Inteliquent Announces Third Quarter Results and Increases 2013 Financial Estimates

Inteliquent Announces Third Quarter Results and Increases 2013 Financial
Estimates

Third Quarter Highlights

  *Company increases 2013 financial estimates
  *Voice Revenues of $50.1 million
  *Billed minutes of 30.4 billion
  *Adjusted EBITDA (as defined below) of $17.0 million

CHICAGO, Oct. 31, 2013 (GLOBE NEWSWIRE) -- Inteliquent, Inc. (Nasdaq:IQNT), a
leading provider of voice services, today announced its financial results for
the third quarter.

"We are very pleased with our strong third quarter results," said Ed Evans,
Chief Executive Officer of Inteliquent. "After the sale of our global data
business earlier this year, our strategy of focusing on our voice business is
showing positive results. We continue to see good momentum in our sales
pipeline and a generally constructive pricing environment."

Third Quarter Results

Inteliquent generated voice revenues of $50.1 million in the third quarter of
2013, a decrease of 4.0% compared to $52.2 million of voice revenues in the
third quarter of 2012. The decrease related primarily to a reduction in minute
volumes for termination and international voice services, which was partially
offset by an increase in minute volumes for origination voice services.

Minutes of use decreased 8.2% to 30.4 billion minutes in the third quarter of
2013, compared to 33.1 billion minutes in the third quarter of 2012. Average
price per minute for the three months ended September 30, 2013 was $0.00165,
an increase of 4.4%, compared to $0.00158 for the same time period last year.

As seen in the following chart of selected financial and operational metrics,
sequentially, third quarter 2013 voice revenues and minutes of use both
increased from the previous quarter while average price per minute decreased
slightly.

Selected Financial and Operational Metrics

($ in millions, except                                          
per minute figures)
                       Q32012    Q42012    Q12013    Q22013    Q32013
Voice Revenue           $52.2      $49.8      $50.5      $49.8      $50.1
                                                               
Average Revenue per     $0.00158   $0.00155   $0.00165   $0.00169   $0.00165
Minute
                                                               
Minutes of Use (in                                              
billions):
Local                                                           
Local Transit Services  14.3       13.7       13.6       14.2       14.2
                                                               
Switched Access (Long                                           
Distance)
Termination Services    14.1       13.0       11.9       11.0       11.4
Origination Services    3.9        4.6        4.7        3.9        4.5
                                                               
Other                                                           
International Services  0.8        0.6        0.4        0.3        0.3
                                                               
Total Minutes of Use    33.1       31.9       30.6       29.4       30.4
                                                               
# of Employees ^(1)     291        290        281        143        140
                                                               
(1) Number of employees in periods prior to Q2 2013 include employees related
to the global data business, which was divested on April 30, 2013

Revenue from continuing operations of $50.4 million for the third quarter of
2013 decreased $9.2 million compared to $59.6 million for the same period in
2012.Revenue from continuing operations for the third quarter of 2012
included $6.6 million related to the global data business sold on April 30,
2013.Data operations for the Americas reporting unit did not meet all
criteria required to receive discontinued operations treatment.

Network and facilities expenses for the third quarter of 2013 decreased $3.5
million to $22.0 million from $25.5 million for the three months ended
September 30, 2012.Approximately $2.3 million of this decrease resulted from
the sale of the global data business on April 30, 2013 while $1.2 million of
the decrease resulted from optimizing the cost structure of our voice
network.

Combined operating expenses consisting of Operations, Sales and Marketing, and
General and Administrative expenses were $14.3 million for the third quarter
of 2013, a decrease of 11.7%, or $1.9 million, from $16.2 million for the
third quarter of 2012.Expenses in the third quarter of 2013 included $2.1
million related to an internal investigation conducted by the Audit Committee
of our Board of Directors that concluded in August 2013.The third quarter of
2012 amount included $0.8 million of data sales related expenses associated
with our Americas reporting unit that did not qualify for discontinued
operations treatment.

Depreciation and amortization expense was $3.3 million for the third quarter
of 2013, or 6.5% of revenue, compared to $5.5 million for the third quarter of
2012, or 9.2% of revenue.

