Star Telecom Announces Positive EBITDA for Second
Quarter
Business Wire - August 17, 2000 07:15
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SANTA BARBARA, Calif.--(BUSINESS WIRE)--Aug. 17, 2000--STAR
Telecommunications Inc. (Nadaq:STRX) today announced improved profitability and
EBITDA of $6.6 million for its second quarter ending June 30, 2000.
Significant reductions in both cost of services and SG&A propelled EBITDA for the quarter
to a positive $6.6 million from a negative $21.9 million a year ago. EBITDA also improved
from a negative $4.1 million in the first quarter of 2000. Cost of services as a percentage of
revenues decreased to 85.8% this quarter from 91.3% the prior year. This is also a decrease
from the previous quarter of 88.5%. SG&A decreased to $27.8 million or 11.5% of revenue
this quarter from $45.6 million or 16.7% in the same quarter as last year. Again this was a
decrease from the previous quarter which reported $33.3 million in SG&A or 13.1% of
revenue.
Revenue for the second quarter was $242.3 million, a decrease from $272.3 million in the
prior year's quarter, while minutes increased to 2.1 billion up from 1.7 billion in the same
quarter of the prior year. The revenue decrease reflects a reduction in revenue contribution
from wholesale operations as a result of the company's focus on improving gross margins.
North American wholesale revenue decreased to $72.6 million from $121.1 million one year
ago. North American commercial and retail operations increased to $133.4 million from
$124.7 million a year ago. European operations revenue grew to $36.3 million from $26.5
million the prior year.
The company reported a net loss for the second quarter of $11.3 million or $0.19 per share
compared to a net loss of $27.9 million or $0.48 per share for the second quarter 1999.
Included in the loss for the second quarter 2000 is $13 million for depreciation and
amortization and approximately a $1.5 million loss on the disposal of a non-core subsidiary.
"The performance of our European operations has been outstanding this quarter with
revenues increasing 37% from a year ago," said Chris Edgecomb, chairman and chief
executive officer of STAR. "We will continue to look for strong growth from our European
operations as we continue to fully utilize and reap the benefits of our interconnect with
Deutsche Telecom AG."
Edgecomb added, "Our continuing cost cutting efforts have paid off this quarter and we are
proud to have attained our goal of positive EBITDA. These efforts not only make STAR
stronger, but will contribute to make World Access a stronger company as well."
On June 7, 2000, STAR announced an amendment to the definitive agreement to merge with
World Access Inc. Under the terms of the amendment, each share of STAR common stock
will be converted into .386595 shares of World Access common stock. The transaction is
expected to close before the end of the third quarter 2000.
About STAR Telecommunications
STAR Telecommunications provides global telecommunications services to consumers, long
distance carriers, multinational corporations and Internet service providers worldwide. STAR
provides international and national long distance services, international private line, prepaid
calling cards, calling cards, dial around services and international toll-free services. Visit
STAR at www.startel.com.
Except for the historical information contained herein, this news release contains
forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21B of the Securities Exchange Act of 1934, as amended, and are
subject to the safe harbors created thereby. The company's future actual results could differ
materially from the forward-looking statements discussed herein. A list of the factors that
could cause actual results to differ materially can be found in the documents that the company
files with the SEC including those contained in STAR's prospectus and the Form 10-K for
the period ended December 31, 1999.
STAR Telecommunications Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except for share data)
December 31, 1999 June 30, 2000
(Unaudited)
Current Assets:
Cash and cash equivalents $25,561 $16,844
Short term investments 1,482 1,756
Accounts and notes receivable, net 167,403 161,169
Receivable from related parties 1,390 942
Other current assets 39,250 45,610
Total current assets: 235,086 226,321
Long-Term Assets:
Property and equipment, net 363,089 304,314
Intangible assets, net 200,582 193,316
Other 8,997 5,838
Total assets $807,754 $729,789
Current Liabilities:
Revolving lines of credit $43,540 $23,884
Current portion of long-term
obligations 18,528 7,159
Current portion of note payable
due carrier -- 57,666
Accounts payable 159,920 126,292
Accrued network costs 147,672 102,495
Related party payable 1,133 1,359
Other accrued expenses 25,840 22,048
Deferred revenue 36,374 37,280
Total current liabilities 433,007 378,183
Long Term Liabilities:
Long-term obligations, net of
current portion 49,324 59,403
Other long-term liabilities 47,369 33,634
Total long-term liabilities 96,693 93,037
Stockholders' Equity:
Common stock $.001 par value:
Authorized -- 100,000,000 shares 58 58
Additional paid-in capital 365,845 365,930
Deferred compensation (2,160) (1,810)
Note receivable from stockholder (3,714) (3,856)
Accumulated other comprehensive loss (6,022) (8,017)
Accumulated deficit (75,953) (93,736)
Total stockholders' equity 278,054 258,569
Total liabilities and
stockholders' equity $807,754 $729,789
STAR Telecommunications Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1999 2000 1999 2000
(unaudited)(unaudited)(unaudited)(unaudited)
Revenue $272,269 $242,295 $500,478 $497,400
Operating expenses:
Cost of services 248,589 207,817 441,503 433,657
Selling, general and
administrative expenses 45,588 27,852 77,053 61,181
Depreciation and amortization 10,910 13,078 19,640 26,128
Merger expense 430 -- 1,872 --
305,517 248,747 540,068 520,966
Loss from operations (33,248) (6,452) (39,590) (23,566)
Other income (expense):
Interest income 946 76 1,675 265
Interest expense (2,319) (4,818) (3,532) (7,742)
Other 98 (3,142) (1,923) 7,554
(1,275) (7,884) (3,780) 77
Loss before benefit for
income taxes (34,523) (14,336) (43,370) (23,489)
Benefit for income taxes (6,591) (3,077) (7,886) (5,706)
Net loss $(27,932) $(11,259) $(35,484) $(17,783)
Basic and diluted
loss per share $(0.48) $(0.19) $(0.64) $(0.30)
CONTACT: STAR Telecommunications, Santa Barbara, Calif.
Corporate Headquarters, 805/899-1962
Fax: 805/899-2972
Investor Relations, 800/899-1962
ir@startel.com
www.startel.com |
