Yak Communications Inc. Announces Third Quarter Financial Results
Tuesday May 16, 8:30 am ET
TORONTO, ONTARIO and MIAMI, FLORIDA--(MARKET WIRE)--May 16, 2006 -- Core business remains strong while investments in new business results in Net Loss for the Quarter
Yak Communications Inc. (NasdaqNM:YAKC - News), a provider of telecommunication services to residential and business customers, today announced financial results for its third fiscal quarter ended March, 31, 2006.
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Net loss for the third quarter of fiscal 2006 was $0.4 million, or ($0.03) per diluted share, compared with net earnings of $1.9 million, or $0.15 per diluted share, for the third quarter of fiscal 2005. Net earnings for the nine-months ended March 31, 2006 were $1.1 million, or $0.09 per diluted share, compared with net earnings of $5.0 million, or $0.39 per diluted share, for the nine-months ended March 31, 2005.
Net revenues were $22.7 million for the third quarter of fiscal 2006, as compared to net revenues of $23.9 million for the third quarter of fiscal 2005. Net revenues for the nine-months ended March 31, 2006 were $70.2 million, up from $69.2 million for the comparable period in the prior year.
The net loss for the three months ended March 31, 2006, was principally caused by an increase in the provision for income taxes and lower dial-around revenues in Canada. These losses were largely offset by network efficiencies gained by bringing a greater portion of traffic onto our network. Operating costs for the period increased due to the cost associated with the restatement of our financial statements and increased advertising costs.
"Our results for the quarter were mixed. While we are disappointed with the decline in revenues for the third quarter of fiscal 2006 due to increased dial-around competition in Canada, the net loss incurred this quarter was principally due to our continued investment and launch of our VoIP products and our ongoing national advertising campaign for these products which we believe will benefit the Company in the longer term," said Charles Zwebner, President and Chief Executive Officer. "In Canada, we are beginning to see the positive effects of our Canadian advertising campaigns which has resulted in our signing up more than 30,000 yakLongDistance(TM) customers since the campaign began in the late second quarter. We have also added more than 14,000 yakCell® customers and 18,000 yakCallingCard(TM) customers during that same time period. We continue to generate cash from our consolidated operations and have noticed an improvement in our United States business."
"We continue to see an increase in usage of our YakforFree(TM) service which had more than 40,000 registered users as of March 31, 2006, and currently, there are approximately 60,000 downloads for this service. At the end of the quarter, we had over 900 consumers upgrading to the yakToAnyone service and 1,200 yakUnlimited customers using our system. We continue to see consumer acceptance of our new VoIP products and a positive response to our marketing strategies. We look forward to substantially increasing our marketing efforts during the next year in order to maximize growth and shareholder value," concluded Zwebner
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