Cbeyond Reports Second Quarter 2006 Results; Results Driven by Accelerated Growth in Customers and Revenue.ATLANTA Atlanta (ətlăn`tə, ăt–), city (1990 pop. 394,017), state capital and seat of Fulton co., NW Ga., on the Chattahoochee R. and Peachtree Creek, near the Appalachian foothills; inc. 1847. -- Cbeyond Cbeyond is a company based in Atlanta, Georgia, that provides various communications services to small businesses. Service service over single or multiple bonded T-1. Technologies employed by the Cbeyond network include VoIP and Cisco Systems equipment. , Inc. (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 : CBEY CBEY Center for Business and the Environment at Yale ), ("Cbeyond"), a managed services An umbrella term for third-party monitoring and maintaining of computers, networks and software. The actual equipment may be inhouse or at the third-party's facilities, but the "managed" implies an ongoing effort; for example, making sure the equipment is running at a certain quality provider that delivers integrated packages of voice, broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). , and mobile services to small businesses, today announced its second quarter 2006 results. Recent financial and operating highlights include the following: --Strong second quarter revenue growth with revenues of $52.5 million, up 37.6% over the second quarter of 2005. The second quarter of 2006 included a $0.9 million positive adjustment relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc customer promotional liabilities recorded in prior periods; --Net income of $1.4 million, including non-cash stock-based compensation expense of $1.3 million recorded under SFAS SFAS Statement of Financial Accounting Standards SFAS Special Forces Assessment and Selection SFAS Student Financial Aid Services SFAS Sport Fishing Association of Singapore SFAS Safety Features Actuation System SFAS Statewide Fixed Assets System No. 123R, which was adopted during the first quarter of 2006; --Adjusted 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 (a non-GAAP measure) of $9.4 million during the second quarter of 2006, an increase of 63.2% from the second quarter of 2005, or $8.5 million excluding the effect of the revenue adjustment; --Rapid growth in customers with 1,805 net customer additions, bringing the total customers in Cbeyond's six markets to 23,714; and --An increase in average monthly revenue per customer location (ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. ) to $768, or $755 excluding the effect of the revenue adjustment, up from $751 in the prior quarter, driven by continued growth in application use per customer. Financial Overview and Key Operating Metrics metrics Managed care A popular term for standards by which the quality of a product, service, or outcome of a particular form of Pt management is evaluated. See TQM. Financial and operating metrics, which include non-GAAP financial measures, for the three months and six months ended June June: see month. 30, 2005, and 2006 include the following:
For the Three Months Ended June 30,
-------------------------------------
2005 2006 Change % Change
-------- -------- -------- ----------
Selected Financial Data
(dollars in thousands)
Revenue $38,182 $52,534 $14,352 37.6%
Operating expenses $38,471 $51,269 $12,798 33.3%
Operating income (loss) $ (289) $ 1,265 $ 1,554 N/M
Net income (loss) before
dividends $ (932) $ 1,406 $ 2,338 N/M
Capital expenditures $ 6,626 $11,534 $ 4,908 74.1%
Key Operating Metrics and
Non-GAAP Financial Measures
Customers 17,435 23,714 6,279 36.0%
Net additions 1,457 1,805 348 23.9%
Average monthly churn rate 1.0% 1.0% 0.0% 0.0%
Average monthly revenue per
customer location $ 762 $ 768 $ 6 0.8%
Adjusted EBITDA (in thousands) $ 5,756 $ 9,391 $ 3,635 63.2%
For the Six Months Ended June 30,
-------------------------------------
2005 2006 Change % Change
-------- -------- -------- ----------
Selected Financial Data
(dollars in thousands)
Revenue $73,358 $100,112 $26,754 36.5%
Operating expenses $74,764 $ 99,021 $24,257 32.4%
Operating income (loss) $(1,406) $ 1,091 $ 2,497 N/M
Net income (loss) before
dividends $(2,508) $ 1,426 $ 3,934 N/M
Capital expenditures $10,364 $ 22,545 $12,181 117.5%
Key Operating Metrics and
Non-GAAP Financial Measures
Customers 17,435 23,714 6,279 36.0%
Net additions 2,722 3,367 645 23.7%
Average monthly churn rate 1.0% 1.0% 0.0% 0.0%
Average monthly revenue per
