NEW YORK–(BUSINESS WIRE)–Ziff Davis, Inc. (NASDAQ: ZD) today reported preliminary unaudited financial results for the fourth quarter and year ended December 31, 2021.
“We had a strong finish to an exceptional year in which we posted fantastic results and executed on a transformational spin-off,” said Vivek Shah, CEO of Ziff Davis. “We are excited by our growth prospects and the opportunities to continue to deploy our financial and human capital to generate value for our stakeholders.”
FOURTH QUARTER 2021 HIGHLIGHTS
On October 7, 2021, Ziff Davis completed the separation of the cloud fax business to Consensus Cloud Solutions, Inc. (“Consensus”). As the spin-off occurred during the fourth quarter of 2021, Ziff Davis has classified Consensus as a discontinued operation in its financial statements for all periods. Results in this press release represent continuing operations, except for the Statement of Cash Flows, net cash provided by operating activities and free cash flow, which are on a combined continuing and discontinued operations basis.
Q4 2021 quarterly revenues increased 6.4% to $408.6 million compared to $384.1 million for Q4 2020. On a pro-forma(6) basis, Q4 2021 quarterly revenues increased 10.4% to $408.6 million as compared to $370.1 million for Q4 2020.
GAAP net income per diluted share from continuing operations(3) increased to $7.62 in Q4 2021 compared to $0.91 for Q4 2020. The earnings increase was primarily due to an unrealized gain on investment of $290 million to record our investment in Consensus ($6.03 per share, after tax).
Adjusted non-GAAP net income per diluted share from continuing operations(3)(4) for the quarter decreased (3.1)% to $2.17 compared to $2.24 for Q4 2020. On a pro-forma(6) basis, Adjusted non-GAAP net income per diluted share from continuing operations(3)(4) for the quarter increased 0.5% to $2.17 as compared to $2.16 for Q4 2020.
GAAP net income from continuing operations increased to $370.0 million compared to $41.7 million for Q4 2020 primarily due to an unrealized gain on investment of $290 million to record our investment in Consensus.
Adjusted non-GAAP net income from continuing operations increased by 4.4% to $104.3 million as compared to $99.9 million for Q4 2020. On a pro-forma(6) basis, Adjusted non-GAAP net income from continuing operations increased by 8.4% to $104.3 million as compared to $96.2 million for Q4 2020.
Adjusted EBITDA(5) for the quarter increased 2.9% to $161.6 million compared to $157.1 million for Q4 2020. On a pro-forma(6) basis, Adjusted EBITDA(5) for the quarter increased 6.8% to $161.6 million compared to $151.3 million for Q4 2020.
Net cash provided by operating activities from continuing and discontinued operations was $85.3 million during Q4 2021 compared to $124.1 in Q4 2020. Q4 2021 free cash flow from continuing and discontinued operations(2) was$59.1 million during Q4 2021 compared to $102.9 million in Q4 2020.
The company ended the quarter with approximately $1.05 billion in cash, cash equivalents, and investments after deploying approximately $29.7 million during the quarter for current and prior year acquisitions.
Key financial results for Q4 2021 versus Q4 2020 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.
The following table reflects Actual and Pro Forma Results from Continuing Operations, except for Cash Provided by Operating Activities and Free Cash Flow which is on a combined basis of continuing operations and discontinued operations, for the fourth quarter of 2021 and 2020 (in millions, except per share amounts). Pro-Forma Results from Continuing Operations below excludes the operating results from Voice assets in Australia, New Zealand, and the United Kingdom that were sold in 2020 and 2021, respectively, and the Company’s B2B Backup business that was sold during the third quarter of 2021.
