Inphonic (NASDAQ:INPC)
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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.