Alamosa (NASDAQ:APCS)
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From May 2019 to May 2024
Highlights:
-- Income from Operations increased 166% to $34.9 million
compared to first quarter pro-forma of $13.1 million
-- Adjusted EBITDA increased 33% to $91.7 million compared to
first quarter pro-forma of $69.0 million
-- Exchanged 222,817 preferred stock units for 16.8 million newly
issued shares of common stock
-- As previously announced:
- Subscribers increased approximately 52,000 to 1.447 million
- Average monthly customer churn declined to 2.1 percent
Alamosa Holdings, Inc. (NASDAQ: APCS), a PCS Affiliate of
Sprint (NYSE: FON) today reported financial and operational results
for the second quarter ended June 30, 2005. Reported results also
reflect customer results for net subscriber additions, total direct
subscribers and average monthly customer churn previously reported on
July 15, 2005. For comparison purposes, the Company is also providing
condensed pro-forma statements of operations and certain operating
metrics for the four quarters of 2004 and the first quarter of 2005,
assuming the acquisition of AirGate PCS, Inc. had taken place at the
beginning of the respective quarters.
Total consolidated revenue for the second quarter was $339.4
million comprised of: $237.7 million in subscriber revenues, $90.0
million in travel revenues (including wholesale and resale) and $11.7
million in product sales revenues. Total consolidated revenue grew by
7% from the first quarter of 2005 and 22% from the second quarter of
2004, on a pro-forma basis. Total consolidated Adjusted EBITDA was
$91.7 million for the second quarter compared to pro-forma total
consolidated Adjusted EBITDA of $69.0 million in the first quarter of
2005 and $68.6 million in the second quarter of 2004.
Income from Operations increased 166% or $21.8 million
sequentially to $34.9 million in the second quarter from $13.1 million
in the first quarter on a pro-forma basis. On a year over year basis,
Income from Operations increased $19.7 million on a pro-forma basis.
The increase reflects the scale the Company is creating from growth in
its subscriber base and growth in its roaming and wholesale revenue.
The Company reported a second quarter net loss of $5.6 million or
$0.04 per common share, after preferred stock dividends and inducement
premiums of approximately $5.6 million and a $14.9 million loss on
derivatives associated with the preferred stock due to early
conversions and the increase in fair value of stock warrants. The
second quarter loss compares to a reported net loss of $3.1 million or
$0.02 per common share, after preferred stock dividends, during the
first quarter of 2005. On a pro-forma basis, the consolidated Company
net loss was $3.9 million for the first quarter of 2005 and $20.1
million during the second quarter of 2004.
During the quarter, the Company exchanged 222,817 preferred stock
units for 16.8 million shares of newly issued common stock. In
addition, the Company spent approximately $39.6 million on fixed asset
additions including the launch of 117 new sites, 30 of which were in
the former AirGate properties, in the second quarter increasing the
covered population to 19.7 million.
Net subscriber additions totaled 52,000 during the second quarter,
including 3,000 purchased subscribers, compared to 81,000 net
additions in the first quarter and 47,000 net additions in the same
quarter one year ago on a pro-forma basis. The Company ended the
second quarter with 1.447 million subscribers, a 22% increase over
1.188 million subscribers one year ago. The Company reported combined
average monthly customer churn of 2.1 percent for the second quarter,
compared to 2.3 percent in the first quarter of 2005 and 2.2 percent
one year ago on a pro-forma basis.
"The second quarter of 2005 was another great quarter for Alamosa.
It was highlighted by passing the 1 million customer benchmark in the
original Alamosa territories along with new records in terms of
Revenues, Adjusted EBITDA and average monthly customer churn," said
David E. Sharbutt, Chairman and Chief Executive Officer of Alamosa
Holdings, Inc. "Although net subscriber additions in the second
quarter were seasonally lower, we achieved solid subscriber growth and
continued our positive customer retention trends. We continued to
expand and improve the network and distribution system in the
Southeast and further rationalized our balance sheet through several
induced preferred stock exchanges that significantly reduces our
dividend requirements." Mr. Sharbutt concluded by stating, "We are
focused on execution and the growth of our business for the second
half of 2005."
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*T
SUMMARY OF SECOND QUARTER 2005 OPERATING STATISTICS
(a) Consolidated results include Holding Company activity, which is
not presented separately
Alamosa Alamosa Alamosa
Holdings Inc. Holdings Inc. Holdings Inc.
