magicJack Reports Second Quarter 2018 Financial Results
August 06 2018 - 4:10PM
magicJack VocalTec Ltd. (Nasdaq: CALL), a leading VoIP cloud-based
communications and UCaaS company, today announced financial results
for the second quarter ending June 30, 2018.
Second Quarter 2018 Financial
Highlights:
- Net revenues: Total net revenues for the
second quarter of 2018 were $20.0 million. Net revenues from the
sales of magicJack devices were $1.8 million and access rights
renewal revenues were $12.4 million, and accounted for 62% of total
net revenues. Prepaid minute revenues were $1.0 million and access
and wholesale charges were $0.7 million during the quarter.
Broadsmart Global, Inc. contributed $2.8 million in revenues to the
second quarter of 2018. Other revenue items contributed the
remaining $1.3 million of total net revenues during the second
quarter of 2018.
- Operating Income: GAAP operating income for
the second quarter of 2018 was $4.8 million, which included $0.6
million in charges primarily related to non-recurring professional
and legal costs and severances expenses.
- Adjusted EBITDA: Adjusted EBITDA for the
second quarter of 2018 was $7.1 million.
- Net Income: GAAP net income attributable to
common shareholders for the second quarter of 2018 was $4.1 million
or $0.25 GAAP diluted net income per share based on 16.2 million
weighted-average diluted ordinary shares outstanding. GAAP net
income included the aforementioned items under the Operating Income
section above, as well as a $0.2 million impact from certain tax
items, which included an increase to uncertain tax positions and an
increase to deferred tax assets related foreign currency
revaluation.
- Non-GAAP net income: Non-GAAP net income
attributable to common shareholders for the second quarter of 2018
was $5.4 million or $0.33 non-GAAP net income per diluted share
based on 16.2 million weighted-average diluted ordinary shares
outstanding.
- Cash: As of June 30, 2018, magicJack VocalTec
had cash and cash equivalents of $58.9 million and no debt. During
the second quarter of 2018, the company generated $5.1 million in
net cash provided by operating activities.
A reconciliation of GAAP to non-GAAP measures
has been provided in the tables included below in this press
release. An explanation of these measures is also included below
under the heading “Non-GAAP Measures.”
Additional Second Quarter 2018
Highlights:
- As of June 30, 2018, magicJack had an estimated 1.85 million
active MJ subscribers, which are defined as device users that are
under an active subscription contract.
- magicJack activated 72,000 subscribers during the Second
quarter of 2018. Activations are defined as devices that become
activated on to a subscription contract during a given period.
- During the quarter ended June 30, 2018, magicJack’s average
monthly churn was 2.0%.
Update on B. Riley Merger:
- The closing of the acquisition of the Company by B.Riley
remains pending final regulatory approval. The Company will
communicate additional updates once closing conditions have been
satisfied.
About magicJack VocalTec Ltd.
magicJack VocalTec Ltd. (Nasdaq: CALL), the
inventor of magicJack and a pioneer in Voice over IP (VoIP)
technology and services, is a leading cloud communications company.
With its easy-to-use, low cost solution for telecommunications, the
Company has sold more than 11 million award-winning magicJack
devices, which is now in its fifth generation, has millions of
downloads of its free calling apps, and holds more than 30
technology patents.
Broadsmart, a leading hosted UCaaS (Unified
Communication as a Service) provider for medium-to-large
multi-location enterprise customers, is a division of magicJack
VocalTec Ltd. Broadsmart has a track record of designing,
provisioning and delivering complex UCaaS solutions to blue chip
corporate customers on a nationwide basis. Broadsmart has expertise
in servicing enterprises with hundreds-to-thousands of
locations.
magicJack® is a registered trademark of
magicJack VocalTec Ltd. All other product or company names
mentioned are the property of their respective owners.
Contact:
Investor
Relations561-749-2255ir@vocaltec.com
Non-GAAP Measures
The Non-GAAP measures shown in this release
exclude various items detailed further below.
- magicJack defines non-GAAP adjusted EBITDA as GAAP operating
income (loss) excluding: depreciation and amortization, share-based
compensation, impairment of intangible assets, asset impairment,
proxy contest related expenses, severance and senior management
transition expenses, write-down of inventory components and other
items, which include a provision for legal settlements, transaction
related expenses, costs related to Broadsmart acquisition matters
and employment of its founders, provision for restructuring and a
provision for certain tax matters.
