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WALL, NJ, Mar 28, 2008 (MARKET WIRE via COMTEX News Network) -- Centennial Communications Corp. (NASDAQ: CYCL) ("Centennial") today reported income from continuing operations of $6.6 million, or $0.06 per diluted share, for the fiscal third quarter of 2008 as compared to income from continuing operations of $0.3 million, or $0.00 per diluted share, in the fiscal third quarter of 2007. Consolidated adjusted operating income (AOI)(1) from continuing operations for the fiscal third quarter was $99.1 million, as compared to $89.0 million for the adjusted prior-year quarter. For comparison, the Company's fiscal 2007 financial results have been adjusted to reflect the Universal Service Fund (USF) charge (2) in the period to which it relates.
"In the U.S., we continue to invest heavily in training our front-line Associates to engender a competitive spirit that keeps everyone focused on the bottom line," said Michael J. Small, Centennial's chief executive officer. "We've improved upon our long successful local market strategy by delighting customers at every touch-point with innovative new features, improving an already superior network and targeting our advertising within our footprint to showcase our strengths against the most relevant competitors."
Small continued, "In Puerto Rico, we're capitalizing on our leading position to consistently grow customers, improve customer retention and sustain a robust ARPU. Our Puerto Rico wireless business grew cash flow 13 percent during the fiscal third quarter, our best effort in more than two years. We're also leveraging our assets to attack new revenue streams in the residential market, and are seeing meaningful growth from our cable partnerships."
Centennial reported fiscal third-quarter consolidated revenue from continuing operations of $251.2 million, which included $137.8 million from U.S. wireless and $113.4 million from Puerto Rico operations. Consolidated revenue from continuing operations grew 8 percent versus the adjusted fiscal third quarter of 2007. The Company ended the quarter with 1,086,300 total wireless subscribers, which compares to 1,034,200 for the year-ago quarter and 1,068,300 for the previous quarter ended November 30, 2007(3). The Company reported 474,500 total access lines and equivalents at the end of the fiscal third quarter, which compares to 397,800 for the year-ago quarter.
OTHER HIGHLIGHTS
CENTENNIAL SEGMENT HIGHLIGHTS
U.S. Wireless Operations
Puerto Rico Wireless Operations
Puerto Rico Broadband Operations
DEFINITIONS AND RECONCILIATION
(1) Adjusted operating income is defined as net income (loss) before loss from discontinued operations, income from equity investments, minority interest in income of subsidiaries, income tax expense, gain on sale of equity investments, interest expense, net, (loss) gain on disposition of assets, litigation settlement expense, strategic alternatives/recapitalization costs, stock-based compensation expense and depreciation and amortization. Please refer to the schedule below for a reconciliation of adjusted operating income to consolidated net income (loss) and the Investor Relations website at www.ir.centennialwireless.com for a discussion and reconciliation of this and other non-GAAP financial measures.
Reconciliation of adjusted operating income to consolidated net income
(loss):
Three Months Ended Nine Months Ended
February February February February
29, 2008 28, 2007 29, 2008 28, 2007
-------- -------- --------- ---------
Adjusted operating income $ 99,108 $ 84,599 $ 295,128 $ 264,987
Depreciation and amortization (35,262) (32,624) (102,873) (97,537)
Stock-based compensation expense (2,112) (1,851) (8,548) (6,669)
Strategic alternatives/
recapitalization costs -- -- -- (285)
Litigation settlement expense -- -- (2,950) --
(Loss) gain on disposition of
assets (120) 265 (1,731) (28)
--------- --------- --------- ---------
Operating income 61,614 50,389 179,026 160,468
Interest expense, net (47,508) (50,540) (143,901) (152,943)
Gain on sale of equity
investments -- 4,730 -- 4,730
Income tax expense (7,302) (4,252) (20,270) (11,285)
Minority interest in income of
subsidiaries (171) (264) (492) (705)
Income from equity investments -- 258 -- 804
--------- --------- --------- ---------
Income from continuing operations 6,633 321 14,363 1,069
Loss from discontinued operations (1,218) (1,669) (2,257) (37,928)
========= ======== ========= =========
Net income (loss) $ 5,415 $ (1,348) $ 12,106 $ (36,859)
========= ======== ========= =========
(2) Please refer to the Company's Form 10-K for the year ending May 31, 2007 and the fiscal fourth-quarter 2007 earnings press release for information regarding prior-period USF charges.
