InPhonic Completes Sale of Liberty Wireless Assets and Announces Preliminary Fourth Quarter 2005 Results and 2006 Financial Guid
January 03 2006 - 3:30PM
Business Wire
InPhonic, Inc. (Nasdaq:INPC), a leading online seller of wireless
phones and service plans, today announced that it has sold certain
assets of its MVNO, Liberty Wireless, to TelePlus Wireless, Corp.,
a wholly-owned subsidiary of TelePlus Enterprises, Inc. (NASDAQ
OTCBB:TLPE) (http://www.teleplus.ca). Additionally, the Company
expects to report lower than expected fourth quarter 2005 revenues
from continuing operations and revises 2006 financial guidance.
Liberty Wireless Assets Sale TelePlus has acquired Liberty's
wireless subscriber base, the popular Liberty Wireless brand and
the Hispanic-targeted, Spanish language Viva Liberty(SM) brand.
Customers should not experience any change in service, billing or
coverage, as TelePlus will continue to utilize InPhonic's MVNE
platform pursuant to an MVNE services agreement. InPhonic will
continue to deliver the systems platform for procurement,
activation, billing, and customer care, as well as self-service
platforms based on web and speech recognition technology. Under the
terms of the agreement, InPhonic will receive approximately $1.9
million in cash, subject to certain post closing adjustments, and
an MVNE services agreement to provide ongoing services to TelePlus
and its Liberty customers. The transaction was completed on
December 31, 2005. "We are very pleased that TelePlus has acquired
the Liberty Wireless customer base. Our customers will continue to
receive the same great service and coverage without interruption,"
said David A. Steinberg, InPhonic's Chairman and CEO. "From a
strategic standpoint, we will be able to focus our attention on
profitably growing our core business. In addition, we will no
longer be competing with our carrier partners and more importantly
we are now able to sell the carriers' prepaid products as well as
Liberty Wireless products for TelePlus." Preliminary Fourth Quarter
2005 Results and 2006 Guidance. The Company also announced today
that, based on preliminary information and subject to customary end
of year review and audit, it expects to report fourth quarter 2005
revenues from continuing operations excluding Liberty Wireless of
between $92 million and $96 million, primarily due to lower than
expected holiday sales and the delay of a manufacturer's product
launches into the first quarter. These results compare to previous
guidance of $104 million to $106 million and third quarter 2005
revenue from continuing operations excluding Liberty Wireless of
$92 million, and would represent an increase of approximately 92%
over fourth quarter 2004 revenues from continuing operations
excluding Liberty Wireless. Primarily as a result of the lower than
expected revenue, the Company expects to report Adjusted EBT per
diluted share and Adjusted EBITDA below its previously stated
guidance. The Company plans to release its final results and host
an earnings conference call in mid February 2006. The Company also
updated its guidance for the 2006 fiscal year. Based on current
information, the Company preliminarily expects revenue from
continuing operations for the full year to grow approximately 25 to
30 percent with an Adjusted EBITDA margin for the full year of 7 to
10 percent. Mr. Steinberg commented, "Our preliminary results came
in below our expectations. InPhonic and a number of other wireless
distribution companies had a difficult holiday season. We are
confident that the strategic initiatives that we have undertaken
this quarter in our core Wireless Activation Services business are
in place for 2006. These initiatives include investments in new
distribution and our operations targeted at growing the business
profitably and improving our customer experience." About InPhonic
Headquartered in Washington, D.C., InPhonic, Inc. (NASDAQ:INPC) is
a leading online seller of wireless services and products. InPhonic
sells these services and devices, and provides world-class customer
service through websites that it creates and manages for online
businesses, national retailers, member-based organizations and
associations under their own brands. InPhonic also operates
Wirefly, a leading mobile phones and wireless plans comparison site
that was awarded "Best of the Web" by Forbes magazine in 2004.
InPhonic also delivers a full range of mobility solutions to
enterprise clients through its Mobile Virtual Network Enablement
(MVNE) platform. In 2004, InPhonic was selected #1 company of the
year on the Inc. 500 - Inc. Magazine's list of the fastest-growing
privately held companies in the United States. More recently,
InPhonic was named T-Mobile's Internet Partner of the Year for
2004. For more information on the company, its products and
services, visit the InPhonic Corporate Web site at
www.inphonic.com. "Safe Harbor" Statement - Under the Private
Securities Litigation Reform Act of 1995, this press release may
contain forward-looking statements that involve risks and
uncertainties. Important factors, which could cause actual
operating results to differ materially from those in the
forward-looking statements, are detailed in filings with the
Securities and Exchange Commission made from time to time by the
Company. This press release and statements are current as of the
date of the individual announcements and the Company undertakes no
obligation to publicly release any revisions to any forward-looking
statement to reflect events or circumstances after the date thereof
or to reflect the occurrence of unanticipated events.
Forward-Looking Statements - This press release contains
forward-looking statements, including, without limitation, all
statements related to future financial performance, plans to grow
our business and build our brand. Words such as "expect,"
"anticipate," "believe" and similar expressions are intended to
identify forward-looking statements. These forward-looking
statements are based upon our current expectations. Forward-looking
statements involve risks and uncertainties. Our actual results and
the timing of events could differ materially from those anticipated
in such forward-looking statements as a result of these risks and
uncertainties, which include, without limitation, risks related to
our fluctuating operating results, seasonality in our business, our
ability to acquire products on reasonable terms, our online
business model, demand for our products, the strength of our brand,
competition, our ability to fulfill orders and other risks detailed
in our filings with the Securities and Exchange Commission,
including our Annual Report on Form 10-K for the Year ended
December 31, 2004 and our Quarterly Reports on Form 10-Q. You are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date of this press release.
All forward-looking statements are qualified in their entirety by
this cautionary statement, and InPhonic undertakes no obligation to
revise or update any forward-looking statements to reflect events
or circumstances after the date hereof. Adjusted EBITDA -Earnings
before interest, taxes, depreciation and amortization adjusted for
stock-based compensation, loss on investments, restructuring costs,
settlement costs, one-time and non-recurring expenses, which are
defined as expenses that have been eliminated during the period and
that are not expected to recur in future periods. In addition, the
Company recently sold certain assets of its Liberty Wireless MVNO
business, and Adjusted EBITDA also includes an adjustment for
certain revenues and costs associated with the assets that were
sold. Adjusted EBT - Earnings excluding net interest and other
expense (income), stock-based compensation, restructuring costs,
loss on investments, depreciation and amortization related to
acquisitions, settlement costs, one-time and non-recurring
expenses, which are defined as expenses that have been eliminated
during the period and are not expected to recur in future periods.
In addition, the Company recently sold certain assets of its
Liberty Wireless MVNO business, and Adjusted EBT also includes an
adjustment for certain revenues and costs associated with the
assets that were sold. Adjusted EBT per diluted share - per share
value of Adjusted EBT on a fully-diluted basis. The Company
believes that the presentation of Non-GAAP measures provides useful
information to management and investors regarding certain
additional financial and business trends relating to its financial
condition and results of operations. The Company believes when U.S.
GAAP results are viewed in conjunction with these Non-GAAP
measures, investors are provided with a more meaningful
understanding of the Company's ongoing operating performance. In
addition, the Company's management uses these measures for
reviewing the Company's financial results. These measures should be
considered in addition to results prepared in accordance with U.S.
GAAP, but should not be considered a substitute for, or superior
to, GAAP results. Investors are encouraged to review the related
GAAP financial measures and the reconciliation of these Non-GAAP
financial measures to their most directly comparable GAAP financial
measure.
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