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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| First Comms. | LSE:FCOM | London | Ordinary Share | COM SHS USD0.001 (REGS) |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 0.015 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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RNS Number : 4227L
First Communications, Inc.
06 May 2010
First Communications, Inc. Announces Audited Results for
The Year Ended December 31, 2009
AKRON, OH, May 6, 2010 - Today First Communications, Inc. (AIM: FCOM) (the
"Company"), a leading Midwest competitive local exchange carrier providing data
and voice services, announces the following developments:
· Finalization of its December 31, 2009 financial statements, as audited by
its independent accountants;
· An increase in EBITDA to $14.1 million in 2009, up from $0.8 million in
2008;
· The sale of $15.0 million of its minority owned equity in Diamond
Communications Holdings LLC, ("Diamond"); and
· The extension of its credit facility (the "Facility") to March 31, 2012.
The Company confirms that it has today posted its audited financials to its
shareholders and that these audited financials will shortly be available on its
website.
Discussion of 2009 Results
Items of note in the year ended December 31, 2009 results:
· Revenues for 2009 of $173.6 million (compared to $153.5 million for 2008);
· Increase in gross margin percentage from 30.6% to 38.4% from 2008 to 2009;
· EBITDA (as defined below) of $14.1 million for 2009, compared to $0.8
million for 2008; and
· Higher net income primarily resulting from higher EBITDA as discussed above
and the gain associated with the Tower Asset Contribution discussed in the
footnotes to the audited financial statements.
Note: The results for the year 2008 include a full 12 month contribution from
First Communications, LLC ("FC LLC"), and Xtension Services, Inc. ("Xtensions"),
and just over 9 months contribution from First Telecom Services, LLC ("FTS") and
a 3 months contribution from First Global Telecom, Inc. ("Globalcom").
Additionally, the 2009 financial statements include $5.8 million of revenue and
$3.7 million in EBITDA earned from the towers assets before the contribution
thereof on August 20, 2009 to an affiliate of Diamond.
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, and before a one-time gain
related to the Company's 2009 Contributed Assets and related financing as
discussed in the footnotes to the audited financial statements.
Selected Financial Information
+----------+---------------------+----------+----------+----------+----------+----------+
| FIRST COMMUNICATIONS, INC. |
| SELECTED FINANCIAL INFORMATION |
| For the Years Ended December 31, 2009 and 2008 |
| (all numbers in 000's) |
| |
+---------------------------------------------------------------------------------------+
| | | | Year Ended December 31, | |
+----------+---------------------+----------+--------------------------------+----------+
| | | | 2009 | 2008 |Variance | |
+----------+---------------------+----------+----------+----------+----------+----------+
| | | | | | | |
+----------+---------------------+----------+----------+----------+----------+----------+
| Revenues, net | | $ | $ | $ | |
| | | 173,574 | 153,507 | 20,067 | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Gross Margin | | 66,587 | 46,917 | 19,670 | |
+--------------------------------+----------+----------+----------+----------+----------+
| | Gross Margin % | | 38.4% | 30.6% | | |
+----------+---------------------+----------+----------+----------+----------+----------+
| | | | | | | |
+----------+---------------------+----------+----------+----------+----------+----------+
| SG&A Expenses | | 52,547 | 46,675 | 5,872 | |
+--------------------------------+----------+----------+----------+----------+----------+
| SG&A as a % of Revenues | | 30.3% | 30.4% | | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Other Income (Expense) | | 48 | 593 | (545) | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| EBITDA | | 14,088 | 835 | 13,253 | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | | |
+----------+---------------------+----------+----------+----------+----------+----------+
| Depreciation and Amortization | | 13,556 | 19,031 | (5,475) | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | 8,284 | 9,777 | (1,493) | |
| Interest Expense | | | | | |
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Gain on Exchange of Asset | | (26,998) | - | (26,998) | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Loss on Extinguishment of Debt | | 4,725 | - | 4,725 | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Impairment of Goodwill and | | | 53,500 | (53,500) | |
| Intangible Assets | | - | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| | | 310 | (5,278) | 5,588 | |
| Income Tax Expense (Benefit) | | | | | |
| | | | | | |
+--------------------------------+----------+----------+----------+----------+----------+
| Net Income (Loss) | | $ | $ | $ | |
| | | 14,211 | (76,195) | 90,406 | |
+----------+---------------------+----------+----------+----------+----------+----------+
Operational Highlights and Current Outlook:
Ray Hexamer, CEO of First Communications commented:
"After a disappointing year in 2008, we made significant progress in 2009's
difficult economic environment by realigning our resources while investing in
new product and sales resources. We also finished the first of a three year
capital project in lighting and expanding our expansive fiber network. The
continued double digit growth in bandwidth demand has placed a premium on many
of our unique fiber routes throughout the Midwest and Northeast.
