magicJack Reports Third Quarter 2016 Financial Results
November 09 2016 - 4:15PM
magicJack VocalTec Ltd. (Nasdaq:CALL), a leading VoIP
cloud-based communications and UCaaS company, today announced
financial results for the third quarter ended September 30, 2016.
“We were pleased with our execution in the third
quarter,” said Gerald Vento, President and CEO of magicJack
VocalTec. “The results were driven by our consumer business
highlighted by low churn, stabilization in activations and ongoing
traction with our organic growth initiatives.”
Third Quarter 2016 Financial
Highlights:
- Net revenues: Total net revenues for the third
quarter of 2016 were $24.6 million. Net revenues from the sales of
magicJack devices were $2.8 million and access rights renewal
revenues were $14.5 million, and accounted for 59% of total net
revenues. Prepaid minute revenues were $1.4 million and access and
wholesale charges were $1.2 million during the quarter. Broadsmart
Global, Inc. contributed $2.8 million in revenues to the third
quarter of 2016. Other revenue items contributed the remaining $1.9
million of total net revenues during the third quarter of 2016.
- Operating income: GAAP operating income for
the third quarter of 2016 was $5.4 million.
- Adjusted EBITDA: Adjusted EBITDA for the third
quarter of 2016 was $7.0 million.
- Net income: GAAP net income attributable to
common shareholders for the third quarter of 2016 was $3.4 million
or $0.21 GAAP diluted net income per share based on 15.9 million
weighted-average diluted ordinary shares outstanding.
- Non-GAAP net income: Non-GAAP net income
attributable to common shareholders for the third quarter of 2016
was $4.6 million or $0.29 non-GAAP net income per share based on
15.9 million weighted-average diluted ordinary shares
outstanding.
- Cash and free cash flow: As of September 30,
2016, magicJack VocalTec had cash and cash equivalents of $51.5
million and no debt. During the third quarter of 2016, the company
generated $4.9 million in net cash provided by operating activities
and $4.8 million in free cash flow.
A reconciliation of GAAP to non-GAAP measures,
as well as the calculation of free cash flow 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 Third Quarter 2016 and Recent
Highlights:
- As of September 30, 2016, magicJack had an estimated 2.21
million active MJ subscribers, which are defined as device users
that are under an active subscription contract.
- magicJack activated 102,000 subscribers during the third
quarter of 2016. Activations are defined as devices that become
activated on to a subscription contract during a given period.
- During the quarter ended September 30, 2016, magicJack’s
average monthly churn was 2.4%.
Quarterly Conference Call:
In conjunction with this announcement, magicJack
VocalTec will host a conference call on Wednesday, November 9,
2016, at 5:00 p.m. EST to review the company's financial results
for the third quarter 2016. To access this call, dial
1-888-204-4426 (United States), or 1-913-312-6690 (international),
with conference ID #1894388. A live webcast of the conference call
will be accessible from the investor relations page of magicJack
VocalTec's website at http://www.vocaltec.com and a recording will
be archived and accessible at http://www.vocaltec.com/events.cfm. A
recording of this conference call will also be available through
November 23, 2016, by dialing 1-877-870-5176 (United States), or
1-858-384-5517 (international). The recording access code is
#1894388.
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. magicJack is the largest-reaching CLEC
(Competitive Local Exchange Carrier) in the United States in terms
of area codes available and number of states in which it is
certified.
In March 2016, magicJack VocalTec Ltd. acquired
Broadsmart, a leading hosted UCaaS (Unified Communication as a
Service) provider for medium-to-large multi-location enterprise
customers. 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.
Non-GAAP Measures
The GAAP measures shown in this release exclude
various items detailed further below.
- magicJack defines non-GAAP net revenues as net revenues minus
the impact of certain tax matters.
- magicJack defines adjusted EBITDA as GAAP operating income
excluding: depreciation and amortization, share-based compensation,
impairment of intangible assets, gain on mark-to-market,
non-recurring and transaction related expenses, severance payments,
provision for device returns, transition costs related to
introduction of a new device, the net change to provision for bad
debt expense, write-down of inventory component, a legal settlement
and certain tax matters.
