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TheStreet Open House

EasyLink Services International Corporation Announces Fiscal Second Quarter 2011 Financial Results

Stock quotes in this article: ESIC

About EasyLink Services International Corporation

EasyLink Services International Corporation (EasyLink) (Nasdaq:ESIC), headquartered in Norcross, GA, offers a comprehensive portfolio of "any to any" business messaging and transaction services that can bridge the most challenging technology gaps while creating significant cost efficiencies across an organization. From Desktop Fax and Production Messaging to EDI, Managed File Transfer, Document Capture and Management, Secure Messaging and Telex we help companies drive costs out of their operations. With over two decades of servicing customers around the globe, EasyLink has established a proven track record for providing effective, reliable and secure communications. For more information on EasyLink, visit www.easylink.com .

The EasyLink Services International Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=7889

EASYLINK SERVICES INTERNATIONAL CORPORATION
Consolidated Statements of Income
 for the three and six months ended January 31, 2011 and 2010
(Unaudited)
(in thousands, except per share data)
         
  Three Months  Six Months 
  2011 2010 2011 2010
         
Service revenue $ 47,425 $ 20,404 $ 70,160 $ 40,902
         
Cost of services 17,494 5,677 24,085 11,763
Gross Profit 29,931 14,727 46,075 29,139
         
Operating expenses:        
Product development and enhancement 3,557 1,757 5,496 3,615
Selling and marketing 6,776 3,228 9,733 6,498
General and administrative 12,399 6,646 19,988 13,869
Acquisition and integration related 817  -- 2,415  --
         
Operating income 6,382 3,096 8,443 5,157
         
Other income (expense):        
Interest expense (1,598) (434) (2,411) (928)
Other income (expense) 23 (104) 334 237
         
Income before income taxes 4,807 2,558 6,366 4,466
         
Provision for income taxes 1,868 1,250 2,460 1,794
         
Net income 2,939 1,308 3,906 2,672
         
Dividends on preferred stock (1,962) (216) (2,012) (432)
         
         
Income attributable to common stockholders $ 977 $ 1,091 $ 1,894 $ 2,239
         
Basic income per common share $ .03 $ .04 $ .06 $ .09
         
Diluted income per common share $ .03 $ .04 $ .06 $ .08
         
Weighted average number of common shares outstanding - basic 29,448 26,280 29,354 26,275
         
Weighted average number of common shares outstanding – diluted 31,563 29,426 30,890 29,413
   
EASYLINK SERVICES INTERNATIONAL CORPORATION   
Consolidated Balance Sheets    
(in thousands)     
     
  January 31, 2011 (unaudited) July 31, 2010
ASSETS    
Current assets:    
Cash and cash equivalents  $ 21,223  $ 20,475
Accounts receivable, net  31,095  11,480
Other current assets  10,938  8,463
Total current assets  63,256  40,418
     
Property and equipment, net  19,563  5,521
Goodwill and other intangible assets, net  127,613  50,329
Other long term assets  6,759  8,218
Total assets  $ 217,191  $ 104,486
     
LIABILITIES AND STOCKHOLDERS' EQUITY    
Current liabilities:    
Accounts payable and accrued expenses  $ 25,102  $ 11,051
Current portion of long term debt  27,923  15,258
Other current liabilities  3,955  1,497
Total current liabilities  56,980  27,806
     
Long term debt  88,126  9,684
Other liabilities  563  285
Total liabilities  145,669  37,775
     
Stockholders' Equity:    
Preferred stock (a) (a)
Common Stock  311  302
Additional paid-in capital  133,356  132,799
Treasury Stock  (2,122)  (2,122)
Accumulated other comprehensive loss  (5,456)  (5,797)
Accumulated deficit  (54,567)  (58,471)
Total stockholders' equity  71,522  66,711
Total liabilities and stockholders' equity  $ 217,191  $ 104,486
(a) less than 1,000    
         
EASYLINK SERVICES INTERNATIONAL CORPORATION        
Reconciliation of GAAP Net income attributable to common stockholders to Non-GAAP Net income attributable to common stockholders        
for the three and six months ended January 31, 2011 and 2010         
(Unaudited)        
(in thousands)        
         
  Three Months Six Months
  2011 2010 2011 2010
GAAP Net Income attributable to common stockholders  $ 977  $ 1,091  $ 1,894  $ 2,239
Non-GAAP Adjustments:        
Amortization  2,484  1,264  3,803  2,537
Stock Compensation  173  219  650  455
Acquisition Expenses  817  --   2,415  -- 
Non-cash Interest  182  136  678  284
Non-GAAP Tax Effect  (1,104)  (792)  (1,983)  (1,317)
Non Cash Dividends  1,929  --   1,929  -- 
         
Non-GAAP Net Income attributable to common stockholders  $ 5,459  $ 1,919  $ 9,385  $ 4,200
         
EASYLINK SERVICES INTERNATIONAL CORPORATION        
Reconciliation of GAAP Basic income per common share to Non-GAAP Basic income per common share        
for the three and six months ended January 31, 2011 and 2010         
(Unaudited)        
  Three Months Six Months
  2011 2010 2011 2010
GAAP Basic income per common share  $ 0.03  $ 0.04  $ 0.06  $ 0.09
Non-GAAP Adjustments:        
Amortization  0.08  0.05  0.13  0.10
Stock Compensation  0.01  0.01  0.02  0.02
Acquisition Expenses  0.03  --   0.08  -- 
Non-cash Interest  0.01  0.01  0.02  0.01
Non-GAAP Tax Effect  (0.04)  (0.04)  (0.06)  (0.06)
Non Cash Dividends  0.07  --   0.07  -- 
         
Non-GAAP Basic income per common share  $ 0.19  $ 0.07  $ 0.32  $ 0.16
         
EASYLINK SERVICES INTERNATIONAL CORPORATION
Reconciliation of GAAP Diluted income per common share to Non-GAAP Diluted income per common share
for the three and six months ended January 31, 2011 and 2010         
(Unaudited)        
  Three Months Six Months
  2011 2010 2011 2010
GAAP Diluted income per common share  $ 0.03  $ 0.04  $ 0.06  $ 0.08
Non-GAAP Adjustments:        
Amortization  0.08  0.04  0.12  0.09
Stock Compensation  0.01  0.01  0.02  0.02
Acquisition and integration related   0.03  --   0.08  -- 
Non-cash Interest  0.01  --   0.02  0.01
Non-GAAP Tax Effect  (0.05)  (0.02)  (0.06)  (0.06)
Non Cash Dividends  0.06  --   0.06  -- 
         
Non-GAAP Diluted income per common share  $ 0.17  $ 0.07  $ 0.30  $ 0.14
         
Weighted average number of common shares outstanding - diluted  31,562,960  29,426,187  30,890,350  29,413,353
         
EASYLINK SERVICES INTERNATIONAL CORPORATION        
Reconciliation of GAAP Net Income to Adjusted EBITDA         
for the three and six months ended January 31, 2011 and 2010         
(Unaudited)        
(in thousands)        
  Three Months Six Months
  2011 2010 2011 2010
Net Income  $ 2,939  $ 1,308  $ 3,906  $ 2,672
Interest expense  1,598  434  2,411  928
Provision for income taxes  1,868  1,250  2,461  1,794
Depreciation and amortization  4,714  2,052  6,922  4,108
Stock compensation  173  219  650  455
Acquisition and integration related   817  --   2,415  -- 
Adjusted EBITDA  $ 12,109  $ 5,263  $ 18,765  $ 9,957
CONTACT: EasyLink Services International Corporation
         Glen Shipley
         678-533-8004
         gshipley@easylink.com

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