Income from continuing operations in the third quarter of 2013 was $6.6
million, compared to income from continuing operations of $5.7 million in the
third quarter of 2012.

On April 30, 2013, the Company completed its divestiture of the global data
business.In the third quarter of 2013, loss from discontinued operations, net
of income tax provision, was $0.1 million compared to $8.5 million for the
third quarter of 2012.

Adjusted EBITDA (a non-GAAP financial measure) from continuing operations in
the third quarter of 2013 was $17.0 million, a decrease of 1.7%, compared to
$17.3 million in the third 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.

2013 Business Outlook

Taking into account actual results for the first nine months of the year and
management's current belief about revenue trends, expenses and the competitive
environment, Inteliquent now estimates as follows for 2013:

                    
Revenue              $222 - $225 million
Adjusted EBITDA      $64 - $67 million
Capital Expenditures $11 - $13 million

The financial estimates include the results for Inteliquent's global data
business prior to its divestiture on April 30, 2013.

Conference Call & Web Cast

The third quarter conference call will be held on Thursday, October 31, 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 1-480-629-9770
(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 November 30, 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: 4645306.

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; our ability to
maintain relationships with business providers following the sale of our
global data business; our ability to focus on the growth and performance of
our voice business following the sale of our global 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 voice 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 ability to develop and provide other 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; matters arising out of or related to the impairment charge and
financial forecasting practices that were the subject of an investigation by
the Company's Audit Committee; the possibility that the Securities and
Exchange Commission may disagree with the Audit Committee's findings and may
require a restatement of financial statements or additional or different
remediation; any other proceedings which may be brought against the Company by
the Securities and Exchange Commission or other governmental agencies; the
outcome of current and potential shareholder derivative actions filed against
certain of the Company's officers and directors; the possibility of additional
private litigation related to the impairment charge and financial forecasting
practices that were subject to investigation by the Audit Committee and
related matters; 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, 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.

About Inteliquent

Inteliquent is a leading provider of wholesale voice services for carriers and
service providers. Inteliquent is used by nearly all national and regional
wireless carriers, cable companies and CLECs in the markets it serves, and its
network carries approximately ten billion minutes of traffic per month. Please
visit Inteliquent's website at www.inteliquent.com and follow us on Twitter
@Inteliquent.

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

INTELIQUENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

                                       Three Months Ended Nine Months Ended
                                        September30,      September30,
(In thousands, except per share        2013     2012      2013      2012
amounts)
Revenue                                 $ 50,396 $ 59,573  $ 163,133 $ 178,722
Operating expense:                                                
Network and facilities expense
(excluding depreciation and             22,027   25,546    70,716    72,481
amortization)
Operations                              7,182    10,312    22,488    27,780
Sales and marketing                     1,090    2,017     4,650     6,195
General and administrative              6,071    3,850     15,105    14,801
Depreciation and amortization           3,293    5,544     11,505    16,234
Carrier settlement                      --       9,000     --        9,000
Impairment of fixed assets              --       1,257     --        1,257
Loss (gain) on disposal of fixed assets 3        (55)      226       (168)
Gain on disposal of Americas data       —        —         (23,171)  —
assets
                                                                 
Total operating expense                 39,666   57,471    101,519   147,580
                                                                 
Income from operations                  10,730   2,102     61,614    31,142
                                                                 
Other expense (income):                                           
Interest income                         (1)      (42)      (53)      (132)
Other expense (income)                  4        --        5         (1)
                                                                 
Total other expense (income)            3        (42)      (48)      (133)
                                                                 
Income from continuing operations       10,727   2,144     61,662    31,275
before income taxes
(Benefit) provision for income taxes    4,177    (3,596)   8,524     3,082
                                                                 
Income from continuing operations       6,550    5,740     53,138    28,193
Loss from discontinued operations, net  68       8,475     7,102     20,567
of income tax provision
Loss (gain) on disposal of discontinued 11       —         (783)     —
operations
                                                                 
