Editor's Pick: Markets: The week that was (16-20/11/09)
(FCOM.L) First Communications Inc Buy/Sell
Add to portfolio Set Alert Level 2 Desktop Trader
Summary
|
|
|||||||||||||||||||||||||||||||||||||||||||
|
|
|||||||||||||||||||||||||||||||||||||||||||
| Date/Time | Headline | Source |
|---|---|---|
| 07-10-09 | RNS |
|
|
RNS Number : 4208A First Communications, Inc. 07 October 2009 First Communications deploys Alcatel-Lucent next-generation optical transport solution as part of new high-capacity, low latency network from Chicago to New Jersey Akron, Ohio and Murray Hill, N.J., October 7, 2009 - Alcatel-Lucent (Euronext and NYSE: ALU) and First Communications today announced the successful deployment of Alcatel-Lucent's advanced multi-reach dense wavelength division multiplexing (DWDM) platform for First Communications' new high-capacity, low latency network between Chicago and Newark/New York City. Upgradeable to 40Gbit/s, the new network is running 1G to 10G services today expanding First Communications' reach to transport customers in New Jersey, Pennsylvania, Ohio and Illinois via 14 cities including Chicago, Cleveland, Akron, Pittsburgh, Reading, Morristown, and Newark. First Communications plans to expand the transport services over more of its metro and long-haul fiber network spanning 4,500 route miles based on customer demand. Targets include upstate New York, Philadelphia, Wilmington, Baltimore, Washington, D.C., Ashburn, Va. and east coast connectivity such as the Trans-Atlantic crossings on the New Jersey coast. "The completion of this initial network deployment is a key milestone in our strategy to leverage the network assets obtained with the First Telecom Services acquisition in 2008. This event represents our continued commitment to the investment in infrastructure that will enable First Communications to provide quality service to our enterprise and carrier customers," said Ray Hexamer, Chief Executive Officer of First Communications. The Alcatel-Lucent optical transport solution enables First Communications to carry voice, data and video traffic over a single platform to cost-effectively address customer demand for advanced business applications such as financial and trading exchange connectivity, data center connectivity, research or education infrastructure, video applications, and carrier or regional service provider networks. "Over the past decade, First Communications has built a highly scalable telecommunications platform, fiber-based infrastructure and support system, which represents a combination of world-class technology, and cutting edge product offerings," said Walt Paskowski, Vice President of Sales for Vertical Markets in Alcatel-Lucent's North America region. "Our optical networking solution will help First Communications meet the growing demand for its services as it continues to expand and grow." About the Alcatel-Lucent solution The Alcatel-Lucent solution is based on its 1626 Light Manager addressing operators' demands for increased capacity, flexibility and manageability to support a faster time-to-market for a new breed of blended Internet, video and triple play services. Meeting operators' requirements for bandwith scaling seamlessly, the 1626 LM provides a unique fully-tunable and reconfigurable optical add-drop multiplex architecture, enabling operators to design, plan and operate their networks with dramatically enhanced agility. About First Communications First Communications is a leading integrated telecommunications carrier based in the Midwestern United States. Founded in 1998, First Communications has built a highly reliable fiber-based infrastructure which it uses to provide small and medium business, enterprise, and carrier customers superior voice, internet, and transport services. First Communications' mission is to provide secure and reliable next-generation services that support the critical communications needs of its commercial customers. For more information visit First Communications on the Internet: http://www.firstcomm.com About Alcatel-Lucent Alcatel-Lucent (Euronext Paris and NYSE: ALU) is the trusted partner of service providers, enterprises and governments worldwide, providing solutions to deliver voice, data and video communication services to end-users. A leader in fixed, mobile and converged broadband networking, IP technologies, applications and services, Alcatel-Lucent leverages the unrivalled technical and scientific expertise of Bell Labs, one of the largest innovation powerhouses in the communications industry. With operations in more than 130 countries and the most experienced global services organization in the industry, Alcatel-Lucent is a local partner with a global reach. Alcatel-Lucent achieved revenues of Euro 16.98 billion in 2008 and is incorporated in France, with executive offices located in Paris. For more information, visit Alcatel-Lucent on the Internet: http://www.alcatel-lucent.com
First Communications Press Contacts
Colleen Gallagher Tel : 330-835-2479 cgallagher@firstcomm.com
Alcatel-Lucent Press Contacts
84
Denise Panyik-Dale Tel :+ 1 908-582-4897 dpanyikdale@alcatel-lucent.com
Alcatel-Lucent Investor Relations
This information is provided by RNS The company news service from the London Stock Exchange END
MSCKGMGGKNZGLZM More |
||
| 30-09-09 | RNS |
|
This news article is displayed preformatted as it may contain results tables
RNS Number : 9125Z
First Communications, Inc.
30 September 2009
30 September 2009
First Communications, Inc. Announces Unaudited Interim Results for the
Six Months Ended June 30, 2009
AKRON, OH, September 30, 2009 - Today First Communications, Inc. (AIM: FCOM) ("First Communications" or the "Company"), a leading Midwest competitive local exchange carrier providing data and voice services, announces its unaudited interim results for the six months ended June 30, 2009.
Discussion of Six Months Ended June 30, 2009 Results
Items of note in the six months ended June 30, 2009 results:
- Revenue for the first six months of 2009 of $88.0 million (compared to
$69.3 million reported for the same period in 2008);
- Increase in gross margin from 31.2% to 36.5% from the six months ended
June 30, 2008 to the same period in 2009;
- EBITDA (as defined below) of $5.1 million for the first six months of 2009
compared to $2.4 million for the same period last year;
- A net loss improvement from ($5.9) million to ($5.7) million primarily
resulting from higher EBITDA as discussed above, and a reduction in
depreciation and amortization as discussed in more detail below in the
section labeled "Management's Discussion and Analysis of Financial
Condition and Results of Operations".
Note: The results for the six months ended June 30, 2008 include a full six month's contributions from First Communications, LLC ("FC LLC"), and Xtension Services, Inc. ("Xtensions"), and just over three month's contribution from First Telecom Services, LLC ("FTS"). First Global Telecom, Inc. ("Globalcom") is not included in the six months ended June 30, 2008 numbers as it was not acquired until September 30, 2008. All entities are included for all six months in 2009.
EBITDA is defined herein as net income (loss) before depreciation and amortization, impairment of goodwill and other intangibles, interest expense, and provision for (benefit from) income taxes.
Selected Financial Information
FIRST COMMUNICATIONS, INC.