A primary goal of 2009 was reducing the financial leverage of the business and
providing adequate liquidity for our fiber expansion. That was accomplished
through the contribution of our tower business, discussed in the footnotes to
our audited financial statements, along with the expansion of EBITDA.
2009 operating highlights include the following:
· Added 968 new route miles to our expansive fiber network and completed the
low latency core network from Chicago to New York;
· Core growth revenue as a percentage of total revenue (excluding wholesale
revenues) grew from 50% in Q1 to 61.8% in Q4 of 2009; and
· Added Lyle Patrick as our CFO and key personnel to bolster our finance
department.
With the above results setting a stage for further cash flow momentum in 2010,
we plan to continue to execute on our plan of growing core revenues in our key
Midwest markets while deploying discretionary capital into our fiber network as
it becomes a more substantial contributing segment of our Company."
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Revenues
First Communications, Inc. reported revenues of $173.6 million for the year
ended December 31, 2009, compared to $153.5 million reported for the year ended
December 31, 2008. 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.
Additionally, 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 margin increased from 30.6% in 2008 to 38.4% in 2009 due to
the supply of higher margin services including dedicated T1 integrated voice and
data services On-net, as discussed above.
Sales, General and Administrative Expenses
As a percentage of revenues, the Company's selling, general and administrative
expenses for the year ended December 31, 2009 decreased to 30.3% compared to
30.4% for the year ended December 31, 2008. The decrease in expenses as a
percentage of revenues primarily relates to headcount reductions and other
related expense reductions.
Depreciation and Amortization of Other Intangibles
Depreciation and amortization charges decreased from $19.0 million for the year
ended December 31, 2008 to $13.6 million for the year ended December 31, 2009.
The decrease is primarily due to the write down of intangible assets in 2008,
thus reducing amortization going forward.
Interest Expense
Interest expense decreased from $9.8 million for the year ended December 31,
2008 to $8.3 million for the year ended December 31, 2009, primarily related to
the reduction in bank debt.
Gain on Exchange of Asset/Loss on Extinguishment of Debt
In 2009, the Company had a gain of $27.0 million related to the transaction for
the Contributed Assets and the related Facility restructuring, which also
resulted in a reduction in the amount of debt expense being deferred of $4.7
million.
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, a non-cash impairment to goodwill was
recorded of $28.2 million in 2008. 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, also in 2008. There
was no impairment in 2009.
EBITDA, Income from Operations, and Net Income
The Company's EBITDA increased from $0.8 million for the year ended December 31,
2008 to $14.1 million for the year ended December 31, 2009. The Company's income
from operations increased from a loss of $72.3 million for the year ended
December 31, 2008 to income of $0.5 million for the year ended December 31,
2009. The Company reported a $14.2 million net income for the year ended
December 31, 2009 compared to a loss of $76.2 million for 2008. As noted above,
the increase in EBITDA related primarily to higher revenues, and related
margins, with the increase in income from operations primarily resulting from
higher EBITDA and the impairment of goodwill and intangible assets in 2008. The
increase in net income results from the above, as well as the gain on exchange
of assets in 2009.
Cash
Cash balances amounted to $0.3 million as at December 31, 2009 compared to $0.3
million at December 31, 2008.
Capital Expenditures
Capital expenditures for the year ended December 31, 2009 were $12.0 million
related to the expansion of the Company's network, network and system upgrades,
installation costs and capitalized labor.
