T-NETIX Reports 2002 Net Income of $2.1 Million; Restates 2001 Net Loss to $2.0 Million from $1.6 Million.Business Editors/High-Tech Writers DALLAS--(BUSINESS WIRE)--March 26, 2003 T-NETIX, Inc. (Nasdaq:TNTX) reports its financial results for the year and fourth quarter ended December December: see month. 31, 2002 and announced that it will restate re·state tr.v. re·stat·ed, re·stat·ing, re·states To state again or in a new form. See Synonyms at repeat. re·state its financial statements for the year ended December 31, 2001. For the year 2002, net income was $2.1 million, or $0.13 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. share, compared to a net loss of $2.0 million, or $0.14 per diluted share (restated from a net loss of $1.6 million, or $0.11 per diluted share as previously reported) for the year 2001. Revenues were $119.8 million for the year 2002 compared to $117.8 million for the year 2001. For the fourth quarter of 2002, net loss was $0.8 million, or $.05 per diluted share, compared to net loss of $4.5 million, or $.30 per share (restated from a net loss of $4.4 million, or $.30 per share as previously reported) for the fourth quarter of 2001. Revenues were $32.1 million for the fourth quarter of 2002, compared to $25.5 million for the fourth quarter of 2001. The year 2002 and fourth quarter of 2002 financial results includes a charge related to an impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. of an asset. The Company recorded a $1.1 million impairment charge to an asset relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc a contract that is in legal dispute. The impairment charge does not change the Company's belief in its rights under the disputed contract nor does it change the Company's position to pursue its rights. In March 2003, the Company invested in another provider of similar services that it anticipates will significantly reduce its costs of validation See validate. validation - The stage in the software life-cycle at the end of the development process where software is evaluated to ensure that it complies with the requirements. services and uncollectible accounts Uncollectible account An account which cannot be collected by a company because the customer is not able to pay or is unwilling to pay. . As such, the Company intends to sell to third parties its rights under the disputed contract. The impairment charge reduces the carrying value Carrying Value Also know as "book value," it is a company's total assets minus intangible assets and liabilities, such as debt. Notes: This is different than market value, as it can be higher or lower depending on the circumstances. of the asset to reflect the Company's estimate of the market value of these services to third parties. For supplemental information purposes only, on a pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma basis (non-generally accepted accounting principles), excluding the non-recurring charge, the Company's net income for the year 2002 and fourth quarter of 2002 would have been $3.2 million, or $0.21 per diluted share and $0.4 million, or $0.02 per diluted share, respectively. "In 2002 the Company reported net income for the first time since 1998. In 2002, revenues from our core business grew 28% over last year. In 2003 and beyond, we will build upon this successful performance from our core inmate INMATE. One who dwells in a part of another's house, the latter dwelling, at the same time, in the said house. Kitch. 45, b; Com. Dig. Justices of the Peace, B 85; 1 B. & Cr. 578; 8 E. C. L. R. 153; 2 Dowl. & Ry. 743; 8 B. & Cr. 71; 15 E. C. L. R. 154; 2 Man. & Ry. 227; 9 B. & Cr. specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. call processing In telecommunication, the term call processing has the following meanings:
tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. calling solutions and voice verification products for security
protection," said Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000.Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a E. Cree Cree, Native North Americans whose language belongs to the Algonquian branch of the Algonquian-Wakashan linguistic stock (see Native American languages). They formerly inhabited the area S of Hudson Bay and James Bay in what is now Quebec, Ontario, and Manitoba S of , Chief Executive Officer. For the year 2002, the Company generated $5.6 million of free cash flow with cash provided from operating activities of 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 of $11.2 million and capital expenditures of $5.9 million. As of December 31, 2002, working capital improved $26.2 million ($9.1 million at year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. 2002, compared to a deficit of $17.1 million at year end 2001). The increase is primarily the result of refinancing Refinancing An extension and/or increase in amount of existing debt. $19.2 million of short-term debt Short-term debt Debt obligations, recorded as current liabilities, requiring payment within the year. to 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. . "T-NETIX's financial condition, profitable operations, free cash flow to fund growth opportunities and retire its debt, together with a strong balance sheet, will supply the financial capital for the Company to remain the #1 provider of specialized inmate calling services to the Corrections Industry and to further distance itself from its competitors," said Henry G. Schopfer III, Chief Financial Officer. The restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. of the financial statements for the year ended December 31, 2001 which resulted in an increase to previously reported net loss by $0.4 million for the year ended December 31, 2001, has been made because the Company did not expense but capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. as part of fixed assets fixed assets npl → activo sg fijo fixed assets npl → immobilisations fpl fixed assets fix npl → contract setup See BIOS setup and install program. costs incurred primarily for orientation and training correctional facilities' employees in the proper use and maintenance of the Company's equipment installed on the facility premises. Under deferred cost guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. as set forth by generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting , it is appropriate to defer de·fer 1 v. de·ferred, de·fer·ring, de·fers v.tr. 1. To put off; postpone. 