Yak Communications (NASDAQ:YAKC)
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Contribution Margin Increases while New Business Investments
Continue
Yak Communications Inc. (NASDAQ:YAKC), a provider of
telecommunication services to residential and business customers,
today announced financial results for its second fiscal quarter ended
December 31, 2005.
Net earnings for the second quarter of fiscal 2006 were $1.0
million or $0.07 per diluted share, compared with net earnings of
$1.3 million, or $0.10 per diluted share, for the second quarter of
fiscal 2005. Net earnings for the six-months ended December 31, 2005
were $1.2 million, or $0.09 per diluted share, compared with net
earnings of $2.6 million, or $0.21 per diluted share, for the six
months ended December 31, 2004.
Net revenues were $24 million for the second quarter of fiscal
2006, as compared to net revenues of $24.2 million for the second
quarter of fiscal 2005. Net revenues for the six-months ended
December 31, 2005 were $47.5 million, up from $45.4 million for the
same period in the prior year.
Contribution margin improved in the second quarter to 39.9% from
39.5% when compared to the second quarter of fiscal 2005. For the
six-months ended December 31, 2005, contribution margin improved to
39.4% from 37.4% for the same period in the prior year. Improved
margins were primarily due to network efficiencies gained by bringing
a greater portion of traffic onto the Company's network. As Yak
continues to launch its VoIP offering, margin is being negatively
affected. During the second quarter of fiscal 2006, Yak handled 291
million minutes of traffic on net, serving approximately 900,000
customers monthly.
"We are pleased with our results for the second quarter of fiscal
2006, as we continued to execute according to our internal plans and
strategy," said Charles Zwebner, President and Chief Executive
Officer. "Our contribution margins are improving as we direct more
traffic on to our network. We continue to generate cash from our
consolidated operations. We are deploying the cash flows from our
core business to market Yak's dial around and 1+ products to Hispanic
communities across the United States, and to market and broaden our
product offerings into VoIP."
"During the quarter, we launched two VoIP products, yakFor Free
and yakToAnyone, and subsequently during January 2006, we launched
yakUnlimited. At December 31, 2005, we had experienced over 13,000
downloads of yakForFree with over 500 consumers upgrading to
yakToAnyone. We also have more than 700 yakBasic customers and 700
yakUnlimited customers using our system. We are excited about the
initial consumer acceptance of our new products and the response to
our marketing strategies, and look forward to substantially
increasing those marketing efforts during calendar/fiscal 2006 as
well as maximizing growth and shareholder value," concluded Zwebner.
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 voice services
(VoIP) to residential and small businesses in North America over high
speed internet access. Yak currently serves approximately 900,000
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 results of the audit and review processes
performed by the Company's independent auditors with respect to any
restatement of the Company's historic financial statements, the
Company's success in integrating the operations of any 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 that
affect our business.
Yak Communications Inc. (NASDAQ:YAKC)