|
|
|
|
|
Pro-Forma Results(6) |
||
|
|
Q4 2021 |
Q4 2020 |
% Change |
Q4 2021 |
Q4 2020 |
% Change |
|
Revenues |
|
|
|
|
|
|
|
Digital Media |
$325.7 |
$297.9 |
9.3% |
$325.7 |
$297.9 |
9.3% |
|
Cybersecurity and Martech |
$82.9 |
$86.2 |
(3.8)% |
$82.9 |
$72.2 |
14.8% |
|
Total Revenue: (1) |
$408.6 |
$384.1 |
6.4% |
$408.6 |
$370.1 |
10.4% |
|
Income from Operations |
$85.4 |
$77.9 |
9.6% |
|
|
|
|
GAAP Income per Diluted Share from Continuing Operations (3) |
$7.62 |
$0.91 |
737.4% |
|
|
|
|
Adjusted Non-GAAP Income per Diluted Share from Continuing Operations (3) (4) |
$2.17 |
$2.24 |
(3.1)% |
$2.17 |
$2.16 |
0.5% |
|
GAAP Net Income from Continuing Operations |
$370.0 |
$41.7 |
787.3% |
|
|
|
|
Adjusted Non-GAAP Net Income from Continuing Operations |
$104.3 |
$99.9 |
4.4% |
$104.3 |
$96.2 |
8.4% |
|
Adjusted EBITDA (5) |
$161.6 |
$157.1 |
2.9% |
$161.6 |
$151.3 |
6.8% |
|
Adjusted EBITDA Margin (5) |
39.5% |
40.9% |
(1.4)% |
39.5% |
40.9% |
(1.4)% |
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities from Continuing and Discontinued Operations |
$85.3 |
$124.1 |
(31.3)% |
|
|
|
|
Free Cash Flow from Continuing and Discontinued Operations (2) |
$59.1 |
$102.9 |
(42.6)% |
|
|
|
FULL YEAR 2021 HIGHLIGHTS
2021 revenues increased 22.3% to a record of $1.42 billion compared to $1.16 billion for 2020. On a pro-forma(6) basis, 2021 revenues increased 26.8% to $1.38 billion as compared to $1.09 billion for 2020.
GAAP net income per diluted share(3) from continuing operations increased to $8.09 in 2021 compared to $0.58 for 2020. The net income increase was primarily due to an unrealized gain on investment of $290 million to record our investment in Consensus. ($6.24 per share, after tax).
Adjusted non-GAAP net income per diluted share from continuing operations(3)(4) for the year increased by 23.4% to $6.33 compared to $5.13 for 2020. On a pro-forma(6) basis, Adjusted non-GAAP net income per diluted share from continuing operations(3)(4) for the year increased 31.4% to $6.11 as compared to $4.65 for 2020.
GAAP net income from continuing operations increased to $387.5 million compared to $27.4 million for 2020 primarily due to an unrealized gain on investment of $290 million to record our investment in Consensus.
Adjusted non-GAAP net income from continuing operations increased by 22.5% to $292.7 million as compared to $238.9 million for 2020. On a pro-forma(6) basis, Adjusted non-GAAP net income from continuing operations increased by 30.5% to $282.5 million as compared to $216.4 million for 2020.
Adjusted EBITDA(5) for the year increased 23.3% to $498.7 million compared to $404.5 million for 2020. On a pro-forma(6) basis, Adjusted EBITDA(5) for the year increased 28.3% to $484.6 million compared to $377.7 million for 2020.
Net cash provided by operating activities from continuing and discontinued operations was $515.6 million during 2021 compared to $480.1 million in 2020. Free cash flow from continuing and discontinued operations(2) was $402.5 million during 2021 compared to $407.7 million in 2020.
The following table reflects Actual and Pro-Forma Results from Continuing Operations, except for Cash Provided by Operating Activities and Free Cash Flow which is on a combined basis of continuing operations and discontinued operations for the twelve months ended December 31, 2021 and 2020 (in millions, except per share amounts). Pro-Forma Results from Continuing Operations below excludes the operating results from Voice assets in Australia, New Zealand, and the United Kingdom that were sold in 2020 and 2021, respectively, and the Company’s B2B Backup business that was sold during the third quarter of 2021.
