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In a release dated October 26, the company stated:
- Revenue for the third quarter of 2009 was $251.8 million, compared to $241.3 million for the second quarter of 2009 and $338.0 million for the third quarter of 2008.
- The company has not yet finalized its review of foreign exchange gains and losses, net of tax effect, for the third quarter and nine months of 2009. In addition, it is reasonably likely that we will have to restate our results of operations for the second quarter of 2009, to reflect foreign exchange adjustments that are currently recorded in our preliminary third quarter results and restate the first quarter of 2009 for a $0.6 million depreciation adjustment that was recorded in our second quarter of 2009 results.
- Preliminary net loss for the third quarter of 2009 was $8.7 million or $0.12 per share, compared to a net loss of $4.0 million or $0.06 per share for the second quarter of 2009 and net income of $3.3 million or $0.05 per share for the third quarter of 2008.
- Expenses associated with the KPN unsolicited tender offer during the third quarter were $7.4 million. Excluding these expenses, preliminary net loss for the third quarter would have been $1.3 million or $0.02 per share.
- The growth in revenue was driven by an increase in trading revenue due to the company's growth initiatives taking effect, improvement in global economic conditions and favorable foreign exchange. The company's strategic pricing initiative implemented earlier in the year enabled growth at a higher profitability level.
- Adjusted EBITDA for the third quarter of 2009 was $12.7 million, compared to $10.7 million for the second quarter of 2009 and $10.3 million for the third quarter of 2008. Adjusted EBITDA is a non-GAAP measurement presented to provide further information about the company's operating trends. Since Adjusted EBITDA excludes, among other things, foreign exchange gains and losses, we do not expect that any restatement would change Adjusted EBITDA for the third quarter of 2009 or for the year-to-date Adjusted EBITDA.
"I am extremely pleased with our results for Q3," said Ofer Gneezy, president and CEO of iBasis. "We held the elevated level of traffic profitability that we achieved in Q2 resulting from our strategic pricing initiatives, while achieving growth in minutes and revenue largely attributable to the early impact of our growth initiatives and the improving economy.
"We achieved the highest gross profit in more than a year and the highest Adjusted EBITDA since the beginning of the global economic downturn in the fourth quarter of 2007. I believe this validates the strategic steps we've taken and positions iBasis well for future profitable growth.
"Excluding the expenses associated with the KPN unsolicited tender offer, we reduced operating expenses in the third quarter, continuing the trend that began in the fourth quarter of 2007. We have reduced quarterly operating expenses by 30 percent since that quarter, which was the first quarter after the acquisition of KPN Global Carrier Services.
"We grew our Trading business sequentially across all of the key metrics: traffic, revenue, gross profit, and gross margin. As we have done for more than three years, we continued to achieve stable average margin per minute on declining average revenue per minute. We also continued to grow our mobile origination and termination business.
"In the third quarter our Outsourcing business achieved sequential growth in minutes and revenue while gross profit declined 10 percent compared to the second quarter as the traffic growth was more than offset by a 14 percent sequential reduction in margin per minute.
"Our Retail businesses achieved a significant sequential increase in average margin per minute in the third quarter. This enabled the business to maintain approximately flat gross profit even as the immigrant communities that are integral to the calling card business continued to be adversely affected by economic conditions."
iBasis is a wholesale carrier of international long distance telephone calls and a provider of retail prepaid calling services and enhanced services for mobile operators.
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