VSL Tata Comm Ltd Adr

Teleglobe International Holdings Ltd (NASDAQ:TLGB), a leading provider of international telecommunications services to Internet service providers and to fixed and mobile network operators, announced today unaudited second quarter 2005 results for the period ended June 30, 2005. Second quarter 2005 revenue was $239.2 million versus $255.3 million in the first quarter of 2005 and $230.7 million in the second quarter of 2004. Net loss for second quarter 2005 was $0.4 million versus $8.4 million in the first quarter of 2005 and $3.8 million in the second quarter of 2004. Net loss attributable to common shareholders for the second quarter of 2005 was $0.4 million, or $(0.01) per share, versus $8.4 million, or $(0.22) per share, in the first quarter of 2005 and $5.4 million, or $(0.17) per share in the second quarter of 2004. Prior period financials are not comparable as ITXC Corp. (ITXC) results were included for the full period in the second and first quarters of 2005 but for only one month of the year-ago period. The merger with ITXC and related transactions were consummated on May 31, 2004. As of June 30, 2005, the company had 39,108,492 shares outstanding. Second quarter 2005 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $9.8 million including a $1.6 million loss from foreign exchange translations versus $3.9 million including a $1.9 million loss from foreign exchange translations in the first quarter of 2005. Second quarter results also include a $2.2 million pretax gain on the sale of a Vancouver facility associated with the company's plan to reduce operating expenses. The second quarter also includes the impact of major favorable settlements with carriers. The first quarter figure includes integration expenses and professional fees incurred in connection with the Company's internal Foreign Corrupt Practices Act ("FCPA") investigation of $2.0 million. EBITDA is a non-GAAP concept (see non-GAAP financial data footnote in this press release). Liam Strong, president and CEO of Teleglobe, stated, "During the second quarter, Teleglobe continued to execute on its plan to create a more productive, efficient operating platform from which to leverage a higher-growth revenue mix over time. Voice and data revenue were affected by price erosion in the quarter while our higher-margin value added services performed above expectations. Volumes in the voice business were hampered by the seasonally slower period and by integration completion late in the quarter; data volume growth was consistent with prior quarters' gains. In May, we successfully completed the final integration stages of our international TDM voice network with ITXC's global VoIP network, unifying routing and network traffic management into one voice IP network. The benefits of unified routing, helped by a lower percentage of voice revenue in the mix and the timing of voice settlements, contributed to sequential gross margin expansion and EBITDA growth." Mr. Strong concluded, "Looking into the second half of the year, we continue to focus on driving volume growth and new product introductions while channeling a portion of the integration synergies we have generated into programs to increase our productivity and profitability." Non-GAAP Results EBITDA (Earnings before interest, taxes, depreciation, and amortization) for second quarter 2005 was $9.8 million versus $3.9 million in the first quarter of 2005 and $4.8 million in the second quarter of 2004. EBITDA is a non-GAAP concept, differing from GAAP measures in that it excludes net interest expense, taxes, depreciation and amortization. A more detailed reconciliation of the differences between GAAP and non-GAAP results is included in the financial tables in this press release. Non-GAAP Financial Data We are presenting EBITDA (Earnings before interest, taxes, depreciation and amortization) and Gross Margin because management considers them to be important supplemental measures of our performance and believes that they are frequently used by interested parties in the evaluation of companies in our industry. However, EBITDA and Gross Margin have limitations as analytical tools, and you should not consider them in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include the following: -- EBITDA does not reflect cash expenditures, future requirements for capital expenditures, or contractual commitments; -- EBITDA does not reflect changes in, or cash requirements for, working capital needs; -- EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on debt; -- Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and EBITDA does not