- magicJack defines non-GAAP net income as GAAP net income
attributable to common shareholders excluding: share-based
compensation, impairment of intangible assets, gain on
mark-to-market, non-recurring and transaction related expenses,
severance payments, provision for device returns, transition costs
related to introduction of a new device, the net change to
provision for bad debt expense, write-down of inventory component,
a legal settlement, tax impact from gain on mark-to-market,
decrease in tax valuation allowance, foreign currency revaluations
on tax assets, net uncertain tax positions, tax impact due to
expiration of stock options and impact of income tax rate reduction
in Israel.
- magicJack defines free cash flow as net cash provided by
operating activities minus capital expenditures.
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.
Forward Looking Statements
This press release contains forward-looking
statements that involve substantial risks and uncertainties. All
statements, other than statements of historical facts, contained in
this press release, including statements about strategy, future
operations, new product introductions and customer acceptance,
future financial position, prospects, plans and objectives of
management, are forward-looking statements. Many factors could
cause our actual results, performance or achievements to be
materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements. These factors include, among other
things: changes to our business resulting from increased
competition; our ability to develop, introduce and market
innovative products, services and applications; our ability to
expand our network of retail partners and to increase sales of
magicJack devices; our ability to successfully monetize our
products, services and applications and market them globally;
delays in development we may experience with respect to magicJack
devices, our mobile apps, our first SMB product and Broadsmart’s
products; our customer turnover rate and our customer acceptance
rate; the risk that Broadsmart's assets will not be integrated
successfully or that such integration may be more difficult, time
consuming or costly than expected; the risk that expected increased
revenues and EBITDA and expected synergies from the Broadsmart
acquisition may not be fully realized or may take longer to realize
than expected; the risk that magicJack will experience any
difficulty maintaining relationships with Broadsmart's customers,
employees or suppliers; our ability to expand our network of small,
medium-sized and large businesses; changes in general economic,
business, political and regulatory conditions; availability and
costs associated with operating our network and business and our
ability to control costs; potential liability resulting from
pending or future litigation, or from changes in the laws,
regulations or policies; the degree of legal protection afforded to
our products; changes in the composition or restructuring of us or
our subsidiaries and the successful completion of acquisitions,
divestitures and joint venture activities; and the various other
factors discussed in the “Risk Factors” section of our Annual
Report on Form 10-K, our Quarterly Reports on Form 10-Q and other
filings with the Securities and Exchange Commission. Such factors,
among others, could have a material adverse effect upon our