Alamosa (consolidated)(a) (consolidated)(a) (consolidated)(a)
(combined) Q2 2005 Q1 2005 Q2 2004
----------------- ----------------- -----------------
Service Revenue
(millions) $ 327.7 $ 303.3 $ 198.6
Adjusted EBITDA
(millions) $ 91.7 $ 69.0 $ 68.6
Net income
(loss)
(millions) $ (5.6) $ (3.9) $ (20.1)
---------------- ---------------- ----------------
Total Direct
Subscribers 1,447,000 1,395,000 1,188,000
Net Additions
(including
purchased
subscribers) 52,000 81,000 47,000
Wholesale/
Resale
Subscribers 282,000 266,000 112,000
----------------- ---------------- ----------------
ARPU (including
roaming &
wholesale) $ 77 $ 75 $ 76
ARPU (without
roaming &
wholesale) $ 56 $ 55 $ 56
CCPU (including
roaming) $ 43 $ 41 $ 43
CCPU (without
roaming) $ 29 $ 29 $ 31
CPGA $ 361 $ 358 $ 356
---------------- ---------------- ----------------
Other Select
Operating Alamosa Alamosa Alamosa
Metrics (Q2 (consolidated)(a) (consolidated)(a) (consolidated)(a)
2005)
----------------- ----------------- -----------------
Cash & ST
investment at
period-end
(millions) $ 159.9 $ 106.3 $ 43.9
Fixed Asset
Additions
during period
(millions) $ 39.6 $ 24.3 $ 15.3
---------------- ---------------- ----------------
Licensed POPs
(millions) 23.2 15.8 7.4
Covered POPs
(millions) 19.7 13.3 6.4
Churn (net of
30 day
returns) 2.1% 2.0% 2.4%
Penetration -
Covered POPs 7.3% 7.6% 6.7%
---------------- ---------------- ----------------
Total Voice
System Minutes
of Use (MOUs)
(millions) 4,520 3,066 1,454
Average Voice
MOUs Per User
(without
roaming) 767 723 869
Average Voice
MOUs Per User
(including
roaming) 953 904 1,069
Inbound Roaming
Minutes
(millions) 983 676 307
Inbound
Wholesale &
Resale Minutes
(millions) 260 235 25
Outbound
Roaming
Minutes
(millions) 796 538 258
---------------- ---------------- ----------------
*T
BUSINESS OUTLOOK
The following business outlook for 2005 may be materially affected
by competitive conditions, continued development and acceptance of new
Vision products and services, changes in pricing plans, the
integration of AirGate PCS, Inc., the pending business combination
between Sprint and Nextel and general economic conditions, among other
things (See "Forward Looking Statements" below):
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*T
AirGate AirGate Alamosa
From Pro- Pro-Forma
February Forma Combined
Alamosa 16, 2005 Combined Year Year
---------------- ---------- --------- ---------- -------- -----------
Adjusted $ 250 $ 65 $ 315 $ 71.5 $ 321.5
EBITDA million million million million million
Fixed Asset $ 90 $ 50 $ 140
Additions million million million
Net Subscriber
Additions 165,000 40,000 205,000 56,000 221,000
Average
Monthly Churn
- less than 2.4% 2.6% 2.5% 2.6% 2.5%
*T
CURRENT DEVELOPMENT
As announced on August 8, 2005, AirGate PCS, Inc., a wholly-owned
subsidiary of Alamosa, filed a lawsuit against Sprint, certain of its
affiliates and Nextel Communications, Inc. in the Delaware Court of
Chancery alleging, among other things, that following the completion
of their pending merger, Sprint may breach the exclusivity covenants
contained in its management agreement with AirGate and that Nextel
unlawfully interfered with AirGate's exclusive rights under such
agreement. The complaint seeks, among other things, an order directing
Sprint and its affiliates to specifically perform their contractual
obligations under their agreements with AirGate, an injunction
preventing Sprint and Nextel from taking any action or entering into
any agreement that would violate the exclusivity covenants contained
in the agreements, a declaratory judgment declaring the rights,
remedies and obligations of the parties under the agreements, and
damages or other relief.
SECOND QUARTER EARNINGS RELEASE & CONFERENCE CALL
Alamosa has scheduled a conference call, which will be broadcast
live over the Internet, on Wednesday, August 10, 2005 at 9:00 a.m. ET.
Investors and analysts may access the call live via phone by dialing
913-981-5543 and asking for the Alamosa call 10 minutes prior to the
start time or listen live over the Internet by logging on to
www.alamosapcs.com or www.earnings.com. A telephonic replay of the
conference call will be available through Wednesday, August 17, 2005,
and may be accessed by calling 719-457-0820 and using the passcode
9400564. An audio archive will be available shortly after the call on
the company's website at www.alamosapcs.com or www.earnings.com for 30
days.
ABOUT ALAMOSA
Alamosa Holdings, Inc. is the largest (based on number of
subscribers) PCS Affiliate of Sprint (NYSE: FON), which operates the
largest all-digital, all-CDMA Third-Generation (3G) wireless network
in the United States. Alamosa has the exclusive right to provide
digital wireless mobility communications network services under the
Sprint brand name throughout its designated territory located in
Texas, New Mexico, Oklahoma, Arizona, Colorado, Utah, Wisconsin,
Minnesota, Missouri, Washington, Oregon, Arkansas, Kansas, Illinois,
California, Georgia, South Carolina, North Carolina and Tennessee.
Alamosa's territory includes licensed population of 23.2 million
residents, including 15.8 million residents in Alamosa's territories
and 7.4 million residents in the recently acquired AirGate properties.
ABOUT SPRINT
Sprint offers an extensive range of innovative communication
products and solutions, including global IP, wireless, local and
multi-product bundles. A Fortune 100 company with more than $27
billion in annual revenues in 2004, Sprint is widely recognized for
developing, engineering and deploying state-of-the-art network
technologies, including the United States' first nationwide
all-digital, fiber-optic network; an award-winning Tier 1 Internet
backbone; and one of the largest 100-percent digital, nationwide
wireless networks in the United States. For more information, visit
www.sprint.com/mr.
FORWARD LOOKING STATEMENTS
Statements contained in this news release that are forward-looking
statements including "Business Outlook" data and statements containing
terms such as "can", "may", "will", "expect", "plan", and similar
terms and statements about the benefits of the merger between Alamosa
and AirGate PCS, Inc, are subject to various risks and uncertainties.
