NFON AG

Earnings Release • Nov 8, 2002

News Details

Corporate | 8 November 2002 01:16

Infonet Services Corp. english

Infonet Reports Fiscal 2003 Second Quarter Results (Part 2) Corporate-news announcement sent by DGAP. The sender is solely responsible for the contents of this announcement. ——————————————————————————– Other Operating Highlights (continued) – AUCS Outsourcing Contract Completed The AUCS outsourcing contract contributed $11 million to revenue and $3 million to EBITDA in the second quarter of fiscal year 2003. Over the course of the three-year outsourcing contract, which was completed as scheduled on October 1, 2002, revenue contribution totaled approximately $462 million, and EBITDA totaled approximately $107 million. Infonet also has received $9 million in management fees related to the management contract, which also terminated on October 1, 2002. “We have migrated 229 customers onto the Infonet platform as a result of the AUCS contract,” said Mr. Collazo. “We are projecting approximately $25 million in recurring core revenue from these migrated customers in the second half of this fiscal year. In addition, Infonet purchased approximately $1 million of AUCS assets in the third quarter of fiscal year 2003.” -AUCS Incentive Fee “Under the terms of the management contract, and subject to final audit and agreements by other parties, we believe we have earned an incentive fee in excess of $50 million, a substantial portion of which we expect to be payable in cash to Infonet this fiscal year,” said Mr. Collazo. Balance Sheet and Cash Flow At September 30, 2002, Infonet’s balance sheet reflected cash, cash equivalents and short-term investments totaling approximately $511 million, compared with $518 million at fiscal year-end March 31, 2002. Net cash generated from operating activities during the first six months was approximately $33 million, offset by a capital expenditure payment of approximately $22 million, a new business investment of approximately $8 million, a stock repurchase of approximately $5 million, a debt repayment of approximately $6 million and a capital lease repayment of approximately $1 million. Debt totaled approximately $110 million at quarter’s end, down from $118 million at March 31, 2002. Stockholders’ equity equaled approximately $1.1 billion at the close of the quarter. Stock Repurchase Program In January 2002, Infonet’s Board of Directors approved the expenditure of up to $100 million over 24 months to repurchase shares of the company’s common stock. As of September 30, 2002, Infonet had repurchased approximately 3.5 million shares at an average price of $2.23 per share. Financial Summary “Infonet continues to be in an enviable financial position with approximately $511 million in cash on our books and relatively little debt,” said Mr. Collazo. “This is of strategic value as multinational companies looking to outsource their mission critical applications are seeking financially stable partners to minimize the risk of business interruption. With financial stability, 30 years of experience and cash to cover potential needs, Infonet is an attractive alternative.” “Although we expect the turmoil impacting the industry to benefit Infonet in the long run, it is premature to speculate on any specific impact. Nor are we planning on any substantial relief from the significant pricing pressures we have faced all year, which are particularly evident when renewing multiyear contracts.” “The next six months represent a period of high economic and political uncertainty. Nevertheless, we expect core revenue, including the AUCS incentive fee, to result in strong growth over last fiscal year.” “Our strategy remains the same: to focus our energies on providing the highest levels of reliability and customer service available to multinational corporations utilizing our services while maintaining a healthy business.” Regional Highlights Americas Revenue in the Americas decreased 3% from $34 million in the second quarter of fiscal year 2002 to $32 million this quarter. The decrease is largely attributable to competition and pricing pressures in the United States. Sales to new clients in the Americas for the second quarter of this fiscal year include 31 new client contracts: 14 new clients and 17 new contracts with existing clients. This compares with 30 new contracts signed in the second quarter of fiscal year 2002, representing an increase of 3%. Asia Pacific Infonet’s revenue in Asia Pacific increased 20% from $19 million in the second quarter of fiscal year 2002 to $23 million this quarter due to higher demand in this market. Sales to new clients in Asia Pacific for the second quarter of this fiscal year include 37 new client contracts: 22 new clients and 15 new contracts with existing clients. This compares to 56 new contracts signed in the second quarter of fiscal year 2002, the result of higher-than-normal Asia Pacific contract signings in that quarter. Europe, Middle East and Africa (EMEA) Infonet’s core (non-AUCS platform) revenue in the EMEA region increased 13% from $68 million in the second quarter of fiscal year 2002 to $77 million this quarter. Sales to new clients in EMEA for the second quarter of this fiscal year include 127 new client contracts: 61 new clients and 66 new contracts with existing clients. The increase compares to 99 new contracts signed in the second quarter of fiscal year 2002, and represents an increase of 28%. Safe Harbor Statement Infonet may have made forward-looking statements in this release. These statements, if any, are based on information available to the company as of the date of this release and Infonet undertakes no duty to update the information to take account of later events. The accuracy of our forward-looking statements will also be affected by the strength of the market for Infonet products and services, competition, the timely transitioning of new business opportunities to Infonet’s network, final auditing of the factors relevant to the AUCS incentive fee and the effect of currency fluctuation. Investors should bear these risk factors in mind as well as those elaborated on in Infonet’s 10-K, 10-Qs and other recent filings made with the U.S. Securities and Exchange Commission. These documents are available through the investor relations portion of Infonet’s web site at www.infonet.com. (continued) end of message, (c)DGAP 08.11.2002 ——————————————————————————– WKN: 931039; ISIN: US45666T1060; Index: Listed: Amtlicher Markt in Frankfurt; Freiverkehr in Berlin, München und Stuttgart 080116 Nov 02