“A Spate of Factors” Vista Partners November 2018 Macro Economic and Investment Newsletter 11-21-18

Vista Partners (“Vista”) has published November’s FREE Macroeconomic & Investment Monthly Newsletter, “A Spate of Factors.”

Vista’s monthly newsletter contains investment considerations for Banks, Biotech, Cloud Services, Energy, Fintech, Healthcare, Manufacturing, Mining, Natural Resources, Oil & Gas, Real Estate, Silver, and Technology.

Vista Partners centers its Coverage on the Dow 30 Components, Select Emerging Growth Companies & Vista’s Featured Companies, with exclusive, broad-based commentary from Managing Director, John F. Heerdink, Jr.

In November’s edition of the Macroeconomic & Investment Newsletter, Mr. Heerdink states,

“This cooling is due to a spate of factors. Rising interest rates and”…….” Read full newsletter.

Companies Featured in November’s Newsletter:Atossa Genetics, Inc. (NASDAQ: ATOS)  | Cisco (CSCOFirst Majestic Silver Corp. (NYSE: AG) | Fusion, Inc. (NASDAQ: FSNN) | Roche (RHBBY) | Tesla (TSLA) & Travelers (TRV)

Vista Partners publishes 100% of its content free. Vista Partners offers a wealth of mixed-media resources on the Dow 30 & Select Emerging Growth Companies. To receive FREE email updates from Vista, please sign up at VistaPGlobal.com/signup.

About Vista Partners LLC:

Founded in 2005, Vista Partners LLC (“Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, and Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

We encourage readers to view a complete list of disclaimers and disclosures on the Vista Partners website at VistaPGlobal.com/disclaimer.

Please follow Vista Partners on Twitter @VistaPResearch to receive updates, thoughts, and ideas on Dow 30 Components, Select Emerging Growth Companies, Vista’s Featured Companies, International Companies, Pre-IPO Companies & Strategic Companies.

Contact:

inquiries@VistaPGlobal.com




Integrated Cloud Solutions Provider Fusion Reports Progress in Q3 2018

NYC-based Fusion (FSNN), a leading provider of integrated cloud solutions to small, medium and large businesses, is the industry’s single source for the cloud. Fusion’s advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud communications, contact center, cloud connectivity, and cloud computing. Fusion’s innovative, yet proven cloud solutions lower their customers’ cost of ownership and deliver new levels of security, flexibility, scalability, and speed of deployment.

Fusion (FSNN), a leading cloud services provider, today announced financial results for the three and nine months ended September 30, 2018.

Third Quarter 2018 Highlights

  • Revenue was $143.4 million, up 19% compared to $120.8 million in Q2 2018 and up 28% compared to $112.4 million in Q3 2017
  • Gross margin was 49.1%, compared to 45.2% in Q2 2018 and 47.9% in Q3 2017
  • Net loss attributable to common stockholders was $18.1 million, or $0.23 per share, compared to a net loss of $34.5 million, or $0.59 per share in
  • Q2 2018 and a net loss of $1.5 million, or $0.06 per share in Q3 2017
  • Excluding transaction and integration-related expenses, non-GAAP net loss attributable to common stockholders was $11.3 million, or $0.14 per share
  • Adjusted EBITDA (a non-GAAP measure) was $30.6 million, or 21.3% of revenue, compared to $26.6 million in Q2 2018 and $30.1 million in Q3 2017
  • Capital expenditures were 7.6% of revenue, compared to 8.8% of revenue in Q3 2017
  • Unlevered Free Cash Flow (a non-GAAP measure), defined as Adjusted EBITDA less capital expenditures, was $19.7 million, or 13.7% of revenue
  • Achieved integration-related cost synergies with an annualized run-rate of approximately $27 million exiting Q3 2018, representing 77% of the $35 million of targeted acquisition-related synergies within 12 months following the closings
  • Fusion has identified additional integration-related synergy savings that were not part of its original estimate, and now expects to exceed its targeted synergies by at least 30%
  • Average monthly revenue per customer (ARPU) was $303, compared to $309 in Q2 2018 and $298 in Q3 2017. Excluding Fusion’s customer base in Canada, ARPU was $628
  • Monthly Recurring Revenue (MRR) bookings were $2.1 million, up sequentially from $2.0 million in Q2 2018 (inclusive of the full Q2 2018 results)
  • More than 80% of Fusion’s total bookings in September consisted of higher-margin services, while approximately 40% of these sales had an MRR over $1,000
  • Approximately 55% of the MRR of all new bookings represented sales of multi-product solutions
  • Strong progress in cross-selling and upselling, with nearly 30% growth in bookings to existing customers in Q3 2018 compared to Q2 2018
  • Churn was 1.3%, compared to 1.5% in Q2 2018 and 2.3% in Q3 2017
  • Significant improvement in the customer experience, as reflected in higher first call resolution rates, shorter call wait times, and higher CSAT (customer satisfaction) scores

