NEW YORK-World Access Inc., Atlanta, which has been targeted recently by shareholder lawsuits
related to its recent acquisitions and share price volatility, said it expects most of its 1999 revenues to come from
companies it purchased in 1998.
“We expect $725 million in revenues from our core businesses in
1999,” said John D. Phillips, who became the company’s president and chief executive officer in mid-
December.
“(Some) 92 percent of those revenues will come from businesses that were not part of World
Access a year ago, and 81 percent of revenues will come from businesses that were not part of World Access a quarter
ago,” he said during the company’s announcement of quarterly and year-end results.
World Access purchased
four companies in 1998, and three of those transactions closed during the last quarter of 1998: Telco Systems Inc.,
NACT Telecommunications Inc. and Resurgens Communications Group, Phillips said. He was Resurgens’ CEO until
he joined World Access when it completed its acquisition of that company in mid-December.
Between Feb. 12 and
Feb. 15, five investment banks downgraded from “buy” or “accumulate” to
“neutral,” “hold” or “market perform” their recommendations to investors on
World Access stock. The shares have traded between a 52-week high of $40 each and a 52-week low of $7.56. The
stock, which is listed on the Nasdaq National Market, closed Feb. 17 at $7.87.
At least eight class-action
shareholder lawsuits were filed against World Access between Feb. 11 and Feb. 18, most of them in the U.S. District
Court for the Northern District of Georgia.
The World Access Equipment Group develops, manufactures and sells
products, including digital switches, billing and network management systems, cellular base stations, fixed wireless
local loop systems, intelligent multiplexers, microwave and millimeter wave radio systems. It plans to outsource the
manufacturing of its products.
The company earned $11.3 million in gross profits from carrier services and
equipment sales last quarter, double the amount reported during the final quarter of 1997. For the year, it reported gross
profits on equipment sales of about $56 million, compared with approximately $21 million for 1997.
World Access
said it took approximately $93 million in special charges last quarter, much of them related to its recent acquisitions.
They also included “costs associated with the consolidation and integration of [its] wireless radio business in
Wilmington, Mass., into Telco’s operations in Norwood, Mass., [and] the pending sale of [its] internal manufacturing
operations in Alpharetta, Ga., to an established electronics manufacturer.”
Net income from continuing
operations before special charges was about $2.2 million during the latest complete quarter, down slightly from the
nearly $2 million reported for the final quarter of 1997. However, for the full year, net income increased to more than
$13 million, up from about $8.3 million.
Fourth-quarter 1998 net income per diluted share was 8 cents, down from
10 cents during the same year ago quarter. For the year, net income per share was 59 cents, up from 45 cents during all
of 1997.
“Going forward, my role will be to continue to communicate our story to [Wall Street], to mentor our
equipment business, to pursue growth opportunities and to work with Jack Phillips on long-term strategy,” said
Chairman Steven A. Odum.
“This is a brand new company with brand new management and well-positioned
to execute our 1999 and future operating plans.”
Odum also said that four of World Access’ seven top
managers are new and come from companies it has acquired. Furthermore, World Access has added three new
outsiders to its board of directors, he said.
