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NORCROSS, Ga., Oct 14, 2008 (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, reports its financial results for the fourth quarter and fiscal year ended July 31, 2008.
"We are thrilled to report that this year produced record revenues and earnings for the company," says Thomas J. Stallings, CEO of EasyLink. "The acquisition of EasyLink Services Corporation exceeded our internal expectations as the combined team took advantage of available synergies more effectively than previously projected. The Company is now much more diverse in its product offerings, geographic coverage and customer base and is well positioned for the future."
Highlights for the fourth quarter and year ended July 31, 2008 are as follows:
-- Total revenue for the fourth quarter was approximately $23.9 million with a gross profit margin of 71.5%. Total revenue for the year was approximately $92.1 million with a gross profit margin of 71.2%.
-- Revenue for the fourth quarter from On Demand Messaging, which includes faxing, production messaging, document capturing, and management and e-mail services, was approximately $11.6 million, representing 49% of total consolidated revenue and a 68.7% gross profit margin.
Revenue for the year from the On Demand Messaging segment was approximately $43.6 million, representing 47% of total consolidated revenue and a 67.8% gross profit margin.
-- Revenue for the fourth quarter from Supply Chain Messaging, which includes electronic data interchange (EDI) products and services and telex, was approximately $12.3 million, representing 51% of total consolidated revenue and a 74.2% gross profit margin.
Revenue for the year from the Supply Chain Messaging segment was approximately $48.5 million, representing 53% of total consolidated revenue and a 74.2% gross profit margin.
-- Net income for the fourth quarter was approximately $8.1 million. The Company recorded a tax benefit in the fourth quarter of approximately $6.8 million from the release of a portion of its deferred tax asset reserve to offset estimated future taxable income. Net income for the year end was approximately $16.3 million.
-- Adjusted EBIDTA was approximately $6.1 million for the fourth quarter and approximately $25.8 million for the year. EasyLink focuses on Adjusted EBITDA (EBITDA that includes non-cash compensation expense) as a measure of the Company's performance, which it believes serves as a better measure of the Company's performance than net income, because it excludes ongoing non-cash charges.
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 release should be read in conjunction with the Company's Form 8-K earnings release filed with the Securities and Exchange Commission for the quarter ended July 31, 2008.
Investor Conference Call -- Tuesday, October 21, 2008
The Company plans to hold a conference call on Tuesday, October 21, 2008 at 10:00 a.m. EDT to discuss its fourth quarter and fiscal year 2008 results in detail.
Dial-in number: (Toll Free US and Canada): 877-591-4954; (International): 719-325-4930
A replay of the call will also be available on the Company's website, www.easylink.com, for forty-five days.
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 for small businesses to sophisticated fax hosting, tailored corporate e-mail messaging, EDI business-to-business exchanges and specialized telex protocol transmissions for 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.
Forward-Looking and Cautionary Statements
Except for the historical information and discussion contained herein, statements contained in this 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 U.S. 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.
EASYLINK SERVICES INTERNATIONAL CORPORATION
Consolidated Statements of Income
(in thousands, except per share data)
Three Months Ended Twelve Months Ended
July 31, July 31,
2008 2007 2008 2007
(unaudited) (unaudited) (unaudited) (audited)
Service revenue $ 23,925 $ 5,370 $ 92,161 $ 21,870
Cost of services 6,819 1,032 26,565 4,793
Gross Profit 17,106 4,338 65,596 17,077
Operating expenses:
Product development and enhancement 2,250 523 8,233 2,421
Selling and marketing 3,425 203 11,632 1,471
General and administrative 7,927 2,727 29,847 10,405
Operating income 3,504 885 15,884 2,780
Other income (expense):
Interest income (expense) ,net (2,220) 4 (12,089) 178
Equity in Losses in Investment - - (930) -
Other income (expense) (7) - 996 (21)
Income before income taxes 1,277 889 3,861 2,937
(Benefit) provision for income taxes (6,827) (18) (12,439) 201
Net income 8,104 907 16,300 2,736
Dividends on preferred stock (50) (50) (200) (284)
Extinguishment of dividends on retired preferred stock -- -- -- 200
Income attributable to common stockholders $ 8,054 $ 857 $ 16,100 $ 2,652
EASYLINK SERVICES INTERNATIONAL CORPORATION
Consolidated Balance Sheets
(in thousands)
July 31, July 31,
2008 2007
(unaudited) (audited)
ASSETS
Current assets:
Cash and cash equivalents $ 32,091 $ 5,444
Accounts receivable, net 13,576 3,479
Other current assets 5,317 603
Total current assets 50,984 9,526
Property and equipment, net 8,552 944
Goodwill and other intangible assets, net 67,953 10,030
Other long term assets 4,036 14,918
Total assets $ 131,525 $ 35,418
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 13,504 $ 1,768
Current portion of long term debt 7,052 10,000
Other current liabilities 1,862 801
Total current liabilities 22,418 12,569
Long term debt 47,497 -
Other liabilities 1,006 709
Total liabilities 70,921 13,278
Stockholders' Equity:
Preferred stock (a) (a)
Common Stock 251 233
Additional paid-in capital 125,457 101,861
Treasury Stock (303) -
Accumulated other comprehensive loss (1,063) -
Accumulated deficit (63,738) (79,954)
Total liabilities and stockholders' equity $ 131,525 $ 35,418
(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 July 31, Twelve Months Ended July 31,
2008 2007 2008 2007
Net Income $ 8,104 $ 907 $ 16,300 $ 2,736
Interest 2,379 86 12,844 145
Taxes (6,827 ) (18 ) (12,439 ) 201
Depreciation and amortization 2,152 434 8,457 1,952
Non-cash compensation 340 156 686 851
Adjusted EBITDA $ 6,148 $ 1,565 $ 25,848 $ 5,885
SOURCE: EasyLink Services International Corporation
The Investor Relations Group 212-825-3210 Investor Relations: Rachel Colgate: rcolgate@investorrelationsgroup.com Michael Crawford: mcrawford@investorrelationsgroup.com or Media Relations: Susan Morgenbesser: smorgenbesser@investorrelationsgroup.com
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