business, results of operations and financial condition. We do not
assume any obligation to update any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required by law.
magicJack® is a registered trademark of
magicJack VocalTec Ltd. All other product or company names
mentioned are the property of their respective owners.
Third quarter and nine months 2016
financial tables follow:
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands except
per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
Quarter |
|
Quarter |
|
Nine Months |
|
Nine Months |
|
|
|
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
|
|
|
30-Sep-16 |
|
30-Sep-15 |
|
30-Sep-16 |
|
30-Sep-15 |
|
|
Net revenues |
|
|
|
$ |
24,572 |
|
|
$ |
25,409 |
|
|
$ |
73,572 |
|
|
$ |
76,331 |
|
|
|
Cost of revenues |
|
|
|
|
9,509 |
|
|
|
8,225 |
|
|
|
27,556 |
|
|
|
26,361 |
|
|
|
Gross profit |
|
|
|
|
15,063 |
|
|
|
17,184 |
|
|
|
46,016 |
|
|
|
49,970 |
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Marketing |
|
|
|
|
2,680 |
|
|
|
2,357 |
|
|
|
5,659 |
|
|
|
6,940 |
|
|
|
General and administrative |
|
|
|
|
7,641 |
|
|
|
6,286 |
|
|
|
24,828 |
|
|
|
21,297 |
|
|
|
Research and development |
|
|
|
|
1,314 |
|
|
|
1,088 |
|
|
|
3,661 |
|
|
|
3,418 |
|
|
|
Gain on mark-to-market |
|
|
|
|
(2,000 |
) |
|
|
- |
|
|
|
(2,000 |
) |
|
|
- |
|
|
|
Total operating expenses |
|
|
|
|
9,635 |
|
|
|
9,731 |
|
|
|
32,148 |
|
|
|
31,655 |
|
|
|
Operating income |
|
|
|
|
5,428 |
|
|
|
7,453 |
|
|
|
13,868 |
|
|
|
18,315 |
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest and dividend income |
|
|
|
|
5 |
|
|
|
6 |
|
|
|
21 |
|
|
|
23 |
|
|
|
Interest expense |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(57 |
) |
|
|
Other (expense) income |
|
|
|
|
(6 |
) |
|
|
4 |
|
|
|
(11 |
) |
|
|
(2 |
) |
|
|
Total other (expense) income |
|
|
|
|
(1 |
) |
|
|
10 |
|
|
|
10 |
|
|
|
(36 |
) |
|
|
Income before income taxes |
|
|
|
|
5,427 |
|
|
|
7,463 |
|
|
|
13,878 |
|
|
|
18,279 |
|
|
|
Income tax expense |
|
|
|
|
2,205 |
|
|
|
4,152 |
|
|
|
7,407 |
|
|
|
6,708 |
|
|
|
Net income |
|
|
|
|
3,222 |
|
|
|
3,311 |
|
|
|
6,471 |
|
|
|
11,571 |
|
|
|
Net loss attributable to noncontrolling
interest |
|
|
|
|
177 |
|
|
|
- |
|
|
|
481 |
|
|
|
- |
|
|
|
Net income attributable to common
shareholders |
|
|
|
$ |
3,399 |
|
|
$ |
3,311 |
|
|
$ |
6,952 |
|
|
$ |
11,571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per ordinary share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.21 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.66 |
|
|
|
|
|
Diluted |
|
$ |
0.21 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.66 |
|
|
|
Weighted average ordinary shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
15,857 |
|
|
|
16,651 |
|
|
|
15,786 |
|
|
|
17,400 |
|
|
|
|
|
Diluted |
|
|
15,865 |
|
|
|
16,658 |
|
|
|
15,935 |
|
|
|
17,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED BALANCE SHEETS
INFORMATION |
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
(Unaudited) |
|
|
|
|
|
|
|
|
As of |
|
As of |
|
|
ASSETS |
|
30-Sep-16 |
|
31-Dec-15 |
|
|
Current
Assets |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
51,526 |
|
|
$ |
78,589 |
|
|
|
Marketable securities, at fair
value |
|
|
447 |
|
|
|
367 |
|
|
|
Accounts receivable, net of
allowance for doubtful accounts and billing adjustments |
|
|
2,626 |
|
|
|
2,925 |
|
|
|