customer location $ 761 $ 757 $ (4) (0.5%)
Adjusted EBITDA (in thousands) $10,398 $ 16,576 $ 6,178 59.4%
Management Comments "We were pleased to report another solid quarter of financial results, but the real story was our rapid growth in customers and application usage, coupled with the continued strength in ARPU," said Jim Geiger, chief executive officer of Cbeyond. "We recorded strong sales across all our markets, including our earliest ones where we've we've Contraction of we have. we've have been in business four to five years. And our applications used per customer climbed to 5.2, contributing to our positive trend in ARPU and high customer retention rate." Second Quarter Financial and Business Summary Revenues and ARPU Cbeyond reported revenues of $52.5 million for the second quarter of 2006, an increase of 37.6% from the second quarter of 2005. Revenues included a $0.9 million positive adjustment relating to customer promotional liabilities recorded in prior periods. These promotional obligations were recorded at their maximum amount in prior periods due to the lack of sufficient historical experience required under U.S. 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). ) to estimate the amounts that would ultimately be claimed by customers. Going forward, revenues recorded in current periods will include estimates of breakage arising from each type of sales promotion for which the company has sufficient experience to make estimates under GAAP. ARPU, or average revenue per customer location, was $768 in the second quarter, as compared to $751 in the first quarter of 2006. Excluding the $0.9 million revenue adjustment described above, ARPU was $755 in the second quarter, an increase of 0.5% from the first quarter of 2006. While Cbeyond had previously expected that ARPU would decline moderately through at least 2006, ARPU increased in the quarter due to added revenue from our mobile service and an acceleration acceleration, change in the velocity of a body with respect to time. Since velocity is a vector quantity, involving both magnitude and direction, acceleration is also a vector. In order to produce an acceleration, a force must be applied to the body. in the use of other value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: applications. Cost of Service and Gross Margin Cbeyond's gross margin was 69.1% in the second quarter of 2006 as compared with 70.2% in the second quarter of 2005. Excluding the revenue adjustment described above, gross margin in the second quarter of 2006 was 68.5%. Cost of service included $0.5 million in expenses associated with network changes relating to the Triennial tri·en·ni·al adj. 1. Occurring every third year. 2. Lasting three years. n. 1. A third anniversary. 2. A ceremony or celebration occurring every three years. Review Remand To send back. A higher court may remand a case to a lower court so that the lower court will take a certain action ordered by the higher court. A prisoner who is remanded into custody is sent back to prison subsequent to a Preliminary Hearing before a tribunal or magistrate Order (TRRO TRRO Tamil Refugee Relief Organisation ), which were substantially completed in the quarter. In addition, gross margin was negatively impacted by mobile handset The part of the telephone that contains the speaker and the microphone. On a desktop phone, the part you hold in your hand is the handset. On a cellphone, the entire phone is the handset. See multihandset cordless and headset. subsidies expensed in connection with sales of mobile service to our customers and historically typical early stage results in our newly opened Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. market, which we believe is beginning to increase its revenue base to cover the early cost of service in the market. Income from Operations and Adjusted EBITDA Cbeyond reported income from operations of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.3 million in the second quarter of 2006 compared with a loss from operations of $0.3 million in the second quarter of 2005. As of January January: see month. 1, 2006, Cbeyond adopted SFAS No. 123R. The income from operations of $1.3 million in the second quarter of 2006 includes $1.3 million in non-cash stock-based compensation expense as calculated using the fair value method under SFAS No. 123R, while the loss from operations of $0.3 million in the second quarter of 2005 includes $0.1 million in non-cash stock-based compensation as calculated using the intrinsic intrinsic /in·trin·sic/ (in-trin´sik) situated entirely within or pertaining exclusively to a part. in·trin·sic adj. 1. Of or relating to the essential nature of a thing. 2. method under APB APB See Accounting Principles Board (APB). No. 25. As these are two different methodologies used for calculating non-cash stock-based compensation, they are not comparable. For the second quarter of 2006, adjusted earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
