TALK.COM ANNOUNCES RECORD CUSTOMERS, REVENUE
AND
Operating Profit for Third Quarter
Third Quarter Highlights:
- 1.35mm Customers, $140mm Revenue and $14.6mm Operating Profit - New Partnerships Launched
with Prodigy, DSI and SchoolCash.com - High Quality Service Recognized by JD Power & Associates -
New Products Introduced: Local Service and Agent Platform - Key Additions Made to Board of
Directors and Management
RESTON, Va., Oct. 26 /PRNewswire/ -- Talk.com (Nasdaq: TALK), the leader in leveraging the power
of the Internet to bill, service, and market telecom services to its growing base of customers, today
announced record operating profit for the third straight quarter. For the three months ended September
30, 1999, Talk.com reported net income of $16.9 million or $0.27 per fully diluted share. Excluding an
extraordinary gain from debt repurchases, total net income for the period was $14.6 million or $0.23 per
fully diluted share.
Total revenue for the third quarter increased to $140 million, a 20% sequential increase over the
second quarter 1999. Revenue growth during the period was fueled by the continued expansion of
Talk.com's registered online accounts, which totaled 1.35 million customers at the end of September
1999 -- a 35% increase over the last six months. Talk.com further reported that gross margins for the
third quarter rose to 39%, an increase of more than two times the comparable quarter in 1998. Finally,
the Company currently has approximately $55mm, of cash up from $37mm at the end of the second
quarter.
In making today's announcement, Gabe Battista, Talk.com's Chairman and Chief Executive Officer
stated, "Our Company's strong results for the quarter underscore Talk.com's powerful combination of
winning strategy, compelling product and top personnel. From the all-important customer perspective,
we are finding that consumers are increasingly attracted to our high quality service and the savings we
offer. We continue to leverage the power of the Internet to attract, bill and retain customers who are
demanding the most competitive rates available." "We also believe that the significance of Talk.com
recently being rated number two among hundreds of long distance carriers in customer satisfaction by
JD Power & Associates, the global leader in quality and satisfaction measurements, will further
strengthen our customer-focused positioning," added Mr. Battista.
In the third quarter, Talk.com continued to expand on its strategy of building new marketing
relationships to efficiently capture new customers who can be serviced online. E-commerce deals
signed during the period included a cross-marketing agreement with Direct Sales International, one of
the nation's top magazine subscription distributors, and SchoolCash.com, an innovative marketer to
parents and educators associated with more than 100,000 schools nationwide. "Talk.com continues to
aggressively partner with like-minded e-commerce companies that can deliver added value to both the
customer base and our bottom-line results," noted Mr. Battista. "The company also completed test
marketing to new partnership members during the quarter and is now applying these proven formulas to
grow its customer base."
From a product perspective, Talk.com announced earlier today the addition of local services to its
telecom product portfolio and recently launched the industry's first end-to-end paperless e-commerce
agent platform, featuring real-time commission reporting. Mr. Battista commented, "The delivery of local
services provides an attractive bundle with our core long distance product. We have the ability to
upsell local services to a segment of our existing customer base and to add this service in new
marketing opportunities." He continued, "With respect to our agent platform, we have created a
unique tool for this important method of distribution and have felt an immediate response. This product
highlights the efficiencies of our e-commerce model and opened the door to a $10 billion sales channel
in telecom."
During the third quarter, the Company also strengthened its leadership. Former FCC Chairman Mark S.
Fowler, and leading financial executive and General Partner of New Enterprise Associates, Arthur J.
Marks, were both named to the Talk.com Board of Directors. In addition, Ed Meyercord, an executive
who joined Talk.com in 1996 and has substantial finance and telecom industry experience, was
appointed Chief Financial Officer.
Concluded Mr. Battista, "Talk.com now has the products, strategy and talent to further advance our
market position as the leading e-commerce player in the telecom industry. Now, the company as a
whole can truly concentrate its energies and expertise on accelerating this growth and capitalizing on
our very strong business momentum." |
