Trinsic, Inc. shows first quarter profit
Published 9:40 am Wednesday, June 1, 2005
By By Tim Cottrell
After several weeks of bad news, Trinsic Communications, Inc. (formerly Z-Tel) managed to lessen the blows over the past two weeks, with two major announcements.
The first of those announcements came almost two weeks ago with the news that Trinsic had posted a profit during the first quarter of this year.
Trey Davis, CEO for Trinsic, gave these statements via a press release on the company's website.
"We made great progress in the first quarter in executing our new strategy of becoming a more Verizon-centric company," Davis said. "Completing a Commercial Services Agreement with Verizon was a big step. We are also pleased with the progress that the sales teams are making in the small business market in the New York area, but that strategy only works if we continue to be diligent in managing our costs, which we continue to scrutinize. We implemented several cost-cutting measures in the first quarter and in April totaling around $10 million annually. We are confident that the measures we have taken will allow us to continue to successfully execute our strategy."
Part of Trinsic's New York strategy paid off last week as well, with the company signing its first major contract in the area.
According to another press release from the company, Trinsic signed a three-year, $250,000 term agreement with Weston United Community Renewal Inc., a Harlem-based, non-profit organization dedicated to providing the homeless with housing, health, employment and education services. The company will be supplying Weston United with its Advanced ONE SolutionTM including high-speed Internet access, local and long distance services, as well as its INconnect offering with approximately 120 IP phones with Cisco Systems' Call Manager ExpressTM software distributed among seven locations.
Mike Morgan, Vice President of Corporate Development for Trinsic, said he felt the agreement would be beneficial for both parties, and would only help Trinsic continue to grow in New York.
"We are going to be basically supplying them a suite of communication services," Morgan said. "Local and long distance phone service and high speed internet. We've really concentrated a lot in New York. We've sent some sale teams, this will be one of the first clients we're putting on our own network."
Frank Grillo, Trinsic's Chief Operating Officer, echoed Morgan's sentiments in the company press release.
"Trinsic's ability to provide cost-effective communications was, understandably, of paramount importance to a non-profit organization such as Weston United," Grillo said. "They also found the convenience of a single provider for all those services to be a boon for them. Trinsic is proud to be supplying Weston United with a fully managed, integrated communications solution."
While there were numerous reasons to be excited about Trinsic's news over the past two weeks, Morgan urged caution.
"The main reason we were able to turn a profit was we had a settlement on a lawsuit with SBC communications (a settlement of around $6 million)," Morgan said. "Long-term, we do anticipate turning a profit. For the next couple of quarters we probably will not report a net profit, although we will be EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) positive for the remainder of this year."
Davis concluded his press release by thanking everyone at Trinsic.
"We are pleased with the first quarter financial results as well as the previously announced accomplishments on the operating side of the business," Davis said. "I again need to thank the employees of Trinsic for their dedication and hard work."