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Arbinet Reports Second Quarter 2007 ResultsNEW BRUNSWICK, N.J., Aug. 8 /PRNewswire-FirstCall/ -- Arbinet-thexchange, Inc. , reported financial results for the second quarter ended June 30, 2007. Second quarter 2007 fee revenues were $12.5 million, an increase of 9% from $11.5 million in the same quarter 2006. A total of 3.48 billion minutes were bought and sold on Arbinet's exchange in the second quarter 2007, an increase of 17% from 2.99 billion minutes in the second quarter 2006. Arbinet completed 465.4 million calls during the second quarter 2007, compared to 333.5 million for the same period of 2006, representing an increase of 40%. The average call duration on Arbinet's exchange for the second quarter 2007 was 3.7 minutes per call compared to 4.5 minutes per call in the second quarter 2006. Second quarter 2007 net loss was ($2.5) million or ($0.10) per share, compared to net loss of ($0.6) million or ($0.02) per share in the second quarter 2006. Current year operating results reflect charges of $0.8 million related to litigation matters and $1.0 million for severance costs related to management changes and headcount reductions in the Company's core voice and data business. Current year results also include approximately $0.8 million of costs to support the Company's digital media initiatives, including expenses related to Broad Street Digital Limited, which Arbinet acquired in December 2006. Second quarter 2006 results include $1.3 million of expenses related to Arbinet's proxy contest in connection with its 2006 Annual Meeting of stockholders. Roger H. Moore, interim Chief Executive Officer and President of Arbinet, commented, "Second quarter volumes on our core exchange tracked slightly lower than the first quarter, and in-line with recent historic trends. We were, however, able to achieve sequentially flat revenues, as we benefited from stabilized pricing. Since assuming the CEO role, we have been working to improve financial performance and regain the company's business momentum. We reduced headcount in our core voice and data business, and realigned our management team to focus our efforts on identified growth opportunities." "Looking forward, we expect third quarter revenue to comparable to the second quarter. Growth initiatives, settlement of litigation matters and recent cost reduction measures should improve financial performance in the second half of the year. Longer term, we are developing a multi-year plan to apply our technology and services to targeted markets, and will be working with our expanded Board of Directors to identify additional opportunities to increase shareholder value." Quarterly Conference Call Arbinet will host a conference call to discuss its second quarter 2007 results, at 5:00 p.m. EDT today. The dial-in number for the live audio call is (201) 689-8562. A live webcast of the conference call can be accessed through the Company's Investor Relations web site at http://www.arbinet.com/. In addition, a replay of the call will be available from 8:00 p.m. on Wednesday, August 8, 2007 through 11:59 PM ET on Wednesday, August 22, 2007 at http://www.arbinet.com/ and by telephone at (201) 612-7415. The account number to access the replay is 3055 and the conference ID is 250055. About Arbinet Arbinet is a leading provider of solutions to simplify the exchange of digital communications in a converging world. The Company operates the world's largest electronic market for trading, routing and settling communications capacity. Through its managed service offerings, Arbinet provides solutions to simplify the increased complexity of routing calls across traditional and VoIP networks. Arbinet's 900 voice and data Members, including the world's 10 largest international carriers, use Arbinet's Internet based electronic platforms to buy, sell, deliver and settle transactions valued at about $500 million in 2006. These Members include fixed, mobile and VoIP carriers, ISPs and content providers from more than 60 countries who exchange voice, data, content and value added services. For more information about Arbinet's solutions visit http://www.arbinet.com/. Contacts: Jack Wynne, CFO David Pasquale Arbinet-thexchange, Inc. The Ruth Group 1.732.509.9230 1.646.536.7006 [email protected] This press release contains forward-looking statements regarding anticipated future revenues, growth, capital expenditures, management's future expansion plans, expected product and service developments or enhancements, and future operating results. Such forward-looking statements may be identified by, among other