SELECTED FINANCIAL INFORMATION
For the Six Months Ended June 30, 2009 and 2008
(unaudited, in 000's)
Six Months Ended June 30,
2009 2008 Variance
Revenues, net $ 88,041 $ 69,302 $ 18,739
Gross Margin 32,106 21,637 10,469
Gross Margin % 36.5% 31.2%
SG&A Expenses 27,281 19,022 8,259
SG&A as % of Revenues 31.0% 27.4%
EBITDA 5,050 2,431 2,619
Depreciation and Amortization 6,785 10,818 4,033
Net (Loss) $ (5,730) $ (5,867) $ 137
Operational Highlights and Current Outlook:
Ray Hexamer, CEO of First Communications commented:
"We have continued to progress in the first half of 2009 with the integration of our two 2008 acquisitions, Globalcom and FTS. Additionally, we continue to operate, manage and grow our core businesses, which combined with these acquisitions, help position us well to achieve our goal of becoming the dominant Midwest provider of data and voice services. Additionally, while the sale of the non-core Tower Assets announced on August 21, 2009 was a substantial step forward in improving our balance sheet (the financial implications of which are discussed in the section, "Tower Asset Contribution"), we will continue to pursue other opportunities to improve our balance sheet, while, of course, balancing the opportunities for investment in our network and growing the customer base.
We believe these actions, and others already in motion, such as specifically focusing on higher margin customers, such as those on dedicated T1 integrated voice and data On-Net services, and, to a lesser degree, reduction of personnel and other general and administrative cost reductions in early 2009, position the Company well for achieving financial success in 2009 and into future years."
Management's Discussion and Analysis of Financial Condition and Results of Operations
Revenues
First Communications, Inc. reported revenues of $88.0 million for the six months ended June 30, 2009, compared to $69.3 million reported for the six months ended June 30, 2008. The growth in revenue has resulted from the inclusion of financial results from FTS and Globalcom for a full six months offset to some degree by declines in legacy residential and voice services compared to the previous year. The Company's strategy has been to focus increasingly on the small and medium sized commercial market in key geographical areas, and the supply of higher margin services including dedicated T1 integrated voice and data On-Net services, while de-emphasizing some of its legacy voice services.
Gross Margin
The Company's gross margins increased from 31.2% in 2008 to 36.5% in 2009 primarily due to higher margins from Globalcom and FTS offset to a degree by declines in margins in legacy residential and voice services
Sales, General and Administrative Expenses
As a percentage of revenues, the Company's selling, general and administrative expenses for the six months ended June 30, 2009 increased to 31.0% compared to 27.4% for the six months ended June 30, 2008. The increase in expenses came from the expansion of the Company's sales force, opening of new sales offices, and costs associated with integrating two new subsidiaries.
Depreciation and Amortization of Other Intangibles
Depreciation and amortization charges decreased from $10.8 million for the six months ended June 30, 2008 to $6.8 million for the six months ended June 30, 2009. The decrease is primarily related to impairment, as of December 31, 2008, of certain intangible assets (as discussed in the Company's 2008 financial results previously filed with the AIM), thus lowering the asset base, and the required annual amortization thereof on an ongoing basis.
EBITDA, Income from Operations, and Net Income
The Company's EBITDA increased from $2.4 million for the six months ended June 30, 2008 to $5.1 million for the six months ended June 30, 2009. The Company's loss from operations improved from $(8.2) million for the six months ended June 30, 2008 to $(2.0) for the six months ended June 30, 2009. The Company reported a $(5.7) million net loss for the six months ended June 30, 2009 compared to a loss of $(5.9) million for the same period in 2008. The increase in EBITDA related primarily to the Company's emphasis on higher margin On-Net customers as discussed above, thus resulting in higher gross margins, offset to a degree by general and administrative expenses related to the acquisition and integration of the two businesses acquired in 2008. The improvement in operating loss results from those same factors, in addition to the reduction in depreciation and amortization expense, as discussed above. Finally, the improvement in net loss encompasses all the above, with some offset from increased interest expense, resulting from higher debt.
Cash
Cash balances amounted to $2.6 million as at June 30, 2009 compared to $1.4 million at June 30, 2008. The increase in the Company's cash position resulted from higher cash flow provided by operations, offset by capital expenditure investment as discussed below and the repayment of our debt and related interest obligations.
Capital Expenditures
Capital expenditures for the six months ended June 30, 2009 were $6.4 million related primarily to the expansion of the Company's network, network and system upgrades, installation costs and capitalized labor.
Post Balance Sheet Events
Tower Asset Contribution
On August 20, 2009, the Company entered into a transaction in which the Company contributed to Diamond Communications, LLC ("Diamond") all of the assets of FTS (the "Contributed Assets") relating to the business (the "Tower Business") of wireless antenna and equipment collocation operations, capabilities and applications, which includes all wireless antenna collocation contracts and associated revenue and liabilities, FTS owned towers (collectively, the "Towers") and the rights and obligations under certain agreements with various operating affiliates of FirstEnergy Corp (the "Affiliate Agreements") to service existing contracts and develop new contracts to provide wireless collocation applications and capabilities, DAS, Wi-Fi systems, and new tower site development. In exchange for the contribution of the Contributed Assets, Diamond agreed that the Contributed Assets would remain subject to the lien of the Company's lender group to the extent the lien related to $50 million of the Company's debt which had been incurred in connection with the acquisition of and/or the conduct of the Tower Business. Diamond also agreed to provide a limited guarantee of this portion of the Company's debt. The Company also was issued Class A and Class B membership Units in Diamond with a negotiated value of $20 million resulting in an interest of 13.6% in Diamond. As of December 31, 2008, the net book value of the Contributed Assets was $44.3 million. Subsequent to the acquisition of FTS on March 7, 2008, the Company recorded $7.8 million in revenues and $5.05 million in profit before tax derived from the Contributed Assets in the year ended December 31, 2008.
As part of the transaction, the Company has the opportunity to receive additional units of Class A and B Membership Units in Diamond under an earn-out formula (the "Earn-Out Units"). The number of Earn-Out Units to which the Company may be entitled is based on the net annualized recurring revenue from certain qualifying leases earned during the period beginning on April 17, 2009 and ending on March 31, 2011. The maximum value of the Earn-Out Units is $18.57 million.
The agreement contains representation, warranties and covenants that are typical of transactions of this size and type including, without limitation, mutual indemnification obligations for breaches of those representations, warranties and covenants that are subject to baskets and caps depending on the source of the indemnification claim. Any indemnification obligation the Company might have (although none is anticipated) will be first satisfied through a return of the units of membership interest the Company has received.
