Deltathree Reports Second Quarter 2010 Financial Results
Second quarter 2010 GAAP net loss totaled $813,000, or $(0.01) per diluted share, compared to a GAAP net loss for the second quarter of 2009 of $1.3 million, or $(0.02) per diluted share. Second quarter 2010 non-GAAP adjusted EBITDA (as defined below) loss was $550,000, or $(0.01) per diluted share, compared to a non-GAAP adjusted EBITDA loss of $957,000, or $(0.01) per diluted share, for the second quarter of 2009.
deltathree defines adjusted EBITDA as earnings before stock-based compensation, interest, income taxes, depreciation and amortization. deltathree uses adjusted EBITDA as a measure of the company's operating trends. The adjusted EBITDA numbers presented may not be comparable to similarly titled measures reported by other companies. Consistent with Regulation G under the U.S. federal securities laws, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measure, and this reconciliation is located under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" following the Condensed Consolidated Statements of Cash Flows included in this press release.
As of June 30, 2010, deltathree held approximately $1.6 million in cash, cash equivalents, restricted cash and short-term investments, and had negative working capital equal to approximately $2.9 million and negative stockholders' equity equal to approximately $2.5 million. While deltathree's cost-reduction activities continue to yield measurable improvements, the company is continuing to draw upon its cash reserves on a monthly basis.
On August 3, 2010, the company completed a draw down of the $1.2 million line of credit available under the March 2010 loan and security agreement with D4 Holdings, LLC. On August 10, 2010, the company entered into a second loan and security agreement with D4 Holdings for an additional credit line in a principal amount of $1.0 million. These credit lines have provided deltathree important near-term financial flexibility and reflect the confidence in the company held by D4 Holdings, the majority stockholder of deltathree and whose ownership includes the owners of ACN, Inc., an international direct seller of telecommunications services. The company is continuing to explore potential capital initiatives aimed at further strengthening its balance sheet and remedying its negative working capital.
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