Alaska Communications Systems Reports First Quarter 2007 Results.- Revenue Increased 9.6% to $90.6 Million, Up from $82.6 Million First Quarter 2006 - - Cash Provided by Operating Activities Increased 82.7% to $27.8 Million - - EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become Increased 14.9% to $32.5 Million, Up from $28.3 Million First Quarter 2006 - - Increases 2007 Annual Guidance - - Provides Insight into Strategic Investment - ANCHORAGE, Alaska -- Alaska Communications Systems This article is about the current telecommunications company. For the historical "Alaska Communications System", see AT&T Alascom. Alaska Communications Systems, (or ACS) is a telecommunications corporation, headquartered in Anchorage, Alaska. Group, Inc. ("ACS (Asynchronous Communications Server) See network access server. ") (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :ALSK) today reported financial results for its first quarter ended March 31, 2007. "Our market position, strong business fundamentals business fundamentals The general background within which an economy operates including earnings, sales, wage rates, taxes, and inflation. Improving business fundamentals are generally viewed as bullish for stocks, although stock prices at any given point and track record of execution continue to contribute to superior financial performance, growing cash flows and a strengthened balance sheet," said Liane li·an·a also li·ane n. Any of various climbing, woody, usually tropical vines. [Alteration of French liane, probably from lier, to bind, from Old French; see liable.] Pelletier, ACS president, chief executive officer and chair. "First quarter performance delivered year-over-year revenue growth of 10 percent and EBITDA growth of 15 percent fueled by our wireless and data offerings. Given first quarter performance, we are increasing annual guidance today for revenue, EBITDA and wireless capital expenditures." Financial Highlights: First Quarter 2007 Compared to First Quarter 2006 * Revenues increased 9.6 percent to $90.6 million, compared to $82.6 million in the prior year quarter. * Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. increased 63.7 percent to $14.6 million, compared to $8.9 million in the prior year quarter. * Net income was $7.6 million, or $0.17 per share (diluted). In the first quarter 2006, the Company incurred a net loss of $8.4 million, or $0.20 per share, of which $9.7 million was attributable to loss on extinguishment The destruction or cancellation of a right, a power, a contract, or an estate. Extinguishment is sometimes confused with merger, though there is a clear distinction between them. of debt. * Net cash provided by operations increased 82.7 percent to $27.8 million, compared to $15.2 million in the prior year quarter. * EBITDA increased 14.9 percent to $32.5 million, compared to $28.3 million in the prior year quarter. First quarter 2007 EBITDA benefited from the final out-of-period CETC CETC CANMET Energy Technology Centre (Canada) CETC Competitive Eligible Telecommunications Carrier (FCC) CETC Connecticut Employment and Training Commission CETC Central European Transport Corridor receipt of $700,000. * Cash, restricted cash and short-term investments increased to $37.8 million, compared to $25.1 million in the prior year quarter. * Net leverage ratio declined to 3.2 times EBITDA, compared to 3.7 times in the prior year quarter. David Wilson David Wilson may refer to:
"The strength of our revenue performance, coupled with stringent cost containment cost containment, n the features of a dental benefits program or of the administration of the program designed to reduce or eliminate certain charges to the plan. driven by process improvement, delivered exceptional cash flow performance. Net cash provided by operating activities increased to $27.8 million from $15.2 million in the prior year quarter, which included $8.9 million in debt redemption charges Redemption charge The commission a mutual fund charges an investor who is redeeming shares. For example, a 2% redemption charge (also called a back end load) on the sale of shares valued at $1000 will result in payment of $980 (or 98% of the value) to the investor. and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. settlements. After giving effect to these debt settlement cash outflows, cash from operations increased over 15 percent," added Wilson. Metric Highlights: First Quarter 2007 Compared to Fourth Quarter 2006 * Increased the total number of retail customer relationships across all product lines by approximately 4,300 to over 450,000. * Increased wireless subscribers by 2.6 percent, or over 3,500, bringing the total to approximately 137,500. * Improved overall average wireless monthly churn to 1.4 percent compared to 1.8 percent in the prior quarter. Prior period churn has been restated to negate ne·gate tr.v. ne·gat·ed, ne·gat·ing, ne·gates 1. To make ineffective or invalid; nullify. 2. To rule out; deny. See Synonyms at deny. 3. the gross up of installs and disconnects that was caused by certain account changes. * Increased wireless ARPU, now $60.60, up from $60.01 in Q4, inclusive of inclusive of prep. Taking into consideration or account; including. CETC revenue of $10.26 and $9.85, respectively. * Increased long distance subscribers by over 1,000 to approximately 65,000 customers. * Retail local access lines declined by 0.5 percent to 194,000 while DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary lines increased 3.1 percent to 45,400 lines. DSL line gains were almost 1,400, exceeding retail local access line losses of less than 1,000. * Recorded approximately 245,900 total local access lines. Total local access lines decreased by approximately 6,800 or 2.7 percent, driven by wholesale access lines leaving the network. 2007 Business Outlook For the full-year 2007 ACS is increasing its revenue, EBITDA and wireless growth capital expenditure guidance. Revenues are now expected to be in the range of $360 million to $370 million versus prior guidance of $350 million to $360 million; EBITDA to be in the range of $120 million to $124 million versus prior guidance of $118 million to $122 million; and capital expenditures are expected to be approximately $46 million versus prior guidance of approximately $42 million. ACS is reaffirming its maintenance capital expenditure guidance at approximately $37 million and the increase in guidance is solely attributable to wireless, primarily related to customer-driven wireless footprint expansion, and is funded by excess cash it expects to generate in 2007. ACS is reaffirming its cash interest expense guidance which is expected to be approximately $27 million. The guidance presented is exclusive of ACS' strategic investment. Strategic Investment Pelletier stated, "Building on the company's track record of extracting profitable growth from the Alaska market, ACS is looking to extend and enhance its proven business model with a strategic