TNS, Inc. Announces Second Quarter 2011 Financial Results
RESTON, Va., Aug 01, 2011 (BUSINESS WIRE) --
TNS, Inc. (NYSE: TNS), a leading provider of business-critical, cost-effective data communications services for transaction-oriented applications, today reported its second quarter 2011 results.
Henry H. Graham, Jr., CEO, commented, "TNS' second quarter 2011 performance was solid as we gained further traction in our areas of investment. Adjusted earnings came in at the high end of our outlook range. Telecommunication Services Division revenue grew from both last year and last quarter, excluding Cequint's contribution, and we signed a key tier 1 mobile operator for identity services, adding significantly to our now 200 million carrier-provided name database. Cequint continues to perform in line with our expectations, launching our NameID wireless caller name product in the quarter with T-Mobile. Our Payments and Financial Services divisions continue to grow internationally, partially offsetting weaker North American markets. Given the progress and consistency demonstrated by our first half results, we are raising the lower end of our 2011 outlook range. We will continue to strategically invest in identity and verification, multi-channel payment gateway, IP registry and wireless solutions, and expect these to support our growth in the second half of 2011 and beyond."
TNS acquired Cequint, Inc. (Cequint) on October 1, 2010 and has included its results in those of the Telecommunication Services Division from the date of acquisition. Therefore, 2011 results are not comparable to those of prior periods.
Total revenue for the second quarter of 2011 increased 8.5% to $142.3 million from second quarter 2010 revenue of $131.2 million. Cequint contributed $2.8 million to second quarter 2011 revenue. On a constant dollar basis, revenues for the second quarter of 2011 increased 4.9% to $137.6 million.
Second quarter 2011 GAAP net income decreased to $1.1 million, or $0.04 per share, from second quarter 2010 GAAP net income of $6.5 million, or $0.24 per share. Included in GAAP net income for the second quarter of 2010 was a pre-tax charge of $3.2 million, or $0.07 per share, resulting from accelerated depreciation of certain network assets associated with the CSG integration and a pre-tax charge of $0.5 million, or $0.01 per share, associated with severance. Excluding these items and the related tax effects, second quarter 2010 net income was $8.8 million, or $0.33 per share.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) before stock compensation expense for the second quarter of 2011 decreased 3.0% to $34.3 million, or 24.1% of revenue, from $35.3 million, or 26.9% of revenue, for the second quarter of 2010. Excluding the abovementioned second quarter 2010 pre-tax charge of $0.5 million associated with severance, EBITDA before stock compensation expense decreased 4.2%. On a constant dollar basis EBITDA before stock compensation expense for the second quarter of 2011 was $32.5 million, or 23.6% of revenue.
Adjusted earnings decreased 13.0% to $13.5 million, or $0.52 per share, for the second quarter of 2011 compared to adjusted earnings of $15.5 million, or $0.58 per share, for the second quarter of 2010. Excluding the abovementioned $3.6 million in second quarter 2010 pre-tax charges, adjusted earnings decreased 26.8% from $18.4 million, or $0.69 per share. Included in other income (expense) for the second quarter of 2011 was a pre-tax loss of $0.4 million, or ($0.01) per share, compared to a second quarter 2010 pre-tax gain of $2.9M, or $0.09 per share, related to the revaluation of certain foreign currency denominated assets and liabilities.
EBITDA before stock compensation expense, adjusted earnings and adjusted earnings per share are non-GAAP measures. See "Financial Measures" below for a discussion of these metrics.
The table below discloses adjusted earnings and adjusted earnings per share, excluding the charges mentioned above, at currency exchange rates reported for second quarter 2011 and at the 2010 rates.
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