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NORCROSS, Ga., Jun 15, 2009 (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, today reports its financial results for the third quarter of fiscal 2009, ended April 30, 2009.
"Despite challenging market conditions and continued negative currency effects we reported $21 million in revenue and $1.2 million in net income in the quarter," said Thomas J. Stallings, CEO of EasyLink. "We have executed a number of strategic initiatives that will position the Company well for the future, including the subsequent restructuring of our debt. Further, we continue to closely manage our expenses by streamlining functions and consolidating locations to optimize costs. Our operational and debt restructuring efforts will contribute approximately $3 million in additional cash flow per quarter, beginning in fiscal 2010."
Highlights for the third quarter of fiscal 2009 and nine-months ended April 30, 2009 are as follows:
The year-over-year quarterly decrease in revenue of approximately $2.6 million resulted from decreased volumes, principally from our Supply Chain Messaging segment, and the devaluation of the British pound to the United States dollar.
The decrease in year-over-year nine-month revenue of approximately $3.5 million resulted from the same events as described in the quarterly results above.
-- Revenue for the third quarter of fiscal 2009 from On Demand Messaging, which includes fax, production messaging, document capture and management and e-mail services, was approximately $10.7 million, with a 68.8% gross margin and represented 50.8% of total consolidated revenue.
Revenue for the nine-month period ended April 30, 2009 from the On Demand Messaging segment was approximately $32.3 million, with a 68.8% gross margin and represented 49.9% of total consolidated revenue.
-- Revenue for the third quarter of fiscal 2009 from Supply Chain Messaging, which includes electronic data interchange ("EDI") products and services and telex, was approximately $10.3 million, with a 69.4% gross margin and represented 49.2% of total consolidated revenue.
Revenue for the nine-month period ended April 30, 2009 from the Supply Chain Messaging segment was approximately $32.4 million, with a 72.4% gross margin and represented 50.1% of total consolidated revenue.
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 April 30, 2009.
Investor Conference Call - Monday, June 15, 2009
The Company plans to hold a conference call on Monday, June 15, 2009, at 4:15 p.m. ET to discuss its third quarter of fiscal year 2009 results in detail.
The Company invites all those interested in hearing management's discussion to join the call by dialing 888-708-5690 (U.S.) or 913-312-0696 (International). An audio replay of the call will be available on EasyLink's website, www.easylink.com, for 45 days.
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, is uniquely positioned to deliver a variety of messaging services that range from simple web-based fax delivery to sophisticated fax hosting, tailored corporate e-mail messaging, EDI business-to-business exchanges and specialized telex protocol transmissions for the 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.
| EASYLINK SERVICES INTERNATIONAL CORPORATION | ||||||||||||||||
| Consolidated Statements of Income | ||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||
| April 30, | April 30, | |||||||||||||||
| 2009
(unaudited) |
2008 (unaudited) | 2009
(unaudited) |
2008
(unaudited) |
|||||||||||||
| Service revenue | $ | 21,039 | $ | 23,600 | $ | 64,710 | $ | 68,236 | ||||||||
| Cost of services | 6,501 | 6,701 | 19,023 | 19,746 | ||||||||||||
| Gross Profit | 14,538 | 16,899 | 45,687 | 48,490 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Product development and enhancement | 1,774 | 2,112 | 5,902 | 5,984 | ||||||||||||
| Selling and marketing | 3,124 | 2,898 | 9,780 | 8,207 | ||||||||||||
| General and administrative | 6,759 | 7,367 | 22,649 | 21,919 | ||||||||||||