investment in a fiber facility between Alaska and the Pacific Northwest, positioning ACS to more effectively compete for an estimated $200 million in existing carrier, enterprise and government demand; serve burgeoning broadband growth; and benefit from favorable macroeconomic mac·ro·ec·o·nom·ics n. (used with a sing. verb) The study of the overall aspects and workings of a national economy, such as income, output, and the interrelationship among diverse economic sectors. trends in Alaska. We believe this investment would allow ACS to capture the full value of its wireline and wireless Alaska infrastructure and enable ACS to continue to deliver best-in-class growth. ACS is completing a very detailed feasibility study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. and project plan for the fiber and we look forward to providing additional insight on today's conference call including estimates of an up front investment cost of $75 million to $90 million; annual cash costs, inclusive of financing costs, of $10 million to $12 million; and a commercial launch date of early 2009." Wilson added, "We are well positioned from a liquidity standpoint, exiting the quarter with $37.8 million in cash and restricted cash. We also have adequate debt capacity to finance our strategic investment having reduced our net leverage ratio by over a turn since year-end 2004 to 3.2 times. ACS remains committed to its current dividend and management believes the strategic investment can further expand future cash flow per share." Conference Call The company will host a conference call and live webcast today at 5:00 p.m. Eastern Time to discuss first quarter results. For parties in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. and Canada, call 800-257-6566 to access the earnings call. Parties outside the United States and Canada can access the call at 303-275-2170. The live webcast of the conference call is accessible from the "Events Calendar" section of the company's website (www.alsk.com). The webcast will be archived on the ACS website. A telephonic replay of the conference call will also be available two hours after the call and will run until April 30, 2007 at midnight ET. To hear the replay, parties in the United States and Canada should call 800-405-2236 and enter pass code 11088068. Parties outside the United States and Canada should call 303-590-3000 and enter pass code 11088068. About Alaska Communications Systems ACS is the leading integrated communications provider in Alaska, offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. More information can be found on the company's website at www.acsalaska.com or at its investor site at www.alsk.com. Forward-Looking EBITDA Guidance This press release includes information related to management's estimate of EBITDA for the year ending December 31, 2007. EBITDA, as defined by the company, may not be similar to EBITDA measures used by other companies and is not a measurement under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting (GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). ). Management believes that EBITDA provides useful information to investors about the company's performance because it eliminates the effects of period-to-period changes in costs associated with capital investments, interest and stock-based compensation expense that are not directly attributable to the underlying performance of the company's business operations Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets . Management believes the most directly comparable GAAP measure would be "Net cash provided by operating activities." Due to the difficulty in forecasting and quantifying the amounts that would be required to be included in this comparable GAAP measure, the company is not providing an estimate of year-end net cash provided by operating activities at this time. Forward-Looking Statements This press release includes certain "forward-looking statements," as that term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These forward-looking statements are based on management's beliefs as well as on a number of assumptions concerning future events made using information currently available to management. Readers are cautioned not to put undue reliance on such forward-looking statements, which are not a guarantee of performance and are subject to a number of uncertainties and other factors, many of which are outside ACS' control. Such factors are, without limitation, whether the company undertakes the strategic investment described above as well as the company's ability to complete, manage, integrate, market, maintain, and attract sufficient customers to the infrastructure subject to the investment, and the products and services it may derive therefrom there·from adv. From that place, time, or thing. Adv. 1. therefrom - from that circumstance or source; "atomic formulas and all compounds thence constructible"- W.V. . The company cannot assure you that the strategic investment, if made, will generate sufficient revenue at acceptable cost. Other factors are, without limitation, fluctuations in wireless revenue, including roaming revenue; changes in company's relationships with its roaming partners; increased competition, including wireline facilities-based competition; changes in capital expenditures, strategic investments, or other factors affecting the company's ability to generate sufficient earnings and cash flows to continue to make dividend payments to its stockholders; changes in revenue from Universal Service Funds; regulatory limitations on the company's ability to change its pricing or bundle its communications services or other public policy changes; the continued availability of financing necessary to support future business; changes in accounting policies or practices; changes in the demand for the company's products and services, retail and wholesale; rapid technological developments in the telecommunications industry; changes in interest rates or other general national, regional or local economic conditions, including changes in tourism in Alaska. For further information regarding risks and uncertainties associated with ACS' business, please refer to the company's SEC filings, including, but not limited to, the sections entitled "Risk Factors" and "Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial of Financial Condition and Results of Operations" in our annual report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 2006. Copies of the company's SEC filings may be obtained by contacting its investor relations Investor relations The process by which the corporation communicates with its investors. department at (907) 564-7556 or by visiting its investor relations website at www.alsk.com. All information in this release is as of April 26, 2007. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company's expectations. [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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