Inteliquent Reports Financial Results That Exceed Revised 2012 Financial Guidance

Inteliquent Reports Financial Results That Exceed Revised 2012 Financial
Guidance

Highlights

  *2012 revenue increased by 3% to over $275 million
  *Record data services revenue of $18.2 million in Q4 2012 and $69.5 million
    in 2012
  *Record voice services revenue of $206.0 million in 2012
  *Adjusted EBITDA (a non-GAAP financial measure) was $14.5 million in Q4
    2012 and $72.0 million in 2012
  *Paid a $97 million ($3.00 per share) special cash dividend in Q4 2012
  *Completed a $15 million revolving credit facility in March 2013

CHICAGO, March 7, 2013 (GLOBE NEWSWIRE) -- Inteliquent (Nasdaq:IQNT), a
leading global provider of voice and data services, today announced its
financial results for the fourth quarter and full year 2012.

"2012 was a transition year for Inteliquent. We grappled with several legacy
issues, and emerged in a position to have a successful 2013," said Ed Evans,
Chief Executive Officer of Inteliquent. "We are making progress and expect
2013 to be a year in which we drive greater efficiencies in our business
operations."

Financial and Operating Results

In the fourth quarter of 2012, Inteliquent generated revenue of $67.7 million,
a decrease of 3% compared to $69.5 million of revenue in the fourth quarter of
2011. The revenue decrease related primarily to a continued reduction in
minute volumes for local transit services, which was partially offset by an
increase in minute volumes for our other voice services. For the full year
2012, revenue increased by 3% to $275.5 million compared to $268.3 million in
2011.Both the voice business and the data business generated revenue growth
for the full year 2012.

Minutes of use decreased by 4% to 31.9 billion minutes in the fourth quarter
of 2012, compared to 33.3 billion minutes for the fourth quarter of 2011.
Minutes of use for the full year 2012 were 132.0 billion, an increase of 1%
from 130.4 billion minutes during 2011.

Data traffic volume increased by 42% to 9.5 terabits per second in the fourth
quarter of 2012, compared to 6.7 terabits per second in the fourth quarter of
2011. Data traffic volume for the full year 2012 was 32.7 terabits per
second, an increase of 46% from 22.4 terabits per second during 2011.

Adjusted EBITDA in the fourth quarter of 2012 was $14.5 million, a decrease of
34% compared to $22.1 million in the fourth quarter of 2011.In the fourth
quarter of 2012, Inteliquent definitively settled a dispute with one of its
largest customers and agreed to new terms that govern a portion of their
commercial relationship effective October 5, 2012.Inteliquent's fourth
quarter 2012 results include the impact of the revised economic terms between
Inteliquent and the customer. Adjusted EBITDA for the full year 2012 was
$72.0 million, a decrease of 21% compared to $91.0 million during 2011.See
"Use of Non-GAAP Financial Measures" below for a discussion of the
presentation of Adjusted EBITDA and reconciliation to net income.

In the fourth quarter of 2012, Inteliquent recorded $91.0 million of one-time
expenses, including a $88.7 million asset impairment primarily related to
goodwill and intangible assets initially recorded at the time of the Tinet
acquisition.The remaining $2.3 million consisted of an additional cash
severance charge and an additional write-down of equipment related to our
hosted services business line that was discontinued in 2012.In the full year
2012, Inteliquent recorded $103.2 million of one-time expenses, including a
$88.7 million asset impairment primarily related to goodwill and intangible
assets initially recorded at the time of the Tinet acquisition, a $9.0 million
dispute settlement, a $3.4 million write-down related to our hosted services
business line that was discontinued in 2012, a $1.2 million cash severance
charge, and a $0.9 million charge related to Value Added Taxes from prior
periods.

Loss from operations for the fourth quarter of 2012 was $88.1 million,
compared to income from operations of $12.5 million for the fourth quarter of
2011. Loss from operations for the full year 2012 was $73.9 million, compared
to income from operations of $46.6 million for full year 2011.

