With some recent company moves to address their debt overhang, this stock should be on more solid footing going forward. The company's results continue to improve and I think the stock price will follow suit.
BELLEVUE, Wash., Aug 11, 2010 (BUSINESS WIRE) -- Telanetix, Inc. (OTCBB:
-- Revenue was $7.3 million, compared to $6.9 in the second quarter of 2009, and $7.7 million in Q1 2010
-- Core voice revenue increased to $5.9 million compared to $4.9 million in the second quarter of 2009, and $5.8 million in Q1 2010
-- Adjusted EBITDA improved to $321,000, compared to a loss of $129,000 a year ago
-- Gross profit was $4.3 million, or 58.6% of revenue, compared to $4.2 million, or 60.7% of revenue a year ago, and $4.5 million, or 58.5% of revenue, in Q1 2010
-- Total operating expenses improved to $5.1 million compared to $5.2 million a year ago
-- Operating loss reduced to $818,000 for the second quarter compared to a loss of $962,000 a year ago
-- Net income from continuing operations for the second quarter was $3.4 million, or $0.11 per share, compared to a loss of $6.4 million, or a loss of $0.20 per share, in the second quarter last year
Adjusted EBITDA is a non-GAAP financial measure. Management believes certain non-GAAP measures provide relevant and meaningful measures by which investors can evaluate the business. EBITDA is defined as earnings or loss before interest, income taxes, depreciation and amortization, and the company defines Adjusted EBITDA as EBITDA adjusted for non-cash items including stock-based and warrant compensation, charges related to changes in fair market value of warrant and beneficial conversion feature liabilities. Reconciliation can be found at the end of this release.
Doug Johnson, Telanetix's CEO, commented, "Our top line growth in the second quarter was impacted by the expected attrition of two accounts, which comprise the majority of our legacy business. We expect the attrition of these accounts will be completed by the end of calendar 2010. We achieved second quarter growth in our core revenue, which includes our next generation Digital Phone Service (DPS), Individual Services and our SIP Trunking service, of 21% year-over-year and a slight increase sequentially, helping to offset the expected decline in legacy product revenues.
"We also achieved some significant milestones during the first half of fiscal 2010. Last month we announced a significant new distribution relationship with Mitel Networks, Inc., which adds a new revenue stream for the Company and expands our overall reach in the marketplace to potential customers ranging from larger medium-size businesses to Fortune 1000 Enterprises.
"We also recently completed a successful comprehensive financial recapitalization of the Company that substantially reduced our overall $29.6 million debt to a more manageable $7.5 million level, after giving effect to the closing of the rights offering discussed below, while simultaneously increasing our working capital by $2 million. We believe Telanetix is now in a much stronger position to capitalize on growth opportunities ahead and expand our presence and share in the market."
Telanetix also plans to conduct a $3.0 million pro-rata rights offering that will allow stockholders of record as of the record date of the rights offering to purchase shares of common stock at an expected subscription price of approximately $0.03852 per share. The record date is expected to be the effective date of the registration statement to be filed to register the shares of common stock issuable upon exercise of the subscription rights. The exact number of subscription rights to be distributed per share of common stock will be set forth in such registration statement. Telanetix's board of directors required the rights offering as a condition to the recapitalization to provide stockholders with the opportunity to purchase common stock at the same implied price per share paid by the Hale Capital Partners in the recapitalization.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of securities in any state in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
Net income from continuing operations for the second quarter of 2010 was $3.4 million, or $0.11 per share, compared to a loss of $6.4 million, or a loss of $0.20 per share, in the second quarter last year. Net income for the second quarter of 2010 includes a $5.0 million credit for the change in fair market value of derivative liabilities and $788,000 of interest expense. The net loss for the second quarter of 2009 includes a $4.4 million charge related to the change in fair market value of derivative liabilities and $1.1 million of interest expense.
Total cash and cash equivalents were $965,000 at June 30, 2010, an increase from $824,000 at March 31, 2010.
Conference Call Information
Management will conduct a conference call at 1:30 p.m. PT (4:30 p.m. ET) today. To access the call in the United States, dial (866) 543-6411 and to access the call internationally, dial (617) 213-8900 and enter pass code 89547543. The call will also be broadcast live over the Internet and will be available for replay for 90 days at www.telanetix.com. A telephone replay will be available two hours after the call through August 18, 2010 by dialing (888) 286-8010 in the United States and (617) 801-6888 for international callers. All parties will need the following replay pass code 74878807.
About Telanetix, Inc.
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