reflect any cash requirements for such replacements; -- EBITDA reflects the impact on earnings of charges resulting from matters we consider not to be indicative of our ongoing operations; and -- Other companies in our industry may calculate EBITDA and Gross Margin differently than we do, limiting their usefulness as a comparative measure. -- The Gross Margin calculation excludes any depreciation or amortization relating to property, equipment and intangible assets required to generate revenues. Because of these limitations, we rely primarily on the GAAP results and use EBITDA and Gross Margin only as supplemental measures. Adjusted EBITDA is a further supplemental measure of our performance. We compute Adjusted EBITDA by adjusting EBITDA to eliminate the impact of a number of items that management does not consider indicative of our ongoing operating performance. You are encouraged to evaluate each adjustment and the reasons we consider it appropriate for supplemental analysis. In addition, in evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. The presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. Subsequent Event On July 25, 2005, Teleglobe announced it entered into a definitive agreement to be acquired by Videsh Sanchar Nigam Limited, VSNL (NYSE: VSL), India's leading provider of international communications and Internet services. The transaction, which is subject to regulatory approvals, approval of Teleglobe's shareholders, and other customary closing conditions, is structured as an amalgamation of Teleglobe with a newly formed subsidiary of VSNL. Pursuant to the amalgamation, Teleglobe shareholders will receive consideration of $4.50 per common share in cash. Teleglobe plans to file with the SEC and mail to its shareholders a proxy statement in connection with the transaction. Investors should carefully review Teleglobe's proxy statement with respect to the proposed transaction when it is filed with the SEC before making any decision concerning the proposal offer. The proxy statement will contain important information about Teleglobe, VSNL, the transaction and related matters. Once filed, investors will be able to obtain these documents and other relevant documents for free at the SEC web site www.sec.gov, and at Teleglobe's web site, www.teleglobe.com. Participants in Solicitation Teleglobe, VSNL and their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from Teleglobe's shareholders in connection with the proposed acquisition information concerning Teleglobe's participants in the solicitation as set forth in the Teleglobe's form 10-K filed with the SEC on March 17, 2005. Information concerning VSNL's participants in the solicitation is set forth in the form 20-F filed by VSNL with the SEC on September 29, 2004 and the forms 6-K filed by VSNL with the SEC on October 27, 2004, April 11, 2005, May 10, 2005, June 7, 2005 and July 25, 2005. About Teleglobe: Teleglobe is a leading provider of international voice, data, Internet and mobile roaming services with over 50 years of industry expertise in international telecommunications. Teleglobe became a public company trading on the Nasdaq under the symbol TLGB with the acquisition of Voice over IP (VoIP) network leader ITXC Corp. on June 1, 2004. Teleglobe owns and operates one of the world's most extensive telecommunications networks, reaching over 240 countries and territories with advanced voice, mobile, and data services. Teleglobe is the carrier of choice to more than 1,400 wholesale customers representing the world's leading telecommunications, mobile operators and Internet service providers. With an annual run-rate of over 13 billion minutes, and a significant portion of the world's Internet traffic, Teleglobe's network is consistently ranked among the most robust and reliable, performing at the high end of industry standards. Detailed information about Teleglobe is available on the company's web site at www.Teleglobe.com. Forward-looking Statements Teleglobe has included in this press release forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including all statements concerning future or expected events or results. Actual results could differ materially from those projected in the companies' forward-looking statements due to numerous known and unknown risks and uncertainties, including, among other things, the risks and uncertainties described in the Form 10-Q that was filed by Teleglobe on August 10, 2005, as well as other Teleglobe periodic filings with the Securities and Exchange Commission. -0- *T Teleglobe International Holdings Ltd - Selected Financial Highlights for the