Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Infonet - Leader of Managed Data Communicaton Services -- Ignore unavailable to you. Want to Upgrade?

To: JakeStraw who wrote (161)	1/4/2002 9:33:00 AM
From: JakeStraw	Read Replies (1) \| Respond to of 241

Infonet to Repurchase Shares Provides Insight Into Upcoming Quarters biz.yahoo.com EL SEGUNDO, Calif.--(BUSINESS WIRE)--Jan. 3, 2002--Infonet Services Corporation (NYSE:IN; FSE:IN) today announced the initiation of a stock buyback program. Jose A. Collazo, Infonet's Chairman, President and CEO, said, ``We believe that Infonet stock, at current levels, provides a sound investment opportunity for the company.'' Mr. Collazo described Infonet's cash position as ``robust.'' He said the Company expects to achieve free cash flow in 2003 and its current cash consumption is small. Currently, Infonet has about $500 million in cash on its balance sheet. In addition, a recent IRS prefiling agreement has resulted in enhanced cash flow expected to exceed $150 million over the next 15 years. ``The expected cash to be generated from the IRS ruling makes a repurchase program more feasible,'' said Mr. Collazo. Consequently, he said that the Board of Directors has authorized a program to repurchase shares of Infonet Class B common stock. The Board approved the use of up to $100 million to repurchase shares over two years. These repurchases will be made in open market or privately negotiated transactions in compliance with the US SEC's Rule 10b-18, subject to market conditions, legal requirements and other factors. This plan does not obligate Infonet to acquire any particular amount of stock and may be suspended at any time at Infonet's discretion. Mr. Collazo said, ``Infonet's business has historically not been impacted by short term economic cycles and while Infonet has been acquiring a record number of clients, the company has seen some delay in application launches. We are also seeing aggressive competitive pricing in the market.'' He made the following adjustments to FY'02 guidance: Year-end revenue of approximately $645 million. Year-end EBITDA of approximately $70 million. Year-end net loss of $6 million. Capital expenditures to be approximately $80 million; additionally, Infonet has spent $25 million to purchase an office building in El Segundo to accommodate growth. For the new fiscal year beginning in April of 2002 he said, ``We expect core revenues, which will represent approximately 90% of total revenues, to grow at 20%. The winding down of the AUCS contract by October 2002 will result in AUCS revenues which are non-core to account for less than 10% of total revenues. EBITDA from core revenues will be approximately $80 million, and we expect to return to profitability,'' he said. ``Capital expenditures are expected to be at approximately $80 million.'' Mr. Collazo also announced that the Board approved a stock option exchange program. The program allows eligible participants holding options with an exercise price of $13.00 or higher to exchange them for new options to be issued on a date which will be more than six months from now and at the fair market value at that time. The offer will not be available to Mr. Collazo and to members of the Board of Directors. The exchanged options will be cancelled and replaced on a one-for-one basis. The offer to exchange is expected to be from approximately January 7, 2002 through February 14, 2002, the issuance of replacement options is expected to be in August 2002. ``We believe the long-term prospects for Infonet are excellent,'' said Mr. Collazo. ``And with recent contract wins, we are proving our ability to become a global full-service partner to the largest and best multinational enterprises in the world.''