FSN Fusion Telecommunications International,

NEW YORK, Nov. 14 /PRNewswire-FirstCall/ -- Fusion (AMEX:FSN) today announced financial results for the quarter ended September 30, 2008. Recent Highlights: -- Consolidated Revenues increased 8.7% from $13.4 million, to $14.5 million for third quarter 2008; -- Adjusted EBITDA decreased 8.7% over third quarter 2007; -- Raised $2.0 million in debt and equity financing; -- Revenues from Corporate customers increased 48% over prior quarter; -- Over 130,000 visitors to Jinti, the Chinese social networking site, have registered for Fusion's Efonica VoIP services. Fusion reported Consolidated Revenues of $14.5 million for the quarter ended September 30, 2008. This represented an increase of 8.7% compared to revenues of $13.4 million for the quarter ended September 30, 2007. The increase over the prior year was primarily attributable to an increase in the number of minutes as well the revenue per minute in the Carrier segment in the third quarter of 2008 compared to the third quarter of 2007. Consolidated Gross Margin decreased slightly to 6.2% in the third quarter of 2008 compared to 7.5% in the third quarter of 2007. Selling, General and Administrative costs decreased slightly by 0.7% compared to the third quarter of 2007, but decreased 5.7% from the previous quarter. The improvement was primarily attributable to the Company's continuing focus on cost-containment and maximizing infrastructure efficiencies. For the third quarter ended September 30, 2008, Adjusted EBITDA loss (earnings before interest, taxes, depreciation, amortization, and specific non-recurring and non-cash adjustments) increased $146 thousand, or (8.7%), to ($1.83) million, compared to Adjusted EBITDA of ($1.68) million for the third quarter of 2007. Fusion also reported an increase in Net Loss in the third quarter of the current year compared to the third quarter of the prior year. For the third quarter of 2008, Fusion reported a Net Loss of ($2.57) million or ($0.07) per share compared to a net loss of ($2.37) million or ($0.09) per share during the quarter ended September 30, 2007. As of September 30, 2008, the Company had current assets of $4.6 million compared to $6.3 million as of December 31, 2007. The decrease was primarily a result of a decrease in Accounts Receivable due to early receipt in the first quarter of 2008 of certain receivables. Total Liabilities and Stockholders' equity at September 30, 2008 was $15.3 million compared to $18.1 million as of December 31, 2007. In the third quarter of 2008, the Company raised an additional $0.9 million in debt and equity financing. Commenting on the results, Matthew Rosen, Chief Executive Officer of Fusion, said, "The third quarter of 2008 was a challenging one for Fusion, as it was for all companies in these difficult economic times. We believe, however, that competitive telecommunications providers like Fusion will benefit as companies small and large seek to reduce costs and enhance the basic communications services that support their businesses. Even in such a challenging economic environment, we are pleased to report that both revenues and EBITDA improved from the second quarter of this year." Expanding on Mr. Rosen's comments, Don Hutchins, President and Chief Operating Officer of Fusion, said, "We are particularly pleased with the 28% growth in our carrier business over the second quarter, and believe that the 48% growth in higher margin Corporate revenues will be enhanced by the expansion of our direct sales force in the current quarter. Additionally, Fusion's strong international distribution initiatives, such as our strategic marketing relationship with Jinti, the well-known Chinese social networking site, will continue to play a key role in Fusion's future success." Use of Non-GAAP Financial Measures: The Company believes that EBITDA (earnings before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the communications industry to analyze companies on the basis of operating performance and leverage. The Company also believes that EBITDA provides investors with a measure of the Company's operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant nonrecurring transactions, such as impairment losses associated with divested businesses and forgiveness of debt, which vary significantly between periods and are not recurring in nature. Although the Company uses Adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. EBITDA and Adjusted EBITDA are not intended to represent cash flows for the period presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Generally Accepted Accounting Principles (GAAP). Consistent with the SEC Regulation G, the non-GAAP measures in this press release have been reconciled to the nearest GAAP measure, which can be viewed under the heading "Reconciliation of Net Income (Loss) to Adjusted EBITDA," immediately following the Consolidated Statements of Operations included in this press release. Earnings Conference call The Company will host a conference call to discuss its financial results at 10:00 A.M. ET today. The conference call can be accessed by dialing 877-604-9675. A replay of the call will be available through Monday, November 17, 2008. To listen to the replay, please call 888-203-1112 (Domestic) or 719-457-0820 (International). To access the replay, users will need to enter the following passcode: 6422186. The call will be available live on the Internet at http://www.fusiontel.com/. The online archive of the