MIAMI & TORONTO -- REVENUES AND EARNINGS PER SHARE INCREASE OVER PREVIOUS QUARTER
YAK Communications Inc. (NASDAQ:YAKC), a provider of telecommunication services to residential and business customers, today released its results for the first quarter of fiscal 2005.
For the first quarter of fiscal 2005 which ended September 30, 2004, YAK announced sales of $21,197,000 an increase of 4.4 per cent over sales of $20,306,000 for the previous quarter. Earnings per diluted share were $0.12 representing an increase of 10% over the previous quarter. Sales and earnings were in line with previous guidance.
During the quarter ended September 30, 2004 Yak processed on its own network 270 million minutes of traffic, a 4% increase over the previous quarter (the fourth quarter of fiscal 2004) with 25 million calls (9% increase over the previous quarter) serving over 860,000 monthly customers (6% increase over the previous quarter).
For the month of September 2004, YAK sales were approximately $7.1 million with the operating divisions contributing as follows:
- Yak - 'dial-around': $5.7 million;
- Argos & Contour (managed telco resale services to enterprise): $1.4 million.
All $ amounts are in US currency.
"We are very pleased with these quarterly results," said YAK President and CEO Charles Zwebner. "We increased sales and earnings per share in line with our strategy of continuing to grow our traditional telecom business, and more importantly we also launched during September our YAK WorldCity VoIP(TM) products of local, long distance and value added services over high speed internet access (DSL or cable). Customers can sign up for these services on-line at www.yak.com with a simplified end-to-end process. Several hundred customers have already signed up with essentially no advertising to date but by word of mouth only. The system works well and the quality is good. It is anticipated that marketing initiatives for YAK WorldCity VoIP(TM) will start during January 2005 simultaneously with a substantially lower and aggressive competitive pricing plan. Until then, we will be upgrading and tweaking our systems to be able to accommodate VoIP subscribers in Canada, U.S., and international 'en-masse'."
"One-time costs associated primarily with professional, consulting fees and startup costs that were invested for the purposes of the Company's VoIP future growth plans totaled approximately $520,000. These expenditures are all expensed in our statements. We continue to demonstrate that notwithstanding that we have entered the VoIP space, we believe that the company can continue to be profitable given its mature business and infrastructure, free cash flow, strong balance sheet, low debt positions, and network and carrier relationships.
The Company expects sales for the current quarter (second quarter of fiscal 2005) to be in the range of $21 million to $22 million and earnings per diluted share to range from $0.11 to $0.13.
About YAK Communications Inc.: YAK Communications Inc. (the "Company") (NASDAQ: YAKC) is an Integrated Communications Provider (ICP) offering a full array of long distance (1+, toll free and dial-around), local lines, travel cards, cellular long distance, data services, and broadband voice (VoIP) to residential and small businesses in North America over high speed internet access. Yak currently serves approximately 860,000 customers for its traditional telecom services. For more information, visit http://www.yak.com
Forward Looking Statements:
Statements contained in this news release which are not strictly historical are forward looking within the meaning of the safe harbor clause of the Private Securities Litigation Reform Act of 1995. The Company makes these statements based on information available to it as of the date of this news release and assumes no responsibility to update or revise such forward-looking statements.
Editors and investors are cautioned that forward-looking statements invoke risk and uncertainties that may cause the Company's actual results to differ materially from such forward-looking statements.
Words such as "projects", "believe", "anticipates", "estimate", "plans", "expect", "intends", and similar words and expressions are intended to identify forward-looking statements and are based on our current expectations, assumptions, and estimates about us and our industry. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Although the Company believes that such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. Our actual results could differ materially from those anticipated in such forward-looking statements as a result of several factors, risks and uncertainties. These factors, risks and uncertainties include, without limitation, the Company's success in integrating the operations of its newly-acquired businesses, and associated reduction in costs, the successful implementation of its business plans including growth of existing product offerings, strategic acquisitions and development of broadband telephony products, the successful integration of new management team members, continued and increased demand for its services, the successful deployment of new equipment and realization of material savings there from, competition from larger and/or more experienced telecommunications providers, its ability to continue to develop its markets, general economic conditions, changes in governmental regulation, and other factors that may be more fully described in the Company's literature and periodic filings with the Securities and Exchange Commission. You are urged to carefully review and consider these disclosures which describe certain factors which affect our business.
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