- magicJack defines non-GAAP net income as GAAP net income (loss)
attributable to common shareholders excluding: share-based
compensation, impairment of intangible assets, asset impairment,
proxy contest related expenses, severance and senior management
transition expenses, write-down of inventory components and other
items, which include a provision for legal settlements, transaction
related expenses, costs related to Broadsmart acquisition matters
and employment of its founders, provision for restructuring, a
provision for certain tax matters, and tax related items.
Reconciliations of these non-GAAP measures to
the most directly comparable GAAP measures are included with the
financial information included in this press release. These
measures are not in accordance with, or an alternative for, GAAP
and may be different from non-GAAP measures used by other
companies. Management believes that the presentation of non-GAAP
results, when shown in conjunction with corresponding GAAP
measures, provides useful information to management and investors
regarding financial and business trends related to the company's
results of operations. Further, management believes that these
non-GAAP measures improve management's and investors' ability to
compare the company's financial performance with other companies in
the technology industry. Because these items vary significantly
between companies, it is useful to compare results excluding these
amounts as identified below.
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
Quarter |
|
Quarter |
|
Six Months |
|
Six Months |
|
|
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
|
|
30-Jun-18 |
|
30-Jun-17 |
|
30-Jun-18 |
|
30-Jun-17 |
|
Net revenues |
|
|
|
$ |
20,022 |
|
$ |
22,381 |
|
|
$ |
40,037 |
|
$ |
45,578 |
|
|
Cost of
revenues |
|
|
|
|
7,100 |
|
|
8,166 |
|
|
|
14,263 |
|
|
17,617 |
|
|
Gross profit |
|
|
|
|
12,922 |
|
|
14,215 |
|
|
|
25,774 |
|
|
27,961 |
|
|
Operating
expenses: |
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
|
|
|
893 |
|
|
2,120 |
|
|
|
2,085 |
|
|
4,527 |
|
|
General
and administrative |
|
|
|
|
5,799 |
|
|
9,544 |
|
|
|
13,301 |
|
|
22,369 |
|
|
Research
and development |
|
|
|
|
1,404 |
|
|
1,462 |
|
|
|
2,861 |
|
|
2,961 |
|
|
Impairment of intangible assets and goodwill |
|
|
|
- |
|
|
- |
|
|
|
131 |
|
|
31,527 |
|
|
Total
operating expenses |
|
|
|
|
8,096 |
|
|
13,126 |
|
|
|
18,378 |
|
|
61,384 |
|
|
Operating income (loss) |
|
|
|
|
4,826 |
|
|
1,089 |
|
|
|
7,396 |
|
|
(33,423 |
) |
|
Other
income (expense): |
|
|
|
|
|
|
|
|
|
|
|
Interest
and dividend income |
|
|
|
|
187 |
|
|
17 |
|
|
|
280 |
|
|
23 |
|
|
Other
income (expense) |
|
|
|
|
5 |
|
|
(13 |
) |
|
|
3 |
|
|
(30 |
) |
|
Total
other income (expense) |
|
|
|
|
192 |
|
|
4 |
|
|
|
283 |
|
|
(7 |
) |
|
Income (loss) before income taxes |
|
|
|
|
5,018 |
|
|
1,093 |
|
|
|
7,679 |
|
|
(33,430 |
) |
|
Income
tax expense (benefit) |
|
|
|
|
922 |
|
|
2,587 |
|
|
|
1,617 |
|
|
(8,768 |
) |
|
Net income (loss) |
|
|
|
|
4,096 |
|
|
(1,494 |
) |
|
|
6,062 |
|
|
(24,662 |
) |
|
Net loss attributable to noncontrolling
interest |
|
|
|
- |
|
|
(67 |
) |
|
|
- |
|
|
- |
|
|
Net income (loss) attributable to common
shareholders |
|
$ |
4,096 |
|
$ |
(1,561 |
) |
|
$ |
6,062 |
|
$ |
(24,662 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per ordinary share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.25 |
|
$ |
(0.10 |
) |
|
$ |
0.37 |
|
$ |
(1.54 |
) |
|
|
|
Diluted |
|
$ |
0.25 |
|
$ |
(0.10 |
) |
|
$ |
0.37 |
|
$ |
(1.54 |
) |
|
Weighted average ordinary shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
16,205 |
|
|
16,078 |
|
|
|
