DGAP-News: Infonet Services Corp.
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neuester Beitrag 03.08.01 14:37:07 von
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Infonet Announces First Quarter Results and Revises Annual Guidance
EBITDA, Operating Income, Net Income, and EPS
"The strength of our business model has allowed us to maintain profitability in the first quarter," said Mr. Collazo, "and our control over expenses and strong cash position enhance the inherent strength of our business." Earnings before interest, taxes, depreciation and amortization (EBITDA) during Q1 FY `02 increased to $22 million from $18 million in Q1 FY `01. Depreciation for Q1 FY `02 increased to $18 million compared with $9 million in Q1 FY `01. Operating income for Q1 FY `02 before stock compensation charges was $4 million, unchanged from Q1 FY `01.
First quarter net income was $3 million versus $8 million in the comparable quarter. Basic and diluted earnings per share for Q1 FY `02 were $0.01 versus $0.02 in Q1 FY `01. "First quarter net income in the previous fiscal year were positively affected by a one-time credit related to a stock compensation plan restructuring," said Mr. Collazo.
Client Data During Q1 FY `02, Infonet added 185 new client service contracts. Of the new contracts, 116 were new clients and 69 represented additional sales to existing clients from cross-selling activities.
"New client numbers are strong," said Mr. Collazo. "Multinationals not only buy our services to become more globally efficient, but to increase their ROI." He attributed increased sales to the success of the Company`s Application Defined Networking (ADN) programs. "These programs leverage Infonet`s consultative sales approach to network solutions."
AUCS Sales from the AUCS channel, however, continue to perform below expectations. Mr. Collazo said that Infonet faces several challenges with the AUCS customer base, including:
* Transitioning clients. * Renewing contracts for AUCS legacy services in a competitive pricing environment. * Lack of sales of new Infonet services to existing AUCS clients. * Imposing new business practices on a channel accustomed to different processes.
"Clients value Infonet for its high level of customer service," said Mr. Collazo. "Creating the groundwork for a seamless client transition from the AUCS platform to the Infonet platform has absorbed significantly more management resources than originally expected. In addition, continued delays in the transition have hampered our ability to sell new Infonet services into the AUCS channel."
Mr. Collazo said that since Infonet has assumed the management of AUCS, many of the AUCS client contracts have come up for renewal. "In the increasingly competitive regional environment," he said, "renewal pricing for legacy AUCS services has been disappointing. In addition, our move to eliminate unprofitable product lines from the AUCS portfolio caused a downturn in our revenue from this area."
"While our growth projections always factor price erosion," he continued, "they are based on the counterbalancing benefit of growth from new sales. Until we can sell former AUCS clients new Infonet services, the non-core AUCS business will not perform as well as our core network services. The process of transitioning AUCS clients to the Infonet platform is planned to be completed within the next nine months," said Mr. Collazo.
As a result of instituting new Infonet policies, AUCS clients that were being billed on an annual basis are now receiving monthly invoices. In addition, under its management contract, Infonet has reduced the annual losses within the AUCS business from more than $250 million to approximately $70 million, and reduced the AUCS workforce from 1,300 to 600 employees. The contract for managing AUCS still has more than a year to go.
Mr. Collazo reaffirmed his confidence that the AUCS transaction will ultimately add to Infonet`s future growth rate. Although the performance of AUCS has impacted revenue growth as we integrate the customer base, the terms of the agreements with AUCS have nonetheless enabled us to make a reasonable margin during this transition period. The AUCS customer base has given us access to a significant number of major accounts; this critical mass and market share would have required substantial additional investment which we have avoided."
Strategic Review Process As previously announced, Infonet is in the process of exploring strategic alternatives in light of KPN Telecom B.V.`s previous announcement that it desires to sell its stake in Infonet as part of its debt reduction plan. This process has caused certain of Infonet`s partners to delay full-scale sales efforts pending resolution of the process. This delay by our partners is also having an effect on Infonet`s rate of revenue growth.
Safe Harbor Statement Infonet has made forward-looking statements 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, particularly AUCS clients, and the effect of currency fluctuation. Investors should refer to risk factors elaborated on in Infonet`s 10K, 10-Qs and other recent filings made with the U.S. Securities and Exchange Commission. These documents are available through the investor relations portion of Infonet`s web site at http://www.infonet.com.
Infonet Services Corporation Morgan Molthrop +1-310-335-2606 email@example.com or Amanda Bassett +44-7860-249-997 firstname.lastname@example.org
end of message, (c) DGAP 03.08.2001
031433 Aug 01
Autor: DGAP import (),14:37 03.08.2001
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