Significant Subsequent Events
Diamond Stock Sale
As discussed in Note 2 to the audited financial statements, we currently own
class A and B membership Units (the "Units") in Diamond. On April 30, 2010, we
entered into an agreement pursuant to which we disposed of a portion of the
Units for $15.0 million. The total number of our units of membership interest in
Diamond was reduced with this transaction from approximately 13.6% to
approximately 3.8%. This transaction has not affected our current right to
receive additional units in Diamond under an earn-out formula that was part of
the Contribution Agreement by and between the Company, Diamond, and others,
pursuant to which FTS contributed its wireless tower assets to Diamond and
Diamond provided a limited guaranty of a certain amount of the Company's debt in
exchange for the Units.
Amendment to Facility
Effective as of April 30, 2010, the Company entered into an 'Amendment No. 3' to
its Facility (the "Amendment No. 3"). With the sale of the Diamond Units
discussed above, $7.5 million of the proceeds were used to reduce the Term Loan
of the Company, in inverse order of maturity, with amounts outstanding under the
Revolver also reduced by $7.5 million, although the Revolver is available for
future drawdown. Overall, the Facility has been reduced to $ 76.3 million, and
as of April 30, 2010, the outstanding bank debt of the Company was $ 68.6
million, both after assuming the pay down amounts discussed above, and the
regular principal payment of $1.25 million as of March 31, 2010.
As part of the Amendment No. 3, 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 No.3:
Equity Offering
· The Company intends to initiate an Equity Offering (the "Offering").
Within 120 days of April 30, 2010, the Company shall be required to have
received $4.0 million of net proceeds pursuant to the Offering, with $2.5
million of such contributions used to repay the Term Loan, in inverse order of
maturity, and $1.5 million shall reduce the Revolver, although that amount is
available for future drawdown. Two of the existing shareholders of the Company
have committed the initial $4.0 million of equity requirement.
· The Company will seek to extend the Offering above the required $4.0
million to raise Excess Net Proceeds (the "Excess Net Proceeds"), with 50% of
such additional contributions to be used to repay the Term Loan, in inverse
order of maturity, and 50% to retained by the Company for corporate purposes.
Maturity Date
· The maturity date of the loans under the Facility has been extended to
March 31, 2012.
Covenants
· The Facility has a maximum leverage test, a minimum fixed charge test, a
minimum liquidity requirement, and a capital expenditure limitation.
· Maximum leverage (total debt to EBITDA) of 4.25 to 1.0 at June 30, 2010,
3.75 to 1.0 at September 30, 2010, 3.50 to 1.0 at March 31, 2011, and 3.25 to
1.0 at September 30, 2011 and thereafter.
· Minimum fixed charge coverage of 1.0 to 1.0 at June 30, 2010, 1.05 to 1.0
at September 30, 2010 and 1.1 to 1.0 at December 31, 2010 and thereafter.
· Until the $4.0 million in equity discussed above is received, $2.5
million is to be deposited in a fully blocked account which is not available to
be withdrawn; after receipt of the equity, the blocked account is subject to
withdrawal, and a minimum liquidity amount of $1.25 million is to be maintained.
· During any fiscal year, no more than $10.0 million is to be incurred for
capital expenditures. Notwithstanding the above, Excess Net Proceeds can be
used to spend additional capital expenditures above the $10.0 million.
Pricing and Fees
The Facility will be priced at LIBOR plus 600 bps, and will apply to the Term
Loan and the Revolver. There is a 100 bps commitment fee on the undrawn
Revolver. Upon raising an additional $6.0 million of equity within 120 days of
the effective date of the Amendment No. 3, the pricing will be reduced to LIBOR
plus 500 bps, and the commitment fee will reduce by 50 bps.
Scheduled Amortization
All scheduled payments will be reduced from $1.5 million to $1.25 million per
quarter through maturity.
Existing Subordinated Note Payments
As discussed in Note 9 to the audited financial statements, we have a $6.0
million subordinated note (the "Note") with a shareholder. As part of the
Amendment No. 3, previously scheduled monthly principal and interest payments of
$83,000 beginning on January 31, 2011 will continue to be allowed as part of the
Amendment No. 3, with the one-time payment previously scheduled for December 31,
2010 ($442,000 in principal and $880,000 in interest) to be deferred until April
1, 2012. In consideration for the deferral, interest on the sub-note has
increased from 11% to 12%.
