Trinsic Announces Financial Results for the Fourth Quarter and Year End 2004; Elects New Directors.TAMPA, Fla. -- Trinsic, Inc. (NASDAQ/SC: TRIN TRIN Short for TRaders INdex. A technical analysis indicator calculated by taking the advances-to-declines spread and dividing that by the volume of advances to declines. Notes: If the value of this is less than 1, then it is considered to be a very bullish indicator ), a leading provider of enhanced circuit-switched and IP (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. ) telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. services, today announced its financial results for the fourth-quarter and full-year 2004. For the three-month period ended December December: see month. 31, 2004, the company reported revenue of $58.3 million compared with $74.5 million for the fourth quarter of 2003, and a net loss of $1.8 million compared with a net loss of $4.5 million for the prior year period. Net loss attributable to common stockholders was $61.3 million, or $2.51 per share, for the fourth quarter versus $9.4 million, or $1.32 per share, for the same quarter in 2003. The company reported 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 (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Revenues for 2004 were $251.5 million compared with $289.2 million for 2003. Net loss for 2004 was $33.6 million compared with a net loss of $16.1 million for 2003, and net loss attributable to common stockholders was $106.5 million, or $9.12 per share, compared with $33.8 million, or $4.77 per share. EBITDA for 2004 was negative $10.5 million compared with a positive $8.5 million for 2003. Trey Davis, Trinsic's chief executive officer, commented, "I first need to thank the Trinsic employees who worked so diligently dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d during the past several months. The fourth quarter of 2004 was very challenging for Trinsic, but we substantially accomplished most of our goals. We are very pleased that the company returned to an EBITDA positive position during the fourth quarter. In addition to operating improvements, we completed an exchanged offer for 100% of our preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. during the fourth quarter, thus simplifying our balance sheet. We also executed a commercial services agreement with Qwest (Qwest Communications International Inc., Denver, CO, www.qwest.com) A telecommunications company that offers services to telecom carriers, businesses and homes using an extensive fiber-optic network throughout the U.S. and Mexico. which will allow Trinsic to continue to provide our traditional circuit-switched telephone services in the Qwest territories." Davis concluded, "Despite immense challenges in the communications industry communications industry, broadly defined, the business of conveying information. Although communication by means of symbols and gestures dates to the beginning of human history, the term generally refers to mass communications. , we are confident that the steps that management has taken, and continues to take, will best position Trinsic to meet those challenges and improve shareholder value." Trinsic also reported that Roy Neel Roy M. Neel is a United States Democratic Party operative and lobbyist who served as a top assistant to Vice President Al Gore and President Bill Clinton. Raised in Smyrna, Tennessee, Neel joined the U.S. Navy and served a tour of duty in Vietnam as a photojournalist. and Raymond Raymond, town, Canada Raymond, town (1991 pop. 3,130), S Alta., Canada, SE of Lethbridge, in a sugar beet area. Sugar is refined and honey is produced there. A provincial agricultural college is in the town. L. Golden have been elected to its board of directors. Mr. Neel Noun 1. Neel - French physicist noted for research on magnetism (born in 1904) Louis Eugene Felix Neel is an Adjunct adjunct (aj´ungkt), n a drug or other substance that serves a supplemental purpose in therapy. adjunct Professor of Political Science at Vanderbilt University Vanderbilt University, at Nashville, Tenn.; coeducational; chartered 1872 as Central Univ. of Methodist Episcopal Church, founded and renamed 1873, opened 1875 through a gift from Cornelius Vanderbilt. Until 1914 it operated under the auspices of the Methodist Church. , where he teaches courses in Presidential Transitions and Presidential Leadership. He is also chairman of the Jackson Jackson. 1 City (1990 pop. 37,446), seat of Jackson co., S Mich., on the Grand River; inc. 1857. It is an industrial and commercial center in a farm region. Group, a Washington-based consulting firm Noun 1. consulting firm - a firm of experts providing professional advice to an organization for a fee consulting company business firm, firm, house - the members of a business organization that owns or operates one or more establishments; "he worked for a specializing in public policy and politics, and a director of Blue State Digital, a leading national online communications firm. He served as President Clinton's Deputy Chief of Staff, responsible for coordinating all policy and communications activities for the President. From 1994 to 2001, he served as President and Chief Executive Officer of the U. S. Telecom Association, a trade group representing the regional Bell companies and nearly 1,000 local telecom companies. During that period he helped advance major telecom deregulation Deregulation The reduction or elimination of government power in a particular industry, usually enacted to create more competition within the industry. Notes: Traditional areas that have been deregulated are the telephone and airline industries. laws and was an internationally-recognized speaker on telecom issues. Mr. Golden has spent his entire 38 year career in investment banking. From 1962 to 1987, Mr. Golden served in various capacities at Salomon Brothers