|
|
|
|
|
Pro-Forma Results(6) |
||
|
|
2021 |
2020 |
% Change |
2021 |
2020 |
% Change |
|
Revenues |
|
|
|
|
|
|
|
Digital Media |
$1,068.5 |
$811.1 |
31.7% |
$1,068.5 |
$811.1 |
31.7% |
|
Cybersecurity and Martech |
$348.2 |
$347.7 |
0.1% |
$314.7 |
$279.6 |
12.6% |
|
Total Revenue: (1) |
$1,416.7 |
$1,158.8 |
22.3% |
$1,383.2 |
$1,090.7 |
26.8% |
|
Income from Operations |
$166.4 |
$136.6 |
21.8% |
|
|
|
|
GAAP Income per Diluted Share from Continuing Operations (3) |
$8.09 |
$0.58 |
1,294.8% |
|
|
|
|
Adjusted Non-GAAP Income per Diluted Share from Continuing Operations (3) (4) |
$6.33 |
$5.13 |
23.4% |
$6.11 |
$4.65 |
31.4% |
|
GAAP Net Income from Continuing Operations |
$387.5 |
$27.4 |
1,314.2% |
|
|
|
|
Adjusted Non-GAAP Net Income from Continuing Operations |
$292.7 |
$238.9 |
22.5% |
$282.5 |
$216.4 |
30.5% |
|
Adjusted EBITDA (5) |
$498.7 |
$404.5 |
23.3% |
$484.6 |
$377.7 |
28.3% |
|
Adjusted EBITDA Margin (5) |
35.2% |
34.9% |
0.3% |
35.0% |
34.6% |
0.4% |
|
|
|
|
|
|
|
|
|
Net Cash Provided by Operating Activities from Continuing and Discontinued Operations |
$515.6 |
$480.1 |
7.4% |
|
|
|
|
Free Cash Flow from Continuing and Discontinued Operations (2) |
$402.5 |
$407.7 |
(1.3)% |
|
|
|
ZIFF DAVIS GUIDANCE
The Company’s estimates for fiscal year 2022 are as follows (in millions, except per share amounts):
|
|
|
Revenue |
Adjusted |
Adjusted Diluted |
|
FY 2022 Range of Estimates |
|
$1,497-$1,535 |
$538-$555 |
$6.52-$6.79 |
Adjusted non-GAAP net income per diluted share for 2022 excludes share-based compensation of between $24 million and $28 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 2022 (exclusive of the release of reserves for uncertain tax positions) will be between 23.5% and 25%.
The Company has not reconciled the non-GAAP Business Outlook for 2022 Adjusted EBITDA or Adjusted non-GAAP Diluted EPS and tax rate information 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.
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Notes: |
|
|
(1) |
The revenues associated with each of the businesses may not foot precisely since each is presented independently. |
|
(2) |
Free cash flow is defined as net cash provided by operating activities from continuing operations, less purchases of property and equipment from continuing operations, plus contingent consideration from continuing operations. Free cash flow amounts are not meant as a substitute for GAAP, but are solely for informational purposes. |
|
(3) |
The estimated GAAP effective tax rates were approximately 1.4% for Q4 2021 and 30.8% for Q4 2020. The estimated Adjusted non-GAAP effective tax rates were approximately 23.1% for Q4 2021 and 22.8% for Q4 2020. |
|
(4) |
Adjusted non-GAAP net income 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 December 31, 2021 and 2020 totaled $(5.45) and $1.33 per diluted share, respectively. |
|
(5) |
Adjusted EBITDA is defined as net income from continuing operations before interest; gain on sale of businesses; goodwill impairment of business; loss on investments, net; other income (expense), net; income tax expense (benefit); income (loss) from equity method investment, net; 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. |
|
(6) |
Pro-forma figures are provided taking into consideration the sale of certain Voice assets in Australia, New Zealand, and the United Kingdom as well as the sale of the Company’s B2B Backup business as if they had occurred January 1, 2020. As a result of the separation of the Consensus business on October 7, 2021, a portion of Ziff Davis’ shared overhead costs were reduced. Ziff Davis estimates that it would have achieved additional savings of approximately $7 million and $9 million in 2021 and 2020, respectively, if Consensus was separated on January 1, 2020. |
About Ziff Davis
Ziff Davis, Inc. (NASDAQ: ZD) is a vertically focused digital media and internet company whose portfolio includes leading brands in technology, entertainment, shopping, health, cybersecurity, and martech. For more information, visit www.ziffdavis.com.
Preliminary Unaudited Results: These fourth quarter and full year 2020 and 2021 results are preliminary, unaudited, and subject to adjustments. In particular, due to the complexity of the October 7, 2021 spin-off of Consensus and the related transactions (including the debt-for-debt exchange), the presentation of the transaction’s impact on the Company’s financial statements (including the presentation of continuing and discontinued operations and the size of the gain associated with the retention of the 19.9% stake in Consensus) is still being finalized. Any change to the impact of the unrealized gain on investment of $290 million associated with the retention of the 19.9% stake in Consensus could be material to our GAAP net income from continuing operations. As a result of the foregoing, certain information provided herein is subject to change.
