 2007, while the first quarter of 2008 was $233.2 million.

Getty Images: New Form 8-K

 

 

Jupitermedia Conference Call

• Revenues (rounded numbers) per segment for Jupiterimages in Q1/2008:
  • Single Images: $12.6 million (Q4/2007: $12.7 million)
  • Subscription: $7.5 million (Q4/2007: $7.5 million)
  • Distributors, Other: $6.1 million (Q4/2007: $6.6 million)

• Consequently Alan Meckler said that "the weakness came from the distribution side of the business".
• Unfortunately no answer to a direct question about the revenues of Stockxpert.
• "Three to seven micropayment sites will be very successful over the next years".
• "The [microstock] revolution is [still] going on" in a "challenging environment".
• "The RM business is not growing as it used to be".
• The "digital Superstore" (Jupiterdigital) is likely to launch on Sept. 1st.

Jupiterimages Q1/2008 Results

Jupitermedia, the parent company of Jupiterimages, released yesterday the results for Q1/2008. Currently at the time of writing no new JUPM SEC filings are available, and shares closed yesterday at $2.31. The Conference Call will follow today. More details in the press release.

Jupiterimages´ Q1/2008 revenues ($26.142 million) were the lowest in the last two years:

• Y-o-Y down -6,35% or -$1.772 million from $27.914 million in Q1/2007.

• Down -2,39% or -$641.000 from $26.783 million in the previous quarter Q4/2007.

 

(1) Jupiterimages Rev.  (2) JUPM Rev.  (3) Jup.images Rev. in % of JUPM Rev.

Y	2005	Q1/06	Q2/06	Q3/06	Q4/06	2006	Q1/07	Q2/07	Q3/07	Q4/07	2007	Q1/08
1	80.66	26.565	26.807	26.177	27.087	106.64	27.914	27.383	26.824	26.783	108.904	26.142
2	113.75	33.941	35.026	33.784	34.779	137.53	34.771	34.699	34.766	36.128	140.334	34.546
3	70.9%	78.27%	76.53%	77.48%	77.88%	77.54%	80.28%	78.92%	77.16%	74.13%	77.60%	75.67%

 

Alan Meckler said that "revenues from our JupiterimagesUnlimited high level royalty-free subscription offering grew over 100% from the first quarter of 2007 to the first quarter of 2008. We are also starting to see significant growth from our recently launched Stockxpert.com microstock subscription offering".

The business outlook for the whole Jupitermedia Corporation for Q2/2008 expects quarterly revenues of $35.0 million - $36.0 million, like in the previous quarter.

QuickLinks For 2008-05-05

• Ahead of the Bel, Blair cuts Getty Images on price:
  An analyst downgraded shares of Getty Images late Friday, predicting the stock photography provider has little room for growth as the shares close in on their buyout price.
  William Blair analyst Troy Mastin lowered shares of Getty to "Market Perform" from "Outperform" in a note to investors. The stock finished at $33.15 on Friday. Mastin said shares are fairly priced ahead of an expected buyout from private equity firm Hellman & Friedman LLC. [...]
  "Shares no longer offer an adequate upside to justify the rating," he said.
  In addition, the analyst noted Getty's first-quarter results reported Thursday were above his estimates, and said the positive earnings make the completion of the buyout very likely.
  AP Story on Forbes. -More new events here.
  Related:
  
  • Getty’s Numbers Suggest Buyout Is on Track (NYT, Deal Book, May 05, 2008)

Getty Images Q1/2008 Numbers (Light Version)

Full quarterly metrics, like in Q4/2007, are understandably missing this time. More here.

