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j2 Global Reports First Quarter 2019 Results
Achieves Record First Quarter Revenues & Raises Full Year 2019
Estimates
Announces Adjustment to Dividend Policy to
Accelerate Growth
LOS ANGELES–(BUSINESS WIRE)–j2 Global, Inc. (NASDAQ: JCOM) today reported financial results for the
first quarter ended March 31, 2019; increased its revenue, Adjusted
EBITDA and Adjusted Non-GAAP earnings per diluted share estimates for
the year. j2 also announced that its Board of Directors has approved a
dividend to be paid on June 4, 2019, and, based on the Board’s view of
the strength and prospects of investment opportunities across the
Company, has decided to suspend dividend payments following the June 4,
2019 dividend to retain and redirect that cash flow to enhance the
growth of our various businesses.
“Our portfolio of businesses – and the leadership managing it – has
never been stronger or deeper,” said Vivek Shah, CEO of j2 Global. “It’s
reflected in our first quarter results, our improved outlook for the
remainder of the year and the breadth of promising investment
opportunities in front of us. It’s why we are confident that by
suspending our dividend, we can prudently direct the increasing cash
flow to opportunities within our businesses to create greater
shareholder returns over the near, medium and long term.”
FIRST QUARTER 2019 RESULTS
Q1 2019 quarterly revenues increased 6.9% to a first quarter record of
$299.9 million compared to $280.6 million for Q1 2018.
Net cash provided by operating activities increased to $116.9 million
compared to $103.9 million for Q1 2018. Q1 2019 free cash flow(1) increased
15.0% to $104.3 million compared to $90.7 million for Q1 2018.
GAAP earnings per diluted share(2) increased 73.7% to $0.66
in Q1 2019 compared to $0.38 for Q1 2018.
Adjusted non-GAAP earnings per diluted share(2)(3) for the
quarter increased 14.8% to $1.40 compared to $1.22 for Q1 2018.
GAAP net income increased by 71.4% to $32.4 million compared to $18.9
million for Q1 2018.
Quarterly Adjusted EBITDA(4) increased 10.9% to $113.9
million compared to $102.7 million for Q1 2018.
j2 ended the quarter with approximately $320 million in cash and
investments after deploying approximately $82 million during the quarter
for acquisitions and j2’s regular quarterly dividend.
Key financial results for Q1 2019 versus Q1 2018 are set forth in the
following table (in millions, except per share amounts). Reconciliations
of Adjusted non-GAAP earnings per diluted share, Adjusted EBITDA and
free cash flow to their nearest comparable GAAP financial measures are
attached to this Press Release.
Q1 2019 | Q1 2018 | % Change | ||||||||||
Revenues | ||||||||||||
Cloud Services | $152.2 million | $149.5 million | 1.8% | |||||||||
Digital Media | $147.6 million | $131.1 million | 12.6% | |||||||||
Total Revenue: |
$299.9 million | $280.6 million | 6.9% | |||||||||
Operating Income | $50.9 million | $46.2 million | 10.2% | |||||||||
Net Cash Provided by Operating Activities | $116.9 million | $103.9 million | 12.5% | |||||||||
Free Cash Flow (1) | $104.3 million | $90.7 million | 15.0% | |||||||||
GAAP Earnings per Diluted Share (2) | $0.66 | $0.38 | 73.7% | |||||||||
Adjusted Non-GAAP Earnings per Diluted Share (2) (3) | $1.40 | $1.22 | 14.8% | |||||||||
GAAP Net Income | $32.4 million | $18.9 million | 71.4% | |||||||||
Adjusted Non-GAAP Net Income | $68.4 million | $59.8 million | 14.4% | |||||||||
Adjusted EBITDA (4) | $113.9 million | $102.7 million | 10.9% | |||||||||
Adjusted EBITDA Margin (4) | 38.0% | 36.6% | 1.4% | |||||||||
BUSINESS OUTLOOK
For fiscal 2019, the Company is increasing its estimates that it will
achieve revenues between $1.33 billion and $1.37 billion from between
$1.29 billion and $1.33 billion, Adjusted EBITDA between $540 million
and $556 million from between $520 million and $540 million, and
Adjusted non-GAAP earnings per diluted share of between $6.95 and $7.15
from between $6.65 and $6.95.
