Exhibit 99.1
[Graphic Omitted]
For Immediate Release
FOR MORE INFORMATION: MEDIA CONTACT:
Peter Wiederspan Penny Thomas
Director, Finance Corporate Communications Manager
Illuminet Illuminet
(360) 493-6165 (360) 493-6000
[email protected] [email protected]
Illuminet Announces 35% Increase in Third Quarter Revenues
Over Year Ago Quarter
Net Income increases 175% to $9.9 million
EPS increase 131% to $0.30 per share
OLYMPIA, Wash., October 25, 2000 - Illuminet Holdings, Inc. (NASDAQ: ILUM),
which provides call routing, calling name delivery, wireless roaming, prepaid
account management, local number portability and other services to
telecommunications carriers, today announced financial results for its third
quarter ended September 30, 2000.
Revenue for the quarter increased 35% to $41.6 million, compared to $30.8
million in the third quarter of 1999. Growth in the quarter was driven by
increased revenue from the company's Intelligent Network Services, Wireless
Roaming products and Network Usage Software Applications. These products are
provided to over 800 carriers including integrated communications providers,
incumbent local exchange carriers, wireless carriers, long distance carriers,
competitive local exchange carriers, and internet service providers. The results
include approximately $2.8 million in revenue or $0.05 per diluted share, from
sales of network usage software applications. Nine-month revenue increased 35%
to $112.4 million, compared to $83.1 million for the nine months ended September
30, 1999.
"Our results in the third quarter were outstanding. Driving the strong growth
during the quarter was the continued success of our Intelligent Network
Services," commented Roger Moore, president and CEO.
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"We experienced strong demand for our services as carriers sought more
cost-effective solutions to provide value added services to their customers. Our
business and services have not been affected by recent concerns in the telecom
sector as we are fortunate to have a broad customer base with revenues from all
segments of the communications carrier industry."
Increases in revenue during the third quarter of 2000 came from several areas
including the company's Calling Name Delivery service, which increased 95% from
the prior year quarter. Also, the company's IS-41 wireless messaging business
grew 70% from the prior year quarter fueled by continued growth in wireless
carrier penetration, new one-rate plans which promote ease of roaming, and
carrier deployment of wireless data applications.
Net income in the third quarter increased 175% to $9.9 million or $0.30 per
diluted share, compared to $3.6 million or $0.13 per diluted share in the third
quarter of 1999. Diluted earnings per share for the two quarters was based upon
33.7 million shares and 28.4 million shares, respectively. Net income for the
nine months increased 155% to $21.5 million or $0.63 per diluted share, compared
to $8.4 million or $0.29 per diluted share for the nine months ended September
30, 1999. In addition, costs (primarily carrier costs) continued to be stable as
a percentage of revenue, and are reflected in the third quarter EPS growth.
For the nine months ended September 30, 2000, Illuminet has committed over $19
million in capital expenditures related to network expansion, corporate
infrastructure, and product development including $1.5 million to develop a new
Internet Offload Signaling Service, furthering its commitment to providing
solutions for next generation network carriers.
Looking forward, Moore added, "We expect our core business revenues to grow
around 20%, based upon the continued success of our network services. We also
think that carriers' actions to control capital expenditures could increase
opportunities for Illuminet's outsourced solutions."
THIRD QUARTER REVENUE
Network Services increased 28% to $37.1 million during the third quarter of
2000, compared to $29.0 million in the third quarter of 1999. Within Network
Services, Network Connectivity increased 12% to $15.0 million in the third
quarter of 2000, compared to $13.4 million in the third quarter of 1999;
Intelligent Network Services increased 46% to $17.0 million in the third quarter
of 2000, compared to $11.6 million in the third quarter of 1999; and Wireless
Prepaid and Unregistered Roaming revenue increased 26% to $5.1 million in the
third quarter of 2000, compared to $4.0 million in the third quarter of 1999.
THIRD QUARTER EXPENSES
Carrier costs in the most recent quarter decreased on an absolute basis and as a
percentage of revenue, to $6.8 million or 16% of revenue, compared to $7.8
million or 25% of revenue in the third quarter of 1999. This decrease reflects
improved network efficiencies and increased volume discounts. Operating expense
in the quarter was $10.7 million or 26% of revenue, compared to $8.8 million or
29% of revenue in the third quarter of 1999. SG&A expense was $5.7 million or
14% of revenue, compared to $4.4 million or 14% of revenue in the third quarter
of 1999. Depreciation was $4.1 million in the most recent quarter or 10% of
revenue, compared to $3.5 million or 11% of revenue in the third quarter of
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1999. Increases in expenses reflect additional personnel and other resources
necessary to support our growing revenue base.
RECENT HIGHLIGHTS
o In the quarter, Illuminet granted SS7 interoperability certification to three
IP-based softswitch vendors and connected a new IP-based carrier to its SS7
network, underscoring Illuminet's commitment to the convergence of the Public
Switched Telephone Network (PSTN) and next-generation networks using
packet-switched technology and broadband infrastructure.
o In September, Illuminet's wholly-owned subsidiary, National Telemanagment
Corporation (NTC), signed an agreement with Rural Cellular Corporation in
Alexandria, MN, for its unique iRoam(TM) service, offering seamless
nationwide roaming and other key benefits to RCC's Smartpay Wireless(R)
prepaid subscribers in 14 states. Illuminet completed its acquisition of NTC
in June 2000. NTC is one of the largest prepaid wireless providers in the
country.
CONFERENCE CALL
Illuminet will host a live conference call and Webcast to discuss its
third-quarter financial results on Wednesday, October 25 at 5 p.m. Eastern Time
(2 p.m. Pacific Time), featuring remarks by Roger Moore, president and chief
executive officer, and Dan Weiss, chief financial officer. The live Webcast and
replay of the call will be available at www.illuminet.com or www.vcall.com.
until Thursday, November 2, 2000.
