Corporate | 8 November 2002 01:05

Infonet Services Corp. english

Infonet Reports Fiscal 2003 Second Quarter Results (Part 1) Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– Financial Highlights Q2 FY 2003 vs.Q2 FY 2002 · Total revenue: $143 vs. $160 million, down 11% · Core revenue: $132 vs. $120 million, up 9% · Core revenue is 92% of total revenue · EBITDA: $10 vs. $13 million, down 26% · Core EBITDA: $7 vs. $4 million · Net loss: $6 vs. $4 million · New client contracts: 195 vs. 185, up 5%. El Segundo, CA – November 7, 2002 – Infonet Services Corporation (NYSE/FSE: IN), a leading provider of value-added global communications services, today announced results for the second quarter of fiscal year 2003, ended September 30, 2002. Results include the expected decline of the company’s non-core revenue from the AUCS outsourcing contract. This contract ended October 1, 2002. Core revenue (non-AUCS platform), which is 92% of total revenue, increased to $132 million in the second quarter of fiscal year 2003, compared with $120 million in the comparable quarter last year, an increase of 9%. Revenue Total revenue for the second quarter of fiscal year 2003 totaled $143 million, compared with revenue in the corresponding quarter last year of $160 million. Outsourcing revenue from the AUCS contract contributed 25% of last year’s second quarter ($40 million), compared to only 8% during the second quarter of this year ($11 million). Core revenue (non-AUCS platform) was up 9% from the second quarter of fiscal year 2002. The largest components of revenue this quarter were network services ($76 million, or 53% of Q2 FY 2003 revenue) and consulting, integration and provisioning services ($48 million, or 34% of Q2 FY 2003 revenue). Network services revenue of $76 million in the second quarter of fiscal year 2003 increased by $3 million, or 4% from a year ago. This reflects good growth in services provided, offset by price erosion on the renewal of multiyear contracts. Consulting, integration and provisioning revenue totaled $48 million, down from $49 million a year ago. The decline, primarily reflecting the expected loss of revenue from clients using the AUCS platform, masks a 20% increase in consulting, integration and provisioning revenue from clients using Infonet’s core services. The increase in core revenue reflects the provisioning of new client contracts signed over the last few quarters. Expenses Total expenses for the quarter declined to $156 million from $171 million a year ago. Country representative compensation expenses in the second quarter of fiscal year 2003 declined to $30 million from $56 million a year ago, primarily as a result of the decrease in AUCS-related outsourcing revenue. Bandwidth and related costs totaled $28 million, contrasted to $33 million a year ago, a 16% decline. This is consistent with Infonet’s strategy to leverage bandwidth expenses while increasing revenue. Network operations expenses rose slightly to $27 million compared with $26 million in the corresponding year-earlier quarter, because of an increase in network operations depreciation expenses and other expenses. Indirect selling, general and administrative expenses, net of a $12 million increase directly related to revenue for in-country support and local access costs, rose $3 million from the comparable quarter. This $3 million increase includes a write-off of $2 million for bad debt expenses offset by a decrease of approximately $2 million in stock-based compensation charges. “While we’re focusing on holding the line on expenses, we’ve increased sales efforts to take advantage of opportunities arising in the market,” said José A. Collazo, Infonet’s Chairman, President and CEO. Total depreciation and amortization for the second quarter of fiscal year 2003 totaled $19 million, about even with the second quarter a year ago. Operating Income, Net Income, EPS As a result of lower total revenue and higher expenses, primarily related to core services, Infonet incurred an operating loss in the second quarter of fiscal year 2003 of $13 million, contrasted to an operating loss in the comparable quarter of $11 million. For the current second quarter, Infonet recorded a tax credit of $6 million compared with a tax credit in the second quarter a year ago of $3 million. The net loss for the current second quarter totaled $6 million, or $0.01 per share. In the year-ago second quarter, the company recorded a net loss of $4 million, or $0.01 per share. “We have taken measures to bring our expenses down,” said Mr. Collazo. “This has allowed us to keep operating costs under control in the face of declining total revenue and continued investment in our core business.” Other Operating Highlights – Capital Expenditures The cash outlay for capital expenditures in the first half of fiscal year 2003 was approximately $22 million compared with $122 million for the first half of fiscal year 2002. “We expect capital expenditures for this fiscal year to be approximately $60 million, lower than the $95 million we previously anticipated,” said Mr. Collazo. “We’ve been able to reduce our cap ex by more fully utilizing our existing assets and entering into capacity leases because of attractive terms.” – EBITDA Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of fiscal year 2003 totaled $10 million versus $13 million a year ago. Core (non-AUCS platform) EBITDA was $7 million in the current quarter compared with $4 million a year ago, an increase of 54%. – Client Data During the second quarter of fiscal year 2003, Infonet added 195 new client service contracts. Of the new contracts, 97 were new clients and 98 represented additional sales to existing clients. “Our client wins have continued at a strong pace, and we have benefited from the signing of former KPNQwest clients,” said Mr. Collazo. “While the financial problems of some of our competitors have led to increased sales opportunities, it will take some time to translate this into new clients and new revenue for Infonet.” (Continued) end of message, (c)DGAP 08.11.2002 ——————————————————————————– WKN: 931039; ISIN: US45666T1060; Index: Listed: Amtlicher Markt in Frankfurt; Freiverkehr in Berlin, München und Stuttgart 080105 Nov 02