Infonet Announces Fiscal 2001 Annual Results: Strong Revenue and Net Income Growth
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-Record Client Additions
LONDON--(BUSINESS WIRE)--June 11, 2001--Infonet Services Corp. (NYSE:IN - news; FSE:IN):
Financial Highlights FY 2001 vs. FY 2000:
-- Revenue up 37 Percent
-- Core Revenue up 31 Percent
-- Customer Signings up 33 Percent
-- EBITDA up to $92 Million From $19 Million
-- Operating Income up to $24 Million From ($29 Million)
-- Net Income up to $27 Million From ($27 Million)
-- EPS 6 Cents vs. (6 Cents)
-- Company Fully Funded
Infonet Services Corp. (NYSE:IN - news; FSE:IN) today announced fiscal year 2001 (FY '01) and fourth-quarter (Q4) revenue of $661.9 million and $189.9 million, respectively.
This compares with FY '00 year-end revenue of $481.4 million and Q4 FY '00 revenue of $154.5 million.
Jose A. Collazo, chairman, president and chief executive officer, said, ``Our 37 percent revenue growth for the year was driven by strong sales in our core network services area.''
Revenue from Infonet's core value-added network services area -- which includes intranet, Internet, broadband and remote access services -- grew 31 percent from FY '00 to FY '01. Fourth-quarter revenue for network services was $75.4 million, vs. $65.0 million in Q4 '00, an increase of 16 percent.
``Infonet's core network services have grown roughly 30 percent per year for over five years,'' said Collazo. ``In addition, demand for network services in the first quarter of FY '02 has remained strong, as evidenced by new contract signings.''
Other revenue lines, including Application Services, Consulting Integration and Provisioning Services and Other Communications Services, performed in accordance with expectations, Collazo said.
EBITDA: Dramatic Increase
Earnings before interest, tax, depreciation and amortization (EBITDA) increased to $91.7 million for the year, from $19.1 million in FY '00. EBITDA during Q4 FY '01 increased to $32.7 million from $15.6 million in Q4 FY '00.
``During the year, we were able to take advantage of the declining cost of bandwidth and the financial benefits of moving from leased to owned capacity,'' said Collazo. ``We also were able to accelerate our network build-out, thus increasing our capacity and volume-driven efficiencies.''
Operating Income, Net Income and EPS: Continued Profitability
``We've gained significant control over costs by owning our network,'' said Collazo, ``and our distribution strategy continues to deliver considerable SG&A savings. Consequently, Infonet's profitability margin continues to increase.''
Operating income for year-end FY '01 increased to $23.7 million from ($28.8 million) in FY '00. Operating income for Q4 FY '01 increased to $11.2 million from $4.7 million in Q4 FY '00. Before stock-based compensation charges, operating income was $34.8 million for FY '01 and $15.3 million for Q4 FY '01.
FY '01 year-end net income was $27.2 million, up from ($26.7 million) in FY '00. Fourth-quarter net income was $8.9 million, up from $5.5 million in Q4 FY '00. Basic and diluted earnings per share for FY '01 were 6 cents, vs. (6 cents) in FY '00. Basic and diluted earnings per share for Q4 FY '01 were 2 cents, vs. 1 cent in Q4 FY '00. The company has fully implemented SAB 101 and FASB 133 requirements during FY '01.
Client Data: Record Number of New Contracts Signed
``With 386 new customer contracts signed in FY '01,'' Collazo said, ``Infonet reported its strongest year in history for new client signings. Infonet also sold 194 contracts for new services to existing customers, showing that our broad product line and commitment to customer service leads to enduring and expanding client relationships.''
He noted that the company experienced a particularly strong fourth quarter, adding 110 contracts with new customers. Average revenue per client increased 10 percent.
``Our consultative sales approach has proven a significant competitive advantage,'' said Collazo. Earlier in the year, Infonet launched two new initiatives, the patent-pending Network Analysis Program (NAP) and Application Defined Networking (ADN) -- both designed to provide further insight into the impact of applications on networks before expensive networking technical decisions are made.
``Infonet is one of the few companies in the world with the technological resources to accurately predict how the global deployment of an application will impact an existing network,'' he said.
Infonet Not Impacted by Weak Global Economy
``The fact that we've seen an increase in new accounts and an increase in the average revenue per account when people are predicting an adverse economic impact due to the U.S. economy, confirms our past experience: that Infonet sales are not dependent upon strong economic indicators,'' said Collazo.
``The fact that our services make companies more efficient and give them a competitive advantage allows us the ability to continue growing strongly during periods of weakness in the general economy.''
Strong Cash Position
``In all, we closed the year in an enviable, robust financial position, with a network that is more efficient, faster and more sophisticated than ever before,'' said Collazo. Infonet closed the year with approximately $600 million in cash on its books.
``We are fully funded and poised to execute our long-term strategic plan,'' he said. ``We will likely be free cash flow positive within 18 months. And because we substantially completed the build-out of our network this year, much of our future capital expenditures will be used directly to support customers.''
Looking Forward
Collazo reconfirmed Infonet's FY '02 projections, made in an earlier news release, stating that Infonet expects net income to continue to rise and that total revenue is expected to increase by more than 25 percent. He reiterated that the company is in the process of exploring strategic alternatives as a result of the desire of certain of the company's shareholders to sell all or part of their respective equity stakes in the company. |