Net Income Cbeyond reported net income of $1.4 million for the second quarter of 2006 as compared to a net loss of $0.9 million and a net loss available to common stockholders of $3.4 million for the second quarter of 2005. Cash and Marketable Securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has Cash, cash equivalents and marketable securities amounted to $32.0 million at the end of the second quarter of 2006, as compared to $29.5 million at the end of the first quarter of 2006. Capital Expenditures Capital expenditures were $11.5 million during the second quarter of 2006, compared to $11.0 million in the first quarter of 2006. Business Outlook for 2006 Based on results for the first half of 2006, Cbeyond has updated its guidance for the year 2006, as follows:
Prior Guidance Current Guidance
--------------------- ---------------------
Revenues At least $206 million At least $212 million
Adjusted EBITDA At least $30 million At least $32 million
Capital expenditures $42 million $42 million
Conference Call Cbeyond will hold a conference call to discuss this press release Thursday Thursday: see week. , August 3, 2006, at 5:00 p.m. ET. A live broadcast of the conference call will be available on-line at www.cbeyond.net. To listen to the live call, please go to the Web site at least 10 minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. The conference call will also be available by dialing (866) 558-6338 (for domestic U.S. callers) and (213) 785-2437 (for international callers). For those who cannot listen to the live broadcast, an on-line replay will be available shortly after the call and continue to be available for a year. About Cbeyond Cbeyond (NASDAQ: CBEY) is an Atlanta-based managed services provider that delivers integrated packages of voice, mobile and broadband services See broadband and broadband service provider. to small businesses in Atlanta, Chicago Chicago, city, United States Chicago (shĭkä`gō, shĭkô`gō), city (1990 pop. 2,783,726), seat of Cook co., NE Ill., on Lake Michigan; inc. 1837. , Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. , Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. , Houston Houston, city (1990 pop. 1,630,553), seat of Harris co., SE Tex., a deepwater port on the Houston Ship Channel; inc. 1837. Economy The fourth largest city in the nation and the largest in the entire South and Southwest, Houston is a port of entry; and Los Angeles. Cbeyond offers core communications services such as local and long-distance long-dis·tance adj. 1. Covering a long distance: a long-distance runner; operating under long-distance supervision. 2. voice, mobile and broadband Internet access Broadband Internet access, often shortened to just "broadband", is high speed Internet access—typically contrasted with dial-up access over modem. Dial-up modems are generally only capable of a maximum bitrate of 56 kbit/s (kilobits per second) and require the full use of a along with enhanced applications, including voicemail See voice mail. , email, Web hosting Making a Web site available on the Internet. Many ISPs host a few personal Web pages for an individual at no additional cost above the monthly service fee, but the address is subordinate to the ISP; for example, www.friendlyisp.com/pat_smith. , fax-to-email, data backup, file-sharing, VPN (Virtual Private Network) A private network that is configured within a public network (a carrier's network or the Internet) in order to take advantage of the economies of scale and management facilities of large networks. and more. Cbeyond manages these services over a private, 100-percent Voice over Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (VoIP) facilities-based network. For more information on Cbeyond, visit www.cbeyond.net. Forward Looking Statements This document contains forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of 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. Such statements