NEW BRUNSWICK, N.J., Feb. 28 /PRNewswire-FirstCall/ --
Arbinet-thexchange, Inc. (NASDAQ:ARBX) today reported financial
results for the fourth quarter and full year ended December 31,
2007. Fourth quarter 2007 fee revenues were $12.4 million, a 3.9%
decrease compared to $12.9 million in the fourth quarter 2006, and
essentially flat with the third quarter 2007. A total of 3.7
billion minutes were bought and sold on Arbinet's exchange in the
fourth quarter 2007, a 1.9% increase compared to 3.6 billion
minutes in the fourth quarter 2006. Arbinet completed 469.7 million
calls during the fourth quarter 2007, compared to 420.3 million
calls in the fourth quarter 2006. Fourth quarter 2007 trading
revenue and related costs each declined approximately $20.1 million
or 14.8% compared to the same quarter in 2006, reflecting the lower
average trade rate of minutes transacted through the platform.
Fourth quarter 2007 net loss was ($3.6) million or ($0.14) per
diluted share, compared to a net loss of ($1.7) million or ($0.07)
per diluted share in the fourth quarter 2006. Current year results
include $3.0 million in operating losses related to the Company's
digital media segment. The Company is evaluating strategic
alternatives for Broad Street Digital Ltd., a license management
platform for intellectual property rights and digital content
distribution, and expects to divest the business in the second
quarter of 2008. As a result, the Company recorded a pre-tax
impairment charge of $2.3 million to write down Broad Street
Digital's intangible and other long-lived assets to their estimated
fair value. Full year 2007 fee revenues were $50.1 million, an
increase of 4.5% from 2006 fee revenues of $47.9 million. A total
of 14.4 billion minutes were bought and sold on Arbinet's exchange
in 2007, up from 12.6 billion in 2006, representing a year over
year increase of 14.3%. Full year 2007 net loss was ($6.9) million
or ($0.28) per diluted share, compared to a net loss of ($.4)
million or ($0.02) per diluted share for the full year 2006.
William M. Freeman, President and Chief Executive Officer of
Arbinet, said, "While our fourth quarter and full-year results were
mainly in line with our expectations, we realize that we have a lot
to do to improve growth and profitability. The decision regarding
Broad Street Digital is a result of the review conducted by
management and the Board which concluded that the best path to
creating value for our shareholders is to refocus on growing our
core voice and data businesses." Separately, Arbinet today
announced its strategic priorities for 2008. In addition to
refocusing on its core voice and data businesses, Arbinet is
working to increase liquidity on the exchange by changing the way
it markets its products and services. Arbinet is working to enhance
its data offering to capture a greater share of the rapidly growing
data market. Lastly, Arbinet also announced a special one-time cash
distribution to shareholders of $0.40 per share. Quarterly
Conference Call Arbinet will host a conference call to discuss its
fourth quarter 2007 results at 5:00 p.m. Eastern Time today. The
dial-in number for the live audio is 888-562-3654, or 973-582-2703
for international callers; the passcode is 36430509. A live web
cast of the conference call will be available on Arbinet's web site
at http://www.arbinet.com/. A replay of the call will be available
from 8:00 p.m. Eastern Time on Thursday, February 28, 2008 through
midnight on March 13, 2008 at http://www.arbinet.com/ and by
telephone at 800-642-1687, or 706-645-9291 for international
callers; the passcode is 36430509. 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 990
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 2007. 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/. Forward-Looking Statements 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 effectively divest Broad Street Digital
Limited; members (in particular, significant trading members) not
trading on our exchange or utilizing our new and additional
services (including DirectAxcess(SM), PrivateExchange(SM),
AssuredAxcess(SM) and PeeringSolutions(SM)); continued volatility
in the volume and mix of trading activity; 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; regulatory
uncertainty; 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 that 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 Twelve Months Ended December 31, December 31, 2006
2007 2006 2007 Trading revenues $135,663 $115,562 $495,115 $483,891
Fee revenues 12,880 12,423 47,863 50,146 Total revenues 148,543
127,985 542,978 534,037 Cost of trading revenues 135,705 115,547
495,159 484,116 12,838 12,438 47,819 49,921 Costs and expenses
Operations and development 4,677 5,532 17,554 21,339 Sales and
marketing 2,492 2,387 8,446 9,414 General and administrative 4,104
3,693 16,189 15,297 Depreciation and amortization 1,795 1,926 6,954
8,014 Severance charges - 288 - 1,318 Restructuring and impairment
charges - 2,329 - 1,657 Reserve for Litigation 600 - 507 1,940
Total costs and expenses 13,668 16,155 49,650 58,979 Income (loss)
from operations (830) (3,717) (1,831) (9,058) Interest income
(expense), net 561 453 1,992 1,780 - - - - Other income (expense),
net 374 (304) 1,342 569 Income before income taxes 105 (3,568)
1,503 (6,709) Provision for income taxes 1,798 7 2,013 232 Income
from continuing operations (1,693) (3,575) (510) (6,941)
Discontinued operations: Income from discontinued operations, net
of income tax of $4 - - 121 - Net income $(1,693) $(3,575) $(389)
$(6,941) Preferred stock dividends and accretion - - - - Net income
attributable to common stockholders $(1,693) $(3,575) $(389)
$(6,941) Basic earnings per share: Continuing operations $(0.07)
$(0.14) $(0.02) $(0.28) Discontinued operations 0 0 0 0 Net income
$(0.07) $(0.14) $(0.02) $(0.28) Diluted earnings per share:
Continuing operations $(0.07) $(0.14) $(0.02) $(0.28) Discontinued
operations - - - - Net income $(0.07) $(0.14) $(0.02) $(0.28)
Weighted average number of common shares Basic 25,280,864
25,534,241 25,177,662 25,072,482 Diluted 25,280,864 25,534,241
25,177,662 25,072,482 ARBINET - THEXCHANGE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS As of As of December 31, 2006 December
31, 2007 Assets Current Assets: Cash and cash equivalents 32,986
28,556 Marketable securities 30,051 20,344 Trade accounts
receivable, net 34,809 28,451 Other current assets 1,966 2,862
Total current assets 99,812 80,213 Property and equipment, net
23,828 23,001 Other long-term assets 8,882 6,720 Total Assets
$132,522 $109,934 Liabilities & Stockholders' Equity Current
Liabilities: Short-term debt obligations 8,748 785 Accounts payable
19,945 16,394 Deferred revenue 3,220 2,499 Accrued expenses and
other current liabilities 10,418 8,313 Total current liabilities
42,331 27,991 Other long-term liabilities 3,260 2,282 Total
Liabilities 45,591 30,273 Stockholders' Equity 86,931 79,661 Total
Liabilities & Stockholders' Equity $132,522 $109,934
DATASOURCE: Arbinet-thexchange, Inc. CONTACT: Jack Wynne, CFO of
Arbinet-thexchange, Inc., +1-732-509-9230; Andrea Priest, or, Andi
Salas, both of Joele Frank, Wilkinson Brimmer Katcher,
+1-212-355-4449 Web site: http://www.arbinet.com/
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