Such forward-looking statements are made pursuant to the "safe-harbor"
provisions of the Private Securities Litigation Reform Act of 1995 and
are made based on management's current expectations or beliefs as well
as assumptions made by, and information currently available to,
management. A variety of factors could cause actual results to differ
materially from those anticipated in Alamosa's forward-looking
statements, including the following factors: Alamosa's dependence on
its affiliation with Sprint; shifts in populations or network focus;
changes or advances in technology; changes in Sprint's national
service plans or fee structure with us; change in population;
difficulties in network construction; increased competition in our
markets and adverse changes in financial position, condition or
results of operations and as outlined in the "Business Outlook"
section of this release, competitive conditions, continued development
and acceptance of new Vision products and services, changes in pricing
plans, the integration of AirGate PCS, Inc., the pending business
combination between Sprint and Nextel and general economic conditions,
among other things. For a detailed discussion of these and other
cautionary statements and factors that could cause actual results to
differ from Alamosa's forward-looking statements, please refer to
Alamosa's filings with the Securities and Exchange Commission,
especially in the "risk factors" sections of Alamosa's Annual Report
on Form 10-K for the year ended December 31, 2004 and in subsequent
filings with the Securities and Exchange Commission. Investors and
analysts should not place undue reliance on forward-looking
statements.
Definitions of Operating and Non-GAAP Financial Measures
We provide readers financial measures generated using generally
accepted accounting principles ("GAAP") and using adjustments to GAAP
("Non-GAAP"). These financial measures reflect conventions or standard
measures of liquidity, profitability or performance commonly used by
the investment community in the telecommunications industry for
comparability purposes.
The Non-GAAP financial measures used in this release include the
following:
-- Adjusted earnings before interest, taxes, depreciation and
amortization ("Adjusted EBITDA") are defined as net
income/(loss) plus income taxes, net interest expense,
depreciation expense, amortization expense and other non-cash
expense items. Adjusted EBITDA is a measure used by the
investment community in the telecommunications industry for
comparability and is not intended to represent the results of
our operations in accordance with GAAP.
The financial measures and other operating metrics used in this
release include the following:
-- ARPU, or average monthly revenue per user, is a measure used to
determine the average monthly subscriber revenue earned for
subscribers based in our territory. This measure is calculated
by dividing subscriber revenues (ARPU) or total service
revenues (ARPU with roaming) in our consolidated statement of
operations by our average daily subscribers during the period
divided by the number of months in the period.
-- CCPU, or cash cost per user, is a measure of the costs to
operate our business on a per subscriber basis consisting of
costs of service and operations, general and administrative
expenses and debt exchange expenses in our consolidated
statement of operations, plus handset subsidies on equipment
sold to existing subscribers (CCPU with roaming) less roaming
charges paid to Sprint PCS (CCPU before roaming). These costs
are divided by average daily subscribers during the period
divided by the number of months in the period to calculate
CCPU.
-- CPGA, or cost per gross addition, is used to measure the
average cost we incur to add a new subscriber in our
territory. Costs we incur in calculating this measure include
handset subsidies on new subscriber activations, commissions,
rebates and other selling and marketing costs. We calculate
CPGA by dividing (a) the sum of cost of products sold and
selling and marketing expenses associated with transactions
with new subscribers during the measurement period, less
product sales revenues associated with transactions with new
subscribers during the measurement period, by (b) the total
number of subscribers activated in our territory during the
period (net of activations deactivated within 30 days and
activations due to transfers from Sprint PCS and other PCS
Affiliates of Sprint into our territory).
-- Average monthly churn is used to measure the rate at which
subscribers based in our territory deactivate service on a
voluntary or involuntary basis. We calculate average monthly
churn based on the number of subscribers deactivated during
the period (net of transfers out of our service area and those
who deactivated within 30 days of activation) as a percentage
of our average daily subscriber base during the period divided
by the number of months during the period.
-- Licensed POPs represent the number of residents (usually
expressed in millions) in our territory in which we have an
exclusive right to provide wireless mobility communications
services under the Sprint brand name in the PCS wireless
spectrum. The number of residents located in our territory
does not represent the number of wireless subscribers that we
serve or expect to serve in our territory.
-- Covered POPs represent the number of residents (usually
expressed in millions) covered by our portion of the PCS
network of Sprint in our territory. The number of residents
covered by our network does not represent the number of
wireless subscribers that we serve or expect to serve in our
territory.