Inventories |
|
|
4,463 |
|
|
|
5,723 |
|
|
|
Deferred costs |
|
|
2,316 |
|
|
|
2,097 |
|
|
|
Prepaid income taxes |
|
|
602 |
|
|
|
2,747 |
|
|
|
Receivable from earnout escrow |
|
|
2,000 |
|
|
|
- |
|
|
|
Deposits and other current
assets |
|
|
2,508 |
|
|
|
2,655 |
|
|
|
Total current assets |
|
|
66,488 |
|
|
|
95,103 |
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net |
|
|
3,805 |
|
|
|
3,302 |
|
|
|
Intangible assets, net |
|
|
29,924 |
|
|
|
6,687 |
|
|
|
Goodwill |
|
|
47,485 |
|
|
|
32,304 |
|
|
|
Deferred
tax assets, non-current |
|
|
30,824 |
|
|
|
30,689 |
|
|
|
Deposits
and other non-current assets |
|
|
819 |
|
|
|
751 |
|
|
|
Total Assets |
|
$ |
179,345 |
|
|
$ |
168,836 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND CAPITAL EQUITY |
|
|
|
|
|
|
Current
Liabilities |
|
|
|
|
|
|
Accounts payable |
|
$ |
2,780 |
|
|
$ |
1,086 |
|
|
|
Income tax payable |
|
|
1,764 |
|
|
|
- |
|
|
|
Accrued expenses and other current
liabilities |
|
|
7,223 |
|
|
|
6,284 |
|
|
|
Deferred revenue, current
portion |
|
|
49,324 |
|
|
|
52,554 |
|
|
|
Total current liabilities |
|
|
61,091 |
|
|
|
59,924 |
|
|
|
|
|
|
|
|
|
|
Deferred revenue, net
of current portion |
|
|
45,811 |
|
|
|
50,146 |
|
|
|
Other non-current
liabilities |
|
|
13,451 |
|
|
|
11,098 |
|
|
|
Total Capital
Equity |
|
|
58,992 |
|
|
|
47,668 |
|
|
|
Total Liabilities and
Capital Equity |
|
$ |
179,345 |
|
|
$ |
168,836 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
(Unaudited) |
|
Nine Months |
|
Nine Months |
|
|
|
|
Ended |
|
Ended |
|
|
|
|
30-Sep-16 |
|
30-Sep-15 |
|
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net income |
|
$ |
6,471 |
|
|
$ |
11,571 |
|
|
|
Provision for doubtful accounts and
billing adjustments |
|
|
210 |
|
|
|
70 |
|
|
|
Share-based compensation |
|
|
3,169 |
|
|
|
3,906 |
|
|
|
Depreciation and amortization |
|
|
3,510 |
|
|
|
2,877 |
|
|
|
Impairment of intangible
assets |
|
|
498 |
|
|
|
- |
|
|
|
Increase (decrease) of uncertain
tax position |
|
|
1,548 |
|
|
|
(1,124 |
) |
|
|
Deferred income tax provision |
|
|
626 |
|
|
|
6,105 |
|
|
|
Interest expense - non-cash |
|
|
- |
|
|
|
57 |
|
|
|
Gain on mark-to-market |
|
|
(2,000 |
) |
|
|
- |
|
|
|
Changes in operating assets and
liabilities |
|
|
(748 |
) |
|
|
(4,131 |
) |
|
|
Net cash provided by
operating activities |
|
|
13,284 |
|
|
|
19,331 |
|
|
|
Cash flows from
investing activities: |
|
|
|
|
|
|
Purchases of investments |
|
|
(80 |
) |
|
|
- |
|
|
|
Purchases of property and
equipment |
|
|
(256 |
) |
|
|
(548 |
) |
|
|
Acquisition of Broadsmart |
|
|
(40,019 |
) |
|
|
- |
|
|
|
Net cash used in investing
activities |
|
|
(40,355 |
) |
|
|
(548 |
) |
|
|
Cash flows from
financing activities: |
|
|
|
|
|
|
Purchase of treasury stock |
|
|
- |
|
|
|
(13,565 |
) |
|
|
Payment of other current
liabilities |
|
|
- |
|
|
|
(1,500 |
) |
|
|
Repurchase of shares to settle
withholding liability |
|
|
- |
|
|
|
(94 |
) |
|
|
Proceeds from exercise of ordinary
share options |
|
|
8 |
|
|
|
- |
|
|
|
Net cash provided by (used
in) financing activities |
|
|
8 |
|
|
|
(15,159 |
) |
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents |
|
|
(27,063 |
) |
|
|
3,624 |
|
|
|
Cash and cash
equivalents, beginning of period |
|
|
78,589 |
|
|
|
75,945 |
|
|
|
Cash and cash
equivalents, end of period |
|
$ |
51,526 |
|
|
$ |