Amendment to Facility
Effective as of August 20, 2009, the Company entered into 'Amendment No. 2' to its Facility (the "Amendment"). Diamond subsequently repaid the portion of the debt guaranteed by it as described above, resulting in the term debt of the Company being reduced by $40.0 million, and the amounts outstanding under the revolver being reduced by $10.0 million, although the revolver is available for future drawdown. Overall the Facility has been reduced to $87.5 million, and as at August 20, 2009 the net debt of the Company was $77.5 million.
As part of the Amendment, the Company's lenders agreed to waive all identifiable, existing defaults under the Facility, and amended certain future covenants. The following is a summary of some of the key terms of the Amendment:
Capital contribution
- The Company is required to receive at least $10 million of cash capital
contributions by January 31, 2010. At least $10 million of such
contributions must be used to repay revolving loans that are part of the
Facility, and the commitment to make revolving loans is permanently
reduced by 50% of the aggregate of such repayment. One-half of the amounts
then remaining are used to prepay the term loans that are part of the
Facility (in inverse order of maturity), with the other one-half being
available to the Company for working capital and/or capital expenditure
purposes.
Maturity Date
- The maturity date of the loans under the Facility has been amended so that
the scheduled maturity date will occur earlier than under the terms of the
previous facility (March 6, 2013). The scheduled maturity date will occur
based on how much capital is contributed by the end of January 2010.
Amount of Capital Contributed Scheduled Maturity Date
(in thousands)
<$10,000 December 7, 2010
>$10,000 and <$17,500 September 7, 2011
>$17,500 and <$25,000 December 7, 2011
>$25,000 June 7, 2012
Conversion of Certain Accounts Payable to Subordinated Debt
On August 20, 2009, the Company and FirstEnergy Corp. ("FE") agreed to convert $6 million in payables owed by the Company to FE for past services provided by FE to the Company to a subordinated note (the "FE Note"). The terms of the FE Note provide for the principal balance of the FE Note to be amortized over a 120 month period at an annual interest rate of 11%, provided, however, that no monthly payments of principal or interest are to be made on the FE Note until December 31, 2010 at which time any accrued and unpaid interest installments shall be due. Monthly payments of principal and interest will begin on January 31, 2011 and shall be due and payable on the last day of each succeeding month until the earlier of the date that is (a) thirty (30) days after the maturity date of the Facility (as described above) or (b) January 31, 2021, on which date the entire unpaid principal and interest accrued and unpaid on the FE Note shall be due and payable in full. The FE Note is subordinated to the Company's lenders and is unsecured. The FE Note may be prepaid by the Company at any time without penalty.
About First Communications
First Communications is a leading competitive local exchange carrier in the Midwestern United States. Founded in 1998, First Communications has built a highly scalable telecommunications platform, infrastructure and support system, which represents a combination of world-class technology, and cutting-edge product offerings. First Communications is led by a strong management team that has operated telecom companies throughout all cycles of the telecommunications market.
Forward-looking Statements
This press release contains statements relating to future results of First Communications and statements which may be identified by the use of the words "may", "intend", "expect" and like words that are "forward-looking statements". Actual results may differ materially from those projected as a result of certain risks and uncertainties.
For Further Information:
First Communications, Inc.
Joe Morris Tel: (330) 835-2472
Collins Stewart Europe Limited - Nominated Adviser and Broker
Piers Coombs/Stewart Wallace Tel: +44 (0) 207 523-8350
JUNE 30, 2009 and 2008 CONDENSED FINANCIAL STATEMENTS
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2009 and 2008
(in thousands)
Previously
As of Restated
As of
June 30, 2009 June 30, 2008
ASSETS (unaudited) (unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 2,645 $ 1,437
Accounts receivable - trade, less allowance
for
doubtful accounts of $2,770 and $1,110, 18,822 13,164
respectively
Income tax receivable 2,052 4,798
Inventory 3,173 2,955
Other current assets 4,705 3,327
TOTAL CURRENT ASSETS 31,397 25,681
PROPERTY AND EQUIPMENT, net 43,390 23,206
OTHER ASSETS
Goodwill 105,202 90,820
Other intangible assets, net 66,878 98,482
Deferred tax asset - -
Deposits and other assets 6,018 6,337
TOTAL OTHER ASSETS 178,098 195,639
TOTAL ASSETS $ 252,885 $ 244,526
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2009 and 2008
(in thousands, except for per share data)
Previously
As of Restated
As of
June 30, 2009 June 30, 2008
LIABILITIES, REDEEMABLE PREFERRED STOCK AND (unaudited) (unaudited)
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 7,000 $ 7,000
Revolver 10,000 3,750
Accounts payable - trade 28,608 12,906
Income tax payable (94) 1,926
Accrued expenses 18,003 1,051
Deferred tax liability 221 212
Deferred revenue 9,898 6,482
TOTAL CURRENT LIABILITIES 73,636 33,327
NON-CURRENT LIABILITIES
Long-term debt, net of current maturities 100,500 61,250
Revolver 9,484 -
Deferred tax liability 538 5,105
Deferred revenue 14,010 15,273
Other long-term liabilities 1,204 -
TOTAL NON-CURRENT LIABILITIES 125,736 81,628
TOTAL LIABILITIES 199,372 114,955
REDEEMABLE PREFERRED STOCK, $0.001 par
value; 10,000,000 shares
authorized, 15,000 shares issued and
outstanding (liquidation
preference $1,000 per share) 16,388 15,000
SHAREHOLDERS' EQUITY
Series A Common Stock, $0.001 par value;
59,165,000 shares authorized,
26,067,000 shares issued and outstanding 26 26
Series B Non-Voting Common Stock, $0.001 par
value; 835,000 shares
authorized, issued and outstanding 1 1
Additional paid in capital 119,482 119,482
Retained (deficit) (82,384) (4,938)
TOTAL SHAREHOLDERS' EQUITY 37,125 114,571
TOTAL LIABILITIES, REDEEMABLE PREFERRED $ 252,885 $ 244,526
STOCK AND SHAREHOLDERS' EQUITY
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2009 and 2008
(in thousands)
Previously
Six Months Restated
Six Months
Ended Ended
June 30, 2009 June 30, 2008
(unaudited) (unaudited)
$ 88,041 $ 69,302
REVENUES, NET
COST OF FACILITIES, exclusive
of depreciation and
amortization stated below 55,935 47,665