Matthew Rosen, Fusion’s Chairman, and Chief Executive Officer stated, “The third quarter marked an important milestone for Fusion, as we are reporting our first full quarter of consolidated results following the closing of the Birch and MegaPath acquisitions, and our strong performance is beginning to demonstrate the power of our combined platform. Our revenue trend has now largely been stabilized, and we showed sequential, month-over-month growth in MRR in September. Our churn rate improved materially, while bookings, backlog and ARPU were all solid. We exited the quarter having achieved 77% of our pre-merger synergy target, and since we have uncovered a substantial amount of additional integration-related cost savings, we now expect to outperform our original synergy target by at least 30%. We have a lot of exciting opportunities ahead of us thanks to our strong positioning in the market. Our unique Single Source for the Cloud approach, combined with the benefits of our greater scale, has significantly enhanced our competitive advantage. The investments we’re making in our sales channels, service delivery, and customer care are paying dividends. We are seeing more sales opportunities than ever before, especially for larger, higher ARPU deals for multiple services. Our cross-selling and upselling efforts have gotten off to a fantastic start, and we have the right strategy in place to gain a much larger share of our existing customers’ spend. Finally, we are advancing our technology leadership and innovation to launch new, disruptive software solutions in 2019, keeping Fusion ahead of the curve in the marketplace.”

Keith Soldan, Fusion’s Chief Financial Officer, said, “The strength of the third quarter results clearly illustrates execution of our strategic plan through enhanced distribution, selling multiple products as an integrated solution, with continued investment in high-ROI customer care initiatives, all while maximizing synergies and shareholder value. The continued successful execution of our plan, with growing Adjusted EBITDA and low capital expenditures, positions Fusion to deliver increasing levels of free cash flow in the quarters to come. We continue to expect an annualized revenue run rate of at least $575 million and an Adjusted EBITDA margin of 25% exiting the second quarter of 2019, with potential for upside to the margin.

