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ARCH COMMUNICATIONS GROUP ANNOUNCES SECOND FISCAL QUARTER RESULTS;REPORTS RECORD CASH FLOW AND NET NEW SUBSCRIBER UNITS

 WESTBOROUGH, Mass., March 30 /PRNewswire/ -- Arch Communications


Group, Inc. (NASDAQ: APGR) reported today that revenues for the second

fiscal quarter ending Feb. 28, 1993 were $10,443,000 or 24.1 percent ahead of last year's corresponding quarter revenues of $8,410,000. Second quarter operating cash flow, or Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA), increased 11.7 percent to $2,689,000, a new record, versus $2,407,000 for the second quarter in fiscal year '92. EBITDA is the accepted key performance measure for paging companies.
 Arch also reported that during the second quarter the Company added through internal growth a record 14,196 net new subscriber units in service, representing a 32.5 percent annualized growth rate, more than double the 6,453 units put into service a year earlier. Including approximately 1,300 subscriber units acquired with the purchase of a small business in upstate New York during the first quarter, Arch had 188,798 subscriber units in service as of Feb. 28, 1993.
 Revenues for the six months ending Feb. 28, 1993 were $20,279,000 versus $16,008,000 for the corresponding period in fiscal 1992. Operating cash flow was a record $5,356,000 versus $4,802,000 for the corresponding fiscal 1992 period. The company attributed the increases primarily to growth in their subscriber base. Although EBITDA grew over the prior year, the company said, negative cash flow of approximately $550,000 associated with opening five new Market Expansions reduced some of the effect of core market growth. In the first half, 27,364 net new units were added for a 34.2 percent annualized growth rate.
 Commenting on the results, Chief Executive Officer C.E. Baker said, "We are pleased with the continued strong operating performance by Arch. We are particularly pleased with the financial performance of our Core Markets (markets open more than 18 months). Second quarter EBITDA in Core Markets increased 26.7 percent over the same period a year ago and for the six months ended Feb. 28, 1993, EBITDA was 22.9 percent ahead of the corresponding period in fiscal 1992. Market expansions which have incurred approximately $550,000 of EBITDA losses during the first six months of fiscal 1993 have accounted for approximately 5,000 new subscriber units this year.
 "Mr. Baker also noted that the Company's acquisition program is proceeding on course with one transaction closed in the first fiscal quarter and a second closed just after the end of the second fiscal quarter. A third transaction is scheduled to close in the third fiscal quarter, Mr. Baker said, and other acquisitions are progressing satisfactorily.
 "Our Page South wide area paging system buildout continues according to plan," Mr. Baker stated. "Major portions of the system are now completed and we are selling local and regional coverage on it at this time. The advantages of more services and a wider coverage area are very obvious to our existing and potential customers."
 Arch seeks to build shareholder equity by growing earnings before interest, taxes, depreciation and amortization, "EBITDA", and by increasing paging units in service. EBITDA, or operating cash flow, is the key performance measure for paging companies and is the basis for valuation as well as for borrowings from institutional lenders. The Company believes that it can best grow EBITDA and paging units in service by establishing the lowest cost operating structure within its service areas, installing efficient high-quality transmission systems, and quickly and effectively responding to its customers through its decentralized organizational structure.
