Exhibit 99.1
ARBINET ANNOUNCES SECOND QUARTER 2009 FINANCIAL RESULTS
NEW BRUNSWICK, N.J., August 6, 2009 - Arbinet Corporation (NasdaqGM: ARBX), a leading provider of innovative voice and IP solutions for buying and selling telecommunications capacity, today reported financial results for the second quarter ended June 30, 2009.
Second quarter 2009 fee revenues were $8.7 million, a 6% decrease from the first quarter 2009 and a 36% decrease from the second quarter 2008. A total of 2.6 billion minutes were bought and sold on Arbinet’s platform in the second quarter 2009, compared to 3.55 billion minutes in the second quarter 2008. Arbinet completed 291 million calls during the second quarter 2009, compared to 503 million calls in the second quarter 2008. The average call duration of calls completed during the second quarter 2009 was 4.5 minutes per call, compared to 3.5 minutes per call in the second quarter 2008.
The Company’s net income from continuing operations in the second quarter 2009 was $967,000, or $0.04 per diluted share, compared to net income from continuing operations of $132,000, or $0.01 per diluted share in the second quarter 2008. Second quarter 2009 results include a non-cash foreign currency exchange gain of $3.1 million.
In commenting on the Company’s second quarter results, Shawn O’Donnell, President and Chief Executive Officer of Arbinet stated, “Through streamlining our product offering, launching our wholesale carrier services product, enhancing our sales leadership team and managing our costs effectively, we continue our efforts to drive the Company toward profitable growth. In the second quarter we began to see our revenues stabilize and we are optimistic that we will begin to realize future benefits from our initiatives. We remain committed to positioning the Company for future growth and profitability to create value for our shareholders.”
Quarterly Conference Call
Arbinet will host a conference call to discuss its second quarter 2009 results at 5:00 P.M. Eastern Time today.
The dial-in number for the live audio call beginning at 5:00 P.M. Eastern Time is 888-562-3654, or 973-582-2703 for international callers; the passcode is 22571234. A live web cast of the conference call will be available on Arbinet’s web site at http://www.arbinet.com.
A replay of the call will be available from 8:00 P.M. Eastern Time on August 6, 2009 through midnight Eastern Time on August 13, 2009 at http://www.arbinet.com and by telephone at 800-642-1687, or 706-645-9291 for international callers; the passcode is 22571234.
About Arbinet Corporation
Arbinet is a leading provider of international voice and IP solutions to carriers and service providers globally. With more than 1100 carriers across the world utilizing the Arbinet network, Arbinet combines global scale with sophisticated platform intelligence, call routing and industry leading credit management and settlement capabilities. Customers and suppliers include many leading fixed line, mobile, wholesale and VoIP carriers as well as calling card, ISPs and content providers around the world who buy and sell voice and IP telecommunications capacity and content. The Company can be reached at its corporate headquarters in New Brunswick, NJ at +1.732.509.9100 or by email at sales@arbinet.com.
Forward-Looking Statements
This press release contains forward-looking statements regarding anticipated future revenues, growth, capital expenditures, management’s future expansion plans, expected product and service developments or enhancements, and future operating results. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as: "believes," "expects," "may," "will," “optimistic”, "should" or "anticipates," or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Various important risks and uncertainties may cause Arbinet’s actual results to differ materially from the results indicated by these forward-looking statements, including, without limitation: members (in particular, significant trading members) not trading on our exchange or utilizing our new and additional services (including DirectAxcessSM, PrivateExchangeSM, AssuredAxcessSM and PeeringSolutionsSM); continued volatility in the volume and mix of trading activity; our uncertain and long member enrollment cycle; the failure to manage our credit risk; failure to manage our growth; pricing pressure; investment in our management team and investments in our personnel; regulatory uncertainty; system failures, human error and security breaches that could cause Arbinet to lose members and expose it to liability; Arbinet’s ability to obtain and enforce patent protection for our methods and technologies; losses in efficiency due to cost cutting and restructuring initiatives; decreased trading volumes due to our efforts to increase call quality on our exchange; and economic conditions and volatility of financial markets, and the impact they may have on Arbinet and our customers For a further list and description of the risks and uncertainties the Company faces, please refer to Part I, Item 1A of the Company’s Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 16, 2009, and other filings that have been filed with the Securities and Exchange Commission. Arbinet assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise and such statements are current only as of the date they are made.