16,199 |
|
|
16,056 |
|
|
|
|
Diluted |
|
|
16,205 |
|
|
16,078 |
|
|
|
16,199 |
|
|
16,056 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
INFORMATION |
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
As of |
|
As of |
|
ASSETS |
|
30-Jun-18 |
|
31-Dec-17 |
|
Current
Assets |
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
58,896 |
|
$ |
52,638 |
|
Investments, at fair value |
|
|
369 |
|
|
369 |
|
Accounts
receivable, net |
|
|
2,153 |
|
|
2,428 |
|
Inventories |
|
|
1,825 |
|
|
1,880 |
|
Contractual Cost - Current |
|
|
301 |
|
|
1,936 |
|
Prepaid
income taxes |
|
|
844 |
|
|
2,016 |
|
Deposits
and other current assets |
|
|
1,753 |
|
|
1,874 |
|
Total
current assets |
|
|
66,141 |
|
|
63,141 |
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
2,264 |
|
|
2,772 |
|
Intangible assets, net |
|
|
8,820 |
|
|
10,190 |
|
Goodwill |
|
|
32,304 |
|
|
32,304 |
|
Deferred
tax assets |
|
|
31,467 |
|
|
31,726 |
|
Deposits
and other non-current assets |
|
|
814 |
|
|
909 |
|
Contractual Cost - Non Current |
|
|
541 |
|
|
- |
|
Total
Assets |
|
$ |
142,351 |
|
$ |
141,042 |
|
|
|
|
|
|
|
LIABILITIES AND CAPITAL EQUITY |
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
Accounts
payable |
|
$ |
2,289 |
|
$ |
3,199 |
|
Accrued
expenses and other current liabilities |
|
|
5,111 |
|
|
6,454 |
|
Contract
liabilities - Current |
|
|
39,129 |
|
|
42,243 |
|
Total
current liabilities |
|
|
46,529 |
|
|
51,896 |
|
|
|
|
|
|
|
Contract liabilities -
Non Current |
|
|
36,602 |
|
|
38,797 |
|
Other non-current
liabilities |
|
|
13,994 |
|
|
13,787 |
|
Total Capital
Equity |
|
|
45,226 |
|
|
36,562 |
|
Total Liabilities and Capital Equity |
|
$ |
142,351 |
|
$ |
141,042 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
(Unaudited) |
|
Six Months |
|
Six Months |
|
|
|
|
Ended |
|
Ended |
|
|
|
|
30-Jun-18 |
|
30-Jun-17 |
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net (loss) income |
|
$ |
6,062 |
|
|
$ |
(24,662 |
) |
|
|
Provision
for doubtful accounts and billing adjustments |
|
|
21 |
|
|
|
126 |
|
|
|
Share-based compensation |
|
|
1,985 |
|
|
|
1,303 |
|
|
|
Depreciation and amortization |
|
|
1,777 |
|
|
|
2,419 |
|
|
|
Impairment of intangible assets |
|
|
131 |
|
|
|
31,527 |
|
|
|
Increase
of uncertain tax position |
|
|
(56 |
) |
|
|
1,809 |
|
|
|
Deferred
income tax (benefit) provision |
|
|
119 |
|
|
|
(9,091 |
) |
|
|
Loss on
sale of assets |
|
|
- |
|
|
|
18 |
|
|
|
Changes
in operating assets and liabilities |
|
|
(3,698 |
) |
|
|
(7,575 |
) |
|
|
Net cash provided by (used in) operating
activities |
|
|
6,341 |
|
|
|
(4,126 |
) |
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Proceeds
from sales of investments |
|
|
- |
|
|
|
245 |
|
|
|
Purchases
of property and equipment |
|
|
30 |
|
|
|
(248 |
) |
|
|
Acquisition of intangible assets |
|
|
- |
|
|
|
(1,089 |
) |
|
|
Net cash (used in) investing activities |
|
|
(30 |
) |
|
|
(1,092 |
) |
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Repurchase of ordinary shares to settle withholding liability |
|
|
(53 |
) |
|
|
(135 |
) |
|
|
Net cash (used in) financing activities |
|
|
(53 |
) |
|
|
(135 |
) |
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents |
|
|
6,258 |
|
|
|
(5,353 |
) |
|
|
Cash and cash
equivalents, beginning of period |
|
|
52,638 |
|
|
|
52,394 |
|
|
|
Cash and cash
equivalents, end of period |
|
$ |
58,896 |
|
|
$ |
47,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF OPERATING INCOME (LOSS) TO
NON-GAAP ADJUSTED EBITDA |
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Quarter |
|
Quarter |
|
Six Months |
|
Six Months |
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
