CORG Cordia Corp (CE)

Cordia Corporation (OTCBB: CORG), a global communications service provider and distributor of landline, wireless and Voice over Internet Protocol (“VoIP”) technologies, products and services, today announced financial results for the third quarter and nine-month periods ended September 30, 2010.

Third Quarter Highlights

• 19% increase in VoIP revenue from previous quarter and 8% increase from comparable period in 2009
• Launched international sales of prepaid calling cards in Europe and Asia
• Retained independent auditing firm to complete 2009 and 2010 audits with the goal of becoming a fully reporting company in 2011

Financial Overview

For the quarter ended September 30, 2010, Cordia reported total revenues of approximately $15,145,000 and a net loss of approximately ($373,000), or ($0.03) per share, compared with its previous quarter 2010 results of approximately $16,218,000 in revenues, and a net loss of ($1,049,000), or ($0.10) per share.

Total revenues for the nine-month period ended September 30, 2010, were approximately $48,569,000, with a net loss of approximately ($2,529,000), or ($0.23) per share, compared with revenues of approximately $58,455,000, and a net loss of approximately ($3,020,000), or ($0.37) per share, for the nine month period ended 2009.

Consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) was approximately ($60,000) for the quarter ended September 30, 2010. EBITDA for the nine-month period ended 2010, was approximately ($106,000).

Operations Overview

“Over the past several years, Cordia has focused its efforts and capital on expanding its telecommunications capabilities internationally and increasing profit margins related to our selective business lines,” said Kevin Griffo, Chief Executive Officer. “During the third quarter we successfully launched international sales of prepaid calling cards in Europe and Asia, and have seen an overall increase in gross profit margins of 5% relative to all our services offerings in 2010. In the fourth quarter, we will continue to expand our international calling card offerings to include India, France, the U.K., Spain, Greece and Australia in addition to existing offerings in Italy and Hong Kong. We also expect to see a positive increase in our VoIP revenues as we continue to focus on the enterprise business market in the Philippines and our sales expansion efforts in Brazil.”

Griffo further stated, “Since the launch of our global long distance product, which offers unlimited calling to over fifty countries, we have seen a steady increase in sales. Because customers may use a mobile phone, in addition to their landline, we have become an attractive low cost alternative to the mobile market satisfying their global calling needs.

“During this quarter we have seen an increase of 19% in VoIP revenues as compared with last quarter, while our wireline revenues have remained consistent. We have however, experienced a decline in our prepaid calling card revenues, which is attributable to the continued expansion of VoIP services offered in the marketplace. Cordia's own VoIP offerings are a contributing factor to the overall prepaid calling card decline and we believe that positive increases in our VoIP revenues will offset the decline in prepaid revenues in future quarters,” explained Griffo. “The company plans to continue with the expansion of its calling card business; however, expansion will be limited to areas where we can utilize our own global VoIP network to ensure higher margins, such as our newly released cards in Italy and Hong Kong. We look forward to the continued expansion of our international services and believe that each service will become profitable on a stand alone basis much like our wireline services. We believe these efforts will allow the company to become EBITDA positive by year end 2010, and going forward.”

Form-10 Filing

In September, Cordia announced that it had engaged an independent auditing firm to audit fiscal year ends 2009 and 2010. Upon completion of the audits, expected by the end of March, the Company intends to prepare and file a Form-10 with the Securities and Exchange Commission for the year ending 2010. Cordia plans on becoming a fully reporting company filing quarterly and annual audited financial results going forward.

EBITDA Calculation

EBITDA is calculated as net income before deducting interest, taxes, depreciation and amortization. Although EBITDA is not a measure of actual cash flow because it does not consider changes in assets and liabilities that may impact cash balances, the Company’s management reviews these non-GAAP financial measures internally to evaluate the Company’s performance and manage the operations. Additionally, the Company believes it is a useful metric to evaluate operating performance and has therefore included such measures in the reporting of operating results.

