Inteliquent, Inc. (NASDAQ:IQNT) Q4 2014 Earnings Conference Call - Final Transcript

Feb 26, 2015 • 10:00 am ET


Inteliquent, Inc. (NASDAQ:IQNT) Q4 2014 Earnings Conference Call - Final Transcript


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Good day, everyone, and welcome to the Inteliquent Fourth Quarter Earnings and Full Year 2014 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Mr. Richard Monto, General Counsel. Please go ahead, sir.

Richard L. Monto

Thank you, and welcome to the Inteliquent Fourth Quarter 2014 Earnings Conference Call.

(Forward-Looking Cautionary Statements)

In our remarks, we will also refer to non-GAAP financial measures which we believe, in combination with GAAP results, provide additional analytic tools to understand our operations. Tables that reconcile non-GAAP financial measures to GAAP results are also included in our earnings release issued today.

Now for the substance of the call, I'd like to hand the call over to Ed Evans, Inteliquent's CEO.

Edward Evans

Thank you, Richard, and good morning, everyone. Thank you for joining us today as we discuss our results for the fourth quarter of 2014. Today, I'll provide a brief overview of our operational results. And then Kurt Abkemeier will provide a review of our financial performance as well as certain detailed operational metrics. We will also provide time for questions following our prepared comments.

Our fourth quarter results outperformed expectations due to continued growth from our sales pipeline, stabilization in our pricing and our continued focus on operational excellence. In the fourth quarter of 2012, we experienced a 10% rate of growth in voice revenues over the same quarter of 2013. Voice revenues for the quarter were $55.4 million.

Our net income for the fourth quarter was $10.1 million, a 15% increase over the fourth quarter of 2013. Our adjusted EBITDA, a non-GAAP financial measure, increased 12% over the fourth quarter of 2013 to $20.1 million. This was our sixth consecutive quarter of MOU growth on our network, and we transited more minutes of use in 2014 than in any other time in our history.

I am very pleased with our results for 2014. The company is producing very solid results and traffic volumes grew across all of our products in 2014. During the year, we also benefited from price reductions that were less than what we had expected. We have maintained margin levels during 2014 through the continued focus on operational excellence. During 2014, our traffic grew 13%, while voice network cost increased only 5%. We've done a great job of managing network expenses while growing traffic on our network.

As previously discussed, we have begun to introduce our new 8XX service, which was launched during the third quarter. During the fourth quarter, we have delivered customer traffic using this service. For the full year, we spent about $800,000 expanding our wireline footprint to accommodate this new service, and we will now begin to reap the benefits in 2015. During the fourth quarter, we began to see revenue, albeit not a material amount, from our new 8XX service.

We continue to build cash on our balance sheet. As we have stated previously, our first priority is to identify opportunities to reinvest the capital and create shareholder value.