SELLING, GENERAL AND 27,281 19,022
ADMINISTRATIVE EXPENSES
DEPRECIATION AND AMORTIZATION 6,785 10,818
OPERATING (LOSS) (1,960) (8,203)
OTHER INCOME (EXPENSE), NET
Interest expense (3,995) (795)
Other 225 (184)
OTHER INCOME (EXPENSE), NET (3,770) (979)
(LOSS) BEFORE INCOME TAXES (5,730) (9,182)
(BENEFIT) FOR INCOME TAXES - (3,315)
NET (LOSS) $ (5,730) $ (5,867)
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2009 and 2008
(in thousands)
Previously
Six Months Restated
Six Months
Ended Ended
June 30, 2009 June 30, 2008
(unaudited) (unaudited)
CASH FLOW FROM OPERATING ACTIVITIES
Net (loss) $ (5,730) $ (5,867)
Depreciation & amortization 6,785 10,818
Deferred taxes - 1,041
Changes in Operating Assets & Liabilities
Account receivable - net, 2,112 2,909
Inventory (371) (249)
Prepaid expenses (2,442) (1,837)
Deposits and other assets 219 (1,273)
Accounts payable - trade 8,287 (424)
Income tax receivable and payable 324 (3,234)
Accrued expenses 1,460 (1,549)
Other long-term liabilities (1,109) -
Deferred revenue 4,454 (2,588)
CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES 13,989 (2,253)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment, net (6,401) (1,539)
Acquisition of assets and assumption of liabilities, net of cash acquired - (46,625)
CASH FLOW USED IN INVESTING ACTIVITIES (6,401) (48,164)
CASH FLOW FROM FINANCING ACTIVITIES
Net borrowings of and payments on long term loans (6,000) 68,250
Reduction in redeemable preferred stock - (25,000)
Payment of deferred financing costs - (3,821)
Net borrowings of and payments on revolver 729 3,125
CASH FLOW PROVIDED BY (USED IN) FINANCING ACTIVITIES (5,271) 42,554
NET INCREASE (DECREASE) IN CASH 2,317 (7,863)
CASH, BEGINNING OF PERIOD 328 9,300
CASH, END OF PERIOD $ 2,645 $ 1,437
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR CKCKNKBKBPCB
More |
||
| 27-08-09 | RNS |
|
|
RNS Number : 0918Y AIM 27 August 2009
NOTICE (608) 27/08/2009 7:30am
RESTORATION OF TRADING ON AIM FIRST COMMUNICATIONS INC. The trading on AIM for the under-mentioned securities was temporarily suspended. The suspension is lifted from 27/08/2009 7:30am, an announcement having been made.
Common Shares of USD0.001 each (B1W0JM9)(USU319731076)
(REG S) If you have any queries relating to the above, please contact the company's nominated adviser on 020 7523 8000 Ref: AIMNOT608 This information is provided by RNS The company news service from the London Stock Exchange END
EXCCKOKDABKKNFB More |
||
| 27-08-09 | RNS |
|
This news article is displayed preformatted as it may contain results tables
RNS Number : 0813Y
First Communications, Inc.
27 August 2009
First Communications, Inc. Announces Audited Results for
The Year Ended December 31, 2008 and Restated Unaudited Interim Results for the Six Months Ended June 30, 2008
- Finalisation of its December 31, 2008 financial statements, as audited by
its newly retained independent auditor, Ernst & Young LLP;
- Contribution of the tower assets of its subsidiary to Diamond
Communications, Inc. (*Diamond*);
- An amendment to its existing credit facility (the *Facility*); and
- Restatement of its interim results for the six months ended June 30, 2008.
AKRON, OH, August 27, 2009 - Today First Communications, Inc. (AIM: FCOM) (the "Company"), a leading Midwest competitive local exchange carrier providing data and voice services, announces the following developments:
December 31, 2008 Audited Financial Statements
The Company confirms that it has today posted its audited financials to its shareholders and that these will shortly be available on its website. The Company believes that as a result and following the announcement of its results for the twelve month period ended December 31, 2008, that the suspension in trading of its common stock on the AIM, initiated on March 18, 2009, will be lifted later today. The Company requested the suspension when it identified accounting irregularities by an individual within the Company (who is no longer with the Company) resulting in a material overstatement of its first half results for 2008. The Company has since investigated and has completed an extensive audit process with its auditors. The Company has reviewed and corrected its previously announced unaudited interim results for the six months ended June 30, 2008.
Furthermore, the Board and management have taken action to ensure its financial procedures will not be compromised going forward, including the appointment of J. Lyle Patrick as Interim Chief Financial Officer in March of 2009. The Company has also received support from its key stakeholders and agreed on amended terms with its banks, including a waiver by the lenders of all identifiable, existing defaults under the Facility.
Discussion of 2008 Results
Items of note in the year ended December 31, 2008 results (see note below):
- The Company completed the acquisition of FirstEnergy Telecom Services, Inc. Assets (*FTS*) in March of
2008 and GCI Globalcom Holdings, Inc. (*Globalcom*) in October of 2008;
- Revenue for 2008 of $153.5 million (compared to $141.0 million reported for 2007);
- Decrease in gross margin from 32.2% to 30.6% from 2007 to 2008;
- EBITDA (as defined below) of $0.8 million for 2008, however this is stated before the below items which
has led to a lower EBITDA compared to a pro forma adjusted EBITDA, were the Company to report on this
basis for the year:
- Pro forma results for Globalcom and FTS for the months in 2008 when not owned by
the Company (rather than inclusion from the date of acquisition only);
- Add-back of exceptional costs in relation to the Renaissance transaction;
- Add-back of various one-time transactional and other costs associated with the
Globalcom acquisition; and
- Lower net income primarily resulting from lower EBITDA as discussed above, the
impairment of goodwill and other intangibles, and a change in estimates associated
with the amortizable lives for customer lists, all as discussed in more detail
below in the section labeled *Management*s Discussion and Analysis of Financial
Condition and Results of Operations*.
Note: The results for the year 2008 include a full 12 month contributions from First Communications, LLC ("FC LLC"), and Xtension Services, Inc. ("Xtensions"), and just over 9 months contribution from FTS and a 3 months contribution from Globalcom. The 2007 pro forma results reflect a full year's contribution from FC LLC and Xtensions.
EBITDA is defined herein as net income (loss) before depreciation and amortization, impairment of goodwill and other intangibles, interest expense, and provision for (benefit from) income taxes.
Selected Financial Information
FIRST COMMUNICATIONS, INC.
