NORCROSS, Ga., Dec. 13, 2010 (GLOBE NEWSWIRE) -- EasyLink Services International Corporation ("EasyLink" or "Company") (Nasdaq: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 million 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) (Nasdaq: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.
The EasyLink Services International Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7889
| EASYLINK SERVICES INTERNATIONAL CORPORATION | ||
| Consolidated Statements of Income | ||
| (in thousands, except per share data) | ||
| Three Months Ended | ||
| October 31, | ||
| 2010 | 2009 | |
| (unaudited) | (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 | ||