Voice over Internet Protocol (VoIP) solutions provider deltathree (News - Alert) announced first-quarter results for 2009 that highlighted several important financial achievements as the company returned to top-line sequential revenue growth and reported improvements in reducing the its overall net losses.
Effi Baruch (News - Alert), interim chief executive officer and president, and senior vice president of Operations and Technology at deltathree, said the company's financial performance improvements are a direct result of strategic initiatives focused on stabilizing and growing core international VoIP reseller solutions business, as well as materially reducing company-wide operating expenses and improving profitability.
deltathree provides hosted communications solutions for resellers, end-users and service providers worldwide.
For the first quarter, the New York-based company reported total revenues of $5.3 million, compared to $4.6 million in the fourth quarter 2008, and $5.4 million in the first quarter 2008. In addition, Q1 a net loss of $0.4 million, compared to $2.8 million for the same period in 2008.
The drivers behind the 13 percent rise in deltathree's sequential revenue growth, says Baruch, were a jump in sales associated with the company's core international reseller business and a one-time customer payment of approximately $0.2 million.
After posting admittedly disappointing numbers in 2008, deltathree’s interim CEO said the company made a late surge and solid progress toward addressing several key issues to close out the year’s fourth quarter.
In April, while announcing financial results for Q4 2008, as well as the full year 2008 ended December 31, Baruch said objectives of a previously announced restructuring plan had been met and are expected to go a long way in significantly reducing fixed operating expenses in order to better align the organization with its current operations.
“While our full year 2008 performance was disappointing in light of a highly competitive telecommunications market, I believe we have made solid progress on the key issues of reducing core operating expenses, improving our quarterly bottom line performance, and bolstering the company's balance sheet through our latest round of funding after the end of the year,” Baruch said at the time.
Now, according to the Q1 results, excluding the positive impact of the one-time customer payment, deltathree was generated an 8 percent rise in sequential revenue growth on the as the restructuring plan continues to pay dividends.
"Overall, we are pleased with the progress made during the first quarter and we believe that these results establish a solid foundation upon which to leverage our improved operating efficiencies going forward," said Baruch.
In February, D4 Holdings purchased a controlling interest in deltathree and set forward a plan to immediately begin aligning the strategic interests of both businesses.
Baruch said the companies saw “extensive opportunities” to match deltathree's comprehensive portfolio of global VoIP offerings and solutions with the international marketing and distribution capabilities available to D4 Holdings.
Since then, Baruch said his team has been collaborating closely with the D4 Holdings in an effort to leverage the opportunities “we see for delivering high quality, next generation VoIP solutions to customers worldwide."
"The successful closing of D4 Holdings' investment in deltathree aligns the company with a key strategic investor whose owners have extensive expertise and reach in the global telecommunications sector and provides the company with an immediate capital infusion,” said Baruch.
In today’s announcement, deltathree claims to have made significant progress in terms of improving its quarterly cash utilization and operating cash flow performance. At the end of Q1 total cash, cash equivalents, restricted cash and short-term investments rose to $2.9 million, as the company strengthened its balance sheet following the net receipt of $1.07 million related to the closing equity transaction with D4 Holdings.
As of March 31, 2009, deltathree held approximately $2.9 million in cash, cash equivalents, restricted cash and short-term investments, with no outstanding debt, according to the company.
Tim Gray is a Web Editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Tim’s articles, please visit his columnist page.
Edited by Tim Gray