2. To postpone the induction of (one eligible for the military draft). v.intr. incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. direct contract acquisition and origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real costs to the extent there are contractually committed revenues or upfront non-refundable revenues. The Company has exclusive contracts with the correctional facilities to provide telecommunication telecommunication Communication between parties at a distance from one another. Modern telecommunication systems—capable of transmitting telephone, fax, data, radio, or television signals—can transmit large volumes of information over long distances. services to inmates generally for a three to five year non-cancellable term, but is not guaranteed recovery of these costs from the correctional facilities. Although the Company estimates the net margin it expects to be generated from each contract to far exceed the contract setup costs capitalized, it does not meet the required guarantee standard. As such, the Company's management and its Audit Committee in consultation with KPMG KPMG Klynveld Peat Marwick Goerdeler (accounting firm) KPMG Kaiser Permanente Medical Group KPMG Keiner Prüft Mehr Genau (German) KPMG Kommen Prüfen Meckern Gehen , its long-standing long-stand·ing adj. Of long duration or existence: a long-standing friendship. long-standing Adjective existing for a long time independent auditors Independent Auditor An external auditor with a certified public accounting designation that qualifies him or her to provide an auditor's report. Notes: These auditors aren't affiliated with the company being audited. , concluded that the Company should restate its financial statements for 2001. There is no significant impact with using the new accounting treatment on the previously reported financial results for the first three quarters of 2002. The Company expects to file restated financial statements for the 2001 annual period with the Securities and Exchange Commission in connection with the filing of its 2002 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. . Until the Company issues its 2001 restated financial statements, the financial information contained in the Company's previously filed annual report on Form 10-K and the auditors' report thereon there·on adv. 1. On or upon this, that, or it. 2. Archaic Following that immediately; thereupon. Adv. 1. thereon - on that; "text and commentary thereon" on it, on that for the fiscal year ended December 31, 2001 is qualified by the information contained in this press release as to the impact of the restatement described above. To further discuss its year-end results and restatement, the Company will host an investor conference call on Thursday Thursday: see week. , March 27th at 1 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. . To join the call, please dial 800/915-4836 five to ten minutes prior to the start time, or attend our webcast at www.T-NETIX.com. If you are unable to attend, both an audio and web replay will be made available following the call. The web replay will be available at www.T-NETIX.com and the audio replay at 800/428-6051, passcode 288336. About T-NETIX, Inc. T-NETIX is a leading provider of specialized telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. products and services, including security enhanced call processing, call validation and billing for the corrections communications marketplace. The Company provides its products and services to more than 1,400 private, local, county and state correctional facilities throughout 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 Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of . We deliver these services through direct contracts with correctional facilities, and through contracts with some of the world's leading telecommunications service providers A Telecommunications Service Provider or TSP is a type of Communications Service Provider that has traditionally provided telephone and similar services. This category includes ILECs, CLECs, and mobile wireless companies. , including Verizon, AT&T, SBC (1) (SBC Communications Inc., San Antonio, TX, www.sbc.com) A large, national telecommunications company that grew from a multitude of local and regional companies, including Southwestern Bell, Pacific Bell and Nevada Bell, into a single, unified brand by 2002. Communications, Qwest and Sprint. For additional news and information, visit the company's web site at www.t-netix.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. Except for historical information contained herein, the statements in this release are forward-looking and made pursuant to the safe harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted or expected results. Those risks include, among other things, the competitive environment in the industry in general and in the company's specific market areas, inflation, changes in costs of goods and services In economics, economic output is divided into physical goods and intangible services. Consumption of goods and services is assumed to produce utility (unless the "good" is a "bad"). It is often used when referring to a Goods and Services Tax. and economic conditions in general and in the company's specific market area. Those and other risks are more fully described in the company's filings with the Securities and Exchange Commission.