Revenue in Total (T), with Sequential change (S) and Year-over-Year-change (Y):

PER	2005	Q1/06	Q2/06	Q3/06	Q4/06	2006	Q1/07	Q2/07	Q3/07	Q4/07	2007	Q1/08
T	$733.2	$200.4	$204.6	$197.9	$203.5	$806.6	$212.7	$218.0	$208.9	$218.1	$857.6	$233.2*
S	-	8.1%	1.9%	-3.3%	2.7%	-	4.4%	2.5%	-4,17%	4.40%	-	6.92%
Y	17.9%	12.8%	10.5%	7.4%	9.5%	10.0%	6.1%	6.5%	5,56%	7.07%	6.32%	9.64%

• Income from operations was $44.7 million:
  • compared to $55.7 million in Q1/2007
  • compared to $47.8 million in Q4/2007

• Net income was $23.9 million:
  • compared to $38.0 million in Q1/2007 (- 37%)
  • compared to $28.5 million in Q4/2007 (- 16%)
    

Assuming another 4% loss in revenues in Q3/2008 and results in Q2 and Q4 at the least like in Q1/2008, Getty Images could be good for 2008 revenues of around $923 million (for various reasons a highly speculative conclusion ...). The company itself expects revenues for 2008 of approximately $900 million.

*The initial projection for Q1/2008 was "approximately $220 million".

A21 Reports Q4/2007 + Full Year 2007 Financial Results

A21 (ATWO), the parent company of SuperStock, the Royalty-Free brand Purestock, the subscription brand PurestockX, of Ingram Publishing/Ingram Stock, ArtSelect and the upcoming MediaMagnet, has released Q4/2007 and full year 2007 financial results (in T$):

 

A21 Revenues = Total, Image Licensing = Im. Lic., Art Select = Art S.

YEAR	2005	Q1/06	Q2/06	Q3/06	Q4/06	2006	Q1/07	Q2/07	Q3/07	Q4/07	2007
Total	9.563	2.935	4.511	5.904	6.283	19.633	6.124	5.696	5.387	6.099	23.306
Im. Lic.	9.563	2.935	3.022	2.986	3.032	11.976	3.168	3.038	2.765	2.936	11.907
Art S.	--	--	1.489	2.918	3.251	7.657	2.956	2.658	2.622	3.163	11.399

 

Unlike in previous quarters, I currently lack the time to describe more details publicly. Please read the fine print in the Financial Exhibits section here and do your own math.
The recent SEC filing has more details: please read all details here.

Jupitermedia Releases Financial Results For Q4/2007 + Full Year 2007

Jupitermedia, the parent company of Jupiterimages, today released the results for Q4/2007 and the full year 2007. In contrast to previous quarters, I lack the time this quarter here on this blog to take a closer look at some financial details publicly, and actually readers used to read the fine print will find all details for their Excel sheets here in the press release. A quick and very general overlook:

 

(1) Jupiterimages Rev.  (2) JUPM Rev.  (3) Jup.images Rev. in % of JUPM Rev.

Y	2005	Q1/06	Q2/06	Q3/06	Q4/06	2006	Q1/07	Q2/07	Q3/07	Q4/07	2007
1	80.658	26.565	26.807	26.177	27.087	106.636	27.914	27.383	26.824	26.783	108.904
2	113.754	33.941	35.026	33.784	34.779	137.530	34.771	34.699	34.766	36.128	140.334
3	70.9%	78.27%	76.53%	77.48%	77.88%	77.536%	80.28%	78.92%	77.16%	74.13%	77.60%

 

Jupitermedia reports Q4/2007 and Full Year 2007 Financial Results

... next week on March 18th, and not today, as it was announced this morning in a separate press release.

This is partly disappointing since many people were waiting for the new key numbers of one of the few remaining publicly traded companies in what was once is called the Stock Photo Industry, and since Jupitermedia CEO Alan Meckler said two weeks ago in a meaningful statement "I think we are doing better than Getty. Getty´s numbers cast a bad light on the stock image business and us. Now we move forward without Getty Images' numbers hanging around our neck".

New Getty Images SEC Filing

Full Overview of the awaited SEC filing and its parts and of the Agreement and Plan of Merger:

• Complete document here, short version here.
• "The Company" = Getty Images.
• "Parent": Abe Investment, L.P. (*)

Excerpt from Entry into a material definitive agreement:

The Merger Agreement contains restrictions on the Company´s ability to solicit third party proposals or provide information to, or participate in discussions or negotiations with, third parties regarding competing proposals.