“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 2022 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 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 Ziff Davis’ (formerly J2 Global, Inc.) filings with the Securities and Exchange Commission (“SEC”). For a more detailed description of the risk factors and uncertainties affecting Ziff Davis, refer to the 2020 Annual Report on Form 10-K filed by Ziff Davis on March 1, 2021, and the other reports filed by Ziff Davis 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 2022 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 and Pro Forma net income, Adjusted non-GAAP and Pro Forma net income per diluted share, Adjusted and Pro Forma 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.
|
ZIFF DAVIS, INC. AND SUBSIDIARIES |
|||||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||||||
|
(UNAUDITED, IN THOUSANDS) |
|||||||
|
|
December 31, |
|
December 31, |
||||
|
ASSETS |
|
|
|
||||
|
Cash and cash equivalents |
$ |
694,842 |
|
|
$ |
176,443 |
|
|
Short-term investments |
|
229,200 |
|
|
|
663 |
|
|
Accounts receivable, net of allowances of $9,811 and $11,552, respectively |
|
311,728 |
|
|
|
309,549 |
|
|
Prepaid expenses and other current assets |
|
60,290 |
|
|
|
52,160 |
|
|
Current assets, discontinued operations |
|
4,626 |
|
|
|
84,028 |
|
|
Total current assets |
|
1,300,686 |
|
|
|
622,843 |
|
|
Long-term investments |
|
122,593 |
|
|
|
97,495 |
|
|
Property and equipment, net |
|
161,209 |
|
|
|
133,973 |
|
|
Operating lease right-of-use assets |
|
55,617 |
|
|
|
103,534 |
|
|
Trade names, net |
|
147,761 |
|
|
|
158,553 |
|
|
Customer relationships, net |
|
275,451 |
|
|
|
363,515 |
|
|
Goodwill |
|
1,524,429 |
|
|
|
1,507,098 |
|
|
Other purchased intangibles, net |
|
149,512 |
|
|
|
156,821 |
|
|
Deferred income taxes, noncurrent |
|
5,917 |
|
|
|
12,195 |
|
|
Other assets |
|
20,090 |
|
|
|
15,760 |
|
|
Other assets, discontinued operations |
|
— |
|
|
|
493,545 |
|
|
TOTAL ASSETS |
$ |
3,763,265 |
|
|
$ |
3,665,332 |
|
|
|
|
|
|
||||
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
||||
|
Accounts payable and accrued expenses |
$ |
226,621 |
|
|
$ |
197,855 |
|
|
Income taxes payable, current |
|
3,143 |
|
|
|
30,447 |
|
|
Deferred revenue, current |
|
185,571 |
|
|
|
166,132 |
|
|
Operating lease liabilities, current |
|
27,156 |
|
|
|
31,267 |
|
|
Current portion of long-term debt |
|
54,609 |
|
|
|
396,800 |
|
|
Other current liabilities |
|
130 |
|
|
|
495 |
|
|
Current liabilities, discontinued operations |
|
— |
|
|
|
59,559 |
|
|
Total current liabilities |
|
497,230 |
|
|
|
882,555 |
|
|
Long-term debt |
|
1,036,018 |
|
|
|
1,182,220 |
|
|
Deferred revenue, noncurrent |
|
14,839 |
|
|
|
14,201 |
|
|
Operating lease liabilities, noncurrent |
|
53,708 |
|
|
|
97,561 |
|
|
Income taxes payable, noncurrent |
|
11,690 |
|
|
|
11,675 |
|
|
Liability for uncertain tax positions |
|
42,546 |
|
|
|
53,089 |
|
|
Deferred income taxes, noncurrent |
|
108,982 |
|
|
|
