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Inteliquent Announces Strong First Quarter Results and Revises 2013 Financial Guidance

Inteliquent Announces Strong First Quarter Results and Revises 2013 Financial
Guidance

Q1 2013 Highlights

  *Divested global data business for $54.5 million on April 30, 2013
    
  *Total revenue was $69.7 million, an increase of 3% from Q4 2012
    
  *Voice services revenue was $50.5 million, an increase of 2% from Q4 2012
    
  *Record data services revenue was $19.2 million, an increase of 5% from Q4
    2012
    
  *Adjusted EBITDA (a non-GAAP financial measure) was $18.0 million, an
    increase of 24% from Q4 2012

CHICAGO, May 1, 2013 (GLOBE NEWSWIRE) -- Neutral Tandem, Inc. d/b/a
Inteliquent (Nasdaq:IQNT), a leading provider of voice services, today
announced its financial results for the first quarter of 2013.

"Our performance thus far in 2013 is very encouraging," said Ed Evans, Chief
Executive Officer of Inteliquent. "The sale of our data business accomplishes
several goals. It is highly accretive and it allows us to focus all of our
efforts on the voice business, which we expect will yield further
improvements.We are becoming more disciplined in everything that we do."

Financial and Operating Results

In the first quarter of 2013, Inteliquent generated revenue of $69.7 million,
a decrease of 1% compared to $70.7 million of revenue in the first quarter of
2012. The revenue decrease related primarily to a reduction in minute volumes
for local transit and termination voice services, which was partially offset
by an increase in volumes for our origination voice services and data
services.

Voice minutes of use decreased by 11% to 30.6 billion minutes in the first
quarter of 2013, compared to 34.2 billion minutes in the first quarter of
2012. Average price per minute increased by 6% over the same time period.

Data traffic volume increased by 47% to 10.7 terabits per second in the first
quarter of 2013, compared to 7.3 terabits per second in the first quarter of
2012. Average price per megabit decreased by 24% over the same time period.

Adjusted EBITDA (a non-GAAP financial measure) in the first quarter of 2013
was $18.0 million, a decrease of 15% compared to $21.3 million in the first
quarter of 2012. See "Use of Non-GAAP Financial Measures" below for a
discussion of the presentation of Adjusted EBITDA and reconciliation to net
income.

Income from operations in the first quarter of 2013 was $11.2 million,
compared to income from operations of $10.7 million in the first quarter of
2012.

Divestiture of Global Data Business

Yesterday, Inteliquent announced the sale of NT Network Services LLC and NT
Network Services LLC, SCS (collectively, the "global data business") to Global
Telecom & Technology, Inc. ("GTT) for $54.5 million, subject to certain
adjustments.The total consideration consisted of $52.5 million in cash and
$2.0 million of non-cash commercial services to be provided by GTT to
Inteliquent.The transaction signed and closed on April 30, 2013.

The divestiture of the global data business positions Inteliquent as a company
focused exclusively on its voice services business, clarifying our strategic
direction and value proposition. On a pro forma basis, Inteliquent's
operations will be very similar to its asset profile prior to its October 2010
acquisition of Tinet S.p.A. The divestiture will not impact the voice
business, including its customers and employees. We expect to classify and
report results of the global data business as discontinued operations in its
consolidated financial statements beginning in the second quarter of 2013.

As a result of the transaction, Inteliquent will have considerable balance
sheet flexibility with an estimated cash balance of approximately $85
million.We intend to conduct a comprehensive review of our alternatives
related to our cash position.

Selected Financial and Operational Metrics


($ in millions, except per minute                                 
and per MB figures)
                                                                 
Voice                             Q12012  Q22012  Q32012  Q42012  Q12013
Voice Revenue                     $53.5    $50.8    $52.2    $49.5    $50.5
                                                                 
Total ARPM                        $0.00156 $0.00155 $0.00158 $0.00155 $0.00165
                                                                 
Minutes of Use (in billions):                                     
Local Transit                     16.2     15.1     14.3     13.7     13.6
Termination                       13.2     13.4     14.1     13.0     11.9
Origination                       4.1      3.4      3.9      4.6      4.7
International                     0.7      0.8      0.8      0.6      0.4
Total Minutes of Use              34.2     32.8     33.1     31.9     30.6
                                                                 
                                                                 
Data                                                              
IP Transit Revenue                $14.6    $14.9    $13.5    $14.6    $15.3
Ethernet Revenue                  2.6      2.6      3.1      3.6      3.9
Total Data Revenue                $17.2    $17.5    $16.6    $18.2    $19.2
                                                                 
Average Price per MB              $2.34    $2.26    $2.01    $1.92    $1.79
Volume of Traffic (in tbps)       7.3      7.7      8.2      9.5      10.7
                                                                 
# of Customers                    931      990      1,009    1,041    1,081
# of Customer Connections         3,217    3,502    3,712    3,849    4,092
                                                                 
# of POPs                         119      121      121      122      122
# of Sales Reps (Quota-bearing)   26       26       28       28       25
^(1)
                                                                 
Other                                                             
# of Employees ^(1)               281      291      291      290      281
                                                                 
(1) Includes dedicated full-time                                  
sales contractors.


