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Start Time: 08:30
End Time: 09:15
EarthLink, Inc. (ELNK)
Q1 2014 Earnings Conference Call
May 06, 2014, 08:30 AM ET
Joseph F. Eazor - CEO and President
Bradley A. Ferguson - EVP and CFO
Louis M. Alterman - SVP of Finance and Treasurer
Michael Crawford - B. Riley Caris
Barry Sine - Drexel Hamilton
Donna Jaegers - D.A. Davidson & Co.
Lance Vitanza - CRT Capital Group LLC
Arun Seshadri - Credit Suisse AG
Anthony Klarman - Deutsche Bank AG
Previous Statements by ELNK
» EarthLink Holdings Management Discusses Q4 2013 Results - Earnings Call Transcript
» EarthLink Management Discusses Q3 2013 Results - Earnings Call Transcript
» EarthLink Management Discusses Q2 2013 Results - Earnings Call Transcript
» EarthLink Management Discusses Q1 2013 Results - Earnings Call Transcript
I will now turn the conference over to Mr. Louis Alterman, Senior Vice President of Finance and Treasurer for EarthLink. Please go ahead, sir.
Louis M. Alterman
Thanks, and welcome to our call. During today's call, we will refer to earnings slides that are available for you to view in the Investor Relations section of our website at earthlink.net. Following our comments, there will be an opportunity for questions.
Before we continue, I would like to point out that certain statements contained in this earnings release and on this conference call are forward-looking statements, rather than historical facts. They are subject to risks and uncertainties that could cause actual results to differ materially from those described.
With respect to such forward-looking statements, the company seeks the protections afforded by the Private Securities Litigation Reform Act of 1995. These risks include a variety of factors, including competitive developments and risk factors listed in the company's SEC reports and public releases. Those lists are intended to identify certain principal factors that could cause actual results to differ materially from those described in the forward-looking statements, but are not intended to represent a complete list of all risks and uncertainties inherent to the company's business.
In an effort to provide useful information to investors, our comments today also include non-GAAP financial measures. For details on these measures, including why we use them and a reconciliation to the most comparable GAAP measures, please refer to our earnings release and the Form 8-K that has been furnished to the SEC, both of which are available on our website at earthlink.net.
After Joe's opening comments, Brad Ferguson, our Chief Financial Officer, will discuss the quarter's financial results.
Now I'd like to hand things over to Joe Eazor, our President and CEO.
Joseph F. Eazor
Thank you, Louis. Good morning to everyone joining us on the call. Four months into the job, I continue to be very excited to be part of EarthLink and I'm even more bullish on our opportunities than I was the day I joined.
I'll start this morning by saying that I'm generally pleased with the financial results of the quarter. We focused on driving operating improvements in a number of areas, which are starting to show up in our results.
Though revenue is not yet where I wanted it to be, we took some good steps to lock down more of the base to protect our future revenue. We have a team focused on improving cost of revenue and we've made good progress and successfully begun to lower our costs.
We initiated an intense focus on managing CapEx and cash flow and our pleased with our results in the quarter. Brad will take you through the details of all this in a couple of minutes.
So over the last few months, I've undertaken a thorough strategic, operational and financial review of the company. To me it's clear that we have tremendous opportunity to create significant value and we have a lot of work to do to get there to be the great company that we can be.
At the highest level, we must have a focused strategy that's targeted the market with the market opportunities aligned with where we have true competitive advantages. We must deliver maximum value to our customers and our employees. We must simplify our operations to become operationally excellent and we must look for ways to optimize our portfolio of products and businesses.
To be clear, this means that we will stop doing certain things recognizing that we cannot be everything to everybody. I will speak to each of these in more detail beginning on Page 2. Let me start with our strategic focus and intent.
After conducting a thorough review of our products in markets and then spending significant time with our customers, including a number of CIOs from our largest customers, it is clear that we have some industry-leading products capabilities. We are a recognized leader in managed network services.
At our core we are outstanding at optimizing and managing networks across multiple locations on a national or regional basis. This not only includes momentum and success with the who's who list of retail brands, it also includes other industries where our customers have multiple location and are dependent on the success of the network, like retail banking, retail healthcare, multi-location professional services and so on.
This is a growing and healthy market. Even though we have good momentum, we barely scratched the surface with an average share in existing customers of less than 10% and numerous other potential customers that can benefit from our services.
Additionally, we have a number of strong cloud services. They're relevant and naturally fit with our managed network services. These include Hosted Voice over IP, network and other data analytics, disaster recovery, security at hosted relevant applications. We're in the early stages of pursuing these areas that have tremendous opportunities for growth. Therefore, our strategy is to focus on and invest in managed network and relevant cloud services as a primary growth platform going forward.