Adjusted non-GAAP earnings per diluted share for 2019 excludes
share-based compensation of between $23 million and $27 million,
amortization of acquired intangibles and the impact of any currently
unanticipated items, in each case net of tax.
It is anticipated that the non-GAAP effective tax rate for 2019
(exclusive of the release of reserves for uncertain tax positions) will
be between 20.5% and 22.5%.
The Company has not reconciled the Adjusted non-GAAP earnings per
diluted share and tax rate guidance included in this release to the most
directly comparable GAAP measure because this cannot be done without
unreasonable effort due to the variability with respect to costs related
to acquisitions and taxation, which are potential adjustments to future
earnings. We expect the variability of these items to have a potentially
unpredictable and significant impact on our future GAAP financial
results.
DIVIDEND
j2’s Board of Directors approved a quarterly cash dividend of $0.4550
per common share, a $0.01, or 2.2% increase versus last quarter’s
dividend, to be paid on June 4, 2019 to all shareholders of record as of
the close of business on May 20, 2019. Based on the significant number
of current investment opportunities within j2’s portfolio of businesses
and the historic returns from prior investments, the Board has decided
to suspend dividend payments for the foreseeable future after the June
4, 2019 payment to retain and redirect that cash flow to enhance the
growth of our various businesses.
Notes:
(1) |
Free cash flow is defined as net cash provided by operating activities, less purchases of property, plant and equipment, plus contingent consideration. Free cash flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes. |
|||||||
(2) |
The estimated GAAP effective tax rates were approximately (0.9)% for Q1 2019 and 27.1% for Q1 2018. The estimated Adjusted non-GAAP effective tax rates were approximately 20.9% for Q1 2019 and 23.7% for Q1 2018. |
|||||||
(3) |
Adjusted non-GAAP earnings per diluted share excludes certain non-GAAP items, as defined in the Reconciliation of GAAP to Adjusted non-GAAP Financial Measures, for the three months ended March 31, 2019 and 2018 totaled $0.74 and $0.84 per diluted share, respectively. |
|||||||
(4) |
Adjusted EBITDA is defined as earnings before interest and other expense, net; income tax expense; depreciation and amortization; and the items used to reconcile EPS to Adjusted non-GAAP EPS, as defined in the Reconciliation of GAAP to Adjusted non-GAAP Financial Measures. Adjusted EBITDA amounts are not meant as a substitute for GAAP, but are solely for informational purposes. |
|||||||
About j2 Global
j2 Global, Inc. (NASDAQ: JCOM) is a leading internet information and
services company consisting of a portfolio of brands including IGN,
Mashable, Humble Bundle, Speedtest, PCMag, Offers.com, Everyday Health
and What To Expect in its Digital Media business and eFax, eVoice,
Campaigner, Vipre, KeepItSafe and Livedrive in its Cloud Services
business. j2 reaches over 180 million people per month across its
brands. As of December 31, 2018, j2 had achieved 23 consecutive fiscal
years of revenue growth. For more information about j2, please visit www.j2global.com.
