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Fusion Reports Fourth Quarter and Full Year 2017 Financial ResultsNEW YORK, March 22, 2018 (GLOBE NEWSWIRE) -- Fusion (NASDAQ:FSNN), a leading cloud services provider, today announced financial results for its fourth quarter and full year ended December 31, 2017. Fourth Quarter 2017 Highlights
Full Year 2017 Highlights
Subsequent Events
Management Commentary “Fusion delivered outstanding results over the course of 2017,” said Matthew Rosen, Fusion’s Chief Executive Officer. “Excluding the contribution from Apptix, the company achieved year-over-year revenue growth in Business Services for all four quarters, confirming that our strategy is working and demonstrating the strength of our value proposition in the marketplace. This performance was highlighted by Fusion’s strong growth and solid operational metrics in Business Services in the fourth quarter. We also saw sustained positive momentum in organic bookings and in the contract value of our backlog, which bodes well for the future as we convert these customer wins to revenue. “We have also made significant progress toward closing the Birch acquisition. Over the past several months, teams from both sides have been working closely together to develop detailed integration plans so that we will hit the ground running on Day One after the close. We also received overwhelming support for the transaction at our shareholder meeting in February. While the regulatory process has taken longer than expected, only one more state application requires approval for us to be in a position to close the transaction, and we expect to obtain this by the end of the first week of April. “Meanwhile, the debt syndication process remains extremely active, and we are as confident as ever in closing the financing. The lengthy regulatory approval process has given us a greater opportunity to work on achieving the best possible terms for Fusion, in light of both present and future opportunities to create shareholder value through acquisitions. We continue to feel very good about the deal today and believe we have a clear path to closing the financing in the near term,” Mr. Rosen concluded. “Fusion’s strong year-over-year Adjusted EBITDA growth in the fourth quarter and for full year demonstrates our ability to successfully identify and integrate acquisitions,” said Michael Bauer, Fusion’s Chief Financial Officer. “In 2017, Fusion achieved all of the cost synergies related to Apptix. With the additional liquidity from our recent equity offering, we believe that Fusion is well positioned for sustained future growth to create long-term value, leveraging the unique and compelling single source platform we have built over the past six years.” Fourth Quarter 2017 Financial Results Consolidated revenue grew 36% in Q4 2017 to $40.3 million, compared to $29.6 million in Q4 2016, driven by increases in the company’s Business Services and Carrier Services segments. Business Services revenue grew by $4.7 million or 19% in Q4 2017 to $29.6 million, compared to $24.8 million in Q4 2016, primarily due to the acquisition of Apptix. Excluding the contribution from Apptix, Business Services revenue grew 12% year over year. Carrier Services revenue grew by $5.9 million or 125% in Q4 2017 to $10.7 million, compared to $4.8 million Q4 2016, primarily due to an increase in the total minutes of traffic carried on Fusion’s network. Consolidated gross margin was 42.6% in Q4 2017, as compared to 50.1% in Q4 2016, primarily due to a greater proportion of Carrier Services revenue, which generates a substantially lower margin than Business Services revenue, within our consolidated results. Business Services gross margin was 56.5%, compared to 58.3% in Q4 2016, primarily due to the inclusion of revenue from customers acquired during the first half of 2017 which carried a lower gross margin. Carrier Services gross margin was 4.3%, compared to 7.0% in the fourth quarter of 2016. Net loss attributable to common stockholders in Q4 2017 was $4.1 million, or $0.18 per share on a basic and diluted basis, compared to a net loss in Q4 2016 of $4.6 million, or $0.26 per share on a basic and diluted basis. The provision for income taxes in Q4 2017 was $20 thousand compared to an income tax benefit of $1.6 million in Q4 2016. Adjusted EBITDA grew 91% in Q4 2017 to $4.2 million, compared to $2.2 million in Q4 2016 (see definition and further discussion about the presentation of adjusted EBITDA, a non-GAAP term, below). Capital expenditures totaled $0.6 million in Q4 2017, or 1.6% of consolidated revenue. Full Year 2017 Financial Results Consolidated revenue grew 21% in 2017 to $150.5 million, compared to $124.7 million in 2016. Business Services revenue grew 32% to $117.3 million, compared to $89.2 million in 2016, primarily due to the Apptix acquisition. Carrier Services revenue was $33.2 million in 2017 compared to $35.5 million in 2016. Consolidated gross margin in 2017 was 44.8% versus 43.3% in 2016. Business Services gross margin was 56.5% 2017, as compared to 58.6% in 2016, primarily due to the inclusion of revenue from customers acquired during the first half of 2017 which carried a lower gross margin. Carrier Services gross margin was 3.6%, as compared to 4.8% in the prior year. Net loss attributable to common shareholders in 2017 was $15.9 million, or $0.72 per share on a basic and diluted basis, compared to net loss in 2016 of $15.1 million, or $0.98 per share on a basic and diluted basis. The provision for income taxes in 2017 was $62 thousand compared to an income tax benefit of $1.6 million in 2016. Adjusted EBITDA grew 73% in 2017 to $15.3 million, compared to $8.9 million in 2016. Capital expenditures totaled $5.0 million in 2017, or 3.3% of consolidated revenue. Further details about the Company’s financial results are available in its annual report on Form 10-K, which will be available in the investor relations section of the Company’s website at ir.fusionconnect.com.
