U.S. Markets open in 3 hrs 23 mins

Fusion Acquires Broadvox's Cloud Services Business

NEW YORK, NY--(Marketwired - Jan 6, 2014) - Fusion ( OTCQB : FSNN ), an emerging leader in cloud services, announced today that on December 31, 2013, it completed the previously announced acquisition of Broadvox LLC's cloud services business, which delivers cloud-based voice, unified communications and cloud connectivity to small, medium and large businesses, for an aggregate purchase price of $32.1 million in cash. The acquisition adds significant scale to Fusion's existing cloud services business, which provides a full complement of cloud communications, cloud connectivity, cloud storage and security services to the business market.

Acquisition Highlights

  • Strong Financial Profile
    • Contributes scale and performance
    • For the nine months ending September 30, 2013, the acquired business generated:
      • Unaudited revenue of $24.5 million, over 90% of which is recurring
      • $3.1 million in adjusted EBITDA, which includes approximately $1.8 million of expenses that are not expected to continue following the acquisition and have not been reflected in the adjustments to EBITDA
      • Over 65% gross margin
  • Growing Customer Base
    • 5,800 business customers
    • 1.2% average monthly churn year to date
    • Over $450 in ARPU
    • Strong focus on key verticals: legal services, hospitality and real estate management
  • Expanded Operations
    • Extends Fusion's Cloud Network and Infrastructure
    • Adds nearly 100 employees to expand sales, marketing, and support efforts
  • Complementary Cloud Services Product Portfolio
    • Cloud-based voice
    • Unified communications
    • Cloud connectivity 
  • Accelerates Organic Growth 
    • Expands sales and marketing team and budget
    • Adds over 300 active distribution partners
    • Adds inside sales resources to focus on cross-sale and up sale of new cloud services to existing customers

For the nine months ended September 30, 2013, the acquired business generated $24.5 million in unaudited revenue, and $3.1 million in adjusted EBITDA, including approximately $1.8 million in expenses that are not expected to continue following the acquisition and have not been reflected in the adjustments to EBITDA. Importantly, over 90% of the revenue is recurring, with more than 65% gross margin. Based on the third quarter of 2013, Fusion's pro forma consolidated revenue run rate, including the acquired business, exceeded $91 million. The acquisition adds 5,800 small, medium and large business customers and more than 300 active distribution partners to Fusion. The combined companies' customer base now totals approximately 10,000, with more than 500 active distribution partners. Broadvox's cloud services sales and marketing efforts, with a strong focus on legal services, hospitality and real estate management, add key new vertical markets to Fusion's own strategy of providing specialized, market-based solutions to important verticals, including healthcare. With the acquisition, Fusion is adding nearly 100 employees to greatly expand its sales, marketing and support functions.

Fusion expects to realize approximately $2.3 million in cost synergies upon completion of the integration of the Broadvox cloud services business. Approximately half of these savings were realized at the date of acquisition, with the remainder expected to be achieved over the next 12 to 24 months. The combined businesses will bring expanded scale and resources to Fusion's sales and marketing efforts with the addition of a strong inside sales and marketing team, increased spending on marketing and the cross-selling of the company's combined products and services. The anticipated performance of the combined business and the integration of advanced service and delivery infrastructures, network facilities and staff will allow Fusion to more rapidly scale, enabling the company to accelerate its organic growth plans while providing a robust platform for additional acquisitions.

Matthew Rosen, Fusion's Chief Executive Officer, said, "We are extremely pleased that the Broadvox cloud services team, partners and customers have joined Fusion. This transaction, our second acquisition of a cloud services business in a little over a year, brings us one step closer to realizing our vision of becoming the largest and most successful provider of cloud solutions in a rapidly growing market. The acquisition also continues the effort begun with last year's acquisition of NBS to identify established cloud services companies with strong management teams to help build our company. We were gratified by the support we received for this transaction as reflected in the approximately $44.0 million in financings announced earlier today from new and existing shareholders, Directors, Advisory Board members, and from financial partners such as Praesidian Capital, Plexus Capital, and several other notable institutions and individuals."

