EXHIBIT 99.1
iBasis Reports Record Revenue, Margin and Traffic Volume for
Third Quarter 2004
BURLINGTON, Mass.--(BUSINESS WIRE)--Oct. 20, 2004--
Company Achieves Fifth Consecutive Quarter of Growth;
Continues Growth in Wholesale and Retail Businesses;
Increases Cash Through Equity Placement
iBasis, Inc. (OTCBB: IBAS), a leader in international long
distance, VoIP, and prepaid calling cards, today announced results for
the third quarter ended September 30, 2004.
Revenue for the third quarter of 2004 was $70.4 million, compared
to $44.0 million for the third quarter of 2003. Net loss for the third
quarter of 2004 was $1.0 million, or $(0.02) per share, compared to
net loss for the third quarter of 2003 of $5.6 million, or $(0.13) per
share.
Highlights of the third quarter include:
-- Raised $31.5 million through private placement of equity;
-- Achieved second consecutive quarter of positive cash flow from
operations;
-- Achieved fifth consecutive quarter of revenue growth;
-- Increased revenue 60% over Q3 2003 and 15% over Q2 2004; and
-- Increased Retail revenue 54% over Q2 2004.
"We achieved very strong growth in both our wholesale and retail
business segments," said Ofer Gneezy, president and CEO of iBasis.
"The shakeout in international wholesale telecommunications is
continuing, with large carriers deemphasizing or exiting the wholesale
business. Our proven ability to deliver high quality service to both
incumbent and emerging providers, while maintaining very solid gross
margins, puts us in a strong position to increase our market share in
this environment.
"We also strengthened our balance sheet dramatically this quarter
with the addition of $31.5 million through a successful private
placement of equity. As a result of this cash infusion, in combination
with the debt refinancing completed in Q2, which enabled all of our
long-term debt to become convertible into equity, we believe we are on
a clear path to become completely debt-free."
($ in millions) Wholesale Retail(b) Total
- ------------------ ----------- ----------- -------
Revenue $58.6 $11.8 $70.4
Gross Margin(a) $8.5 $1.8 $10.3
Gross Margin % 14.6% 15.1% 14.7%
(a) Net Revenue less Data Communications and Telecommunications costs
(b) Previously referred to as Prepaid and other Enhanced Services
(PES)
Key Indicators
Minutes of use on The iBasis Network(TM) in the third quarter 2004
rose to 1.3 billion, a 49% increase over the 866 million minutes
carried in the third quarter 2003, and a 16% increase over the 1.1
billion minutes in the second quarter 2004. Average revenue per minute
remained stable at 5.5 cents per minute in the third quarter 2004, the
same as in the second quarter 2004. Average revenue per minute is
based on our reported net revenue divided by minutes of traffic.
Operational Milestones
In the third quarter 2004, Tier One carrier customers generated
approximately 43% of iBasis Wholesale VoIP revenue, compared to 44% in
Q2 2004. As VoIP has become the preferred wholesale transport
technology, and as local and emerging alternative carriers have grown
their share of retail traffic, the portion of our traffic that comes
from Tier One carriers has become less meaningful as a measurement of
our performance. In the future, we will not report this data.
Overseas-originated calls accounted for 43% of revenue in the third
quarter of 2004, compared to 42% of revenue in the second quarter
2004.
iBasis ended the third quarter with 287 customers, up from 277 at
the end of the second quarter. New customers announced during the
quarter included Cyprus Telecom, the national carrier of Cyprus,
Hanaro, Korea's second-largest fixed-line and Internet broadband
operator, and Skype, the global peer-to-peer Internet telephony
company.
Also during the quarter iBasis launched Pingo, a prepaid long
distance service that leverages the Company's existing network and
back office infrastructure and is sold directly to consumers through
an eCommerce interface at www.pingo.com.
Equity Placement
On September 24, 2004 iBasis completed a private placement of
$31.5 million, providing the Company with more working capital. In the
offering, iBasis sold 15.0 million shares of its common stock to new
and existing accredited individual and institutional investors at
$2.10 per share.
Guidance
The following statements are forward-looking and actual results
may differ materially due to factors noted below, among others. The
information provided in this financial outlook is as of October 20,
2004, and supersedes all previous guidance.
The Company believes it will achieve positive cash flow for the
year, and will achieve net income in Q4 2004.
About iBasis
Founded in 1996, iBasis (OTCBB: IBAS) is a leading wholesale
carrier of international long distance telephone calls and a provider
of retail prepaid calling services, including the Pingo(TM) web-based
offering and disposable calling cards, which are sold through major
distributors and available at retail stores throughout the U.S. iBasis
customers include many of the largest telecommunications carriers in
the world, including AT&T, Cable & Wireless, China Mobile, China
Unicom, MCI, Sprint, Telefonica, Telenor, and Telstra. iBasis has
carried more than nine billion minutes of international voice over IP
(VoIP) traffic over its global Cisco Powered(TM) network, and is one
of the ten largest carriers of international voice traffic in the
world(1). For three consecutive years service providers have named the
Company as the best international wholesale carrier in ATLANTIC-ACM's
annual International Wholesale Carrier Report Card(2). iBasis was also
ranked the #1 fastest-growing technology company in New England in the
2002 and 2003 Technology Fast 50 programs sponsored by Deloitte &
Touche. The Company can be reached at its worldwide headquarters in
Burlington, Massachusetts, USA at 781-505-7500 or on the Internet at
www.ibasis.com.
Assured Quality Routing, ConnectPoint, and iBasis are registered
marks, Pingo, DirectVoIP, The iBasis Network, Internet Central Office,
Internet Branch Office, and IP CallCard are trademarks of iBasis, Inc.
Cisco and Cisco Powered are registered trademarks of Cisco Systems,
Inc. All other trademarks are the property of their respective owners.