SELECTED FINANCIAL INFORMATION
For the Years Ended December 31, 2008 and 2007
(all numbers in 000's)
Year Ended December 31,
2008 2007 Variance
(Pro forma)
Revenues, net $ 153,507 $ 140,959 $ 12,548
Gross Margin 46,917 45,463 1,454
Gross Margin % 30.6% 32.2%
SG&A Expenses 46,675 31,867 14,808
SG&A as % of Revenues 30.4% 22.6%
EBITDA 835 14,431 (13,596)
Depreciation and Amortization 19,031 6,580 12,451
Impairment of Goodwill and Other 53,500 - 53,500
Intangibles
Net Income (Loss) $ (76,195) $ 5,847 $ (82,042)
Operational Highlights and Current Outlook:
Ray Hexamer, CEO of First Communications commented:
"We are happy to have put the challenges of 2008 behind the Company. The impropriety discovered compromised the Company, but our Board, investors, bank group, auditors, and management rallied around correcting any issues and setting the foundation for continued growth going forward. We made significant progress in 2008 with two great acquisitions in Globalcom and FTS. The assets we have assembled and the efficiencies we expect to create going forward puts First Communications in a position to continue our path in 2009 with the intention of becoming the dominant Midwest provider of data and voice services.
2008 operating highlights include the following:
- Expanded sales staff from 20 at the start of 2008 to over 60 by year end;
- Sold 723 T-1*s in the fourth quarter of 2008 compared to 156 in the first
quarter of 2008;
- Ramped T-1*s installed from 73 in the first quarter of 2008 to 650 in the
fourth quarter of 2008;
- Expanded the fiber network and lit additional routes; and
- Integrated Globalcom and FTS and realized $5.8 million of annualized
savings by year end 2008 on Globalcom acquisition closed in October 2008.
Coupled with a full year's operating and financial results from Globalcom and FTS, we believe these actions above, and many others already in motion, such as focusing on higher margin customers, reduction of personnel in April 2009 and other general and administrative cost reductions, will drive the Company to greater financial success in 2009 and beyond."
Management's Discussion and Analysis of Financial Condition and Results of Operations
Revenues
First Communications, Inc. reported revenues of $153.5 million for the year ended December 31, 2008, compared to $141.0 million reported for the year ended December 31, 2007. The growth in revenue has resulted from the inclusion of financial results from FTS and Globalcom offset to some degree by declines in legacy residential and voice services compared to the previous year. The Company's strategy has been to increasingly focus on the small and medium sized commercial market in key geographical areas, and the supply of higher margin services including dedicated T1 integrated voice and data On-Net services, while de-emphasizing some of its legacy voice services.
Gross Margin
The Company's gross margins decreased from 32.2% in 2007 to 30.6% in 2008 due to declines in margins in legacy residential and voice services, offset to some degree by higher margins from Globalcom and FTS.
Sales, General and Administrative Expenses
As a percentage of revenues, the Company's selling, general and administrative expenses for the year ended December 31, 2008 increased to 30.4% compared to 22.6% for the year ended December 31, 2007. The increase in expenses came from the expansion of the Company's sales force, opening of new sales offices, costs associated with integrating two new subsidiaries, and Renaissance transaction costs as discussed above.
Depreciation and Amortization of Other Intangibles
Depreciation and amortization charges increased from $6.6 million for the year ended December 31, 2007 to $19.0 million for the year ended December 31, 2008. The increase is primarily due to the impact of additional tangible and intangible assets associated with the two new subsidiaries acquired during the year and the change in the amortization period for customer related intangibles from eight to four years. Specific non-cash charges to other intangibles were as follows:
Purchase Price Adjustment $8.9 million related to Globalcom*s customer
lists due to a change in assumed lives;
Write off of Globalcom*s trademark value of $600K; and
Write off of the Company*s investment in PowerGrid of $500K.
Impairment of Goodwill and Other Intangibles (Customer Lists)
As a result of general market conditions related to borrowing costs and a more recent analysis of the discounted cash flow supporting the Company's goodwill balance using updated assumptions, an exceptional non-cash impairment to goodwill was recorded of $28.2 million. Additionally, a similar impairment occurred related to the valuation of certain of the Company's customer lists (recorded as other intangibles), resulting in a charge of $25.3 million.
EBITDA, Income from Operations, and Net Income
The Company's EBITDA decreased from $14.4 million for the year ended December 31, 2007 to $0.8 million for the year ended December 31, 2008. The Company's income from operations decreased from $7.0 million for the year ended December 31, 2007 to a $72.3 million loss for the year ended December 31, 2008. The Company reported a $76.2 million net loss for the year ended December 31, 2008 compared to income of $5.8 million for 2007. As noted above, the decrease in EBITDA related primarily to declining sales related to the de-emphasis of some of the Company's legacy voice services and sales, general and administrative expenses, with the decrease in income from operations and net income primarily resulting from the increase in depreciation and amortization expense and the impairment of goodwill and other intangible assets.
Cash
Cash balances amounted to $0.3 million as at December 31, 2008 compared to $9.3 million at December 31, 2007. The decrease in the Company's cash position resulted from lower margin sales, higher SG&A costs and exceptional transaction related costs.
Capital Expenditures
Capital expenditures for the year ended December 31, 2008 were $6.0 million related to the expansion of the Company's network, network and system upgrades, installation costs and capitalized labor. In addition, fixed assets of approximately $31.2 million were acquired through the Company's two 2008 acquisitions.
Post Balance Sheet Events
Tower Asset Contribution
On August 20, 2009, the Company entered into a transaction in which the Company contributed to Diamond Communications, LLC ("Diamond") all of the assets of FTS (the "Contributed Assets") relating to the business (the "Tower Business") of wireless antenna and equipment collocation operations, capabilities and applications, which includes all wireless antenna collocation contracts and associated revenue and liabilities, FTS owned towers (collectively, the "Towers") and the rights and obligations under certain agreements with various operating affiliates of FirstEnergy Corp (the "Affiliate Agreements") to service existing contracts and develop new contracts to provide wireless collocation applications and capabilities, DAS, Wi-Fi systems, and new tower site development. In exchange for the contribution of the Contributed Assets, Diamond agreed that the Contributed Assets would remain subject to the lien of the Company's lender group to the extent the lien related to $50 million of the Company's debt which had been incurred in connection with the acquisition of and/or the conduct of the Tower Business. Diamond also agreed to provide a limited guarantee of this portion of the Company's debt. The Company also was issued Class A and Class B membership Units in Diamond with a negotiated value of $20 million resulting in an interest of 13.6% in Diamond. As of December 31, 2008, the net book value of the Contributed Assets was $44.3 million and the profit before tax was $5.05 million. Subsequent to the acquisition of FTS on March 7, 2008, the Company recorded $7.8 million in revenues derived from the Contributed Assets in the year ended December 31, 2008.
As part of the transaction, the Company has the opportunity to receive additional units of Class A and B Membership Units in Diamond under an earn-out formula (the "Earn-Out Units"). The number of Earn-Out Units to which the Company may be entitled to is based on the net annualized recurring revenue from certain qualifying leases earned during the period beginning on April 17, 2009 and ending on March 31, 2011. The maximum value of the Earn-Out Units is $18.57 million.