“Safe Harbor” Statement Under the Private Securities Litigation
Reform Act of 1995: Certain statements in this Press Release are
“forward-looking statements” within the meaning of The Private
Securities Litigation Reform Act of 1995, including those contained in
Vivek Shah’s quote and the “Business Outlook” portion regarding the
Company’s expected fiscal 2019 financial performance. These
forward-looking statements are based on management’s current
expectations or beliefs and are subject to numerous assumptions, risks
and uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements. These factors
and uncertainties include, among other items: the Company’s ability to
grow non-fax revenues, profitability and cash flows; the Company’s
ability to identify, close and successfully transition acquisitions;
subscriber growth and retention; variability of the Company’s revenue
based on changing conditions in particular industries and the economy
generally; protection of the Company’s proprietary technology or
infringement by the Company of intellectual property of others; the risk
of adverse changes in the U.S. or international regulatory environments,
including but not limited to the imposition or increase of taxes or
regulatory-related fees; and the numerous other factors set forth in j2
Global’s filings with the Securities and Exchange Commission (“SEC”).
For a more detailed description of the risk factors and uncertainties
affecting j2 Global, refer to the 2018 Annual Report on Form 10-K filed
by j2 Global on March 1, 2019, and the other reports filed by j2 Global
from time-to-time with the SEC, each of which is available at www.sec.gov.
The forward-looking statements provided in this press release, including
those contained in Vivek Shah’s quote and in the “Business Outlook”
portion regarding the Company’s expected fiscal 2019 financial
performance are based on limited information available to the Company at
this time, which is subject to change. Although management’s
expectations may change after the date of this press release, the
Company undertakes no obligation to revise or update these statements.
About Non-GAAP Financial Measures
To supplement our consolidated financial statements, which are prepared
and presented in accordance with GAAP, we use the following Adjusted
non-GAAP financial measures: Adjusted non-GAAP net income, Adjusted
non-GAAP earnings per diluted share, Adjusted EBITDA and free cash flow.
The presentation of this financial information is not intended to be
considered in isolation or as a substitute for, or superior to, the
financial information prepared and presented in accordance with GAAP.
We use these Adjusted non-GAAP financial measures for financial and
operational decision-making and as a means to evaluate period-to-period
comparisons. Our management believes that these Adjusted non-GAAP
financial measures provide meaningful supplemental information regarding
our performance and liquidity by excluding certain expenses and
expenditures that may not be indicative of our recurring core business
operating results. We believe that both management and investors benefit
from referring to these Adjusted non-GAAP financial measures in
assessing our performance and when planning, forecasting, and analyzing
future periods. These Adjusted non-GAAP financial measures also
facilitate management’s internal comparisons to our historical
performance and liquidity. We believe these Adjusted non-GAAP financial
measures are useful to investors both because (1) they allow for greater
transparency with respect to key metrics used by management in its
financial and operational decision-making and (2) they are used by our
institutional investors and the analyst community to help them analyze
the health of our business.