T-NETIX, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share and share amounts)
December 31,
--------------------------------
2001 2001 As
2002 Restated Reported
---------- ---------- ----------
ASSETS
Cash and cash equivalents $ 6,554 $995 $995
Accounts receivable, net 20,038 18,030 18,030
Prepaid expenses 1,608 1,232 1,232
Inventories 1,424 705 705
---------- ---------- ----------
Total current assets 29,624 20,962 20,962
Property and equipment, net 25,342 29,801 30,217
Goodwill, net 2,245 2,245 2,245
Deferred tax asset 2,297 2,297 2,297
Assets held for sale 937 -- --
Intangible and other assets, net 6,212 7,475 7,476
---------- ---------- ----------
Total assets $66,657 $62,780 $63,197
========== ========== ==========
LIABILITIES, REDEEMABLE CONVERTIBLE
PREFERRED STOCK AND STOCKHOLDERS'
EQUITY
Liabilities:
Accounts payable $8,816 $10,795 $10,795
Accrued liabilities 7,996 5,089 5,089
Subordinated note payable -- 3,750 3,750
Current portion of long-term debt 3,694 18,436 18,436
---------- ---------- ----------
Total current liabilities 20,506 38,070 38,070
Long-term debt 19,091 218 218
---------- ---------- ----------
Total liabilities 39,597 38,288 38,288
Stockholders' equity:
Preferred stock, $.01 stated
value, 10,000,000 shares
authorized; no shares issued or
outstanding at December 31,
2002 and 2001, respectively -- -- --
Common stock, $.01 stated value,
70,000,000 shares authorized;
15,052,210 and 15,032,638 shares
issued and outstanding at
December 31, 2002 and 2001,
respectively 150 150 150
Additional paid-in capital 42,334 41,831 41,831
Accumulated deficit (15,424) (17,489) (17,072)
---------- ---------- ----------
Total stockholders' equity 27,060 24,492 24,909
---------- ---------- ----------
Total liabilities redeemable
convertible preferred stock and
stockholders' equity $66,657 $62,780 $63,197
========== ========== ==========
T-NETIX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share and share amounts)
Year Ended December 31,
-----------------------------
2001 2001 As
2002 Restated Reported
--------- --------- ---------
Revenue:
Telecommunication services $57,514 $62,378 $62,378
Direct call provisioning 48,798 26,899 26,899
Internet services -- 23,886 23,886
Equipment sales and other 13,498 4,596 4,596
--------- --------- ---------
Total revenue 119,810 117,759 117,759
Operating Costs and Expenses:
Operating costs (exclusive of
depreciation and amortization shown
separately below)
Telecommunications services 21,222 25,764 25,306
Direct call provisioning 46,796 24,012 24,012
Internet services -- 14,963 14,963
Cost of equipment sold and other 4,703 2,117 2,117
--------- --------- ---------
Total operating costs 72,721 66,856 66,398
Selling, general and administrative 25,591 25,036 25,036
Research and development 3,054 4,539 4,539
Impairment of telecommunications assets 1,119 2,678 2,678
Depreciation and amortization 12,101 12,963 13,004
--------- --------- ---------
Total operating costs and
expenses 114,586 112,072 111,655
--------- --------- ---------
Operating income 5,224 5,687 6,104
Interest and other expenses, net (2,707) (2,446) (2,446)
Gain on sale of assets 36 -- --
--------- --------- ---------
Income from continuing operations before
income taxes 2,553 3,241 3,658
Income tax expense 180 735 735
--------- --------- ---------
Net income from continuing operations 2,373 2,506 2,923
Loss from discontinued operations (616) (2,346) (2,346)
Gain on sale of assets of discontinued
assets 308 -- --
Impairment of assets of discontinued
operations -- (1,125) (1,125)
--------- --------- ---------
Net loss from discontinued operations (308) (3,471) (3,471)
--------- --------- ---------
Net income (loss) before accretion of
discount on redeemable convertible
preferred stock 2,065 (965) (548)
Accretion of discount on redeemable
convertible preferred stock -- (1,077) (1,077)
--------- --------- ---------