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*T
ALAMOSA HOLDINGS,INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(dollars in thousands, except share information)
June 30, December 31,
2005 2004
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 69,298 $ 129,917
Short term investments 90,642 50,418
Customer accounts receivable, net 85,399 44,687
Receivable from Sprint 20,677 24,809
Interest receivable 228 216
Inventory 13,845 9,136
Prepaid expenses and other assets 19,476 13,170
Deferred customer acquisition costs 5,614 6,337
Deferred tax asset 4,450 4,230
------------ ------------
Total current assets 309,629 282,920
Property and equipment, net 539,684 441,808
Debt issuance costs, net 8,561 9,086
Early redemption option on preferred
stock 7,451 21,387
Goodwill 245,087 --
Intangible assets, net 793,839 416,716
Other noncurrent assets 5,671 4,188
------------ ------------
Total assets $ 1,909,922 $ 1,176,105
============ ============
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLEPREFERRED STOCK AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 29,207 $ 24,692
Accrued expenses 55,007 43,916
Payable to Sprint 35,902 35,852
Interest payable 23,589 21,076
Deferred revenue 25,844 22,549
Current installments of capital leases 110 110
------------ ------------
Total current liabilities 169,659 148,195
------------ ------------
Long term liabilities:
Capital lease obligations 695 749
Other noncurrent liabilities 9,413 5,835
Deferred tax liability 33,844 16,362
Senior notes 1,092,872 739,141
------------ ------------
Total long term liabilities 1,136,824 762,087
------------ ------------
Total liabilities 1,306,483 910,282
------------ ------------
Commitments and contingencies -- --
Mandatorily redeemable convertible
preferred stock:
Series B preferred stock, $.01 par
value; 750,000 shares authorized;
225,363 and 478,987 shares issued
and outstanding, respectively 75,820 161,148
Series C preferred stock, $.01 par
value; 500,000 shares authorized; no
shares issued -- --
------------ ------------
Total mandatorily redeemable
convertible
preferred stock 75,820 161,148
------------ ------------
Stockholders' equity:
Preferred stock, $.01 par value;
8,750,000
shares authorized; no shares issued -- --
Common stock, $.01 par value;
290,000,000
shares authorized; 162,659,994 and
114,895,245 shares issued and
outstanding, respectively 1,627 1,149
Additional paid-in capital 1,285,186 860,425
Accumulated deficit (757,080) (756,834)
Unearned compensation (2,114) (65)
------------ ------------
Total stockholders' equity 527,619 104,675
------------ ------------
Total liabilities and stockholders'
equity $ 1,909,922 $ 1,176,105
============ ============
ALAMOSA HOLDINGS, INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(dollars in thousands, except per share amounts)
For the three months ended
June 30,
---------------------------
2005 2004
------------ ------------
Revenues:
Subscriber revenues $ 237,692 $ 133,569
Roaming and wholesale revenues 89,967 51,705
------------ ------------
Service revenues 327,659 185,274
Product sales 11,720 8,055
------------ ------------
Total revenue 339,379 193,329
------------ ------------
Costs and expenses:
Cost of service and operations 162,596 91,062
Cost of products sold 29,953 16,379
Selling and marketing 46,011 31,839
General and administrative expenses 9,135 5,706
Merger related expenses -- --
Depreciation and amortization 55,905 25,523
Loss on disposal of property and
equipment 131 2,604
Non-cash compensation 716 25
------------ ------------
Total costs and expenses 304,447 173,138
------------ ------------
Income from operations 34,932 20,191
Loss on debt extinguishment (482) --
Gain (loss) on derivative instrument (14,925) (11,926)
Interest and other income 1,573 221
Interest expense (25,295) (18,952)
------------ ------------
Loss before income taxes (4,197) (10,466)
Income tax (expense) benefit 4,193 (240)
------------ ------------
Net loss (4) (10,706)
Preferred stock dividend (851) (2,576)
Preferred stock conversion premium (4,777) (6,441)
------------ ------------
Net loss attributable to common
stockholders $ (5,632)$ (19,723)
============ ============
Net loss per common share, basic
and diluted $ (0.04)$ (0.19)
============ ============
Weighted average common shares
outstanding, basic and diluted 157,080,740 101,885,776
============ ============
For the six months ended
June 30,
---------------------------
2005 2004
------------ ------------
Revenues:
Subscriber revenues $ 427,672 $ 258,315
Roaming and wholesale revenues 158,144 94,858
------------ ------------
Service revenues 585,816 353,173
Product sales 21,335 16,846
------------ ------------
Total revenue 607,151 370,019
------------ ------------
Costs and expenses:
Cost of service and operations 284,871 177,278
Cost of products sold 58,532 36,162
Selling and marketing 91,288 62,832
General and administrative expenses 18,315 11,423
Merger related expenses 1,280 --
Depreciation and amortization 96,559 52,907
Loss on disposal of property and
equipment 107 2,910
Non-cash compensation 1,487 51
------------ ------------
Total costs and expenses 552,439 343,563
------------ ------------
Income from operations 54,712 26,456
Loss on debt extinguishment (482) (13,101)
Gain (loss) on derivative instrument (14,076) 746
Interest and other income 2,673 389
Interest expense (47,649) (37,187)
------------ ------------
Loss before income taxes (4,822) (22,697)
Income tax (expense) benefit 4,576 (557)
------------ ------------
Net loss (246) (23,254)
Preferred stock dividend (3,000) (5,796)
Preferred stock conversion premium (5,506) (6,441)
------------ ------------
Net loss attributable to common
stockholders $ (8,752)$ (35,491)
============ ============
Net loss per common share, basic and
diluted $ (0.06) $ (0.36)
============ ============