Salomon Brothers was a Wall Street investment bank. , retiring in 1987 as Executive Vice President of Finance and Administration of Salomon Noun 1. Salomon - American financier and American Revolutionary War patriot who helped fund the army during the American Revolution (1740?-1785) Haym Salomon , Inc. In 1989, Mr. Golden became a partner of Wolfensohn & Co., an investment banking services firm, and became chairman in 1996 after the firm merged with Bankers Trust The Bankers Trust is a historic American banking organisation that was acquired by Deutsche Bank in 1998. It was originally set up when banks could not perform trust company services. . He is a graduate of the Baruch School of Business and Public Administration and received a Master's degree master's degree n. An academic degree conferred by a college or university upon those who complete at least one year of prescribed study beyond the bachelor's degree. Noun 1. from the Wharton School. In addition to extensive public speaking and the publishing of several articles and papers on the capital markets, Mr. Golden was appointed Chairman of the Federal Energy Administration's Finance Advisory Committee. He currently serves as vice-chair of the National Wildlife Endowment Fund Noun 1. endowment fund - the capital that provides income for an institution endowment patrimony - a church endowment chantry - an endowment for the singing of Masses . "Mr. Neel and Mr. Golden are welcome additions to our board. We look forward to their contributions," said Davis. Trinsic is unable to timely file its 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 fiscal year ended December 31, 2004 (the "Form 10-K") without unreasonable effort or expense by the due date of March 31, 2005. The company plans to file for a 15-day extension on Form 12b-25 and expects to file its Form 10-K within that time period. Consistent with Securities and Exchange and Commission's Regulation G, the following table provides a reconciliation of Trinsic's guidance for EBITDA for the fourth quarter of 2004, to the 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 (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ) measure of net income. EBITDA is not a measure under GAAP, is not meant to be a replacement for GAAP and should not be considered as an alternative to net income as a measure of performance or to cash flows as a measure of liquidity. We have included EBITDA data to assist in understanding our operating results. EBITDA is a measure commonly used in the telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. industry, and many securities analysts use EBITDA as a way of evaluating our financial performance.
Three Months Twelve Months
Ended Ended
December 31, December 31,
Reconciliation of EBITDA with Net Loss 2004 2004
------------ -------------
Net loss $ (1,778) $ (33,613)
Interest and other income (760) (2,753)
Interest and other expense 1,382 6,111
Depreciation and amortization 4,312 19,764
------------ -------------
EBITDA $ 3,156 $ (10,491)
============ =============
This press release contains 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. made pursuant to 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. Words such as "anticipate," "estimate," "expect," and "projects" signify sig·ni·fy v. sig·ni·fied, sig·ni·fy·ing, sig·ni·fies v.tr. 1. To denote; mean. 2. To make known, as with a sign or word: signify one's intent. forward-looking statements. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various risks and uncertainties. Some of these risks and uncertainties are identified in Trinsic's periodic filings with the Securities and Exchange Commission. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on Trinsic's business, financial condition, and results of operations. Trinsic assumes no obligation to update these forward-looking statements. About Trinsic Trinsic offers consumers and businesses enhanced circuit-switched and IP telephony The two-way transmission of voice over a packet-switched IP network, which is part of the TCP/IP protocol suite. The terms "IP telephony" and "voice over IP" (VoIP) are synonymous. services. All Trinsic products include proprietary services, such as Web-accessible, voice-activated calling and messaging features that are designed to meet customers' communications needs intelligently and intuitively. Trinsic is a member of the Cisco Powered Network Program and makes its services available on a wholesale basis to other communications and utility companies, including Sprint. Trinsic changed its name from Z-Tel Technologies, Inc. on January 3, 2005. For more information about Trinsic and its innovative services, please visit www.trinsic.com.