Selected financial and operational metrics are presented in the following
table:

($ in millions, except per minute and per MB figures)
                                                                 
Voice                             Q42011  Q12012  Q22012  Q32012  Q42012
Voice Revenue                     $51.8    $53.5    $50.8    $52.2    $49.5
                                                                 
Total ARPM                        $0.00156 $0.00156 $0.00155 $0.00158 $0.00155
                                                                 
Minutes of Use (in billions):                                     
Local Transit                     16.9     16.2     15.1     14.3     13.7
Termination                       12.0     13.2     13.4     14.1     13.0
Origination                       3.7      4.1      3.4      3.9      4.6
International                     0.7      0.7      0.8      0.8      0.6
Total Minutes of Use              33.3     34.2     32.8     33.1     31.9
                                                                 
                                                                 
Data                                                              
IP Transit Revenue                $14.8    $14.6    $14.9    $13.5    $14.6
Ethernet Revenue                  2.8      2.6      2.6      3.1      3.6
Total Data Revenue                $17.7    $17.2    $17.5    $16.6    $18.2
                                                                 
Average Price per MB              $2.62    $2.34    $2.26    $2.01    $1.92
Volume of Traffic (in tbps)       6.7      7.3      7.7      8.2      9.5
                                                                 
# of Customers                    884      931      990      1,009    1,041
# of Customer Connections         3,175    3,217    3,502    3,712    3,849
                                                                 
# of POPs                         119      119      121      121      122
# of Sales Reps (Quota-bearing)   26       26       26       28       28
^(1)
                                                                 
                                                                 
Other                                                             
# of Employees ^(1)               291      281      291      291      290
                                                                 
                                                                 
(1) Includes dedicated full-time sales contractors.

New Credit Facility

On March 5, 2013, Inteliquent entered into a $15 million revolving credit
facility. The credit facility has a term of three years and an interest rate
of LIBOR + 3.25%.Inteliquent has no plans to draw on the facility at this
time and remains debt-free.The facility serves to increase the company's
financial flexibility and further strengthens its liquidity position.

2013 Business Outlook

Inteliquent's financial estimates for 2013 are as follows:

  *Revenue is expected to be $240 - $250 million.
    
  *Adjusted EBITDA is expected to be $27 -$34 million.
    
  *Capital Expenditures are expected to be $20 - $25 million.

"We are pleased to have outperformed on our most recent 2012 financial
guidance for revenue and Adjusted EBITDA," said David Zwick, Executive Vice
President and Chief Financial Officer of Inteliquent."Looking forward to the
current year, our 2013 plan is focused on driving cash flow generation via
optimizing our operations and increasing our spending discipline.We recently
introduced enhancements to our financial decision-making processes, which we
expect to yield benefits during the year," concluded Mr. Zwick.

Conference Call & Web Cast

The fourth quarter conference call will be held on Thursday, March7, 2013 at
10:00 a.m. (ET). A live web cast of the conference call as well as a replay
will be available online on the company's corporate web site at
www.inteliquent.com. Participants can also access the call by dialing
1-877-941-0844 (within the United States and Canada), or 1-480-629-9835
(international callers). A replay of the call will be available approximately
two hours after the call has ended and will be available until 11:59 p.m. (ET)
on April14, 2012. To access the replay, dial 1-800-406-7325 (within the
United States and Canada), or 1-303-590-3030 (international callers) and enter
the conference ID number: 4520845#.

Cautions Concerning Forward-Looking Statements

This press release contains "forward-looking statements" that involve
substantial risks and uncertainties. All statements, other than statements of
historical fact, included in this press release regarding our strategy, future
operations, future financial position, future revenues, projected costs,
prospects, plans and objectives of management are forward-looking statements.
The words "anticipates," "believes," "efforts," "expects," "estimates,"
"projects," "proposed," "plans," "intends," "may," "will," "would," and
similar expressions are intended to identify forward-looking statements,
although not all forward-looking statements contain these identifying words.
Actual results or events could differ materially from the plans, intentions
and expectations disclosed in the forward-looking statements we make. Factors
that might cause such differences include, but are not limited to: the impact
of current and future regulation, including intercarrier compensation reform
enacted by the Federal Communications Commission; the effects of competition,
including direct connects, and downward pricing pressure resulting from such
competition; the risks associated with our ability to successfully develop and
market new services, many of which are beyond our control and all of which
could delay or negatively affect our ability to offer or market new services;
the risk that our business and the Tinet business will not be integrated
successfully; technological developments; the ability to obtain and protect
intellectual property rights; the impact of current or future litigation; the
potential impact of any future acquisitions, mergers or divestitures; natural
or man-made disasters; the ability to attract, develop and retain executives
and other qualified employees; changes in general economic or market
conditions, including currency fluctuations; and other important factors
included in our reports filed with the Securities and Exchange Commission,
particularly in the "Risk Factors" section of our Annual Report on Form 10-K
for the period ended December31, 2011 and Quarterly Reports on Form 10-Q for
the periods ended March31, 2012,June30, 2012, and September30, 2012, as
such Risk Factors may be updated from time to time in subsequent reports.
Furthermore, such forward-looking statements speak only as of the date of this
press release. We undertake no obligation to update any forward-looking
statements to reflect events or circumstances after the date of such
statements.