For more information on these Adjusted non-GAAP financial measures,
please see the appropriate GAAP to Adjusted non-GAAP reconciliation
tables included within the attached Exhibit to this release.
j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED, IN THOUSANDS) |
||||||||||||||||||
March 31, 2019 | December 31, 2018 | |||||||||||||||||
ASSETS | ||||||||||||||||||
Cash and cash equivalents | $ | 226,612 | $ | 209,474 | ||||||||||||||
Accounts receivable, net of allowances of $11,152 and $10,422, respectively |
176,741 | 221,615 | ||||||||||||||||
Prepaid expenses and other current assets | 32,208 | 29,242 | ||||||||||||||||
Total current assets | 435,561 | 460,331 | ||||||||||||||||
Long-term investments | 93,731 | 83,828 | ||||||||||||||||
Property and equipment, net | 104,635 | 98,813 | ||||||||||||||||
Operating lease right-of-use assets | 69,289 | — | ||||||||||||||||
Goodwill | 1,415,635 | 1,380,376 | ||||||||||||||||
Other purchased intangibles, net | 513,454 | 526,468 | ||||||||||||||||
Other assets | 10,608 | 11,014 | ||||||||||||||||
TOTAL ASSETS | $ | 2,642,913 | $ | 2,560,830 | ||||||||||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||
Accounts payable and accrued expenses | $ | 186,964 | $ | 166,521 | ||||||||||||||
Income taxes payable, current | 10,641 | 12,915 | ||||||||||||||||
Deferred revenue, current | 129,964 | 127,568 | ||||||||||||||||
Operating lease liabilities, current | 5,378 | — | ||||||||||||||||
Other current liabilities | 2,013 | 318 | ||||||||||||||||
Total current liabilities | 334,960 | 307,322 | ||||||||||||||||
Long-term debt | 1,015,967 | 1,013,129 | ||||||||||||||||
Deferred revenue, noncurrent | 11,839 | 13,200 | ||||||||||||||||
Operating lease liabilities, noncurrent | 68,189 | — | ||||||||||||||||
Income taxes payable, noncurrent | 11,675 | 11,675 | ||||||||||||||||
Liability for uncertain tax positions | 54,096 | 59,644 | ||||||||||||||||
Deferred income taxes, noncurrent | 68,103 | 69,048 | ||||||||||||||||
Other long-term liabilities | 21,430 | 51,068 | ||||||||||||||||
TOTAL LIABILITIES | 1,586,259 | 1,525,086 | ||||||||||||||||
Commitments and contingencies | — | — | ||||||||||||||||
Preferred stock | — | — | ||||||||||||||||
Common stock | 477 | 481 | ||||||||||||||||
Additional paid-in capital | 358,932 | 354,210 | ||||||||||||||||
Treasury stock | — | (42,543 | ) | |||||||||||||||
Retained earnings | 742,173 | 769,575 | ||||||||||||||||
Accumulated other comprehensive loss | (44,928 | ) | (45,979 | ) | ||||||||||||||
TOTAL STOCKHOLDERS’ EQUITY | 1,056,654 | 1,035,744 | ||||||||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 2,642,913 | $ | 2,560,830 | ||||||||||||||
j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED, IN THOUSANDS EXCEPT SHARE AND PER SHARE DATA) |
|||||||||||||||||
Three Months Ended March 31, |
|||||||||||||||||
2019 | 2018 | ||||||||||||||||
Total revenues | $ | 299,893 | $ | 280,623 | |||||||||||||
Cost of revenues (1) | 51,013 | 48,145 | |||||||||||||||
Gross profit | 248,880 | 232,478 | |||||||||||||||
Operating expenses: | |||||||||||||||||
Sales and marketing (1) | 86,880 | 86,311 | |||||||||||||||
Research, development and engineering (1) | 12,984 | 12,210 | |||||||||||||||
General and administrative (1) | 98,154 | 87,799 | |||||||||||||||
Total operating expenses | 198,018 | 186,320 | |||||||||||||||
Income from operations | 50,862 | 46,158 | |||||||||||||||
Interest expense, net | 16,019 | 15,751 | |||||||||||||||
Other expense, net | 2,215 | 4,519 | |||||||||||||||
Income before income taxes and net loss in earnings of equity method investment |
32,628 | 25,888 | |||||||||||||||
Income tax (benefit) expense | (295 | ) | 7,017 | ||||||||||||||
Net loss in earnings of equity method investment | 474 | — | |||||||||||||||