79,569 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET REVENUES TO ADJUSTED NET
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Quarter |
|
Quarter |
|
Nine Months |
|
Nine Months |
|
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
|
30-Sep-16 |
|
30-Sep-15 |
|
30-Sep-16 |
|
30-Sep-15 |
|
|
Net revenues |
|
$ |
24,572 |
|
|
$ |
25,409 |
|
|
$ |
73,572 |
|
|
$ |
76,331 |
|
|
|
Certain tax matters |
|
|
- |
|
|
|
- |
|
|
|
57 |
|
|
|
- |
|
|
|
Non-GAAP net revenues |
|
$ |
24,572 |
|
|
$ |
25,409 |
|
|
$ |
73,629 |
|
|
$ |
76,331 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF OPERATING INCOME TO ADJUSTED
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Quarter |
|
Quarter |
|
Nine Months |
|
Nine Months |
|
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
|
30-Sep-16 |
|
30-Sep-15 |
|
30-Sep-16 |
|
30-Sep-15 |
|
|
GAAP Operating income |
|
$ |
5,428 |
|
|
$ |
7,453 |
|
|
$ |
13,868 |
|
|
$ |
18,315 |
|
|
|
Depreciation and amortization |
|
|
1,328 |
|
|
|
853 |
|
|
|
3,510 |
|
|
|
2,877 |
|
|
|
Share-based compensation |
|
|
919 |
|
|
|
1,206 |
|
|
|
3,169 |
|
|
|
3,906 |
|
|
|
Impairment of intangible
assets |
|
|
498 |
|
|
|
- |
|
|
|
498 |
|
|
|
- |
|
|
|
Gain on mark-to-market |
|
|
(2,000 |
) |
|
|
- |
|
|
|
(2,000 |
) |
|
|
- |
|
|
|
Non-recurring and transaction
related expenses |
|
|
653 |
|
|
|
75 |
|
|
|
1,514 |
|
|
|
659 |
|
|
|
Severance payments |
|
|
24 |
|
|
|
148 |
|
|
|
635 |
|
|
|
1,331 |
|
|
|
Provision for device returns |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(52 |
) |
|
|
Transition costs related to
introduction of new device |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5 |
|
|
|
Net change to provision for bad
debt expense |
|
|
64 |
|
|
|
(2 |
) |
|
|
219 |
|
|
|
74 |
|
|
|
Write-down of inventory
component |
|
|
112 |
|
|
|
- |
|
|
|
112 |
|
|
|
- |
|
|
|
Legal settlement |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
675 |
|
|
|
Certain tax matters |
|
|
- |
|
|
|
- |
|
|
|
57 |
|
|
|
- |
|
|
|
Adjusted EBITDA |
|
$ |
7,026 |
|
|
$ |
9,733 |
|
|
$ |
21,582 |
|
|
$ |
27,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET INCOME TO NON-GAAP NET
INCOME |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Quarter |
|
Quarter |
|
Nine Months |
|
Nine Months |
|
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
|
30-Sep-16 |
|
30-Sep-15 |
|
30-Sep-16 |
|
30-Sep-15 |
|
|
GAAP Net income attributable to common
shareholders |
|
$ |
3,399 |
|
|
$ |
3,311 |
|
|
$ |
6,952 |
|
|
$ |
11,571 |
|
|
|
Share-based compensation |
|
|
919 |
|
|
|
1,206 |
|
|
|
3,169 |
|
|
|
3,906 |
|
|
|
Impairment of intangible
assets |
|
|
498 |
|
|
|
- |
|
|
|
498 |
|
|
|
- |
|
|
|
Gain on mark-to-market |
|
|
(2,000 |
) |
|
|
- |
|
|
|
(2,000 |
) |
|
|
- |
|
|
|
Non-recurring and transaction
related expenses |
|
|
653 |
|
|
|
75 |
|
|
|
1,514 |
|
|
|
659 |
|
|
|
Severance payments |
|
|
24 |
|
|
|
148 |
|
|
|
635 |
|
|
|
1,331 |
|
|
|
Provision for device returns |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(52 |
) |
|
|
Transition costs related to
introduction of new device |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
5 |
|
|
|
Net change to provision for bad
debt expense |
|
|
64 |
|
|
|
(2 |
) |
|
|
219 |
|
|
|
74 |
|
|
|
Write-down of inventory
component |
|
|
112 |
|
|
|
- |
|
|
|
112 |
|
|
|
- |
|
|
|
Legal settlement |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