30-Jun-18 |
|
30-Jun-17 |
|
30-Jun-18 |
|
30-Jun-17 |
|
GAAP Operating income (loss) |
|
$ |
4,826 |
|
|
$ |
1,089 |
|
|
$ |
7,396 |
|
|
$ |
(33,423 |
) |
|
Depreciation and amortization |
|
|
818 |
|
|
|
894 |
|
|
|
1,777 |
|
|
|
2,419 |
|
|
Share-based compensation |
|
|
892 |
|
|
|
567 |
|
|
|
1,985 |
|
|
|
1,303 |
|
|
Impairment of intangible assets |
|
|
- |
|
|
|
- |
|
|
|
131 |
|
|
|
31,527 |
|
|
Asset
impairment |
|
|
- |
|
|
|
104 |
|
|
|
- |
|
|
|
490 |
|
|
Proxy
contest related expenses |
|
|
- |
|
|
|
25 |
|
|
|
- |
|
|
|
1,042 |
|
|
Severance
and senior management transition expenses |
|
|
30 |
|
|
|
16 |
|
|
|
143 |
|
|
|
2,928 |
|
|
Write-down of inventory components |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
386 |
|
|
Other
Items |
|
|
541 |
|
|
|
1,697 |
|
|
|
1,192 |
|
|
|
1,895 |
|
|
Non- GAAP Adjusted EBITDA |
|
$ |
7,107 |
|
|
$ |
4,392 |
|
|
$ |
12,624 |
|
|
$ |
8,567 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME (LOSS) TO
NON-GAAP NET INCOME |
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Quarter |
|
Quarter |
|
Six Months |
|
Six Months |
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
30-Jun-18 |
|
30-Jun-17 |
|
30-Jun-18 |
|
30-Jun-17 |
|
GAAP Net income (loss) attributable to common
shareholders |
|
$ |
4,096 |
|
|
$ |
(1,561 |
) |
|
$ |
6,062 |
|
|
$ |
(24,662 |
) |
|
Share-based compensation |
|
|
892 |
|
|
|
567 |
|
|
|
1,985 |
|
|
|
1,303 |
|
|
Impairment of intangible assets |
|
|
- |
|
|
|
- |
|
|
|
131 |
|
|
|
31,527 |
|
|
Asset
impairment |
|
|
- |
|
|
|
104 |
|
|
|
- |
|
|
|
490 |
|
|
Proxy
contest related expenses |
|
|
- |
|
|
|
25 |
|
|
|
- |
|
|
|
1,042 |
|
|
Severance
and senior management transition expenses |
|
|
30 |
|
|
|
16 |
|
|
|
143 |
|
|
|
2,928 |
|
|
Write-down of inventory components |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
386 |
|
|
Other
Items |
|
|
541 |
|
|
|
1,697 |
|
|
|
1,192 |
|
|
|
1,895 |
|
|
Tax
related items |
|
|
(168 |
) |
|
|
2,594 |
|
|
|
(53 |
) |
|
|
(8,089 |
) |
|
Non-GAAP Net income |
|
$ |
5,391 |
|
|
$ |
3,442 |
|
|
$ |
9,460 |
|
|
$ |
6,820 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) per ordinary share –
Diluted |
|
$ |
0.25 |
|
|
$ |
(0.10 |
) |
|
$ |
0.37 |
|
|
$ |
(1.54 |
) |
|
Share-based compensation |
|
|
0.06 |
|
|
|
0.04 |
|
|
|
0.12 |
|
|
|
0.08 |
|
|
Impairment of intangible assets |
|
|
- |
|
|
|
- |
|
|
|
0.01 |
|
|
|
1.96 |
|
|
Asset
impairment |
|
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
0.03 |
|
|
Consideration adjustment / Gain on mark-to-market |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Transaction related expenses |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Proxy
contest related expenses |
|
|
- |
|
|
|
0.00 |
|
|
|
- |
|
|
|
0.06 |
|
|
Severance
and senior management transition expenses |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
0.01 |
|
|
|
0.18 |
|
|
Write-down of inventory components |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.02 |
|
|
Other
Items |
|
|
0.03 |
|
|
|
0.11 |
|
|
|
0.07 |
|
|
|
0.12 |
|
|
Tax
related items |
|
|
(0.01 |
) |
|
|
0.16 |
|
|
|
(0.00 |
) |
|
|
(0.50 |
) |
|
Non-GAAP Net income per share – Diluted |
|
$ |
0.33 |
|
|
$ |
0.21 |
|
|
$ |
0.58 |
|
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average ordinary shares outstanding - Diluted: |
|
|
16,205 |
|
|
|
16,078 |
|
|
|
16,199 |
|
|
|
16,056 |
|
|
|
|
|
|
|
|
|
|
|
Magicjack Vocaltec (NASDAQ:CALL)
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From Jul 2024 to Aug 2024
Magicjack Vocaltec (NASDAQ:CALL)
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From Aug 2023 to Aug 2024