Don Hutchins, Fusion's President and Chief Operating Officer, said, "We have been working with Broadvox and their great management and staff on the integration effort for more than four months. The experienced professionals who are joining Fusion's cloud services team share the same culture and commitment to service excellence, and we are all excited about the substantial opportunities for growth that this transaction provides. Our integration planning confirmed our belief that the combination of our businesses will help us achieve our financial goals, build scale and deliver leading edge cloud solutions to our expanding base of customers."

Fusion has launched its new cloud services website, www.fusiontel.com, to coincide with the announcement of its acquisition of Broadvox's cloud services business.

CEA Capital Advisors acted as Fusion's advisor in the acquisition.

Use of Non-GAAP Financial Measurements:

This release contains certain non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flow of the Company. Pursuant to the requirements of Regulation G, the Company has provided a reconciliation of non-GAAP financial measures to the most directly comparable financial measure in the accompanying tables.

The Company believes that EBITDA (earnings from continuing operations before interest, taxes, depreciation and amortization) is useful to investors because it is commonly used in the communications industry to evaluate companies on the basis of operating performance and leverage. The Company also believes that EBITDA provides investors with a measure of the Company's operational and financial progress that corresponds with the measurements used by management as a basis for allocating resources and making other operating decisions. Adjusted EBITDA provides an adjusted view of EBITDA that takes into account certain significant non-recurring transactions, if any, such as impairment losses and professional fees associated with pending acquisitions, which vary significantly between periods and are not recurring in nature, as well as certain recurring non-cash charges such as stock-based compensation. Although the Company uses adjusted EBITDA as one of several financial measures to assess its operating performance, its use is limited as it excludes certain significant operating expenses. EBITDA and adjusted EBITDA are not intended to represent cash flows for the period presented, nor have they been presented as an alternative to operating income or as an indicator of operating performance and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with Generally Accepted Accounting Principles ("GAAP"). 

 
Broadvox Enterprise Services
Statement of Operations
For the Three and Nine Months Ended September 30, 2013
(unaudited)
 
           
(in thousands)   Three Months   Nine Months
Revenues   $ 8,658   $ 24,503
Cost of revenues, exclusive of depreciation and amortization, shown separately below   2,814   8,277
Gross profit   5,844   16,226
Depreciation and amortization   1,000   3,103
Selling general and administrative expenses   4,291   13,216
Total operating expenses   5,291   16,319
Operating income (loss)   553   (93)
Interest expense, net   (24)   (93)
Net income (loss)   $ 529   $ (186)
         
         
 
 
Broadvox Enterprise Services
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA
For the Three and Nine Months Ended September 30, 2013
(Unaudited)
 
(in thousands)   Three Months   Nine Months
Net loss   $ 529   $ (186)
Interest expense   24   93
Depreciation and amortization   1,000   3,103
EBITDA   1,553   3,010
Stock-based compensation expense   26   79
Adjusted EBITDA   $ 1,579   $ 3,089
         
         

About Fusion

Fusion is a leading provider of integrated cloud solutions to small, medium and large businesses. Fusion's advanced, proprietary service platform enables the integration of leading edge solutions in the cloud, including cloud voice, cloud connectivity, cloud storage and security. Fusion's innovative yet proven cloud solutions lower our customers' cost of ownership, and deliver new levels of security, flexibility, scalability and speed of deployment. For more information, please visit www.fusiontel.com.

Forward Looking Statements:

Statements in this press release that are not purely historical facts, including statements regarding Fusion's beliefs, expectations, intentions or strategies for the future, may be "forward-looking statements" under the Private Securities Litigation Reform Act of 1996. Such statements consist of any statement other than a recitation of historical fact and can be identified by the use of forward-looking terminology such as "may", "expect", "anticipate", "intend", "estimate" or "continue" or the negative thereof or other variations thereof or comparable terminology. The reader is cautioned that all forward-looking statements are speculative, and there are certain risks and uncertainties that could cause actual events or results to differ from those referred to in such forward-looking statements. This disclosure highlights some of the important risks regarding the Company's business. The primary risk of the Company is its ability to raise new and continued capital to execute its comprehensive business strategy. There may be additional risks associated with the integration of businesses following an acquisition, concentration of revenue from one source, competitors with broader product lines and greater resources, emergence into new markets, the termination of any of the Company's significant contracts or partnerships, the Company's ability to comply with its senor debt agreements, the Company's inability to maintain working capital requirements to fund future operations or the Company's ability to attract and retain highly qualified management, technical and sales personnel, and the other factors identified by us from time to time in the Company's filings with the Securities and Exchange Commission, which are available through http://www.sec.gov. Statements in this press release relating to the projected revenues, EBITDA, cost-synergy savings and other forecasted benefits of our acquisition of NBS are "forward-looking" statements and are based upon certain assumptions that may or may not prove to be accurate; and if inaccurate could cause our actual results to differ materially from our projections. However, the risks included should not be assumed to be the only things that could affect future performance. We may, among other things, also be subject to service disruptions, delays in collections, or facilities closures caused by potential or actual acts of terrorism or government security concerns.