2013 Business Outlook

As a result of Inteliquent's strong first quarter and the divestiture of its
global data business, Inteliquent is revising its financial estimates for
2013.The financial estimates include results from the global data business
for the first four months of 2013 only.The new outlook is as follows:

                    Original            Revised
Revenue              $240 - $250 million $200 - $210 million
Adjusted EBITDA      $27 - $34 million   $34 - $40 million
Capital Expenditures $20 - $25 million   $14 - $18 million

"The initiatives that we began 6 months ago to re-focus the organization on
profitability and cash flow are taking hold.Our cost-cutting decisions – as
tough as they might be – are becoming visible in our financial results," said
David Zwick, Executive Vice President and Chief Financial Officer of
Inteliquent."It is a pleasure to report a clean quarter without any one-time
adjustments to EBITDA.The company has been stabilized and we are moving in
the right direction again," concluded Mr. Zwick.

Conference Call & Web Cast

The first quarter conference call will be held on Wednesday, May 1, 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
1-877-941-0843 (within the United States and Canada), or 1-480-629-9819
(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 June 1, 2013. 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: 4612966#.

Cautionary Statement Regarding 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 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 effects of competition, including direct connects, and
downward pricing pressure resulting from such competition; risks associated
with the sale of our data business, including issues regarding separating our
network, IT and billing systems from the network and systems sold to the
buyer, and that the cost savings and other benefits we hope to receive may not
materialize in part or at all; our ability to maintain relationships with
business providers following the sale of the data business; our regular review
of strategic alternatives; the impact of current and future regulation,
including intercarrier compensation reform enacted by the Federal
Communications Commission; 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; 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; and other important factors included in our
reports filed with the Securities and Exchange Commission (the "SEC"),
particularly in the "Risk Factors" section in our Annual Report on Form 10-K
for the period ended December 31, 2012, as such Risk Factors may be updated
from time to time in subsequentreports. 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.

Additional Information and Where to Find It

In connection with the proxy contest initiated by Clinton Magnolia Master
Fund, Ltd., Neutral Tandem, Inc. d/b/a Inteliquent (the "Company") will be
filing a definitive proxy statement and accompanying WHITE proxy card with the
SEC in connection with the solicitation of proxies for its 2013 annual meeting
of stockholders. Stockholders are strongly advised to read the Company's 2013
definitive proxy statement when it becomes available because it will contain
important information. Stockholders will be able to obtain copies of the
Company's 2013 definitive proxy statement and other documents filed by the
Company with the SEC in connection with its 2013 annual meeting of
stockholders at the SEC's website at www.sec.gov or at the "Investor
Relations" section of the Company's website at ir.inteliquent.com.

Participants in the Solicitation

The Company, its directors, its executive officers, and certain other members
of management and employees of the Company may be deemed "participants" in the
solicitation of proxies from stockholders of the Company in connection with
the matters to be considered at the 2013 annual meeting of stockholders.
Information regarding the persons who may, under the rules of the SEC, be
considered participants in the solicitation of the stockholders of the Company
in connection with such matters is set forth in the preliminary proxy
statement filed with the SEC on April 19, 2013 and will be set forth in the
definitive proxy statement to be filed with the SEC.

About Inteliquent

Headquartered in Chicago, Inteliquent provides intelligent networking to solve
challenging voice interconnection and interoperability issues. With an
advanced MPLS network that is highly interconnected to major carriers and
service providers, Inteliquent serves its voice customers worldwide. Please
visit Inteliquent's website at www.inteliquent.com and follow us on
Twitter@Inteliquent.

The condensed consolidated statements of income, balance sheets and statements
of cash flows are unaudited and subject to reclassification.



NEUTRAL TANDEM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
                                                                    
                                                           Three Months Ended
                                                           March 31,
                                                           2013      2012
                                                                    
Revenue                                                     $69,667   $70,696
                                                                    
Operating expense:                                                   
Network and facilities expense (excluding depreciation and  33,486    30,515
amortization)
Operations                                                  10,344    11,551
Sales and marketing                                         4,172     4,034
General and administrative                                  5,016     6,738
Depreciation and amortization                               5,444     7,300
Gain on disposal of fixed assets                            --       (105)
Total operating expense                                     58,462    60,033
                                                                    
Income from operations                                      11,205    10,663
                                                                    
Other expense (income):                                              
                                                                    
Interest income                                             (2)       (3)
Other income                                                (27)      (13)
Foreign exchange loss (gain)                                501       (227)
                                                                    
Total other expense (income)                                472       (243)
Income before income taxes                                  10,733    10,906
Provision for income taxes                                  3,833     4,251
Net income                                                  $6,900    $6,655
                                                                    