Net income | $ | 32,449 | $ | 18,871 | |||||||||||||
Basic net income per common share: | |||||||||||||||||
Net income attributable to j2 Global, Inc. common shareholders | $ | 0.67 | $ | 0.39 | |||||||||||||
Diluted net income per common share: | |||||||||||||||||
Net income attributable to j2 Global, Inc. common shareholders | $ | 0.66 | $ | 0.38 | |||||||||||||
Basic weighted average shares outstanding | 47,560,749 | 47,873,007 | |||||||||||||||
Diluted weighted average shares outstanding | 48,509,181 | 48,706,717 | |||||||||||||||
(1) Includes share-based compensation expense as follows: | |||||||||||||||||
Cost of revenues | $ | 132 | $ | 121 | |||||||||||||
Sales and marketing | 404 | 365 | |||||||||||||||
Research, development and engineering | 358 | 432 | |||||||||||||||
General and administrative | 4,192 | 5,502 | |||||||||||||||
Total | $ | 5,086 | $ | 6,420 | |||||||||||||
j2 GLOBAL, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED, IN THOUSANDS) |
|||||||||||||||||
Three Months Ended March 31, |
|||||||||||||||||
2019 | 2018 | ||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||
Net income | $ | 32,449 | $ | 18,871 | |||||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: |
|||||||||||||||||
Depreciation and amortization | 49,209 | 42,618 | |||||||||||||||
Amortization of financing costs and discounts | 2,965 | 2,852 | |||||||||||||||
Amortization of operating lease assets | 4,796 | — | |||||||||||||||
Share-based compensation | 5,086 | 6,420 | |||||||||||||||
Provision for doubtful accounts | 2,888 | 4,134 | |||||||||||||||
Deferred income taxes, net | 548 | 354 | |||||||||||||||
Changes in fair value of contingent consideration | 5,003 | 4,100 | |||||||||||||||
Loss on equity investments | 628 | 3,678 | |||||||||||||||
Decrease (increase) in: | |||||||||||||||||
Accounts receivable | 41,926 | 59,647 | |||||||||||||||
Prepaid expenses and other current assets | (2,143 | ) | 2,574 | ||||||||||||||
Other assets | (144 | ) | 2,132 | ||||||||||||||
Increase (decrease) in: | |||||||||||||||||
Accounts payable and accrued expenses | (11,550 | ) | (45,144 | ) | |||||||||||||
Income taxes payable | (2,333 | ) | (1,721 | ) | |||||||||||||
Deferred revenue | (2,352 | ) | 3,210 | ||||||||||||||
Operating lease liabilities | (518 | ) | — | ||||||||||||||
Liability for uncertain tax positions | (5,464 | ) | 933 | ||||||||||||||
Other long-term liabilities | (4,140 | ) | (748 | ) | |||||||||||||
Net cash provided by operating activities | 116,854 | 103,910 | |||||||||||||||
Cash flows from investing activities: | |||||||||||||||||
Purchases of equity method investment | (9,794 | ) | (13,403 | ) | |||||||||||||
Purchases of property and equipment | (12,531 | ) | (13,165 | ) | |||||||||||||
Acquisition of businesses, net of cash received | (59,339 | ) | (80,223 | ) | |||||||||||||
Purchases of intangible assets | — | (175 | ) | ||||||||||||||
Net cash used in investing activities | (81,664 | ) | (106,966 | ) | |||||||||||||
Cash flows from financing activities: | |||||||||||||||||
Repurchase of common stock | (1,177 | ) | (611 | ) | |||||||||||||
Issuance of stock, net of costs | 5,259 | 658 | |||||||||||||||
Dividends paid | (21,483 | ) | (19,884 | ) | |||||||||||||
Deferred payments for acquisitions | (1,395 | ) | (189 | ) | |||||||||||||
Other | (480 | ) | (54 | ) | |||||||||||||
Net cash used in financing activities | (19,276 | ) | (20,080 | ) | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | 1,224 | 3,960 | |||||||||||||||
Net change in cash and cash equivalents | 17,138 | (19,176 | ) | ||||||||||||||
Cash and cash equivalents at beginning of period | 209,474 | 350,945 | |||||||||||||||
Cash and cash equivalents at end of period | $ | 226,612 | $ | 331,769 | |||||||||||||
j2 GLOBAL, INC. AND SUBSIDIARIES |