include, but are not limited to statements identified by words such as "believes," "expects," "anticipates," "estimates," "intends," "plans," "targets," "projects" and similar expressions. Such statements are based upon the current beliefs and expectations of Cbeyond's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. Factors that might cause future results to differ include, but are not limited to, the following: changes in federal or state regulation that affects the Company; the timing of the initiation initiation, the transition and attendant ceremonies, such as ordeals and rites, involved in passing from one state or status to another, often from childhood to adulthood. It was among the most important social institutions of early humans. , progress or cancellation cancellation (See: cancel) CANCELLATION. Its general acceptation, is the act of crossing a writing; it is used sometimes to signify the manual operation of tearing or destroying the instrument itself. Hyde v. Hyde, 1 Eq. Cas. Abr. 409; Rob. of significant contracts or arrangements; the mix and timing of services sold in a particular period; competitive factors; the need to balance the recruitment recruitment /re·cruit·ment/ (re-krldbomact´ment) 1. the gradual increase to a maximum in a reflex when a stimulus of unaltered intensity is prolonged. 2. and retention of experienced management and personnel with the maintenance of high labor utilization utilization, n 1. the extent to which a given group uses a particular service in a specified period. Although usually expressed as the number of services used per year per 100 or per 1000 persons eligible for the service, utilization rates may be ; rapid technological change and the timing and amount of start-up Start-up The earliest stage of a new business venture. costs incurred in connection with the introduction of new services or the entrance into new markets; the inability to attract sufficient customers in new markets; changes in estimates of taxable income Under the federal tax law, gross income reduced by adjustments and allowable deductions. It is the income against which tax rates are applied to compute an individual or entity's tax liability. The essence of taxable income is the accrual of some gain, profit, or benefit to a taxpayer. or utilization of deferred tax assets which could significantly affect the Company's effective tax rate; and general economic and business conditions. Key Operating Metrics and Non-GAAP Financial Measures In this press release, the Company uses several key operating metrics and non-GAAP financial measures. In Schedule I, the Company defines each of these metrics and provides a reconciliation of non-GAAP financial measures to the most directly comparable GAAP financial measure. These financial measures and operating metrics are a supplement to GAAP financial information and should not be considered as an alternative to, or more meaningful than, net income (loss), cash flow or 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. (loss) as determined in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with GAAP. SCHEDULE I Adjusted EBITDA is not a substitute for operating income, net income, or cash flow from operating activities as determined in accordance with accounting principles generally accepted 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. , or GAAP, as a measure of performance or liquidity. The Company defines adjusted EBITDA as net income (loss) before interest, taxes, depreciation and amortization expenses, excluding non-cash stock option compensation, write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of public offering costs and gain recognized on troubled debt restructuring troubled debt restructuring See debt restructuring. , loss on disposal of property and equipment and other non-operating income or expense. Information relating to total adjusted EBITDA is provided so that investors have the same data that management employs in assessing the overall operation of the Company's business. Total adjusted EBITDA allows the chief operating decision maker to assess the performance of the Company's business on a consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: basis that corresponds to the measure used to assess the ability of its operating segments to produce operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. to fund working capital needs, to service debt obligations and to fund capital expenditures. In particular, total adjusted EBITDA permits a comparative assessment of the Company's operating performance, relative to a performance based on GAAP results, while isolating i·so·late tr.v. i·so·lat·ed, i·so·lat·ing, i·so·lates 1. To set apart or cut off from others. 