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Mpower Reaffirms Adjusted EBITDA and Revises Revenue Guidance for
2005
ROCHESTER, N.Y., June 29 /PRNewswire-FirstCall/ -- Mpower Holding Corporation
(AMEX:MPE), the parent company of Mpower Communications Corp., a leading
provider of data and voice services to retail and wholesale business customers,
today announced that it is reaffirming its 2005 Adjusted EBITDA guidance in the
range of $18-$21 million, or 93-126% higher than full year 2004 Adjusted
EBITDA, and revising its 2005 revenue guidance to $190-$193 million, or 26-28%
higher than full year 2004 revenue, from its previous guidance of $200-$208
million. Revenue guidance is being adjusted due to increased revenue churn in
April and May 2005 from the recent acquisition of ICG's California business, as
well as continued shortfalls to plan in sales headcount and delays in UNE-P
wholesale opportunities. However, these factors are not expected to impact the
company's Adjusted EBITDA guidance for 2005.
Guidance for 2005 capital expenditures remains unchanged at $17-$21 million for
the full year 2005, and total transition expenses and capital expenditures from
the January 2005 acquisition of ICG's California customer base and SONET fiber
network are still expected to be in the range of $2.3-$3.4 million throughout
the second and third quarters of 2005.
Mpower is also adjusting its 2006 guidance. Assuming the company maintains
current sales headcount levels, as well as returning revenue churn to levels
experienced prior to April and May, it would expect to grow 2006 revenue at
industry standard rates of 3-7% and to grow 2006 Adjusted EBITDA by 25-35%,
which it believes is above industry rates, but below its existing 2006
guidance.
Mpower continues to have no long-term debt and expects to have approximately
$30 million of unrestricted cash, cash equivalents and investments
available-for-sale at year-end 2005.
Conference Call to Discuss Revised Guidance
Date: Thursday, June 30, 2005
Time: 11:00 a.m. (Eastern time)
Dial-in Number: 1-800-683-1575
Replay Number: 1-877-519-4471, PIN#6234752
Available through July 7, 2005
Use of Non-GAAP Financial Information
The SEC has adopted rules (Regulation G) regulating the use of non-GAAP
financial measures. Because of Mpower's use of a non-GAAP financial measure,
Adjusted EBITDA, to supplement Mpower's consolidated financial statements
presented on a GAAP basis, as well as the use of Adjusted EBITDA in forecasted
guidance and in this press release, Regulation G requires Mpower to include in
this press release a presentation of the most directly comparable GAAP measure,
Net Income (Loss), and a reconciliation of Adjusted EBITDA to this GAAP
measure. Mpower has presented a reconciliation of this measure for the period
above. The non-GAAP measure Adjusted EBITDA provides an enhancement to an
overall understanding of Mpower's past financial performance and prospects for
the future as well as useful information to investors because of (i) the
historical use by Mpower of Adjusted EBITDA as a performance measurement; (ii)
the value of Adjusted EBITDA as a measure of performance before gains, losses
or other charges considered to be outside the company's core business operating
results; and (iii) the use of Adjusted EBITDA, or a similar term, by almost all
companies in the CLEC sector as a measurement of performance. Mpower has
excluded from its presentation of Adjusted EBITDA incremental ICG transition
expenses, network facility relocation expenses, stock-based compensation, gains
on sales of assets, agent selling expense - warrants, other income, and loss
from discontinued operations because Mpower does not believe that including
such items in Adjusted EBITDA provides investors with an appropriate measure of
determining Mpower's performance in its core business. Mpower's utilization of
this non-GAAP measurement is not meant to be considered in isolation or as a
substitute for net income (loss), income (loss) from continuing operations,
cash flow, gross margin and other measures of financial performance prepared in
accordance with GAAP. Adjusted EBITDA is not a GAAP measurement and Mpower's
use of it may not be comparable to similarly titled measures employed by other
companies in the telecommunications industry.
2005 Guidance
RECONCILIATION TO GAAP (amounts in $ thousands) Low - High
Operating Revenue $190,000 - $193,000
Adjusted EBITDA $18,000 - $21,000
Agent Selling Expense - Warrants ($ 200)
Stock-Based Compensation Expense ($ 200)
Incremental ICG Transition Expenses ($1,000)
Network Facility Relocation Expenses ($500) - ($300)
Gain on Sale of Assets, net $ 300
Depreciation and Amortization ($22,700) - ($22,600)
Loss from Operations ($6,300) - ($3,000)
Other Income $ 7,300
Interest Income $ 400
Interest Expense ($3,600) - ($3,500)
(Loss) Income from Continuing Operations ($2,200) - $1,200
Loss from Discontinued Operations ($ 300)
Net (Loss) Income (GAAP)(A) ($2,500) - $900
Total CAPEX (B) $17,000 - $21,000
(A) Depreciation and amortization, interest expense, incremental ICG
transition expenses, and possibly certain other items that reconcile
Adjusted EBITDA to the GAAP measurement Net Income (Loss) are subject
to change based on future purchase accounting adjustments related to
the ICG acquisition. The final amounts may differ materially, or be
classified differently, from forecasted amounts used in guidance.
(B) Total CAPEX excludes capital expenditures related to the transition
of the January 2005 acquisition of ICG's California customer base and
SONET fiber network.
About Mpower Holding Corporation
Founded in 1996, Mpower Holding Corporation (AMEX:MPE) is the parent company of
Mpower Communications, a leading facilities-based broadband communications
provider offering a full range of data, telephony, Internet access and network
services for retail business and wholesale customers in California, Nevada and
Illinois. Further information about the company can be found at
http://www.mpowercom.com/.
Forward-Looking Statements
Under the safe harbor provisions of the Private Securities Litigation Reform
Act of 1995, certain statements contained in this press release regarding our
and/or management's intentions, hopes, beliefs, expectations or predictions of
the future are forward-looking statements. These forward- looking statements
are not historical facts and are only estimates or predictions. Actual results
may differ materially from those projected as a result of risks and
uncertainties including, but not limited to, sales growth, changes in federal
or state telecommunications regulations, market acceptance of our product and
service offerings, the liquidity of our common stock, our ability to secure
adequate financing or equity capital to fund our operations and network
expansion, our ability to manage growth and maintain a high level of customer
service, the performance of our network and equipment, our ability to enter
into strategic alliances or transactions, the cooperation of incumbent local
exchange carriers in provisioning lines and interconnecting our equipment,
regulatory approval processes, the effect of regulatory decisions on our access
charges and operating costs, changes in technology, price competition and other
market conditions and risks detailed from time to time in our filings with the
Securities and Exchange Commission. We undertake no obligation to update
publicly any forward-looking statements, whether as a result of future events,
new information, or otherwise.
DATASOURCE: Mpower Holding Corporation
CONTACT: Mpower Communications Investor Contact - Gregg Clevenger, Chief
Financial Officer, +1-585-218-6547, , or Mpower
Communications Media Contact - Michele Sadwick, Vice President,
+1-585-218-6542, , both of Mpower Holding Corporation
Web site: http://www.mpowercom.com/