  • What happens if you win Mega Millions' $970M jackpot?
    News
    Associated Press

    What happens if you win Mega Millions' $970M jackpot?

    Despite the terrible odds — one in 302.5 million for those keeping score at home — someone will eventually match all six numbers and win the Mega Millions jackpot, which now stands at $970 million. Here are some answers for someone holding that prized lottery ticket for what would be the second-largest lottery jackpot in U.S. history. Lottery officials recommend winners take a deep breath, put their winning ticket in a safe spot and consult with a reputable financial planner before popping over to the lottery headquarters.

  • The ‘smart money’ says it’s time to buy the Chinese internet giants and the U.S. FAANGs
    News
    MarketWatch

    The ‘smart money’ says it’s time to buy the Chinese internet giants and the U.S. FAANGs

    When the media and investors turn negative on stocks but the “smart money” is bullish, it’s a good time to think about buying. After all, exactly what is the smart money, and how do you know? Lately, several fund managers who pass this test have been pounding the table on Chinese internet names.

  • Provocateur Stormy Daniels Takes an Unexpected Turn in the National Spotlight
    Politics
    Time

    Provocateur Stormy Daniels Takes an Unexpected Turn in the National Spotlight

    To understand what it means to be famous like Stormy Daniels, for the reasons she is famous, spend time with her in a public space. On Oct. 15, a California judge threw out the defamation case she filed against Donald Trump. Over the past year, Daniels, 39, has become the Zelig of White House scandals.

  • Goldman Sachs Adds Nvidia To 'Conviction Buy' List
    Business
    Yahoo Finance Video

    Goldman Sachs Adds Nvidia To 'Conviction Buy' List

    Goldman Sachs analyst Toshiya Hari reiterated his 'Buy' rating for Nvidia and added the chip-maker to Goldman’s 'Conviction Buy' list.

  • Business
    Reuters

    Micron to buy Intel's stake in joint venture IM Flash Technologies

    The deal terms include payment of about $1.5 billion in cash, as well as taking over Intel's debt to the venture, which was about $1 billion as of Aug. 30, Micron said. Intel and Micron initially contributed about $1.2 billion each to set up IM Flash Technologies in 2006. IM Flash (Intel-Micron Flash) makes 3D XPoint used in data centres and high-end computers and the joint venture is already consolidated in Micron's reported financial statements.

  • 7 Stocks Warren Buffett Can’t Stop Buying
    Finance
    InvestorPlace

    7 Stocks Warren Buffett Can’t Stop Buying

    Sometimes identifying the best stocks to buy can be difficult, but you could do a lot worse than checking out the stocks selected by one of the world’s savviest hedge fund managers — Warren Buffett. Buffett’s stock picks are a popular source for investors, and for good reason. The billionaire Buffett is many things: He’s among the world’s most successful fund managers, a legendary philanthropist and owns more than 60 companies.

  • Cigna (CI) Gains As Market Dips: What You Should Know
    Business
    Zacks

    Cigna (CI) Gains As Market Dips: What You Should Know

    Cigna (CI) closed the most recent trading day at $212.73, moving +0.72% from the previous trading session. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate.