The agreement contains representation, warranties and covenants that are typical of transactions of this size and type including, without limitation, mutual indemnification obligations for breaches of those representations, warranties and covenants that are subject to baskets and caps depending on the source of the indemnification claim. Any indemnification obligation the Company might have (although none are anticipated) will be first satisfied through a return of the units of membership interest the Company has received.
Amendment to Facility
Effective as of August 20, 2009, the Company entered into an 'Amendment No. 2' to its Facility (the "Amendment"). Diamond subsequently repaid the portion of the debt guaranteed by it as described above, resulting in the term debt of the Company reducing by $40.0 million, and the amounts outstanding under the revolver reducing by $10.0 million, although the revolver is available for future drawdown. Overall the Facility has been reduced to $87.5 million, and as at August 20, 2009 the net debt of the Company was $77.5 million.
As part of the Amendment, the Company's lenders agreed to waive all identifiable, existing defaults under the Facility. The following is a summary of some of the key terms of the Amendment:
Capital contribution
- the Company is required to receive at least $10 million of cash capital contributions by January 31, 2010. At least $10 million of such contributions must be used to repay revolving loans that are part of the Facility, and the commitment to make revolving loans is permanently reduced by 50% of the aggregate of such repayment. One-half of the amounts then remaining are used to prepay the term loans that are part of the Facility (in inverse order of maturity), with the other one-half being available to the Company for working capital and/or capital expenditure purposes.
Maturity Date
- The maturity date of the loans under the Facility has been amended so that the scheduled maturity date will occur earlier than under the terms of the previous facility (March 6, 2013). The scheduled maturity date will occur based on how much capital is contributed by the end of January 2010.
Amount of Capital Contributed Scheduled Maturity Date
(in thousands)
<$10,000 December 7, 2010
>$10,000 and <$17,500 September 7, 2011
>$17,500 and <$25,000 December 7, 2011
>$25,000 June 7, 2012
Financial Covenants
- The Facility has a minimum EBITDA test, a maximum leverage test, a minimum
fixed charge test, and a limitation on capital expenditures.
- Minimum EBITDA will be a quarterly test beginning July 1, 2009 with levels
of $2.8 million at September 30, 2009, $8.8 million at December 31, 2009,
$13.6 million at March 31, 2010, $17.8 million at June 30, 2010, and $18.8
million at September 30, 2010. Until June 30, 2010, EBITDA shall be
determined on a cumulative basis since July 1, 2009. Thereafter, it shall
be determined on a last twelve months basis.
- Maximum leverage (total debt to EBITDA) of 5.5 to 1.0 at March 31, 2010,
5.0 to 1.0 at June 30, 2010, 4.25 to 1.0 at September 30, 2010, 4.0 to 1.0
at December 31, 2010, and 3.50 to 1.0 thereafter.
- Minimum fixed charge coverage of 1.0 to 1.0 at December 31, 2010 and March
31, 2011, 1.1 to 1.0 at June 30, 2011 and 1.2 to 1.0 thereafter.
- Maximum capital expenditures of $10 million during any consecutive
twelve-month period.
Pricing and Fees
The new pricing grid, based on leverage, will be as follows. It will apply for revolving loans and term loans.
Level Total Debt to EBITDA Commitment Fee LIBOR Margin ABR Margin
I >6.00 to 1.00 100 bps 600 bps 500 bps
II >4.50 to 1.00 and <6.00 to 75 bps 550 bps 450 bps
1.00
III <4.50 to 1.00 50 bps 500 bps 400 bps
Restatement of the Six Months ended June 30, 2008 Results
Further to the announcement, dated March 18, 2009, that the Company had become aware of a material misstatement in its historical financial results as a result of accounting irregularities by an individual (who is no longer with the Company), the Company determined that its historical results for the six month period ended June 30, 2008, as previously reported, were materially inaccurate, resulting in an overstatement of its results of operations in such period. As a result, a restatement of its accounts for the six months ended June 30, 2008 was performed.
On becoming aware of the situation, the Company took immediate steps to ensure that its financial procedures were supplemented and retained a forensic team to investigate its accounts in order to determine the extent of the misstatement. In addition, the Company had discussions with its key stakeholders, including its banks.
The Company confirms that it has today posted its restated accounts to its shareholders and that these will shortly be available on its website. The Company believes that as a result, and following the announcement of its audited results for the twelve month period ended December 31, 2008, that the suspension in trading of its common stock on AIM, initiated on March 18, 2009, will be lifted later today.
The six months restated condensed financial statements compared to those previously filed reflect a decrease in revenue of $4.5 million, an increase in costs of facilities by $1.5 million, an increase in selling, general and administrative expenses of $1.4 million, all resulting in a decrease in EBITDA of $7.4 million. Net income decreased from $2.4 million to a loss of $5.9 million. The decrease in EBITDA primarily reflects approximately $5.0 million of improper entries primarily related to revenue as well as $2.4 million in entries made to better reflect the accruals for cost of facilities and in the allowance for doubtful accounts. Net income was impacted by those same entries, in addition to an increase in depreciation and amortization of $5.6 million primarily related to an accounting method change in the lives associated with customer lists (from eight years to four years), offset by a $4.8 million change in income tax expense as the net loss before income taxes created a tax benefit, as opposed to a provision.
Following the identification of the accounting irregularities set out above, the Company has put in place revised financial reporting procedures in order to ensure that key financial controls are in place. The Company believes that its current procedures are sufficient in terms of its obligations as a quoted company on AIM, however recognizes that it needs to enhance its internal systems given the circumstances and will put this in place over the next three months, in consultation with its auditors.
Appointment of Interim Chief Financial Officer
In March 2009, James Lyle Patrick, 57, was appointed Interim Chief Financial Officer. Mr. Patrick comes with a background of finance, accounting and telecommunications experience. In addition to fourteen years with Arthur Andersen, he has approximately twenty year's experience as Chief Financial Officer with Consolidated Communications, McLeodUSA, Completel, MetroPCS and US LEC. He has substantial public company experience, having served as CFO at MetroPCS, a NYSE quoted wireless communications provider with a market capitalization of $2.8 billion and at US LEC, formerly a Nasdaq quoted competitive telecommunications company, which was acquired by Paetec in 2007 for $450 million. Mr. Patrick is a member of the AICPA, is the former Chairman of CompTel (US Competitive Telecom Trade Organization), a former Board member of USTA (United States Telecom Association) and is the former Chairman of the Illinois Telephone Association.
