Exhibit 99.1
iBasis Returns to Profitability with Record
Revenue, Gross Profit, and Traffic Volume in Fourth Quarter 2005;
Company Achieves Fourth Consecutive Quarter of Positive Cash Flow
BURLINGTON, Mass.--(BUSINESS WIRE)--Feb. 2, 2006--iBasis, Inc.
(OTCBB: IBAS), a leader in international long distance, VoIP, and
prepaid calling cards, today announced results for the fourth quarter
and full year ended December 31, 2005.
Revenue for the fourth quarter of 2005 was $107.6 million,
compared to $75.1 million for the fourth quarter of 2004. For the full
year 2005, revenue was $385.5 million, an increase of 46% over 2004
revenue of $263.7 million.
Net income for the fourth quarter of 2005 was $0.6 million, or
$0.01 per share, compared to net loss for the fourth quarter of 2004
of $1.2 million, or $(0.02) per share. Net loss for the full year 2005
was $1.7 million, or $(0.02) per share, compared to a net loss for
full year 2004 of $17.5 million, or $(0.35) per share. Net loss for
the full year 2005 included $2.0 million in debt conversion premiums
and transaction costs incurred in Q2 and Q3. Net loss for the full
year 2004 included debt refinancing costs of $2.6 million, a loss on a
non-marketable security of $5.0 million, and income from discontinued
operations of $1.9 million.
The Company purchased 983,000 shares of its common stock for $1.9
million in the fourth quarter of 2005, and an additional 175,000
shares for $0.3 million in January 2006, under its $5 million stock
buy-back program.
Highlights of the fourth quarter and full year 2005 include:
-- Returned to profitability in Q4;
-- Achieved fourth consecutive quarter of positive cash flow,
increasing cash $5.6 million during 2005;
-- Carried 2.3 billion minutes of traffic in Q4 2005, a 15%
increase over Q3 2005;
-- Increased Retail revenue by 17% over Q3, while expanding
Retail margin from 15.4% to 16.0%, resulting in a 21% increase
in Retail gross profit; and
-- Met all elements of the guidance: Increased revenue for the
full year 2005 by 46% over full year 2004, achieved net
income, excluding debt conversion costs, and had positive cash
flow for the year.
"We are delighted to have returned to profitability and to have
met all elements of our guidance," said Ofer Gneezy, president and CEO
of iBasis. "We had a strong fourth quarter, with record revenue, gross
profit, and traffic. Both our Trading business and our Retail business
performed well. We continued to generate cash - our fourth consecutive
quarter of positive cash flow.
"In our Trading business, we resumed growth in both revenue and
gross profit, overcoming the pressure we experienced in the previous
two quarters. We again achieved over 50% sequential revenue growth
from consumer VoIP providers, which now account for 9% of our Trading
revenue. We ended the fourth quarter with more than 30 consumer VoIP
provider customers, representing more than nine million users
worldwide.
"In our Retail business, we achieved significant sequential growth
in revenue, gross profit, and gross margin, as cards introduced in the
second half of 2005 performed well.
"Looking back over the full year, we made tremendous progress,
having eliminated our long-term bond debt and establishing iBasis as a
leading provider for the highest growth segments of international
voice services - consumer VoIP and prepaid calling services. Our
Retail revenue nearly doubled, and our Retail gross profit more than
doubled, adding $6.4 million in gross profit as the Retail gross
margin expanded. Our Trading revenue increased 39%, adding $4.4
million in gross profit, albeit with reduced gross margin. The growth
in both businesses contributed significantly to our improved
profitability. We expect that over time, when our Retail business is a
larger share of our total business and consumer VoIP is a larger share
of our Trading business, the overall Company gross margin will
improve."
Fourth Quarter Results for Trading and Retail Businesses:
($ in millions) Trading Retail Total
- ----------------------------- -------------- ------------ ------------
Revenue $87.1 $20.5 $107.6
- ----------------------------- -------------- ------------ ------------
Gross Profit(a) $9.5 $3.3 $12.8
- ----------------------------- -------------- ------------ ------------
Gross Margin 10.9% 16.0% 11.9%
(a) Net revenue less data communications and telecommunications costs
Key Indicators
Minutes of use on The iBasis Network(TM) in the fourth quarter
2005 rose to 2.3 billion, a 51% increase over the 1.5 billion minutes
carried in the fourth quarter 2004, and a 15% increase over the 2.0
billion minutes in the third quarter 2005. Average revenue per minute
(ARPM) was 4.8 cents in the fourth quarter 2005, approximately the
same as in the third quarter 2005.
Operational Milestones
iBasis ended the fourth quarter with 391 Trading customers. New
customers announced during the year included Callmate Telips
(Pakistan), Econet (Africa), and Globacom (Nigeria), Pakistan
Telecommunications Company Limited, SOFTBANK/Yahoo BB (Japan),
Telecorp (Australia), Telefonica Deutschland GmbH (Germany), Telemar
(Brazil), and Voiceserve (U.K.).
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 February 2,
2006, and supersedes all previous guidance.
The Company believes that in 2006 it will:
-- achieve revenue in the range of $480 to $500 million; and
-- achieve EPS of $0.05 to $0.08.
Planned expenditures for 2006 include $10 to $12 million in
capital asset investments.
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(R) web-based
offering (www.pingo.com) 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, including AT&T, Cable & Wireless, China
Mobile, China Unicom, MCI, Sprint, Skype, and Telefonica. iBasis
carried 7.8 billion minutes of international voice over IP (VoIP)
traffic in 2005, and is one of the ten largest carriers of
international voice traffic in the world(1). For four consecutive
years service providers named iBasis the best international wholesale
carrier in ATLANTIC-ACM's annual International Wholesale Carrier
Report Card(2). iBasis was also ranked among the fastest-growing
technology companies in New England in the 2002, 2003, and 2004
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.
iBasis and Pingo are registered marks, and The iBasis Network is a
trademark of iBasis, 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,
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 its 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 2005 data compared with iBasis 2004 traffic
volume.
(2)ATLANTIC-ACM International Wholesale Carrier Report Card -
2002, 2003, 2004, & 2005.
iBasis, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
December December
31, 31,
2005 2004
--------- ---------
(Unaudited)
Assets
Cash, cash equivalents and short-term investments $ 44,414 $ 38,825
Accounts receivable, net 47,641 34,133
Prepaid expenses and other current assets 2,676 2,420
Property and equipment, net 11,754 11,861
Deferred debt financing costs, net --- 177
Other assets 323 360
--------- ---------
Total assets $106,808 $ 87,776
========= =========
Liabilities and Stockholders' Equity (Deficit)
Accounts payable $ 27,796 $ 24,340
Accrued expenses 24,479 12,186
Deferred revenue 9,517 6,303
Current portion of long term debt 1,598 1,775
Long term debt, net of current portion 2,216 65,933
Other long term liabilities 916 1,132
--------- ---------
Total liabilities 66,522 111,669
Stockholders' equity (deficit) 40,286 (23,893)
--------- ---------
Total liabilities and stockholders' equity
(deficit) $106,808 $ 87,776
========= =========
iBasis, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended
December 31,
------------------
2005 2004
--------- --------
(Unaudited)
Net revenue $107,588 $75,136
Cost and operating expenses:
Data communications and telecommunications
(excluding depreciation and amortization) 94,834 64,476
Research and development 3,101 3,138
Selling and marketing 3,026 2,765
General and administrative 4,260 2,986
Depreciation and amortization 1,584 1,893
--------- --------
Total costs and operating expenses 106,805 75,258
--------- --------
Income (loss) from operations 783 (122)
Interest income (expense), net 240 (1,083)
Other expenses, net (217) (78)
Foreign exchange (loss) gain (185) 37
--------- --------
Net income (loss) $ 621 $(1,246)
========= ========
Net income (loss) per share:
Basic $ 0.01 $ (0.02)
Diluted $ 0.01 $ (0.02)
Weighted average common shares outstanding:
Basic 101,045 62,823
Diluted 105,101 62,823
iBasis, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Year Ended
December 31,
-------------------
2005 2004
--------- ---------
(Unaudited)
Net revenue $385,485 $263,678
Cost and operating expenses:
Data communications and telecommunications
(excluding depreciation and amortization) 336,152 225,169
Research and development 12,435 13,803
Selling and marketing 11,618 9,205
General and administrative 15,421 12,987
Depreciation and amortization 6,712 10,345
--------- ---------
Total costs and operating expenses 382,338 271,509
--------- ---------
Income (loss) from operations 3,147 (7,831)
Interest expense, net (1,492) (4,031)
Other expenses, net (417) (234)
Foreign exchange (loss) gain (939) 339
Loss on non-marketable long-term security --- (5,000)
Debt conversion premium and transaction costs (1,975) ---
Debt refinancing-related charges --- (2,640)
--------- ---------
Loss from continuing operations (1,676) (19,397)
Income from discontinued operations --- 1,861
--------- ---------
Net loss $( 1,676) $(17,536)
========= =========
Basic and diluted net (loss) income per share:
Continuing operations $ (0.02) $ (0.38)
Discontinued operations --- 0.03
--------- ---------
Total net loss per share $ (0.02) $ (0.35)
========= =========
Weighted average common shares outstanding:
Basic 80,236 50,514
Diluted 80,236 50,514
CONTACT: iBasis, Inc.
Media:
Chris Ward, 781-505-7557
cward@ibasis.net
or
Investors:
Richard Tennant, 781-505-7409
ir@ibasis.net