MagicJack Vocaltec Ltd (CALL)

[hercules16]

An article at realmoney.com http://realmoney.thestreet.com/articles/03/16/2016/magicjack-rings-some-brief-gains

Their take on earnings:
CALL reported 38 cents of fourth-quarter earning per share after the closing bell, beating analysts' consensus 30-cent estimates. Quarterly revenues totaled $24.6 million, or just a shade below the $25 million consensus forecast. (Of course, it's worth noting that MagicJack doesn't garner much coverage, so yesterday's "consensus estimates" only involved two analysts.)

MagicJack also reported $24.3 million in free cash flow (about $1.50 per share) for 2015 as a whole, which put its price-to-free-cash-flow ratio below 6x. The firm -- which has historically held relatively large amounts of cash -- ended the quarter with $78.6 million in the bank, or about $5 per share.

.......

But the biggest news of the day was MagicJack's announcement of plans to buy privately held Broadsmart for $38 million in cash and $2 million in stock. (The deal also calls for an additional $2 million earn-out if Broadsmart rings up $15.6 million in 2016 revenues.)

Broadsmart is a so-called "UCaaS" company, meaning it provides "Unified Communication as a Service." That means the firm offers phone and other communications services to medium- and large-sized businesses, so the merger will give MagicJack access to the key "VoIP for Business" market.


But not surprisingly, that also means that MagicJack is ponying up for the acquisition. CALL is paying 3.2x Broadsmart's 2015 revenue, as well as 9.1x EBITDA. Still, MagicJack will have no debt and about $40 million in cash (or roughly $2.50 per share) following the deal's closure.