2008-08-14 08:20:00
NEW YORK, Aug. 14 /EMWNews/ -- Fusion (Amex: FSN) today announced financial results for the quarter ended June 30, 2008.
Recent Highlights: -- Consolidated Revenues were $11.4 million, compared to $13.7 million for second quarter 2007; -- Adjusted EBITDA improved 2.2% over second quarter 2007; -- Raised $1.3 million in debt and equity financing; -- Successful Jinti launch coincides with August 2008 Olympic Games: Chinese website to market Fusion's Efonica VoIP services to over 20 million unique visitors per month; -- Opened office in the Philippines and began in-country sales. Fusion reported Consolidated Revenues of $11.4 million for the quarter ended June 30, 2008. This represented a decrease of 17% compared to revenues of $13.7 million for the quarter ended June 30, 2007. The decrease over the prior year was primarily attributable to the inherent quarter-to-quarter volatility of the Company's Carrier Services segment, which also decreased 17% in the second quarter of 2008 compared to the second quarter of 2007. Consolidated Gross Margin decreased slightly to 6.6% in the second quarter of 2008 compared to 7.2% in the second quarter of 2007. Selling, General and Administrative costs decreased 6.7% compared to the second quarter of 2007. The improvement was primarily attributable to the Company's continuing focus on cost-containment and maximizing infrastructure efficiencies. For the second quarter ended June 30, 2008, Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and specific non-recurring and non-cash adjustments) improved $45 thousand, or 2.2%, to ($2.03) million, compared to Adjusted EBITDA of ($2.07) million for the second quarter of 2007. Fusion also reported an increase in Net Loss in the second quarter of the current year compared to the second quarter of the prior year. For the second quarter of 2008, Fusion reported a Net Loss of ($2.89) million or ($0.08) per share compared to a net loss of ($1.78) million or ($.07) per share during the quarter ended June 30, 2007. However, the second quarter of 2007 included a non-recurring gain on the sale of the Company's equity interest in its subsidiary in India of $0.94 million, and the second quarter of 2008 included a non-recurring loss on disposal of fixed assets of $59 thousand. Excluding these non-recurring items in each year, the Company's net loss for the second quarter of 2008 would have been ($2.8) million, compared to ($2.7) million in the second quarter of 2007, or an increase of only $0.1 million. As of June 30, 2008, the Company had current assets of $4.7 million compared to $6.3 million as of December 31, 2007. The decrease was primarily a result of cash used in operations and a decrease in Accounts Receivable due to early receipt in the first quarter of 2008 of certain receivables. Total Liabilities and Stockholders' equity at June 30, 2008 was $15.8 million compared to $18.1 million as of December 31, 2007. In the second quarter of 2008, the Company raised an additional $1.3 million in debt and equity financing. Commenting on the results, Matthew Rosen, Chief Executive Officer of Fusion, said, "While revenues were essentially flat when compared to the first quarter of 2008, reflecting the historical volatility of the Carrier Services segment, we continued to grow revenues in our new corporate segment, expanded distribution in both the corporate and consumer segments, and positioned ourselves for what we anticipate will be improved results in the current quarter. Expanding on Mr. Rosen's comments, Don Hutchins, President and Chief Operating Officer of Fusion, said "We are particularly pleased to announce the opening of our sales office in the Philippines and the launch of our Efonica services in that market. We are also pleased to announce the launch of our marketing effort with Jinti, in which the well-known Chinese social networking site will market our Efonica consumer VoIP services to the 20 million unique visitors it attracts to its site every month. We believe that these and other similar marketing efforts will play a key role in Fusion's future success." Use of Non-GAAP Financial Measures: The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the communications industry to analyze companies on the basis of operating performance and leverage. The Company also believes that EBITDA provides investors with a measure of the Company's operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant nonrecurring transactions, such as impairment losses associated with divested businesses and forgiveness of debt, which vary significantly between periods and are not recurring in nature. Although the Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. EBITDA and Adjusted EBITDA are not intended to represent cash flows for the period presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Generally Accepted Accounting Principles (GAAP). Consistent with the SEC Regulation G, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measure, which can be viewed under the heading "Reconciliation of Net Income (Loss) to Adjusted EBITDA", immediately following the Consolidated Statements of Operations included in this press release. Earnings Conference call The Company will host a conference call to discuss its financial results at 1:00 p.m. EDT today. The conference call can be accessed by dialing 877-340-7912. A replay of the call will be available through Sunday, August 17, 2008. To listen to the replay, please call 888-203-1112 (Domestic) or 719-457-0820 (International). To access the replay, users will need to enter the following passcode: 9939374. The call will be available live on the Internet at http://www.fusiontel.com. The online archive of the web cast will be available for one year following the call.