Weighted average common shares
outstanding, basic and diluted 143,090,447 98,688,272
============ ============
ALAMOSA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(dollars in thousands)
For the six months ended
June 30,
--------------------------
2005 2004
------------- ------------
Cash flows from operating activities:
Net loss $ (246) $ (23,254)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Non-cash compensation 1,487 51
Non-cash interest expense on derivative
instruments -- 6
Non-cash accretion of asset retirement
obligations 144 91
Non-cash (gain) loss on derivative
instruments 14,076 (746)
Provision for bad debts 5,173 4,114
Depreciation and amortization of property
and equipment 48,681 35,945
Amortization of intangible assets 47,878 16,962
Amortization of financing costs included
in interest expense 454 488
Amortization of debt premium (1,442) --
Loss on debt extinguishment 482 13,101
Interest accreted on discount notes 13,171 12,056
Deferred income taxes (220) --
Loss on disposal of property and
equipment 107 2,910
Merger related expenses 1,280 --
(Increase) decrease in:
Receivables (985) (12,579)
Inventory (378) 17
Prepaid expenses and other assets (1,394) 1,633
Increase (decrease) in:
Accounts payable and accrued expenses (54,271) 10,891
------------- ------------
Net cash provided by operating
activities 73,997 61,686
------------- ------------
Cash flows from investing activities:
Proceeds from sale of assets 214 380
Purchases of property and equipment (65,617) (42,636)
Net cash paid in business combination (69,831) --
Merger related expenses (436) --
Change in restricted cash -- 1
Change in short term investments 4,400 (50,119)
------------- ------------
Net cash used in investing activities (131,270) (92,374)
------------- ------------
Cash flows from financing activities:
Proceeds from issuance of senior notes -- 250,000
Redemption of senior notes (6,800) --
Repayments of borrowings under senior
secured debt -- (200,000)
Merger related expenses (844) --
Debt issuance costs -- (8,100)
Preferred stock dividends (3,793) (6,053)
Preferred stock conversion premium -- (116)
Stock options exercised 7,876 719
Shares issued to employee stock purchase
plan 267 492
Proceeds from restricted stock sales 2 --
Payments on capital leases (54) (330)
------------- ------------
Net cash provided by (used in)
financing activities (3,346) 36,612
------------- ------------
Net increase (decrease) in cash and cash
equivalents (60,619) 5,924
Cash and cash equivalents at beginning of
period 129,917 99,644
------------- ------------
Cash and cash equivalents at end of period $ 69,298 $ 105,568
============= ============
Supplemental disclosure of non-cash
financing and investing activities:
Stock issued in business combination $ 330,848 $ --
Warrants assumed in business combination 2,568 --
Fair value of assets acquired in business
combination 879,084 --
Fair value of liabilities assumed in
business combination (441,518) --
Conversion of preferred stock 85,328 65,626
Preferred stock issued in debt exchange -- 51
Non-cash fixed asset additions 127 --
Asset retirement obligations capitalized 321 75
Capitalized lease obligations incurred -- 67
Change in accounts payable for purchases
of property and equipment 3,855 (11,186)
ALAMOSA HOLDINGS INC.
BALANCE SHEETS
AS OF JUNE 30, 2005
Alamosa AirGate PCS, Alamosa
(Delaware), Inc. Holdings,
Inc. Inc.
------------ ------------- ------------
ASSETS
Current Assets:
Cash and cash equivalents $55,206 $4,366 $69,298
Short term investments 51,087 39,549 90,642
Customer accounts
receivable, net 58,761 26,638 85,399
Receivable from Sprint 17,285 3,392 20,677
Interest receivable 228 -- 228
Intercompany receivable 20,606 -- --
Inventory 10,024 3,821 13,845
Prepaid expenses and other
assets 12,146 7,019 19,476
Deferred customer
acquisition costs 5,362 252 5,614
Deferred tax asset 4,230 7,611 4,450
------------ ------------- ------------
Total current assets 234,935 92,648 309,629
Property and equipment, net 449,040 90,644 539,684
Debt issuance costs, net 8,561 -- 8,561
Early redemption option on
preferred stock -- -- 7,451
Goodwill -- 255,305 245,087
Intangible assets, net 401,583 392,256 793,839
Other noncurrent assets 4,268 1,403 5,671
------------ ------------- ------------
Total assets $1,098,387 $832,256 $1,909,922
============ ============= ============
LIABILITIES, MANDATORILY REDEEMABLE CONVERTIBLE PREFERRED STOCK AND
STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $23,808 $5,399 $29,207
Accrued expenses 51,027 14,787 55,007
Payable to Sprint 23,424 12,478 35,902
Interest payable 21,077 2,512 23,589
Intercompany payable -- 3,010 --
Deferred revenue 19,890 5,954 25,844
Current installments of
capital leases 110 -- 110
------------ ------------- ------------
Total current
liabilities 139,336 44,140 169,659
Capital lease obligations 695 -- 695
Other noncurrent liabilities 6,018 1,070 9,413
Deferred tax liability 16,605 27,700 33,844
Senior notes 745,923 346,949 1,092,872
------------ ------------- ------------
Total liabilities 908,577 419,859 1,306,483
------------ ------------- ------------
Mandatorily redeemable
convertible preferred stock -- -- 75,820
------------ ------------- ------------
Stockholders' Equity:
Preferred stock -- -- --
Common stock -- -- 1,627
Additional paid-in capital 932,059 424,560 1,285,186
Accumulated deficit (740,512) (12,163) (757,080)
Unearned compensation (1,737) -- (2,114)
------------ ------------- ------------
Total stockholders'
equity 189,810 412,397 527,619
------------ ------------- ------------
Total liabilities and
stockholders' equity $1,098,387 $832,256 $1,909,922
============ ============= ============
ALAMOSA HOLDINGS, INC.
STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 2005
Alamosa AirGate PCS, Alamosa
(Delaware), Inc. Holdings,
Inc. Inc.