  • Aurora Cannabis stock leads sector higher after news it will start trading on NYSE next week
    News
    MarketWatch

    Aurora Cannabis stock leads sector higher after news it will start trading on NYSE next week

    Canadian marijuana company Aurora Cannabis Inc.’s shares rose about 4% Thursday after it said shares have been approved for trading on the New York Stock Exchange starting October 23. The stock (CA:ACB)(CA:ACB) which is currently trading on the over-the-counter market, will trade under the ticker symbol “ACB”. The shares are also traded on the Toronto Stock Exchange.

  • Ford Motor Company Earnings: What to Watch For
    Business
    Motley Fool

    Ford Motor Company Earnings: What to Watch For

    Ford Motor Company (NYSE: F) will report its third-quarter earnings results after the markets close on Oct. 24. Wall Street analysts polled by Thomson Reuters expect Ford to report earnings of $0.30 per share, on average, down from $0.43 in the third quarter of 2017. Ford's F-Series pickups continue to sell well and generate good profits, thanks to high-margin versions like this F-150 Limited.

  • Jamal Khashoggi's brutal death brings to question an era of Bay Area tech investment
    Finance
    American City Business Journals

    Jamal Khashoggi's brutal death brings to question an era of Bay Area tech investment

    New details have emerged about the killing of journalist Jamal Khashoggi by Saudi agents — involving his beheading and dismemberment upon entering the Saudi consulate in Istanbul, Turkey — thanks to audio files described by Turkish officials. As evidence mounts of the Washington Post columnist’s gruesome death tied to Saudi Arabia, Bay Area tech companies, which have gobbled up billions in funding from the kingdom in recent years, could see that money river dry up as Saudi investment becomes increasingly toxic. President Donald Trump has criticized those rushing to condemn the nation, telling the Associated Press: "You know, you’re guilty until proven innocent." Yet even still, Japanese investor Softbank isn’t stomaching the brutal killing tied to its major investment fund so easily.

  • Don’t sweat a stock-market selloff with midterms around the corner, says strategist
    News
    MarketWatch

    Don’t sweat a stock-market selloff with midterms around the corner, says strategist

    “On average, the S&P 500 actually has been negative year to date in early October during a midterm year,” said Detrick, in a note. Read: Will midterm elections sink the stock market? As for the market’s dismal performance the past couple of weeks, Detrick expects stocks to remain under pressure in the near term as they had done in 2016 when the S&P 500 slid for nine straight sessions before the election in November.

  • PayPal higher after-hours following upbeat earnings report
    Business
    Yahoo Finance Video

    PayPal higher after-hours following upbeat earnings report

    Shares of PayPal up after market close after quarterly profit beats estimates.

  • Finance
    American City Business Journals

    American Express beats Q3 expectations, raises full-year guidance

    American Express Co. (NYSE: AXP) on Thursday posted financial results for its third quarter that surpassed estimates for both revenue and earnings. The New York-based company cited increased consumer spending in noting the results, which were released following the close of markets. AmEx posted total revenue for the quarter of $10.114 billion, up 9 percent from the same period last year and beating estimates of $10.05 billion.

  • AT&T (T) Q3 Earnings Preview: How Are Events Shaping Up?
    Business
    Zacks

    AT&T (T) Q3 Earnings Preview: How Are Events Shaping Up?

    The market expects AT&T (T) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2018. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 24.

  • The same question that can chart a path to early retirement is the one Warren Buffett used to build Berkshire Hathaway into a powerhouse
    Business
    Business Insider

    The same question that can chart a path to early retirement is the one Warren Buffett used to build Berkshire Hathaway into a powerhouse

    Inversion is a mental model that involves flipping your outlook to prevent the opposite of what you want to happen from happening. Warren Buffett and his business partner Charlie Munger employed inversion as a business strategy to build Berkshire Hathaway into a powerhouse. In a recent podcast with Brandon of the Mad Fientist, who retired early at 34, productivity expert James Clear said the same strategy Buffett used can help set someone on the path for early retirement.

  • Finance
    CNBC

    China's stock market is getting pummeled and history shows that is bad news for US markets

    U.S. stocks are lower about 70 percent of the time in periods when there are big drops of 10 percent or more in Shanghai stocks, according to analytics firm Kensho. The main U.S. indexes lose about 5 percent when Shanghai stocks fall 10 percent or more in a 30-day period. Big blue chips, like Goldman and Caterpillar are among the losers, but copper and oil also fall hard when Shanghai sees a big decline.