Net income per share:                                                
Basic                                                       $0.21     $0.21
Diluted                                                    $0.21     $0.21
                                                                    
Weighted average number of shares outstanding:                       
Basic                                                       32,337   31,664
Diluted                                                     32,453   32,058



NEUTRAL TANDEM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
(Unaudited)
                                                                
                                                      March 31,  December 31,
                                                      2013       2012
ASSETS                                                           
Current assets:                                                  
Cash and cash equivalents                              $37,445  $31,479
Receivables, net                                       45,229    42,833
Deferred income taxes-current                          657       1,210
Prepaid expenses                                       8,661     11,203
Total current assets                                   91,992    86,725
Property and equipment—net                             52,341    53,517
Restricted cash                                        125       962
Deferred income taxes-non-current                      4,302     2,710
Other assets                                           1,867     1,686
Total assets                                           $150,627 $145,600
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY                             
Current liabilities:                                             
Accounts payable                                       $9,700   $12,385
Accrued liabilities:                                             
Taxes payable                                          10,029    8,298
Circuit cost                                           11,431    13,200
Rent                                                   1,897     1,831
Payroll and related items                              4,288     4,507
Other                                                  5,452     4,833
Total current liabilities                              42,797   45,054
Other liabilities                                      770       1,453
Total liabilities                                      43,567    46,507
Shareholders' equity:                                            
Preferred stock—par value of $.001; 50,000 authorized
shares; no shares issued and outstanding at March 31,            
2013 and December 31, 2012
Common stock—par value of $.001; 150,000 authorized
shares; 32,389 shares and 32,345 shares issued and               
outstanding at March 31, 2013 and December 31, 2012,
respectively
Additional paid-in capital                             200,596   199,331
Less treasury stock, at cost; 3,083 in 2013 and 2012   (50,103)  (50,103)
Accumulated other comprehensive loss                   (5,078)   (4,904)
Retained earnings                                      (38,387)  (45,263)
Total shareholders' equity                             107,060   99,093
Total liabilities and shareholders' equity             $150,627 $145,600



NEUTRAL TANDEM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
                                                               
                                                 Three Months Ended March 31,
                                                 2013           2012
                                                               
Cash Flows From Operating Activities:                           
Net income                                        $6,900       $6,655
Adjustments to reconcile net cash flows from                    
operating activities:
Depreciation and amortization                     5,444         7,300
Deferred income taxes                             (1,039)       (965)
Gain on disposal of fixed assets                  --          (105)
Non-cash share-based compensation                 1,870         3,116
Loss (gain) on intercompany foreign exchange      250           (326)
transactions
Excess tax deficiency associated with stock       488           62
option exercise
Changes in assets and liabilities:                              
Receivables                                       (2,848)       2,400
Other current assets                              2,337         (1,973)
Other noncurrent assets                           (195)         64
Accounts payable                                  (1,005)       (1,305)
Accrued liabilities                               (164)         1,265
Noncurrent liabilities                            (23)          428
                                                               
Net cash provided by operating activities         12,015        16,616
                                                               
Cash Flows From Investing Activities:                           
Purchase of equipment                             (6,154)       (9,122)
Proceeds from sale of equipment                   --         100
Decrease in restricted cash                       837           --
                                                               
Net cash used by investing activities             (5,317)       (9,022)
                                                               
Cash Flows From Financing Activities:                           
Proceeds from the issuance of common shares      --         --
associated
with stock option exercise                       --         8
Restricted shares withheld to cover employee     (117)         (256)
taxes paid
Excess tax deficiency associated with stock      (488)         (62)
option exercise
                                                               
Net cash used by financing activities            (605)         (310)
                                                               
Effect of exchange rate changes on cash           (127)         186
                                                               
Net Increase In Cash And Cash Equivalents         5,966         7,470
Cash And Cash Equivalents—Beginning               31,479        90,279
Cash And Cash Equivalents—End                     $37,445      $97,749
                                                               
Supplemental Disclosure Of Cash Flow Information:               
Cash paid for interest                            $--         $--
Cash paid for taxes                               $979         $6,160
                                                               
Supplemental Disclosure Of Noncash Flow Items:                  
Investing Activity—Accrued purchases of equipment $1,848       $4,635
                                                               

                      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                
                            March 31,                         Full Year
                            2013              2012            2013*
                                                            
Net income                   $6,900          $6,655        $8,065
Interest income              (2)              (3)            (10)
Provision for income taxes   3,833            4,251          4,545
Depreciation and             5,444            7,300          17,600
amortization
EBITDA                       $16,175         $18,203       $30,200
Non-cash share-based         1,870            3,116          6,800
compensation
Adjusted EBITDA              $18,045         $21,319       $37,000

* 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. The
financial estimates include results from the global data services business for
the first four months of 2013 only.

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

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