157,308 |
|
|
Other long-term liabilities |
|
37,546 |
|
|
|
41,400 |
|
|
Long-term liabilities, discontinued operations |
|
— |
|
|
|
14,304 |
|
|
TOTAL LIABILITIES |
|
1,802,559 |
|
|
|
2,454,313 |
|
|
Commitments and contingencies |
|
— |
|
|
|
— |
|
|
Preferred stock, $0.01 par value. Authorized 1,000,000 and none issued |
|
— |
|
|
|
— |
|
|
Preferred stock – Series A, $0.01 par value. Authorized 6,000; total issued and outstanding zero |
|
— |
|
|
|
— |
|
|
Preferred stock – Series B, $0.01 par value. Authorized 20,000; total issued and outstanding zero |
|
— |
|
|
|
— |
|
|
Common stock, $0.01 par value. Authorized 95,000,000; total issued and outstanding 47,440,137 and 44,346,630 shares at December 31, 2021 and 2020, respectively. |
|
474 |
|
|
|
443 |
|
|
Additional paid-in capital |
|
506,405 |
|
|
|
456,274 |
|
|
Retained earnings |
|
1,530,015 |
|
|
|
809,108 |
|
|
Accumulated other comprehensive loss |
|
(76,188 |
) |
|
|
(54,806 |
) |
|
TOTAL STOCKHOLDERS’ EQUITY |
|
1,960,706 |
|
|
|
1,211,019 |
|
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
3,763,265 |
|
|
$ |
3,665,332 |
|
|
ZIFF DAVIS, INC. AND SUBSIDIARIES |
|||||||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||
|
(UNAUDITED, IN THOUSANDS) |
|||||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
|
Total revenues |
$ |
408,628 |
|
|
$ |
384,055 |
|
|
$ |
1,416,722 |
|
|
$ |
1,158,829 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Cost of revenues (1) |
|
45,718 |
|
|
|
46,159 |
|
|
|
188,053 |
|
|
|
178,403 |
|
|
Gross profit |
|
362,910 |
|
|
|
337,896 |
|
|
|
1,228,669 |
|
|
|
980,426 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
|
Sales and marketing (1) |
|
138,100 |
|
|
|
114,610 |
|
|
|
493,049 |
|
|
|
366,359 |
|
|
Research, development and engineering (1) |
|
21,875 |
|
|
|
19,038 |
|
|
|
78,874 |
|
|
|
57,148 |
|
|
General and administrative (1) |
|
117,541 |
|
|
|
126,398 |
|
|
|
457,692 |
|
|
|
420,295 |
|
|
Goodwill impairment on business |
|
— |
|
|
|
— |
|
|
|
32,629 |
|
|
|
— |
|
|
Total operating expenses |
|
277,516 |
|
|
|
260,046 |
|
|
|
1,062,244 |
|
|
|
843,802 |
|
|
Income from operations |
|
85,394 |
|
|
|
77,850 |
|
|
|
166,425 |
|
|
|
136,624 |
|
|
Interest expense, net |
|
(16,810 |
) |
|
|
(20,836 |
) |
|
|
(79,031 |
) |
|
|
(56,188 |
) |
|
Loss on debt extinguishment, net |
|
(4,527 |
) |
|
|
— |
|
|
|
(4,527 |
) |
|
|
— |
|
|
(Loss) gain on sale of businesses |
|
— |
|
|
|
— |
|
|
|
(21,798 |
) |
|
|
17,122 |
|
|
Loss on investments, net |
|
— |
|
|
|
— |
|
|
|
(16,677 |
) |
|
|
(20,991 |
) |
|
Unrealized gain on short-term investment |
|
290,073 |
|
|
|
— |
|
|
|
290,073 |
|
|
|
— |
|
|
Other income, net |
|
1,759 |
|
|
|
4,034 |
|
|
|
1,293 |
|
|
|
65 |
|
|
Income from continuing operations before income taxes and income from equity method investment, net |
|
355,889 |
|
|
|
61,048 |
|
|
|
335,758 |
|
|
|
76,632 |
|
|
Income tax (benefit) expense |
|
5,156 |
|
|
|
18,781 |
|
|
|
(15,944 |
) |
|
|
37,929 |
|
|