2. To place in quarantine. 3. the effects of depreciation and amortization, which may vary among segments without any correlation correlation In statistics, the degree of association between two random variables. The correlation between the graphs of two data sets is the degree to which they resemble each other. to their underlying operating performance, and of non-cash stock option compensation, which is a non-cash expense Noun 1. non-cash expense - an expense (such as depreciation) that is not paid for in cash disbursal, disbursement, expense - amounts paid for goods and services that may be currently tax deductible (as opposed to capital expenditures) that varies widely among similar companies. The following information includes a reconciliation of total adjusted EBITDA to net income (loss):
CBEYOND, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
2005 2006 2005 2006
---------- -------- -------- ---------
Revenues:
Customer revenue $ 37,178 $50,939 $71,304 $ 97,398
Terminating access revenue 1,004 1,595 2,054 2,714
---------- -------- -------- ---------
Total revenue 38,182 52,534 73,358 100,112
Operating expenses:
Cost of service 11,380 16,253 21,824 31,251
Selling, general and
administrative 21,113 28,152 41,288 54,329
Depreciation and
amortization 5,978 6,864 11,652 13,441
---------- -------- -------- ---------
Total operating
expenses 38,471 51,269 74,764 99,021
---------- -------- -------- ---------
Operating income (loss) (289) 1,265 (1,406) 1,091
Other income (expense):
Interest income 260 409 508 799
Interest expense (684) (38) (1,315) (46)
Loss on disposal of
property and equipment (194) (136) (273) (293)
Other income (expense),
net (25) - (22) -
---------- -------- -------- ---------
Total other income
(expense) (643) 235 (1,102) 460
---------- -------- -------- ---------
Income before taxes (932) 1,500 (2,508) 1,551
Income taxes - (94) - (125)
Net income (loss) (932) 1,406 (2,508) 1,426
Dividends accreted on
preferred stock (2,484) - (4,869) -
---------- -------- -------- ---------
Net income (loss) available to
common stockholders $ (3,416) $ 1,406 $(7,377) $ 1,426
========== ======== ======== =========
Earnings (loss) per common
share
Basic $ (21.96) $ 0.05 $(50.18) $ 0.05
Weighted average number of
common shares outstanding
Basic 156 26,760 147 26,696
CBEYOND, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands)
(Unaudited)
December 31, June 30,
2005 2006
------------ -----------
ASSETS
Current Assets
Cash and cash equivalents $ 27,752 $ 29,007
Marketable securities 10,170 3,000
Accounts receivable, net of allowance
for doubtful accounts of $1,811 and
$1,945 as of December 31, 2005 and June
30, 2006, respectively 10,688 14,196
Other assets 4,328 5,869
------------ -----------
Total current assets 52,938 52,072
Property and equipment, gross 142,973 164,389
Less: accumulated depreciation (85,905) (98,496)
------------ -----------
Property and equipment, net 57,068 65,893
Other assets 4,826 4,022
------------ -----------
Total assets $ 114,832 $ 121,987
============ ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 9,364 $ 5,065
Other accrued liabilities 29,989 36,208
Current portion of capital lease
obligations 382 195
------------ -----------
Total current liabilities 39,735 41,468
Deferred installation revenue 511 548
Stockholders' equity
Common stock 266 270
Deferred stock compensation (701) (33)
Additional paid-in capital 230,797 234,084
Accumulated deficit (155,776) (154,350)
------------ -----------
Total stockholders' equity 74,586 79,971
------------ -----------
Total liabilities and stockholders'
equity $ 114,832 $ 121,987
============ ===========
CBEYOND, INC. AND SUBSIDIARIES
Selected Operating Statistics
(Dollars in thousands, except where noted)
(Unaudited)
---------------------------------------------
Jun. 30 Sept. 30 Dec. 31 Mar. 31 Jun. 30
2005 2005 2005 2006 2006
-------- --------- -------- -------- --------
Revenues
Atlanta $13,046 $13,874 $14,443 $14,863 $15,932
Dallas 10,321 10,840 11,402 11,901 12,690
Denver 11,660 12,445 12,977 13,769 14,773
Houston 2,862 3,592 4,331 5,217 6,302
Chicago 293 652 1,183 1,820 2,636
Los Angeles - - - 8 201
-------- --------- -------- -------- --------