These restrictions are not applicable until April 4, 2008, however, with respect to a certain party with whom the Company has previously engaged in discussions with respect to a proposal.

Deutsche Bank Equity Research on Getty Images

In a short research note published yesterday, Deutsche Bank Equity Research reports -- very likely for the last time like the analysts of Kaufmann Bros. and Robert W. Baird -- on Getty Images:

 

Getty Images {Closing Price: USD 31.67, Target Price: USD 34.00, Recommendation: HOLD}.

• 39% Premium For Getty Images Purchase: Despite industry articles suggesting lackluster interest for the auction of Getty Images above $1.6bn just two weeks ago, private equity firm Hellman & Friedman (also known for privatizing DoubleClick and subsequently selling to Google 2yrs later) agreed to acquire Getty for $2.4bn (+debt), or $34/share in cash.

The $34 share price represents a 39% premium to the Friday closing price, which was much higher than our expectation of a $25 price tag.

Reuters Interview with Getty Images´CEO Jonathan Klein: "Overall systemic issues"

Reuters finally interviewed Jonathan Klein:

But a shift of advertising to the Internet and the growth of text-only paid-search advertisements led to a decline in volume for Getty´s rights-managed still pictures.
"The overall systemic issues around less print advertising, more online communication, and significant amount of spend on text-based search, which we hate because it does not have pictures, is not going to change because our ownership changes," Jonathan Klein said in an interview.
"But in the private environment we may be able to focus a little more on longer term growth", he said. "We´ll be able to continue to do what we´re doing without having the public glare every three months."
Klein said the board had at least one other bid to consider, but picked Hellman & Friedman since the price carried a strong premium and the deal did not hinge on financing conditions. He would not identify other bidders.

Reuters in "Private equity to buy Getty Images for $2.1 bln" (two pages).

QuickLinks For 2008-02-25

• Good bye all you conference calls and analyst questions:
  Troy Mastin, an analyst at William Blair & Co., said Getty´s core business of selling more-expensive photographs to newspapers and magazines had declined as those media struggled with the rise of Internet content. Sales to direct mail and brochure customers also cooled.
  At the same time, though, Getty´s newer businesses grew faster [iStock]. Mastin said customers who once bought the low end of Getty´s core stock photos moved over to buy the even cheaper royalty-free photos. And Getty´s editorial offerings - news, sports and celebrity photos for the media - grew, as did its video footage business.
  While Getty didn´t give a specific reason for its January decision to seek a buyer, Mastin said it was likely because Getty felt Wall Street was paying more attention to the stagnating core business than to its emerging segments. "Public markets didn´t seem willing to consider (Getty´s businesses) separately", Mastin said.
  Seattle Post-Intelligencer/Jessica Mintz in "Getty Images agrees to be bought".

Getty Images to be sold to private equity firm Hellman & Friedman for about $2.4 billion

Full text of Getty Images´ press release here in the press release section.

The opinion of the NYSE over the course of this day (enjoy it, as long as Getty Images is a public company).

 

a21: "Strategic Alternatives"

Over the past years we´ve seen a fixed chronology of releasing annually and quarterly financial results in the stock photo industry. Usually Getty Images is first off the mark, followed later by Jupitermedia and then A21.

A21, parent company of SuperStock, PurestockX, ArtSelect and MediaMagnet, released Q3/2007 results in mid-November 2007, followed by a SEC filing, and will probably publish Q4 and Full Year 2007 results in late March or early April (like last year).

The Day After

AP Story (compiled) on these news:

Shares of Getty Images Inc. climbed Friday as an analyst upgraded the company.

Shares of Getty added $2.38, or 9.6 percent, to $27.31 in afternoon trading.

William Blair & Co.´s Troy Mastin said its current stock price allows for an early prediction that it may move higher.