Mr. Patrick is currently a director of Deltathree, Inc. Mr. Patrick has not been a director of any other company or partnership in the past five years. Mr. Patrick does not own any shares in First Communications, Inc.
As required to be disclosed under the AIM Rules for Companies, J. Lyle Patrick was the CFO of McLeodUSA until July 2001. McLeodUSA subsequently filed for a voluntary petition for bankruptcy relief under Chapter 11 in January 2002, these matters were settled in January 2007 with no finding of fault.
There are no further disclosures required under Schedule 2 paragraph (g) of the AIM Rules for Companies.
About First Communications
First Communications is a leading competitive local exchange carrier in the Midwestern United States. Founded in 1998, First Communications has built a highly scalable telecommunications platform, infrastructure and support system, which represents a combination of world-class technology, and cutting-edge product offerings. First Communications has over 214,000 customers and owns 3,500 miles of fiber. First Communications is led by a strong management team that has operated telecom companies throughout all cycles of the telecommunications market.
Forward-looking Statements
This press release contains statements relating to future results of First Communications and statements which may be identified by the use of the words "may", "intend", "expect" and like words that are "forward-looking statements". Actual results may differ materially from those projected as a result of certain risks and uncertainties.
For Further Information:
First Communications, Inc.
Joe Morris Tel: (330) 835-2472
Collins Stewart Europe Limited - Nominated Adviser and Broker
Piers Coombs/Stewart Wallace Tel: +44 (0) 207 523-8350
RESTATED JUNE 30, 2008 CONDENSED FINANCIAL STATEMENTS
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2008
(in thousands)
Original Restated
As of As of
June 30, 2008 June 30, 2008
ASSETS (unaudited) (unaudited)
CURRENT ASSETS
Cash and cash equivalents $ 1,267 $ 1,437
Accounts receivable - trade, less allowance for
doubtful accounts of $607 and $1,110, 15,524 13,164
respectively
Income tax receivable 1,242 4,798
Inventory 2,860 2,955
Prepaid expenses 3,966 3,327
TOTAL CURRENT ASSETS 24,859 25,681
PROPERTY AND EQUIPMENT, net 49,324 23,206
OTHER ASSETS
Goodwill 88,079 90,820
Other intangible assets, net 78,298 98,482
Deposits and other assets 6,321 6,337
TOTAL OTHER ASSETS 172,698 195,639
TOTAL ASSETS $ 246,881 $ 244,526
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, 2008
(in thousands, except for per share data)
Original Restated
As of As of
June 30, 2008 June 30, 2008
LIABILITIES, REDEEMABLE PREFERRED STOCK AND (unaudited) (unaudited)
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 7,000 $ 7,000
Line of credit - 3,750
Accounts payable - trade 10,584 12,906
Income tax payable - 1,926
Accrued expenses 2,865 1,051
Deferred tax liability, net 213 212
Deferred revenue 6,764 6,482
TOTAL CURRENT LIABILITIES 27,426 33,327
NON-CURRENT LIABILITIES
Long-term debt, net of current maturities 61,250 61,250
Deferred tax liability, net 5,105 5,105
Deferred revenue 15,273 15,273
TOTAL NON-CURRENT LIABILITIES 81,628 81,628
TOTAL LIABILITIES 109,054 114,955
REDEEMABLE PREFERRED STOCK, $0.001 par
value; 10,000,000 shares
authorized, 15,000 shares issued and
outstanding (liquidation
preference $1,000 per share) 15,000 15,000
SHAREHOLDERS' EQUITY
Series A Common Stock, $0.001 par value;
59,165,000 shares authorized,
26,067,000 shares issued and outstanding 26 26
Series B Non-Voting Common Stock, $0.001 par
value; 835,000 shares
authorized, issued and outstanding 1 1
Additional paid in capital 119,482 119,482
Retained earnings (deficit) 3,318 (4,938)
TOTAL SHAREHOLDERS' EQUITY 122,827 114,571
TOTAL LIABILITIES, REDEEMABLE PREFERRED $ 246,881 $ 244,526
STOCK AND SHAREHOLDERS' EQUITY
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Six Months Ended June 30, 2008
(in thousands)
Original Restated
Six Months Six Months
Ended Ended
June 30, 2008 June 30, 2008
(unaudited) (unaudited)
$ 73,774 $ 69,302
REVENUES, NET
COST OF FACILITIES, exclusive
of depreciation and
amortization stated below 46,097 47,665
SELLING, GENERAL AND 17,573 19,022
ADMINISTRATIVE EXPENSES
DEPRECIATION AND AMORTIZATION 5,244 10,818
OPERATING INCOME (LOSS) 4,860 (8,203)
OTHER INCOME (EXPENSE), NET
Interest expense (1,008) (795)
Other (11) (184)
OTHER INCOME (EXPENSE), NET (1,019) (979)
INCOME (LOSS) BEFORE INCOME 3,841 (9,182)
TAXES
PROVISION (BENEFIT) FOR INCOME 1,452 (3,315)
TAXES
NET INCOME (LOSS) $ 2,389 $ (5,867)
Original Restated
Six Months Six Months
Ended Ended
June 30, 2008 June 30, 2008
(unaudited) (unaudited)
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) $ 2,389 $ (5,867)
Depreciation & amortization 5,244 10,818
Deferred taxes 1,041 1,040
Changes in Operating Assets & Liabilities
Account receivable - net, 2,991(a) 2,909
Inventory 45 (249)
Prepaid expenses (2,695) (1,837)
Deposits and other assets (1,159) (1,273)
Accounts payable - trade (123) (424)
Income tax receivable and payable (1,557) (3,234)
Accrued expenses 431 (1,549)
Deferred revenue (2,296) (2,588)
CASH FLOW PROVIDED BY (USED IN) OPERATING ACTIVITIES 4,311 (2,254)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment (2,123) (1,539)
Acquisition of assets and assumption of liabilities, net of cash acquired (45,877) (46,625)
Investment in joint venture (134) -
CASH FLOW USED IN INVESTING ACTIVITIES (48,134) (48,164)
CASH FLOW FROM FINANCING ACTIVITIES
Net borrowings of and payments on long term loans 68,250 68,250
Reduction in redeemable preferred stock (25,000) (25,000)
Payment of deferred financing costs (3,794) (3,821)
Net borrowings of and payments on line of credit (625) 3,125
Change in bank overdraft (3,041) -
CASH FLOW PROVIDED BY FINANCING ACTIVITIES 35,790 42,554
NET (DECREASE) IN CASH (8,033) (7,863)