Third Quarter 2018 Financial Results

  • Revenue was $143.4 million, up 28% compared to $112.4 million in Q3 2017. The increase was primarily due to the contribution of revenue from Fusion and MegaPath.
  • Gross margin was 49.1% for the three months ended September 30, 2018, compared to 47.9% in the year-ago period. The increase is primarily due to the realization of cost of revenue synergies within the quarter through network consolidation and network grooming throughout Fusion’s footprint, along with a slight shift in revenue mix due to accelerating sales of higher-margin cloud services.
  • Selling, General and Administrative expense was $46.8 million, compared to $26.8 million in Q3 2017. The increase was primarily due to the contribution from Fusion and MegaPath, and included $6.8 million of acquisition transaction and restructuring costs.
  • Net loss attributable to common stockholders was $18.1 million, or $0.23 per share on a basic and diluted basis, compared to net loss to common stockholders in Q3 2017 of $1.5 million, or $0.06 per share on a basic and diluted basis. Excluding acquisition transaction and restructuring costs, net loss attributable to common stockholders was $11.3 million, or $0.14 per share.
  • Adjusted EBITDA was $30.6 million, compared to $30.1 million in Q3 2017 (see definition and further discussion about the presentation of adjusted EBITDA, a non-GAAP term, below). Capital expenditures totaled $10.9 million, or 7.6% of revenue, compared to $9.9 million, or 8.8% of revenue in Q3 2017. Unlevered Free Cash Flow, defined as Adjusted EBITDA less capital expenditures, was $19.7 million, or 13.7% of revenue.
  • Total cash and equivalents at September 30, 2018, were $15.4 million, compared to $5.8 million at December 31, 2017. Fusion paid $6.9 million in principal amortization payments on its credit facilities during Q3 2018.

Further details about the Company’s financial results are available in its quarterly report on Form 10-Q, which will be available in the investor relations section of the Company’s website at ir.fusionconnect.com.

Shares of FSNN closed trading today at $2.62/share up 6.07% and are up in the aftermarket at $2.90/share.

To learn more about Fusion (Nasdaq: FSNN) and to track its progress please visit the Vista Partners Fusion (FSNN) Coverage Page.

Fusion Reports Third Quarter 2018 Financial Results

Revenue up 28% Year over Year; Additional Acquisition-related Cost Savings Now Expected to Drive At Least 30% Upside to Original Synergy Target NEW YORK, Nov. 13, 2018 –…

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Fusion Wins 3-Year Contract to Provide Managed Communications Solution for a Leading Healthcare Company

NYC based Fusion (NasdaqGM: FSNN), a leading provider of integrated cloud solutions to small, medium and large businesses, is a  Single Source for the Cloud®. Fusion’s advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud communications, contact center, cloud connectivity and cloud computing. Fusion’s innovative, yet proven cloud solutions lower their customers’ cost of ownership and deliver new levels of security, flexibility, scalability, and speed of deployment.

Fusion announced recently that it has been awarded a more than $1.5 million, three year agreement to deliver Fusion’s advanced managed communications solution to over 150 locations of a leading healthcare company providing psychiatric, dependency and behavioral health services. The healthcare company cited Fusion’s flexibility in developing specialized solutions to meet the highly regulated company’s rigorous requirements, Fusion’s keen understanding of the demands of the healthcare industry and the experience and expertise of Fusion’s highly trained technology professionals who were charged with implementing the solution within the company’s challenging time schedule.

The company further cited Fusion’s consultative, solutions-based sales team for identifying customer pain points and developing a clear and comprehensive plan to deliver a simple solution to the company’s complex communications problems. It was also impressed by Fusion’s straightforward, cost-efficient pricing model and strong customer support, with comprehensive training and 24x7x365 live monitoring and maintenance and customer service. Fusion’s Quality of Service guarantees for 100% uptime supported the company’s confidence in making the change to Fusion.

Dan Foster, Fusion’s Chief Revenue Officer, stated, “We’re delighted to serve this leading health care organization, which places the same focus as our own technology team on the collaboration and flexibility required to create the company’s highly valued service delivery system. Fusion’s experience in delivering comprehensive, specialized healthcare solutions has won the confidence of major healthcare systems across the United States, and we look forward to growing with this expanding community of care, which is synonymous with excellence, customer service and an unparalleled commitment to its patients and community.”

To learn more and to track Fusion (FSNN)’s progress please visit the Vista Partners Dedicated Coverage Page for Fusion.

Fusion Wins Over $1.5 Million, Three Year Contract to Provide Managed Communications Solution for a Leading Healthcare Company

The company further cited Fusion’s consultative, solutions-based sales team for identifying customer pain points and developing a clear and comprehensive plan to deliver a simple solution to the company’s complex communications problems.  It was also impressed by Fusion’s straightforward, cost-efficient..