  • Alibaba (BABA) Dips More Than Broader Markets: What You Should Know
    Finance
    Zacks

    Alibaba (BABA) Dips More Than Broader Markets: What You Should Know

    Investors will be hoping for strength from BABA as it approaches its next earnings release, which is expected to be November 2, 2018. On that day, BABA is projected to report earnings of $1.16 per share, which would represent a year-over-year decline of 10.08%. Investors should also note any recent changes to analyst estimates for BABA.

  • Finance
    Investopedia

    Berkshire Is Undervalued, Says JPMorgan

    Berkshire Hathaway Inc.'s ( BRK.B) Class B shares are cheap if you apply the same metrics that its CEO Warren Buffett does to value companies, according to JPMorgan. In a research note, reported on by CNBC, analyst Sarah DeWitt said Berkshire, a company that investors have historically struggled to value properly because of its many moving parts, suddenly appears to be attractively priced when factoring in all the profits made by the stocks held in its $200 billion equity portfolio into its earnings. “Look-through earnings” take into account current period earnings that show up in financial statements, together with other sources of earnings expected in the long run. This method is used by Buffett as a way to appreciate that companies sometimes retain earnings after paying dividends and later invest them at a higher rate of return.

  • Finance
    IPO-Edge.com

    Why Warren Buffett and a Wal-Mart Heir Want a Slice of This Brazilian Payments IPO

    Warren Buffett and Wal-Mart heir Rob Walton are buying tickets to Brazil. Should investors join them for the ride? Brazilian digital-payments company StoneCo (ticker: STNE) plans to sell up to $1.1 billion in an offering of new and existing shares, valuing the company at $6.2 billion if they price at the top of the indicative range.

  • Qualcomm (QCOM) Stock Moves -1.44%: What You Should Know
    Finance
    Zacks

    Qualcomm (QCOM) Stock Moves -1.44%: What You Should Know

    This has lagged the Computer and Technology sector's loss of 3.96% and the S&P 500's loss of 2.61% in that time. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.53 billion, down 6.27% from the year-ago period. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

  • Texas Instruments (TXN) Dips More Than Broader Markets: What You Should Know
    Business
    Zacks

    Texas Instruments (TXN) Dips More Than Broader Markets: What You Should Know

    This has lagged the Computer and Technology sector's loss of 3.96% and the S&P 500's loss of 2.61% in that time. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $4.30 billion, up 4.48% from the year-ago period. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

  • Wynn Resorts (WYNN) Q3 Earnings Preview: What to Look Out For
    Business
    Zacks

    Wynn Resorts (WYNN) Q3 Earnings Preview: What to Look Out For

    The market expects Wynn Resorts (WYNN) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2018. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates. The stock might move higher if these key numbers top expectations in the upcoming earnings report, which is expected to be released on October 25.

  • Markets think the midterms could be as big as the presidential election
    Finance
    Yahoo Finance

    Markets think the midterms could be as big as the presidential election

    The midterm elections are less than three weeks away. According to strategists at Barclays, the options market is pricing in a 1.6% swing on election night, a modest swing given the recent volatility we’ve seen in the stock market.

  • Business
    CNBC

    Want to work for Jack Ma? These are the traits he looks for in a candidate

    For Jack Ma , the man behind Chinese tech giant Alibaba BABA , that's a process that took him some time to master. Ma, speaking in the Indonesia resort island of Bali last week, recalled a hiring mistake he made in the early days of Alibaba. As it turned out, that plan was designed to cost $12 million — way over the spending budget that the company could afford back then, Ma explained.

  • Advanced Micro Devices (AMD) Q3 Earnings Preview: Here's What to Look Out For
    Business
    Zacks

    Advanced Micro Devices (AMD) Q3 Earnings Preview: Here's What to Look Out For

    Advanced Micro Devices (AMD) is expected to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended September 2018. This widely-known consensus outlook gives a good sense of the company's earnings picture, but how the actual results compare to these estimates is a powerful factor that could impact its near-term stock price. The earnings report, which is expected to be released on October 24, 2018, might help the stock move higher if these key numbers are better than expectations.