Except for historical information, all of the expectations,
projections and assumptions contained in the foregoing press release,
including those relating to the company's current expectations
regarding revenue growth, sources of revenue, margin improvement,
profitability, future capital expenditures, and cash flows constitute
forward-looking statements under the Private Securities Litigation
Reform Act of 1995 and involve risks and uncertainties. Important
factors that could cause actual results to differ materially from such
forward-looking statements include, but are not limited to, (i) the
extent of adoption of the company's services and the timing and amount
of revenue and margin generated by these services; (ii) fluctuations
in the market for and pricing of these services; and (iii) the other
considerations described as "Risk Factors" in the Company's most
recent Forms 10-K and 10-Q, and the company's other SEC filings. We
have no current intention to update any forward-looking statements.
Use of Non-GAAP Financial Data
The Company provides certain financial data in addition to
providing financial results in accordance with GAAP. This data is not
in accordance with, or an alternative to GAAP, and may be different
from Non-GAAP financial data used by other companies. This Non-GAAP
financial data includes average revenue per minute, which the Company
believes provides useful information, to both its management and
investors about the Company's current performance.
(1)Telegeography 2004 data compared with iBasis annualized Q3 2004
traffic volume.
(2)ATLANTIC-ACM International Wholesale Carrier Report Card -
2002, 2003, & 2004.
iBasis, Inc.
Consolidated Balance Sheets
(In thousands)
September 30, December 31,
2004 2003
----------------- ---------------
(Unaudited)
Assets
Cash and cash equivalents $ 46,587 $17,270
Accounts receivable, net 29,315 21,767
Prepaid expenses and other current
assets 3,665 5,295
Property and equipment, net 11,546 17,175
Deferred debt financing costs, net 128 326
Long term investment in non-
marketable security --- 5,000
Other assets 390 705
----------------- ---------------
Total assets $ 91,631 $67,538
================= ===============
Liabilities and Stockholders' Deficit
Accounts payable $ 23,220 $19,902
Accrued expenses 17,553 18,652
Deferred revenue 5,099 417
Current portion of long term debt 1,942 2,097
Long term debt, net of current
portion 67,383 65,829
Other long term liabilities 1,079 2,749
----------------- ---------------
Total liabilities 116,276 109,646
Stockholders' deficit:
Common stock 63 46
Treasury stock, at cost ( 341) ( 341)
Additional paid-in capital 404,129 370,393
Accumulated deficit (428,496) ( 412,206)
----------------- ---------------
Total stockholders' deficit ( 24,645) ( 42,108)
----------------- ---------------
Total liabilities and
stockholders' deficit $ 91,631 $67,538
================= ===============
iBasis, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Sept. 30,
------------------------------
2004 2003
--------------- ------------
(Unaudited)
Net revenue $ 70,359 $ 44,032
Costs and operating expenses:
Data communications and
telecommunications (excluding
depreciation and amortization) 60,037 38,502
Research and development 3,585 2,893
Selling and marketing 2,308 1,877
General and administrative 3,480 1,228
Depreciation and amortization 2,141 4,267
Non-cash stock-based compensation --- 29
--------------- ------------
Total costs and operating
expenses 71,551 48,796
--------------- ------------
Loss from operations ( 1,192) ( 4,764)
Interest expense, net ( 1,428) ( 771)
Other expenses, net ( 71) ( 98)
Debt refinancing transaction
costs ( 205) ---
--------------- ------------
Loss from continuing operations ( 2,896) ( 5,633)
Income from discontinued operations 1,861 ---
--------------- ------------
Net loss $ ( 1,035) $( 5,633)
==============================
Basic and diluted net loss (income)
per share:
Loss from continuing operations $ ( 0.06) $ ( 0.13)
Income from discontinued operations 0.04 ---
--------------- ------------
Net loss per share $ ( 0.02) $ ( 0.13)
=============== ============
Weighted average common shares outstanding:
Basic 47,884 44,714
=============== ============
Diluted 47,884 44,714
=============== ============
iBasis, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
Nine Months Ended Sept. 30,
------------------------------
2004 2003
-------------- --------------
(Unaudited)
Net revenue $ 188,542 $ 124,992
Costs and operating expenses:
Data communications and
telecommunications (excluding
depreciation and amortization) 160,693 106,799
Research and development 10,665 10,017
Selling and marketing 6,440 5,774
General and administrative 9,699 6,557
Depreciation and amortization 8,452 16,129
Non-cash stock-based compensation --- 86
-------------- --------------
Total costs and operating
expenses 195,949 145,362
-------------- --------------
Loss from operations ( 7,407) ( 20,370)
Interest expense, net ( 2,948) ( 3,058)
Gain on bond repurchases and
exchanges --- 16,615
Other expenses, net ( 156) ( 292)
Loss on long-term non-marketable
security ( 5,000) ---
Debt refinancing charges:
Transaction costs ( 2,159) ---
Additional interest expense, net ( 481) ---
-------------- --------------
Loss from continuing operations ( 18,151) ( 7,105)
Income from discontinued operations 1,861 ---
-------------- --------------
Net loss $ (16,290) $ ( 7,105)
==============================
Basic and diluted net loss (income)
per share:
Loss from continuing operations $ ( 0.39) $ ( 0.16)
Income from discontinued operations 0.04 ---
-------------- ---------------
$ ( 0.35) $ ( 0.16)
============== ===============
Weighted average common shares outstanding:
Basic 46,411 44,672
============== ==============
Diluted 46,411 44,672
============== ==============
CONTACT: iBasis, Inc.
Media:
Chris Ward, 781-505-7557
cward@ibasis.net
or
Investors:
Richard Tennant, 781-505-7409
ir@ibasis.net