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“…Amidst Market Volatility” Vista Partners October Macro Economic and Investment Newsletter 10-18-18

Vista Partners (“Vista”) has published October’s FREE Macroeconomic & Investment Monthly Newsletter, “…Amidst Market Volatility.”

Vista’s monthly newsletter contains investment considerations for Banks, Biotech, Cloud Services, Energy, Fintech, Healthcare, Manufacturing, Mining, Natural Resources, Oil & Gas, Real Estate, and Technology.

Vista Partners centers its Coverage on the Dow 30 Components, Select Emerging Growth Companies & Vista’s Featured Companies, with exclusive, broad-based commentary from Managing Director, John F. Heerdink, Jr.

In October’s edition of the Macroeconomic & Investment Newsletter, Mr. Heerdink states,

“The U.S. economy is not the stock market.”…….” Read full newsletter.

Companies Featured in September’s Newsletter: | Amazon (AMZN) | Apple (AAPL) | Atossa Genetics, Inc. (NASDAQ: ATOS)  | First Majestic Silver Corp. (NYSE: AG) | Fusion, Inc. (NASDAQ: FSNN) | JPMorgan Chase (JPM).

Vista Partners publishes 100% of its content free. Vista Partners offers a wealth of mixed-media resources on the Dow 30 & Select Emerging Growth Companies. To receive FREE email updates from Vista, please sign up at VistaPGlobal.com/signup.

About Vista Partners LLC:

Founded in 2005, Vista Partners LLC (“Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, and Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

We encourage readers to view a complete list of disclaimers and disclosures on the Vista Partners website at VistaPGlobal.com/disclaimer.

Please follow Vista Partners on Twitter @VistaPResearch to receive updates, thoughts, and ideas on Dow 30 Components, Select Emerging Growth Companies, Vista’s Featured Companies, International Companies, Pre-IPO Companies & Strategic Companies.

Contact:

inquiries@VistaPGlobal.com




Cloud Services Provider Fusion Signs Contract With Leading Fashion & Lifestyle Brand

Fusion (FSNN), a leading provider of cloud services, announced recently that it has signed a three year, $750,000 contract with a leading fashion and lifestyle brand to connect 29 of the brand’s locations to the cloud. The fashion company selected Fusion over multiple providers to deliver a secure, PCI-compliant cloud-based solution with Quality of Service guarantees that ensure 100% uptime.

Fusion reported that its award-winning SD-WAN solution was chosen to achieve significant improvements in voice and video quality, a key concern for the company, which employs innovative multimedia promotions to market its brand. The company further cited the solution’s ease and speed of deployment and the professionalism of Fusion’s dedicated implementation team. Fusion’s SD-WAN’s efficient bandwidth utilization ensures the highest level of application performance for the company while reducing costs. Eager to avoid the finger pointing that so often results in multi-vendor environments, the company was impressed with Fusion’s single source, end to end managed solution, which seamlessly integrates Fusion’s WiFi and fully diverse Internet and Security solutions with its advanced SD-WAN offering.

Dan Foster, Fusion’s Chief Revenue Officer stated, “This well-known fashion company is a true original, known for innovation and for having developed a unique approach to delivering its vibrant lifestyle brand, incorporating video, the web, music and events. We are honored to have earned the company’s confidence in delivering our all-in solutions and look forward to finding new and innovative ways to help support the company’s growth

Fusion Wins $750,000, Three Year Contract to Provide Single Source Cloud Solutions for High End Fashion and Lifestyle Brand

Fusion (FSNN), a leading provider of cloud services, announced today that it has signed a three year, $750,000 contract with a leading fashion and lifestyle brand to connect 29 of the brand’s locations to the cloud.  The fashion company selected Fusion over multiple providers to deliver a secure, PCI-compliant..