675 |
|
|
|
Tax impact from gain on
mark-to-market |
|
|
761 |
|
|
|
- |
|
|
|
761 |
|
|
|
- |
|
|
|
Decrease in tax valuation
allowance |
|
|
- |
|
|
|
(676 |
) |
|
|
- |
|
|
|
(149 |
) |
|
|
Foreign currency revaluations on
tax assets |
|
|
(135 |
) |
|
|
2,002 |
|
|
|
(228 |
) |
|
|
700 |
|
|
|
Uncertain tax positions, net |
|
|
361 |
|
|
|
48 |
|
|
|
1,066 |
|
|
|
(247 |
) |
|
|
Tax impact due to expiration of
stock options |
|
|
(47 |
) |
|
|
- |
|
|
|
152 |
|
|
|
- |
|
|
|
Impact of income tax rate reduction
in Israel |
|
|
- |
|
|
|
- |
|
|
|
1,411 |
|
|
|
- |
|
|
|
Non-GAAP Net income |
|
$ |
4,609 |
|
|
$ |
6,112 |
|
|
$ |
14,261 |
|
|
$ |
18,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP earnings (loss) per ordinary share –
Diluted |
|
$ |
0.21 |
|
|
$ |
0.20 |
|
|
$ |
0.44 |
|
|
$ |
0.66 |
|
|
|
Share-based compensation |
|
|
0.06 |
|
|
|
0.07 |
|
|
|
0.20 |
|
|
|
0.22 |
|
|
|
Impairment of intangible
assets |
|
|
0.03 |
|
|
|
- |
|
|
|
0.03 |
|
|
|
- |
|
|
|
Gain on mark-to-market |
|
|
(0.13 |
) |
|
|
- |
|
|
|
(0.13 |
) |
|
|
- |
|
|
|
Non-recurring and transaction
related expenses |
|
|
0.04 |
|
|
|
0.00 |
|
|
|
0.10 |
|
|
|
0.04 |
|
|
|
Severance payments |
|
|
0.00 |
|
|
|
0.01 |
|
|
|
0.04 |
|
|
|
0.08 |
|
|
|
Provision for device returns |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(0.00 |
) |
|
|
Transition costs related to
introduction of new device |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.00 |
|
|
|
Net change to provision for bad
debt expense |
|
|
0.00 |
|
|
|
(0.00 |
) |
|
|
0.01 |
|
|
|
0.00 |
|
|
|
Write-down of inventory
component |
|
|
0.01 |
|
|
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
Legal settlement |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
0.04 |
|
|
|
Tax impact from gain on
mark-to-market |
|
|
0.05 |
|
|
|
- |
|
|
|
0.05 |
|
|
|
- |
|
|
|
Decrease in tax valuation
allowance |
|
|
- |
|
|
|
(0.04 |
) |
|
|
- |
|
|
|
(0.01 |
) |
|
|
Foreign currency revaluations on
tax assets |
|
|
(0.01 |
) |
|
|
0.12 |
|
|
|
(0.01 |
) |
|
|
0.04 |
|
|
|
Uncertain tax positions, net |
|
|
0.02 |
|
|
|
0.00 |
|
|
|
0.07 |
|
|
|
(0.01 |
) |
|
|
Tax impact due to expiration of
stock options |
|
|
(0.00 |
) |
|
|
- |
|
|
|
0.01 |
|
|
|
- |
|
|
|
Impact of income tax rate reduction
in Israel |
|
|
- |
|
|
|
- |
|
|
|
0.09 |
|
|
|
- |
|
|
|
Non-GAAP Net income per share – Diluted |
|
$ |
0.29 |
|
|
$ |
0.37 |
|
|
$ |
0.89 |
|
|
$ |
1.06 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average ordinary shares outstanding - Diluted: |
|
|
15,865 |
|
|
|
16,658 |
|
|
|
15,935 |
|
|
|
17,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NET CASH PROVIDED BY
OPERATING ACTIVITIES TO FREE CASH FLOW |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
|
|
|
|
(Unaudited) |
|
Quarter |
|
Quarter |
|
Nine Months |
|
Nine Months |
|
|
|
|
Ended |
|
Ended |
|
Ended |
|
Ended |
|
|
|
|
30-Sep-16 |
|
30-Sep-15 |
|
30-Sep-16 |
|
30-Sep-15 |
|
|
Net cash provided by operating activities |
|
$ |
4,935 |
|
|
$ |
5,656 |
|
|
$ |
13,284 |
|
|
$ |
19,331 |
|
|
|
Less: Capital expenditures |
|
|
(97 |
) |
|
|
- |
|
|
|
(256 |
) |
|
|
(548 |
) |
|
|
Free cash flow |
|
$ |
4,838 |
|
|
$ |
5,656 |
|
|
$ |
13,028 |
|
|
$ |
18,783 |
|
|
|
Contact:
Seth Potter
Investor Relations
561-749-2255
ir@vocaltec.com
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