IncrediMail Ltd. (NASDAQ: MAIL), a digital media company that
develops and markets downloadable consumer products, today reported
financial results for the third quarter ended September 30,
2010.
Revenues for the third quarter of 2010 rose 13% to $7.5 million,
up from $6.6 million in the same quarter last year. EBITDA was 44%
of sales, totaling $3.3 million, in-line with the third quarter of
2009. Net profit increased from $2.1 million or $0.21 per diluted
share in the third quarter of 2009, to $2.2 million, or $0.22 per
diluted share this year.
In the first nine months of 2010, revenues were $21.7 million,
increasing 10%, compared to $19.7 million in same period of 2009,
and net profit was $6.6 million, up 11%, compared to $5.9 million
in the first nine months of 2009.
Total operating expenses in the third quarter of 2010 were $4.2
million, including a one-time allocation for compensation related
expenses of $0.5 million, compared to $3.3 million in the third
quarter of 2009.
Commenting on the results, IncrediMail CEO Josef Mandelbaum
said, “The strong financial results of the third quarter continue
to demonstrate the power of our business model and provide the
necessary foundation for future growth. We have recently embarked
on a new strategic plan for the company that will require a renewed
focus on the consumer, and investment in certain key strategic
areas of the company balanced with finding efficiencies in other
parts of the business.”
“Moving forward, we will build upon our existing base to build,
acquire and enhance a portfolio of personal productivity products
that help make our consumers' lives a little simpler. We believe
this approach will help us to accomplish several goals: strengthen
revenues through product sales and advertising, diversify our
revenue streams and add new growth channels outside of search. In
preparation for the accelerated growth we are expecting, we have
begun restructuring the company by hiring additional experienced
personnel and realigning the Company’s activities with our new
goals. Our new strategy emphasizing our core competencies and
initiatives to move the plan forward will begin to unfold in the
coming months.”
“As part of our repositioning the Company towards growth, we
will be discontinuing our dividend distribution in 2011. As a
growth-oriented company, cash that we had paid out in the form of a
dividend will in 2011 be used to increase shareholder value by
growing our business by way of investment in organic and
non-organic growth,” Mandelbaum added.
Conference Call
IncrediMail will host a conference call to discuss the results,
today, November 4th at 10:30 AM ET (16:30 PM Israel Time). We
invite all those interested in participating in the call to dial
1-(866)-744-5399. Callers from Israel may access the call by
dialing (03) 918-0685. Participants may also access a live webcast
of the conference call through the Investor Relations section of
IncrediMail's website at www.incredimail-corp.com. The webcast will
be archived on the company’s website for seven days.
About IncrediMail Ltd.
IncrediMail Ltd. (NASDAQ: MAIL, www.incredimail-corp.com) is an
internet company that develops customized, downloadable graphic
consumer applications used to generate search revenues and designs,
markets and delivers high end personal desktop software. The
company’s award winning e-mail client product, IncrediMail Premium,
is sold in over 100 countries in 10 different languages. Other
products include HiYo, a graphic add-on to instant messaging
software, Magentic, a wallpaper and screensaver software, and
PhotoJoy, software for presenting digital personal photos.
Non-GAAP measures
Use of Non-GAAP Financial Information - In addition to reporting
financial results in accordance with generally accepted accounting
principles, or GAAP, IncrediMail uses EBITDA as a non-GAAP
financial performance measurement. EBITDA is calculated by adding
back to net income: interest, taxes, stock-based compensation and
depreciation and amortization. IncrediMail's management believes
the non-GAAP financial information provided in this release is
useful to investors' understanding and assessment of IncrediMail’s
on-going core operations and prospects for the future. The
presentation of this non-GAAP financial information is not intended
to be considered in isolation or as a substitute for results
prepared in accordance with GAAP. Management uses both GAAP and
non-GAAP information as presented in this press release in
evaluating and operating business internally and as such deemed it
important to provide all this information to investors. These
non-GAAP financial measures may differ materially from the non-GAAP
financial measures used by other companies. Reconciliation between
results on a GAAP and non-GAAP basis is provided in tables
immediately following IncrediMail's Statement of Operations in this
press release.