 Arch Communications Group, Inc. provides paging services in 13 states, serving primarily middle and small market areas with populations ranging from 250,000 to 1,000,000. The Company's operations are organized into 5 business units operating as Page New England; Page New York; Page Michigan; Page South in North Carolina, South Carolina and Georgia; and Interlink Paging in Louisiana and Florida.
 FINANCIAL HIGHLIGHTS
 (In thousands, except for share and per share data)
 Three Months Ended Six Months Ended
 Feb. 28, Feb. 29, Feb. 28, Feb. 29,
 1993 1992 1993 1992
 Revenues $10,443 $8,410 $20,279 $16,608
 Operating cash flow(A) 2,689 2,407 5,356 4,802
 Net income (loss) (1,302) (1,871) (2,298) (3,994)
 Pro forma net income
 (loss) per common
 share ($0.18) ($0.33) ($0.32) ($0.79)
 Pro forma weighted
 average common
 shares (B) 7,124,745 5,718,858 7,124,745 5,062,843
 (A) Operating cash flow is Earnings Before Interest, Taxes, Depreciation and Amortization, "EBITDA".
 (B) Pro forma weighted average shares reflects the effects of issuance of 2,593,250 shares in a public offering closed January 17, 1992.
 ARCH COMMUNICATIONS GROUP, INC.
 CONSOLIDATED CONDENSED BALANCE SHEETS
 (in thousands)
 Feb. 28, 1993 Aug. 31 1992
 (unaudited)
 Current assets:
 Cash and equivalents $6,714 $12,501
 Accounts receivable, net 1,964 1,649
 Prepaid advertising 270 177
 Prepaid expenses and other 762 539
 Total current assets 9,710 14,866
 Property and equipment, at cost 47,983 42,209
 Less accumulated depreciation
 and amortization 16,506 16,631
 Property and equipment, net 31,477 25,578
 Intangible and other assets, net 13,484 14,707
 Total Assets $54,671 $55,151
 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
 Current Liabilities:
 Current maturities of
 long-term debt $5,183 $172
 Accounts payable 4,855 3,210
 Accrued expenses and other
 liabilities 3,633 3,430
 Total current liabilities 13,671 6,812
 Long-term debt, less current
 maturities 36,016 41,057
 Stockholders' equity (deficit):
 Common stock-$.01 par 71 71
 Additional paid-in capital 44,694 44,694
 Accumulated deficit (39,781) (37,483)
 Total stockholders' equity 4,984 7,282
 Total $54,671 $55,151
 ARCH COMMUNICATIONS GROUP, INC.
 CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
 (unaudited and in thousands, except share and per share amounts)
 Three months ended Six months ended
 2/28/93 2/29/92 2/28/93 2/29/92
 Service, rental and
 maintenance
 revenues $9,192 $7,553 $17,995 $15,090
 Product sales 1,251 857 2,284 1,518
 Total revenues 10,443 8,410 20,279 16,608
 Expenses:
 Services, rental
 and maintenance 2,313 2,018 4,400 3,973
 Cost of products
 sold 692 422 1,294 828
 Selling 1,639 1,133 3,238 2,212
 General and
 administrative 3,110 2,430 5,991 4,793
 Depreciation and
 amortization 3,202 3,099 6,187 6,297
 Total 10,956 9,102 21,110 18,103
 Operating income
 (loss) (513) (692) (831) (1,495)
 Interest expense, net 789 1,179 1,467 2,499
 Net income (loss) ($1,302) ($1,871) ($2,298) ($3,994)
 Pro forma net income
 (loss) per common
 share (18 cents) (33 cents) (32 cents) (79 cents)
 Pro forma weighted
 average number of
 common shares
 outstanding 7,124,745 5,718,858 7,124,745 5,062,843
 ARCH COMMUNICATIONS GROUP, INC.
 CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
 Six Months Ended
 (unaudited and in thousands)
 2/28/93 2/29/92
 Cash provided by operating
 activities $5,158 $2,374
 Cash flows investing activities:
 Additions to property and
 equipment, net (9,684) (3,013)
 Additions to intangibles
 and other (1,178) (353)
 Net cash used for investing
 activities (10,862) (3,366)
 Cash flows from financing
 activities:
 Net proceeds from issuance
 of common stock --- 25,417
 Issuance of long-term debt --- 900
 Repayment of long-term debt (83) (12,431)
 Net cash provided by financing
 activities (83) 13,886
 Net increase (decrease) in cash and
 equivalents (5,787) ---
 -0- 3/30/93
 /CONTACT: William A. Wilson, vice president of finance and CFO, Arch Communications, 508-898-0962/
 (APGR)


CO: Arch Communications Group, Inc. ST: Massachusetts IN: SU: ERN

CH -- NE002 -- 0899 03/30/93 09:21 EST
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