TNS Revenue for fourth quarter 2004 increased 3.4%

Gross margin in the fourth quarter of 2004 of 54.0% increased 760 basis points from fourth quarter 2003 gross margin of 46.4%. Included in revenue and cost of sales for the fourth quarter 2003 is $1.5 million associated with certain telecommunication charges incurred by us and billed to customers in our Telecommunication Services Division. Excluding these charges, total revenue for the fourth quarter of 2004 increased 6.1% to $63.4 million from fourth quarter 2003 revenues of $59.8 million, and gross margin in the fourth quarter of 2004 increased 640 basis points from fourth quarter 2003 gross margin of 47.6%. Fourth quarter 2004 GAAP net income attributable to common stockholders was $2.4 million, or $0.09 per share, versus a fourth quarter 2003 GAAP net loss attributable to common stockholders of $3.1 million, or $(0.25) per share. Earnings before interest, taxes, depreciation, and amortization (EBITDA) before stock compensation expense for the fourth quarter of 2004 increased 14.6% to $17.9 million from fourth quarter 2003 EBITDA before stock compensation expense of $15.6 million. Adjusted earnings for the fourth quarter of 2004 increased 54.1% to $7.7 million, or $0.27 per share, from fourth quarter 2003 adjusted earnings of $5.0 million, or $0.40 per share. As previously announced during the quarter, the Company won the following customer contracts: -- An electronic foreign exchange transaction routing agreement with Hotspot FXi. -- An agreement to exclusively provide internal Signaling System 7 (SS7) signaling for ICG Communications, in addition to TNS acquisition of all ICGs customer contracts and certain assets relating its SS7 network. -- A renewal of an agreement with Metavante Corporation, the financial technology subsidiary of Marshall & Ilsley Corporation, to be the primary transaction network provider for dial ATM traffic in the U.S. -- A 5-year agreement with PayPoint in the United Kingdom to provide dial-up connectivity between its 12,000 retail terminals and its headquarters. Financial Review: -- Fourth quarter 2004 total revenue increased 3.4% to $63.4 million from fourth quarter 2003 revenue of $61.4 million. Included in revenue are the following components: -- Revenue from the International Services Division increased 45.4% to $22.3 million from fourth quarter 2003 revenue of $15.4 million. ISD revenue sharply increased through higher volumes from POS customers mainly in the U.K., Australia, France, Spain and Italy. -- Revenue from the Financial Services Division increased 19.5% to $6.8 million from fourth quarter 2003 revenue of $5.7 million through growth in the number of customer connections. -- Revenue from the Telecommunication Services Division decreased 8.4% to $8.7 million from fourth quarter 2003 revenue of $9.5 million. Included in TSD revenues for the fourth quarter 2003 is $1.5 million associated with certain telecommunication charges incurred by us and billed to our TSD customers. Excluding these charges, TSD revenue for the fourth quarter of 2004 increased 8.8% to $8.7 million from fourth quarter 2003 revenues of $8.0 million. -- Revenue from the POS Division decreased 16.9% to $25.6 million on 1.68 billion transactions from $30.8 million in fourth quarter 2003 on 2.0 billion transactions. The decrease in fourth quarter 2004 POS Division revenue is primarily due to lower transaction volumes with a major customer.