RECONCILIATION OF GAAP TO ADJUSTED NON-GAAP FINANCIAL MEASURES |
THREE MONTHS ENDED MARCH 31, 2019 AND 2018 |
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition related integration costs; (3) elimination of interest costs in excess of the coupon rate associated with the convertible notes; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of change in value on investment; (6) elimination of additional tax expense/benefit from prior years; and (7) elimination of dilutive effect of the convertible debt. |
Three Months Ended March 31, | |||||||||||||||||||||||
2019 |
Per Diluted Share * |
2018 |
Per Diluted Share * |
||||||||||||||||||||
Net income | $ | 32,449 | $ | 0.66 | $ | 18,871 | $ | 0.38 | |||||||||||||||
Plus: | |||||||||||||||||||||||
Share based compensation (1) | 3,287 | 0.07 | 4,935 | 0.10 | |||||||||||||||||||
Acquisition related integration costs (2) | 4,377 | 0.09 | 5,878 | 0.12 | |||||||||||||||||||
Interest costs (3) | 1,296 | 0.03 | 1,610 | 0.03 | |||||||||||||||||||
Amortization (4) | 25,504 | 0.54 | 26,370 | 0.55 | |||||||||||||||||||
Investments (5) | 474 | — | 2,120 | 0.04 | |||||||||||||||||||
Tax expense from prior years (6) | 1,009 | 0.02 | — | — | |||||||||||||||||||
Convertible debt dilution (7) | — | 0.01 | — | 0.01 | |||||||||||||||||||
Adjusted non-GAAP net income | $ | 68,396 | $ | 1.40 | $ | 59,784 | $ | 1.22 | |||||||||||||||
* The reconciliation of net income per share from GAAP to
Adjusted non-GAAP may not foot since each is calculated independently.
j2 GLOBAL, INC. AND SUBSIDIARIES |
RECONCILIATION OF GAAP TO ADJUSTED NON-GAAP FINANCIAL MEASURES |
THREE MONTHS ENDED MARCH 31, 2019 AND 2018 |
(UNAUDITED, IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) |
Non-GAAP net income is GAAP net income with the following modifications: (1) elimination of share-based compensation and the associated payroll tax expense; (2) elimination of certain acquisition related integration costs; (3) elimination of interest costs in excess of the coupon rate associated with the convertible notes; (4) elimination of amortization of patents and intangible assets that we acquired; (5) elimination of change in value on investment; (6) elimination of additional tax expense/benefit from prior years; and (7) elimination of dilutive effect of the convertible debt. |
Three Months Ended March 31, | ||||||||||||||||||
2019 | 2018 | |||||||||||||||||
Cost of revenues | $ | 51,013 | $ | 48,145 | ||||||||||||||
Plus: | ||||||||||||||||||
Share based compensation (1) | (132 | ) | (121 | ) | ||||||||||||||
Amortization (4) | (523 | ) | (594 | ) | ||||||||||||||
Adjusted non-GAAP cost of revenues | $ | 50,358 | $ | 47,430 | ||||||||||||||
Sales and marketing | $ | 86,880 | $ | 86,311 | ||||||||||||||
Plus: | ||||||||||||||||||
Share based compensation (1) | (404 | ) | (365 | ) | ||||||||||||||
Acquisition related integration costs (2) | 122 | (440 | ) | |||||||||||||||
Adjusted non-GAAP sales and marketing | $ | 86,598 | $ | 85,506 | ||||||||||||||
Research, development and engineering | $ | 12,984 | $ | 12,210 | ||||||||||||||
Plus: | ||||||||||||||||||
Share based compensation (1) | (358 | ) | (432 | ) | ||||||||||||||
Acquisition related integration costs (2) | — | (97 | ) | |||||||||||||||
Adjusted non-GAAP research, development and engineering | $ | 12,626 | $ | 11,681 | ||||||||||||||
General and administrative | $ | 98,154 | $ | 87,799 | ||||||||||||||
Plus: | ||||||||||||||||||
Share based compensation (1) | (4,192 | ) | (5,502 | ) | ||||||||||||||
Acquisition related integration costs (2) | (5,487 | ) | (6,936 | ) | ||||||||||||||
Amortization (4) | (37,320 | ) | (33,151 | ) | ||||||||||||||
Tax expense from prior years (6) | (3,373 | ) | — | |||||||||||||||
Adjusted non-GAAP general and administrative | $ | 47,782 | $ | 42,210 | ||||||||||||||
