Trinsic Announces First Quarter Financial Results; Reports Positive Net Income.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 services, today announced its financial results for the first quarter of 2005. For the three-month period ended March 31, 2005, the company reported revenue of $57.1 million compared with $68.5 million for the first quarter of 2004 and net income of $0.4 million compared with a net loss of $10.4 million for the prior year period. Net income attributable to common stockholders was $0.4 million, or $0.01 per share, for the first quarter of 2005 versus a net loss attributable to common stockholders of $14.8 million, or $2.05 per share, for the same quarter in 2004. 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.
Trey Davis, Trinsic's Chief Executive Officer, commented, "We made great progress in the first quarter in executing our new strategy of becoming a more Verizon-centric company. Completing a Commercial Services Agreement with Verizon was a big step. We are also pleased with the progress that the sales teams are making in the small business market in 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 area. But that strategy only works if we continue to be diligent dil·i·gent adj. Marked by persevering, painstaking effort. See Synonyms at busy. [Middle English, from Old French, from Latin d in managing our costs, which we continue to scrutinize scru·ti·nize tr.v. scru·ti·nized, scru·ti·niz·ing, scru·ti·niz·es To examine or observe with great care; inspect critically. scru . We implemented several cost cutting measures in the first quarter and in April totaling around $10 million annually. We are confident that the measures we have taken will allow us to continue to successfully execute our strategy." Davis continued, "There are two somewhat unusual items included in this quarter's numbers. First, we recorded income of $6 million related to a settlement of litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. with 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. . On the negative side, we wrote down our note receivable note receivable A debt due from borrowers and evidenced by a written promise of payment. Note receivable, an entry on the asset side of many corporate balance sheets, indicates the dollar amount of loans due to be repaid by borrowers. from SipStorm by $2.5 million. Absent these two transactions we would have reported a net loss in the first quarter but we would have reported positive EBITDA for the quarter. We intend to remain in a positive EBITDA position through-out the remainder of 2005." Frank Grillo Frank Grillo (born June 8, 1963 in New York City, New York) is an American actor. Grillo is probably best known for his role as Nick Savrinn in Season One of Prison Break. , Trinsic's Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. , added, "We are extremely pleased with the initial success of our two New York sales teams. The New York market has been very receptive receptive /re·cep·tive/ (re-cep´tiv) capable of receiving or of responding to a stimulus. to our 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. and Managed PBX (Private Branch eXchange) An inhouse telephone switching system that interconnects telephone extensions to each other as well as to the outside telephone network (PSTN). service offerings. In the second quarter we will be adding both a Managed Security and Remote Access offering to round out the product set." Davis concluded, "We are pleased with the first quarter financial results as well as the previously announced accomplishments on the operating side of the business. I again need to thank the employees of Trinsic for their dedication and hard work." Consistent with Securities and Exchange and Commission's Regulation G, the following table provides a reconciliation of Trinsic's EBITDA for the first quarter of 2005, 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.
For the quarter ended March 31,
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Reconciliation of EBITDA with net 2005 2004
income (loss) (in thousands) --------------- ---------------
Net income (loss) $ 442 $ (10,384)
Interest and other income (6,804) (842)
Interest and other expense 1,753 1,270
Depreciation and amortization 4,179 5,311
--------------- ---------------
EBITDA $ (430) $ (4,645)
=============== ===============
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, including the risk that we may not remain EBITDA positive for the remainder of 2005. 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 wire line and IP telephony 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
Consolidated Balance Sheets
(Unaudited)
(In thousands, except share data)
March 31, December 31,
2005 2004
------------ ------------
Assets
Current assets:
Cash and cash equivalents $ 5,122 $ 1,363
Accounts receivable, net of allowance for
doubtful accounts of $12,661 and $10,967 34,941 27,242
Prepaid expenses and other current assets 1,299 836
------------ ------------
Total current assets 41,362 29,441
Property and equipment, net 25,339 27,829
Intangible assets, net - 457
Other assets 5,354 3,609
------------ ------------
Total assets $ 72,055 $ 61,336
============ ============
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued liabilities $ 54,888 $ 55,605
Deferred revenue 7,096 6,264
Current portion of long-term debt and
capital lease obligations 14,338 7,536
Asset based loan 13,880 12,934
------------ ------------
Total current liabilities 90,202 82,339
Long-term deferred revenue 18 46
Long-term debt and capital lease obligations 18 33
------------ ------------
Total liabilities 90,238 82,418
------------ ------------
Commitments and contingencies
(Notes 7 and 10)
Stockholders' deficit:
Common stock, $0.01 par value; 150,000,000
shares authorized; 55,253,612 shares
issued; 55,185,302 shares outstanding 552 553
Notes receivable from stockholders (1,269) (3,685)
Unearned stock compensation (376) (466)
Additional paid-in capital 392,440 392,488
Accumulated deficit (409,452) (409,894)
Treasury stock, 68,310 shares at cost (78) (78)
------------ ------------
Total stockholders' deficit (18,183) (21,082)
------------ ------------
Total liabilities and stockholders'
deficit $ 72,055 $ 61,336
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