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“Superfirms’ Domination Influences Economic Factors”

Vista Partners (“Vista”) has published September’s FREE Macroeconomic & Investment Monthly Newsletter, “Superfirms’ Domination Influences Economic Factors.”

Vista’s monthly newsletter contains investment considerations for Banks, Biotech, Cloud Services, Energy, Fintech, Healthcare, Manufacturing, Mining, Materials, Nuclear Energy, Real Estate, and Technology.

Vista Partners centers its Coverage on the Dow 30 Components, Select Emerging Growth Companies & Vista’s Featured Companies, with exclusive, broad-based commentary from Managing Director, John F. Heerdink, Jr.

In September’s edition of the Macroeconomic & Investment Newsletter, Mr. Heerdink states,

“An imminent freeze on stock buybacks could challenge the market. With the third quarter coming to a close, as of October 5…….” Read full newsletter.

Companies Featured in September’s Newsletter: 3M (MMM) | Amazon (AMZN) | Apple (AAPL) | Atossa Genetics, Inc. (NASDAQ: ATOS) | | First Majestic Silver Corp. (NYSE: AG) | Fusion, Inc. (NASDAQ: FSNN) | Microsoft (MSFT) | UnitedHealth Group (UNH).

Vista Partners publishes 100% of its content free. Vista Partners offers a wealth of mixed-media resources on the Dow 30 & Select Emerging Growth Companies. To receive FREE email updates from Vista, please sign up at VistaPGlobal.com/signup.

About Vista Partners LLC:

Founded in 2005, Vista Partners LLC (“Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, and Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

We encourage readers to view a complete list of disclaimers and disclosures on the Vista Partners website at VistaPGlobal.com/disclaimer.

Please follow Vista Partners on Twitter @VistaPResearch to receive updates, thoughts, and ideas on Dow 30 Components, Select Emerging Growth Companies, Vista’s Featured Companies, International Companies, Pre-IPO Companies & Strategic Companies.

Contact:

inquiries@VistaPGlobal.com




Leading Transportation Company Hires Cloud Services Provider Fusion

NYC based Fusion (Nasdaq: FSNN) is a leading provider of integrated cloud solutions to small, medium and large businesses.  Fusion’s advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud communications, contact center, cloud connectivity, and cloud computing. Fusion’s innovative, yet proven cloud solutions lower their customers’ cost of ownership and deliver new levels of security, flexibility, scalability, and speed of deployment.

Fusion announced recently today that it has secured a $1.1 million, three-year cloud solutions agreement to provide cloud voice and connectivity services to a major transportation company delivering third-party logistical services to businesses across North America. The transportation company cited Fusion’s engineering expertise in designing a flexible, easy to implement and use a technology solution that will facilitate and expedite the company’s move to the cloud. It also cited the professionalism of Fusion’s implementation team, which is providing dedicated project management and support for rapid deployment of Fusion’s integrated cloud voice and connectivity solutions.

Following a thorough review of service providers, it was reported that the transportation company chose Fusion for its comprehensive portfolio of leading edge, single source cloud solutions and its ability to deliver on its commitment to meet the company’s rigorous service delivery requirements. The company apparently indicated that it believes Fusion’s scalable, all-in approach will facilitate its plans for the adoption of additional cloud services to support the company’s growth over time. Deployment of Fusion’s fully integrated cloud solutions removes the complexities of operating in multi-vendor environments and will allow the expanding transportation company to focus on its core business as it optimizes its communications network.

Dan Foster, Fusion’s Chief Revenue Officer stated, “We’re pleased to have earned this leading transportation company’s confidence in migrating to the cloud with Fusion’s award-winning single source cloud solutions. Increasingly, we find that companies are recognizing the value of acquiring multiple services from a single provider, eliminating the frustrating finger-pointing that so often occurs in multi-vendor environments. Fusion’s consultative and dedicated sales, technology and support team delivered a customized solution that took into account the company’s present cloud-readiness while preparing for future adoption of additional advanced cloud services. We’re confident that Fusion will be able to increase productivity across the enterprise while controlling costs, and help the company scale as it grows.”

