Jupitermedia Reports Q1 Results

Posted on 5/10/2005 by Jim Pickerell | Printable Version | Comments (0)



May 10, 2005

Jupitermedia Corporation has reported revenues for the first quarter of 2005 at $25.0 million compared to revenues of $14.4 million for the same period last year, an increase of 74%. Net income for the first quarter was $5.5 million, or $0.16 per diluted share, compared to net income of $1.6 million, or $0.06 per diluted share, for the same period last year.

On March 7, 2005 they acquired Creatas, L.L.C., the parent company of Dynamic Graphics, Inc. (www.dgusa.com) and PictureQuest Acquisition Company, L.L.C., and their many stock photo and related graphics brands ("Dynamic Graphics Group"), for $38.2 million in cash and 1,483,074 restricted shares of Jupitermedia common stock for a total purchase price of approximately $60.4 million. Jupitermedia financed the cash portion of the purchase price with cash on hand and $20.0 million in borrowings under a credit facility with JP Morgan Chase Bank, N.A. obtained in connection with the transaction.

Excluding the results of Dynamic Graphics Group for the quarter, Jupiter's revenues for the first quarter were $21.6 million and net income was $5.2 million. This leaves $3.4 million in revenue for 19 business days of ownership of Dynamic Graphics. If this rate of sales were to remain steady throughout 2005, Dynamic Graphics Group should add about $38 million in revenue to Jupitermedia.

"We are pleased with our financial results for the first quarter, with record revenues and net income," stated Jupitermedia's Chairman and CEO Alan M. Meckler. "Jupitermedia is now the third largest company in the world in the field of selling and distributing stock photography, stock footage and other imagery. Dynamic Graphics' Creatas Images, PictureQuest and Liquid Library brands are widely known worldwide and provide us with thriving sales operations in the United States, the U.K., Germany and Australia. In addition, Dynamic Graphics Group is one of the leading publishers of magazines for stock photo and graphics professionals. We will make effective use of these properties to help distribute and cross-promote our existing JupiterImages brands. This acquisition was accretive to our earnings for the first quarter," added Meckler.

Jupitermedia is divided into five basic divisions: Online Images, Online Media, Research, Events and Other. Revenue for the Online Images division was $12,163 million or 49% of total revenue. This is the company's fastest growing division. In Q2 2005 they expect revenues of between $32.5 and $33.5 million and total revenue for 2005 of between $125 and $129 million. This guidance does not factor in any revenue from future acquisitions that are expected during the year. If the percentage of revenue for Online Images remains the same throughout the year (and it will probably increase) total revenue for the image side of Jupiter's business will be over $61 million for 2005.

In the conference call Meckler noted that there was a 9% growth in Online Image sales in Q1 2005 compared to Q4 2005. This would represent a 36% annualized rate of growth if it can be maintained throughout the year.

Meckler indicated that some new initiatives in their image business will be announced shortly and hinted that they would include an expansion of the Rights Managed side of the business as well as continued growth in the Subscription and regular RF areas.

Jupitermedia is the largest owner of digitized images in the world, and until the acquisition of Creatas had always focused on selling through the internet. As a result of examining the Creatas model they seem to have recognized that some customers like to talk to someone during the sales process. Thus, "telephone sales is just another distribution channel," Meckler said and the company intends to use their current 60+ sales people to sell subscriptions as well as other products.

He suggested that the next acquisitions of companies with photo content would be in the "$2 to $8 to $10 million range."

Copyright © 2005 Jim Pickerell. The above article may not be copied, reproduced, excerpted or distributed in any manner without written permission from the author. All requests should be submitted to Selling Stock at 10319 Westlake Drive, Suite 162, Bethesda, MD 20817, phone 301-461-7627, e-mail: wvz@fpcubgbf.pbz

Jim Pickerell is founder of www.selling-stock.com, an online newsletter that publishes daily. He is also available for personal telephone consultations on pricing and other matters related to stock photography. He occasionally acts as an expert witness on matters related to stock photography. For his current curriculum vitae go to: http://www.jimpickerell.com/Curriculum-Vitae.aspx.  


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