Total revenues $38,182 $41,403 $44,336 $47,578 $52,534
======== ========= ======== ======== ========
Operating profit (loss)
Atlanta $6,016 $6,772 $5,978 $7,173 $7,993
Dallas 3,113 3,646 4,103 3,900 4,277
Denver 4,779 5,234 5,397 6,077 6,643
Houston (301) 197 397 538 1,349
Chicago (1,976) (1,999) (615) (1,382) (965)
Los Angeles - - (382) (1,029) (1,585)
Corporate (11,920) (12,470) (13,529) (15,451) (16,447)
-------- --------- -------- -------- --------
Total operating
profit (loss) $(289) $1,380 $1,349 $(174) $1,265
======== ========= ======== ======== ========
Adjusted EBITDA
Atlanta $7,540 $8,249 $7,384 $8,640 $9,386
Dallas 4,455 4,957 5,336 5,278 5,644
Denver 6,085 6,544 6,701 7,346 7,919
Houston 74 631 936 1,120 2,001
Chicago (1,822) (1,794) (358) (1,081) (615)
Los Angeles - - (382) (1,029) (1,438)
Corporate (10,576) (11,022) (11,773) (13,089) (13,506)
-------- --------- -------- -------- --------
Total adjusted
EBITDA $5,756 $7,565 $7,844 $7,185 $9,391
======== ========= ======== ======== ========
Adjusted EBITDA margin
(market-level)
Atlanta 57.8% 59.5% 51.1% 58.1% 58.9%
Dallas 43.2% 45.7% 46.8% 44.3% 44.5%
Denver 52.2% 52.6% 51.6% 53.4% 53.6%
Houston 2.6% 17.6% 21.6% 21.5% 31.8%
Chicago N/M N/M (30.3%) (59.4%) (23.3%)
Los Angeles N/M N/M N/M N/M N/M
Adjusted EBITDA margin
(as % of total revenue)
Corporate (27.7%) (26.6%) (26.6%) (27.5%) (25.7%)
Total 15.1% 18.3% 17.7% 15.1% 17.9%
Capital expenditures
Atlanta $1,365 $1,046 $1,935 $1,396 $1,655
Dallas 816 894 1,795 2,482 2,180
Denver 1,043 1,047 1,047 1,747 1,134
Houston 1,142 894 1,492 1,217 787
Chicago 1,029 879 727 745 698
Los Angeles 93 252 1,786 847 816
Corporate 1,138 1,796 3,812 2,577 4,264
-------- --------- -------- -------- --------
Total capital
expenditures $6,626 $6,808 $12,594 $11,011 $11,534
======== ========= ======== ======== ========
Other Operating Data
Customers
(at period end) 17,435 18,897 20,347 21,909 23,714
Net additions 1,457 1,462 1,450 1,562 1,805
Average monthly
churn rate 1.0% 1.0% 0.9% 1.0% 1.0%
Average monthly
revenue per customer
location $762 $760 $753 $751 $768
CBEYOND, INC. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure
(In thousands)
(Unaudited)
---------------------------------------------
Jun. 30 Sept. 30 Dec. 31 Mar. 31 Jun. 30
2005 2005 2005 2006 2006
-------- --------- -------- -------- --------
Reconciliation of
Adjusted EBITDA to Net
income (loss):
Total Adjusted EBITDA
for reportable
segments $5,756 $7,565 $7,844 $7,185 $9,391
Depreciation and
amortization (5,978) (6,097) (6,411) (6,577) (6,864)
Non-cash stock
option
compensation (67) (88) (84) (782) (1,262)
Interest income 260 374 443 390 409
Interest expense (684) (730) (379) (8) (38)
Gain on early
retirement of debt - - 4,060 - -
Loss on disposal of
property and
equipment (194) (109) (157) (157) (136)
Other income
(expense), net (25) 13 - - -
Income taxes - - - (31) (94)
-------- --------- -------- -------- --------
Net income (loss) $(932) $928 $5,316 $20 $1,406
======== ========= ======== ======== ========
Three Months Ended Six Months Ended
June 30, June 30,
------------------ -----------------
2005 2006 2005 2006
--------- -------- -------- --------
Reconciliation of
Adjusted EBITDA to Net
income (loss):
Total Adjusted EBITDA
for reportable
segments $5,756 $9,391 $10,398 $16,576
Depreciation and
amortization (5,978) (6,864) (11,652) (13,441)
Non-cash stock
option
compensation (67) (1,262) (152) (2,044)
Interest income 260 409 508 799
Interest expense (684) (38) (1,315) (46)
Gain on early
retirement of debt - - - -
Loss on disposal of
property and
equipment (194) (136) (273) (293)
Other income
(expense), net (25) - (22) -
Income taxes - (94) - (125)
--------- -------- -------- --------
Net income (loss) $(932) $1,406 $(2,508) $1,426
========= ======== ======== ========
Except for historical information and discussion contained herein, statements contained in this release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The specific forward-looking statements cover Cbeyond's expectations for revenue, EBITDA, as adjusted, and capital expenditures for the fiscal year 2006. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations. Numerous factors could cause or contribute to such differences. Some of the factors and risks associated with our business are discussed in Cbeyond's filings with the Securities and Exchange Commission. CBEY-F CBEY-G |
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