Interested parties should dial into the call 10 minutes prior to the start time and ask to be placed into the Fusion call. An operator will register your name and organization. If you have any difficulty connecting with the conference call, please contact MZ Group at 1 949.491.8235. Use of Non-GAAP Financial Measurements The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the cloud communications industry to evaluate companies on the basis of operating performance and leverage. Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant non-recurring transactions, if any, such as impairment losses and expenses associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as changes in fair value of the Company’s derivative liabilities and stock-based compensation. The Company also believes that Adjusted EBITDA provides investors with a measure of the Company’s operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Although the Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. EBITDA and Adjusted EBITDA are not intended to represent cash flows for the periods presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). In accordance with SEC Regulation G, the non-GAAP measurements in this press release have been reconciled to the nearest GAAP measurement, which can be viewed under the heading "Reconciliation of Net Loss to Adjusted EBITDA", immediately following the Consolidated Balance Sheets included in this press release. - Tables Follow -
About Fusion Fusion (NASDAQ:FSNN), a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry's single source for the cloud. Fusion's advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud communications, contact center, cloud connectivity, and cloud computing. Fusion's innovative, yet proven cloud solutions lower our customers' cost of ownership, and deliver new levels of security, flexibility, scalability, and speed of deployment. For more information, please visit www.fusionconnect.com. Forward Looking Statements Statements in this press release that are not purely historical facts, including statements regarding Fusion’s beliefs, expectations, intentions or strategies for the future, may be “forward-looking statements” under the Private Securities Litigation Reform Act of 1995. Such statements consist of any statement other than a recitation of historical fact and may sometimes be identified by the use of forward-looking terminology such as “may”, “expect”, “anticipate”, “intend”, “estimate” or “continue” or the negative thereof or other variations thereof or comparable terminology. The reader is cautioned that all forward-looking statements are speculative, and there are certain risks and uncertainties that could cause actual events or results to differ from those referred to in such forward-looking statements. Important risks regarding the Company’s business include the Company’s ability to raise the capital necessary to fund its acquisition of Birch Communications Holdings, Inc. (and no assurance can be made as to the timing, terms or completion of any financing or whether a financing will be available on favorable terms, or at all), its ability to obtain the required approvals necessary to close that transaction, and its ability to integrate that business following the closing; the Company’s ability to comply with covenants included in its senior debt agreements; competitors with broader product lines and greater resources; emergence into new markets; natural disasters, acts of war, terrorism or other events beyond the Company’s control; and other factors identified by Fusion from time to time in its filings with the Securities and Exchange Commission, which are available through https://www.sec.gov. However, the reader is cautioned that Fusion’s future performance could also be affected by risks and uncertainties not enumerated above. In the event that there is any inconsistency between the information contained in this press release and the information set forth in Fusion’s Form 10-K or 10-Q filed with the Securities and Exchange Commission, the information contained in the Form 10-K or 10-Q governs. Fusion Contact: Investor Relations: |