About Inteliquent

Headquartered in Chicago, Inteliquent (operating respectively under the legal
names Neutral Tandem, Inc. and Tinet S.p.A. or the name of the applicable
affiliate) provides intelligent networking to solve challenging
interconnection and interoperability issues on a global scale.With an
advanced MPLS network that is highly interconnected to carriers around the
world, Inteliquent provides voice, IP Transit and Ethernet services to major
carriers, service providers, and content management firms based in over 80
countries and six continents. With over 130 Ethernet sites worldwide, the
company is the largest global Ethernet interconnection provider, a top-five
global IP transit provider and has a leading IPv6 network. Please visit
Inteliquent's website at www.inteliquent.com and follow us on
Twitter@Inteliquent.

The Inteliquent logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=3797

The condensed consolidated statements of income, balance sheets and statements
of cash flows are unaudited and subject to reclassification. The tax-related
figures in the financial statements are preliminary and may be adjusted in
connection with an ongoing analysis of the impairment charges recorded in the
fourth quarter of 2012.

NEUTRAL TANDEM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In thousands, except per share amounts)
(Unaudited)
                                                                
                                   Three Months Ended Years Ended December 31
                                    December 31
                                   2012       2011    2012         2011
                                                                
Revenue                             $67,665    $69,466 $275,453     $268,284
                                                                
Operating expense:                                               
Network and facilities expense
(excluding depreciation and         33,654     27,482  126,590      108,279
amortization)
Operations                          11,656     12,917  48,131       42,024
Sales and marketing                 4,096      3,748   16,097       13,599
General and administrative          8,131      5,201   27,495       27,972
Depreciation and amortization       6,951      7,326   29,749       29,366
Carrier Settlement                  --       --    9,000        --
Impairment of fixed assets          14,892     --    16,149       --
Impairment of goodwill              49,603     --    49,603       --
Impairment of intangible assets     25,848     --    25,848       --
Loss on disposal of fixed assets    895        292     731          439
Total operating expense             155,726    56,966  349,393      221,679
                                                                
Income (loss) from operations       (88,061)   12,500  (73,940)     46,605
                                                                
Other (income) expense:                                          
                                                                
Interest expense                    --       --    --         --
Interest income                     (10)       (10)    (10)         (42)
Other (income) expense              (254)      17      (305)        437
Foreign exchange loss (gain)        268        738     446          421
                                                                
Total other expense (income)       14         745     131          816
Income (loss) before income taxes  (88,074)   11,755  (74,070)     45,789
Provision for income taxes          816        5,782   7,195        18,732
Net (loss) income                   ($88,890)  $5,973  ($81,265)    $27,057
                                                                
Net income (loss) per share:                                     
Basic                               ($2.76)    $0.19   ($2.55)      $0.83
Diluted                             ($2.76)    $0.19   ($2.55)      $0.82
                                                                
Weighted average number of shares                                
outstanding:
Basic                               32,219     31,478  31,918       32,780
Diluted                             32,219     31,860  31,918       33,195


NEUTRAL TANDEM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
                                                                    
                                                            December 31
                                                            2012     2011
ASSETS                                                               
Current assets:                                                      
Cash and cash equivalents                                   $31,479  $90,279
Receivables, net                                             42,829   46,991
Deferred income taxes-current                                1,210    3,227
Other current assets                                         11,266   6,655
Total current assets                                         86,784   147,152
Intangible assets                                            --      28,644
Goodwill                                                     --     48,137
Property and equipment—net                                   53,517   75,045
Restricted cash                                              962      962
Deferred income taxes-non-current                            2,876    --
Other assets                                                 1,685    2,870
Total assets                                                 $145,824 $302,810
                                                                    
LIABILITIES AND SHAREHOLDERS' EQUITY                                 
Current liabilities:                                                 
Accounts payable                                             $12,382  $13,792
Accrued liabilities:                                                 
Taxes payable                                                13,309   2,567
Circuit cost                                                 13,200   8,743
Rent                                                         1,831    1,525
Payroll and related items                                    4,516    4,366
Other                                                        3,186    2,640
Total current liabilities                                    48,422   33,633
Other liabilities                                            1,075    1,693
Deferred income taxes-noncurrent                             --     7,806
                                                                    