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
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 | Tel: +44 (0) 207 523-8350 |
| Wallace | |
+------------------------+-----------------------------------------+
+--------------------------------------+-----------------+--+----------+
| December 31, 2009 AND 2008 CONDENSED FINANCIAL STATEMENTS |
| |
| FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| As of December 31, 2009 and 2008 |
| (in thousands) |
| |
+----------------------------------------------------------------------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| | December | |December |
| | 31, | | 31, |
+--------------------------------------+-----------------+--+----------+
| | 2009 | | 2008 |
+--------------------------------------+-----------------+--+----------+
| ASSETS | | | |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| CURRENT ASSETS | | | |
+--------------------------------------+-----------------+--+----------+
| Cash and cash equivalents | $ | | $ |
| | 278 | | 328 |
+--------------------------------------+-----------------+--+----------+
| Accounts receivable - trade, less | | | |
| allowance for doubtful accounts | | | |
+--------------------------------------+-----------------+--+----------+
| of $1,609 and $2,055 at December 31, | 15,959 | | 20,934 |
| 2009 and 2008, respectively | | | |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| Income tax receivable and deferred | 867 | | 2,473 |
+--------------------------------------+-----------------+--+----------+
| Inventory | 3,023 | | 2,802 |
+--------------------------------------+-----------------+--+----------+
| Prepaid expenses and other | 2,567 | | 2,263 |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| TOTAL CURRENT ASSETS | 22,694 | | 28,800 |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| PROPERTY AND EQUIPMENT, NET | 43,525 | | 40,881 |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| OTHER ASSETS | | | |
+--------------------------------------+-----------------+--+----------+
| Goodwill | 105,202 | | 105,202 |
+--------------------------------------+-----------------+--+----------+
| Other intangible assets, net | 22,915 | | 69,518 |
+--------------------------------------+-----------------+--+----------+
| Investments | 20,000 | | - |
+--------------------------------------+-----------------+--+----------+
| Deposits and other assets | 2,316 | | 6,492 |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| TOTAL OTHER ASSETS | 150,433 | | 181,212 |
+--------------------------------------+-----------------+--+----------+
| | | | |
+--------------------------------------+-----------------+--+----------+
| TOTAL ASSETS | $ | | $ |
| | 216,652 | | 250,893 |
+--------------------------------------+-----------------+--+----------+
+-----------------------------------+--------------------+----------+-------------------+
| FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED BALANCE SHEETS |
| As of December 31, 2009 and 2008 |
| (in thousands, except for per share data) |
| |
+---------------------------------------------------------------------------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| | December | | December |
| | 31, | | 31, |
+-----------------------------------+--------------------+----------+-------------------+
| | 2009 | | 2008 |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| LIABILITIES, REDEEMABLE PREFERRED | | | |
| STOCK AND SHAREHOLDERS' EQUITY | | | |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| CURRENT LIABILITIES | | | |
+-----------------------------------+--------------------+----------+-------------------+
| Current portion of long-term debt | $ | | $ |
| | 15,000 | | 9,500 |
+-----------------------------------+--------------------+----------+-------------------+
| Revolver | 9,000 | | 10,000 |
+-----------------------------------+--------------------+----------+-------------------+
| Accounts payable - trade | 17,333 | | 13,253 |
+-----------------------------------+--------------------+----------+-------------------+
| Accrued expenses | 12,382 | | 23,616 |
+-----------------------------------+--------------------+----------+-------------------+
| Deferred tax liability, net | - | | 221 |
+-----------------------------------+--------------------+----------+-------------------+
| Deferred revenue | 6,965 | | 4,769 |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| TOTAL CURRENT LIABILITIES | 60,680 | | 61,359 |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| NON-CURRENT LIABILITIES | | | |
+-----------------------------------+--------------------+----------+-------------------+
| Revolver | 10,824 | | 8,755 |
+-----------------------------------+--------------------+----------+-------------------+
| Long-term debt, net of current | 50,000 | | 104,000 |
| maturities | | | |
+-----------------------------------+--------------------+----------+-------------------+
| Note payable | 6,000 | | - |
+-----------------------------------+--------------------+----------+-------------------+
