Acceris Communications Reports Fourth Quarter and Fiscal Year 2003 Results.Business Editors/High-Tech Writers SAN DIEGO--(BUSINESS WIRE)--April 14, 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 fourth quarter and full year ended December December: see month. 31, 2003. 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 December 31, 2003 was $32.5 million, which is comparable to $36.1 million in the third quarter of 2003 and an increase of 50 percent from $21.7 million in the fourth quarter of 2002. For the three months ended December 31, 2003, the Company incurred 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 compared to an operating loss of $1.5 million for the third quarter of 2003 and an operating loss of $6.1 million in the fourth quarter of 2002. The Company's net loss was $4.5 million in the fourth quarter of 2003 compared to a loss of $3.3 million in the third quarter of 2003 and $11.1 million in the fourth quarter of 2002. The net loss per common share was $0.44 in the fourth quarter of 2003 versus $1.92 in the fourth quarter of 2002. For the year ended December 31, 2003, revenues rose 54 percent to $135.9 million from $88.1 million in 2002. The operating loss for fiscal year 2003 increased to $19.9 million from $7.5 million for 2002. The net loss for the fiscal year 2003 decreased to $26.3 million from $27.5 million in 2002. The net loss per common share for the year ended December 31, 2003 was $3.75 versus $4.73 for 2002. Highlights of the fourth quarter: - Rebranded the company to Acceris Communications Inc., including new websites and new trading symbol Trading symbol See: Ticker symbol - Completed the successful integration of acquired networks, infrastructure and product lines - Extended long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and funding commitment to June June: see month. 30, 2005 - Appointed 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 as President of Acceris Communications - Strengthened balance sheet through conversion of debt to equity - Entered the market for local dial tone services - Acquired additional VoIP patent to create foundational VoIP patent portfolio "In 2003, we focused on implementing a number of bold decisions that have strengthened the foundation of our business. We now have the right strategies, the right structure, the right people and resources in place to generate further growth and enhance returns for our shareholders," said Allan Allan can refer to:
The Company also announced several changes to its board of directors. Mr. Albert Reichmann Albert Reichmann (born 1929) was one of the five brothers that controlled the Reichmann business empire. Albert joined his brothers Paul and Ralph in Toronto. While the eldest of the three it was Paul who had the keenest business sense and was the president of Olympia and retired as a member of the Acceris board, effective March 23, 2004. Mr. Reichmann joined Acceris' board in September, 2001. William H. Lomicka was appointed to replace Mr. Reichmann. Mr. Lomicka is Chairman of Coulter Ridge Capital, a private investment firm. He graduated from the College of Wooster, Wooster, Ohio and earned his MBA MBA abbr. Master of Business Administration Noun 1. MBA - a master's degree in business Master in Business, Master in Business Administration from the Wharton Graduate School of the University of Pennsylvania (body, education) University of Pennsylvania - The home of ENIAC and Machiavelli. http://upenn.edu/. Address: Philadelphia, PA, USA. . He has 40 years of financial management experience with particular expertise in the area of rapidly expanding service companies. He is presently a director of Counsel Corporation as well as a number of other public and private companies. In addition, Mr. John Walter
John Walter (1738/9 - November 17, 1812), founder of resigned as a director, effective April 5, 2004, due to non-compete restrictions imposed by a former employer. Mr. Walter joined Acceris' board in December of 2002. The Company would like to express its appreciation for Mr. Reichmann's and Mr. Walter's contribution during their terms of service (networking) Terms Of Service - (TOS) The rules laid down by an on-line service provider such as AOL that members must obey or risk being "TOS-sed" (disconnected). . 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 31, 2003 filed with the Securities and Exchange Commission on April 14, 2004 for further information. 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. , Section 21E of the Exchange Act, as amended, and information relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc Acceris 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.