Fusion Wins $1.1 Million, Three Year Contract to Provide Cloud Communications Solutions for a Leading Transportation Company

NEW YORK, Sept. 25, 2018 (GLOBE NEWSWIRE) —  Fusion (FSNN), a leading provider of cloud services, announced today that it has secured a $1.1 million, three year cloud solutions agreement to provide cloud voice and connectivity services to a major transportation company delivering third party logistical..

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Fusion Scores 3-year Cloud Solutions Agreement With “Major Family Entertainment Center & Restaurant Chain”

NYC-based Fusion is a leading provider of integrated cloud solutions to small, medium and large businesses, and is a Single Source for the Cloud®. Fusion’s advanced, proprietary cloud service platform enables the integration of leading edge solutions in the cloud, including cloud communications, contact center, cloud connectivity and cloud computing. Fusion’s innovative, yet proven cloud solutions lower their customers’ cost of ownership and deliver new levels of security, flexibility, scalability, and speed of deployment.

Fusion recently announced that it has secured a $1.1 million, three-year cloud solutions agreement with a major family entertainment center and restaurant chain. The popular chain looked to Fusion to consolidate its communications services across several hundred locations in the United States. The chain is currently reviewing a multiple site deployment in Canada to further support its network optimization efforts.

Fusion’s dedicated solutions integration team facilitated the onboarding of the account for an expedited installation process, exceeding the customer’s expectations for rapid deployment and seamless integration with existing applications and workflows. Fusion’s all-in, fully integrated solution met the chain’s requirement for a single source to provide the highest quality services at competitive pricing across its rapidly expanding chain of popular establishments. The chain also looked for a solution that could support the integration of locations across the border into Canada, a growing territory for the well-known entertainment and restaurant chain.

Dan Foster, Fusion’s Chief Revenue Officers stated, “We’re proud to help the management team of this major organization focus on serving their growing base of customers, relieving them of the need to divert precious resources to manage their wide-ranging and expanding voice and connectivity network. We look forward to growing with the company and improving productivity across the enterprise with the always-on, reliable communications solutions required for businesses to compete, succeed and grow.”

To learn more about Fusion (Nasdaq: FSNN) and to track its progress please visit the Vista Partners Coverage Pages. 

Fusion Wins $1.1 Million, Multi-Year Contract to Provide Cloud Communications Solution for a Major Restaurant Brand

Fusion (FSNN), a leading provider of cloud services, announced today that it has secured a $1.1 million, three-year cloud solutions agreement with a major family entertainment center and restaurant chain. The popular chain looked to Fusion to consolidate its communications services across several hundred..

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Vista Partners Publishes August’s FREE Macroeconomic & Investment Monthly Newsletter – “Robust Economy, Resilient Market”

Vista Partners (“Vista”) has published August’s FREE Macroeconomic & Investment Monthly Newsletter, “Robust Economy, Resilient Market.”

Vista’s monthly newsletter contains investment considerations for Banks, Biotech, Cloud Services, Energy, Fintech, Healthcare, Manufacturing, Mining, Materials, Nuclear Energy, Real Estate, and Technology.

Vista Partners centers its Coverage on the Dow 30 Components, Select Emerging Growth Companies & Vista’s Featured Companies, with exclusive, broad-based commentary from Managing Director, John F. Heerdink, Jr.

In August’s edition of the Macroeconomic & Investment Newsletter, Mr. Heerdink states,

“The market seems to have had its fantods and now is back to looking bullish. To be sure, fears and worries about a trade conflict have….”Read full newsletter.

Companies Featured in August’s Newsletter: Atossa Genetics, Inc. (NASDAQ: ATOS) | DowDupont Holding Company (DWDP) |First Majestic Silver Corp. (NYSE: AG) | Fusion, Inc.(NASDAQ: FSNN) | Goldman Sachs (GS) & Health Insurance Innovations, Inc. (HIIQ).

