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GCI Reports Third Quarter 2006 Financial Results.

* Consolidated revenue of $125.8 million

* Net income of $7.1 million or $0.13 per diluted share

* EBITDA of $43.2 million

ANCHORAGE, Alaska, Nov. 1 /PRNewswire/ -- GCI today reported net income of $7.1 million, or earnings per diluted share of $0.13, for the third quarter of 2006. The company's third quarter net income compares to income of $2.3 million, or earnings per diluted share of $0.04 in the same period of 2005.

GCI's third quarter 2006 revenues totaled $125.8 million, an increase of 10.6 percent over the third quarter of 2005. Revenues increased across all GCI business segments on a year-over-year basis.

Third quarter 2006 earnings before interest, taxes, depreciation, amortization and non-cash share based compensation expense (EBITDA) totaled $43.2 million. EBITDA increased $5.0 million or 13.1 percent from the third quarter of 2005. Third quarter 2005 EBITDA, as adjusted, totaled $38.2 million including the MCI credit utilized of $1.4 million.

Sequentially, revenues for the company increased $7.6 million over second quarter 2006 revenues of $118.2 million. Third quarter EBITDA of $43.2 million increased 9.4 percent over EBITDA of $39.5 million in the second quarter of 2006.

For the third quarter of 2006 GCI significantly exceeded its revenue and EBITDA guidance. The company expected revenues of approximately $116 million to $118 million, and EBITDA of approximately $39.5 million, excluding non-cash share based compensation expense. Prior guidance for the year 2006 was for $450 million to $460 million in revenues and EBITDA of $150 million to 154 million. As a result of the third quarter growth GCI is increasing its 2006 full year guidance for revenues and EBITDA. Revenues are now expected in the range of $470 million to $480 million and EBITDA is expected in the range of $154 million to $158 million for the year 2006.

"Results for the year to date substantially exceeded expectations and as a result we have raised EBITDA guidance for the year by $4 million," said GCI president Ron Duncan. "All of our business lines are performing better than expected and we are clearly on our way to another year of record performance."

"While delighted by the excellent results I am troubled by our failure to turn up our own local phone lines at the expected rate. We missed our DLPS conversion targets again in this quarter and have been forced to lower our guidance for the second time. We now expect to have more than 30,000 lines on our own facilities by year end."

"The failure lies primarily in our inability to complete plant preparation for local consumer service. We are reviewing our internal processes and making the changes necessary to increase the rate at which we are able to turn up our own local lines. The bad news is that we are still paying more than $25 million per year to ACS. The good news is that we can eliminate the majority of that expense as we build out on our own facilities. Our challenge is to deploy those facilities more rapidly."

Highlights

* Consumer revenues increased to $45.2 million, an improvement of 11.9 percent over the prior year and increased 2.3 percent from the second quarter of 2006. The increases were from voice, video, data and wireless sales.

* Network access revenues increased to $45.6 million, an increase of 14.0 percent over the prior year and increased 10.3 percent over the second quarter of 2006. The increase in revenues is due primarily to a 23.8 percent increase in long distance minutes carried on GCI's network for other common carriers for the third quarter of 2006 as compared to the third quarter of 2005. Minutes for the third quarter increased 12.7 percent from the second quarter of 2006.

* Commercial revenues increased 5.4 percent from the prior year and 9.6 percent from the second quarter of 2006. Commercial experienced growth in video, data and wireless revenues on both a year over year and sequential basis.

* GCI has provisioned 28,300 consumer and commercial lines on its Digital Local Phone Service (DLPS) facilities at the end of the third quarter of 2006, an increase of 1,900 lines over the second quarter of 2006. Third quarter conversions were approximately one-half of the planned number due to further delays in upgrading plant for phone service. Continued delays are expected to materially reduce total conversions for the year. GCI now expects to serve more than 30,000 lines on its DLPS facilities by the end of 2006.

* GCI local access lines increased by 800 for the quarter. Consumer, network access and commercial local access lines totaled 112,200 at the end of the third quarter of 2006 representing an estimated 26 percent share of the total access lines market in Alaska.

* GCI had 84,000 consumer and commercial cable modem access customers at the end of the third quarter of 2006, an increase of 1,900 over the 82,100 cable modem customers at the end of the second quarter 2006. GCI customers continue to migrate from dial up access service to cable modem. Average monthly revenue per cable modem totaled $31.86 for the third quarter of 2006 as compared to $31.54 for the second quarter of 2006.

* Beginning August 1, 2006 and ending October 11, 2006 GCI repurchased 533,500 shares of its Class A Common shares at a cost of approximately $6.7 million or $12.52 per share. The company is authorized to purchase an additional $8.5 million of Class A shares by the end of the fourth quarter of 2006. GCI will repurchase shares depending on market conditions and the availability of free cash flows.

GCI will hold a conference call to discuss the quarter's results on Thursday, November 2, 2006 beginning at 2 p.m. (Eastern). To access the briefing on November 2, dial 888-791-1856 (International callers should dial 210-234-0001) and identify your call as "GCI." In addition to the conference call, GCI will make available net conferencing. To access the call via net conference, log on to http://www.gci.com/ and follow the instructions. A replay of the call will be available for 72-hours by dialing 800-879-6115, access code 7461 (International callers should dial 402-220-4742.)

For full text and financial tables, go to http://www.gci.com/.

GCI is the largest telecommunications company in Alaska. A pioneer in bundled services, GCI provides local, wireless, and long distance telephone, cable television, Internet and data communication services throughout Alaska. More information about the company can be found at http://www.gci.com/.

The foregoing contains forward-looking statements regarding the company's expected results that are based on management's expectations as well as on a number of assumptions concerning future events. Actual results might differ materially from those projected in the forward looking statements due to uncertainties and other factors, many of which are outside GCI's control. Additional information concerning factors that could cause actual results to differ materially from those in the forward looking statements is contained in GCI's cautionary statement sections of Form 10-K and 10-Q filed with the Securities and Exchange Commission.

CONTACT: John Lowber, +1-907-868-5628, or jlowber@gci.com, or Bruce Broquet, +1-907-868-6660, or bbroquet@gci.com, or David Morris, +1-907-265-5396, or dmorris@gci.com, all of GCI

Web site: http://www.gci.com/
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Date:Nov 2, 2006
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