NEW YORK, March 31 /PRNewswire-FirstCall/ -- Fusion (AMEX:FSN)
today announced financial results for the quarter and full year
ended December 31, 2008. Recent Highlights: -- Full Year 2008
Consolidated Revenues were $50.6 million, compared to $55.0 million
for full year 2007; -- Adjusted EBITDA loss for 2008 full year and
fourth quarter increased 2.2% over 2007 full year and 19.1% over
2007 fourth quarter, but improved for second consecutive quarter;
-- Raised $6.8 million in debt and equity financing in full year
2008; -- Revenues from corporate customers increased 39% over prior
quarter; -- Selling, General and Administrative costs improved for
the third consecutive quarter, and improved 3.4% compared to full
year 2007; -- Company appealed notice of intent to de-list Fusion
stock by NYSE Amex to Appeals Panel at Hearing on March 25, 2009;
Company received notice from the Appeals Panel on March 30, 2009
that it had been granted a sixty day extension. Fusion reported
Consolidated Revenues of $50.6 million and $13.1 million for the
year and quarter ended December 31, 2008, respectively. This
represented a decrease of 8.1% and 10.9% compared to revenues of
$55.0 million and $14.7 million for the year and quarter ended
December 31, 2007. The decrease over the prior year was primarily
attributable to a decrease in the carrier segment, which was due in
large part to lower traffic volumes resulting from the challenging
economic environment, as well as normally expected variations in
traffic. Consolidated Gross Margin decreased slightly to 6.5% for
the year and 6.3% for the fourth quarter of 2008, compared to 7.7%
for the year and 7.6% for the fourth quarter of 2007. Although
overall results were lower than anticipated due to the reasons
indicated above, fourth quarter revenue for the corporate division
increased by 39% compared to the prior quarter and nearly 400% when
compared to the fourth quarter of 2007. The fourth quarter was our
fourth successive quarter of growth in both revenue and margin in
the corporate division. The average monthly charge per customer
increased by 16% and the total contract value of our existing
customer base increased by more than 60%. Selling, General and
Administrative costs improved for the third consecutive quarter,
and represented a 3.4% decrease for 2008 compared to 2007. It was
also a 2.4% improvement for the fourth quarter of 2008 over 2007.
The improvement was primarily attributable to the Company's
continuing focus on cost-containment and maximizing infrastructure
efficiencies. 2008 results also included $0.1 million in one-time
costs associated with the consumer business. Excluding this
additional expense, the year over year improvement would have been
4.2%. For the year ended December 31, 2008, Adjusted EBITDA loss
(earnings before interest, taxes, depreciation, amortization, and
specific non-recurring and non-cash adjustments) increased $0.2
million, or 2.2%, to ($7.6) million, compared to Adjusted EBITDA of
($7.4) million for the year ended 2007. Fusion also reported an
increase in Net Loss in the year ended December 31, 2008 compared
to the year ended December 31, 2007. For 2008, Fusion reported a
Net Loss of ($15.6) million, and a Net Loss applicable to Common
Stockholders of ($16.2 million) or ($0.44) per share compared to a
Net Loss of ($12.7) million, and a Net Loss applicable to Common
Stockholders of ($13.2) million or ($0.48) per share during the
year ended December 31, 2007. As of December 31, 2008, the Company
had current assets of $4.1 million compared to $6.3 million as of
December 31, 2007. The decrease was primarily a result of a
decrease in Accounts Receivable due to early receipt in the first
quarter of 2008 of certain receivables. Total Liabilities and
Stockholders' equity (deficit) at December 31, 2008 was a ($4.8)
million deficit, compared to $6.7 million in equity as of December
31, 2007. The primary reasons for the change were the $5.1 million
impairment primarily associated with the exit in the Consumer
segment, as well as the Net Loss from Operations in 2008 of $10.5
million, offset by additional equity investments of $3.5 million.
As required by Amex Company Guide Section 610(b), the Company also
disclosed that financial statements for the fiscal year ended
December 31, 2008, again contained a going concern qualification
from its independent accounting firm, Rothstein, Kass and Company,
P.C. Commenting on the results, Matthew Rosen, Chief Executive
Officer of Fusion, said, "The fourth quarter of 2008, and the year
in general, were challenging for Fusion, and for virtually all
companies having to deal with the realities of an uncertain and
struggling economy. While our business was impacted by lower
traffic volumes and a slowing of both the sales cycles and the
availability of investment capital, we ultimately believe that the
economic situation will benefit us in the long term, as we are able
to provide communications services that assist companies in
reducing their costs without compromising on quality. To reach our
goal of positive Adjusted EBITDA prior to the end of 2009, in
addition to our continuing efforts to work on adequate financing,
we have maximized our operational efficiencies, reduced cash
requirements and increased our focus on growing our higher margin
corporate business." Expanding on Mr. Rosen's comments, Don
Hutchins, President and Chief Operating Officer of Fusion, said,
"We believe that the major progress we have seen in direct and
partner corporate sales will continue, and we anticipate a
significant increase in future revenues from this division.
