Press Releases

2006 Press

JUPITERMEDIA CORPORATION REPORTS RESULTS FOR ITS SECOND QUARTER ENDED JUNE 30, 2006

(New York, NY - August 8, 2006) - Jupitermedia Corporation (Nasdaq: JUPM) today reported results for the quarter ended June 30, 2006.

Highlights for the second quarter include:

  • Revenues for the second quarter of 2006 were $35.0 million compared to revenues of $29.1 million for the same period last year, an increase of 20%.
  • Earnings per diluted share from continuing operations were $0.09 and included stock-based compensation expense of $0.02.

Beginning on January 1, 2006, Jupitermedia began expensing stock-based compensation. The results of the second quarter of 2006 include non-cash stock-based compensation expense of $906,000. The provision for income taxes for the second quarter of 2006 was $88,000, which was net of a $1.5 million benefit from the reversal of the valuation allowance related to deferred income tax assets. Net income for the second quarter of 2006 was $2.4 million, or $0.07 per diluted share, compared to net income of $7.0 million, or $0.19 per diluted share, for the same period last year. Net income for the second quarter of 2006 included a loss of $718,000, net of income taxes, related to the sale of Jupitermedia's Research business.

"We have been emphasizing the development of our Jupiterimages division and have made significant investments in our image production, technology platforms and direct sales teams over the past several quarters. The full benefits of these investments, as well as the benefits from integrating our many recent image acquisitions, will be more apparent in future quarters, stated Jupitermedia's Chairman and CEO Alan M. Meckler. "Jupitermedia continues to grow as a powerful creator and distributor of a wide range of commercial images and digital content. In addition to the expansion of our image offerings, through several acquisitions we increased our wholly-owned royalty-free music offerings," added Meckler.

Jupitermedia Corporation 2nd Quarter 2006 Financial Results Conference Call Alert

Jupitermedia Corporation invites you to participate in its conference call reviewing 2006 second quarter results on Wednesday, August 9, 2006 at 11:00 am EST.

The conference call number is (800) 565-5442 for domestic participants and (913) 312-1298 for international participants; confirmation code "473 2301." Please call five minutes in advance to ensure that you are connected prior to the presentation. The conference call replay will be available until Wednesday, August 23, 2006. Replay call numbers are (888) 203-1112 for domestic participants and (719) 457-0820 for international participants: pass code: "473 2301."

Acquisitions

  • In April 2006, Jupitermedia acquired certain assets of Steve Shapiro Music, including a wholly-owned music library of over 2,200 royalty-free music tracks. Steve Shapiro Music owns a wide selection of tracks offering moods, themes and instrumentation ranging from hip-hop to classical styles. Terms of the acquisition were not disclosed.

  • In May 2006, Jupitermedia acquired all of the shares of IFA Bilderteam GmbH (www.ifa-bilderteam.com). IFA Bilderteam is headquartered in Munich, Germany and has an office in Dusseldorf, Germany. IFA Bilderteam is a leading resource for rights-managed images. Terms of the acquisition were not disclosed.

  • In June 2006, Jupitermedia acquired all of the shares of Workbook, Inc. (www.workbookstock.com) from Alexis Scott. Workbook Stock, a division of Workbook, Inc., is a leading resource for high-end rights-managed images. Workbook Stock is headquartered in Los Angeles, CA. Simultaneously, Alexis Scott purchased the Workbook print directories, Workbook.com, and all other assignment products from Workbook, Inc. Terms of the transactions were not disclosed.

  • In August 2006, Jupitermedia acquired the assets of RoyaltyFreeMusic.com (www.royaltyfreemusic.com). RoyaltyFreeMusic.com's library includes overy 1,100 wholly-owned tracks of high quality royalty-free themes, underscores, voiceovers beats, loops and bumpers. Terms of the acquisition were not disclosed.

Divestiture and Discontinued Operations
In March 2006, Jupitermedia announced that it sold its JupiterResearch division for $10.1 million in cash and the assumption of certain liabilities by the purchaser, subject to certain post-closing adjustments. The purchaser is JupiterResearch, LLC a subsidiary of JupiterKagan, Inc., which is a portfolio company of MCG Capital Corporation (Nasdaq: MCGC). As a result of this sale, Jupitermedia's Research segment is now being presented as a discontinued operation in accordance with Statement of Financial Accounting Standards No. 144.

New Online Images Offerings
Jupitermedia continued to expand its international presence and strengthen its world-class image offerings with the addition of:

In July 2006, Jupitermedia announced the launch of photos.jp (www.photos.jp), the first micropayment stock photography Web site based in Japan. Photos.jp was developed and built in Japan with Jupitermedia's partner Aeria, Inc. and utilizes software based on Jupiterimages' partner Stockxpert.com (www.stockxpert.com), a leading micropayment stock photography Web site.

In July 2006, Jupitermedia launched a powerful new search engine on its Jupiterimages Web site (www.jupiterimages.com). The new search engine was built with key input from Jupiterimages' customers and delivers the critical features they need, including the ability to find images with and without people and by gender, age and ethnicity. It also enables search by the subjects' emotions (i.e., subject is angry, content, frustrated, happy, laughing, sad, serious or worried) and by the subject looking at or away from the camera and includes many other requested search features.

New Online Media Offerings
Jupitermedia continued to expand and strengthen its world-class proprietary JupiterWeb content and advertising opportunities with the addition of the following:

In May 2006, JupiterWeb division announced the launch of TwoMinuteTips.com (www.twominutetips.com). TwoMinuteTips.com produces original interactive video programming for its audience of IT professionals and presents brief tutorials that will help IT professionals solve everyday problems. The first video tutorials produced were titled "Building Mobile Apps" and "Adding Dynamic Menus with ASP.NET 2.0."

In May 2006, JupiterWeb division announced the launch of Open Networks Today (www.opennetworkstoday.com/) in EarthWeb.com's Networking Channel. The editors of Open Networks Today review articles from across the Web and provide networking news through frequently updated headlines tailored to the network professional. Open Networks Today attracts professionals and serious enthusiasts, from executive IT management to senior-level IT staff and consultants looking for up-to-date news, feature stories and community resources, on topics such as network security, infrastructure, management, standards and protocols and network services.

In June 2006, JupiterWeb division introduced two new services, ProspectLinksm (www.jupiterweb.com/prospectlink/) and ClickLinksm (www.jupiterweb.com/clicklink/), to its "Guaranteed Effective Marketing Solutions" (GEMS) series. ProspectLink is a turnkey solution for technology marketers interested in attracting qualified IT buyers, while ClickLink is a cost-per-click advertising program that delivers the contextual targeting and simplicity of buying keywords.


			Jupitermedia Corporation

       Unaudited Consolidated Condensed Statements of Operations

   For the Three Months and Six Months Ended June 30, 2005 and 2006
               (in thousands, except per share amounts)

                                Three Months Ended  Six Months Ended
                                     June 30,           June 30,
                                ------------------ ------------------
                                  2005      2006     2005      2006
                                --------  -------- --------  --------
Revenues                        $29,075   $35,026  $48,786   $68,967
Cost of revenues (exclusive of
 items shown separately below)   10,390    12,712   16,646    24,637
Advertising, promotion and
 selling                          5,498     7,875    8,867    15,041
General and administrative        4,289     7,136    7,433    13,367
Depreciation                        423       849      701     1,502
Amortization                        876     2,095    1,705     4,366
                                --------  -------- --------  --------
Total operating expenses         21,476    30,667   35,352    58,913
                                --------  -------- --------  --------

Operating income                  7,599     4,359   13,434    10,054

Income (loss) on investments and
 other, net                         (11)       64      (41)      137
Interest income                      95       164      214       281
Interest expense                   (200)   (1,393)    (288)   (2,712)
                                --------  -------- --------  --------

Income before income taxes,
 minority interests and equity
 income from investments, net     7,483     3,194   13,319     7,760
Provision for income taxes          934        88    1,612     1,803
Minority interests                   (8)      (26)     (31)      (35)
Equity income from investments,
 net                                132        59      132        50
                                --------  -------- --------  --------
Income from continuing
 operations                       6,673     3,139   11,808     5,972
Income from discontinued
 operations, net of taxes           363         -      774        67
Gain (loss) on sale of
 discontinued operations, net of
 taxes                                -      (718)       -     5,573
                                --------  -------- --------  --------
Net income                       $7,036    $2,421  $12,582   $11,612
                                ========  ======== ========  ========

Earnings per share:
Basic
     Income from continuing
      operations                  $0.19     $0.09    $0.35     $0.17
                                ========  ======== ========  ========
     Net income                   $0.21     $0.07    $0.38     $0.33
                                ========  ======== ========  ========
Diluted
     Income from continuing
      operations                  $0.18     $0.09    $0.33     $0.16
                                ========  ======== ========  ========
     Net income                   $0.19     $0.07    $0.35     $0.32
                                ========  ======== ========  ========
Shares used in computing
 earnings per share:
Basic                            34,304    35,333   33,523    35,223
                                ========  ======== ========  ========
Diluted                          36,836    36,307   36,044    36,238
                                ========  ======== ========  ========

            See notes to consolidated financial statements.

Segment Information

The following tables summarize the results of the segments of Jupitermedia for the three and six months ended June 30, 2005 and 2006. Online images consists of the Jupiterimages business that includes: BananaStock, Workbook Stock, Brand X, FoodPix, Botanica, Nonstock, The Beauty Archive, IFA Bilderteam, Comstock Images, Creatas Images, PictureQuest, Liquid Library, Thinkstock Images, Thinkstock Footage, Bigshot Media, Goodshoot, ITStockFree, Stock Image, Pixland, Photos.com, Ablestock.com, PhotoObjects.net, Clipart.com, FlashFoundry.com and AnimationFactory.com. Online media consists of the JupiterWeb business that includes the internet.com, EarthWeb.com, DevX.com and Graphics.com Networks. Other includes corporate overhead, depreciation and amortization.

                                Three Months Ended  Six Months Ended
                                     June 30,           June 30,
                                ------------------ ------------------
                                  2005      2006     2005      2006
                                --------  -------- --------  --------
Revenues:
  Online images                 $19,731   $26,807  $31,894   $53,372
  Online media (A)                9,336     8,213   16,876    15,589
  Other                               8         6       16         6
                                --------  -------- --------  --------
                                 29,075    35,026   48,786    68,967
                                --------  -------- --------  --------

Cost of revenues and operating
 expenses:(B)
  Online images                  11,783    17,747   17,264    33,969
  Online media                    5,706     5,457   10,780    10,638
  Depreciation and amortization   1,299     2,944    2,406     5,868
  Other                           2,688     4,519    4,902     8,438
                                --------  -------- --------  --------
                                 21,476    30,667   35,352    58,913
                                --------  -------- --------  --------

Operating income (loss):
  Online images                   7,948     9,060   14,630    19,403
  Online media                    3,630     2,756    6,096     4,951
  Other (C)                      (3,979)   (7,457)  (7,292)  (14,300)
                                --------  -------- --------  --------
                                 $7,599    $4,359  $13,434   $10,054
                                ========  ======== ========  ========

(A) Jupitermedia sold its ClickZ.com Network on August 5, 2005. Online
    media revenues include $766,000 and $1.5 million for the three and
    six months ended June 30, 2005, respectively, from the ClickZ.com
    Network.

(B) Operating expenses include stock-based compensation expense of
    $906,000 and $1.7 million, respectively, for the three and six
    months ended June 30, 2006.

(C) Includes depreciation and amortization expense.

                       Jupitermedia Corporation

            Unaudited Consolidated Condensed Balance Sheets

                  December 31, 2005 and June 30, 2006
          (in thousands, except share and per share amounts)

                                            December 31,   June 30,
                                                2005         2006
                                            ------------ ------------
                   ASSETS
  Current assets:
     Cash and cash equivalents                  $18,546      $20,480
     Accounts receivable, net of allowances
      of $1,935 and $1,766, respectively         20,640       23,696
     Prepaid expenses and other                   3,517        4,805
     Deferred income taxes                          425        1,362
     Assets of discontinued operations            8,763            -
                                            ------------ ------------
        Total current assets                     51,891       50,343
                                            ------------ ------------

  Property and equipment, net of accumulated
   depreciation of $10,211 and $11,836,
   respectively                                   9,807       11,628
  Intangible assets, net                         66,799       80,826
  Goodwill                                      169,960      184,191
  Deferred income taxes                           8,690        5,053
  Investments and other assets                    1,766        2,160
                                            ------------ ------------
        Total assets                           $308,913     $334,201
                                            ============ ============
    LIABILITIES AND STOCKHOLDERS' EQUITY
  Current liabilities:
     Accounts payable                            $6,552       $6,458
     Accrued payroll and related expenses         2,390        3,009
     Accrued expenses and other                  13,287       14,347
     Current portion of long-term debt           16,000       20,000
     Deferred revenues                           11,743       12,652
     Liabilities of discontinued operations       7,211            -
                                            ------------ ------------
        Total current liabilities                57,183       56,466
  Long-term debt                                 46,214       52,249
  Deferred revenues                                 156          196
                                            ------------ ------------
        Total liabilities                       103,553      108,911
                                            ------------ ------------
  Stockholders' equity:
     Preferred stock, $.01 par value,
      4,000,000 shares authorized, no shares
      issued                                          -            -
     Common stock, $.01 par value,
      75,000,000 shares authorized,
      34,937,025 and 35,486,622 shares
      issued at December 31, 2005 and June
      30, 2006, respectively                        349          355
     Additional paid-in capital                 251,919      258,650
     Accumulated deficit                        (45,291)     (33,679)
     Treasury stock, 65,000 shares at cost         (106)        (106)
     Accumulated other comprehensive income
      (loss)                                     (1,511)          70
                                            ------------ ------------
        Total stockholders' equity              205,360      225,290
                                            ------------ ------------
        Total liabilities and stockholders'
         equity                                $308,913     $334,201
                                            ============ ============

            See notes to consolidated financial statements.

                       Jupitermedia Corporation

       Unaudited Consolidated Condensed Statements of Cash Flows

            For the Six Months Ended June 30, 2005 and 2006
                            (in thousands)

                                                    Six Months Ended
                                                        June 30,
                                                    -----------------
                                                      2005     2006
                                                    -------- --------
Cash flows from operating activities:
  Income from continuing operations                 $11,808   $5,972
  Adjustments to reconcile net income to net cash
   provided by operating activities:
    Depreciation and amortization                     2,406    5,868
    Stock-based compensation                              -    1,668
    Provision (benefit) for losses on accounts
     receivable                                         (65)     209
    Minority interests                                   31       35
    Equity income from investments, net                (132)     (50)
    (Income) loss on investments and other, net          41     (138)
    Deferred income taxes                             1,009   (1,179)
    Excess tax benefit from stock-based compensation      -   (2,698)
  Changes in current assets and liabilities (net of
   businesses acquired):
    Accounts receivable, net                            548   (3,479)
    Prepaid expenses and other                          393   (1,409)
    Accounts payable and accrued expenses            (3,725)  (2,893)
    Deferred revenues                                  (508)     949
    Discontinued operations                           2,036    1,110
                                                    -------- --------
       Net cash provided by operating activities     13,842    3,965
                                                    -------- --------
Cash flows from investing activities:
  Purchases of property and equipment                  (846)  (1,296)
  Acquisitions of businesses and other              (49,523) (25,684)
  Proceeds (distributions) from sales of assets and
   other                                                (65)     363
  Proceeds from sale of discontinued operations           -    9,600
  Discontinued operations                                 -        -
                                                    -------- --------
       Net cash used in investing activities        (50,434) (17,017)
                                                    -------- --------
Cash flows from financing activities:
  Borrowings under credit facilities                 20,000   19,000
  Debt issuance costs                                  (257)     (38)
  Repayment of borrowings under credit facilities         -   (8,965)
  Proceeds from exercise of stock options             6,620    2,195
  Excess tax benefit from stock-based compensation        -    2,698
  Discontinued operations                                 -        -
                                                    -------- --------
       Net cash provided by financing activities     26,363   14,890
                                                    -------- --------
Effects of exchange rates on cash                         -       96
                                                    -------- --------
Net increase (decrease) in cash and cash equivalents(10,229)   1,934
Cash and cash equivalents, beginning of period       30,179   18,546
                                                    -------- --------
Cash and cash equivalents, end of period            $19,950  $20,480
                                                    ======== ========
Supplemental disclosures of cash flow:
    Cash paid for income taxes                         $482   $6,107
                                                    ======== ========
    Cash paid for interest                             $196   $1,594
                                                    ======== ========
Non-cash investing activities:
    Common stock issued for acquisitions            $21,611       $-
                                                    ======== ========

            See notes to consolidated financial statements.

Business Outlook

Jupitermedia's financial guidance is prepared in accordance with accounting principles generally accepted in the United States of America. Historical results below have been adjusted to conform to this presentation. The amounts below reflect the preliminary allocation of the purchase prices paid by Jupitermedia in connection with its recent acquisitions and are subject to change pending a final allocation of these amounts. The following forward looking-statements reflect Jupitermedia's expectations as of August 8, 2006. Due to potential changes in general economic conditions and the various other risk factors discussed below and in Jupitermedia's reports filed with the Securities and Exchange Commission from time to time, actual results may differ materially. Jupitermedia intends to continue its practice of not updating forward-looking statements until its next quarterly results announcement, other than in publicly available statements.

Future Expectations

(In millions except for earnings per diluted               Q3  2006
 share)                                                       to
                                               Q3  2006    Q2  2007
                                               --------    --------
                                                 (A)         (A)

Revenues                                      $35.8-36.8 $151.0-156.0

Cost of revenues, advertising, promotion &
 selling, and general & administrative
 expenses                                     $25.5-26.5 $103.0-108.0

EBITDA (Earnings before interest, taxes,
 depreciation and amortization)                    $10.3   $46.0-50.0

Depreciation and amortization                       $3.5   $14.5-15.5

Interest expense, net                               $1.3         $3.8

Provision for income taxes                          $2.2   $11.0-12.0

Net income                                          $3.3        $17.7

Diluted share count                                 36.3         36.8

Earnings per diluted share                         $0.09   $0.45-0.50

Notes:

(A) This financial guidance does not include estimated share-based
    compensation expense relating to employee stock options in the
    amount of $0.02 per share and $0.08 per share for Q3 2006 and for
    the period from July 1, 2006 to June 30, 2007, respectively.



About Jupitermedia Corporation
Jupitermedia Corporation (Nasdaq: JUPM), (www.jupitermedia.com), headquartered in Darien, CT, is a leading global provider of original information and images for information technology, business and creative professionals. Jupitermedia includes Jupiterimages, one of the leading images companies in the world with over 7.0 million images online serving creative professionals with brands like BananaStock, Workbook Stock, Brand X, FoodPix, Botanica, Nonstock, The Beauty Archive, IFA Bilderteam, Comstock Images, Creatas Images, PictureQuest, Liquid Library, Thinkstock Images, Thinkstock Footage, Bigshot Media, Goodshoot, ITStockFree, Stock Image, Pixland, Photos.com, Ablestock.com, PhotoObjects.net, Clipart.com, FlashFoundry.com, AnimationFactory.com and RoyaltyFreeMusic.com. The online media division of Jupitermedia is JupiterWeb, which operates four distinct online networks: internet.com and EarthWeb.com for IT and business professionals; DevX.com for developers; and Graphics.com for creative professionals. JupiterWeb properties include more than 150 Web sites and over 150 e-mail newsletters that are viewed by over 20 million users and generate over 350 million page views monthly.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release which are not historical facts are "forward-looking statements" that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The potential risks and uncertainties address a variety of subjects including, for example, the competitive environment in which Jupitermedia competes; the unpredictability of Jupitermedia's future revenues, expenses, cash flows and stock price; Jupitermedia's ability to integrate acquired businesses, products and personnel into its existing businesses; Jupitermedia's ability to protect its intellectual property; and Jupitermedia's dependence on a limited number of advertisers. For a more detailed discussion of such risks and uncertainties, refer to Jupitermedia's reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. The forward-looking statements included herein are made as of the date of this press release, and Jupitermedia assumes no obligation to update the forward-looking statements after the date hereof.

All current Jupitermedia Corporation press releases can be found on the World Wide Web at www.jupitermedia.com/corporate/press.html

CONTACT:
Michael DeMilt
VP of Marketing
Jupitermedia Corporation
203-662-2989
press@jupitermedia.com