Telanetix, Inc. (OTCBB: TNXI), a leading communications
solutions provider offering next generation voice services and
solutions to the business market, today reported financial results
for its 2010 fourth quarter and full year ended December 31,
2010.
Fourth Quarter 2010 Financial Highlights
- Core voice revenue increased 10 percent
year-over-year to $6.0 million, compared to $5.4 million in the
fourth quarter of 2009.
- Total revenue was $6.7 million, a
decrease of 6.9 percent compared to $7.2 million in the fourth
quarter of 2009. The decline in total revenue was due to the
expected decrease in legacy product revenues, which were $733,000,
a 59 percent decrease compared to $1.8 million in the fourth
quarter of 2009.
- Adjusted EBITDA improved to $536,000,
compared to $130,000 in the fourth quarter last year.
- Net loss from continuing operations was
$1.6 million, or $0.00 per share, compared to net income of $1.1
million, or $0.04 per share, in the fourth quarter last year.
- Total cash and cash equivalents
increased $58,000 to $2.3 million at December 31, 2010.
Full Year 2010 Financial Highlights
- Core voice revenue increased 15.9
percent year-over-year to $23.7 million.
- Total revenue increased $228,000
year-over-year to $28.5 million.
- Adjusted EBITDA of $1.7 million, first
full year positive EBITDA and a more than $2.1 million improvement
compared to an adjusted EBITDA loss of $379,000 for 2009.
- Net income from continuing operations
was $10.3 million, or $0.06 per share, which included a $16.5
million gain on recapitalization and $800,000 credit from change in
fair market value of derivative liabilities, compared to net loss
in 2009 of $8.1 million, or a loss of $0.26 per share, which
included a $4.1 million expense for interest and a $3.8 million
credit for warrant and beneficial conversion feature
liabilities.
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
earning 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. A reconciliation of net income to adjusted EBITDA
can be found at the end of this release.
“Our fourth quarter core voice revenue increased 10 percent over
the same quarter last year and full-year core revenue grew nearly
16 percent over 2009,” said Doug Johnson, Telanetix’s CEO. “In
addition, we achieved our fifth consecutive quarter of positive
adjusted EBITDA and first full year positive EBITDA. During the
quarter, our legacy revenue flattened out from recent declines, and
we expect it to stay flat or modestly improve in 2011.
“During the year we made progress building on our strategic
partnerships and expanding our customer reach by adding new channel
partners, including Mitel Networks and Vertical Communications,
each of which offers our SIP trunking services to customers ranging
from medium-sized businesses to Fortune 1000 enterprises. We have
seen strong initial interest in these services and expect this to
be an important growth driver in 2011.
”2010 was a pivotal year for Telanetix and we are pleased with
our progress and positive steps that have stabilized the company,
including completing a comprehensive recapitalization of the
Company. We believe we are well positioned now to build on this
stable foundation and further expand our presence and share in the
marketplace. We expect to achieve continued double digit growth in
our core revenue for 2011.”
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) 314-5232 and to access the call internationally, dial
(617) 213-8052 and enter pass code 75412259. 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 30, 2011
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 34842285.
About Telanetix, Inc.
Telanetix, Inc. (OTCBB: TNXI) is a leading communications
solutions provider offering voice over IP (VoIP) 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 2011,
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.
TELANETIX, INC.