Deutsche Bank Equity Research on GYI: In-Line 4Q and lowering '08 ests again - HOLD

In a short research note published early today, Deutsche Bank Equity Research reports on Getty Images:

Getty Images {Ticker: GYI, Closing Price: USD 24.93, Target Price: USD 25.00, Recommendation: HOLD}.

We maintain our HOLD rating on shares of Getty Images and $25 price target after the company reported 1% Y/Y organic growth in 4Q.

While we remain cautious on the creative imagery business on pricing/volume concerns, we still think there is value in its Editorial and iStockphoto businesses, which in our view are the better-positioned segments at Getty.

Getty Images Q4/2007 Financial Results and Conference Call

"The year ended well", but "we are not declaring victory", Jonathan Klein said during the Conference Call.

While Getty Images´quarterly revenues grew +7,1% from $203,6 million in Q4/2006 and + 4,4% from $208,9 million in Q3/2007 to a new record of $218,1 million in Q4/2007 and yearly revenues grew + 6,3% from $806,6 million in 2006 to a new record of $857,6 million in 2007, the quarterly net income decreased from $30,9 million in Q4/2006 to 28,5 million in Q4/2007 (but up from $25,7 in Q3/2007) and the yearly net income decreased from $130,4 million in 2006 to $125,9 million in 2007.

Getty Images Releases Quarterly Metrics Q4/2007

   

Click here to be directed to the separate page with all the numbers from Getty Images´ Quarterly Metrics Q4/2007.

Or click here to open the same link to the separate page in a new browser window or browser tab.

 

Related:

•Getty Images Reports Financial Results for Q4 and 2007
  (recent press release, Jan. 31, 2008)

Deutsche Bank Equity Research upgrades Getty Images from SELL to HOLD, New Target Price $25

In a research note published this morning, Deutsche Bank Equity Research has upgraded Getty Images:

Upgraded to HOLD from SELL, lowering PT [price target] to $25 (from $27):

While not commenting on market rumours, Getty Images yesterday responded to Monday´s report in the New York Times by confirming that its Board of Directors is exploring strategic alternatives to enhance shareholder value and has retained Goldman, Sachs & Co. as its financial advisor. The Times reported that bids could fetch around $1.5bn and be submitted around Jan 31.

We remain concerned about structural issues but think the stock has adjusted for the risk at 5x 08E EBITDA (hist. avg. 7x). We believe the shares are likely to range between $23 - $26.

Getty Images For Sale - Update III

• Thomas Weisel Partners analyst Christa Quarles said Getty Images´assets, such as iStockphoto, add value.

She said iStockphoto could bring in as much as $83 million in 2008 alone. [up from an estimated $51,5 million in 2007] [...]

Getty Images For Sale - Update II

Little over ten months ago, Jupitermedia announced one day after the New York Post article about a potential sale of the company to Getty Images that "Jupitermedia does not plan to update the market with any further information".

Similar, Getty Images announced today, one day after the New York Times article about "any transaction", that "Getty Images does not plan to update the market with any further information".

A21 Reports Q3/2007 Financial Results

A21 (ATWO), the parent company of SuperStock, the Royalty-Free brand Purestock, the subscription brand PurestockX, of Ingram Publishing/Ingram Stock, ArtSelect and the upcoming MediaMagnet, has released the Q3/2007 financial results (in T$):

 

A21 Revenues = Total, Image Licensing = Im. Lic., Art Select = Art S.

YEAR	2005	Q1/06	Q2/06	Q3/06	Q4/06	2006	Q1/07	Q2/07	Q3/07
Total	9.563	2.935	4.511	5.904	6.283	19.633	6.124	5.696	5.387
Im. Lic.	9.563	2.935	3.022	2.986	3.032	11.976	3.168	3.038	2.765
Art S.	--	--	1.489	2.918	3.251	7.657	2.956	2.658	2.622

 

A21 said that the net income for Q3 reflects lower revenues and margins "along with an extraordinary restructuring charge". Shares fell in late morning more than 15%.