| Deferred tax liability, net | 1,390 | | 538 |
+-----------------------------------+--------------------+----------+-------------------+
| Deferred revenue | 13,490 | | 14,685 |
+-----------------------------------+--------------------+----------+-------------------+
| Other long-term liabilities | 814 | | 2,313 |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| TOTAL NON-CURRENT LIABILITIES | 82,518 | | 130,291 |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| TOTAL LIABILITIES | 143,198 | | 191,650 |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| REDEEMABLE PREFERRED STOCK, $0.001 par | | |
| value; 10,000,000 shares | | |
| authorized, | | |
+--------------------------------------------------------+----------+-------------------+
| 15,000 shares issued and | | | |
| outstanding at | | | |
+-----------------------------------+--------------------+----------+-------------------+
| December 31, 2009 and 2008 | 17,380 | | 15,468 |
| (liquidation preference of | | | |
| $1,000 per share, before accrued | | | |
| dividends) | | | |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| SHAREHOLDERS' EQUITY | | | |
+-----------------------------------+--------------------+----------+-------------------+
| Series A Common Stock, $0.001 par | | | |
| value; 60,000,000 shares | | | |
| authorized, | | | |
+-----------------------------------+--------------------+----------+-------------------+
| 26,902,000 shares issued and | 27 | | 27 |
| outstanding | | | |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| Additional paid in capital | 119,482 | | 119,482 |
+-----------------------------------+--------------------+----------+-------------------+
| Retained (deficit) | (63,435) | | (75,734) |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| TOTAL SHAREHOLDERS' EQUITY | 56,074 | | 43,775 |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| | | | |
+-----------------------------------+--------------------+----------+-------------------+
| TOTAL LIABILITIES, REDEEMABLE | $ | | $ |
| PREFERRED STOCK AND | 216,652 | | 250,893 |
| SHAREHOLDERS' EQUITY | | | |
+-----------------------------------+--------------------+----------+-------------------+
Note: Certain 2008 current liabilities have been reclassified to conform with
the 2009 presentation
+---------------------------------+----------+--------------------+----------+-------------------+
| FIRST COMMUNICATIONS, INC. AND SUBSIDIARIES |
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
| For the years ended December 31, 2009 and 2008 |
| (in thousands) |
| |
+------------------------------------------------------------------------------------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | Year | | Year |
| | | Ended | | Ended |
| | | December | | December |
| | | 31, 2009 | | 31, 2008 |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| REVENUES, NET | | $ | | $ |
| | | 173,574 | | 153,507 |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| COST OF FACILITIES, exclusive | | | | |
| of depreciation and | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| amortization stated below | | 106,987 | | 106,590 |
+---------------------------------+----------+--------------------+----------+-------------------+
| SELLING, GENERAL AND | | 52,547 | | 46,675 |
| ADMINISTRATIVE EXPENSES | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | - | | 53,500 |
| IMPAIRMENT OF GOODWILL AND | | | | |
| INTANGIBLE ASSETS | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| DEPRECIATION AND AMORTIZATION | | 13,556 | | 19,031 |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| OPERATING INCOME (LOSS) | | 484 | | (72,289) |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| OTHER INCOME (EXPENSE), NET | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| Interest expense | | (8,284) | | (9,777) |
+---------------------------------+----------+--------------------+----------+-------------------+
| Gain on exchange of assets | | 26,998 | | - |
+---------------------------------+----------+--------------------+----------+-------------------+
| (Loss) on extinguishment of | | (4,725) | | - |
| debt | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| Other | | 48 | | 593 |
+---------------------------------+----------+--------------------+----------+-------------------+
| OTHER INCOME (EXPENSE), NET | | 14,037 | | (9,184) |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| INCOME (LOSS) BEFORE INCOME | | 14,521 | | (81,473) |
| TAXES | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| INCOME TAX EXPENSE (BENEFIT) | | 310 | | (5,278) |
+---------------------------------+----------+--------------------+----------+-------------------+
| | | | | |
+---------------------------------+----------+--------------------+----------+-------------------+
| NET INCOME (LOSS) | | | | $ |
| | | $ | | (76,195) |
| | | 14,211 | | |
+---------------------------------+----------+--------------------+----------+-------------------+
Note: 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.