Trinsic, Inc. and Subsidiaries
Unaudited Consolidated Statement of Operations Data
(In thousands, except share and per share data)
Quarters Ended Years Ended
December 31, December 31,
----------------------- -----------------------
2004 2003 2004 2003
----------- ---------- ----------- ----------
Revenues $ 58,301 $ 74,489 $ 251,477 $ 289,180
----------- ---------- ----------- ----------
Operating expenses:
Network operations,
exclusive of
depreciation shown
below and
amortization shown
below 28,024 36,941 123,723 135,531
Sales and marketing 6,775 4,721 21,094 19,421
General and
administrative 19,574 31,294 112,350 125,765
Asset impairment
charge - - - -
Wholesale
development costs - - - -
Restructuring
charge 772 - 4,801 -
Depreciation and
amortization 4,312 5,583 19,764 23,449
----------- ---------- ----------- ----------
Total operating
expenses 59,457 78,539 281,732 304,166
----------- ---------- ----------- ----------
Operating loss (1,156) (4,050) (30,255) (14,986)
----------- ---------- ----------- ----------
Nonoperating income
(expense):
Interest and other
income 760 272 2,753 1,930
Interest and other
expense (1,382) (683) (6,111) (3,071)
----------- ---------- ----------- ----------
Total
nonoperating
expense (622) (411) (3,358) (1,141)
----------- ---------- ----------- ----------
Net loss (1,778) (4,461) (33,613) (16,127)
Less mandatorily
redeemable
convertible
preferred stock
dividends and
accretion (2,137) (4,869) (15,326) (17,480)
Less deemed
dividend related
to beneficial
conversion
feature (57,401) (48) (57,584) (186)
----------- ---------- ----------- ----------
Net loss
attributable to
common
stockholders $ (61,316) $ (9,378) $ (106,523) $ (33,793)
=========== ========== =========== ==========
Weighted average
common shares
outstanding 24,416,355 7,128,287 11,676,783 7,079,384
=========== ========== =========== ==========
Basic and diluted
net loss per share $ (2.51) $ (1.32) $ (9.12) $ (4.77)
=========== ========== =========== ==========
Trinsic, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheet Data
(In thousands, except share data)
December 31, December 31,
2004 2003
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 1,363 $ 12,013
Accounts receivable, net of allowance for
doubtful accounts of $10,967 and $13,804 27,242 20,605
Prepaid expenses and other current assets 836 3,876
---------- ----------
Total current assets 29,441 36,494
Property and equipment, net 27,829 39,069
Intangible assets, net 457 2,287
Other assets 3,609 3,820
---------- ----------
Total assets $ 61,336 $ 81,670
========== ==========
Liabilities, Mandatorily Redeemable
Convertible Preferred Stock and
Stockholders' Deficit
Current liabilities:
Accounts payable and accrued liabilities $ 55,605 $ 55,442
Deferred revenue 6,264 7,073
Current portion of long-term debt and
capital lease obligations 7,536 5,074
Asset based loan 12,934 -
---------- ----------
Total current liabilities 82,339 67,589
Long-term deferred revenue 46 361
Long-term debt and capital lease obligations 33 457
---------- ----------
Total liabilities 82,418 68,407
---------- ----------
Mandatorily redeemable convertible preferred
stock, $.01 par value; 10,000,000 shares
authorized; 1,771,018 issued; 1,747,684
outstanding (aggregate liquidation value
of $158,779) - 144,282
---------- ----------
Commitments and contingencies (Notes 12, 17
and 22)
Stockholders' deficit:
Common stock, $.01 par value; 30,000,000
shares authorized; 55,253,612 and
7,237,298 shares issued; 55,185,302
and 7,168,988 outstanding 553 73
Notes receivable from stockholders (3,685) (1,121)
Unearned stock compensation (466) -
Additional paid-in capital 392,488 188,987
Accumulated deficit (409,894) (318,880)
Treasury stock, 68,310 shares at cost (78) (78)
---------- ----------
Total stockholders' deficit (21,082) (131,019)
---------- ----------
Total liabilities, mandatorily redeemable
convertible preferred stock and
stockholders' deficit $ 61,336 $ 81,670
========== ==========
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