Net income (loss) applicable to common
stockholders $2,065 $(2,042) $(1,625)
========= ========= =========
Income per common share from continuing
operations
Basic $0.16 $0.17 $0.20
========= ========= =========
Diluted $0.15 $0.17 $0.20
========= ========= =========
Loss per common share from discontinued
operations
Basic $(0.02) $(0.23) $(0.23)
========= ========= =========
Diluted $(0.02) $(0.23) $(0.23)
========= ========= =========
Income (loss) per common share applicable
to common shareholders
Basic $0.14 $(0.14) $(0.11)
========= ========= =========
Diluted $0.13 $(0.14) $(0.11)
========= ========= =========
Shares used in computing net income
(loss) per common share
Basic 15,041 14,847 14,847
========= ========= =========
Diluted 15,363 14,847 14,847
========= ========= =========
T-NETIX, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Amounts in thousands, except per share and share amounts)
Year Ended December 31,
----------------------------
2001 2001 As
2002 Restated Reported
-------- --------- ---------
Cash flows from operating activities:
Net income from continuing operations $2,373 $2,506 $2,923
Adjustments to reconcile net income to
net cash provided by operating
activities from continuing operations:
Depreciation and amortization 12,101 12,963 13,004
Impairment of telecommunication
assets 1,119 2,678 2,678
Net gain on sale of property and
equipment (344) -- --
Loss on writedown of investments 278 -- --
Accretion of discount on subordinated
note payable -- 39 39
Changes in operating assets and
liabilities:
Accounts receivable (3,911) (717) (717)
Bad debt 1,903 1,489 1,489
Prepaid expenses (376) (5) (5)
Inventories (719) 453 453
Intangibles and other assets (2,172) (1,132) (1,132)
Accounts payable (1,979) 2,024 2,024
Accrued liabilities 2,907 (892) (892)
-------- --------- ---------
Cash provided by operating
activities of continuing
operations 11,180 19,406 19,864
-------- --------- ---------
Cash used in investing activities:
Purchase of property and equipment (5,903) (5,190) (5,648)
Acquisition of business or business
assets (250) (1,654) (1,654)
Investment in patents -- (410) (410)
Proceeds from disposal or property and
equipment 729 -- --
Other investing activities (327) (175) (175)
-------- --------- ---------
Cash used in investing activities
of continuing operations (5,751) (7,429) (7,887)
-------- --------- ---------
Cash flows from financing activities:
Payments on line of credit (18,209) (9,167) (9,167)
Payments on subordinated debt (3,750) -- --
Proceeds from issuance of senior secured
term note 14,000 -- --
Proceeds from issuance of senior
subordinated promissory note 9,000 -- --
Payments on other debt (595) (129) (129)
Common stock issued for cash under stock
option plans (8) 6 6
-------- --------- ---------
Cash provided by (used in)
financing activities of
continuing operations 438 (9,290) (9,290)
-------- --------- ---------
Cash used by discontinued operations (308) (1,794) (1,794)
-------- --------- ---------
Net increase in cash and cash equivalents 5,559 893 893
Cash and cash equivalents at beginning of
year 995 102 102
-------- --------- ---------
Cash and cash equivalents at end of year $6,554 $995 $995
======== ========= =========
Supplemental Disclosures:
Cash paid during the year for:
Interest $2,243 $2,555 $2,555
======== ========= =========
Income taxes $260 $707 $707
======== ========= =========
Non-cash financing activities:
Accretion on preferred stock $-- $1,077 $1,077
======== ========= =========
Conversion of preferred stock $-- $18 $18
======== ========= =========
Notes received in exchange for assets $91 $-- $--
======== ========= =========
Common stock received in exchange for
assets $278 $-- $--
======== ========= =========
Detachable stock purchase warrants
issue $511 $52 $52
======== ========= =========
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion