Acceris Communications Reports First Quarter Results.News Editors/Business Editors/High-Tech Writers SAN DIEGO--(BUSINESS WIRE)--May 11, 2004 Acceris Communications Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :ACRS ACRS See: Accelerated cost recovery system ACRS See Accelerated Cost Recovery System (ACRS). ) today reported its financial results for the first quarter ended March 31, 2004. The Company's total operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the for the quarter ended March 31, 2004 was $35.2 million, which is comparable to $32.5 million in the fourth quarter of 2003 and an increase of 16 percent from $30.4 million in the first quarter of 2003. Revenue in the first quarter of 2004 included recognition of approximately $6.4 million in non-recurring revenue from a discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: network service offering. For the three months ended March 31, 2004, the Company earned operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $0.9 million compared to an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $4.1 million for the fourth quarter of 2003 and an operating loss of $12.6 million in the first quarter of 2003. The Company's net income was $0.6 million in the first quarter of 2004 compared to a loss of $4.5 million in the fourth quarter of 2003 and $14.9 million in the first quarter of 2003. The net income per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. common share was $0.03 in the first quarter of 2004 versus a net loss per diluted common share of $2.55 in the first quarter of 2003. Highlights of the first quarter: - Recorded EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become of $2.6 million in the first quarter of 2004 (1) - Expanded local dial tone service in the states of New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and New Jersey - Completed consolidation of network operating centers in San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. and Pittsburgh Pittsburgh (pĭts`bərg), city (1990 pop. 369,879), seat of Allegheny co., SW Pa., at the confluence of the Allegheny and the Monongahela rivers, which there form the Ohio River; inc. 1816. "We are starting to realize the results of our achievements in 2003. With a strengthened foundation and the right strategies, structure and people in place, we believe Acceris is poised to generate significant growth," said Kelly Kel·ly , Ellsworth Born 1923. American abstract painter and sculptor whose works are characterized by flat color areas with sharply defined edges. Kelly, Emmett 1898-1979. Murumets, President of Acceris Communications. Please see the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December December: see month. 31, 2003 filed with the SEC on April 14, 2004 and the Company's Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the three months ended March 31, 2004 filed with the SEC on May 12, 2004 for further information. (1) "EBITDA," which is calculated as Earning Before deductions for Interest, Taxes, Depreciation and Amortization, is not a measure of financial performance under GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). . EBITDA is provided for the use of the reader in understanding the Company's operating results and is not prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with, nor does it serve as an alternative to, GAAP measures and may be materially different from similar measures used by other companies. While not a substitute for information prepared in accordance with GAAP, the Company believes that this information is helpful for investors to more easily understand the Company's operating financial performance, especially in light of the significant restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). activities the Company has recently undertaken. The Company also feels that this measure may better enable an investor to form views of the Company's potential financial performance in the future. These measures have limitations as analytical analytical, analytic pertaining to or emanating from analysis. analytical control control of confounding by analysis of the results of a trial or test. tools, and investors should not consider them in isolation or as substitutes for analysis of the Company's results prepared in accordance with GAAP. A reconciliation of EBITDA to the nearest GAAP measure, net income, as it appears on our income statement is below:
Three Months Ended
March 31, 2004
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EBITDA $2,551
Less: Depreciation and amortization (1,704)
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Operating income $847
Total other income(expense) (357)
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Income from continuing operations $490
Gain from continuing operations (net of $0 tax) 104
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Net Income $594
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About Acceris Acceris is a broad based communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. serving residential, small and medium-sized business and large enterprise customers in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . A facilities-based carrier, it provides a range of products including local dial tone and 1+ domestic and international long distance voice services, as well as fully managed and fully integrated data and enhanced services Enhanced service is service offered over commercial carrier transmission facilities used in interstate communications, that employs computer processing applications that act on the format, content, code, protocol, or similar aspects of the subscriber's transmitted information; . Acceris offers its communications products and services both directly and through a network of independent agents, primarily via multi-level marketing Multi-level marketing (MLM, now sometimes called network marketing) is a business model that combines direct marketing with franchising. Multi-level marketing businesses function by recruiting salespeople (also called Distributors, Independent Business and commercial agent programs. Acceris also offers a proven network convergence solution for voice and data in Voice over Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. ("VoIP") communications technology Noun 1. communications technology - the activity of designing and constructing and maintaining communication systems engineering, technology - the practical application of science to commerce or industry and holds two foundational patents in the VoIP space. For further information, visit Acceris' website at www.acceris.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This release contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Exchange Act, as amended that are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may," "will," "anticipate," "believe," "estimate," "expect," "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect our current view of future events and are subject to certain risks and uncertainties as noted in our securities and other regulatory filings. Should one or more of these risks or uncertainties materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or should underlying assumptions prove incorrect, our actual results could differ materially from those anticipated in these forward-looking statements. We undertake no obligation and do not intend to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" or to reflect the occurrence of any unanticipated events. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. Many factors could cause actual results to differ materially from our forward-looking statements.