CASH, BEGINNING OF PERIOD 9,300 9,300
CASH, END OF PERIOD 1,267 1,437
1. Includes $35 of accounts receivable - related party re-classed from Cash Flow from Investing Activities
December 31, 2008 AND 2007 CONDENSED FINANCIAL STATEMENTS
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2008 and 2007
(in thousands)
Restated
December 31,
December 31,
2008
2007
ASSETS
CURRENT ASSETS
Cash and cash equivalents
$ 328
$ 9,300
Accounts receivable - trade, less allowance for doubtful accounts
of $2,055 and $661 at December 31, 2008 and 2007, respectively
20,934
14,738
Income tax receivable
2,473
-
Inventory
2,802
136
Prepaid expenses
2,263
823
TOTAL CURRENT ASSETS
28,800
24,997
PROPERTY AND EQUIPMENT, NET
40,881
7,223
OTHER ASSETS
Goodwill
105,202
88,079
Other intangible assets, net
69,518
63,280
Deposits and other assets
6,492
1,357
TOTAL OTHER ASSETS
181,212
152,716
TOTAL ASSETS
$ 250,893
$ 184,936
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 2008 and 2007
(in thousands, except for per share data)
Restated
December 31, December 31,
2008 2007
LIABILITIES, REDEEMABLE PREFERRED
STOCK AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 9,500 $ -
Revolver 10,000 625
Accounts payable - trade 20,321 13,220
Income tax payable - 362
Accrued expenses 16,548 2,600
Deferred tax liability, net - 221 213
Deferred revenue - 4,769 3,244
TOTAL CURRENT LIABILITIES 61,359 20,264
NON-CURRENT LIABILITIES
Revolver 8,755
-
Long-term debt, net of current 104,000 -
maturities
Deferred tax liability, net 538 4,064
Deferred revenue 14,685 170
Other long-term liabilities 2,313 -
TOTAL NON-CURRENT LIABILITIES 130,291 4,234
TOTAL LIABILITIES 191,650 24,498
REDEEMABLE PREFERRED STOCK, $0.001 par value;
10,000,000
shares authorized,
15,000 and 40,000 shares issued
and outstanding at
December 31, 2008 and 2007, 15,468 40,000
respectively (liquidation
preference $1,000 per share)
SHAREHOLDERS' EQUITY
Series A Common Stock, $0.001 par
value; 59,165,000 shares
authorized,
26,067,000 shares issued and 26 26
outstanding
Series B Non-Voting Common Stock,
$0.001 par value; 835,000 shares
authorized, 835,000 shares issued 1 1
and outstanding
Additional paid in capital 119,482 119,482
Retained earnings (deficit) (75,734) 929
TOTAL SHAREHOLDERS' EQUITY 43,775 120,438
TOTAL LIABILITIES, REDEEMABLE $ 250,893 $ 184,936
PREFERRED STOCK AND
SHAREHOLDERS' EQUITY
FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the years ended December 31, 2008 and 2007
(in thousands)
Restated
Year
Ended
Year December 31, 2007
Ended
December 31, 2008
REVENUES, NET $ 153,507 $ 140,959
COST OF FACILITIES, exclusive
of depreciation and
amortization stated below 106,590 95,496
SELLING, GENERAL AND 46,675
ADMINISTRATIVE EXPENSES 31,867
53,500 -
IMPAIRMENT OF GOODWILL AND
INTANGIBLE ASSETS
DEPRECIATION AND AMORTIZATION 19,031 6,580
OPERATING INCOME (LOSS) (72,289) 7,016
OTHER INCOME (EXPENSE), NET
Interest expense (9,777) (1,416)
Other 593 835
OTHER INCOME (EXPENSE), NET (9,184) (581)
INCOME (LOSS) BEFORE INCOME (81,473) 6,435
TAXES
PROVISION (BENEFIT) FOR INCOME (5,278) 588
TAXES
NET INCOME (LOSS) $ 5,847
$ (76,195)
Notes:
Actual results for 2008 represent a full year's results for FC LLC and Xtensions and the performance of FTS and Globalcom from the date of acquisition.
Figures for 2007 represent the combined financial statements of First Communications on a pro forma basis (including FC and Xtensions) and do not represent accounting consolidated figures.
FIRST COMMUNICATIONS, INCCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSFor
the years ended December 31, 2008 and 2007(in thousands)
Year Ended RestatedYear Ended
December 31, 2008 December 31, 2007
CASH FLOW FROM OPERATING ACTIVITIES
Net income (loss) $ (76,195) $ 5,847
Depreciation & amortization 19,031 5,990
Deferred taxes (4,951) 225
Impairment of goodwill and 53,500 -
intangibles assets
Changes in Operating Assets &
Liabilities
Account receivable - trade, net 4,062 (1,265)(a)
Inventory 104 105
Prepaid expenses (122) (258)
Deposits and other assets (54) (1,568)
Accounts payable * trade 2,684 (3,786)
Income taxes payable (2,256) 363
Accrued expenses 8,280 (5,187)
Deferred revenue (5,810) 1,287
Other long-term liabilities 2,313 -
CASH FLOW PROVIDED BY OPERATING 586 1,753
ACTIVITIES
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment (6,042) (2,363)
Acquisition of assets and (104,837) (88,706)
assumption of liabilities, net of
cash acquired
Investment in joint venture - -
Net change in accounts receivable - - -
related party
CASH FLOW USED IN INVESTING (110,879) (91,069)
ACTIVITIES
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from common stock Issuance - 81,631
Proceeds from issuance of debt 120,000 15,000
Reduction in redeemable preferred (25,000) -
stock
Payment of deferred financing costs (5,309) -
Net borrowings and payments on line 18,130 706
of credit
Change in bank overdraft - 5,114
Payments on debt (6,500) (9)
Payments of transaction costs - (2,959)
related to sale of Company
Cash distributions to owners - (3,653)
CASH FLOW PROVIDED BY FINANCING 101,321 95,830
ACTIVITIES
NET INCREASE (DECREASE) IN CASH (8,972) 6,514
CASH, BEGINNING OF PERIOD 9,300 2,786
CASH, END OF PERIOD 328 9,300
Notes:
Actual results for 2008 represent a full year's results for FC LLC and Xtensions and the performance of FTS and Globalcom from the date of acquisition.
Figures for 2007 represent the combined financial statements of First Communications on a pro forma basis (including FC and Xtensions) and do not represent accounting consolidated figures.
(a) Includes $ (3,599) of accounts receivable - related party re-classed from Cash Flow from Investing Activities
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR CKAKNBBKBOFB
More |
||
There are currently no messages on this discussion board
Please feel free to post a message and get things going.
Discussion Board Terms & Conditions FSA Market Abuse Fact Sheet
More...