"We are pleased with our financial results for the second quarter, with
record revenues and net income," stated Jupitermedia's Chairman and CEO
Alan M. Meckler. "We have been emphasizing the development of our
JupiterImages division and the second quarter illustrates continued
organic and overall growth in the sales and distribution of commercial
images. The acquisition of PictureArts in July marks our seventh major
images acquisition since June 2003 (ArtToday, Comstock, Thinkstock,
Hemera, Dynamic Graphics, Goodshoot and PictureArts). We plan to
continue our acquisitions program in the coming months. Our employees
are working hard to shape and integrate these acquisitions so that
Jupitermedia becomes a powerful creator and distributor of a wide range
of commercial images. The full impact of this integration will be more
apparent in future quarters. In the meantime we continue to evolve as a
company making positive financial progress not only with JupiterImages,
but with our JupiterWeb, JupiterResearch and JupiterEvents divisions,"
added Meckler.
Jupitermedia Corporation 2nd Quarter 2005 Financial Results Conference Call Alert
Jupitermedia Corporation invites you to participate in its conference
call reviewing 2005 second quarter results, scheduled for Tuesday,
August 2, 2005 at 11:00 am EST.
The conference call number is
(800) 289-0730 for domestic participants and (913) 981-5509 for
international participants; pass code "892 6504." Please call five
minutes in advance to ensure that you are connected prior to the
presentation. The conference call replay will be available until
Tuesday, August 16, 2005. Replay call numbers are (888) 203-1112 for
domestic participants and (719) 457-0820 for international
participants: pass code: "892 6504."
Acquisitions
In May, Jupitermedia announced the acquisition of JGuru.com (www.jguru.com),
an online community that provides news, information, forums and online
courses designed for Java(TM) programmers and software developers. The
JGuru.com online community is comprised of top Java(TM) developers, who
are encouraged to maintain their individuality and express their own
opinions freely, which gives JGuru.com the credibility needed for the
success of any online community. Terms of this acquisition were not
disclosed.
In May, Jupitermedia announced that it had acquired all of the shares of Goodshoot S.A.S (www.goodshoot.com),
for approximately U.S. $9.8 million in cash. Goodshoot, based in
Annecy-le-Vieux, France, is a leading resource for royalty free digital
images for business users and creative professionals.
In July, Jupitermedia acquired PictureArts Corporation (www.picturearts.com)
for approximately $63.2 million in cash, subject to certain
post-closing adjustments. The acquisition includes PictureArts' quality
brands: Brand X Pictures, FoodPix, Botanica and Nonstock, as well as
its image distribution business. Jupitermedia financed the purchase
price with cash on hand and borrowings under a $90 million senior
credit facility with JPMorgan Chase Bank, N.A. obtained in connection
with the transaction.
Online Image Offerings
In April,
Jupitermedia announced a collaboration with Adobe through Adobe(R)
Stock Photos, a new stock photography service that offers designers
one-stop shopping for high-quality, royalty-free images for layout and
design. Designers can download non-watermarked comp images from
Jupitermedia's Comstock Images collection (www.comstock.com) and bring them into a layout and then purchase without ever having to leave Adobe Creative Suite 2.
In July, Jupitermedia announced an agreement with Corbis (www.corbis.com),
a leading media services company, to distribute its Comstock Images and
Thinkstock Images collections. Under the terms of the agreement Corbis
will distribute select Comstock and Thinkstock images worldwide through
its Web site www.corbis.com, starting in September.
The following table sets forth the organic and acquisition-related
revenue growth of Jupitermedia's Online images business on a year over
year and sequential quarterly basis for the three months ended June
30, 2005 (dollars in thousands):
(unaudited) Three Three
Months Months
Ended Organic Ended Organic Overall
June 30, Revenue Acquisition June 30, Growth Growth
2004 Growth Revenue 2005 Rate % Rate %
-------- -------- ----------- -------- ------- -------
Online images:
JupiterImages
(1) $5,791 $1,005 $- $6,796 17% 17%
Acquisitions
(2) - - 12,935 12,935 N/M N/M
-------- -------- ----------- -------- ------- -------
Online images
revenues $5,791 $1,005 $12,935 $19,731 17% 241%
======== ======== =========== ======== ======= =======
Three Three
Months Months
Ended Organic Ended Organic Overall
March 31, Revenue Acquisition June 30, Growth Growth
2005 Growth Revenue 2005 Rate % Rate %
-------- -------- ----------- -------- ------- -------
Online images:
JupiterImages
(3) $8,458 $123 $- $8,581 1% 1%
Acquisitions
(4) 3,705 - 7,445 11,150 N/M 201
-------- -------- ----------- -------- ------- -------
Online images
revenues $12,163 $123 $7,445 $19,731 1% 62%
======== ======== =========== ======== ======= =======
(1) JupiterImages consists of: ArtToday, Inc., acquired on June 30,
2003; and Comstock Images, acquired on April 1, 2004.
(2) Acquisitions include: Thinkstock Images, acquired on July 28,
2004; Hemera Images, acquired on November 12, 2004; and Dynamic
Graphics Group, acquired on March 7, 2005.
(3) JupiterImages consists of: ArtToday, Inc., acquired on June 30,
2003; Comstock Images, acquired on April 1, 2004; Thinkstock
Images, acquired on July 28, 2004; and Hemera Images, acquired on
November 12, 2004. Hemera Images' retail box product line has been
excluded since it has been discontinued.
(4) Acquisitions include: Dynamic Graphics Group acquired on March 7,
2005; and Goodshoot S.A.S. acquired on May 19, 2005.
The following table sets forth the organic and acquisition-related
revenue growth of Jupitermedia's Online images business on a year over
year basis for the six months ended June 30, 2005 (dollars in
thousands):
(unaudited) Six Six
Months Months
Ended Organic Ended Organic Overall
June 30, Revenue Acquisition June 30, Growth Growth
2004 Growth Revenue 2005 Rate % Rate %
-------- -------- ----------- -------- ------- -------
Online images:
JupiterImages
(1) $5,184 $2,118 $- $7,302 41% 41%
Acquisitions
(2) 3,064 - 21,528 24,592 N/M 703
-------- -------- ----------- -------- ------- -------
Online images
revenues $8,248 $2,118 $21,528 $31,894 41% 287%
======== ======== =========== ======== ======= =======
(1) JupiterImages consists of ArtToday, Inc., which was acquired on
June 30, 2003.
(2) Acquisitions include: Comstock Images, acquired on April 1, 2004;
Thinkstock Images, acquired on July 28, 2004; Hemera Images,
acquired on November 12, 2004; Dynamic Graphics Group, acquired on
March 7, 2005; and Goodshoot S.A.S. acquired on May 19, 2005. Research Services
In April, Jupitermedia
announced the launch of JupiterResearch's SMB Marketing research
service. The SMB Marketing research service marks the ninth new
practice started by JupiterResearch since its acquisition in July 2002
by Jupitermedia. This service helps companies market effectively and
increase sales to small- and medium-size businesses (SMBs). Drawing on
comprehensive surveys of SMB decision makers, intelligence from
successful marketers and JupiterResearch studies on evolving online
marketing best practices, SMB Marketing identifies and profiles
attractive market segments and spells out effective tactics to win SMB
market share.
In June, Jupitermedia announced the launch of a
new podcasting service called JupiterResearch Conversations. Podcasts
are audio programs than can be listened to online or downloaded and
listened to on a portable media player. JupiterResearch's podcasts
feature conversations with JupiterResearch analysts about key topics
relating to the Internet and emerging consumer technologies.
JupiterResearch Conversations are available at
podcasts.jupiterresearch.com.
Conferences and Trade Shows
JupiterEvents, a division of Jupitermedia, produces paid conferences
and trade shows on IT and business-specific topics worldwide that are
aligned with the content on our Web sites and our research offerings.
JupiterEvents held eight paid conferences and trade shows in the second
quarter of 2005: Search Engine Strategies Conference & Expo Munich
2005; WiFi/VoWiFi Planet Conference & Expo Tokyo 2005; Search
Engine Strategies Conference & Expo Tokyo 2005; Search Engine
Strategies Conference & Expo Toronto 2005; ISPCON Conference &
Expo Spring 2005; Search Engine Strategies Conference & Expo London
2005; WiFi/VoWiFi Planet Conference & Expo Spring 2005; and Search
Engine Watch Forums Live 2005. JupiterEvents has announced the
following conferences and trade shows for the remainder of 2005:
-- Search Engine Strategies Conference & Expo 2005 (August 8-11, San Jose, CA)
-- IT Service Management Forum Conference & Expo 2005 (September 19-24, Chicago, IL)
-- ISPCON Fall 2005 (October 18-20, Santa Clara, CA)
-- Search Engine Strategies Conference & Expo 2005 (October 26-27, Stockholm, Sweden)
-- Search Engine Strategies Conference & Expo 2005 (December 5-8, Chicago, IL)
Jupitermedia Corporation
Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2004 and 2005
(unaudited)
(in thousands, except per share amounts)
Three Months Six Months
Ended Ended
June 30, June 30,
----------------- -----------------
2004 2005 2004 2005
-------- -------- -------- --------
Revenues $17,846 $33,795 $32,199 $58,809
Cost of revenues 6,547 13,113 12,567 22,665
-------- -------- -------- --------
Gross profit 11,299 20,682 19,632 36,144
-------- -------- -------- --------
Operating expenses:
Advertising, promotion and
selling 4,550 6,900 8,125 11,593
General and administrative 2,152 4,521 4,677 7,928
Depreciation 242 423 465 710
Amortization 722 876 1,117 1,705
-------- -------- -------- --------
Total operating expenses 7,666 12,720 14,384 21,936
-------- -------- -------- --------
Operating income 3,633 7,962 5,248 14,208
Income (loss) on investments and
other, net 105 (11) 119 (41)
Interest income 9 95 27 214
Interest expense (56) (200) (62) (288)
-------- -------- -------- --------
Income before income taxes,
minority interests and equity
income from venture fund
investments and other, net 3,691 7,846 5,332 14,093
Provision for income taxes 140 934 140 1,612
Minority interests (26) (8) (37) (31)
Equity income (loss) from venture
fund investments and other, net (16) 132 (9) 132
-------- -------- -------- --------
Net income $3,509 $7,036 $5,146 $12,582
======== ======== ======== ========
Earnings per share:
Basic $0.13 $0.21 $0.19 $0.38
======== ======== ======== ========
Diluted $0.11 $0.19 $0.17 $0.35
======== ======== ======== ========
Shares used in computing earnings
per share:
Basic 27,903 34,304 26,965 33,523
======== ======== ======== ========
Diluted 30,906 36,836 29,783 36,044
======== ======== ======== ========
Segment Information
The following tables summarize the results of the segments of
Jupitermedia for the three and six months ended June 30, 2004 and
2005. Online images consists of the JupiterImages business that
includes Comstock Images, Creatas Images, PictureQuest, Liquid
Library, Thinkstock Images, Thinkstock Footage, Goodshoot Images,
Photos.com, HemeraImages.com, Ablestock.com, PhotoObjects.net,
Clipart.com and Animations.com. Online media consists of the
JupiterWeb business that includes the internet.com, EarthWeb.com,
DevX.com, ClickZ.com and Graphics.com Networks. Research represents
the JupiterResearch business. Events represent the JupiterEvents
business. Other includes corporate overhead, depreciation,
amortization and venture fund related activities.
Three Months Six Months
(unaudited) Ended Ended
(in thousands) June 30, June 30,
----------------- -----------------
2004 2005 2004 2005
-------- -------- -------- --------
Revenues:
Online images $5,791 $19,731 $8,248 $31,894
Online media 8,002 9,336 15,221 16,876
Research 2,201 2,801 4,543 5,356
Events 1,841 1,919 4,163 4,667
Other 11 8 24 16
-------- -------- -------- --------
17,846 33,795 32,199 58,809
-------- -------- -------- --------
Cost of revenues:
Online images 1,143 6,935 1,778 10,120
Online media 2,867 3,455 5,770 6,526
Research 1,318 1,409 2,554 2,849
Events 1,219 1,314 2,465 3,170
-------- -------- -------- --------
6,547 13,113 12,567 22,665
-------- -------- -------- --------
Gross profit:
Online images 4,648 12,796 6,470 21,774
Online media 5,135 5,881 9,451 10,350
Research 883 1,392 1,989 2,507
Events 622 605 1,698 1,497
Other 11 8 24 16
-------- -------- -------- --------
11,299 20,682 19,632 36,144
-------- -------- -------- --------
Advertising, promotion and
selling:
Online images 1,237 3,583 1,556 5,159
Online media 1,760 1,915 3,444 3,708
Research 780 833 1,498 1,701
Events 773 569 1,627 1,025
-------- -------- -------- --------
4,550 6,900 8,125 11,593
-------- -------- -------- --------
General and administrative:
Online images 263 1,083 517 1,681
Online media (186) 163 234 344
Research 177 184 374 407
Events 38 48 82 88
Other 1,860 3,043 3,470 5,408
-------- -------- -------- --------
2,152 4,521 4,677 7,928
-------- -------- -------- --------
Depreciation 242 423 465 710
Amortization 722 876 1,117 1,705
Operating income (loss):
Online images 3,148 8,130 4,397 14,934
Online media 3,561 3,803 5,773 6,298
Research (74) 375 117 399
Events (189) (12) (11) 384
Other (2,813) (4,334) (5,028) (7,807)
-------- -------- -------- --------
3,633 7,962 5,248 14,208
-------- -------- -------- --------
Jupitermedia Corporation
Consolidated Balance Sheets
December 31, 2004 and June 30, 2005
(in thousands, except share and per share amounts)
December 31, June 30,
2004 2005
------------ ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $30,179 $19,950
Accounts receivable, net of allowances
of $966 and $1,351, respectively 15,385 21,417
Unbilled accounts receivable 1,530 1,336
Prepaid expenses and other 2,713 4,238
------------ ------------
Total current assets 49,807 46,941
Property and equipment, net of accumulated
depreciation of $9,256 and $9,876,
respectively 2,339 8,673
Intangible assets, net of accumulated
amortization of $5,371 and $7,074,
respectively 20,939 31,877
Goodwill 42,015 103,674
Investments and other assets 1,197 1,345
------------ ------------
Total assets $116,297 $192,510
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $2,277 $8,157
Accrued payroll and related expenses 1,785 3,039
Accrued expenses and other 5,037 8,198
Deferred revenues 14,183 18,957
Current portion of long-term debt - 8,333
------------ ------------
Total current liabilities 23,282 46,684
Long-term debt - 11,744
Deferred revenues 510 847
Deferred income tax liabilities 121 1,234
Other long-term liabilities 225 -
------------ ------------
Total liabilities 24,138 60,509
------------ ------------
Stockholders' equity:
Preferred stock, $.01 par value,
4,000,000 million shares authorized,
no shares issued and outstanding - -
Common stock, $.01 par value,
75,000,000 shares authorized, and
32,378,361 and 34,694,930 shares
issued at December 31, 2004 and June
30, 2005, respectively 324 347
Additional paid-in capital 215,648 243,856
Accumulated deficit (123,690) (111,108)
Treasury stock, 65,000 shares, at cost (106) (106)
Accumulated other comprehensive income (17) (988)
------------ ------------
Total stockholders' equity 92,159 132,001
------------ ------------
Total liabilities and stockholders'
equity $116,297 $192,510
============ ============
Jupitermedia Corporation
Consolidated Statements of Cash Flows
Six Months Ended June 30, 2004 and 2005
(unaudited)
(in thousands)
Six Months Ended
June 30,
-----------------
2004 2005
-------- --------
Cash flows from operating activities:
Net income $5,146 $12,582
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,582 2,415
Provision (benefit) for losses on accounts
receivable (144) (65)
Provision for income taxes 37 1,009
Minority interests 37 31
Equity (income) loss from venture fund
investments and other, net 9 (132)
(Income) loss on investments and other, net (119) 41
Changes in current assets and liabilities (net of
businesses acquired):
Accounts receivable 322 919
Unbilled accounts receivable (46) 195
Prepaid expenses and other (267) 378
Accounts payable and accrued expenses 1,408 (4,709)
Deferred revenues 1,855 659
-------- --------
Net cash provided by operating activities 9,820 13,323
-------- --------
Cash flows from investing activities:
Additions to property and equipment (207) (846)
Acquisitions of businesses and other (22,917) (49,004)
Distribution from internet.com venture funds 148 -
Proceeds (distributions) from sales of assets and
other 135 (65)
-------- --------
Net cash used in investing activities (22,841) (49,915)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock, net 30,580 -
Borrowings under credit facilities 13,000 20,000
Debt issuance costs - (257)
Repayment of borrowings under credit facility (13,000) -
Proceeds from exercise of stock options 2,096 6,620
-------- --------
Net cash provided by financing activities 32,676 26,363
-------- --------
Net increase (decrease) in cash and cash equivalents 19,655 (10,229)
Cash and cash equivalents, beginning of period 9,567 30,179
-------- --------
Cash and cash equivalents, end of period $29,222 $19,950
======== ========
Supplemental disclosures of cash flow:
Cash paid for income taxes $- $482
======== ========
Cash paid for interest $62 $196
======== ========
Non-cash investing activities:
Common stock issued for acquisitions $- $21,611
======== ========
Business Outlook
Jupitermedia's financial guidance is prepared in accordance with
accounting principles generally accepted in the United States of
America. Historical results below have been adjusted to conform to
this presentation. The amounts below reflect the preliminary
allocation of the purchase prices paid by Jupitermedia in connection
with its recent acquisitions of Thinkstock Images, Megapixel.net,
Hemera Technologies Inc., Creatas, L.L.C., the parent company of
Dynamic Graphics, Inc., GraphicDesignForum.com, JGuru.com, Goodshoot
S.A.S and PictureArts Corporation, and are subject to change pending a
final allocation of these amounts. The following forward
looking-statements reflect Jupitermedia's expectations as of August 1,
2005. Due to potential changes in general economic conditions and the
various other risk factors discussed below and in Jupitermedia's
reports filed with the Securities and Exchange Commission from time to
time, actual results may differ materially. Jupitermedia intends to
continue its practice of not updating forward-looking statements until
its next quarterly results announcement, other than in publicly
available statements.