Total liabilities                                            49,497   43,132
Shareholders' equity:                                                
Preferred stock—par value of $.001; 50,000,000 authorized
shares; no shares issued and outstanding at December 31,             
2012 and December 31, 2011
Common stock—par value of $.001; 150,000,000 authorized
shares; 32,344,614 shares and 31,520,121 shares issued and   32       32
outstanding at December 31, 2012 and December 31, 2011,
respectively
Additional paid-in capital                                   199,331  185,014
Less treasury stock, at cost; 3,083,446 in 2012 and 2011     (50,103) (50,103)
Accumulated other comprehensive loss                         (4,553)  (4,346)
Retained earnings                                            (48,380) 129,081
Total shareholders' equity                                   96,327   259,678
Total liabilities and shareholders' equity                   $145,824 $302,810


NEUTRAL TANDEM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                                  
                                                 Years Ended December 31
                                                 2012      2011     2010
                                                                  
Cash Flows From Operating Activities:                              
Net income (loss)                                 $(81,265) $27,057  $32,608
Adjustments to reconcile net cash flows from operating activities:   
Depreciation and amortization                     29,749    29,366   19,062
Deferred income taxes                             (10,457)  (3,698)  (476)
Impairment of fixed assets                        16,149    --     --
Impairment of goodwill                            49,604    --     --
Impairment of intangible assets                   25,848    --     --
(Gain) Loss on disposal of fixed assets           733       439      (82)
Non-cash share-based compensation                 13,172    15,120   10,072
Change in fair value of ARS                       --      --     (923)
Change in fair value of ARS Rights                --      --     712
Gain on intercompany foreign exchange             (383)     (98)     --
transactions
Excess tax deficiency associated with stock       (1,066)   435      338
option exercise
Changes in assets and liabilities:                                 
Receivables                                       4,777     (9,800)  (1,910)
Other current assets                              (3,696)   726      (2,940)
Other noncurrent assets                           (564)     (929)    2,941
Accounts payable                                  1,761     (2,744)  2
Accrued liabilities                               15,932    1,343    1,137
Noncurrent liabilities                            1,739     497      (29)
                                                                  
Net cash flows from operating activities          62,033    57,714   60,512
                                                                  
Cash Flows From Investing Activities:                              
Purchase of equipment                             (25,922)  (21,986) (18,360)
Proceeds from sale of equipment                   206       27       89
Increase in restricted cash                       --      --     (522)
Purchase of Tinet SpA                             --      --     (103,144)
Other Investments                                 --      (500)    --
Proceeds from the redemption of ARS               --      --     17,125
                                                                  
Net cash flows from investing activities          (25,716)  (22,459) (104,812)
                                                                  
Cash Flows From Financing Activities:                              
Proceeds from the issuance of common shares       1,396     256      116
associatedwith stock option exercise
Restricted shares withheld to cover employee      (1,317)   (1,268)  (333)
taxes paid
Excess tax (deficiency) associated with stock     1,066     (435)    (338)
option exercise
Repurchase of treasury stock                      --      (50,106) (9,556)
Dividends Paid                                    (96,659)  --     --
Principal payments on long-term debt              --      --     (235)
Net cash flows from financing activities          (95,513)  (51,553) (10,346)
                                                                  
Effect of exchange rate changes on cash           396       (97)     (91)
                                                                  
                                                                  
Net Increase In Cash And Cash Equivalents         (58,800)  (16,395) (54,737)
Cash And Cash Equivalents—Beginning               90,279    106,674  161,411
Cash And Cash Equivalents—End                     $31,479   $90,279  $106,674
                                                                  
Supplemental Disclosure Of Cash Flow Information:                   
Cash paid for interest                            $--    $--   $242
Cash paid for taxes                               $12,491   $20,421  $22,666
                                                                  
Supplemental Disclosure Of Noncash Flow Items:                      
Investing Activity—Accrued purchases of equipment $3,411    $6,464   $3,308

                      Use of Non-GAAP Financial Measures

In this press release we disclose "Adjusted EBITDA", which is a non-GAAP
financial measure. For purposes of SEC rules, a non-GAAP financial measure is
a numerical measure of a company's performance, financial position, or cash
flows that either excludes or includes amounts that are not normally excluded
or included in the most directly comparable measure, calculated and prepared
in accordance with generally accepted accounting principles in the United
Sates (GAAP).