Vista Partners publishes 100% of its content free. Vista Partners offers a wealth of mixed-media resources on the Dow 30 & Select Emerging Growth Companies. To receive FREE email updates from Vista, please sign up at VistaPGlobal.com/signup.

About Vista Partners LLC:

Founded in 2005, Vista Partners LLC (“Vista”) is a California Registered Investment Advisor based in San Francisco. Vista delivers timely and relevant insights via the website: www.vistapglobal.com with daily stories, weekly market updates, monthly macroeconomic newsletters, and Vista’s proprietary equity and market research to help you stay informed and stay competitive. Vista’s mission is to invest partner capital while arming investors with a comprehensive global financial perspective across all market sectors. Vista also seeks to provide select issuers with actionable advice regarding fundamental development, corporate governance, and capital market directives.

We encourage readers to view a complete list of disclaimers and disclosures on the Vista Partners website at VistaPGlobal.com/disclaimer.

Please follow Vista Partners on Twitter @VistaPResearch to receive updates, thoughts, and ideas on Dow 30 Components, Select Emerging Growth Companies, Vista’s Featured Companies, International Companies, Pre-IPO Companies & Strategic Companies.

Contact:

inquiries@VistaPGlobal.com




Leading Cloud Services Provider Fusion’s Financial Results for Three & Six Months Ended June 30, 2018

Fusion (NasdaqGM: FSNN), a leading cloud services provider, recently announced financial results for the three and six months ended June 30, 201.  Note that on May 4, 2018, Fusion completed its acquisition of the Cloud and Business Services business of Birch Communications Holdings, Inc. (“Birch”). Due to the nature and structure of that transaction, Birch is considered acquirer of Fusion under generally accepted accounting standards. Accordingly, the financial statements (other than equity) they presented are those of Birch for the current and prior periods with the current period giving effect to the acquisition of Fusion as of May 4, 2018, and MegaPath Holding Corporation, Inc. (“MegaPath”) as of June 15, 2018.

Here are the Q2 2018 Highlights presented:

  • Revenue was $120.8 million, compared to $102.9 million in Q1 2018 and $116.7 million in Q2 2017
  • Gross margin was 45.2%, compared to 46.4% in Q1 2018 and 46.0% in Q2 2017
  • Net loss attributable to common stockholders was $34.5 million, or $0.59 per share, compared to a net loss of $4.0 million, or $0.33 per share in
  • Q1 2018 and a net loss of $4.7 million, or $0.19 per share in Q2 2017
  • Excluding the retirement of debt obligations, non-GAAP net loss attributable to common stockholders was $20.1 million, or $0.34 per share
  • Adjusted EBITDA (a non-GAAP measure) was $26.6 million, or 22.0% revenue, compared to $26.7 million in Q1 2018 and $28.1 million in Q2 2017
  • Unlevered Free Cash Flow (a non-GAAP measure), defined as Adjusted EBITDA less capital expenditures, was $18.6 million, or 15.4% of revenue, compared to $19.3 million in Q1 2018 and $18.2 million in Q2 2017
  • Acquisition integration proceeding ahead of schedule in key areas including: Service Delivery; Network & Engineering; Sales, Marketing and Product; HR and Administration; and Finance and Accounting
  • Achieved integration-related cost synergies with an annualized run-rate of approximately $14 million exiting Q2 2018, representing 40% of the $35 million of targeted acquisition-related synergies within 12 months following the closings
  • Average monthly revenue per customer (ARPU) was $309, compared to $203 in Q1 2018
  • Churn was at the mid-1% level, compared to more than 2% in Q2 2017

