NORCROSS, Ga., May 30, 2012 (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 third quarter 2012 revenue of $45.4 million, net income of $4.3 million and adjusted EBITDA of $10.5 million.
Financial Review
Revenue for the third quarter of fiscal 2012 was approximately $45.4 million compared to $47.8 million in the third quarter of fiscal 2011, down $2.4 million or 5%. Net income for the third quarter of fiscal 2012 was approximately $4.3 million, or $0.14 per basic share and $0.13 per diluted share, which is flat compared to the same results for third quarter of fiscal 2011.
Adjusted EBITDA, which includes non-cash compensation expense and acquisition and integration related charges, was approximately $10.5 million for the third quarter of fiscal 2012 compared to approximately $12.1 million in the third quarter of fiscal 2011. The acquisition and integration related charges in the third quarter of fiscal 2012 were related to the Company's previously announced planned merger with Open Text Corporation.
Nine month comparisons to prior year are less meaningful as the result of the timing of the purchase of the Xpedite entities at the end of the first quarter of fiscal 2011.
Non-GAAP Presentation
This press release contains non-GAAP financial measures that are not in accordance with, or an alternative for, measures prepared in accordance with generally accepted accounting principles and may be different from non-GAAP measures used by other companies. 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 third fiscal quarter ended April 30, 2012.
In addition, these non-GAAP measures: (i) are not based on any comprehensive set of accounting rules or principles; and (ii) have limitations in that they do not reflect all of the amounts associated with EasyLink's results of operations as determined in accordance with GAAP. As such, these measures should only be used to evaluate EasyLink's results of operations in conjunction with the corresponding GAAP measures.
EasyLink believes that the presentation of non-GAAP financial measures, when shown in conjunction with the corresponding GAAP measures, provides useful supplemental information to investors and management regarding financial and business trends relating to its financial condition and results of operations because they exclude certain non-cash charges or items that it does not believe are reflective of its ongoing operating results when assessing the performance of its business.
EasyLink believes that these non-GAAP financial measures also facilitate the comparison by management and investors of results between periods and among its peer companies. However, our peer companies may calculate similar non-GAAP financial measures differently than EasyLink, limiting their usefulness as comparative measures.
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" cloud-based 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, Notifications and Secure Messaging 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
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EASYLINK SERVICES INTERNATIONAL CORPORATION Consolidated Statements of Income for the three and nine months ended April 30, 2012 and 2011 (Unaudited) (in thousands, except per share data) |
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| Three Months | Nine Months | |||
| 2012 | 2011 | 2012 | 2011 | |
| Service revenues, net | $45,405 | $47,782 | $136,924 | $117,942 |
| Cost of services | 15,317 | 16,388 | 45,591 | 40,473 |
| Gross profit | 30,088 | 31,394 | 91,333 | 77,469 |
| Operating expenses: | ||||
| Product development and enhancement | 3,261 | 3,338 | 9,298 | 8,833 |
| Selling and marketing | 6,726 | 6,750 | 19,639 | 16,483 |
| General and administrative | 12,583 | 12,841 | 39,461 | 32,829 |
| Acquisition and integration related | 1,033 | — | 1,480 | 2,415 |
| Total Operating expenses | 23,603 | 22,929 | 69,878 | 60,560 |
| Operating income | 6,485 | 8,465 | 21,455 | 16,909 |
| Other income (expense): | ||||
| Interest (expense) | (1,262) | (1,651) | (4,250) | (4,063) |
| Other non-operating income (expense) | (643) | 163 | (1,060) | 498 |
| Total Other income (expense) | (1,905) | (1,488) | (5,310) | (3,565) |
| Income before income taxes | 4,580 | 6,977 | 16,145 | 13,344 |
| Provision for income taxes | 251 | 2,637 | 5,645 | 5,098 |
| Net Income | 4,329 | 4,340 | 10,500 | 8,246 |
| Dividends on preferred stock | — | — | — | (2,012) |
| Net income attributable to common stockholders | $4,329 | $4,340 | $10,500 | $6,234 |
| Basic net income per common share | $0.14 | $0.14 | $0.33 | $0.21 |
| Diluted net income per common share | $0.13 | $0.13 | $0.32 | $0.20 |
| Weighted average number of common shares outstanding – basic | 32,040 | 30,184 | 31,882 | 29,625 |
| Weighted average number of common shares outstanding – diluted | 33,360 | 32,296 | 33,190 | 31,353 |
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EASYLINK SERVICES INTERNATIONAL CORPORATION Consolidated Balance Sheets (Unaudited) (in thousands) |
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April 30, 2012 |
July 31, 2011 |
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| ASSETS | ||
| Current assets: | ||
| Cash and cash equivalents | $22,535 | $30,178 |
| Accounts receivable, net | 28,087 | 29,752 |
| Other current assets | 5,437 | 7,665 |
| Total current assets | 56,059 | 67,595 |
| Property and equipment, net | 9,432 | 10,127 |
| Goodwill and other intangible assets, net | 134,867 | 142,109 |
| Other long term assets | 23,094 | 23,228 |
| Total assets | $223,452 | $243,059 |
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||
| Current liabilities: | ||
| Accounts payable and accrued expenses | $21,559 | $24,577 |
| Notes payable | 15,978 | 28,088 |
| Other current liabilities | 1,889 | 3,360 |
| Total current liabilities | 39,426 | 56,026 |
| Notes payable, net of current portion | 63,654 | 80,174 |
| Deferred income taxes, net | 7,279 | 6,940 |
| Other liabilities | 741 | 814 |
| Total liabilities | 111,100 | 143,954 |
| Stockholders' Equity: | ||
| Preferred stock | — | — |
| Common Stock | 331 | 324 |
| Additional paid-in capital | 140,876 | 137,467 |
| Treasury Stock | (2,122) | (2,122) |
| Accumulated other comprehensive loss | (3,458) | (2,789) |
| Accumulated deficit | (23,275) | (33,775) |
| Total stockholders' equity | 112,352 | 99,105 |
| Total liabilities and stockholders' equity | $223,452 | $243,059 |
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EASYLINK SERVICES INTERNATIONAL CORPORATION Reconciliation of GAAP Net Income to Adjusted EBITDA for the three and nine months ended April 30, 2012 and 2011 (Unaudited) (in thousands) |
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| Three Months | Nine Months | |||
| 2012 | 2011 | 2012 | 2011 | |
| Net Income | $4,329 | $4,340 | $10,500 | $8,246 |
| Adjustments: | ||||
| Interest expense | 1,262 | 1,651 | 4,250 | 4,063 |
| Provision for income taxes | 251 | 2,637 | 5,645 | 5,098 |
| Depreciation and amortization | 3,182 | 3,032 | 9,634 | 9,955 |
| Stock compensation | 445 | 487 | 2,093 | 927 |
| Acquisition and integration related | 1,033 | — | 1,480 | 2,415 |
| Adjusted EBITDA | $10,502 | $12,147 | $33,602 | $30,704 |