updated 6/8/2011 4:46:45 PM ET 2011-06-08T20:46:45

NORCROSS, Ga., June 8, 2011 (GLOBE NEWSWIRE) -- EasyLink Services International Corporation ("EasyLink" or "Company") (Nasdaq:ESIC) ( www.easylink.com ), a global provider of cloud-based messaging and e-commerce solutions, reported fiscal third quarter 2011 results representing its second consecutive quarter of record revenue, gross profit and cash flow from nine months of operations.

"We are pleased to report record results on a quarter-over-quarter basis as well as on a year-over-year basis for both top-line and bottom-line growth," said Tom Stallings, CEO of EasyLink. "Our team built upon the momentum we experienced in the previous quarter, growing new and existing customer revenues to record levels. While it is too early to be certain, we believe the increased customer activity is a favorable indicator of our future performance and assurance of our strategy to deliver a broader portfolio of productivity enhancing solutions over the cloud."

Financial Review

Revenue for the third quarter of fiscal 2011 was a record $47.8 million, up 132%, compared to $20.6 million in the third quarter of fiscal 2010. Gross profit for the third quarter of fiscal 2011 was a record $31.4 million, up 108%, compared to $15.1 million in the third quarter of fiscal 2010.

On Demand Messaging revenue for the third quarter of fiscal 2011, which includes fax, production messaging, document capture and management, e-mail services, and notifications services, was approximately $38.5 million compared to approximately $10.4 million in the third quarter of fiscal 2010.  On Demand Messaging represented approximately 80% of total revenue for the third quarter of fiscal 2011 compared to approximately 51% in the third quarter of fiscal 2010.

Supply Chain Messaging revenue for the third quarter of fiscal 2011, which includes electronic data interchange ("EDI") products and services and other legacy applications, was approximately $9.3 million compared to approximately $10.2 million in the third quarter of fiscal 2010.  Supply Chain Messaging revenue represented approximately 20% of total revenue in the third quarter compared to approximately 49% in the third quarter of fiscal 2010.

Net income for the third quarter of fiscal 2011 was approximately $4.3 million, or $0.14 per basic share and $0.13 per diluted share, compared to approximately $2.0 million, or $0.06 per basic and diluted share, in the third quarter of fiscal 2010.  Non-GAAP net income ex-items was $6.5 million, or $0.22 per adjusted basic share and $0.20 per diluted share, compared to approximately $2.7 million, or $0.09 per adjusted basic and dilutive share, in the third quarter of fiscal 2010. Please see the GAAP to non-GAAP reconciliation at the end of this release for details.

Adjusted EBITDA, which includes non-cash compensation expense and acquisition and integration related charges, was approximately $12.1 million for the third quarter of fiscal 2011, up 106%, compared to approximately $5.9 million in the third quarter of fiscal 2010.

Cash Flow Statement and Balance Sheet

Cash generated from operations for the nine months ending April 30, 2011 was a record $19.3 million, up 45% from the third quarter of fiscal 2010. Our cash and cash equivalents at April 30, 2011 totaled $27.9 million.

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, 2011.

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 we do not believe are reflective of our ongoing operating results when assessing the performance of our business.

EasyLink believes that these non-GAAP financial measures also facilitate the comparison by management and investors of results between periods and among our peer companies. However, our peer companies may calculate similar non-GAAP financial measures differently than EasyLink, limiting their usefulness as comparative measures.

Investor Conference Call

The Company plans to hold a conference call on Thursday, June 9th at 9:00 a.m. EDT to discuss the results for the third quarter of fiscal 2011.

The Company invites all those interested in hearing management's discussion to join the call by dialing 1-877-857-6163 and international callers should dial 1-719-325-4932, participant pass code 2321931.  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

This press release contains dollar figures and percentages that are approximations. 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

EASYLINK SERVICES INTERNATIONAL CORPORATION  
Consolidated Statements of Income      
for the three and nine months ended April 30, 2011 and 2010  
(Unaudited)      
(in thousands, except per share data)      
  Three Months Nine Months
  2011 2010 2011 2010
         
Service revenues, net  $ 47,782  $ 20,593  $ 117,942  $ 61,495
Cost of services 16,388 5,509 40,473 17,272
Gross profit 31,394 15,084 77,469 44,223
         
Operating expenses:        
Product development and enhancement 3,338 1,884 8,833 5,500
Selling and marketing 6,750 3,087 16,483 9,584
General and administrative 12,841 6,765 32,830 20,634
Acquisition and integration related 2,415
Total Operating expenses 22,929 11,736 60,561 35,718
         
Operating income 8,465 3,348 16,908 8,505
         
Other income (expense):        
Interest expense (1,651) (336) (4,063) (1,264)
Other non-operating income 163 290 498 527
Total Other income (expense) (1,488) (46) (3,565) (737)
         
Income before income taxes 6,977 3,302 13,343 7,768
Provision for income taxes 2,637 1,313 5,098 3,107
Net Income 4,340 1,989 8,246 4,661
         
Dividends on preferred stock (209) (2,012) (642)
Net income attributable to common stockholders  $ 4,340  $ 1,780  $ 6,234  $ 4,019
         
Basic income per common share  $ 0.14  $ 0.06  $ 0.21  $ 0.15
         
Diluted income per common share  $ 0.13  $ 0.06  $ 0.20  $ 0.14
         
Weighted average number of common shares outstanding – basic 30,184 29,110 29,625 27,199
         