web cast will be available for one year following the call. About Fusion: Fusion delivers a full range of advanced IP-based services to corporations, consumers and carriers worldwide. Fusion's Efonica-branded consumer VoIP products and services focus primarily on serving customers in Asia, the Middle East, Africa, Latin America and the Caribbean. For more information please go to http://www.fusiontel.com/ . Statements in this Press Release that are not purely historical facts, including statements regarding Fusion's beliefs, expectations, intentions or strategies for the future, may be "forward-looking statements" under the Private Securities Litigation Reform Act of 1995. All forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from the plans, intentions and expectations reflected in or suggested by the forward-looking statements. Such risks and uncertainties include, among others, introduction of products in a timely fashion, market acceptance of new products, cost increases, fluctuations in and obsolescence of inventory, price and product competition, availability of labor and materials, development of new third-party products and techniques that render Fusion's products obsolete, delays in obtaining regulatory approvals, potential product recalls, securing necessary funding and litigation. Risk factors, cautionary statements and other conditions which could cause Fusion's actual results to differ from management's current expectations are contained in Fusion's filings with the Securities and Exchange Commission and available through http://www.sec.gov/. FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF OPERATIONS Three Months Ended September 30, 2008 2007 (Un-Audited) (Un-Audited) Revenues $14,515,430 $13,356,679 Operating expenses: Cost of revenues 13,608,525 12,355,657 Depreciation and amortization 470,582 437,920 Selling, general and administrative expenses 2,874,173 2,894,804 Advertising and Marketing 35,549 36,472 Total operating expenses 16,988,829 15,724,853 Operating loss (2,473,399) (2,368,174) Other income (expense) Interest income (expense), net (126,564) (10,393) Gain on settlement of debt 25,000 - Other 3,230 7,579 Total other income (expense) (98,334) (2,814) Loss from continuing operations (2,571,733) (2,370,988) Net loss $(2,571,733) $(2,370,988) Losses applicable to common stockholders Loss from continuing operations $(2,571,733) $(2,370,988) Preferred stock dividends (161,214) (161,214) Net loss applicable to common stockholders from continuing operations (2,732,947) (2,532,202) Income from discontinued operations - - Net loss applicable to common stockholders $(2,732,947) $(2,532,202) Basic and diluted net loss per common share: Loss from continuing operations $(0.07) $(0.09) Income (loss) from discontinued operations - - Net loss applicable to common stockholders $(0.07) $(0.09) Weighted average shares outstanding Basic and diluted 37,151,093 26,967,117 FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET September 30, 2008 December 31, 2007 (Un-Audited) (Audited) ASSETS Current assets Cash and cash equivalents $477,073 $114,817 Accounts receivable, net of allowance 3,530,394 5,545,408 Prepaid expenses and other current assets 458,506 481,556 Assets held for sale 129,231 129,231 Total current assets 4,595,204 6,271,012 Property and equipment, net 4,348,190 5,425,846 Other assets Security deposits 58,882 66,638 Restricted cash 416,566 416,566 Goodwill 964,557 964,557 Intangible assets, net 4,868,317 4,892,215 Other assets 97,890 91,455 Total other assets 6,406,212 6,431,431 TOTAL ASSETS $15,349,606 $18,128,289 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities Long-term debt, current portion $1,763,182 $566,567 Capital and equipment financing lease obligations, current portion 129,993 233,759 Accounts payable and accrued expenses 10,976,195 9,663,325 Liabilities of discontinued operations 13,313 15,829 Total current liabilities 12,882,683 10,479,480 Long-term liabilities Long-term debt, net of current portion 85,147 283,433 Capital lease/equipment obligations, net of current portion - 10,922 Other long-term liabilities 531,217 659,271 Total long-term liabilities 616,364 953,626 Stockholders' equity (deficit) Preferred stock, Class A-1, A-2, A-3 & A-4 80 80 Common stock 393,310 299,078 Common stock, Class A - - Capital in excess of par value 123,292,518 120,402,691 Accumulated deficit (121,835,349) (114,006,666) Total stockholders' equity (deficit) 1,850,559 6,695,183 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) $15,349,606 $18,128,289 FUSION TELECOMMUNICATIONS INTERNATIONAL, INC. AND SUBSIDIARIES RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA Three Months Ended September 30, 2008 2007 (Un-Audited) (Un-Audited) Net loss $(2,571,733) $(2,370,988) Loss from continuing operations (2,571,733) (2,370,988) Adjustments: Interest (income) expense, net 126,564 10,393 Depreciation and amortization 470,582 437,920 EBITDA (1,974,587) (1,922,675) Adjustments: (Gain) loss on debt settlement/forgiveness (25,000) - (Gain) loss on disposal of fixed assets - - (Gain) loss on sales of investment in Estel - - One time charges - - Other taxes 36,902 102,673 Non cash compensation 136,548 140,026 Adjusted EBITDA $(1,826,137) $(1,679,976) FUSION Philip Turits CONTACT: 212-201-2407 http://www.newscom.com/cgi-bin/prnh/20050705/NYTU073LOGO http://photoarchive.ap.org/ DATASOURCE: Fusion CONTACT: Philip Turits of Fusion, +1-212-201-2407, Web site: http://www.fusiontel.com/

Copyright