CONSOLIDATED BALANCE SHEETS
As of December 31, 2003 and 2002
(in thousands, except share amounts)
2003 2002
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ASSETS
Current assets:
Cash and cash equivalents $ 2,033 $ 3,620
Accounts receivable, less allowance for doubtful
accounts of $1,764 and $1,704 as of December 31,
2003 and 2002, respectively 18,018 16,924
Investments in convertible
preferred and common stock 2,058 -
Other current assets 2,111 3,064
Net assets of discontinued
operations 91 -
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Total current assets 24,311 23,608
Furniture, fixtures, equipment and software, net 8,483 11,479
Other assets:
Intangible assets, net 3,297 2,574
Goodwill 1,120 173
Investments 1,100 -
Net assets of discontinued operations - 1,350
Other assets 743 2,262
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Total assets $ 39,054 $ 41,446
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LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Accounts payable and accrued liabilities $ 28,272 $ 25,107
Unearned revenue 5,678 958
Revolving credit facility 12,127 9,086
Current portion of notes payable 1,254 2,987
Current portion of obligations
under capital leases 2,715 2,714
Net liabilities of discontinued operations 841 -
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Total current liabilities 50,887 40,852
Notes payable, less current portion 772 1,033
Obligations under capital leases, less
current portion 1,631 4,146
Notes payable to a related party 35,073 59,340
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Total liabilities 88,363 105,371
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Commitments and contingencies
Stockholders' deficit:
Preferred stock, $10.00 par value, authorized
10,000,000 shares, issued and outstanding
619 and 769 as of December 31, 2003 and 2002,
respectively; liquidation preference of $613
and $761 at December 31, 2003 and 2002,
respectively 6 7
Common stock, $0.01 par value, authorized
300,000,000 shares, issued and outstanding
19,262,095 and 5,827,477 at December 31,
2003 and 2002, respectively 192 58
Additional paid-in capital 171,115 130,311
Accumulated deficit (220,622) (194,301)
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Total stockholders' deficit (49,309) (63,925)
-------- --------
Total liabilities and stockholders' deficit $ 39,054 $ 41,446
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ACCERIS COMMUNICATIONS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Year Ended
December 31, December 31,
----------------- ----------------
2003 2002 2003 2002
------- ------- ------- ------
Revenues:
Retail $ 26,482 $ 20,075 $ 108,150 $ 83,705
Enterprise 5,919 1,547 25,615 1,547
Technology 65 47 2,164 2,837
------- ------- ------- ------
Total 32,466 21,669 135,929 88,089
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Operating costs and expenses:
Telecommunications network
expense (exclusive of
depreciation shown below) 18,866 14,230 86,006 50,936
Selling, general, administrative
and other 14,441 9,779 57,264 33,015
Provision for doubtful accounts 1,666 2,274 5,438 5,999
Research and development - 234 - 1,399
Depreciation and amortization 1,548 1,245 7,125 4,270
------- ------- ------- ------
Total operating costs and
expenses 36,521 27,762 155,833 95,619
------- ------- ------- ------
Operating loss (4,055) (6,093) (19,904) (7,530)
Other income (expense):
Interest expense (1,783) (1,883) (8,162) (7,894)
Interest and other income 1,160 224 1,216 395
------- ------- ------- ------
Total other income (expense) (623) (1,659) (6,946) (7,499)
------- ------- ------- ------
Loss from continuing operations (4,678) (7,752) (26,850) (15,029)
Gain (loss) from discontinued
operations, net of $0 tax 222 (3,365) 529 (12,508)
------- ------- -------- --------
Net loss $ (4,456)$(11,117) $(26,321)$(27,537)
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Net income (loss) per common share:
Loss from continuing operations $(0.45) $ (1.33) $ (3.83) $ (2.58)
Income (loss) from discontinued
operations 0.01 (0.58) 0.08 (2.15)
------- ------- -------- -------
Net loss per common share $ (0.44) $ (1.92) $ (3.75) $ (4.73)
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------- ------- -------- -------
Weighted average shares
outstanding (in '000s) 10,504 5,828 7,011 5,828
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