NEW YORK, Aug. 14 /PRNewswire-FirstCall/ -- Fusion (AMEX:FSN) today
announced financial results for the quarter ended June 30, 2009.
Fusion reported Consolidated Revenues of $8.6 million for the
quarter ended June 30, 2009. This represented a decrease of 23%
compared to revenues of $11.2 million for the quarter ended June
30, 2008, and excludes revenues of $0.2 million from the Consumer
segment which has now been reclassified to discontinued operations.
The change from the prior period was primarily attributable to a
decrease in the Carrier segment; however, revenues of the Company's
Corporate Services segment increased 281% from the second quarter
of 2008. The Corporate Services segment has had five consecutive
quarters of double-digit growth in revenue, with revenue for the
second quarter of 2009 increasing 50% as compared with the first
quarter of 2009. The number of customers sold increased
approximately 40% in the second quarter, with the number of seats
or lines sold increasing almost 90% in the same period. Total
customer contract value increased 60% in the second quarter of 2009
as compared with the first quarter of 2009. The Consolidated Gross
Margin percentage after the reclassification increased to 8.0% for
the second quarter of 2009, compared to 6.2% for the second quarter
of 2008. The margin increased as a result of stronger margins in
the Carrier Services segment, as well as increased volume in the
higher margin Corporate Services segment. Selling, General and
Administrative costs improved $0.4 million, or 17% for the second
quarter of 2009 compared to the second quarter of 2008. The
improvement was attributable to the Company's exit from the
Consumer business as well as to a continuing focus on
cost-containment. For the quarter ended June 30, 2009, Adjusted
EBITDA loss (earnings before interest, taxes, depreciation,
amortization, and specific non-recurring and non-cash adjustments)
improved $0.3 million, or 18%, to ($1.4) million, compared to
Adjusted EBITDA loss of ($1.7) million for the second quarter ended
2008. Fusion also reported an increase in Net Loss applicable to
Common Stockholders of ($3.0 million) or ($0.06) per share for the
quarter ended June 30, 2009, compared to a Net Loss applicable to
Common Stockholders of ($2.9) million or ($0.08) per share for the
quarter ended June 30, 2008. The decrease in loss per share
compared to the prior year was due to an increase in the number of
shares outstanding. The primary reason for the increase in Net Loss
was due to a loss on impairment of ($0.2) million associated with
the exit from the Consumer business segment, as well as a loss from
discontinued operations of ($1.1 million), also associated with the
exit from the Consumer business. The Net Loss from Continuing
Operations in the second quarter of 2009 was ($2.1 million), which
was a 16% improvement from the Net Loss from Continuing Operations
in the second quarter of 2008. As of June 30, 2009, the Company had
current assets of $3.1 million compared to $4.2 million as of
December 31, 2008, and total assets of $6.5 million at June 30,
2009 compared to $9.5 million as of December 31, 2008. The
decreases were due to a decrease in Accounts Receivable associated
with a decrease in revenue from the fourth quarter of 2008, as well
as the impairment of Property and Equipment and Intangible Assets
related to the Consumer segment. Total Liabilities at June 30, 2009
were $15.0 million compared to $14.2 million at December 31, 2008,
as a result of an increase in Notes Payable. Stockholders'
(deficit) at June 30, 2009 was an ($8.6) million deficit, compared
to a ($4.8) million deficit as of December 31, 2008. The reason for
the change was the increase in the accumulated deficit, offset by
additional equity investments. Commenting on the results, Matthew
Rosen, Chief Executive Officer of Fusion, said, "Since the
beginning of 2009, Fusion has successfully raised an additional
$2.0 million, and completed our exit from the Consumer business.
With the restructuring completed, we have begun to see the results
of Continuing Operations improve, and can now focus entirely on
driving the growth of the Corporate and Carrier business segments
and securing the capital necessary to implement our business plan."
Expanding on Mr. Rosen's comments, Don Hutchins, Fusion's President
and Chief Operating Officer said, "We are particularly pleased with
the significant growth in our Corporate business segment. With a
strong and growing pipeline of accounts, gross margin approaching
40%, and an average customer contract commitment of just under
three years, we can anticipate greater long term stability in the
customer base, and a steady increase in revenues from this high
growth and high margin business segment." Use of Non-GAAP Financial
Measures: The Company believes that EBITDA (earnings before
interest, taxes, depreciation and amortization) is useful to
investors because it is commonly used in the communications
industry to analyze companies on the basis of operating performance
and leverage. The Company also believes that 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. Adjusted EBITDA provides an adjusted view of EBITDA that
takes into account certain significant nonrecurring transactions,
such as impairment losses associated with divested businesses and
forgiveness of debt, which vary significantly between periods and
are not recurring in nature. 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 period 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 Generally Accepted Accounting Principles (GAAP).