Income (loss) from equity method investment, net |
|
19,249 |
|
|
|
(539 |
) |
|
|
35,845 |
|
|
|
(11,338 |
) |
|
Net income from continuing operations |
|
369,982 |
|
|
|
41,728 |
|
|
|
387,547 |
|
|
|
27,365 |
|
|
(Loss) income from discontinued operations, net of income taxes |
|
(11,093 |
) |
|
|
16,360 |
|
|
|
107,550 |
|
|
|
123,303 |
|
|
Net income |
$ |
358,889 |
|
|
$ |
58,088 |
|
|
$ |
495,097 |
|
|
$ |
150,668 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
Net income per common share from continuing operations: |
|
|
|
|
|
|
|||||||||
|
Basic |
$ |
7.74 |
|
|
$ |
0.94 |
|
|
$ |
8.44 |
|
|
$ |
0.59 |
|
|
Diluted |
$ |
7.62 |
|
|
$ |
0.91 |
|
|
$ |
8.09 |
|
|
$ |
0.58 |
|
|
Net (loss) income per common share from discontinued operations: |
|
|
|
|
|
|
|||||||||
|
Basic |
$ |
(0.23 |
) |
|
$ |
0.37 |
|
|
$ |
2.34 |
|
|
$ |
2.65 |
|
|
Diluted |
$ |
(0.23 |
) |
|
$ |
0.36 |
|
|
$ |
2.24 |
|
|
$ |
2.61 |
|
|
Net income per common share: |
|
|
|
|
|
|
|
||||||||
|
Basic |
$ |
7.51 |
|
|
$ |
1.30 |
|
|
$ |
10.78 |
|
|
$ |
3.24 |
|
|
Diluted |
$ |
7.39 |
|
|
$ |
1.27 |
|
|
$ |
10.33 |
|
|
$ |
3.18 |
|
|
Weighted average shares outstanding: |
|
|
|
|
|
|
|
||||||||
|
Basic |
|
47,778,545 |
|
|
|
44,504,222 |
|
|
|
45,893,928 |
|
|
|
46,308,825 |
|
|
Diluted |
|
48,514,588 |
|
|
|
45,642,292 |
|
|
|
47,862,745 |
|
|
|
47,115,609 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
(1) Includes share-based compensation expense as follows: |
|||||||||||||||
|
Cost of revenues |
$ |
86 |
|
|
$ |
77 |
|
|
$ |
306 |
|
|
$ |
332 |
|
|
Sales and marketing |
|
410 |
|
|
|
218 |
|
|
|
1,288 |
|
|
|
1,011 |
|
|
Research, development and engineering |
|
594 |
|
|
|
365 |
|
|
|
1,984 |
|
|
|
1,396 |
|
|
General and administrative |
|
5,037 |
|
|
|
4,629 |
|
|
|
20,551 |
|
|
|
19,781 |
|
|
Total |
$ |
6,127 |
|
|
$ |
5,289 |
|
|
$ |
24,129 |
|
|
$ |
22,520 |
|
|
ZIFF DAVIS, INC. AND SUBSIDIARIES |
|||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
|||||||
|
(UNAUDITED, IN THOUSANDS) |
|||||||
|
|
Twelve Months Ended |
||||||
|
|
2021 |
|
2020 |
||||
|
Cash flows from operating activities: |
|
|
|
||||
|
Net income |
$ |
495,097 |
|
|
$ |
150,668 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
||||
|
Depreciation and amortization |
|
258,303 |
|
|
|
228,737 |
|
|
Amortization of financing costs and discounts |
|
25,873 |
|
|
|
28,476 |
|
|
Non-cash operating lease costs |
|
1,485 |
|
|
|
17,686 |
|
|
Share-based compensation |
|
25,247 |
|
|
|
24,006 |
|
|
Provision for doubtful accounts |
|
8,738 |
|
|
|
13,283 |
|
|
Deferred income taxes, net |
|
(9,442 |
) |
|
|
5,840 |
|
|
Loss on extinguishment of debt |
|
13,277 |
|
|
|
37,969 |
|
|
Loss (gain) on sale of businesses |
|
21,798 |
|
|
|
(17,122 |
) |
|
Lease asset impairments and other charges |
|
12,710 |
|
|
|
12,121 |
|
|
Goodwill impairment on business |
|
32,629 |
|
|
|
— |
|
|
Changes in fair value of contingent consideration |
|
(1,223 |
) |
|
|
(80 |
) |
|
Foreign currency remeasurement gain |
|
184 |
|
|
|
