Corporate | 6 February 2003 23:19

Infonet Services Corp. english

Infonet Reports Fiscal 2003 Third Quarter Results Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– El Segundo, CA – February 6, 2003 – Infonet Services Corporation, a leading provider of value-added global communications services, today announced results for the third quarter of fiscal 2003, ended December 31, 2002. Revenue for the third quarter of fiscal 2003 was $198 million, compared with $155 million for the third quarter of fiscal 2002, an increase of 28%, and compared with $143 million for the second quarter of fiscal 2003. This includes a portion of a one-time incentive fee that Infonet earned in connection with the completion of a European outsourcing agreement – $57 million of which was recognized and collected in cash in the third quarter of this fiscal year. “Network services” revenue for the third quarter of fiscal 2003 was $84 million, compared with $76 million for third quarter of fiscal 2002, an increase of 10%, and compared with $76 million for the second quarter of fiscal 2003. Clients transitioned to the Infonet World Network from the network previously used for outsourcing services clients contributed approximately $10 million to “network services” revenue for the third quarter. “Consulting, integration and provisioning services” revenue for the third quarter of fiscal 2003 was $45 million, compared with $47 million for the third quarter of fiscal 2002, a decrease of 4%, and compared with $48 million for the second quarter of fiscal 2003. The decrease was primarily due to the completion of the outsourcing agreement. “Application services” revenue for the third quarter of fiscal 2003 was $8 million, compared with $2 million for the comparable quarter in fiscal 2002, and compared with $3 million for the second quarter of fiscal 2003. This increase in revenue reflects a reclassification of outsourcing services revenue from “other communications services” into “application services” revenue upon the completion of the outsourcing contract. “Other communications services” revenue for the third quarter of fiscal 2003 was $62 million, including the incentive fee. For the third quarter of fiscal 2002, “other communications services” revenue was $30 million, including approximately $23 million of revenue from the European outsourcing agreement. Expenses Total expenses for the quarter increased to $166 million from $164 million a year ago. Country representative compensation expenses for the third quarter of fiscal 2003 declined to $25 million from $49 million a year ago, primarily as a result of the completion of the European outsourcing agreement. Bandwidth and related costs totaled $32 million for the third quarter of fiscal 2003, approximately equal to last year’s third quarter costs. Network operations expenses rose to $33 million compared with $25 million in the corresponding year-earlier quarter. This reflects increased expenses associated with the support of transitioned European outsourcing agreement clients and an increase in network operations depreciation expense. Selling, general and administrative (SG&A) expenses rose to $75 million from $59 million in the comparable quarter, primarily due to increased in-country support and local access costs. The transition of European outsourcing revenue – which created a corresponding decrease in country representative compensation – contributed to support and access costs. Additionally, costs related to increased integration and pro-visioning revenue contributed to the increase in SG&A expenses in the current third quarter. Depreciation and amortization for the third quarter of fiscal 2003 totaled $19 million, about the same as in the third quarter a year ago. Operating Income, Net Income, EPS Infonet’s operating income for the third quarter of fiscal 2003 totaled $32 million, which includes the positive effect of the incentive fee. This compares to an operating loss in the comparable quarter last year of $9 million. For the current third quarter, Infonet recorded tax expense of $14 million compared with tax expense in the third quarter a year ago of $2 million. Net income for the current third quarter totaled $18 million, or $0.04 per share. In the year-ago third quarter, the Company recorded a net loss of $9 million, or $0.02 per share. Extraordinary Item: Debt Repayment During the third quarter of fiscal 2003, Infonet repaid all $81 million of the outstanding debt under its $250 million credit agreement. The Company recorded an extraordinary non-cash expense, net of tax, of $1.6 million, which represents unamortized debt issuance costs and other costs associated with the debt payoff. Other Operating Highlights – Capital Expenditures The cash outlay for capital expenditures for the third quarter of fiscal 2003 totaled approximately $15 million compared with $36 million for the third quarter of fiscal 2002. – Client Data During the third quarter of fiscal 2003, Infonet added 148 new client service contracts, compared to 190 new client service contracts during the third quarter of fiscal 2002. Of the new contracts added in the third quarter of fiscal 2003, 76 were new clients and 72 represented additional sales to existing clients. Balance Sheet and Cash Position At December 31, 2002, after paying all $81 million of the outstanding balance under its $250 million credit facility and reflecting the receipt of the $57 million incentive fee, Infonet’s balance sheet reflected cash, cash equivalents and short-term investments totaling $482 million, compared with $518 million at fiscal year-end March 31, 2002. Net cash generated from operating activities during the first nine months of fiscal 2003 was $103 million, offset by a cash outlay for capital expenditures of $37 million, a new business investment of $8 million, stock repurchases of $8 million, and the debt repayment of $88 million. Operating cash flow for the nine month period of $103 million, less the outlay for capital expenditures of $37 million, resulted in a free cash flow of $66 million. Stockholders’ equity was approximately $1.1 billion at the close of the quarter. Stock Repurchase Program In January 2002, Infonet’s Board of Directors approved the expenditure of up to $100 million over 24 months to repurchase shares of the Company’s common stock. Infonet repurchased approximately 1.3 million shares in the third quarter of fiscal 2003 for $2.9 million at an average price of $2.18 per share. As of December 31, 2002, Infonet had repurchased approximately 4.9 million shares under the program for $10.8 million at an average price of $2.22 per share. (more) end of message, (c)DGAP 06.02.2003 ——————————————————————————– WKN: 931039; ISIN: US45666T1060; Index: Listed: Amtlicher Markt in Frankfurt; Freiverkehr in Berlin, München und Stuttgart 062319 Feb 03