------------ ------------- ------------
Revenues:
Subscriber revenues $163,871 $73,821 $237,692
Roaming and wholesale
revenues 66,289 24,776 89,967
------------ ------------- ------------
Service revenues 230,160 98,597 327,659
Product sales 8,715 3,005 11,720
------------ ------------- ------------
Total revenue 238,875 101,602 339,379
Costs and expenses:
Cost of service and
operations 110,615 53,079 162,596
Cost of products sold 22,255 7,698 29,953
Selling and marketing 33,618 12,393 46,011
General and administrative
expenses 3,509 5,373 9,135
Depreciation and
amortization 28,107 27,798 55,905
Loss on disposal of
property and equipment 131 -- 131
Non-cash compensation (47) 550 716
------------ ------------- ------------
Income (loss) from
operations 40,687 (5,289) 34,932
Loss on debt extinguishment (482) -- (482)
Loss on derivative
instruments -- -- (14,925)
Interest and other income 831 706 1,573
Interest expense (19,566) (5,729) (25,295)
------------ ------------- ------------
Income (loss) before
income taxes 21,470 (10,312) (4,197)
Income tax (expense) benefit (5,493) 3,966 4,193
------------ ------------- ------------
Net income (loss) $15,977 $(6,346) $(4)
============ ============= ============
ALAMOSA HOLDINGS, INC.
STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
Alamosa AirGate PCS, Alamosa
(Delaware), Inc. Holdings,
Inc. Inc.
------------ ------------- ------------
Revenues:
Subscriber revenues $318,902 $108,770 $427,672
Roaming and wholesale
revenues 126,895 32,916 158,144
------------ ------------- ------------
Service revenues 445,797 141,686 585,816
Product sales 16,682 4,653 21,335
------------ ------------- ------------
Total revenues 462,479 146,339 607,151
Costs and expenses:
Cost of services and
operations 212,098 74,440 284,871
Cost of products sold 46,406 12,126 58,532
Selling and marketing 70,138 21,150 91,288
General and administrative
expenses 9,611 8,272 18,315
Merger related expenses 436 -- 1,280
Depreciation and
amortization 54,456 42,103 96,559
Loss on disposal of
property and equipment 107 -- 107
Non-cash compensation 556 550 1,487
------------ ------------- ------------
Income (loss) from
operations 68,671 (12,302) 54,712
Loss on debt extinguishment (482) -- (482)
Loss on derivative
instruments -- -- (14,076)
Interest and other income 1,599 1,025 2,673
Interest expense (39,152) (8,497) (47,649)
------------ ------------- ------------
Income (loss) before
income taxes 30,636 (19,774) (4,822)
Income tax (expense) benefit (7,044) 7,611 4,576
------------ ------------- ------------
Net income (loss) $23,592 $(12,163) $(246)
============ ============= ============
ALAMOSA HOLDINGS, INC.
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2005
Alamosa AirGate PCS, Alamosa
(Delaware), Inc. Holdings,
Inc. Inc.
------------ ------------- ------------
Cash flows from operating
activities:
Net income (loss) $23,592 $(12,163) $(246)
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Non-cash compensation 556 550 1,487
Non-cash accretion of asset
retirement obligation 115 29 144
Non-cash loss on derivative
instruments -- -- 14,076
Provision for bad debts 3,863 1,310 5,173
Depreciation and
amortization of property
and equipment 39,323 9,358 48,681
Amortization of intangible
assets 15,133 32,745 47,878
Amortization of financing
costs included in interest
expense 454 -- 454
Amortization of debt premium -- (1,442) (1,442)
Loss on debt extinguishment 482 -- 482
Interest accreted on
discount notes 13,171 -- 13,171
Deferred income taxes -- (7,611) (220)
Loss on disposal of property
and equipment 107 -- 107
Merger related expenses 436 -- 1,280
(Increase) decrease in:
Receivable from/payable to
Parent (22,136) 2,460 --
Receivables (10,426) 9,441 (985)
Inventory (888) 510 (378)
Prepaid expenses and
other assets (59) (3,003) (1,394)
Increase (decrease) in:
Accounts payable and
accrued expenses (6,466) (36,144) (54,271)
------------ ------------- ------------
Net cash provided by
(used in) operating
activities 57,257 (3,960) 73,997
------------ ------------- ------------
Cash flows from investing
activities:
Proceeds from sale of assets 214 -- 214
Purchases of property and
equipment (47,555) (18,062) (65,617)
Net cash paid in business
combination -- 36,314 (69,831)
Merger related expenses (436) -- (436)
Change in short term
investments (676) 5,074 4,400
------------ ------------- ------------
Net cash provided by
(used in) investing
activities (48,453) 23,326 (131,270)
------------ ------------- ------------
Cash flows from financing
activities:
Redemption of senior notes (6,800) -- (6,800)
Merger related expenses -- -- (844)
Preferred stock dividends -- -- (3,793)
Stock options exercised -- -- 7,876
Shares issued to employee
stock purchase plan -- -- 267
Proceeds from restricted
stock sales -- -- 2
Capital distribution to
Parent (73,876) (15,000) --
Payments on capital leases (54) -- (54)
------------ ------------- ------------
Net cash provided by
(used in) financing
activities (80,730) (15,000) (3,346)
------------ ------------- ------------
Net increase (decrease)
in cash and cash
equivalents (71,926) 4,366 (60,619)
Cash and cash equivalents at
beginning of period 127,132 -- 129,917
------------ ------------- ------------
Cash and cash equivalents at
end of period $55,206 $4,366 $69,298
============ ============= ============
Supplemental disclosure of
non-cash financing and
investing activities:
Capital infusion in business
combination $-- $333,416 $--
Stock issued in business
combination -- -- 330,848
Warrants assumed in business
combination -- -- 2,568
Fair value of assets
acquired in business
combination -- 888,920 879,084
Fair value of liabilities
assumed in business
combination -- (449,552) (441,518)
Conversion of preferred
stock -- -- 85,328
Non-cash fixed asset
additions 127 -- 127
Asset retirement obligations
capitalized 292 28 321
Change in accounts payable
for purchases of property
and equipment (973) 4,827 3,855
Computation of Adjusted EBITDA and Reconciliation of Non-GAAP
Liquidity Measures
(Unaudited)
(In thousands)
Alamosa Alamosa
Holdings, (Delaware), AirGate PCS,
Inc. Inc. Inc.