ACCERIS COMMUNICATIONS INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands of dollars, except March 31, December 31,
share and per share amounts) 2004 2003
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ASSETS
Current assets:
Cash and cash equivalents $ 2,155 $ 2,033
Accounts receivable, less allowance
for doubtful accounts of $2,338 and
$1,764 at March 31, 2004 and
December 31, 2003, respectively 15,289 18,018
Investments in preferred and common stock 2,490 2,058
Other current assets 1,715 2,202
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Total current assets 21,649 24,311
Furniture, fixtures, equipment
and software, net 7,298 8,483
Other assets:
Intangible assets, net 2,945 3,297
Goodwill 1,120 1,120
Investment 1,100 1,100
Other assets 728 743
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Total assets $ 34,840 $ 39,054
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities $ 25,101 $ 29,113
Unearned revenue 1,085 5,678
Revolving credit facility 9,168 12,127
Current portion of notes payable 1,271 1,254
Current portion of obligations
under capital leases 2,770 2,715
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Total current liabilities 39,395 50,887
Notes payable, less current portion 759 772
Obligations under capital leases, less
current portion 918 1,631
Notes payable to a related party 41,060 35,073
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Total liabilities 82,132 88,363
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Commitments and contingencies
Stockholders' deficit:
Preferred stock, $10.00 par value,
authorized 10,000,000 shares, issued and
outstanding 619 at March 31, 2004 and
December 31, 2003, liquidation preference
of $613 at March 31, 2004 and December
31, 2003 6 6
Common stock, $0.01 par value, authorized
300,000,000 shares, issued and outstanding
19,262,095 at March 31, 2004 and
December 31, 2003 192 192
Additional paid-in capital 171,192 171,115
Accumulated other comprehensive income 1,346 -
Accumulated deficit (220,028) (220,622)
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Total stockholders' deficit (47,292) (49,309)
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Total liabilities and
stockholders' deficit $ 34,840 $ 39,054
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The notes contained in our Quarterly Report on Form 10-Q are an
integral part of these condensed consolidated financial statements
ACCERIS COMMUNICATIONS INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
March 31,
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(In thousands, except per share amounts) 2004 2003
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Revenues:
Telecommunications services $ 34,723 $ 30,367
Technology licensing and development 450 -
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Total revenues 35,173 30,367
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Operating costs and expenses:
Telecommunications network expense
(exclusive of depreciation shown below) 16,635 25,748
Selling, general and administrative 14,760 14,225
Provision for doubtful accounts 1,227 1,175
Depreciation and amortization 1,704 1,826
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Total operating costs and expenses 34,326 42,974
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Operating income (loss) 847 (12,607)
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Other income (expense):
Interest expense (1,734) (2,013)
Interest and other income 1,377 2
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Total other income (expense) (357) (2,011)
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Income (loss) from continuing operations 490 (14,618)
Gain (loss) from discontinued operations
(net of $0 tax) 104 (277)
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Net income (loss) $ 594 $ (14,895)
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Weighted average shares used in the calculation
of net income (loss) per common share:
Basic 19,262 5,834
Diluted 23,882 5,834
Net income (loss) per common share - basic:
Income (loss) from continuing operations $ 0.02 $ (2.51)
Gain (loss) from discontinued operations 0.01 (0.04)
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Net income (loss) per common share $ 0.03 $ (2.55)
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Net income (loss) per common share - diluted:
Income (loss) from continuing operations $ 0.02 $ (2.51)
Gain (loss) from discontinued operations 0.01 (0.04)
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Net income (loss) per common share $ 0.03 $ (2.55)
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The notes contained in our Quarterly Report on Form 10-Q are an
integral part of these condensed consolidated financial statements
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