Telanetix, Inc. (OTC BB: TNIX), a leading cloud-based
communications provider offering next generation voice services and
solutions to the business market, today reported financial results
for its 2011 fourth quarter and full year ended December 31,
2011.
Fourth Quarter 2011 Financial Highlights
- Core voice revenue increased 21%
year-over-year to $6.6 million, compared to $5.5 million in the
fourth quarter of 2010.
- Total revenue increased 12%
year-over-year to $7.5 million, compared to $6.7 million in the
fourth quarter of last year, reflecting the expected increase in
core product revenues.
- Achieved positive operating income of
$23,000 for the first time in Company history. Net loss from
continuing operations improved to $568,000, or a loss of $0.12 per
share, compared to net loss of $1.6 million, or a loss of $0.36 per
share, in the fourth quarter last year.
- Adjusted EBITDA increased to a record
$1.2 million, compared to $536,000 in the fourth quarter last
year.
- Total cash and cash equivalents were
$1.8 million at December 31, 2011 after debt service of $1.4
million during the year.
Full Year 2011 Financial Highlights
- Core voice revenue increased 13.4%
year-over-year to $24.7 million.
- Total revenue increased $187,000
year-over-year to $28.7 million.
- Net loss from continuing operations was
$5.3 million, or a loss of $1.12 per share, compared to net income
from continuing operations of $10.3 million, or $4.53 per share,
which included a $16.5 million gain on recapitalization and
$800,000 credit from change in fair market value of derivative
liabilities.
- Adjusted EBITDA of $2.6 million,
representing a second consecutive full year of positive EBITDA and
a more than $800,000 increase from adjusted EBITDA of $1.7 million
for 2010.
Doug Johnson, Telanetix’ CEO said, “2011 was a pivotal year for
Telanetix in which we stabilized the company to create a foundation
for growth, and our solid results reported today reflect progress
with our shift in strategic focus toward growing our business and
further expanding our presence and share in the marketplace. Core
revenue for the fourth quarter grew 21 percent year-over-year to a
record $6.6 million and full year total revenue grew 12 percent
over 2010. In addition, we achieved our ninth consecutive quarter
of positive adjusted EBITDA, posting a record $1.2 million for the
fourth quarter, as well as a second consecutive full year of
positive EBITDA.
“During the year we made material progress building on our
strategic partnerships and expanding our customer reach by adding
significant new channel partners, including Mitel Networks,
Vertical Communications and Staples, and growing existing
relationships including Costco and Office Depot,” Johnson
concluded.
FY-2012 Financial Guidance
Based on the strong market acceptance Telanetix has seen for its
DPS and SIP trunking services, the Company expects to achieve total
revenue for 2012 of between $31.5 million to $32.0 million,
representing growth of approximately 10% to 12%, and core voice
revenue for 2012 of between $28.0 million and $28.5 million,
representing growth of between 13% and 15%. The Company also
expects to achieve adjusted EBITDA for 2012 of between $4.50
million and $4.75 million, representing growth of approximately 73%
to 83%. Telanetix expects to fund this growth organically without
need to raise additional capital.
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. Management
uses adjusted EBITDA to evaluate changes in the company’s core
earnings from operations, unaffected by non-cash expenses, expenses
related to the company’s capital structure, taxes or extraordinary
events. 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, as well as the Company’s recent
recapitalization and severance charges. A reconciliation of net
income to adjusted EBIDTA can be found at the end of this
release.
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) 270-6057 and to access the call internationally, dial
(617) 213-8891 and enter pass code 38318731. 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 March 22, 2012
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 81462315.
About Telanetix, Inc.
Telanetix, Inc. (OTC BB: TNIX) is a leading cloud based
communications solutions provider offering next generation voice
services to all business market segments. Telanetix solutions meet
the real-world communications demands of its customers with an
industry-leading value proposition of cutting edge products and
technology that brings enhanced productivity and industry-leading
savings to our customers. The company’s hosted telecom voice
services, marketed under the “AccessLine” brand, give companies
flexible calling solutions, a simpler installation experience, and
a greater range of support options than traditional telecom
providers. With a history of serving over 100,000 business
customers, including Fortune 50 companies, we’ve scaled our
award-winning technologies to meet the needs of
entrepreneurial-minded small businesses.
Safe Harbor Statement
Certain statements contained in this press release are
“forward-looking statements” within the meaning of applicable
federal securities laws, including, without limitation, our
expectations regarding growth in our core revenue for 2012,
anything relating or referring to future financial results and
plans for future business development activities, including
anticipated effects of distribution relationships, and are thus
prospective. Forward-looking statements are inherently subject to
risks and uncertainties some of which cannot be predicted or
quantified based on current expectations. Such risks and
uncertainties include, without limitation, the risks and
uncertainties set forth from time to time in reports filed by the
company with the Securities and Exchange Commission could
materially and adversely affect our business, operating results and
financial condition. Although the company believes that the
expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to have been correct. Consequently, future events and actual
results could differ materially from those set forth in,
contemplated by, or underlying the forward-looking statements
contained herein. The companies undertake no obligation to publicly
release statements made to reflect events or circumstances after
the date hereof.
