Knobias Clip Report (10-21-2008) ESIC
Submitted By Knobias ClipReport
ESIC: CEO Discusses Q4/FY08 Earnings and Growth Strategy for Acquisitions
By Fain Hughes, fhughes@knobias.com
EasyLink Services International Corporation (ESIC) reported its financial results for the fourth quarter and fiscal year ended July 31, 2008.
Total revenue for the fourth quarter was approximately $23.9 million with a gross profit margin of 71.5%. Total revenue for the year was approximately $92.1 million with a gross profit margin of 71.2%. Net income for the fourth quarter was approximately $8.1 million, and net income for the year end was approximately $16.3 million.
Thomas J. Stallings, CEO of EasyLink, commented in a conference call today, “We produced record revenues, that exceeded expectations, and record earnings for FY08. Our gross profit margins were solid for Q4 and FY08. We also added many more accounts to our client base in Q4. We intend to continue to expand our customer base both domestically and internationally. We are confident on our abilities to achieve strong results as we have in Q4 and FY08.”
He continued, “We previously announced an aggressive growth strategy that would result in the company reaching revenues of $250 million by the end of fiscal 2010. We felt at that time that it was achievable through reasonable organic growth and acquisitions. However, recent economic events have changed significantly, and the credit markets have all but disappeared temporarily. This has setback our acquisition plans that we have been working on for the past year. Although, we continue to evaluate acquisition opportunities, we will be limited in the scope of transactions until the financial markets begin to stabalize. We are still very much committed to reaching our goal by the end of 2010 and will remain aggressive in that pursuit.”
Mr. Stallings noted, “The financial sector represents about 19% of our worldwide revenue. The collapse of Lehman has eroded our future expectations for that account. The pending acquisition of Wachovia by Wells Fargo, which are both customers of ours, presents a cloudy outlook for the revenue potential of the account. On the other hand, the acquisition of Washington Mutual , not a customer, by J.P. Morgan, a significant customer, should bring new revenue opportunities.”
He added, “Despite these challenges, our core business remains solid, and we will continue to do all possible to create new value for our shareholders within the limitations of the current economic realities.”
Visit 1800blogger to see all of our industry leading blogs.
