Infonet Announces Fiscal 2001 Annual Results: Strong Revenue and Net Income Growth; Record Client Additions.
LONDON--(BUSINESS WIRE)--June 11, 2001
Infonet Services Corp. (NYSE NYSE
See: New York Stock Exchange :IN) (FSE FSE
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Financial Highlights FY 2001 vs. FY 2000:
-- Revenue up 37 Percent -- Core Revenue up 31 Percent -- Customer Signings up 33 Percent -- EBITDA up to $92 Million From $19 Million -- Operating Income up to $24 Million From ($29 Million) -- Net Income up to $27 Million From ($27 Million) -- EPS 6 Cents vs. (6 Cents) -- Company Fully Funded
Infonet Services Corp. (NYSE:IN) (FSE:IN) today announced fiscal year 2001 (FY '01) and fourth-quarter (Q4) revenue of $661.9 million and $189.9 million, respectively.
This compares with FY '00 year-end revenue of $481.4 million and Q4 FY '00 revenue of $154.5 million.
Jose A. Collazo, chairman, president and chief executive officer, said, "Our 37 percent revenue growth for the year was driven by strong sales in our core network services area."
Revenue from Infonet's core value-added network A communications network that provides services beyond normal transmission, such as automatic error detection and correction, protocol conversion and message storing and forwarding. Telenet and Tymnet are examples of value-added networks. services area -- which includes intranet, Internet Internet
Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , broadband broadband
Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). and remote access services (communications) Remote Access Services - (RAS) A service provided by Windows NT which allows most of the services which would be available on a network to be accessed over a modem link. -- grew 31 percent from FY '00 to FY '01. Fourth-quarter revenue for network services was $75.4 million, vs. $65.0 million in Q4 '00, an increase of 16 percent.
"Infonet's core network services have grown roughly 30 percent per year for over five years," said Collazo. "In addition, demand for network services in the first quarter of FY '02 has remained strong, as evidenced by new contract signings."
Other revenue lines, including Application Services See ASP and Web services. , Consulting Integration and Provisioning Services and Other Communications Services, performed 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 expectations, Collazo said.
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 : Dramatic Increase
Earnings before interest, tax, depreciation and amortization (EBITDA) increased to $91.7 million for the year, from $19.1 million in FY '00. EBITDA during Q4 FY '01 increased to $32.7 million from $15.6 million in Q4 FY '00.
"During the year, we were able to take advantage of the declining cost of bandwidth and the financial benefits of moving from leased to owned capacity," said Collazo. "We also were able to accelerate our network build-out, thus increasing our capacity and volume-driven efficiencies."
Operating Income Operating Income
The profit realized from a business' own operations.
This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. , Net Income and EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. : Continued Profitability
"We've gained significant control over costs by owning our network," said Collazo, "and our distribution strategy continues to deliver considerable SG&A savings. Consequently, Infonet's profitability margin continues to increase."
Operating income for year-end FY '01 increased to $23.7 million from ($28.8 million) in FY '00. Operating income for Q4 FY '01 increased to $11.2 million from $4.7 million in Q4 FY '00. Before stock-based compensation charges, operating income was $34.8 million for FY '01 and $15.3 million for Q4 FY '01.
FY '01 year-end net income was $27.2 million, up from ($26.7 million) in FY '00. Fourth-quarter net income was $8.9 million, up from $5.5 million in Q4 FY '00. Basic and diluted earnings per share diluted earnings per share
An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for FY '01 were 6 cents, vs. (6 cents) in FY '00. Basic and diluted earnings per share for Q4 FY '01 were 2 cents, vs. 1 cent in Q4 FY '00. The company has fully implemented SAB SAB Spontaneous abortion. See Abortion. 101 and FASB FASB
See: Financial Accounting Standards Board
See Financial Accounting Standards Board (FASB). 133 requirements during FY '01.
Client Data: Record Number of New Contracts Signed
"With 386 new customer contracts signed in FY '01," Collazo said, "Infonet reported its strongest year in history for new client signings. Infonet also sold 194 contracts for new services to existing customers, showing that our broad product line and commitment to customer service leads to enduring and expanding client relationships."
He noted that the company experienced a particularly strong fourth quarter, adding 110 contracts with new customers. Average revenue per client increased 10 percent.
"Our consultative sales approach has proven a significant competitive advantage," said Collazo. Earlier in the year, Infonet launched two new initiatives, the patent-pending Network Analysis Program (NAP (1) See network access protection.
(2) (Network Access Point) The first public Internet exchange points (IXPs). Established by the National Science Foundation in the early 1990s, they were set up to provide a standard way to exchange packets for ) and Application Defined Networking (ADN ADN Anchorage Daily News (Alaska newspaper)
ADN Yemen (international vehicle registration)
ADN Ácido Desoxirribonucleico
ADN Acide Désoxyribonucléique (French: DNA) ) -- both designed to provide further insight into the impact of applications on networks before expensive networking technical decisions are made.
"Infonet is one of the few companies in the world with the technological resources to accurately predict how the global deployment of an application will impact an existing network," he said.
Infonet Not Impacted by Weak Global Economy
"The fact that we've seen an increase in new accounts and an increase in the average revenue per account when people are predicting an adverse economic impact due to the U.S. economy, confirms our past experience: that Infonet sales are not dependent upon strong economic indicators Economic indicators
The key statistics of the economy that reveal the direction the economy is heading in; for example, the unemployment rate and the inflation rate. ," said Collazo.
"The fact that our services make companies more efficient and give them a competitive advantage allows us the ability to continue growing strongly during periods of weakness in the general economy."
Strong Cash Position
"In all, we closed the year in an enviable en·vi·a·ble
So desirable as to arouse envy: "the enviable English quality of being able to be mute without unrest" Henry James. , robust financial position, with a network that is more efficient, faster and more sophisticated than ever before," said Collazo. Infonet closed the year with approximately $600 million in cash on its books.
"We are fully funded and poised to execute our long-term strategic plan," he said. "We will likely be free cash flow positive within 18 months. And because we substantially completed the build-out of our network this year, much of our future capital expenditures will be used directly to support customers."
Collazo reconfirmed Infonet's FY '02 projections, made in an earlier news release, stating that Infonet expects net income to continue to rise and that total revenue is expected to increase by more than 25 percent. He reiterated that the company is in the process of exploring strategic alternatives as a result of the desire of certain of the company's shareholders to sell all or part of their respective equity stakes in the company.
Q4 01 Q4 00 % change Revenues: Network Services $ 75,397 $ 64,962 16% Consulting, Integration and Provisioning Services 51,574 34,814 48% Application Services 2,139 3,278 (35%) Other Communication Services 60,804 51,472 18% Total Revenues 189,914 154,526 23% Operating Income $ 11,186 $ 4,674 139% Net Income $ 8,882 $ 5,532 61% EPS $ 0.02 $ 0.01 89% D&A $ 17,342 $ 7,446 133% EBITDA $ 32,682 $ 15,617 109% Operating Income and EBITDA excluding stock-based compensation charges: EBITDA $ 32,682 $ 17,126 91% Operating Income $ 15,340 $ 9,680 58% FY 01 FY 00 % change Revenues: Network Services $283,248 $217,006 31% Consulting, Integration and Provisioning Services 179,932 116,534 54% Application Services 10,540 15,286 (31%) Other Communication Services 188,225 132,618 42% Total Revenues 661,945 481,444 37% Operating Income $ 23,687 $(28,840) na Net Income $ 27,233 $(26,705) na EPS $ 0.06 $ (0.06) na D&A $ 51,654 $ 27,521 88% EBITDA $ 91,730 $ 19,054 381% Operating Income and EBITDA excluding stock-based compensation charges: EBITDA $ 86,453 $ 32,057 170% Operating Income $ 34,799 $ 4,536 667%
Infonet Services Corp. is an innovative leader in providing value-added global communications services to multinational entities. Powering the enterprisewide communications initiatives of more than 2,600 multinationals, Infonet provides a comprehensive portfolio of network-based solutions including Broadband, Internet, Intranet, MultiMedia, Remote Access, Local Access and Application Services (Call Center, Collaboration, Messaging and Hosting).
Infonet is a pioneer in providing multinationals with "The Intelligent Edge in Global Communications(TM)" -- a unique service based on its patent-pending tools that models and optimizes the complex relationship between applications and the global network.
Winner of the World Communication Awards 2000 for "Best Customer Care" and "Best Carrier," Infonet owns and operates The World Network(R), accessible from more than 180 countries, and provides local service support in more than 60 countries and territories.
Founded in 1970, Infonet's stock is traded on the 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 Frankfurt Stock Exchanges Frankfurt Stock Exchange
The largest of Germany's eight securities exchanges, operated by Deutsche Borse AS. under the symbol "IN." Additional information about the company is available at www.infonet.com.
Safe-harbor statement: Infonet has made 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. in this release. These projections are based on information available to the company as of the date of this release, and Infonet undertakes no duty to update the information to take account of later events. Risk factors investors should take into account that might affect results include: strength of the market for Infonet products and services; competition; the timely transitioning of new business opportunities to Infonet's network; and the effect of currency fluctuation Fluctuation
A price or interest rate change. . Investors should refer to risk factors elaborated on in Infonet's 10-K, 10-Qs and other recent filings made with the U.S. Securities and Exchange Commission. These documents are available through the investor relations Investor relations
The process by which the corporation communicates with its investors. portion of Infonet's Web site at www.infonet.com.
Infonet will file its FY 2001 10-K on June 27, 2001. It will be available through www.sec.gov, which can be accessed through Infonet's investor relations site at www.infonet.com.
Webcast/Conference Call Information
Infonet will host a Webcast on June 12, 2001, at 9 a.m. Eastern Time (2 p.m. in London; 6 a.m. in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. ). It will be broadcast live over the Internet and accessible through www.infonet.com. The presentations will also be made available by live audio for those interested in listening in by telephone. The conference call number is 800/289-0437 for investors 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. and Canada, and 913/981-5508 for international participants.