Consistent with the SEC Regulation G, the non-GAAP measures in this
press release have been reconciled to the nearest GAAP measure,
which can be viewed under the heading "Reconciliation of Net Income
(Loss) to Adjusted EBITDA", immediately following the Consolidated
Statements of Operations included in this press release. 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. All forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from the plans, intentions and expectations reflected in or
suggested by the forward-looking statements. Such risks and
uncertainties include, among others, introduction of products in a
timely fashion, market acceptance of new products, cost increases,
fluctuations in and obsolescence of inventory, price and product
competition, availability of labor and materials, development of
new third-party products and techniques that render Fusion's
products obsolete, delays in obtaining regulatory approvals,
potential product recalls, securing necessary funding and
litigation. Risk factors, cautionary statements and other
conditions which could cause Fusion's actual results to differ from
management's current expectations are contained in Fusion's filings
with the Securities and Exchange Commission and available through
http://www.sec.gov/. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050705/NYTU073LOGO) FUSION
Philip Turits, Treasurer CONTACT: 212-201-2407 Damon Testaverde,
Managing Director Network Financial Securities 718-317-7746 FUSION
TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended June 30,
-------- 2009 2008 ---- ---- Revenues $8,649,762 $11,156,341
Operating expenses: Cost of revenues 7,958,141 10,462,043
Depreciation and amortization 226,944 444,430 Loss on Impairment
243,000 - Selling, general and administrative expenses 2,242,168
2,687,762 Advertising and Marketing 3,016 5,091 ----- ----- Total
operating expenses 10,673,269 13,599,326 ---------- ----------
Operating loss (2,023,507) (2,442,985) Other income (expense)
Interest income (expense), net (119,390) (52,412) Other 1,279
(58,893) ----- ------- Total other income (expense) (118,111)
(111,305) -------- -------- Loss from continuing operations
(2,141,618) (2,554,290) Income (loss) from discontinued operations
(885,132) (339,671) -------- -------- Net loss $(3,026,750)
$(2,893,961) =========== =========== Losses applicable to common
stockholders Loss from continuing operations $(2,141,618)
$(2,554,290) Preferred stock dividends in arrears (159,462)
(159,462) -------- -------- Net loss applicable to common
stockholders from continuing operations (2,301,080) (2,713,752)
Income from discontinued operations (885,132) (339,671) --------
-------- Net loss applicable to common stockholders $(3,186,212)
$(3,053,423) =========== =========== Basic and diluted net loss per
common share: Loss from continuing operations $(0.04) $(0.07)
Income (loss) from discontinued operations (0.02) (0.01) -----
----- Net loss applicable to common stockholders $(0.06) $(0.08)
====== ====== Weighted average shares outstanding Basic and diluted
56,822,335 36,414,898 ========== ========== FUSION
TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET June 30, 2009 December 31, 2008
------------- ----------------- ASSETS Current assets 3,109,587
4,232,499 Property and equipment, net 2,268,594 3,829,669 Other
assets 1,086,935 1,405,623 --------- --------- TOTAL ASSETS
$6,465,116 $9,467,791 ========== ========== LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities 14,584,814
12,786,939 Long-term liabilities 434,607 1,445,431 Stockholders'
equity Preferred stock, Class A- 1, A-2, A-3 & A-4 80 80 Common
stock 616,324 457,500 Capital in excess of par value 126,468,981
124,384,568 Accumulated deficit (135,639,690) (129,606,727) Total
stockholders' equity (8,554,305) (4,764,579) ---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $6,465,116 $9,467,791
========== ========== FUSION TELECOMMUNICATIONS INTERNATIONAL, INC.
AND SUBSIDIARIES RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
Three Months Ended June 30, -------- 2009 2008 ---- ---- Net loss
$(3,026,750) $(2,893,961) Income from discontinued operations
885,132 339,671 ------- ------- Loss from continuing operations
(2,141,618) (2,554,290) Adjustments: Interest (income) expense, net
119,390 52,412 Depreciation and amortization 226,944 444,430
------- ------- EBITDA (1,795,284) (2,057,448) Adjustments: (Gain)
loss on settlements of debt - - (Gain)/loss on disposal of fixed
assets - 59,158 Loss on Impairment 243,000 Adjustment for one-time
charges - (7,626) Other taxes 18,580 107,489 Non cash compensation
84,822 191,730 ------ ------- Adjusted EBITDA $(1,448,882)
$(1,706,697) =========== ===========
http://www.newscom.com/cgi-bin/prnh/20050705/NYTU073LOGO
http://photoarchive.ap.org/ DATASOURCE: Fusion CONTACT: Philip
Turits, Treasurer, +1-212-201-2407, or Damon Testaverde, Managing
Director, Network Financial Securities, +1-718-317-7746,
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