Easylink Services (NASDAQ:EASYE)
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Nasdaq Panel Grants EasyLink Extension of Time to Cure Filing
Deficiency
EasyLink Services Corporation (NASDAQ: EASYE), a leading global
provider of services that power the exchange of information between
enterprises, their trading communities and their customers, today
announced that it has completed its determination of previously
announced prior period corrections. The Company has determined that
the impact of these items is to increase net income for the year
ending December 31, 2004 by approximately $0.2 million and to increase
the net loss for the quarter ending March 31, 2005 by approximately
$0.4 million. The Company estimates that these adjustments will also
result in a cumulative net decrease in stockholders' equity of
approximately $0.4 million through March 31, 2005. The Company will
restate its financial statements for the fiscal year ended December
31, 2004 and the quarter ended March 31, 2005 to reflect these
adjustments. The amendments to the Company's financial statements to
effect the restatements are subject to the review and approval of the
Company's former independent registered public accountants. Such
revision may result in changes to the Company's determination and/or
the identification of additional adjustments.
EasyLink previously announced that on August 3, 2005 it had
retained Grant Thornton LLP as its independent registered public
accountants. In connection with its review of the Company's financial
results for the quarter ending June 30, 2005, Grant Thornton
identified certain items related to prior periods that it indicated
may need to be adjusted to enable it to complete its review. The
Company also announced that any adjustment in prior period accounts,
however, would require the review and concurrence of KPMG LLP, the
Company's former independent registered public accountants, and that
it would be unable to announce its 2nd quarter earnings and to file
its Quarterly Report on Form 10-Q until these adjustments are
satisfactorily resolved.
The Company is preparing the amendments to its Annual Report on
Form 10-K for the year ended December 31, 2004 and its Quarterly
Report on Form 10-Q for the quarter ended March 31, 2005 reflecting
the adjustments and, subject to completion of the review and approval
by its former independent registered public accountants, intends to
file the amendments within the next two weeks. The Company intends to
file its Quarterly Reports on Form 10-Q for the second quarter ended
June 30, 2005 and the third quarter ended September 30, 2005, subject
to completion of the review and approval of its current independent
registered public accountants, by the end of November 2005.
On September 29, 2005, the Company appeared before a Nasdaq
Listing Qualifications Panel to request an extension of time to file
its Quarterly Reports on Form 10-Q for the quarters ended June 30,
2005 and September 30, 2005. On November 7, 2005, the Company received
notice that the Panel granted the Company's request for an extension
until December 19, 2005 to file these reports. In addition to the
filing requirement, the Company must regain compliance with the $1
minimum bid price requirement by February 21, 2006 and the Company's
Form 10-Q for the quarter ended September 30, 2005 and Form 10-K for
the year ended December 31, 2005 must report stockholders' equity of
at least $10 million.
About EasyLink Services Corporation
EasyLink Services Corporation (NASDAQ: EASYE), headquartered in
Piscataway, New Jersey, is a leading global provider of outsourced
business process automation services that enable medium and large
enterprises, including 60 of the Fortune 100, to improve productivity
and competitiveness by transforming manual and paper-based business
processes into efficient electronic business processes. EasyLink is
integral to the movement of information, money, materials, products,
and people in the global economy, dramatically improving the flow of
data and documents for mission-critical business processes such as
client communications via invoices, statements and confirmations,
insurance claims, purchasing, shipping and payments. Driven by the
discipline of Six Sigma Quality, EasyLink helps companies become more
competitive by providing the most secure, efficient, reliable, and
flexible means of conducting business electronically. For more
information, please visit www.EasyLink.com.
This news release may contain statements of a forward-looking
nature relating to future events or financial results of EasyLink
Services Corporation. Investors are cautioned that such statements are
only predictions and actual events or results may differ materially.
In evaluating such statements, investors should specifically consider
the various factors that could cause actual events or results to
differ materially from those indicated from such forward-looking
statements. These include: the proposed adjustments to certain prior
period items and the filing of amendments to the Company's Annual
Report on Form 10-K for the year ending December 31, 2005 and the
Quarterly Report on Form 10-Q for the quarter ending March 31, 2005
are subject to review and approval by the Company's former independent
public auditors, KPMG LLP, and such review may result in changes to
the Company's estimates and/or the identification of additional
adjustments; the Company's 2nd and 3rd quarter 2005 results and filing
of the Company's Quarterly Reports on Form 10Q for the quarters ending
June 30, 2005 and September 30, 2005 are subject to review by Grant
Thornton LLP; the need to raise additional capital; the ability to
service our remaining indebtedness; the ability to continue as a going
concern being dependent upon the ability to generate sufficient cash
flow to meet our obligations on a timely basis, to obtain additional
financing or refinancing as may be required, and to achieve and
maintain profitable operations; significant leverage; the ability to
attract additional customers or to expand services sold to existing
customers; the ability to successfully implement our business
strategy; significant competition; the risks inherent in integrating
the EasyLink business; and the risk of being delisted from NASDAQ,
including the risk that the Company is unable to complete the filings
of its Quarterly Reports on Form 10-Q for the 2nd and 3rd quarters of
2005 by December 19, 2005, or the risk that the Company is unable to
regain compliance with the $1 minimum bid price requirement by
February 21, 2006. These and other risks and uncertainties are
described in more detail in the Company's filings with the Securities
and Exchange Commission.