Future Expectations
Actual
Total Actual Actual
2004 Q1 2005 Q2 2005 Q3 2005 Total 2005
-------- --------- --------- ----------- -------------
(in millions, except per share amounts)
Revenues $72.0 $25.0 $33.8 $39.5-40.5 $139.0-141.0
Cost of
revenues,
advertising,
promotion &
selling, and
G&A expenses $53.0 $17.7 $24.6 $28.0-29.0 $96.5-98.5
EBITDA
(Earnings
before
interest,
taxes,
depreciation
and
amortization) $19.0 $7.3 $9.2 $11.0-12.0 $42.0-43.0
Depreciation
and
amortization $3.0 $1.1 $1.3 $1.7 $5.9
Interest
expense, net $- $- $0.1 $1.2 $2.5
Equity income $- $- $0.1 $- $0.1
Provision for
income taxes
(1) $0.3 $0.7 $0.9 $1.3 $4.2
Net income $15.7 $5.5 $7.0 $7.3 $29.0-31.0
363636.8
Diluted share
count 31.8 35.7 36.8 37.0 36.7
0.19
Earnings per
diluted share $0.49 $0.16 $0.19 $0.20 $0.81-0.83
(1) The provision for income taxes includes deferred income tax
expense related to the amortization of certain intangibles, primarily
goodwill from the Dynamic Graphics Group and PictureArts acquisitions,
for income tax purposes that are not amortized in our financial
statements. This deferred income tax expense will be recorded as a
long-term liability on our balance sheet and will not be paid in cash
unless the related assets are sold. About Jupitermedia Corporation
Jupitermedia Corporation (NASDAQ:JUPM) (www.jupitermedia.com),
headquartered in Darien, CT, is a leading global provider of original
information, images, research and events for information technology,
business and creative professionals. Jupitermedia includes
JupiterImages, one of the leading images companies in the world with
over 7.0 million images online serving creative professionals with
brands like Brand X, FoodPix, Botanica, Nonstock, Comstock Images,
Creatas Images, PictureQuest, Liquid Library, Thinkstock Images,
Thinkstock Footage, Goodshoot Images, Photos.com, HemeraImages.com,
Ablestock.com, PhotoObjects.net, Clipart.com and Animations.com; and
JupiterWeb, the online media division of Jupitermedia which operates
five distinct online networks: internet.com and EarthWeb.com for IT and
business professionals; DevX.com for developers; ClickZ.com for
interactive marketers; and Graphics.com, for creative professionals.
JupiterWeb properties include more than 170 Web sites and over 170
e-mail newsletters that are viewed by over 20 million users and
generate over 300 million page views monthly. Jupitermedia also
includes: JupiterResearch, a leading international research advisory
organization specializing in business and technology market research in
18 business areas and 14 vertical markets; and JupiterEvents, which
produces offline conferences and trade shows focused on IT and
business-specific topics, including Search Engine Strategies and IT
Service Management Forum.
"Safe Harbor" Statement under the
Private Securities Litigation Reform Act of 1995: Statements in this
press release which are not historical facts are "forward-looking
statements" that are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve risks and uncertainties that could cause actual
results to differ materially from those described in the
forward-looking statements. The potential risks and uncertainties
address a variety of subjects including, for example, the competitive
environment in which Jupitermedia competes; the unpredictability of
Jupitermedia's future revenues, expenses, cash flows and stock price;
Jupitermedia's ability to integrate acquired businesses, products and
personnel into its existing businesses; Jupitermedia's dependence on a
limited number of advertisers; and Jupitermedia's ability to protect
its intellectual property. For a more detailed discussion of such risks
and uncertainties, refer to Jupitermedia's reports filed with the
Securities and Exchange Commission pursuant to the Securities Exchange
Act of 1934. The forward-looking statements included herein are made as
of the date of this press release, and Jupitermedia assumes no
obligation to update the forward-looking statements after the date
hereof.
All current Jupitermedia Corporation press releases can be found on the World Wide Web at http://www.jupitermedia.com/corporate/press.html
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