About Cordia Corporation

Cordia Corporation, through its operating subsidiaries, Cordia Communications Corp., CordiaIP Corp., My Tel Co, Inc., Northstar Telecom, Inc., Cordia Prepaid Corp. and Cordia International Corp., offers business, residential and wholesale customers local and long distance telecommunications services in more than sixty countries utilizing traditional wireline and Voice over Internet Protocol (“VoIP”) technologies. In addition, Cordia develops and provides a suite of proprietary web-based billing software and outsourced services to local, long distance and VoIP telecommunications providers.

Safe Harbor

This release contains forward-looking statements that involve risks and uncertainties. Cordia's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, among others, availability of management; availability, terms, and deployment of capital; Cordia's ability to successfully market its services to current and new customers, generate customer demand for its product and services in the geographical areas in which Cordia can operate, access new markets, all in a timely manner, at reasonable cost and on satisfactory terms and conditions, as well as regulatory, legislative and judicial developments that could cause actual results to vary in such forward-looking statements.

 

CORDIA CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

    Nine Months Ended   Three Months Ended September 30, September 30,

2010

 

2009

2010

 

2009

Revenues Wireline services $ 26,223,206 $ 30,929,836 $ 8,547,214 $ 9,851,452 Prepaid Revenue 18,369,748 24,007,290 5,084,256 7,354,990 VoIP services 3,965,598 3,496,402 1,512,681 1,398,499 Other   10,500       21,350       1,070       4,500       48,569,052       58,454,878       15,145,221       18,609,441   Cost of Revenues Wireline services 13,689,235 17,243,231 4,493,726 5,353,321 Prepaid Services 17,652,373 22,908,542 5,096,867 6,961,457 VoIP Services   2,670,454       3,654,365       892,747       1,088,778     34,012,062       43,806,138       10,483,340       13,403,556     Gross Profit   14,556,990       14,648,740       4,661,881       5,205,885     Operating Expenses Sales and marketing 3,393,350 2,993,019 1,066,017 942,384 Bad debts 1,335,900 2,345,288 408,433 842,964 General and administrative 9,933,285 9,194,601 3,247,272 3,139,757 Depreciation and amortization   1,167,399       1,240,257       357,346       403,354       15,829,934       15,773,165       5,079,068       5,328,459     Operating Loss   (1,272,944 )     (1,124,425 )     (417,187 )     (122,574 )   Other Income (Expenses) Other income (expense) (678,569 ) (1,025,634 ) 420,654 (334,230 ) Interest income 6,142 456 352 (369 ) Interest expense   (508,688 )     (864,985 )     (352,221 )     (267,349 )   (1,181,115 )     (1,890,163 )     68,785       (601,948 )   Loss Before Income Taxes (2,454,059 ) (3,014,588 ) (348,402 ) (724,522 )   Income tax provision   75,000       5,800       25,000       2,055     Net Loss $ (2,529,059 )   $ (3,020,388 )   $ (373,402 )   $ (726,577 )     Basic (Loss) per share $ (.23 )   $ (.37 )   $ (.03 )   $ (.07 )   Weighted Average Common Shares Outstanding   11,033,622       8,127,926       11,908,498       10,432,846     Diluted (Loss) per share $ (.23 )   $ (.37 )   $ (.03 )   $ (.07 )   Weighted Average Common and Common Equivalent Shares Outstanding   11,033,622      

8,127,926

     

11,908,498

     

10,432,846

      Cordia Corporation Non-GAAP EBITDA     Nine months ended September 30,   Quarter Ended September 30,

2010

 

2009

2010

 

2009

Reconciliation of EBITDA with net (loss) income

  Net income (loss) $ (2,529,059 ) $ (3,020,388 ) $ (373,402 ) $ (726,577 )   Depreciation and amortization 1,167,399 1,240,257 357,346 403,354   Other income (expense) 678,569 1,025,634 (420,654 ) 334,230   Interest income (6,142 ) (456 ) (352 ) 369   Interest expense 508,688 864,985 352,221 267,349   Income tax expense provision

 

75,000       5,800       25,000       2,055     EBITDA $ (105,545 )   $ 115,832     $ (59,841 )   $ 280,780