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Neutral Tandem Announces Third Quarter 2010 Financial Results And Updates Full Year 2010 Financial Estimates To Reflect Tinet Acquisition

Third Quarter 2010 Highlights
  • Revenue of $46.5 million, an increase of 3.9% from $44.7 million in Q3'09  
  • Adjusted EBITDA (as defined below) of $19.9 million, a decrease of 11.0% from $22.3 million in Q3'09  
  • Net income of $9.6 million, a decrease of 13.7%, compared to $11.1 million for Q3'09  
  • Billed minutes of 27.9 billion, an increase of 21.7% over Q3'09

CHICAGO, Nov. 9, 2010 (GLOBE NEWSWIRE) --   Neutral Tandem, Inc. (Nasdaq:TNDM), a leading provider of global interconnection services, today announced its third quarter 2010 financial results.

"We are pleased with our financial results in what was an exciting quarter for Neutral Tandem," said Rian Wren, Chief Executive Officer of Neutral Tandem. "With our acquisition of Tinet on October 1, 2010, we evolved from being a primarily U.S. voice interconnection company into being a global IP-based network services company focused on delivering global connectivity for a variety of media, including voice, data and video. We are excited about having the capability to provide these services to the global wholesale communications marketplace, which we believe will enable us to drive growth for our stockholders going forward."

Third Quarter Results

Revenue increased 3.9% to $46.5 million for the three months ended September 30, 2010, compared to $44.7 million during the three months ended September 30, 2009. The increase in third quarter 2010 revenue was primarily related to an increase in the number of minutes carried over our network as compared to the third quarter of 2009.

Billed minutes increased 21.7% to 27.9 billion minutes for the three months ended September 30, 2010, compared to 23.0 billion minutes for the three months ended September 30, 2009. 

Network and facilities expenses for the three months ended September 30, 2010 were $16.1 million, compared to $13.1 million for the three months ended September 30, 2009. This increase was largely due to greater traffic volumes carried over our network and an increase in our network capacity. Combined operating expenses consisting of Operations, Sales and Marketing, and General and Administrative expenses were $12.9 million for the three months ended September 30, 2010, compared to $10.8 million for the three months ended September 30, 2009. The increase primarily resulted from higher employee expenses, including additional headcount, as well as transaction expenses of $1.2 million related to the Tinet acquisition. Depreciation and amortization expense was $4.2 million for the three months ended September 30, 2010, compared to $3.5 million for the three months ended September 30, 2009. This increase was primarily a result of adding equipment to our switch locations.

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