Additionally, we expect to increase our focus on the carrier
segment that now serves over 200 international customers and
vendors, allowing for significant growth. Improved operating
efficiencies, increased automation of key processes and systems, as
well as other aggressive, cost-cutting measures will help to
improve results, and play a significant role in Fusion's future
success." Use of Non-GAAP Financial Measures: The Company believes
that EBITDA (earnings before interest, taxes, depreciation and
amortization) is useful to investors because it is commonly used in
the communications industry to analyze companies on the basis of
operating performance and leverage. The Company also believes that
EBITDA provides investors with a measure of the Company's
operational and financial progress that corresponds with the
measurements used by management as a basis for allocating resources
and making other operating decisions. Adjusted EBITDA provides an
adjusted view of EBITDA that takes into account certain significant
nonrecurring transactions, such as impairment losses associated
with divested businesses and forgiveness of debt, which vary
significantly between periods and are not recurring in nature.
Although the Company uses Adjusted EBITDA as one of several
financial measures to assess its operating performance, its use is
limited as it excludes certain significant operating expenses.
EBITDA and Adjusted EBITDA are not intended to represent cash flows
for the period presented, nor have they been presented as an
alternative to operating income or as an indicator of operating
performance and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
Generally Accepted Accounting Principles (GAAP). Consistent with
the SEC Regulation G, the non-GAAP measures in this press release
have been reconciled to the nearest GAAP measure, which can be
viewed under the heading "Reconciliation of Net Income (Loss) to
Adjusted EBITDA", immediately following the Consolidated Statements
of Operations included in this press release. Earnings Conference
call The Company will host a conference call to discuss its
financial results at 10:00 A.M. ET today. The conference call can
be accessed by dialing (877) 879-6201. A replay of the call will be
available through Friday, April 3, 2009. To listen to the replay,
please call (888) 203-1112 (Domestic) or (719) 457-0820
(International). To access the replay, users will need to enter the
following passcode: 5643166. The call will be available live on the
Internet at http://www.fusiontel.com/. The online archive of the
web cast will be available for one year following the call. (Logo:
http://www.newscom.com/cgi-bin/prnh/20050705/NYTU073LOGO )
Statements in this Press Release that are not purely historical
facts, including statements regarding Fusion's beliefs,
expectations, intentions or strategies for the future, may be
"forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. All forward-looking statements
involve a number of risks and uncertainties that could cause actual
results to differ materially from the plans, intentions and
expectations reflected in or suggested by the forward-looking
statements. Such risks and uncertainties include, among others,
introduction of products in a timely fashion, market acceptance of
new products, cost increases, fluctuations in and obsolescence of
inventory, price and product competition, availability of labor and
materials, development of new third-party products and techniques
that render Fusion's products obsolete, delays in obtaining
regulatory approvals, potential product recalls, securing necessary
funding and litigation. Risk factors, cautionary statements and
other conditions which could cause Fusion's actual results to
differ from management's current expectations are contained in
Fusion's filings with the Securities and Exchange Commission and
available through http://www.sec.gov/. FUSION TELECOMMUNICATIONS
INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET
December 31, 2008 December 31, 2007 -----------------
----------------- ASSETS Current assets Cash and cash equivalents
$458,246 $114,817 Accounts receivable, net of allowance 3,330,908
5,545,408 Prepaid expenses and other current assets 329,968 481,556
Assets held for sale - 129,231 --- ------- Total current assets
4,119,122 6,271,012 --------- --------- Property and equipment, net
3,941,528 5,425,846 --------- --------- Other assets Security
deposits 51,760 66,638 Restricted cash 416,566 416,566 Goodwill -
964,557 Intangible assets, net 810,908 4,892,215 Other assets
123,440 91,455 ------- ------ Total other assets 1,402,674
6,431,431 --------- --------- TOTAL ASSETS $9,463,324 $18,128,289
========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT) Current Liabilities Long-term debt, current portion
$2,362,992 $566,567 Capital and equipment financing lease