-Tables to Follow -
TELANETIX, INC. Consolidated Balance Sheets
December 31, 2011 December 31,
2010 ASSETS Current assets Cash $ 1,840,265 $
2,330,111 Accounts receivable, net 1,925,955 1,590,022 Inventory
113,305 182,924 Deferred Financing 304,456 - Prepaid expenses and
other current assets 370,589 530,548
Total current assets 4,554,570 4,633,605 Property and equipment,
net 1,683,337 2,641,731 Goodwill 7,044,864 7,044,864 Purchased
intangibles, net 8,978,337 11,178,337 Other assets 379,496
583,632 Total assets $ 22,640,604 $
26,082,169
LIABILITIES AND STOCKHOLDERS'
DEFICIT Current liabilities Accounts payable $ 1,524,645 $
1,609,488 Accrued liabilities 2,538,829 2,326,465 Deferred revenue
1,063,548 1,016,021 Interest tax payable — 225,000 Current portion
of capital lease obligations 356,227 404,710 Current portion of
long-term debt 3,502,213 1,200,000
Total current liabilities 8,985,462 6,781,684
Non-current liabilities Deferred revenue, net of current
portion 170,219 253,798 Capital lease obligations, net of current
portion 353,860 116,251 Long-term accounts payable 39,444 —
Long-term debt, net of current portion 4,306,218
5,291,539 Total non-current liabilities
4,869,741 5,661,588 Total liabilities
13,855,203
12,443,272 Stockholders' equity (deficit)
Common stock, $.0001 par value;
Authorized: 8,000,000 shares; Issued and outstanding: 4,820,098 and
4,594,262 at December 31, 2011 and December 31, 2010,
respectively
482 34,457 Additional paid in capital 44,084,429 43,569,588
Warrants 56,953 56,953 Accumulated deficit (35,356,463 )
(30,022,101 ) Total stockholders' equity (deficit)
8,785,401 13,638,897 Total liabilities and
stockholders' equity (deficit) $ 22,640,604 $ 26,082,169
TELANETIX, INC. Consolidated
Statements of Operations Years ended December
31, 2011 2010 Revenues $ 28,706,786
$ 28,520,084 Cost of revenues 11,835,530
12,098,727 Gross profit 16,871,256 16,421,357
Operating expenses Selling and marketing 6,694,572 6,817,724
General and administrative 7,711,721 7,402,862 Research,
development and engineering 1,884,213 2,566,366 Depreciation
638,410 598,940 Amortization of purchased intangibles
2,200,000 2,200,000 Total operating expenses
19,128,916 19,585,892 Operating
loss (2,257,660 ) (3,164,535 ) Other income (expense)
Interest income 239 1,079 Interest expense (3,187,449 ) (3,306,805
) Gain/(loss) on debt extinguishment — 16,497,185 Change in fair
market value of derivative liabilities —
790,648 Total other income (expense) (3,187,210 )
13,982,827 Income (loss) from continuing
operations before taxes (5,444,870 ) 10,818,292 Income tax
expense (benefit) (110,508 ) 225,000 Income (loss) from
continuing operations (5,334,362 ) 10,593,292 Loss from
discontinued operations — (269,733 )
Net income (loss) $ (5,334,362 ) $
10,323,559
Net income (loss) per share – basic and diluted
Continuing operations $ (1.12 ) $ 4.53 Discontinued operations
— (0.11 ) Net income (loss) per share $ (1.12
) $ 4.42 Weighted average shares outstanding – basic
and diluted 4,747,706 2,335,994
TELANETIX, INC. Net Income (Loss) to EBITDA
Reconciliation (Unaudited) Three months
ended Twelve months ended December 31,
December 31, 2011 2010 2011
2010 Adjusted EBITDA (earnings release purposes
only) Net Income / (Loss) $
(568,440
) $ (1,556,170 ) $ (5,334,362 ) $ 10,323,559 Depreciation and
amortization of purchased intangibles 1,073,486 998,098 4,080,398
3,976,927 Interest Expense 701,819 833,456 3,187,210 3,305,006
Income Tax (Expense)/Benefit (110,508 ) 187,500
(110,508 ) 225,000 EBITDA
1,095,357
462,884 1,822,738 17,830,492 Adjustments for certain non-cash
expenses: Severance Costs 12,948 - 247,740 - Gain on Extinguishment
of Debt - 13,669 - (16,497,185 ) Change in fair market value of
derivative liabilities - - - (790,648 ) Stock based compensation
101,456 59,571 480,866
1,177,841 Adjusted EBITDA $ 1,210,761 $
536,124 $ 2,551,344 $ 1,720,500