Jupiter reports results for 2007, “transition year”
Jupiter Images released its 4Q and full year ’07 results showing moderate growth of 4%, quarter over quarter and 2% for the full year. Total sales for the 4th quarter reached $36.1MM and for the year, $140.3MM. During the management conference call to discuss the results, CEO Alan Meckler called 2007 a “transition year” stressing Jupiter’s moves to adapt its strategy to the changing digital content environment as well as its continuing development of businesses other than licensing images. The company also booked a non-cash impairment charge of $82.2 million related to the write-down of goodwill and intangible assets.
The Online Images division remains the company’s primary source of revenue, however, accounting for 78% of gross revenue for the full year. Operating margins for the Online Images division decreased slightly from 34% in 2006 to 32% in 2007. The online Media division showed a significantly deteriorating operating margin from 36% in 2006 to 24% in 2007, which management says reflects investment in tradeshow start-ups.
The company continues to see improvement in sales of its high-end image subscription business, Jupiter Images Unlimited, as well as the in the volume of Rights Managed (RM) licensing. High-end Royalty Free (RF) single image and CD-ROM sales have declined, however. Meckler emphasized the importance of having wholly-owned content and the flexibility to package that content in various ways to meet the demands of all levels of the market as an important distinction between Jupiter and its competitors. He even went so far as to say that the high-end RF single image and CD-ROM business won’t even be around in ten years.
The company showed a net loss for the 4th quarter and the full year of approximately $77M as a result of the non-cash impairment charge. Without that charge, however, the company shows a declining net profit from $13.1MM in 2006 to $2.2MM in 2007.
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