Interest expense, net | $ | 16,019 | $ | 15,751 | ||||||||||||||
Plus: | ||||||||||||||||||
Acquisition related integration costs (2) | 27 | (23 | ) | |||||||||||||||
Interest costs (3) | (2,242 | ) | (2,116 | ) | ||||||||||||||
Adjusted non-GAAP interest expense, net | $ | 13,804 | $ | 13,612 | ||||||||||||||
Other expense, net | $ | 2,215 | $ | 4,519 | ||||||||||||||
Plus: | ||||||||||||||||||
Investments (5) | — | (2,702 | ) | |||||||||||||||
Adjusted non-GAAP other expense, net | $ | 2,215 | $ | 1,817 | ||||||||||||||
Income tax provision | $ | (295 | ) | $ | 7,017 | |||||||||||||
Plus: | ||||||||||||||||||
Share based compensation (1) | 1,799 | 1,485 | ||||||||||||||||
Acquisition related integration costs (2) | 961 | 1,618 | ||||||||||||||||
Interest costs (3) | 946 | 506 | ||||||||||||||||
Amortization (4) | 12,339 | 7,375 | ||||||||||||||||
Investments (5) | — | 582 | ||||||||||||||||
Tax expense from prior years (6) | 2,364 | — | ||||||||||||||||
Adjusted non-GAAP income tax provision | $ | 18,114 | $ | 18,583 | ||||||||||||||
Net loss in earnings of equity method investment | $ | 474 | $ | — | ||||||||||||||
Plus: | ||||||||||||||||||
Investments (5) | (474 | ) | — | |||||||||||||||
Adjusted non-GAAP net loss in earnings of equity method investment | $ | — | $ | — | ||||||||||||||
Total adjustments | $ | (35,947 | ) | $ | (40,913 | ) | ||||||||||||
GAAP earnings per diluted share | $ | 0.66 | $ | 0.38 | ||||||||||||||
Adjustments * | $ | 0.74 | $ | 0.84 | ||||||||||||||
Adjusted non-GAAP earnings per diluted share | $ | 1.40 | $ | 1.22 | ||||||||||||||
* The reconciliation of net income per share from GAAP to
Adjusted non-GAAP may not foot since each is calculated independently.
The Company discloses Adjusted non-GAAP Earnings Per Share (“EPS”) as a
supplemental Non-GAAP financial performance measure, as it believes it
is a useful metric by which to compare the performance of its business
from period to period. The Company also understands that this Adjusted
non-GAAP measure is broadly used by analysts, rating agencies and
investors in assessing the Company’s performance. Accordingly, the
Company believes that the presentation of this Adjusted non-GAAP
financial measure provides useful information to investors.
Adjusted non-GAAP EPS is not in accordance with, or an alternative to,
net income per share and may be different from Non-GAAP measures with
similar or even identical names used by other companies. In addition,
this Adjusted non-GAAP measure is not based on any comprehensive set of
accounting rules or principles. This Adjusted non-GAAP measure has
limitations in that it does not reflect all of the amounts associated
with the Company’s results of operations determined in accordance with
GAAP.
Non-GAAP Financial Measures
To supplement its condensed consolidated financial statements, which are
prepared and presented in accordance with US GAAP, the Company uses the
following Non-GAAP financial measures: Adjusted EBITDA, Adjusted
non-GAAP Net Income, and Adjusted non-GAAP Diluted EPS (collectively the
“Non-GAAP financial measures”). The presentation of this financial
information is not intended to be considered in isolation or as a
substitute for, or superior to, the financial information prepared and
presented in accordance with U.S. GAAP. The Company uses these Non-GAAP
financial measures for financial and operational decision making and as
a means to evaluate period-to-period comparisons. The Company believes
that they provide useful information about core operating results,
enhance the overall understanding of past financial performance and
future prospects, and allow for greater transparency with respect to key
metrics used by management in its financial and operational decision
making.
