INX Provides 2010 and First Quarter 2011 Business Trends Update
April 18 2011 - 6:00AM
Business Wire
INX Inc. (NASDAQ:INXI) (the “Company”; or “INX”) today provided
an update on business trends, expected results of operations for
2010 and its first quarter ended March 31, 2011, and the status of
completing its 2010 audited financial statements and the
restatement of certain previously issued financial statements.
BUSINESS UPDATE:
The Company was unable to complete its restatement of certain
previously issued financial statements and announce financial
results last week, as contemplated, so the Company is providing an
update on its expectations for certain key components of operating
results, as well as a business trends update similar to the
quarterly updates provided during the past year. Note that
“bookings” as used herein represent net credit approved customer
orders for products and “billings” as used herein represent
invoicing of customers at contract amount for products and
services, neither of which is the same as “revenue” determined in
accordance with Generally Accepted Accounting Principles (“GAAP”).
Statements related to revenue and profitability on a GAAP basis
made herein are the Company’s expectations at this time, are
unaudited, and are subject to the completion of the audit.
For the year ended December 31, 2010 (unaudited):
- Total revenue for 2010 increased by
more than 35% compared to 2009 to over $300 million.
- The Company was profitable on a GAAP
basis for 2010 and results improved substantially compared to 2009.
The 2010 results included approximately $4.1 million of costs
related to the restatement.
- Product bookings increased by
approximately 27% compared to 2009.
- Product billings increased by
approximately 35% compared to 2009.
- Services billings decreased by
approximately 15% compared to 2009.
For the quarter ended March 31, 2011 (unaudited):
- Total revenue is expected to be in the
range of $74 million to $79 million.
- Product bookings increased by
approximately 26% compared to the prior year period.
- Product billings increased by
approximately 27% compared to the prior year period.
- Services billings increased by
approximately 10% compared to the prior year period.
Commenting on the trends in the Company's business, Mark Hilz,
the Company's President and CEO, said, “Given the distractions and
costs related to the financial restatement project, we are very
pleased with our overall performance for 2010. We were able to grow
revenue and improve profitability substantially in 2010. We believe
we exceeded industry growth rates for 2010 and as indicated by our
first quarter performance we continue to experience growth.
Services revenue in 2010 decreased due to the loss of a large
Federal government contract in the fourth quarter of 2009, as we
have previously disclosed, but as indicated by the growth in
services billings in the first quarter of 2011 we are recovering
from the loss of that large contract. Product bookings for the
first quarter of 2011, an indicator of near-term customer demand
grew 26% as compared to the prior year. The first quarter actually
finished better than our forecast of 8% to 21% growth we provided
with our most recent business trends update to investors in
mid-February. We continue to have a strong balance sheet, with no
meaningful debt. Customer demand for INX offerings continues to be
strong going into the second quarter and we expect a sequential
improvement in bookings, billings and revenue as compared to the
first quarter.”
UPDATE ON THE STATUS OF THE AUDIT AND RESTATEMENT
Commenting on the status of the completion of the restatement,
James Long, the Company’s Executive Chairman, said, “Over the past
couple of weeks we have been in what we have referred to as the
‘final stages’ of completing the audit and restatement. We continue
to expect to conclude the audit and file our financial statements
with the SEC in the very near future. Revenue recognition-related
accounting restatements, by their very nature, are complex. This
project has been a very trying and time consuming endeavor, and we
look forward to concluding it. While the best estimate of timing we
can provide at this time continues to be ‘within a few days’, we
are doing everything within our power to complete the audit as
quickly as possible. We will schedule the formal announcement of
our results and the related investor conference call as soon as
possible. We appreciate the continued support of our investors as
we work towards finalizing the audit and bringing the restatement
to closure.”
SAFE HARBOR STATEMENT:
The statements contained in this document that are not
statements of historical fact including but not limited to,
statements identified by the use of terms such as “anticipate,”
“appear,” “believe,” “could,” “estimate,” “expect,” “hope,”
“indicate,” “intend,” “likely,” “may,” “might,” “plan,” “pointing
towards,” “potential,” “project,” “seek,” “should,” “will,”
“would,” and other variations or negative expressions of these
terms, are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are based on current expectations and
are subject to a number of risks and uncertainties. The financial
information contained in this press release is preliminary and
subject to change until the Company files its Annual Report on Form
10-K for the year ended December 31, 2010 and its Quarterly Reports
on Form 10-Q for the quarterly periods ended March 31, 2010 and
June 30, 2010 with the Securities and Exchange Commission. All
numbers and financial information, including references to revenue
and operating income set forth in this press release are unaudited
and are subject to change until the Company completes its
audit.
Actual results could differ materially from the forward-looking
statements contained herein due to numerous factors, including:
- Currently unforeseen events that cause
further delays in the Company's ability to publish its financial
results within the time period indicated herein, or provide an
accurate estimate of the time required to publish its financial
results.
- Currently unforeseen events that cause
the final audited financial results to differ from what the Company
currently expects.
- Events that occur or adjustments made
after the date of this announcement.
- Market and economic conditions,
including capital expenditures by enterprises for network,
telephone communications and data center systems products and
services.
- Unexpected customer contract
cancellations.
- Credit and financial market conditions
that could impact customers' ability to finance purchases.
- Catastrophic events.
Recipients of this document are cautioned to consider these
risks and uncertainties and to not place undue reliance on these
forward-looking statements. All information in this press release,
including the statements concerning the Company’s expectations for
2010 results made in advance of the completion of the audit, is as
of the date of this press release, including the Company’s
estimates of revenue and profitability for 2010 made in advance of
the completion of its audit, and the Company expressly disclaims
any obligation or undertaking to update or revise any
forward-looking statement contained herein to reflect any change in
the Company's expectations with regard thereto, or any change in
events, conditions or circumstances upon which any statement is
based.
ABOUT INX INC.:
INX Inc. (NASDAQ:INXI) is a leading U.S. provider of IP
communications and data center solutions for enterprise
organizations. INX offers a suite of advanced technology solutions
focused around the entire life-cycle of enterprise IP network
communications and data center infrastructure. Solutions are
centered on the design, implementation and support of network
infrastructure, including routing and switching, wireless,
security, unified communications, and data center solutions such as
storage and server virtualization. Customers include enterprise
organizations such as corporations, healthcare organizations,
educational institutions, and federal, state and local governmental
agencies. Because of its focus, expertise and experience
implementing and supporting advanced technology solutions for
enterprises, INX believes it is well positioned to deliver superior
solutions and services to its customers. Additional information
about INX can be found on the Web at www.INXI.com.
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