Trinsic Announces First Quarter Financial Results.TAMPA, Fla. -- Trinsic, Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). : 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 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 first quarter of 2006. For the three-month period ended March 31, 2006, the company reported revenue of $43.9 million, a decrease of $13.2 million from the $57.1 million recognized during the first quarter of 2005. Net loss was $3.6 million, or $0.21 per share, for the quarter ended March 31, 2006 compared with net income of $0.4 million for the prior year period, or $0.08 per share. 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, remarked, "This quarter, we improved our operations by purchasing approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 102,500 access lines from Sprint and further streamlining our operations by eliminating over $7 million in annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. . Separately, we continue to address issues associated with our previously announced agreement that would allow us to monetize Monetize 1. To convert into money. 2. To convert from securities into currency that can be used to purchase goods and services. Notes: For example, you'll often hear Internet marketers talk about "monetizing website visitors. approximately 43,000 access lines in one of our least profitable ILEC (Incumbent Local Exchange Carrier) A traditional local telephone company such as one of the Regional Bell companies (RBOCs). Contrast with CLEC. See ELEC and TELRIC. service territories." In May 2006, Trinsic acquired the final set of UNE-P UNE-P Unbundled Network Element - Platform local access lines from Sprint, bringing the total purchased line count up to 113,700. Since these purchased access lines represented the entirety The whole, in contradistinction to a moiety or part only. When land is conveyed to Husband and Wife, they do not take by moieties, but both are seised of the entirety. of Trinsic's wholesale business, Trinsic will no longer provide wholesale services. Even with these purchases, total lines under management by the company decreased from 527,510 as of March 31, 2005 to 271,704 as of March 31, 2006. Trinsic ended the quarter with $2.2 million in cash. The company took several measures regarding its liquidity during the period. These actions included borrowing an additional $1.0 million from the 1818 Fund III, L.P. and expanding its receivable financing agreement with Thermo Credit to provide for the sale of up to $33 million of its accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying on a continuous basis to Thermo, subject to selection criteria criteria (krītēr´ē  ),n. . Should the company's receivable base grow, Trinsic has the option to further increase the facility up to $38 million through August 1, 2006. Investors and other interested parties should note that the information in this press release should be read in conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the financial statements and footnotes contained in Trinsic's quarterly report to be filed with the Securities and Exchange Commission. Consistent with Securities and Exchange and Commission's Regulation G, the following table provides a reconciliation of Trinsic's EBITDA for the three month periods ended March 31, 2006 and 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.
Trinsic, Inc. and Subsidiaries
Reconciliation EBITDA to Net Income
(In thousands)
Three Months Ended
March 31,
----------------------
2006 2005
---------- ----------
Net income (loss) attributable to common
stockholders $ (3,622) $ 442
Interest and other income (924) (6,804)
Interest and other expense 2,275 1,753
Depreciation and amortization 2,983 4,179
---------- ----------
Earnings Before Interest, Taxes, Depreciation
and Amortization (EBITDA) $ 712 $ (430)
========== ==========
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 risks that we may continue to be EBITDA negative, anticipated increased revenue, average per line margins from the Sprint Nextel Sprint Nextel Corporation (NYSE: S) is one of the largest telecommunications companies in the world. With 55 million subscribers, Sprint Nextel operates the third largest wireless telecommunications network in the United States (based on total wireless customers), behind acquisition may not 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. , and anticipated reductions in operating expenses may not materialize. 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 advanced traditional 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 in·tu·i·tive adj. 1. Of, relating to, or arising from intuition. 2. Known or perceived through intuition. See Synonyms at instinctive. 3. Possessing or demonstrating intuition. . 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 January: see month. 3, 2005. For more information about Trinsic and its innovative services, please visit www.trinsic.com.