Consolidated Balance Sheets
December 31, 2010
December 31, 2009 ASSETS Current assets Cash $
2,330,111 $ 493,413 Accounts receivable, net 1,590,022 1,888,393
Inventory 182,924 253,563 Prepaid expenses and other current assets
530,548 465,348 Total current assets
4,633,605 3,100,717 Property and equipment, net 2,641,731 3,733,120
Goodwill 7,044,864 7,044,864 Purchased intangibles, net 11,178,337
13,378,337 Other assets 583,632 870,476
Total assets $ 26,082,169 $ 28,127,514
LIABILITIES AND STOCKHOLDERS' DEFICIT Current liabilities
Accounts payable $ 1,609,488 $ 1,614,382 Accrued liabilities
2,326,465 3,141,315 Deferred revenue 1,016,021 897,453 Income tax
payable 225,000 - Current portion of capital lease obligations
404,710 683,249 Current portion of long-term debt, net 1,200,000 -
Beneficial conversion feature liabilities -
4,052,071 Total current liabilities 6,781,684
10,388,470 Non-current liabilities Accrued Interest -
2,477,021 Deferred revenue, net of current portion 253,798 264,271
Capital lease obligations, net of current portion and debt discount
116,251 421,782 Long-term debt, net of current portion 5,291,539 -
Convertible debentures - 18,518,487
Total non-current liabilities 5,661,588
21,681,561 Total liabilities 12,443,272
32,070,031 Stockholders' equity (deficit) Common stock,
$.0001 par value; Authorized: 600,000,000 shares;
Issued and outstanding: 344,569,652 and
31,768,320 at December 31, 2010
and December 31, 2009, respectively
34,457 3,177 Additional paid in capital 43,569,588 34,848,164
Warrants 56,953 1,551,802 Accumulated deficit (30,022,101 )
(40,345,660 ) Total stockholders' equity (deficit)
13,638,897 (3,942,517 ) Total liabilities and
stockholders' equity (deficit) $ 26,082,169 $ 28,127,514
TELANETIX, INC.
Consolidated Statements of
Operations
Years ended December 31, 2010
2009 Revenues $
28,520,084 $ 28,291,925 Cost of revenues 12,098,727
11,815,701 Gross profit
16,421,357 16,476,224 Operating expenses Selling and
marketing 6,817,724 6,283,628 General and administrative 7,402,862
8,142,528 Research, development and engineering 2,566,366 2,901,185
Depreciation 598,940 861,779 Amortization of purchased intangibles
2,200,000 2,200,000 Total
operating expenses 19,585,892
20,389,120 Operating loss (3,164,535 ) (3,912,896 )
Other income (expense) Interest income 1,079 1,391 Interest
expense (3,306,085 ) (4,083,058 ) Gain on debt extinguishment
16,497,185 - Change in fair market value of derivative liabilities
790,648 3,782,799 Total other
income (expense) 13,982,827 (298,868 )
Income (loss) from continuing operations before taxes
10,818,292 (4,211,764 ) Income tax expense 225,000 -
Income (loss) from continuing operations 10,593,292 (4,211,764 )
Loss from discontinued operations (269,733 )
(3,853,807 ) Net income (loss) $ 10,323,559
$ (8,065,571 ) Net income (loss) per share – basic
and diluted Continuing operations $ 0.06 $ (0.14 ) Discontinued
operations — (0.12 ) Net income (loss)
per share $ 0.06 $ (0.26 ) Weighted average
shares outstanding – basic and diluted 175,199,587
31,494,707
TELANETIX, INC.
Net Loss to EBITDA
Reconciliation
(Unaudited)
Three months ended December 31,
Twelve months ended December 31, 2010
2009 2010 2009 Adjusted EBITDA
(earnings release purposes only) Net Profit / (Loss) $
(1,556,170
)
$
1,148,073
$ 10,323,559 $ (8,065,571 ) Depreciation and amortization of
purchased intangibles 998,098
1,022,936
3,976,927 4,424,475 Interest expense 833,456 792,310 3,305,006
4,081,440 Impairment of Intangibles -- -- -- 1,413,435 State income
tax expense 187,500 -- 225,000 0
EBITDA
462,884 2,963,319
17,830,492
1,853,779 Adjustments for certain non-cash expenses: Gain on
restructure 13,669 -- (16,497,185 ) 0 Change in fair market value
of derivative liabilities --
(3,557,916
)
(790,648 ) (3,782,799 )
Stock based compensation
59,571
724,710
1,177,841 1,550,357
Adjusted EBITDA
$
536,124
$
130,113
$
1,720,500
$
(378,663 )