Forward Looking Statements
This press release contains historical information and
forward-looking statements within the meaning of The Private
Securities Litigation Reform Act of 1995 with respect to the
business, financial condition and results of operations of the
Company. The words “believe,” “expect,” “intend,” “plan,” “should”
and similar expressions are intended to identify forward-looking
statements. Such statements reflect the current views, assumptions
and expectations of the Company with respect to future events and
are subject to risks and uncertainties. Many factors could cause
the actual results, performance or achievements of the Company to
be materially different from any future results, performance or
achievements that may be expressed or implied by such
forward-looking statements, including, among others, changes in the
markets in which the Company operates and in general economic and
business conditions, loss of key customers and unpredictable sales
cycles, competitive pressures, market acceptance of new products,
inability to meet efficiency and cost reduction objectives, changes
in business strategy and various other factors, both referenced and
not referenced in this press release. Various risks and
uncertainties may affect the Company and its results of operations,
as described in reports filed by the Company with the Securities
and Exchange Commission from time to time. The Company does not
assume any obligation to update these forward-looking
statements.
INCREDIMAIL LTD.
CONDENSED BALANCE SHEETS
U.S. dollars in thousands (except share data)
September 30, December 31, 2010 2009
Unaudited ASSETS CURRENT ASSETS: Cash and cash equivalents $
17,150 $ 24,368 Marketable securities 15,641 5,225 Trade
receivables 2,498 2,320 Other receivables and prepaid expenses
3,306 4,819 Total current assets 38,595
36,732 LONG-TERM ASSETS: Severance pay fund 1,081 1,104 Deferred
taxes 84 63 Other long-term assets 477 495 Property and equipment,
net 1,049 1,366 Other intangible assets, net 212 134
Total long-term assets 2,903 3,162 Total assets $
41,498 $ 39,894 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT
LIABILITIES: Trade payables $ 956 $ 1,039 Dividend payable 4,347 -
Deferred revenues 1,918 2,270 Accrued expenses and other
liabilities 5,426 6,577 Total current liabilities
12,647 9,886 LONG-TERM LIABILITIES: Deferred revenues
1,497 1,616 Accrued severance pay 1,351 1,390 Total
long-term liabilities 2,848 3,006
SHAREHOLDERS' EQUITY
Shares issued and outstanding: 9,659,362
and 9,527,821 at September 30, 2010 and December 31, 2009,
respectively
26,003 27,002 Total liabilities and shareholders'
equity $ 41,498 $ 39,894 INCREDIMAIL LTD. CONDENSED
STATEMENTS OF OPERATIONS U.S. dollars and number of shares in
thousands (except per share data), unaudited
Quarter endedSeptember
30,
Nine months endedSeptember
30,
2010 2009 2010 2009
Revenues $ 7,490 $ 6,608 $ 21,698 $ 19,730 Cost of revenues
382 380 1,154 1,095
Gross profit 7,108 6,228
20,544 18,635 Operating expenses: Research and
development 1,707 1,619 4,895 4,448 Selling and marketing 1,120
1,127 3,713 3,349 General and administrative 1,373
564 3,060 2,310 Total
operating expenses 4,200 3,310
11,668 10,107 Operating income 2,908 2,918
8,876 8,528 Financial income (expense), net 186
105 275 (19 ) Income
before taxes on income 3,094 3,023 9,151 8,509 Taxes on income
944 930 2,578
2,575 Net income $ 2,150 $ 2,093 $ 6,573
$ 5,934 Net earnings per Ordinary share: Basic
$ 0.22 $ 0.22 $ 0.68 $ 0.63 Diluted $
0.22 $ 0.21 $ 0.67 $ 0.63 Diluted
weighted number of shares 9,724 9,807
9,785 9,489 RECONCILIATION OF
GAAP TO NON-GAAP RESULTS: GAAP Net income $ 2,150 $ 2,093 $ 6,573 $
5,934 One-time compensation expenses 450 -- 450 -- Stock based
compensation 212 213 574
532 Non-GAAP net income $ 2,812 $ 2,306
$ 7,597 $ 6,466 Non-GAAP net earnings per share :
Basic $ 0.29 $ 0.24 $ 0.79 $ 0.68
Diluted $ 0.29 $ 0.23 $ 0.78 $ 0.68
GAAP net income $ 2,150 $ 2,093 $ 6,573 $ 5,934 Income tax expense
944 930 2,578 2,575 Interest (income) expense, net (186 ) (105 )
(275 ) 19 Depreciation, Amortization and Stock-based Compensation
414 385 1,161
1,056 EBITDA $ 3,322 $ 3,303 $ 10,037 $
9,584
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