EBITDA is defined as net income before (a)interest expense, net (b)income
tax expense and (c)depreciation and amortization. Adjusted EBITDA is defined
as EBITDA as further adjusted to eliminate non-cash share-based compensation,
impairment charges, foreign exchange loss (gain) on intercompany loans,
dispute settlements, cease operations – hosted services, reduction in force,
value-added tax and other expense related to stock buyback. We believe that
the presentation of Adjusted EBITDA included in this press release provides
useful information to investors regarding our results of operations because it
assists in analyzing and benchmarking the performance and value of our
business. We believe that presenting Adjusted EBITDA facilitates
company-to-company operating performance comparisons of companies within the
same or similar industries by backing out differences caused by variations in
capital structure, taxation and depreciation of facilities and equipment
(affecting relative depreciation expense), which may vary for different
companies for reasons unrelated to operating performance. These measures
provide an assessment of controllable operating expenses and afford management
the ability to make decisions which are expected to facilitate meeting current
financial goals as well as achieve optimal financial performance. They provide
an indicator for management to determine if adjustments to current spending
decisions are needed. Furthermore, we believe that the presentation of
Adjusted EBITDA has economic substance because it provides important insight
into our profitability trends, as a component of net income, and allows
management and investors to analyze operating results with and without the
impact of depreciation and amortization, interest and income tax expense,
non-cash share-based compensation, impairment charges, foreign exchange loss
(gain) on intercompany loans, dispute settlements, cease operations – hosted
services, reduction in force, value-added tax and other expense related to
stock buyback. Accordingly, these metrics measure our financial performance
based on operational factors that management can impact in the short-term,
namely the operational cost structure and expenses of our business. In
addition, we believe Adjusted EBITDA is used by securities analysts, investors
and other interested parties in evaluating companies, many of which present an
EBITDA measure when reporting their results. Although we use Adjusted EBITDA
as a financial measure to assess the performance of our business, the use of
Adjusted EBITDA is limited because it does not include certain material costs,
such as depreciation, amortization and interest and taxes, necessary to
operate our business. We disclose the reconciliation between EBITDA and
Adjusted EBITDA and net income below to compensate for this limitation. While
we use net income as a significant measure of profitability, we also believe
that Adjusted EBITDA, when presented along with net income, provides balanced
disclosure which, for the reasons set forth above, is useful to investors in
evaluating our operating performance and profitability. Adjusted EBITDA
included in this press release should be considered in addition to, and not as
a substitute for, net income as calculated in accordance with generally
accepted accounting principles as a measure of performance.

The following is a reconciliation of net income to EBITDA and Adjusted EBITDA:

NEUTRAL TANDEM, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
(Dollars in thousands)
                                                                 
                       Three Months Ended       Years Ended December 31
                        December 31
                       2012          2011       2012        2011     2013 *
                                                                 
Net income (loss)       $(88,890)     $5,973     $(81,265)   $27,057  $1,322
Interest expense        --          (10)       (10)        (42)     145
(income), net
Provision for income    816           5,782      7,195       18,732   899
taxes
Depreciation and        6,951         7,326      29,749      29,366   21,443
amortization
EBITDA                  $(81,123)     $19,071    $(44,331)   $75,113  $23,809
Non-cash share-based    4,605         2,775      13,171      15,120   6,691
compensation
Impairment of goodwill  49,603        --       49,603      --     --
Impairment of           25,848        --       25,848      --     --
intangible assets
Impairment of fixed     13,269        --       13,269      --     --
assets
Hosted Services         1,623         --       3,402       --     --
Other expenses -        --          --       9,000       962      --
Settlement Dispute
Other expenses -        691           --       1,168       --     --
Severance
Other expenses - Stock  --          --       --        330      --
buyback
Value Added Tax         --          --       895         --     --
Foreign exchange loss
(gain) on intercompany  --          205        --        (552)    --
loan
Adjusted EBITDA         $14,516       $22,051    $72,025     $90,973  $30,500
                                                                 
* The amounts expressed in this column are based on current estimates as of
the date of this press release. This reconciliation is based on the midpoint
of the full year 2013 estimated range announced in this press release.

CONTACT: Media Contact:
         Inteliquent
         Kelly Stein
         (312) 384-8039
        
         Investor Contact:
         Inteliquent
         Darren Burgener
         (312) 380-4548

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