Matthew Rosen, Fusion’s Chairman & CEO stated, “Fusion delivered solid second quarter financial results, demonstrating the progress we have made in stabilizing the Birch business, as we have indicated we would. Our integration of Birch and MegaPath is running ahead of schedule, having made significant progress toward several major milestones in terms of real estate consolidation, network interconnection, sales and marketing, and financial operations. As a result, less than 60 days after closing Birch, we had already achieved nearly 40% of our original 12-month cost synergy target of approximately $35 million for the acquisitions, which we now expect to exceed as we continue to find incremental savings opportunities since the acquisitions closed. With integration well underway, we are focusing on driving Fusion’s growth by increasing our emphasis on our Product, Sales & Marketing organization, including the addition of Dan Foster as our Chief Revenue Officer and key hires in our Partner sales channel group. We anticipate that these efforts will further strengthen our bookings and churn performance, where we have already seen good progress, and lead to top-line expansion. We are also leveraging our intellectual property to accelerate our product and solution innovation, based on our proprietary software for Unified Communications, contact center, secure team messaging, and collaboration. We believe these measures, along with Fusion’s greatly-enhanced scale, bode well for our future growth trends,” Mr. Rosen concluded.

Here are the Q2 2018 Financial Results presented:

  • Revenue in Q2 2018 was $120.8 million, compared to $116.7 million in Q2 2017. The increase was primarily due to $17.7 million of revenue from pre-merger Fusion and $1.6 million of revenue from MegaPath, partially offset by churn impact.
  • Gross margin was 45.2% for the three months ended June 30, 2018, compared to 46.0% for the same period in 2017. The decrease is primarily due to the fixed cost network becoming a higher percentage of the cost of revenue primarily due to the spinoff of the former Birch consumer business on May 4, 2018. Management expects these costs to decline as it aligns its fixed network costs with its business.
  • Selling, General, and Administrative expense were $43.0 million, compared to $29.0 million in Q2 2017. The increase was primarily due to $8.9 million of acquisition transaction costs, $0.9 million in restructuring costs, $5.7 million of expenses attributable to Fusion, and $1.6 million of expenses attributable to MegaPath, partially offset by a lower cost base of $2.7 million.
  • Net loss attributable to common stockholders was $34.5 million, or $0.59 per share on a basic and diluted basis, compared to net loss to common stockholders in Q2 2017 of $4.7 million, or $0.19 per share on a basic and diluted basis. Excluding the retirement of debt obligations, net loss attributable to common stockholders was $20.1 million, or $0.34 per share.
  • Adjusted EBITDA in Q2 2018 was $26.6 million, compared to $28.1 million in Q2 2017 (see definition and further discussion about the presentation of adjusted EBITDA, a non-GAAP term, below). Consolidated capital expenditures totaled $8.0 million in Q2 2018, or 6.6% of revenue, compared to capital expenditures for the former stand-alone Birch of $7.3 million in Q1 2018, and $9.9 million in Q2 2017.
  • Total cash and equivalents at June 30, 2018, were $13.5 million, compared to $5.8 million at December 31, 2017. During the second quarter, Fusion retired approximately $443 million in Birch debt and accrued interest, and approximately $89 million of pre-merger Fusion debt, while incurring an additional $62 million of debt related to the acquisition of MegaPath.
  • Due to the timing of scheduled principal amortization payments, Fusion made no pay downs on its new credit facilities during the second quarter. Going forward, Fusion expects its scheduled principal amortization payments to be approximately $6.9 million per quarter.
  • Further details about the Company’s financial results are available in its quarterly report on Form 10-Q at www.sec.gov.

To learn more about Fusion (Nasdaq: FSNN) and to track its progress please visit the Vista Partners Coverage Pages. 

Fusion Reports Second Quarter 2018 Financial Results

NEW YORK, Aug. 14, 2018– Fusion, a leading cloud services provider, today announced financial results for the three and six months ended June 30, 2018.. On May 4, 2018, Fusion completed its acquisition …..

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