EasyLink Services International (ESIC) Inactive
Filed: 16 Jun 08, 12:00am
Exhibit 99.1
EasyLink Services International Corporation Announces Financial Results for Third Quarter Fiscal 2008
NORCROSS, GA – June 16, 2008– EasyLink Services International Corporation (“EasyLink” or “Company”) (NasdaqCM: ESIC,www.easylink.com), a global provider of comprehensive messaging services and e-commerce solutions, reports its financial results for the third quarter fiscal 2008 ended April 30, 2008.
“This was another strong quarter for us, and we remain on track with our financial goals for the year,” says Thomas J. Stallings, CEO of EasyLink. “The solid revenue and gross margins reflect the ability of our dedicated team. We closed several new relationships in the quarter with name brand organizations that will use our fax or EDI services globally. We also continue seeking accretive acquisitions to enhance our product offerings and increase shareholder value.”
Highlights for the third quarter and nine-months ended April 30, 2008 are as follows:
| • | Total revenue for the third quarter was $23.6 million with a gross profit margin of 71.6%. Total revenue for the nine-month period was $68.2 million with a gross profit margin of 71.1%. |
| o | Revenue for the third quarter from On Demand Messaging, which includes faxing, production messaging, document capturing, and management and e-mail services, was $11.3 million, representing 48% of total consolidated revenue and a 68.1% gross profit margin. |
| o | Revenue for the nine-month period from the On Demand Messaging segment was $32.0 million, representing 47% of total consolidated revenue and a 67.5% gross profit margin. |
| o | Revenue for the third quarter from Supply Chain Messaging, which includes electronic data interchange (EDI) products and services and telex, was $12.3 million, representing 52% of total consolidated revenue and a 74.8% gross profit margin. |
| o | Revenue for the nine-month period from the Supply Chain Messaging segment was approximately $36.2 million, representing 53% of total consolidated revenue and a 74.2% gross profit margin. |
| • | Net income for the third quarter was $6.9 million or $0.28 per basic share and $0.17 per diluted share. The Company recorded a tax benefit in the third quarter of approximately $4.4 million from the release of its deferred tax asset reserve to offset fiscal 2008 taxable income. Net income for the nine-month period was $8.2 million or $0.33 per basic share and $0.29 per diluted share. |
| • | Adjusted EBIDTA for the third quarter was $7.2 million and $19.7 million for the nine-month period. EasyLink intends to focus on Adjusted EBITDA (EBITDA that includes non-cash compensation expense) as a measure of the Company’s performance, which it believes serves as a better measure of the Company’s performance than net income, because it excludes ongoing non-cash charges. |
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EasyLink provides adjusted EBITDA in this press release as additional information regarding its operating results. This measure is not in accordance with, or an alternative for, generally accepted accounting principles (GAAP), and may be different from non-GAAP EBITDA measures used by other companies. EasyLink believes that this presentation of adjusted EBITDA facilitates investors’ understanding of its historical operating trends because it provides an important supplemental measurement in evaluating the operating results of our business. This release should be read in conjunction with the Company’s Form 8-K earnings release filed with the Securities and Exchange Commission for the quarter ended April 30, 2008.
Investor Conference Call – Wednesday, June 17, 2008
The Company plans to hold a conference call on Wednesday, June 18, 2008 at 10:00 a.m. EDT to discuss its third quarter fiscal year 2008 results in detail.
The Company invites all those interested in hearing management’s discussion to join the call by dialing 877-548-7911 (U.S. and Canada) or 719-325-4898 (International).
A live replay of the call will also be available on the Company’s website, www.easylink.com, for forty-five days.
About EasyLink Services International Corporation
EasyLink Services International Corporation (EasyLink) (NasdaqCM: ESIC), headquartered in Norcross, GA, is uniquely positioned to deliver a variety of messaging services that range from simple web-based fax delivery for small businesses to sophisticated fax hosting, tailored corporate e-mail messaging, EDI business-to-business exchanges and specialized telex protocol transmissions for marine and finance industries. With over two decades of servicing customers around the globe, EasyLink has established a proven track record for providing effective, reliable and secure communications. For more information on EasyLink, visit www.easylink.com.
Forward-Looking and Cautionary Statements
Except for the historical information and discussion contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those indicated by such forward-looking statements. These and other risk factors are set forth under the caption “Risk Factors” in the Company’s Annual Report on Form 10-K, the Company’s quarterly reports on Form 10-Q and the Company’s other filings with the U.S. Securities and Exchange Commission. These filings are available on a website maintained by the Securities and Exchange Commission at www.sec.gov. The Company expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein as a result of new information, future events or otherwise.