(1) Share Based Compensation. The Company excludes stock-based
compensation because it is non-cash in nature and because the Company
believes that the Non-GAAP financial measures excluding this item
provide meaningful supplemental information regarding operational
performance. The Company further believes this measure is useful to
investors in that it allows for greater transparency to certain line
items in its financial statements. In addition, excluding this item from
the Non-GAAP measures facilitates comparisons to historical operating
results and comparisons to peers, many of which similarly exclude this
item.
(2) Acquisition Related Integration Costs. The Company excludes
certain acquisition and related integration costs such as adjustments to
contingent consideration, severance, lease terminations, retention
bonuses and other acquisition-specific items. The Company believes that
the Non-GAAP financial measures excluding this item provide meaningful
supplemental information regarding operational performance.
Contacts
Scott Turicchi
j2 Global, Inc.
800-577-1790
[email protected]
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Humboldt
Humboldt Seed Company partners with Apollo Green to bring California cannabis genetics to the global marketplace
Apollo Green to distribute Humboldt Seed Company clonal cannabis genetics to Germany, Portugal and Australia
SAN FRANCISCO, April 30, 2024 /PRNewswire/ — Humboldt Seed Company (HSC), California’s leading cannabis seed producer, has announced a partnership with Canadian-based Apollo Green to make eight breeder cuts available to researchers, licensed commercial cultivators and home growers in legal markets worldwide. This first-to-market clonal genetics release is a significant milestone and will expand access to distinctive, high-quality cannabis genetics in both established and emerging global markets including Germany, Portugal and Australia.
The curated, breeder-verified selection includes pioneering triploid genetics, such as OG Triploid and Donutz Triploid alongside the legendary cult classic Blueberry Muffin. Also available are All Gas OG with a THC content of 21% and four high-THC strains in the 30-35% range: Golden Sands, Guzzlerz, Jelly Donutz and Orange Creampop. These selections represent the top .01% from HSC’s extensive California pheno-hunting program.
Exports will begin in May under Apollo Green’s Canadian federal cannabis license. All shipments have Canadian phytosanitary certification, ensuring plants have been inspected, and are clean and free of pests.
“Access for all to quality genetics has been our core focus since the beginning,” said HSC Co-founder and Chief Science Officer, Benjamin Lind. “Our science-based approach to breeding aligns perfectly with Apollo Green’s high standards and we are excited to be able to extend these hand-selected cuts to a wider audience, especially at this pivotal time where we’re seeing positive regulatory changes globally.”
Oisin Tierney, Apollo Green Director of Business Development, said, “California has long been recognized for setting industry standards, and we are proud to play a role in bringing these esteemed genetics to cultivators worldwide. The triploids are especially noteworthy in terms of the unprecedented potential for enhanced plant vigor, higher yields, shorter flowering times and superior returns for solventless extraction.”
About Humboldt Seed Company
Established in 2001, Humboldt Seed Company is a Northern California heritage brand providing quality cannabis genetics to commercial cultivators and home growers in legalized states across the U.S. and international markets including Spain, Canada, Jamaica, South Africa, Colombia, France, Portugal, Greece, the UK, Malta and Thailand. With a focus on environmental and social justice, they combine traditional breeding and modern scientific practices in their strain development program. They have served the cannabis community for over two decades.
For more information visit https://humboldtseedcompany.com/.
About Apollo Green
Licensed since 2019, Apollo Green is Canada’s leader in cannabis genetics. The company’s mission is to provide an ever-growing bank of seeds and clones to medical patients and recreational consumers. Apollo Green provides clean, trusted cannabis seeds and clones, which are backed by the foremost tissue culture technology to reduce risks, costs and time-to-market for licensed producers around the world. Apollo Green is passionate about cannabis genetics.
For more information visit https://apollogreen.com/.
Media contact
Jaana Prall
[email protected]
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