---------------------------------------
For the For the For the
three three three
months months months
ended June ended June ended June
30, 30, 30,
2005 2005 2005
------------ ------------- ------------
Net income (loss) $(4) $15,977 $(6,346)
Income tax expense (benefit) (4,193) 5,493 (3,966)
Net interest expense 23,722 18,735 5,023
Depreciation and amortization 55,905 28,107 27,798
Non-cash compensation 716 (47) 550
Loss on debt extinguishment 482 482 -
(Gain) loss on derivative
instruments 14,925 - -
(Gain) loss on disposal of
property and equipment 131 131 -
------------ ------------- ------------
Adjusted EBITDA 91,684 68,878 23,059
Provision for bad debts 3,454 2,090 1,364
Non-cash accretion of asset
retirement obligation 74 60 14
Non-cash interest items 5,825 6,826 (1,001)
Cash income tax (expense)
benefit 3,973 (5,493) -
Net interest expense (23,722) (18,735) (5,023)
Working capital changes (16,605) 8,070 (17,754)
------------ ------------- ------------
Cash flows from operating
activities $64,683 $61,696 $659
============ ============= ============
Computation of Average Revenue per User (ARPU)
Computation of Cash Cost per User (CCPU)
(Unaudited)
Alamosa Alamosa
Holdings, (Delaware), AirGate PCS,
Inc. Inc. Inc.
---------------------------------------
For the For the For the
three three three
months months months
ended June ended June ended June
30, 30, 30,
2005 2005 2005
------------ ------------- ------------
Subscriber revenues (000s) $237,692 $163,871 $73,821
Roaming and wholesale revenue
(000s) 89,967 66,289 24,776
------------ ------------- ------------
Service revenue (000s) $327,659 $230,160 $98,597
============ ============= ============
Average subscribers (000s) 1,424 994 430
============ ============= ============
ARPU $56 $55 $57
============ ============= ============
ARPU with roaming $77 $77 $76
============ ============= ============
Cost of service and
operations (000s) $162,596 $110,615 $53,079
Less roaming expense (000s) (57,058) (37,852) (20,304)
General and administrative
expenses (000s) 9,135 3,509 5,373
Merger related expenses
(000s) -- -- --
Upgrade costs in selling and
marketing expenses (000s) 10,400 7,610 2,790
------------ ------------- ------------
$125,073 $83,882 $40,938
============ ============= ============
Average subscribers(000s) 1,424 994 430
============ ============= ============
CCPU $29 $28 $32
============ ============= ============
CCPU with roaming $43 $41 $47
============ ============= ============
Computation of Cost per Gross Addition (CPGA)
(Unaudited)
Alamosa Alamosa AirGate PCS,
Holdings, (Delaware), Inc.
Inc. Inc.
---------------------------------------
For the For the For the
three three three
months months months
ended June ended June ended June
30, 30, 30,
2005 2005 2005
------------ ------------- ------------
Selling and marketing
expenses (000s) $46,011 $33,618 $12,393
Less upgrade costs in selling
and marketing costs(000s) (10,400) (7,610) (2,790)
Cost of products sold(000s) 29,953 22,255 7,698
Product sales revenues(000s) (11,720) (8,715) (3,005)
------------ ------------- ------------
$53,844 $39,548 $14,296
============ ============= ============
Activations (000s) 151 109 42
============ ============= ============
CPGA $357 $363 $340
============ ============= ============
*T
Unaudited Pro Forma Statements of Operations and Operating Metrics
The unaudited pro forma statements of operations and operating
metrics for the quarters ended March 31, 2004, June 30, 2004,
September 30, 2004, December 31, 2004 and March 31, 2005 present the
effects of the acquisition of AirGate PCS, Inc. by Alamosa Holdings,
Inc. using the purchase method of accounting assuming the transaction
had been completed as of the beginning of the respective periods.
The pro forma statements were prepared using historical unaudited
quarterly financial statements of AirGate and Alamosa. Adjustments to
the historical statements of operations include (i) the elimination of
intercompany travel revenue and expense, (ii) amortization of
intangible assets recorded in connection with the acquisition, (iii)
decrease in depreciation of property and equipment based on the fair
value of AirGate property and equipment recorded in connection with
the transaction, (iv) reduction in interest expense based on the fair
value of AirGate debt recorded in connection with the transaction, and
(v) the tax effect of all pro forma adjustments using the historical
effective tax rate.
The unaudited pro forma condensed consolidated financial
information is for illustrative purposes only and does not purport to
represent what the actual consolidated results of operations or the
consolidated financial position of Alamosa Holdings would have been
had the transaction occurred on the dates assumed, nor is it
necessarily indicative of future consolidated results of operations or
financial position.
The unaudited pro forma condensed consolidated financial
information does not include the realization of any cost savings from
operating efficiencies, synergies or other restructurings resulting
from the transaction. The unaudited pro forma condensed consolidated
financial information should be read in conjunction with the separate
historical consolidated financial statements and accompanying notes of
Alamosa Holdings, Inc. and AirGate PCS, Inc.