Net income (loss)                       $ 6,471  $ (2,735) $ 46,819  $ 7,626
                                                                 
Earnings per share – continuing                                   
operations:
Basic                                   $ 0.20   $ 0.18    $ 1.64    $ 0.89
Diluted                                 $ 0.20   $ 0.18    $ 1.63    $ 0.88
Loss per share – discontinued                                     
operations:
Basic                                   $ —      $ (0.27)  $ (0.20)  $ (0.65)
Diluted                                 $ —      $ (0.27)  $ (0.19)  $ (0.64)
Earnings (loss) per share – net income                            
(loss):
Basic                                   $ 0.20   $ (0.09)  $ 1.45    $ 0.24
Diluted                                 $ 0.20   $ (0.09)  $ 1.44    $ 0.24
Weighted average number of shares                                 
outstanding:
Basic                                   32,262   31,993    32,344    31,817
Diluted                                 32,557   31,993    32,548    32,166
Dividends paid per share:               $ 0.06   $ —       $ 1.38    $ —



INTELIQUENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

(In thousands, except per share amounts)            September30, December31,
                                                    2013          2012
ASSETS                                                           
Current assets:                                                  
Cash and cash equivalents                           $ 63,061      $ 31,479
Receivables — net of allowance of $400 and $423,    30,047        30,759
respectively
Deferred income taxes – current                     —             1,210
Prepaid expenses                                    2,132         6,405
Other current assets                                2,029         —
Current assets of discontinued operations           —             26,924
                                                                
Total current assets                                97,269        96,777
Property and equipment — net                        25,782        44,116
Restricted cash                                     125           962
Deferred income taxes – noncurrent                  5,854         2,710
Other assets                                        2,381         1,035
                                                                
Total assets                                        $ 131,411     $ 145,600
                                                                
LIABILITIES AND SHAREHOLDERS' EQUITY                             
Current liabilities:                                             
Accounts payable                                    $ 4,724       $ 7,546
Accrued liabilities:                                             
Taxes payable                                       3,146         2,160
Circuit cost                                        6,299         8,821
Rent                                                2,000         1,829
Payroll and related items                           3,806         2,687
Other                                               2,443         1,062
Current liabilities of discontinued operations      —             22,402
                                                                
Total current liabilities                           22,418        46,507
                                                                
Shareholders' equity:                                            
Preferred stock — par value of $.001; 50,000
authorized shares; no shares issued and outstanding —            —
at September30, 2013 and December31, 2012
Common stock — par value of $.001; 150,000
authorized shares; 32,191 shares and 32,345 shares  32            32
issued and outstanding at September30, 2013 and
December31, 2012, respectively
Less treasury stock, at cost; 3,351 shares and
3,083 shares at September30, 2013 and December31, (51,668)      (50,103)
2012, respectively
Additional paid-in capital                          203,216       199,331
Accumulated other comprehensive loss                —             (4,904)
Accumulated deficit                                 (42,587)      (45,263)
                                                                
Total shareholders' equity                          108,993       99,093
                                                                
Total liabilities and shareholders' equity          $ 131,411     $ 145,600



INTELIQUENT, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

                                                           NineMonthsEnded
                                                            September30,
(In thousands)                                             2013     2012
Operating                                                           
Net income                                                  $ 46,819 $ 7,626
Adjustments to reconcile net income to net cash provided by         
operating activities:
Depreciation and amortization                               12,747   22,798
Deferred income taxes                                       (1,934)  (2,435)
Impairment of fixed assets                                  —        1,257
Loss (gain) on disposal of fixed assets                     493      (164)
Gain on disposal of Americas data assets                    (23,171) —
Gain on disposal of discontinued operations                 (783)    —
Non-cash share-based compensation                           5,169    8,566
Gain (loss) on intercompany foreign exchange transactions   56       (66)
Excess tax deficiency (benefit) associated with share-based 982      (1,176)
payments
Changes in assets and liabilities:                                  
Receivables                                                 (3,636)  (2,868)
Other current assets                                        1,340    (5,666)
Other noncurrent assets                                     (147)    587
Accounts payable                                            (739)    (1,462)
Accrued liabilities                                         3,552    15,884
Noncurrent liabilities                                      —        281
                                                                   
