NC ....Keep TALK ing!! RECORD EARNINGS as below:-
TALK.COM POSTS RECORD EARNINGS OF $31.3 MILLION OR $ 0.50 PER SHARE
NEW HOPE, Pa., April 27 /PRNewswire/ -- TALK.com Inc. (Nasdaq: TALK), the nation's largest provider of e-commerce telecommunications services reported record first quarter earnings of $31.3 million or $0.50 per share for the three months ending March 31, 1999 compared to a loss of $0.65 for the same three month period of 1998. Excluding extraordinary gains, first quarter earnings were $12.3 million or $0.20 per share. Revenue for the first quarter was $110.6 million, an increase of 21% over revenue of $91.1 million for the same three-month period in 1998.
"We are pleased that we exceeded expectations across the board, including revenue and income, and that TALK.com has verified its profitable e-commerce business model," said Gabe Battista, Chief Executive Officer and Chairman of TALK.com. "We remain confident that we will continue to expand our product portfolio and distribution channels on the Internet and provide an expanding customer base new high quality products."
Quarterly Highlights:
Improved Financial Position -- The Company's current cash position
is approximately $35 million and shareholders' equity has improved by
$67.9 million at the end of the quarter. Long-term debt outstanding at
the end of the quarter was $94 million, down significantly from $500
million a year ago. All margin indebtedness was eliminated at the
beginning of the quarter. The Company's improved balance sheet and generation of strong free cash flow from operations support its BB
credit rating from Standard & Poors.
Six-fold Increase in E-Commerce Telecom Revenue -- For the quarter
ended March 31, 1999, revenue generated from online telecom customers grew by 607% to $71.0 million from $11.7 million in the first quarter of 1998. The growth was driven by significant increases throughout
1998 and in the first quarter of online customers. Based on Yankee
Group estimates of electronically billed consumers, TALK.com has the
largest market share in e-commerce telecom services. Given current
subscriber growth, TALK.com remains confident in the sequential growth forecasted in analyst models.
Gross Margins Doubled -- The Company has improved its gross marginto 33% which is a 100% increase over the 16.5% gross margin in the first quarter of 1998 and a 32% increase over the 25% gross margin in the fourth quarter of 1998. Margin expansion was driven primarily by network efficiencies. The Company expects the gross margin to continue to improve throughout 1999.
Expansion of Real Time E-commerce Engine -- The Company recently
established its new TALK.com web site which can handle thousands of users simultaneously to compliment its present industry leading online revenue from its AOL partnership. Using its new brand of TALK.com? to create a popular internet hub for online and offline communications, the Company expects to expand the awareness to the Internet community through advertising and business partnerships so that easy online signup, the nations only "real time" billing information, low rates, online customer service and convenient credit card payment will be available to new sets of customers.
Strategic Re-Focus of Assets -- The Company reached an agreement
to sell the non-strategic assets of the former Symetrics business and
will no longer have management and payroll responsibility for
approximately 100 employees in Melbourne, Florida. These assets were no longer relevant to the Company's e- commerce strategy. Despite the sale of unprofitable revenue associated with Symetrics, the Company expects to meet its sequential growth targets. Also the Company is no longer the guarantor of the Communications Telesystems International (WorldxChange) note and any financial obligations with WorldxChange have terminated.
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