Weighted average number of common shares outstanding –diluted 32,296 29,793 31,353 29,519
 
EASYLINK SERVICES INTERNATIONAL CORPORATION
Consolidated Balance Sheets  
(Unaudited)    
(in thousands)    
     
  April 30, July 31,
  2011 2010
ASSETS    
Current assets:    
Cash and cash equivalents  $ 27,928  $ 20,475
Accounts receivable, net 32,317 11,480
Other current assets 13,071 8,463
Total current assets 73,316 40,418
     
Property and equipment, net 8,706 5,521
Goodwill and other intangible assets, net 138,159 50,329
Other long term assets 4,921 8,218
Total assets  $ 225,102  $ 104,486
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable and accrued expenses  $ 24,862  $ 11,051
Current portion of long term debt 32,066 15,258
Other current liabilities 4,478 1,497
Total current liabilities 61,406 27,806
     
Long term debt 84,152 9,684
Other liabilities 634 285
Total liabilities 146,192 37,775
     
Stockholders' Equity:    
Preferred stock (a) (a)
Common Stock 313 302
Additional paid-in capital 134,204 132,799
Treasury Stock (2,122) (2,122)
Accumulated other comprehensive loss (3,260) (5,797)
Accumulated deficit (50,225) (58,471)
Total stockholders' equity 78,910 66,711
Total liabilities and stockholders' equity  $ 225,102  $ 104,486
     
(a) less than 1,000    
     
EASYLINK SERVICES INTERNATIONAL CORPORATION    
Reconciliation of GAAP Net income attributable to common stockholders to Non-GAAP  
Net income attributable to common stockholders      
for the three and nine months ended April 30, 2011 and 2010    
(Unaudited)        
(in thousands)         
  Three Months Nine Months
  2011 2010 2011 2010
GAAP Net Income attributable to common stockholders  $ 4,340  $ 1,780  $ 6,234  $ 4,019
Non-GAAP Adjustments:        
Amortization 2,837 1,264 6,640 2,537
Stock Compensation 487 219 926 674
Acquisition Expenses 2,415
Non-cash Interest 171 120 849 404
Non-GAAP Tax Effect (1,321) (637) (4,138)  (1,446)
Non Cash Dividends 1,929
         
Non-GAAP Net Income attributable to common stockholders  $ 6,514  $ 2,746  $ 14,855  $ 6,188
         
EASYLINK SERVICES INTERNATIONAL CORPORATION    
Reconciliation of GAAP Basic income per common share to Non-GAAP Basic income per common share
for the three and nine months ended April 30, 2011 and 2010    
(Unaudited)         
  Three Months Nine Months
  2011 2010 2011 2010
GAAP Basic income per common share  $ 0.14  $ 0.06  $ 0.21  $ 0.15
Non-GAAP Adjustments:        
Amortization 0.09 0.04 0.22 0.09
Stock Compensation 0.02 0.01 0.03 0.02
Acquisition Expenses 0.08
Non-cash Interest 0.01 0.03 0.01
Non-GAAP Tax Effect (0.04) (0.02) (0.14) (0.04)
Non Cash Dividends 0.07
         
Non-GAAP Basic income per common share  $ 0.22  $ 0.09  $ 0.50  $ 0.23
     
EASYLINK SERVICES INTERNATIONAL CORPORATION    
Reconciliation of GAAP Diluted income per common share to Non-GAAP Diluted income per common share
for the three and nine months ended April 30, 2011 and 2010    
(Unaudited)        
  Three Months Nine Months
  2011 2010 2011 2010
GAAP Diluted income per common share  $ 0.13  $ 0.06  $ 0.20  $ 0.14
Non-GAAP Adjustments:        
Amortization 0.09 0.04 0.21 0.09
Stock Compensation 0.02 0.01 0.03 0.02
Acquisition and integration related 0.08
Non-cash Interest 0.01 0.03 0.01
Non-GAAP Tax Effect (0.05) (0.02) (0.14) (0.05)
Non Cash Dividends 0.06
         
Non-GAAP Diluted income per common share  $ 0.20  $ 0.09  $ 0.47  $ 0.21
         
EASYLINK SERVICES INTERNATIONAL CORPORATION    
Reconciliation of GAAP Net Income to Adjusted EBITDA    
for the three and nine months ended April 30, 2011 and 2010    
(Unaudited)        
(in thousands)        
  Three Months Nine Months
  2011 2010 2011 2010
Net Income  $ 4,340  $ 1,989  $ 8,246  $ 4,661
Interest expense 1,651 337 4,063 1,264
Provision for income taxes 2,637 1,313 5,098 3,107
Depreciation and amortization 3,032 2,039 9,955 6,147
Stock compensation 487 219 926 674
Acquisition and integration related 2,415
Adjusted EBITDA  $ 12,147  $ 5,896  $ 30,703  $ 15,853
CONTACT: EasyLink Services International Corporation
         Glen Shipley
         678-533-8004
         gshipley@easylink.com

© Copyright 2012, GlobeNewswire, Inc. All Rights Reserved

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 5.11%
$30K home equity loan FICO 5.20%
$75K home equity loan FICO 4.65%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.36%
13.34%
Cash Back Cards 17.87%
17.82%
Rewards Cards 17.12%
17.07%
Source: Bankrate.com