NEW YORK, May 15 /PRNewswire-FirstCall/ -- Fusion (AMEX:FSN) today announced financial results for the quarter ended March 31, 2007.
Recent Highlights: - Increased Consolidated Revenues 39% over first quarter, 2006;
- Improved Adjusted EBITDA 12.5% over first quarter, 2006;
- Received strategic investment from DigitalFX, a leading web-based video
and content services provider, signaling the introduction of converged
multimedia solutions for consumer and corporate customers;
- Completed second round of $7.25 million private placement financing,
raising $3.375 million;
- Launched comprehensive suite of advanced IP-based Business Services; and
- Decreased Selling, General and Administrative expenses for third
consecutive quarter.
Fusion reported Consolidated Revenues of $13.2 million for the quarter ended March 31, 2007. This represented an increase of 39% compared to revenues of $9.5 million for the quarter ended March 31, 2006. The increase over the prior year was attributable to growth in the Company's Voice to Carrier segment, which improved 53% in the first quarter of 2007 compared to the first quarter of 2006.
Consolidated gross margin increased 22%, or $0.2 million in absolute dollars for the first quarter of 2007, compared to the first quarter of 2006.
Selling, general and administrative costs decreased for the third consecutive quarter. The decrease was primarily attributable to the Company's increasing focus on cost containment and maximizing infrastructure efficiencies.
For the first quarter ended March 31, 2007, Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, and specific nonrecurring and non-cash adjustments) improved $0.3 million, or 12.5%, to ($2.3) million, compared to Adjusted EBITDA of ($2.6) million for the first quarter of 2006.
Fusion also reported an improvement in net loss of 4% compared to the first quarter of the prior year. For the first quarter of 2007, Fusion reported a net loss of ($2.8) million or ($0.10) per share compared to a net loss of ($3.0) million or ($0.11) per share during the quarter ended March 31, 2006.
As of March 31, 2007, the Company had cash and cash equivalents of $1.7 million compared to $2.7 million as of December 31, 2006. The decrease in cash was primarily a result of cash used in operations. Total Liabilities and Stockholders' Equity at March 31, 2007 was $23.6 million compared to $27.6 million as of December 31, 2006.
Subsequent to March 31, 2007, the Company completed the second round of its private placement offering, raising an additional $3.375 million in financing. The Company also announced a strategic investment of $0.7 million from DigitalFX, signaling the first step in a joint relationship that will merge content, video and Fusion's IP-based voice services into a single, multimedia solution for Fusion and Digital FX consumer and business customers worldwide.
"Fusion has achieved a number of significant milestones in the last 90 days, and we look forward to building upon them to accomplish our goals in 2007," Matthew Rosen, President and Chief Executive Officer, said. "We have focused our energies on a number of 2007 initiatives designed to continue to drive improved financial results and are excited by the many opportunities we have developed to market and sell our IP-based services to consumers and corporations around the world." 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 800-811-8845. A replay of the call will be available through May 22, 2007. 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: 7295847. 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.
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 TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET March 31, 2007 December 31, 2006
(Un-Audited) (Audited)
ASSETS
Current assets
Cash and cash equivalents $1,674,880 $2,743,155
Accounts receivable, net of
allowance 4,053,774 6,743,753
Restricted cash 40,000 365,000
Prepaid expenses and other current
assets 764,923 622,207
Assets held for sale 129,231 129,231
Total current assets 6,662,808 10,603,346 Property and equipment, net 6,415,852 6,422,016 Other assets
Security deposits 141,868 141,868
Restricted cash 416,566 416,566
Goodwill 4,971,221 4,971,221
Intangible assets, net 4,903,336 4,913,360
Other assets 101,991 104,923
Total other assets 10,534,982 10,547,938
TOTAL ASSETS $23,613,642 $27,573,300 LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current Liabilities
Long-term debt, current portion $150,000 $150,000
Capital and equipment financing
lease obligations, current portion 1,117,986 1,066,746
Accounts payable and accrued
expenses 10,240,330 11,461,112
Investment in Estel 487,652 554,286
Liabilities of discontinued
operations 95,085 95,085
Total current liabilities 12,091,053 13,327,229 Long-term liabilities
Other long-term liabilities 767,451 800,113
Total long-term liabilities 767,451 800,113 Minority interests - - Stockholders' equity (deficit)
Preferred stock, Class A-1 39 39
Common stock 269,590 269,590
Common stock, Class A - -
Capital in excess of par value 114,652,926 114,514,725
Accumulated deficit (104,167,417) (101,338,396)
Total stockholders' equity
(deficit) 10,755,138 13,445,958 TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (DEFICIT) $23,613,642 $27,573,300
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended
March 31,
2007 2006
(Un-Audited) (Audited) Revenues $13,205,954 $9,522,158
Operating expenses:
Cost of revenues 12,085,771 8,605,303
Depreciation and amortization 392,182 230,540
Selling, general and administrative
expenses 3,427,369 3,653,963
Advertising and Marketing 82,215 22,992
Total operating expenses 15,987,537 12,512,798
Operating loss (2,781,583) (2,990,640) Other income (expense)
Interest income (expense), net (2,438) 103,461
Loss from investment in Estel (45,000) (37,558)
Other - (10,447)
Minority interests - 6,292
Total other income (expense) (47,438) 61,748
Loss from continuing operations (2,829,021) (2,928,892) Income (loss) from discontinued
operations (25,168) Net loss $(2,829,021) $(2,954,060) Losses applicable to common
stockholders
Loss from continuing operations $(2,829,021) $(2,928,892)
Preferred stock dividends - -
Net loss applicable to common
stockholders
from continuing operations (2,829,021) (2,928,892)
Income from discontinued operations - (25,168)
Net loss applicable to common
stockholders $(2,829,021) $(2,954,060) Basic and diluted net loss per common
share:
Loss from continuing operations $(0.10) $(0.11)
Income (loss) from discontinued
operations - -
Net loss applicable to common
stockholders $(0.10) $(0.11) Weighted average shares outstanding
Basic and diluted 26,971,465 26,195,614 FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA Three Months Ended
March 31,
2007 2006
(Un-Audited) (Audited) Net loss $(2,829,021) $(2,954,060) Income from discontinued operations - 25,168
Loss from continuing operations (2,829,021) (2,928,892)
Adjustments:
Interest (income) expense, net 2,438 (103,461)
Depreciation and amortization 392,182 230,540
EBITDA (2,434,401) (2,801,813)
Adjustments:
(Gain) loss on settlements of debt - -
Loss on impairment - -
Non Cash Compensation 171,326 216,732
Adjusted EBITDA $(2,263,075) $(2,585,081)
FUSION Jonscott Turco
CONTACT: 212-201-2401
http://www.newscom.com/cgi-bin/prnh/20050705/NYTU073LOGO http://photoarchive.ap.org/ DATASOURCE: Fusion CONTACT: Jonscott Turco of Fusion, +1-212-201-2401, or Web site: http://www.fusiontel.com/
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