TMCnet News
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[February 19, 2004] ITXC Had Record Fourth Quarter Revenues of $97.9 Million ITXC Corp.(R) (NASDAQ:ITXC) had revenues of $97.9 million for the fourth quarter of 2003, an increase of 31% from the same quarter of 2002 and a sequential increase of 31% from the third quarter of 2003.The Company's net loss for the fourth quarter of 2003 was $11.1 million. This compared to a net loss for the fourth quarter of 2002 of $19.2 million and a net loss for the third quarter of 2003 of $9.9 million. The Company's net loss per share was $0.26 for the fourth quarter of 2003 compared to a net loss per share of $0.44 for the fourth quarter of 2002 and a $0.23 net loss per share in the third quarter of 2003. The weighted average shares outstanding for the fourth quarter of 2003 were 43.3 million compared with 44.0 million for the fourth quarter of 2002 and 43.2 million for the third quarter of 2003. The Company had revenues minus data communications and telecommunications expenses and minus network operations expenses for the fourth quarter of 2003 of $5.8 million as compared to $5.5 million in the fourth quarter of 2002 and $3.9 million in the third quarter of 2003. During the fourth quarter of 2003 the Company had SG&A expense of $9.8 million. Of this amount, $1.4 million represents transaction, integration and employee retention expenses relating to the proposed merger between ITXC and Teleglobe. The Company anticipates that it will incur approximately $1.6 million of such transaction, integration and employee retention expenses during the first quarter of 2004. During the fourth quarter of 2003, the Company wrote off the remainder of its South American investment, Telenova, which resulted in a $500,000 charge. The Company also wrote off the remaining carrying value of an intangible asset related to an exclusive contract in Lithuania, which was acquired in the Nexcom Telecommunications acquisition in May 2002. This write off resulted in a $2.0 million charge in the fourth quarter. After this write off, future amortization of intangibles expenses will be reduced by approximately $100,000 per quarter. The two write-offs and the merger related expenses referred to above, increased the net loss in the fourth quarter of 2003 by $3.9 million or $0.09 per share. The Company used $3.6 million in cash during the quarter compared with $18.0 million in the fourth quarter of 2002 and $4.5 million during the third quarter of 2003. The Company ended the quarter and year with over $52.8 million of cash, cash equivalents and marketable securities (of which $6.3 million represents restricted cash) and only $0.8 million of long-term debt, which is related to capital leases. Pursuant to the merger agreement with Teleglobe, the Company no longer has any outstanding buyback authorization. During the quarter the Company purchased no shares under its prior buyback authorizations. Full Year Results Revenues for the year 2003 were $338.4 million, up 26% from $268.4 million in 2002. The Company's net loss in 2003 was $50.5 million compared to $40.3 million in 2002. For 2003, the Company's net loss per share was $1.18 compared to $0.88 in 2002. Minutes of traffic for 2003 were approximately 4.1 billion versus approximately 3.1 billion minutes for 2002. This is a 31% increase year over year. Other Recent News -- In Q403, ITXC established over 50 new connections with VoIP-based carriers using its new carrier-class VoIP Internetworking capability - VoIPLink. ITXC handled over 70 million minutes in the quarter via the new connection model and is now exchanging over 150 million minutes per month with internetworked VoIP carriers, including earlier generation VoIP connections that are currently being upgraded to the new carrier-class model. -- ITXC increased its portfolio of interconnected carriers. Announced interconnects include Dancris in the US, Mobicom in Mongolia, Lanka Bell in Sri Lanka, Comstar in Russia, CTBC in Brazil, and MegaFon in Russia. -- ITXC opened a new switchless carrier facility in Hong Kong to enable Asian voice carriers with Hong Kong PSTN facilities to immediately gain the full benefits of ITXC.net. Multiple carriers are connected at the new Hong Kong facility or "SuperPoP" and traffic has been ramping. -- On Monday, December 15, ITXC carried its billionth minute of international voice traffic for the fourth quarter which ended on December 31, 2003. Since the first minute carried in April 1998, ITXC has delivered nearly 10 billion minutes of voice service to carrier customers around the world over ITXC.net. Also in December, ITXC.net experienced its first 20 million minute day and its first 1 million minute hour. -- ITXC and Teleglobe International Holdings Ltd, signed a definitive merger agreement during the quarter. Early termination of the Hart-Scott-Rodino review period has been received and Teleglobe Bermuda Holdings Ltd has filed a registration statement on Form S-4 with the SEC which is available on the SEC website at http://www.sec.gov/Archives/edgar/data/1278739/ 000104746904003562/a2126758zs-4.htm. (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field.) The merger is subject to a number of conditions including approval by ITXC shareholders which will be sought once the registration statement has been declared effective by the SEC. Chairman Evslin's Comments "It is a pleasure to be able to report renewed growth in traffic, revenue, and margin in the fourth quarter - especially after the weakness in the previous quarter. We have recovered from that and then some. Beyond seasonality, I believe this strength is due to three factors: "1. The advantage our highly automated proprietary routing system gives us. We are continuing to improve the system and our ability to use it. Moreover, we continue to develop tools which let our suppliers and customers interact directly with our systems. I don't believe this kind of routing can be done on an hierarchical PSTN network. "2. Rapid adoption of VoIP by both traditional and non-traditional carriers. Our recently announced VoIPLink Service gives us a unique ability to serve these carriers with a direct VoIP interconnect. "3. Great focus by all ITXC employees despite the announcement of a proposed merger and the distraction of planning for that merger. "The growth in the fourth quarter of 2003 has carried over to January, 2004 although this quarter will not benefit from as many holidays." |