-0-
*T
Alamosa Holdings, Inc.
Pro Forma Statements of Operations
Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005
(000s) Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
---------- ---------- ---------- ---------- ----------
Revenues:
Service
Revenues $186,402 $198,606 $209,245 $218,945 $224,660
Travel and
Roaming 55,835 68,186 80,514 81,621 78,590
---------- ---------- ---------- ---------- ----------
Total
Service
Revenues 242,237 266,792 289,759 300,566 303,250
Product Sales 11,673 11,667 12,208 12,415 12,826
---------- ---------- ---------- ---------- ----------
Total
Revenue 253,910 278,459 301,967 312,981 316,076
---------- ---------- ---------- ---------- ----------
Costs and
expenses:
Cost of service
& operations 124,815 133,418 134,543 154,602 145,276
Cost of
products sold 26,985 23,049 28,916 29,995 35,107
Selling and
marketing 42,909 42,729 54,018 53,334 54,570
General and
Administrative 12,054 10,676 10,485 10,498 12,103
Depreciation
and
amortization 52,476 50,738 51,241 55,175 55,168
(Gain) loss on
disposal of
property and
equipment 303 2,602 227 941 (4)
Non cash
compensation 26 25 30 802 771
---------- ---------- ---------- ---------- ----------
Total costs
and
expenses 259,568 263,237 279,460 305,347 302,991
---------- ---------- ---------- ---------- ----------
Income
(Loss)
from
operations (5,658) 15,222 22,507 7,634 13,085
Loss on debt
exchange (13,101) - - (2,991) -
Change in fair
value of
derivatives 12,672 (11,926) 1,200 (2,251) 849
Interest and
other income 333 409 599 1,253 1,446
Interest
expense (25,815) (23,325) (24,751) (26,213) (25,468)
---------- ---------- ---------- ---------- ----------
Loss before
income tax (31,569) (19,620) (445) (22,568) (10,088)
Income Tax
Benefit/
(Expense) (818) (450) - 1,038 6,181
---------- ---------- ---------- ---------- ----------
Net loss $(32,387) $(20,070) $(445) $(21,530) $(3,907)
========== ========== ========== ========== ==========
Alamosa Holdings, Inc.
Pro Forma Operating Metrics
Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005
(000s) Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
---------- ---------- ---------- ---------- ----------
Subscriber
revenues $186,402 $198,606 $209,245 $218,945 $224,660
Roaming and
wholesale
revenues 55,835 68,186 80,514 81,621 78,590
---------- ---------- ---------- ---------- ----------
Total
Service
Revenues $242,237 $266,792 $289,759 $300,566 $303,250
========== ========== ========== ========== ==========
Average
subscribers 1,123 1,177 1,229 1,288 1,355
========== ========== ========== ========== ==========
ARPU $55 $56 $57 $57 $55
========== ========== ========== ========== ==========
ARPU with
roaming $72 $76 $79 $78 $75
========== ========== ========== ========== ==========
Cost of service
and operations $124,815 $133,418 $134,543 $154,602 $145,276
Less roaming
expenses (36,853) (41,602) (48,359) (50,638) (48,728)
General and
administrative
expenses 12,054 10,676 10,485 10,498 12,103
Upgrade costs
in selling and
marketing 8,003 6,433 11,544 11,043 10,225
---------- ---------- ---------- ---------- ----------
$108,019 $108,925 $108,213 $125,505 $118,876
========== ========== ========== ========== ==========
Average
subscribers 1,123 1,177 1,229 1,288 1,355
========== ========== ========== ========== ==========
CCPU $32 $31 $29 $32 $29
========== ========== ========== ========== ==========
CCPU with
roaming $43 $43 $42 $46 $41
========== ========== ========== ========== ==========
Selling and
marketing
expenses $42,909 $42,729 $54,018 $53,334 $54,570
Less upgrade
costs (8,003) (6,433) (11,544) (11,043) (10,225)
Cost of
products sold 26,985 23,049 28,916 29,995 35,107
Product sales
revenue (11,673) (11,667) (12,208) (12,415) (12,826)
---------- ---------- ---------- ---------- ----------
$50,218 $47,678 $59,182 $59,871 $66,626
========== ========== ========== ========== ==========
Activations 146 134 166 171 186
========== ========== ========== ========== ==========
CPGA $344 $356 $357 $350 $358
========== ========== ========== ========== ==========
Alamosa Holdings, Inc.
Pro Forma Computation of Adjusted EBITDA
Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005
Pro Forma Pro Forma Pro Forma Pro Forma Pro Forma
---------- ---------- ---------- ---------- ---------
(000's)
Net loss $(32,387) $(20,070) $(445) $(21,530) $(3,907)
Income tax
expense
(benefit) 818 450 - (1,038) (6,181)
Net interest
expense 25,482 22,916 24,152 24,960 24,022
Depreciation
and
amortization 52,476 50,738 51,241 55,175 55,168
Non-cash
compensation 26 25 30 802 771
Loss on debt
exchange 13,101 - - 2,991 -
(Gain) loss on
derivative
instrument (12,672) 11,926 (1,200) 2,251 (849)
(Gain) loss on
disposal of
equipment 303 2,602 227 941 (4)
---------- ---------- ---------- ---------- ---------
Adjusted EBITDA $47,147 $68,587 $74,005 $64,552 $69,020
========== ========== ========== ========== =========
*T