| Intangible impairment | - | - | 4,246 | - | ||||||||||||
| Operating income | 2,881 | 4,522 | 3,110 | 12,380 | ||||||||||||
| Other income (expense): | ||||||||||||||||
| Interest and investment income | 11 | 163 | 152 | 596 | ||||||||||||
| Interest expense |
|
(1,585 | ) | (2,306 | ) | (10,603 | ) | (10,465 | ) | |||||||
| Equity in Losses in Investment | - | - | - | (930 | ) | |||||||||||
| Foreign exchange gain | 168 | 128 | 304 | 914 | ||||||||||||
| Other income (expense) | 1 | 11 | 100 | 89 | ||||||||||||
| Income (Loss) before income taxes | 1,476 | 2,518 | (6,937 | ) | 2,584 | |||||||||||
| (Benefit) provision for income taxes | 240 | (4,418 | ) | 995 | (5,613 | ) | ||||||||||
| Net income (loss) | 1,236 | 6,936 | (7,932 | ) | 8,197 | |||||||||||
| Dividends on preferred stock | (49 | ) | (49 | ) | (149 | ) | (150 | ) | ||||||||
| Income (loss) attributable to common stockholders | $ | 1,187 | $ | 6,887 | $ | (8,081 | ) | $ | 8,047 | |||||||
| Basic income (loss) per common share | $ | 0.05 | $ | 0.28 | $ | (0.33 | ) | $ | 0.33 | |||||||
| Diluted income (loss) per common share | $ | 0.05 | $ | 0.17 | $ | (0.33 | ) | $ | 0.29 | |||||||
| Weighted average number of common shares outstanding - basic | 24,243 | 24,604 | 24,460 | 24,319 | ||||||||||||
| Weighted average number of common shares outstanding -diluted | 24,670 | 48,853 | 24,460 | 48,845 | ||||||||||||
| EASYLINK SERVICES INTERNATIONAL CORPORATION | ||||||||
| Consolidated Balance Sheets | ||||||||
| (in thousands) | ||||||||
| April 30, | July 31, | |||||||
|
2009 (unaudited) |
2008 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 9,725 | $ | 32,091 | ||||
| Accounts receivable, net | 12,342 | 13,576 | ||||||
| Other current assets | 3,206 | 5,414 | ||||||
|
Total current assets |
25,273 | 51,081 | ||||||
| Property and equipment, net | 8,789 | 8,552 | ||||||
| Goodwill and other intangible assets, net | 60,018 | 67,953 | ||||||
| Other long term assets | 4,570 | 3,939 | ||||||
| Total assets | $ | 98,650 | $ | 131,525 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 9,779 | $ | 13,504 | ||||
| Current portion of long term debt | 9,583 | 7,052 | ||||||
| Other current liabilities | 1,414 | 1,862 | ||||||
| Total current liabilities | 20,776 | 22,418 | ||||||
| Long term debt | 27,312 | 47,497 | ||||||
| Other liabilities | 679 | 1,006 | ||||||
| Total liabilities | 48,767 | 70,921 | ||||||
| Stockholders' Equity: | ||||||||
| Preferred stock | (a) | (a) | ||||||
| Common Stock | 253 | 251 | ||||||
| Additional paid-in capital | 126,049 | 125,458 | ||||||
| Treasury Stock | (2,122 | ) | (303 | ) | ||||
| Accumulated other comprehensive loss | (2,624 | ) | (1,063 | ) | ||||
| Accumulated deficit | (71,673 | ) | (63,739 | ) | ||||
| Total stockholders' equity | 49,883 | 60,604 | ||||||
| Total liabilities and stockholders' equity | $ | 98,650 | $ | 131,525 | ||||
| (a) less than 1,000 | ||||||||
| EASYLINK SERVICES INTERNATIONAL CORPORATION | |||||||||||||||
| Calculation of Adjusted Earnings before Interest, Taxes, Depreciation and Amortization | |||||||||||||||
| (unaudited, includes non-cash compensation and intangible asset impairment) | |||||||||||||||
| (in thousands) | |||||||||||||||
| Three Months Ended April 30, | Nine Months Ended April 30, | ||||||||||||||
| 2009 | 2008 | 2009 | 2008 | ||||||||||||
| Net Income (Loss) | $ | 1,236 | $ | 6,936 | $ | (7,932 | ) | $ | 8,197 | ||||||
| Interest | 1,585 | 2,307 | 10,603 | 10,465 | |||||||||||
| Taxes | 240 | (4,418 | ) | 995 | (5,613 | ) | |||||||||
| Depreciation and amortization | 2,064 | 2,177 | 6,469 | 6,303 | |||||||||||
| Non-cash compensation | 166 | 115 | 739 | 346 | |||||||||||
| Intangible asset impairment | - | - | 4,246 | - | |||||||||||
| Adjusted EBITDA | $ | 5,291 | $ | 7,117 | $ | 15,120 | $ | 19,698 | |||||||
SOURCE: EasyLink Services International Corporation
EasyLink Services International Corporation
Glen Shipley, 678-533-8004
Copyright Business Wire 2009