periods indicated (Unaudited)(USD$, 000's): Q2-2005 Q1-2005 Q2-2004 Consolidated Statement of Operations - Selected Information ----------------------------- Revenues $239,173 $ 255,307 $230,651 Telecommunication expenses 169,596 189,580 169,370 Network expenses, exclusive of amortization and Depreciation 22,729 22,779 24,068 -------- ---------- -------- Total telecommunication and network expenses $192,325 $ 212,359 $193,438 Selling, general & administrative, bad debt expenses, stock based compensation, restructuring charges, foreign exchange loss (gain) and other income $ 37,037 $ 39,046 $ 32,445 Net (loss) income $ (401)$ (8,445)$ (3,776) Teleglobe International Holdings Ltd - Selected Financial Highlights for the periods Consolidated Balance Sheet as at the Period June 30, December Indicated - Selected Information 2005 31, 2004 --------- --------- Cash, Marketable Securities and Restricted Cash $ 21,447 $ 34,060 Accounts Receivable 213,869 210,588 Other Current Assets 14,933 10,189 -------- -------- Total Current Assets 250,249 254,837 Property and Equipment 131,439 134,083 Intangible Assets 144,179 143,231 Other Non-Current Assets 22,095 21,638 -------- -------- Total Assets $547,962 $553,789 Accounts Payable and Accrued Liabilities $279,012 $275,645 Other Current Liabilities 6,545 6,065 Current Portion of Senior Notes Payable 25,000 -- -------- -------- Total Current Liabilities 310,557 281,710 Other Non-Current Liabilities 13,011 13,929 Senior Notes 75,000 100,000 Total Equity 149,394 158,150 -------- -------- Total Liabilities and Shareholders' Equity $547,962 $553,789 Teleglobe International Holdings Ltd - Selected Financial Highlights for the periods indicated (USD$, 000's)(Unaudited): *Reconciliation of EBITDA to GAAP Measure Q2-2005 Q1-2005 Q2-2004 for the periods indicated --------------------------------------------------------------------- Net (loss) income $ (401) $(8,445) $(3,776) Add: Interest expense, net 2,101 3,932 3,821 Income tax expense (recovery) (299) (287) (2,345) Depreciation 5,762 6,247 5,108 Amortization of intangible assets 2,648 2,455 1,960 ------ ------- ------- EBITDA $9,811 $ 3,902 $ 4,768 Add: Integration costs - 1,331 4,800 Professional fees incurred in connection with Foreign Corrupt Practices Act investigation - 664 - Adjusted EBITDA $9,811 $ 5,897 $ 9,568 *T The EBITDA for the three months ended June 30, 2005 includes a non-recurring gain of $2.2 million relating to the disposal of the Burnaby Vancouver Station, $3.0 million of revenue due to favorable settlement agreements with certain carriers and $0.9 million of similar favorable agreements in network expenses. Additionally, for the three months ended June 30, 2005, the Company's telecommunication expenses were reduced by major favorable settlements with certain carriers for approximately $2.7 million compared to $3.0 million in the first quarter of 2005. -0- *T *Reconciliation of Gross Margin to GAAP Q2-2005 Q1-2005 Q2-2004 Measure for the periods indicated --------------------------------------------------------------------- (Loss) income before income taxes $ (700) $(8,732) $(6,121) Add: Interest expense, net and other income (122) 3,956 3,754 Foreign exchange loss (gain) 1,594 1,926 (179) Depreciation 5,762 6,247 5,108 Amortization of intangible assets 2,648 2,455 1,960 Bad debt expense (recovery) 221 (847) 497 SG&A, stock based compensation and restructuring charges 37,445 37,943 32,194 ------- ------- ------- Gross Margin $46,848 $42,948 $37,213 ------- ------- ------- Gross Margin as a Percentage of Revenue 19.6% 16.8% 16.1% Revenue Information The following table presents relevant revenue-related information for the periods indicated for Teleglobe International Holdings Ltd (Unaudited) Three Three Three Months Months Months Ended Ended Ended June March June 30, 31, 30, 2005 2005 2004 ------- ------- ------- Revenues per line of business (in millions of U.S. dollars) Voice - transport $190 $206 $183 Data - transport 25 26 26 Value - added services 24 23 22 ------- ------- ------- Total $239 $255 $231 Total revenues excluding Bell Canada(1) revenues $215 $228 $211 Percentage of revenues from Bell Canada(1) 10.1% 10.6% 8.6% Minutes of traffic (in millions) Voice - transport 3,328 3,432 2,444 Other 70 63 53 ------- ------- ------- Total 3,398 3,495 2,497 Average voice revenue per minute $0.057 $0.060 $0.075 Geographic distribution of revenues Asia 7% 8% 9% Canada 15% 15% 11% Europe 32% 32% 28% USA 31% 31% 35% Latin America 4% 4% 4% Other 11% 10% 13% ------- ------- ------- Total 100% 100% 100% (1) Bell Canada is Canada's largest telecommunications company. *T