ABOUT ILLUMINET
Founded in 1981, Illuminet is a leading provider of advanced nationwide
signaling and intelligent network services to the communications industry.
Connection to the Illuminet network gives carriers access to the system of
signaling networks of nearly the entire U.S. public-switched telecommunications
infrastructure through a single source. Illuminet specializes in SS7 network
services and intelligent network solutions for services such as calling name
delivery, calling card validation, wireless roaming, number portability, network
usage measurement, network management, Operations Support System (OSS) mediation
services, clearinghouse services, toll-free database and other specialized
database access functions. Illuminet's headquarters are at 4501 Intelco Loop,
SE, Lacey, WA 98503; (360) 493-6000; www.illuminet.com.
EDITOR'S NOTE: Illuminet is a registered service mark with the United States
Patent and Trademark Office. iRoam is a service mark and Smartpay Wireless is a
registered trademark of National Telemanagement Corporation (NTC), an Illuminet
Company.
CAUTIONARY STATEMENT: Certain statements contained in this release are
forward-looking statements. "Forward-looking" statements, as defined in the
Private Securities Litigation reform Act of 1995 ("Act"), are based on current
expectations, estimates and projections. Such statements are made pursuant to
the safe harbor provisions of the Act. Statements that are not historical facts,
including statements about future revenue growth and continued success of our
network services, intelligent network database services, and wireless prepaid
service businesses along with Illuminet's beliefs and expectations are
forward-looking statements. There are certain important factors that could cause
actual results to differ materially from those anticipated by the
forward-looking statements, including but not limited to our ability to provide
reliable services, the impact of any network outages, the ability of third party
communications infrastructure suppliers to maintain operational integrity of our
connections and to continue to provide and expand service to us, our ability to
effectively and cost efficiently
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acquire and integrate complimentary businesses and technologies, continued
acceptance of our SS7 network and the telecommunications market's continuing use
of SS7 technology, our ability to attract and retain employees with requisite
skills to execute our growth plans, intense competition in the market for SS7
services and pricing pressures caused by competition and industry consolidation.
For additional discussion of the principal factors that may cause actual results
to be different, please refer to the company's 10-Q filing on August 14, 2000.
Illuminet undertakes no obligation to update any forward-looking statements
whether as a result of new information, future events or otherwise.
(tables to follow)
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Illuminet Holdings, Inc. and Subsidiaries
Consolidated Income Statement
(In thousands, except share and per-share amounts)
Three months ended Nine months ended
September 30, September 30,
2000 1999 2000 1999
------------------------------------ -------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenue:
Network services $ 37,059 $ 29,027 $ 104,293 $ 77,775
Clearinghouse services 1,470 1,540 4,234 4,592
Network usage software applications 3,064 271 3,852 773
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Total revenue 41,593 30,838 112,379 83,140
Expenses:
Carrier costs 6,798 7,845 20,123 22,305
Operating 10,713 8,832 29,489 24,810
Selling, general, and administrative 5,716 4,443 15,666 12,141
Depreciation and amortization 4,057 3,530 11,505 9,433
Merger costs - - 3,353 -
------------------------------------ -------------------------------------
Total expenses 27,284 24,650 80,136 68,689
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Operating income 14,309 6,188 32,243 14,451
Interest income 1,882 293 5,553 721
Interest expense (259) (634) (1,015) (1,650)
------------------------------------ -------------------------------------
Income before income taxes 15,932 5,847 36,781 13,522
Income tax provision 5,986 2,225 15,305 5,113
------------------------------------ -------------------------------------
Net income $ 9,946 $ 3,622 $ 21,476 $ 8,409
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Earnings per share-diluted $ 0.30 $ 0.13 $ 0.63 $ 0.29
==================================== =====================================
Average shares outstanding - diluted 33,677,898 28,414,306 33,543,619 28,066,764
==================================== =====================================
Net income prior to merger costs $ 9,946 $ 3,622 $ 24,829 $ 8,409
==================================== =====================================
Diluted EPS prior to merger costs $ 0.30 $ 0.13 $ 0.73 $ 0.29
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Illuminet Holdings, Inc. and Subsidiaries
Consolidated Balance Sheet
(In thousands, except share and per share amounts)
September 30, December 31,
2000 1999
--------------------- ---------------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash & cash equivalents $ 28,550 $ 24,223
Available-for-sale securities 83,207 79,738
Accounts receivable, net 39,409 35,942
Deferred income taxes 1,683 1,783
Prepaid expenses and other 2,906 2,039
--------------------- ---------------------
Total current assets 155,755 143,725
Property and equipment, net 59,151 51,095
Other assets 1,667 2,310
--------------------- ---------------------
Total assets $ 216,573 $ 197,130
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable and accrued expenses $ 15,365 $ 13,644
Due to customers 16,610 16,133
Income taxes payable 1,313 1,988
Current portion of obligations under capital leases 2,667 2,653
Current portion of long-term debt 802 1,430
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Total current liabilities 36,757 35,848
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Deferred income taxes 4,966 5,116
Obligations under capital leases, less current portion 3,094 5,101
Long-term debt, less current portion 6,263 11,478
Convertible redeemable preferred stock - 4,071
Stockholders' equity:
Common stock 319 57
Class A common stock - 63
Common stock warrants - 1,521
Additional paid-in capital 114,956 105,560
Deferred stock-based compensation (3,031) (3,885)
Retained earnings 53,249 32,200
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Total stockholders' equity 165,493 135,516
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Total liabilities and stockholders' equity $ 216,573 $ 197,130
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