things, the use of forward-looking terminology such as: "believes," "expects," "may," "will," "should" or "anticipates," or the negative thereof or other variations thereon or comparable terminology, or by discussions of strategy that involve risks and uncertainties. Various important risks and uncertainties may cause Arbinet's actual results to differ materially from the results indicated by these forward-looking statements, including, without limitation: the ability of Arbinet to integrate its acquisition of Flowphonics Limited (now known as Broad Street Digital Limited); members (in particular, significant trading members) not trading on our exchange or utilizing our new and additional services (including data on thexchange(SM), DirectAxcess(SM), PrivateExchange(SM), Assured Axcess(SM) and PeeringSolutions(SM); continued volatility in the volume and mix of trading activity (including the average call duration and the mix of geographic markets traded); our uncertain and long member enrollment cycle; the failure to manage our credit risk; failure to manage our growth; pricing pressure; investment in our management team and investments in our personnel; system failures, human error and security breaches that could cause Arbinet to lose members and expose it to liability; and Arbinet's ability to obtain and enforce patent protection for our methods and technologies. For a further list and description of the risks and uncertainties the Company faces, please refer to Part I, Item 1A of the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 16, 2007, and other filings, which have been filed with the Securities and Exchange Commission. Arbinet assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise and such statements are current only as of the date they are made. ARBINET - THEXCHANGE, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS Three Months Ended Six Month Ended June 30, June 30, 2006 2007 2006 2007 ($ in thousands, except per share data) Trading revenues $115,797 $122,109 $233,408 $251,629 Fee revenues 11,456 12,500 23,186 25,186 Total revenues 127,253 134,609 256,594 276,815 Cost of trading revenues 115,769 122,212 233,343 251,772 11,484 12,397 23,251 25,043 Costs and expenses: Operations and development 4,428 5,414 8,681 10,494 Sales and marketing 1,957 2,382 3,795 4,715 General and administrative 5,115 4,019 8,269 8,483 Depreciation and amortization 1,681 2,038 3,518 4,165 Severance charges - 1,021 - 1,021 Provision for Litigation (93) 790 (93) 1,940 Total costs and expenses 13,088 15,664 24,170 30,818 Loss from operations (1,604) (3,267) (919) (5,775) Interest income (expense), net 731 659 1,378 1,420 Other income (expense), net 150 211 64 167 Income (loss) before income taxes (723) (2,397) 523 (4,188) Provision for income taxes (14) 76 (2) 162 Income (loss) from continuing operations (709) (2,473) (525) (4,350) Discontinued operations: Income from discontinued operations, net of income tax of $4 121 - 121 - Net income (loss) $ (588) (2,473) $ 646 (4,350) Basic earnings (loss) per share: Continuing operations $(0.03) $(0.10) $0.02 $(0.17) Discontinued operations $ 0.01 - $0.01 - Net income $(0.02) $(0.10) $0.03 $(0.17) Diluted earnings (loss) per share: Continuing operations $(0.03) $(0.10) $0.02 $(0.17) Discontinued operations $ 0.01 - $0.01 - Net income $(0.02) $(0.10) $0.03 $(0.17) Weighted average number of common shares Basic 25,160,675 25,478,294 24,996,476 25,468,272 Diluted 25,160,675 25,478,294 25,687,748 25,468,272 ARBINET - THEXCHANGE, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of As of December 31,2006 June 30, 2007 ($ in thousands, except per share data) Assets Current Assets: Cash and cash equivalents $ 32,986 $ 24,562 Marketable securities 30,051 27,205 Trade accounts receivable, net 34,809 29,783 Prepaids and other current assets 1,966 3,520 Total current assets 99,812 85,070 Property and equipment, net 23,828 23,565 Other long-term assets 8,882 8,779 Total Assets $132,522 $117,414 Liabilities & Stockholders' Equity Current Liabilities: Short-term debt obligations $8,748 $3,151 Accounts payable 19,945 15,036 Deferred revenue 3,220 2,876 Accrued expenses and other current liabilities 10,418 11,311 Total current liabilities 42,331 32,374 Other long-term liabilities 3,260 2,962 Total Liabilities 45,591 35,336 Stockholders' Equity 86,931 82,078 Total Liabilities & Stockholders' Equity $132,522 $117,414 Arbinet-thexchange, Inc. CONTACT: Jack Wynne, CFO of Arbinet-thexchange, Inc., +1-732-509-9230;or David Pasquale of The Ruth Group, +1-646-536-7006, [email protected], for Arbinet-thexchange, Inc. Web site: http://www.arbinet.com/ |