About Fusion:
Fusion delivers a full range of advanced IP-based services to
corporations, consumers and carriers worldwide. Fusion's Efonica-branded
VoIP products and services focus primarily on serving consumers in Asia,
the Middle East, Africa, Latin America and the Caribbean. For more
information please go to http://www.fusiontel.com
Statements in this Press Release that are not purely historical facts,
including statements regarding Fusion's beliefs, expectations, intentions
or strategies for the future, may be "forward-looking statements" under the
Private Securities Litigation Reform Act of 1995. All forward-looking
statements involve a number of risks and uncertainties that could cause
actual results to differ materially from the plans, intentions and
expectations reflected in or suggested by the forward-looking statements.
Such risks and uncertainties include, among others, introduction of
products in a timely fashion, market acceptance of new products, cost
increases, fluctuations in and obsolescence of inventory, price and product
competition, availability of labor and materials, development of new
third-party products and techniques that render Fusion's products obsolete,
delays in obtaining regulatory approvals, potential product recalls and
litigation. Risk factors, cautionary statements and other conditions which
could cause Fusion's actual results to differ from management's current
expectations are contained in Fusion's filings with the Securities and
Exchange Commission and available through http://www.sec.gov.
FUSION Philip Turits
CONTACT: 212-201-2407
[email protected]
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
Three Months Ended
June 30,
2008 2007
(Un-Audited) (Un-Audited)
Revenues $11,400,840 $13,744,209
Operating expenses:
Cost of revenues 10,653,614 12,751,750
Depreciation and amortization 462,521 418,635
Selling, general and
administrative expenses 3,048,729 3,269,297
Advertising and Marketing 18,632 23,571
Total operating expenses 14,183,496 16,463,253
Operating loss (2,782,656) (2,719,044)
Other income (expense)
Interest income (expense), net (52,412) 2,526
Gain (loss) on disposal of fixed assets (59,158) 9,759
Gain (loss) on sales of investment in Estel - 937,578
Loss from investment in Estel - (15,000)
Other 264 3,742
Total other income (expense) (111,306) 938,605
Loss from continuing operations (2,893,962) (1,780,439)
Net loss $(2,893,962) $(1,780,439)
Losses applicable to common stockholders
Loss from continuing operations $(2,893,962) $(1,780,439)
Preferred stock dividends -
Net loss applicable to common
stockholders from continuing operations (2,893,962) (1,780,439)
Income from discontinued operations - -
Net loss applicable to common stockholders $(2,893,962) $(1,780,439)
Basic and diluted net loss per common share:
Loss from continuing operations $(0.08) $(0.07)
Income (loss) from discontinued operations - -
Net loss applicable to common stockholders $(0.08) $(0.07)
Weighted average shares outstanding
Basic and diluted 36,141,898 26,958,965
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
June 30, December 31,
2008 2007
(Un-Audited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $273,236 $114,817
Accounts receivable, net of allowance 3,805,781 5,545,408
Prepaid expenses and other current assets 451,359 481,556
Assets held for sale 129,231 129,231
Total current assets 4,659,607 6,271,012
Property and equipment, net 4,676,388 5,425,846
Other assets
Security deposits 68,157 66,638
Restricted cash 416,566 416,566
Goodwill 964,557 964,557
Intangible assets, net 4,876,283 4,892,215
Other assets 92,956 91,455
Total other assets 6,418,519 6,431,431
TOTAL ASSETS $15,754,514 $18,128,289
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Long-term debt, current portion $1,469,666 $566,567
Capital and equipment financing lease
obligations, current portion 178,095 233,759
Accounts payable and accrued expenses 9,489,638 9,663,325
Liabilities of discontinued operations 13,313 15,829
Total current liabilities 11,150,712 10,479,480
Long-term liabilities
Long-term debt, net of current portion 145,244 283,433
Capital lease/equipment obligations,
net of current portion - 10,922
Other long-term liabilities 575,081 659,271
Total long-term liabilities 720,325 953,626
Stockholders' equity (deficit)
Preferred stock, Class A-1, A-2, A-3 & A-4 80 80
Common stock 369,584 299,078
Common stock, Class A - -
Capital in excess of par value 122,777,429 120,402,691
Accumulated deficit (119,263,616) (114,006,666)
Total stockholders' equity (deficit) 3,883,477 6,695,183
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $15,754,514 $18,128,289
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
Three Months Ended
June 30,
2008 2007
(Un-Audited) (Un-Audited)
Net loss $(2,893,962) $(1,780,439)
Loss from continuing operations (2,893,962) (1,780,439)
Adjustments:
Interest (income) expense, net 52,412 (2,526)
Depreciation and amortization 462,521 418,635
EBITDA (2,379,029) (1,364,330)
Adjustments:
(Gain) loss on debt forgiveness - -
(Gain) loss on disposal of fixed assets 59,158 (9,759)
(Gain) loss on sales of investment in Estel - (937,578)
One time charges (7,626) -
Other taxes 107,489 93,875
Non cash compensation 191,730 144,416
Adjusted EBITDA $(2,028,278) $(2,073,376)
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