OVERLAND PARK, KS - April 4, 2010 - Flint Telecom Group, Inc. (FLTT.OB), a fast growing next-generation IP communications products and services company announces the filing of its SEC Form 10Q for the second quarter ending December 31, 2009.
The key highlights of the quarter are:
- Revenues decreased from the previous fiscal quarter due to management's focus on margin and bottom line performance. Although the year on year revenue increased significantly, the Company reported $10.9 million of revenue for the 3 months ending December 31, 2009 as compared to $14.5 million for the three months ending September 30, 2009, a 25% decrease. This reduction in revenue from the previous quarter reflects a greater focus on gross margins and tighter credit management for the period. The Company continues to focus on adding new customers and new partners to drive revenues in the core higher margin businesses that management is focused on building after the operational restructuring.
- Gross margins increased 29% -- The gross margin percentage increased from the previous quarter to 6.3% in the three months ending December 31, 2009 as compared to 4.9% for the three months ending September 30, 2009, and gross margins were up from a negative 32% for the same period last year. For the six months ended December 31, 2009, gross margins increased by over $2.643 million (210%) year on year, moving from negative to positive.
These improvements reflect the successful implementation of management's previously stated key objectives for the period.
- EBITDA loss narrows -- EBITDA losses narrowed to $584,896 for the quarter ending December 31, 2009, down from $1.202 million for the previous quarter ending September 30, 2009. Year on year EBITDA improved by over $4.2 million for the 3 months ending December 31, 2009 as compared to December 31, 2008. EBITDA improved by $3.8 million for the six months ending December 31, 2009 as compared to the six months ending December 31, 2008.
- Reduction in cash required for operations -- Cash required for operations, before debt servicing and capital spending, reduced to $220,713 from $839,699 the previous quarter on the back of improved margins and lower operating costs.
- Restructuring and cost cutting completed -- the reduction in costs from the operational restructuring completed in the quarter ending March 31, 2010 is not reflected in the financial statements ending December 31, 2009. However, the Company has taken an $8.1 million impairment of goodwill and other costs for discontinued operations in the quarter ended December 31, 2009 relating to this restructuring. Before this impairment charge, net losses reduced to $1.9 million for the quarter ending December 31, 2009 as compared to net losses of $3.1 million the previous quarter and $6.0 million for quarter ending December 31, 2008.
Vincent Browne, Flint Chairman and CEO, commented, "Clearly we are very pleased that our operational results continue to improve and reflect our successful strategy and our move to positive trading performance. However, even though we have made expected progress at the operational level, we now have to resolve our debt position. Unfortunately we are currently in default with our unsecured note holders as expected funding initiatives did not materialize last year due to the economic challenges. We continue to work with these groups and are hopeful that we can reach positive outcomes with most if not all of our debt holders shortly to cure the defaults, restructure the balance sheet and allow the stock to better reflect the underlying value in our business."
"Management remains focused on growing our higher margin businesses, keeping a tight rein on costs, and building the consolidated operations to a positive EBITDA which we are tracking to as shown in our recent results. We will also put greater efforts in communicating our strategy, achievements and vision to our existing shareholders, note holders and prospective new investors as we move forward." Mr. Browne concluded.