obligations, current portion 122,960 233,759 Accounts payable and
accrued expenses 10,283,207 9,663,325 Liabilities of discontinued
operations 13,313 15,829 ------ ------ Total current liabilities
12,782,472 10,479,480 ---------- ---------- Long-term liabilities
Other long-term liabilities 1,445,431 953,626 --------- -------
Total long-term liabilities 1,445,431 953,626 --------- -------
Stockholders' equity Preferred stock, Class A- 1, A-2, A-3 &
A-4 80 80 Common stock 457,500 299,078 Capital in excess of par
value 124,384,568 120,402,691 Accumulated deficit (129,606,727)
(114,006,666) ------------ ------------ Total stockholders' equity
(4,764,579) 6,695,183 ---------- --------- TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $9,463,324 $18,128,289 ========== ===========
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended Fiscal Year
Ended December 31, December 31, ------------ ------------ 2008 2007
2008 2007 ---- ---- ---- ---- Revenues $13,113,284 $14,717,018
$50,559,371 $55,023,860 Operating expenses: Cost of revenues
12,283,694 13,604,176 47,253,807 50,797,354 Depreciation and
amortization 488,179 460,303 1,882,959 1,709,040 Loss on Impairment
5,143,231 4,006,664 5,143,231 4,006,664 Selling, general and
administrative expenses 2,822,694 2,891,905 12,056,007 12,484,485
Advertising and Marketing 24,113 5,322 108,086 146,471 ------ -----
------- ------- Total operating expenses 20,761,911 20,968,370
66,444,090 69,144,014 ---------- ---------- ---------- ----------
Operating loss (7,648,627) (6,251,352) (15,884,719) (14,120,154)
Other income (expense) Interest income (expense), net (121,649)
(6,743) (316,284) (17,043) Gain (loss) on debt forgiveness -
618,885 659,991 618,885 Gain (loss) on sale of investment in Estel
- - - 937,578 Loss from investment in Estel - - - (60,000) Other
(1,101) (48,612) (59,049) (27,536) ------ ------- ------- -------
Total other income (expense) (122,750) 563,530 284,658 1,451,884
-------- ------- ------- --------- Loss from continuing operations
(7,771,377) (5,687,822) (15,600,061) (12,668,270) Income (loss)
from discontinued operations - - - - --- --- --- --- Net loss
$(7,771,377) $(5,687,822) $(15,600,061) $(12,668,270) ===========
=========== ============ ============ Losses applicable to common
stockholders Loss from continuing operations $(7,771,377)
$(5,687,822) $(15,600,061) $(12,668,270) Preferred stock dividends
in arrears (161,214) (572,087) (641,352) (572,087) --------
-------- -------- -------- Net loss applicable to common
stockholders from continuing operations (7,932,591) (6,259,909)
(16,241,413) (13,240,357) Income from discontinued operations - - -
- --- --- --- --- Net loss applicable to common stockholders
$(7,932,591) $(6,259,909) $(16,241,413) $(13,240,357) ===========
=========== ============ ============ Basic and diluted net loss
per common share: Loss from continuing operations $(0.18) $(0.22)
$(0.44) $(0.48) Income (loss) from discontinued operations - - - -
--- --- --- --- Net loss applicable to common stockholders $(0.18)
$(0.22) $(0.44) $(0.48) ====== ====== ====== ====== Weighted
average shares outstanding Basic and diluted 42,924,966 28,360,155
37,274,411 27,314,196 ========== ========== ========== ==========
FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA Three Months Ended
Fiscal Year Ended December 31, December 31, ------------
------------ 2008 2007 2008 2007 ---- ---- ---- ---- Net loss
$(7,771,377) $(5,687,822) $(15,600,061) $(12,668,270) Income from
discontinued operations - - - - --- --- --- --- Loss from
continuing operations (7,771,377) (5,687,822) (15,600,061)
(12,668,270) Adjustments: Interest (income) expense, net 121,649
6,743 316,284 17,043 Depreciation and amortization 488,179 460,303
1,882,959 1,709,040 ------- ------- --------- --------- EBITDA
(7,161,549) (5,220,776) (13,400,818) (10,942,187) Adjustments:
(Gain) loss on settlements of debt - (618,885) (659,991) (618,885)
(Gain)/loss on disposal of fixed assets - 115,566 59,158 105,807
(Gain) loss on sales of investment in Estel - - - (937,578) Loss on
impairment 5,143,231 4,006,664 5,143,231 4,006,664 Communication
charges 353,491 Other taxes 37,401 112,303 289,923 410,475 Other
537 Non cash compensation 174,873 88,650 617,499 544,417 -------
------ ------- ------- Adjusted EBITDA $(1,806,044) $(1,516,478)
$(7,596,970) $(7,431,287) =========== =========== ===========
=========== FUSION Philip Turits CONTACT: 212-201-2407 Damon
Testaverde, Managing Director Network 1 Financial Securities
732-758-9001
http://www.newscom.com/cgi-bin/prnh/20050705/NYTU073LOGODATASOURCE:
Fusion CONTACT: Philip Turits of Fusion, +1-212-201-2407, ; or
Damon Testaverde, Managing Director of Network 1 Financial
Securities, +1-732-758-9001, Web Site: http://www.fusiontel.com/
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