+-----------------------------------+------------------------+-----------+
| |
| FIRST COMMUNICATIONS, INC |
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
| For the years ended December 31, 2009 and 2008 |
| (in thousands) |
| |
+------------------------------------------------------------------------+
| | | |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
| | Year | Year |
| | Ended | Ended |
+-----------------------------------+------------------------+-----------+
| | December | December |
| | 31, 2009 | 31, 2008 |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
| CASH FLOW FROM OPERATING | | |
| ACTIVITIES | | |
+-----------------------------------+------------------------+-----------+
| Net income (loss) | $ | $ |
| | 14,211 | (76,195) |
+-----------------------------------+------------------------+-----------+
| Depreciation and amortization | 13,556 | 19,031 |
+-----------------------------------+------------------------+-----------+
| Deferred taxes | 217 | (4,951) |
+-----------------------------------+------------------------+-----------+
| Impairment of goodwill and | - | 53,500 |
| intangibles assets | | |
+-----------------------------------+------------------------+-----------+
| (Gain) on exchange of assets | (26,998) | - |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
| Changes in Operating Assets and | | |
| Liabilities | | |
+-----------------------------------+------------------------+-----------+
| Account receivable - trade, | 4,975 | 4,062 |
| net | | |
+-----------------------------------+------------------------+-----------+
| Inventory | (221) | 104 |
+-----------------------------------+------------------------+-----------+
| Prepaid expenses | (310) | (122) |
+-----------------------------------+------------------------+-----------+
| Deposits and other assets | 299 | (54) |
+-----------------------------------+------------------------+-----------+
| Accounts payable - trade | 3,708 | 2,684 |
+-----------------------------------+------------------------+-----------+
| Income taxes payable | 2,020 | (2,256) |
+-----------------------------------+------------------------+-----------+
| Accrued expenses | (11,295) | 8,280 |
+-----------------------------------+------------------------+-----------+
| Deferred revenue | 1,530 | (5,810) |
+-----------------------------------+------------------------+-----------+
| Other long-term liabilities | (1,497) | 2,313 |
+-----------------------------------+------------------------+-----------+
| CASH FLOW PROVIDED BY OPERATING | 195 | 586 |
| ACTIVITIES | | |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
| CASH FLOW FROM INVESTING | | |
| ACTIVITIES | | |
+-----------------------------------+------------------------+-----------+
| Purchase of property and | (11,969) | (6,042) |
| equipment | | |
+-----------------------------------+------------------------+-----------+
| Acquisition of assets and | - | (104,837) |
| assumption of liabilities, net of | | |
| cash acquired | | |
+-----------------------------------+------------------------+-----------+
| CASH FLOW USED IN INVESTING | (11,969) | (110,879) |
| ACTIVITIES | | |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
| CASH FLOW FROM FINANCING | | |
| ACTIVITIES | | |
+-----------------------------------+------------------------+-----------+
| Proceeds from issuance of debt | - | 120,000 |
| Conversion of payable to | 6,000 | - |
| long-term note | | |
+-----------------------------------+------------------------+-----------+
| Reduction in redeemable | - | (25,000) |
| preferred stock | | |
+-----------------------------------+------------------------+-----------+
| Payment of deferred financing | - | (5,309) |
| costs | 4,725 | - |
| Loss on extinguishment of debt | | |
+-----------------------------------+------------------------+-----------+
| Net borrowings and payments on | 9,499 | 18,130 |
| revolver | | |
+-----------------------------------+------------------------+-----------+
| Payments on debt | (8,500) | (6,500) |
+-----------------------------------+------------------------+-----------+
| CASH FLOW PROVIDED BY FINANCING | 11,724 | 101,321 |
| ACTIVITIES | | |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
| NET (DECREASE) IN CASH | (50) | (8,972) |
+-----------------------------------+------------------------+-----------+
| CASH, BEGINNING OF PERIOD | 328 | 9,300 |
+-----------------------------------+------------------------+-----------+
| CASH, END OF PERIOD | $ | $ |
| | 278 | 328 |
+-----------------------------------+------------------------+-----------+
| | | |
+-----------------------------------+------------------------+-----------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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