TNS, Inc. (NYSE: TNS), a leading provider of business-critical, cost-effective data communications services for transaction-oriented applications, today reported its third quarter 2011 results.

Henry H. Graham, Jr., CEO, commented, “Third quarter 2011 was solid for TNS, with revenue and adjusted earnings trends indicating the investments we have made to transform our business for growth are beginning to generate results. Excluding Cequint’s contribution, Telecommunication Services Division revenue again increased from last year and last quarter, and we expanded and strengthened our customer relationships across all tiers of mobile operators, signed customers for newly released products, and benefited from the quarter’s high voice and data volume. Cequint performed in line with expectations, and adoption rates for our suite of wireless caller identification products are tracking well. International growth in our Payments and Financial Services divisions continues, partially offsetting weaker results in North America. We are again raising the lower end of our 2011 outlook range, and remain focused for the remainder of the year on investing for growth in identity and verification, multi-channel payment gateway, and IP registry and wireless solutions.”

TNS acquired Cequint, Inc. (Cequint) on October 1, 2010 and has included its results in those of the Telecommunication Services Division from the date of acquisition. Therefore, 2011 results are not comparable to those of prior periods. On August 31, 2011, the Payments Division disposed of its Canadian ATM processing assets. Revenues and costs associated with this business are presented for all periods as Discontinued Operations in the attached Condensed Consolidated Statements of Operations.

Total revenue for the third quarter of 2011 increased 9.3% to $142.7 million from third quarter 2010 revenue of $130.6 million. On a constant dollar basis, revenues for the third quarter of 2011 increased 6.7% to $139.3 million. Cequint contributed $2.9 million to third quarter 2011 revenue.

Third quarter 2011 GAAP net income decreased to $1.6 million, or $0.06 per share, from third quarter 2010 GAAP net income of $4.0 million, or $0.15 per share. Included in GAAP net income for the third quarter of 2010 was a pre-tax charge of $1.1 million, or $0.02 per share, resulting from accelerated depreciation of certain network assets associated with the CSG integration; $0.7 million, or $0.01 per share, of acquisition costs in accordance with FASB ASC 805 “Business Combinations” related to the Cequint acquisition; and a pre-tax charge associated with severance of $0.3 million, or $0.01 per share. Excluding these items and the related tax effects, third quarter 2010 net income was $5.3 million, or $0.20 per share.

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