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| Three Months Ended | Nine Months Ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Service revenue | $ | 23,599,696 | $ | 5,390,270 | $ | 68,236,367 | $ | 16,500,465 | ||||||||
| Cost of services | 6,701,442 | 1,190,759 | 19,745,758 | 3,760,384 | ||||||||||||
| Gross Profit | 16,898,254 | 4,199,511 | 48,490,609 | 12,740,081 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Product development and enhancement | 2,111,513 | 595,836 | 5,983,735 | 1,898,177 | ||||||||||||
| Selling and marketing | 2,897,718 | 379,589 | 8,207,447 | 1,268,905 | ||||||||||||
| General and administrative | 7,367,411 | 2,589,139 | 21,918,906 | 7,677,614 | ||||||||||||
| Operating income | 4,521,612 | 634,947 | 12,380,521 | 1,895,385 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest and investment income | 163,160 | 69,856 | 595,836 | 233,542 | ||||||||||||
| Interest expense | (2,306,541 | ) | (18,791 | ) | (10,464,847 | ) | (59,065 | ) | ||||||||
| Equity in Losses in Investment | — | — | (930,269 | ) | — | |||||||||||
| Foreign exchange gain | 128,292 | — | �� | 914,214 | — | |||||||||||
| Other income (expense) | 11,209 | 288 | 89,359 | (21,288 | ) | |||||||||||
| Income before income taxes | 2,517,732 | 686,300 | 2,584,814 | 2,048,574 | ||||||||||||
| (Benefit) provision for income taxes | (4,418,376 | ) | 135,097 | (5,612,515 | ) | 219,367 | ||||||||||
| Net income | 6,936,108 | 551,203 | 8,197,329 | 1,829,207 | ||||||||||||
| Dividends on preferred stock | (49,180 | ) | (48,767 | ) | (149,956 | ) | (233,425 | ) | ||||||||
| Extinguishment of dividends on retired preferred stock | — | — | — | 200,000 | ||||||||||||
| Income attributable to common stockholders | $ | 6,886,928 | $ | 502,436 | $ | 8,047,373 | $ | 1,795,782 | ||||||||
| Basic income per common share | $ | 0.28 | $ | 0.02 | $ | 0.33 | $ | 0.08 | ||||||||
| Diluted income per common share | $ | 0.17 | $ | 0.02 | $ | 0.29 | $ | 0.07 | ||||||||
| Anti-dilutive stock options, warrants and series C preferred stock | 5,793,178 | 2,371,473 | 5,625,675 | 1,482,592 | ||||||||||||
| Weighted average number of common shares outstanding — basic | 24,604,376 | 22,823,776 | 24,318,536 | 22,759,581 | ||||||||||||
| Weighted average number of common shares outstanding — diluted | 48,852,869 | 24,234,565 | 48,844,713 | 24,674,040 | ||||||||||||
| April 30, | July 31, | |||||||
| 2008 | 2007 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 27,179 | $ | 5,444 | ||||
| Accounts receivable, net of allowance for doubtful accounts and allowance for sales returns and allowances | 14,071 | 3,479 | ||||||
| Prepaid expenses and other current assets | 4,528 | 603 | ||||||
| Total current assets | 45,778 | 9,526 | ||||||
| Property and equipment, net | 8,313 | 944 | ||||||
| Goodwill | 44,052 | 6,293 | ||||||
| Other intangible assets, net | 29,120 | 3,737 | ||||||
| Investments | 431 | 13,223 | ||||||
| Restricted cash | 417 | 434 | ||||||
| Deferred acquisition costs | — | 1,039 | ||||||
| Other assets | 225 | 222 | ||||||
| Total assets | $ | 128,336 | $ | 35,418 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 3,681 | $ | 615 | ||||
| Current portion of long term debt | 3,907 | 10,000 | ||||||
| Accrued expenses | 8,378 | 1,153 | ||||||
| Deferred revenue | 681 | 227 | ||||||
| Other current liabilities | 880 | 574 | ||||||
| Total current liabilities | 17,527 | 12,569 | ||||||
| Long term debt | 49,540 | — | ||||||
| Deferred tax liability | 10,307 | — | ||||||
| Other liabilities | 1,182 | 709 | ||||||
| Total liabilities | 78,556 | 13,278 | ||||||
| Stockholders’ Equity: | ||||||||
| Preferred stock | (a | ) | (a | ) | ||||
| Common Stock | 251 | 233 | ||||||
| Additional paid-in capital | 122,326 | 101,861 | ||||||
| Accumulated other comprehensive loss | (955 | ) | — | |||||
| Accumulated deficit | (71,842 | ) | (79,954 | ) | ||||
| Total stockholders’ equity | 49,780 | 22,140 | ||||||
| Total liabilities and stockholders’ equity | $ | 128,336 | $ | 35,418 | ||||
| (a) | less than 1,000 |
| Three Months Ended April 30, | Nine Months Ended April 30, | |||||||||||||||
| 2008 | 2007 | 2008 | 2007 | |||||||||||||
| Net Income | $ | 6,936 | $ | 551 | $ | 8,197 | $ | 1,829 | ||||||||
| Interest | 2,307 | 19 | 10,465 | 59 | ||||||||||||
| Taxes | (4,418 | ) | 135 | (5,613 | ) | 219 | ||||||||||
| Depreciation and amortization | 2,177 | 524 | 6,303 | 1,517 | ||||||||||||
| Non-cash compensation | 115 | 201 | 346 | 695 | ||||||||||||
| Adjusted EBITDA | $ | 7,117 | $ | 1,430 | $ | 19,698 | $ | 4,319 | ||||||||