(34,646 |
) |
|
(Income) loss from equity method investments |
|
(35,845 |
) |
|
|
11,338 |
|
|
(Gain) loss on equity and debt investments |
|
(273,110 |
) |
|
|
20,826 |
|
|
Decrease (increase) in: |
|
|
|
||||
|
Accounts receivable |
|
(18,050 |
) |
|
|
(31,611 |
) |
|
Prepaid expenses and other current assets |
|
(15,650 |
) |
|
|
3,046 |
|
|
Other assets |
|
(3,824 |
) |
|
|
(3 |
) |
|
Increase (decrease) in: |
|
|
|
||||
|
Accounts payable and accrued expenses |
|
13,662 |
|
|
|
2,184 |
|
|
Income taxes payable |
|
(23,974 |
) |
|
|
6,489 |
|
|
Deferred revenue |
|
14,282 |
|
|
|
4,720 |
|
|
Operating lease liabilities |
|
(15,314 |
) |
|
|
(16,439 |
) |
|
Liability for uncertain tax positions |
|
(10,383 |
) |
|
|
9,391 |
|
|
Other long-term liabilities |
|
(899 |
) |
|
|
3,200 |
|
|
Net cash provided by operating activities |
|
515,571 |
|
|
|
480,079 |
|
|
Cash flows from investing activities: |
|
|
|
||||
|
Proceeds on sale of available-for-sale investments |
|
663 |
|
|
|
— |
|
|
Distribution from equity method investment |
|
15,327 |
|
|
|
— |
|
|
Purchases of equity method investment |
|
(23,249 |
) |
|
|
(31,937 |
) |
|
Purchase of equity investments |
|
(999 |
) |
|
|
(1,246 |
) |
|
Sale of equity investments |
|
14,330 |
|
|
|
— |
|
|
Purchases of property and equipment |
|
(113,740 |
) |
|
|
(92,552 |
) |
|
Proceeds from sale of assets |
|
— |
|
|
|
507 |
|
|
Acquisition of businesses, net of cash received |
|
(141,146 |
) |
|
|
(482,227 |
) |
|
Proceeds from sale of businesses, net of cash divested |
|
48,876 |
|
|
|
24,353 |
|
|
Purchases of intangible assets |
|
(78 |
) |
|
|
(3,118 |
) |
|
Proceeds from divestiture of discontinued operations |
|
259,104 |
|
|
|
— |
|
|
Net cash used in investing activities |
|
59,088 |
|
|
|
(586,220 |
) |
|
Cash flows from financing activities: |
|
|
|
||||
|
Proceeds from issuance of long-term debt |
|
— |
|
|
|
750,000 |
|
|
Payment of note payable |
|
— |
|
|
|
(400 |
) |
|
Proceeds from bridge loan |
|
485,000 |
|
|
|
— |
|
|
Debt issuance cost |
|
— |
|
|
|
(7,272 |
) |
|
Payment of debt |
|
(510,197 |
) |
|
|
(650,000 |
) |
|
Debt extinguishment costs |
|
(1,073 |
) |
|
|
(29,250 |
) |
|
Repurchase of common stock |
|
(78,328 |
) |
|
|
(275,654 |
) |
|
Issuance of common stock under employee stock purchase plan |
|
9,232 |
|
|
|
7,382 |
|
|
Exercise of stock options |
|
2,939 |
|
|
|
1,619 |
|
|
Deferred payments for acquisitions |
|
(14,387 |
) |
|
|
(29,180 |
) |
|
Other |
|
(6,776 |
) |
|
|
(1,878 |
) |
|
Net cash (used in) provided by financing activities |
|
(113,590 |
) |
|
|
(234,633 |
) |
|
Effect of exchange rate changes on cash and cash equivalents |
|
(8,879 |
) |
|
|
7,811 |
|
|
Net change in cash and cash equivalents |
|
452,190 |
|
|
|
(332,963 |
) |
|
Cash and cash equivalents at beginning of year |
|
242,652 |
|
|
|
575,615 |
|
|
Cash and cash equivalents at end of year |
$ |
694,842 |
|
|
$ |
242,652 |
|
Contacts
Rebecca Wright
Ziff Davis, Inc.
800-577-1790
investor@ziffdavis.com