Trinsic, Inc. and Subsidiaries
Consolidated Statements of Operations
(Unaudited)
(In thousands, except share and per share data)
Three Months Ended
March 31,
------------------------
2006 2005
----------- -----------
Revenues $ 43,856 $ 57,131
----------- -----------
Operating expenses:
Network operations, exclusive of depreciation
and amortization shown below 24,827 29,833
Sales and marketing 1,607 5,220
General and administrative 16,710 22,508
Depreciation and amortization 2,983 4,179
----------- -----------
Total operating expenses 46,127 61,740
Operating loss (2,271) (4,609)
----------- -----------
Nonoperating income (expense):
Interest and other income 924 6,804
Interest and other expense (2,275) (1,753)
----------- -----------
Total nonoperating income (expense) (1,351) 5,051
----------- -----------
Net income (loss) attributable to common
stockholders $ (3,622) $ 442
=========== ===========
Net income (loss) per share:
Basic $ (0.21) $ 0.08
=========== ===========
Diluted $ (0.21) $ 0.08
=========== ===========
Weighted average shares outstanding:
Basic 17,532,716 5,518,530
=========== ===========
Diluted 17,532,716 5,813,348
=========== ===========
Trinsic, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands)
(Unaudited)
March December
31, 2006 31, 2005
----------- -----------
Assets
Current assets:
Cash and cash equivalents $ 2,160 $ 79
Accounts receivable, net of allowance for
doubtful accounts of $22,478 and $20,489 18,124 13,713
Prepaid expenses and other current assets 3,626 4,713
----------- -----------
Total current assets 23,910 18,505
Property and equipment, net 18,170 19,931
Intangible assets, net 9,417 -
Other assets 3,386 2,884
----------- -----------
Total assets $ 54,883 $ 41,320
=========== ===========
Liabilities and Stockholders' Deficit
Current liabilities:
Accounts payable and accrued liabilities $ 47,795 $ 40,248
Deferred revenue 6,982 6,013
Current portion of long-term debt and
capital lease obligations 9,566 2,418
----------- -----------
Total current liabilities 64,343 48,679
Long-term debt and capital lease obligations 1,794 1,025
----------- -----------
Total liabilities 66,137 49,704
----------- -----------
Stockholders' deficit:
Common stock, $0.01 par value; 150,000,000
shares authorized; 17,808,144 and
17,756,944 shares issued; 17,552,288 and
17,518,573 outstanding 175 175
Unearned stock compensation (252) (360)
Additional paid-in capital 416,771 416,127
Accumulated deficit (427,943) (424,321)
Treasury stock, 255,856 and 238,371 shares
at cost (5) (5)
----------- -----------
Total stockholders' deficit (11,254) (8,384)
----------- -----------
Total liabilities and stockholders'
deficit $ 54,883 $ 41,320
=========== ===========
Trinsic, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
(In thousands)
Three Months Ended
March 31,
------------------------
2006 2005
----------- -----------
Cash flows from operating activities:
Net income (loss) $ (3,622) $ 442
----------- -----------
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating
activities:
Depreciation and amortization 2,983 4,179
Provision for bad debts 2,796 4,377
Expense charged for granting of stock
options 752 41
Change in operating assets and liabilities:
Increase in accounts receivable (7,207) (9,660)
Increase in prepaid expenses (262) (463)
Increase in other assets (502) (1,745)
Increase (decrease) in accounts payable
and accrued liabilities 7,547 (717)
Increase in deferred revenue 969 804
----------- -----------
Total adjustments 7,076 (3,184)
----------- -----------
Net cash provided by (used in)
operating activities 3,454 (2,742)
----------- -----------
Cash flows from investing activities:
Purchases of property and equipment (383) (1,232)
Purchase of customer lists (1,727) -
----------- -----------
Net cash used in investing activities (2,110) (1,232)
----------- -----------
Cash flows from financing activities:
Payments on long-term debt and capital
lease obligations (263) (376)
Proceeds from asset based loan - 946
Proceeds from stand by credit facility 1,000 7,163
----------- -----------
Net cash provided by financing
activities 737 7,733
----------- -----------
Net increase in cash and cash equivalents 2,081 3,759
Cash and cash equivalents, beginning of
period 79 1,363
----------- -----------
Cash and cash equivalents, end of period $ 2,160 $ 5,122
=========== ===========
Non-cash investing and financing activities:
Purchase of customer lists $ 7,180 $ -
=========== ===========
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