Contacts:
Jack Wynne, CFO
Arbinet Corporation
732-509-9230
Andrea Priest / Andi Salas
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449
| ARBINET - THEXCHANGE, INC. AND SUBSIDIARIES |
| CONSOLIDATED STATEMENTS OF OPERATIONS |
| (Unaudited) |
| Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||||
| ($ in thousands, except per share data) | ||||||||||||||||
| Trading revenues | $ | 123,002 | $ | 77,304 | $ | 235,443 | $ | 155,157 | ||||||||
| Fee revenues | 13,571 | 8,674 | 26,301 | 17,921 | ||||||||||||
| Total revenues | 136,573 | 85,978 | 261,744 | 173,078 | ||||||||||||
| Cost of trading revenues | 123,114 | 77,272 | 235,584 | 155,360 | ||||||||||||
| Indirect cost of trading and fee revenues | 5,166 | 4,598 | 10,418 | 9,488 | ||||||||||||
| Total cost of trading and fee revenues | 128,280 | 81,870 | 246,002 | 164,848 | ||||||||||||
| Gross Profit | 8,293 | 4,108 | 15,742 | 8,230 | ||||||||||||
| Cost and expenses: | ||||||||||||||||
| Sales and marketing | 3,580 | 1,848 | 5,791 | 3,665 | ||||||||||||
| General and administrative | 2,745 | 2,438 | 6,130 | 5,036 | ||||||||||||
| Depreciation and amortization | 1,886 | 1,821 | 3,716 | 3,612 | ||||||||||||
| Total operating expenses | 8,211 | 6,107 | 15,637 | 12,313 | ||||||||||||
| Income (loss) from operations | 82 | (1,999 | ) | 105 | (4,083 | ) | ||||||||||
| Interest income | 225 | 27 | 642 | 87 | ||||||||||||
| Interest expense | (142 | ) | (172 | ) | (307 | ) | (323 | ) | ||||||||
| Foreign currency exchange gain (loss) | 4 | 3,149 | (23 | ) | 2,766 | |||||||||||
| Other income (expense), net | 62 | 61 | 118 | 171 | ||||||||||||
| Income (loss) from continuing operations before income taxes | $ | 231 | $ | 1,066 | $ | 535 | $ | (1,382 | ) | |||||||
| Provision for income taxes | 99 | 99 | 180 | 138 | ||||||||||||
| Income (loss) from continuing operations | 132 | 967 | 355 | (1,520 | ) | |||||||||||
| Discontinued operations: | ||||||||||||||||
| Loss from discontinued operations | (784 | ) | - | (1,456 | ) | - | ||||||||||
| Net income (loss) | $ | (652 | ) | $ | 967 | $ | (1,101 | ) | $ | (1,520 | ) | |||||
| Basic net income (loss) per share: | ||||||||||||||||
| Continuing operations | $ | 0.01 | $ | 0.04 | $ | 0.01 | $ | (0.07 | ) | |||||||
| Discontinued operations | $ | (0.03 | ) | $ | - | $ | (0.06 | ) | $ | - | ||||||
| Net income (loss) | $ | (0.02 | ) | $ | 0.04 | $ | (0.05 | ) | $ | (0.07 | ) | |||||
| Diluted net income (loss) per share: | ||||||||||||||||
| Continuing operations | $ | 0.01 | $ | 0.04 | $ | 0.01 | $ | (0.07 | ) | |||||||
| Discontinued operations | $ | (0.03 | ) | $ | - | $ | (0.06 | ) | $ | - | ||||||
| Net income (loss) | $ | (0.02 | ) | $ | 0.04 | $ | (0.05 | ) | $ | (0.07 | ) | |||||
| Dividends declared per common share | $ | 0.40 | $ | - | $ | 0.40 | $ | - | ||||||||
| Weighted average shares used in computing basic | 24,921,380 | 22,097,690 | 24,755,953 | 21,841,153 | ||||||||||||
| net income (loss) per share | ||||||||||||||||
| Weighted average shares used in computing diluted | ||||||||||||||||
| net income (loss) per share | 24,921,380 | 22,220,782 | 24,755,953 | 21,841,153 | ||||||||||||
| Other comprehensive income: | ||||||||||||||||
| Net income (loss) | (652 | ) | 967 | (1,101 | ) | (1,520 | ) | |||||||||
| Cumulative unrealized gain (loss) in available-for-sale securities | (21 | ) | (6 | ) | (8 | ) | 2 | |||||||||
| Foreign currency translation adjustment | (11 | ) | 2,043 | (147 | ) | 1,802 | ||||||||||
| Comprehensive income (loss) | $ | (684 | ) | $ | 3,004 | $ | (1,256 | ) | $ | 284 | ||||||
ARBINET CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| December 31, | June 30, | |||||||
| 2008 | 2009 | |||||||
| ($ in thousands, except per share data) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 16,224 | $ | 17,765 | ||||
| Marketable securities | 7,926 | 4,210 | ||||||
| Trade accounts receivable (net of allowance of $2,071 and $2,539 at December 31, 2008 and June 30, 2009, | ||||||||
| respectively) | 28,176 | 24,052 | ||||||
| Prepaids and other current assets | 3,476 | 2,965 | ||||||
| Total current assets | 55,802 | 48,992 | ||||||
| Property and equipment, net | 20,868 | 19,441 | ||||||
| Security deposits | 2,130 | 2,149 | ||||||
| Intangible assets, net | 163 | 168 | ||||||
| Other assets | 395 | 347 | ||||||
| Total Assets | $ | 79,358 | $ | 71,097 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Due to Silicon Valley Bank | $ | 371 | $ | 299 | ||||
| Accounts payable | 12,924 | 10,378 | ||||||
| Deferred revenue | 2,770 | 1,867 | ||||||
| Accrued and other current liabilities | 7,552 | 6,545 | ||||||
| Current liabilities of discontinued operations | 473 | 100 | ||||||
| Total current liabilities | 24,090 | 19,189 | ||||||
| Long-term debt | 3,600 | 3,600 | ||||||
| Deferred rent | 1,862 | 1,978 | ||||||
| Other long-term liabilities | 61 | 63 | ||||||
| Total liabilities | 29,613 | 24,830 | ||||||
| Commitments and Contingencies | — | — | ||||||
| Stockholders’ Equity: | ||||||||
| Preferred Stock, 5,000,000 shares authorized | — | — | ||||||
| Common Stock, $0.001 par value, 60,000,000 shares authorized, 26,538,245 and 26,679,189 shares issued | ||||||||
| and outstanding, respectively | 27 | 27 | ||||||
| Additional paid-in-capital | 173,867 | 174,876 | ||||||
| Treasury stock, 3,988,819 and 4,666,958 shares, respectively | (15,852 | ) | (17,015 | ) | ||||
| Accumulated other comprehensive gain | 3,576 | 1,772 | ||||||
| Accumulated deficit | (111,873 | ) | (113,393 | ) | ||||
| Total Stockholders’ Equity | 49,745 | 46,267 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 79,358 | $ | 71,097 | ||||