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| 8-K - EASYLINK SERVICES INTERNATIONAL CORP | v205456_8k.htm |
EXHIBIT
99.1
EasyLink
Services International Corporation
Announces
Fiscal First Quarter 2011 Financial Results
NORCROSS,
GA, December 13, 2010 - (BUSINESS WIRE) - EasyLink Services International
Corporation (“EasyLink” or “Company”) (NasdaqCM: ESIC, www.easylink.com), a
global provider of comprehensive messaging services and e-commerce solutions,
reported fiscal first quarter 2011 revenue of approximately $22.7 million,
operating income of approximately $2.1 million, net income of approximately
$967,000 and earnings per share of $.03 per share.
“We are
very excited about our first quarter results and what the future holds for the
new EasyLink,” said Tom Stallings, CEO of EasyLink. “Even with the
inclusion of $2 million in deal expenses from the Xpedite acquisition our team
generated $4.85 in Adjusted EBITDA for the quarter.”
Financial
Review
Revenue
for the first quarter of fiscal 2011 was approximately $22.7 million compared to
$20.5 million in the first quarter of fiscal 2010, which includes ten days of
operations for the newly acquired Xpedite entities. Gross margin was
71.0% in the first quarter of 2011 which is compared to 70.3% in the first
quarter of fiscal 2010. Gross margins are expected to remain in the
70% to 72% range for the rest of the fiscal year.
On Demand
Messaging revenue for the first quarter of fiscal 2011, which includes fax,
production messaging, document capture and management and e-mail services, was
approximately $13.0 million compared to approximately $9.9 million in the first
quarter of fiscal 2010. On Demand Messaging represented 57% of total
revenue.
Supply
Chain Messaging revenue for the first quarter of fiscal 2011, which includes
electronic data interchange (“EDI”) products and services and telex, was
approximately $9.8 million compared to approximately $10.6 million in the
first quarter of fiscal 2010. Supply Chain Messaging decreased on a
year-over-year basis primarily as the result of declining telex
revenue. This trend is expected to continue for the rest of fiscal
2011. Supply Chain Messaging in the first quarter represented 43% of
total revenue.
Net
income attributable to common shareholders for the first quarter of fiscal
2011 was approximately $917,000, or $0.03 per basic and diluted
share. Adjusted EBITDA, which includes non-cash compensation expense,
was approximately $4.8 million for the first quarter of fiscal 2011 compared to
$4.7 million in the first quarter of fiscal 2010.
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 press release should be read in conjunction with the
Company’s Form 8-K earnings release filed with the Securities and Exchange
Commission for the fiscal quarter ended October 31, 2011.
Investor Conference
Call
The
Company plans to hold a conference call on Tuesday, December 14 2010, at
5:00 p.m. EST to discuss the first quarter fiscal year 2011 results in
detail.
The
Company invites all those interested in hearing management’s discussion to join
the call by dialing (877) 397-0250 (U.S. and Canada) or (719)
457-2620 (International), participant code 8217423. If you are
unable to participate and would like to hear a replay of the call, an audio
reply will be available on EasyLink’s investor relations website
at http://ir.easylink.com/events.cfm.
Forward-Looking and
Cautionary Statements
Except
for the historical information and discussion contained herein, statements
contained in this press 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 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.
About EasyLink Services
International Corporation
EasyLink
Services International Corporation (EasyLink) (NasdaqCM: ESIC), headquartered in
Norcross, GA, offers a comprehensive portfolio of “any to any” business
messaging and transaction services that can bridge the most challenging
technology gaps while creating significant cost efficiencies across an
organization. From Desktop Fax and Production Messaging to EDI, Managed File
Transfer, Document Capture and Management, Secure Messaging and Telex we help
companies drive costs out of their operations. 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.
Contact:
EasyLink
Services International Corporation
Glen
Shipley
678-533-8004
gshipley@easylink.com
EASYLINK
SERVICES INTERNATIONAL CORPORATION
Consolidated
Statements of Income
(in
thousands, except per share data)
|
Three Months Ended
|
||||||||
|
October 31,
|
||||||||
|
2010
(unaudited)
|
2009
(unaudited)
|
|||||||
|
Service
revenue
|
$ | 22,736 | $ | 20,498 | ||||
|
Cost
of services
|
6,591 | 6,087 | ||||||
|
Gross
Profit
|
16,145 | 14,411 | ||||||
|
Operating
expenses:
|
||||||||
|
Product
development and enhancement
|
1,938 | 1,859 | ||||||
|
Selling
and marketing
|
2,958 | 3,269 | ||||||
|
General
and administrative
|
9,187 | 7,223 | ||||||
|
Operating
income
|
2,062 | 2,060 | ||||||
|
Other
income (expense):
|
||||||||
|
Interest
expense (net)
|
(809 | ) | (486 | ) | ||||
|
Other
income (expense)
|
307 | 334 | ||||||
|
Income
before income taxes
|
1,560 | 1,908 | ||||||
|
Provision
for income taxes
|
593 | 544 | ||||||
|
Net
income
|
967 | 1,364 | ||||||
|
Dividends
on preferred stock
|
(50 | ) | (216 | ) | ||||
|
Net
income attributable to common stockholders
|
$ | 917 | $ | 1,148 | ||||
|
Basic
income per common share
|
$ | 0.03 | $ | 0.04 | ||||
|
Diluted
income per common share
|
$ | 0.03 | $ | 0.04 | ||||
|
Weighted
average number of common shares outstanding – basic
|
29,261 | 26,269 | ||||||
|
Weighted
average number of common shares outstanding –diluted
|
30,218 | 29,416 | ||||||
EASYLINK
SERVICES INTERNATIONAL CORPORATION
Consolidated
Balance Sheets
(in
thousands)
|
October
31,
|
July
31,
|
|||||||
|
2010 (unaudited)
|
2010
|
|||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 18,085 | $ | 20,475 | ||||
|
Accounts
receivable, net
|
30,869 | 11,480 | ||||||
|
Other
current assets
|
10,230 | 8,463 | ||||||
|
Total
current assets
|
59,184 | 40,418 | ||||||
|
Property
and equipment, net
|
20,895 | 5,521 | ||||||
|
Goodwill
and other intangible assets, net
|
129,903 | 50,329 | ||||||
|
Other
long term assets
|
8,239 | 8,218 | ||||||
|
Total
assets
|
$ | 218,221 | $ | 104,486 | ||||
|
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 27,676 | $ | 11,051 | ||||
|
Current
portion of long term debt
|
27,902 | 15,258 | ||||||
|
Other
current liabilities
|
1,623 | 1,497 | ||||||
|
Total
current liabilities
|
57,201 | 27,806 | ||||||
|
Long
term debt
|
92,114 | 9,684 | ||||||
|
Other
liabilities
|
791 | 285 | ||||||
|
Total
liabilities
|
150,106 | 37,775 | ||||||
|
Stockholders'
Equity:
|
||||||||
|
Preferred
stock
|
|
(a)
|
|
(a)
|
||||
|
Common
Stock
|
303 | 302 | ||||||
|
Additional
paid-in capital
|
133,014 | 132,799 | ||||||
|
Treasury
Stock
|
(2,122 | ) | (2,122 | ) | ||||
|
Accumulated
other comprehensive loss
|
(5,576 | ) | (5,797 | ) | ||||
|
Accumulated
deficit
|
(57,504 | ) | (58,471 | ) | ||||
|
Total
stockholders' equity
|
68,115 | 66,711 | ||||||
|
Total
liabilities and stockholders' equity
|
$ | 218,221 | $ | 104,486 | ||||
(a) less
than 1,000
EASYLINK
SERVICES INTERNATIONAL CORPORATION
Calculation
of Adjusted Earnings before Interest, Taxes, Depreciation and Amortization
(unaudited, includes non-cash compensation)
(in
thousands)
|
Three Months Ended October
31,
|
||||||||
|
2010
|
2009
|
|||||||
|
Net
income
|
$ | 967 | $ | 1,364 | ||||
|
Interest
|
813 | 494 | ||||||
|
Taxes
|
593 | 544 | ||||||
|
Depreciation
and amortization
|
2,209 | 2,057 | ||||||
|
Non-cash
compensation
|
266 | 236 | ||||||
|
Adjusted
EBITDA
|
$ | 4,848 | $ | 4,695 | ||||