Net cash provided by operating activities                   40,748   43,162
                                                                   
Investing                                                           
Purchase of equipment                                       (9,906)  (21,076)
Proceeds from sale of equipment                             28       161
Proceeds from disposition of discontinued operations, net   9,698    
of transaction costs
Proceeds from disposition of Americas data assets, net of   37,092   —
transaction costs
Decrease in restricted cash                                 837      —
                                                                   
Net cash provided by (used for) investing activities        37,749   (20,915)
                                                                   
Financing                                                           
Proceeds from the exercise of stock options                 279      1,315
Restricted shares withheld to cover employee taxes paid     (508)    (963)
Dividends paid                                              (44,145) —
Payments made for repurchase of common stock                (1,565)  —
Excess tax (deficiency) benefit associated with share-based (982)    1,176
payments
                                                                   
Net cash provided by (used for) financing activities        (46,921) 1,528
                                                                   
Effect of exchange rate changes on cash                     6        (223)
Net Increase In Cash And Cash Equivalents                   31,582   23,552
Cash And Cash Equivalents — Beginning                       31,479   90,279
                                                                   
Cash And Cash Equivalents — End                             $ 63,061 $ 113,831
Supplemental Disclosure Of Cash Flow Information:                   
Cash paid for taxes                                         $ 6,070  $ 12,607
Supplemental Disclosure Of Noncash Flow Items:                      
Investing Activity — Accrued purchases of equipment         $ 1,372  $ 2,617

         

                      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 (loss) before (a)interest expense (income)
(b)income tax expense (benefit) and (c)depreciation and amortization.
Adjusted EBITDA is defined as EBITDA as further adjusted to eliminate:
non-cash share-based compensation; as well as non-recurring amounts incurred
in connection with settlement, the discontinuation of our hosted service
offering, severance payments, value added tax payments related to the global
data business we sold, professional and legal fees incurred in connection with
the internal investigation conducted by our Audit Committee; a payment
received under our insurance policy related to Hurricane Sandy; and the gain
on sale of the global data business. 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, non-cash share-based compensation,
amounts incurred in connection with settlement, the discontinuation of our
hosted service offering, severance payments, value added tax payments related
to the global data business we sold, professional and legal fees incurred in
connection with the internal investigation conducted by our Audit Committee, a
payment received under our insurance policy related to Hurricane Sandy, and
the gain on sale of the global data business. 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 (loss) below
to compensate for this limitation. While we use net income (loss) as a
significant measure of profitability, we also believe that Adjusted EBITDA,
when presented along with net income (loss), 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 (loss) as calculated in accordance with generally accepted
accounting principles as a measure of performance.

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

INTELIQUENT, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures to GAAP Financial Measures
(Unaudited)
(Dollars in thousands)
                                                               
                  Three Months Ended       Nine Months Ended     
                  September 30,            September 30,         Full Year
                  2013        2012         2013       2012       2013 *
                                                             
Net income (loss)  $6,471     $ (2,735)  $46,819  $7,626   $52,150
Interest expense   (1)       4           (5)       (11)      --
(income) **
(Benefit)
provision for      4,177      (1,959)      8,751     6,379     13,100
income taxes **
Depreciation and   3,293       7,703       12,747     22,798    16,000
amortization **
EBITDA             $13,940   $3,013     $68,312  $36,792  $81,250
Non-cash
share-based        1,239     2,540       5,169     8,566     6,300
compensation
Carrier settlement --        9,000       --       9,000     --
Hosted services    (450)     1,779       (450)     1,779     (450)
Severance          505       227        879      477      900
Value added tax    --        745        --       895      --
Internal           2,148      --       2,424     --      2,400
investigation
Insurance recovery (423)     --         (423)     --      (400)
Loss (gain) on
sale of global     11       --          (23,954)  --        (24,000)
data business **
Adjusted EBITDA    $ 16,970  $17,304    $51,957  $57,509  $66,000

* The amounts expressed in this column are based on current estimates as of
the date of this press release. The 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 business for the
first four months of 2013 only.
** For comparison purposes, amounts include results from the global data
business for the respective periods, prior to divestiture on April 30, 2013,
which are reported as discontinued operations in the Company's condensed
consolidated statements of operations.

CONTACT: Media Contact:
         Tabitha Long
         (312) 384-8018

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