iBasis Reports Q3iBasis Reports Q3

BURLINGTON, Mass. -- iBasis, Inc. (NASDAQ: IBAS), a KPN affiliate, today announced preliminary results for the third quarter ended September 30, 2009.

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 a significant 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.

Comments on the Third Quarter

“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% since that quarter, which was the first quarter after the acquisition of KPN Global Carrier Services.”

iBasis Inc. (Nasdaq: IBAS)