(3) During the quarter ending February 29, 2008, our U.S. wireless wholesale reseller terminated approximately 35,000 of Centennial's 50,200 wholesale subscribers. As a result, the Company has determined that revenues received from wholesale subscribers are immaterial and has removed these subscribers from all reported periods.
CONFERENCE CALL INFORMATION
As previously announced, the Company will host a conference call to discuss results at 8:30 a.m. ET on Friday, March 28, 2008. Callers should dial (800) 823-4842 to access the call. The conference call will also be simultaneously webcast on Centennial's Investor Relations website at www.ir.centennialwireless.com. A replay of the conference call will also be available beginning Friday, March 28 through Friday, April 11 at both Centennial's Investor Relations website and www.streetevents.com. Callers can also dial (888) 203-1112, Access Code 9948488 to access an audio replay of the conference call.
ABOUT CENTENNIAL
Centennial Communications (NASDAQ: CYCL), based in Wall, NJ, is a leading provider of regional wireless and integrated communications services in the United States and Puerto Rico with approximately 1.1 million wireless subscribers and 474,500 access lines and equivalents. The U.S. business owns and operates wireless networks in the Midwest and Southeast covering parts of six states. Centennial's Puerto Rico business owns and operates wireless networks in Puerto Rico and the U.S. Virgin Islands and provides facilities-based integrated voice, data and Internet solutions. Welsh, Carson, Anderson & Stowe is a significant shareholder of Centennial. For more information regarding Centennial, please visit our websites http://www.centennialwireless.com/ and http://www.centennialpr.com/.
SAFE HARBOR PROVISION
Cautionary statement for purposes of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995: Information in this release that involves Centennial's expectations, beliefs, hopes, plans, projections, estimates, intentions or strategies regarding the future are forward-looking statements. Such forward-looking statements are subject to a number of risks, assumptions and uncertainties that could cause the Company's actual results to differ materially from those projected in such forward-looking statements. These risks, assumptions and uncertainties include, but are not limited to: the effects of vigorous competition in our markets, which may make it difficult for us to attract and retain customers and to grow our customer base and revenue and which may increase churn, which could reduce our revenue and increase our costs; the fact that many of our competitors are larger than we are, have greater financial resources than we do, are less leveraged than we are, have more extensive coverage areas than we do, and may offer less expensive and more technologically advanced products and services than we do; changes and developments in technology, including our ability to upgrade our networks to remain competitive and our ability to anticipate and react to frequent and significant technological changes which may render certain technologies used by us obsolete; our substantial debt obligations, including restrictive covenants, which place limitations on how we conduct business; market prices for the products and services we offer may decline in the future; the effect of changes in the level of support provided to us by the Universal Service Fund; the effects of a decline in the market for our CDMA-based technology; the effects of consolidation in the telecommunications industry; general economic, business, political and social conditions in the areas in which we operate, including the effects of world events, terrorism, hurricanes, tornadoes, wind storms and other natural disasters; our access to the latest technology handsets in a timeframe and at a cost similar to our competitors; our ability to successfully deploy and deliver wireless data services to our customers, including next generation 3G and 4G technology; our ability to generate cash and the availability and cost of additional capital to fund our operations and our significant planned capital expenditures, including the need to refinance or amend existing indebtedness; our dependence on roaming agreements for a significant portion of our wireless revenue and the expected decline in roaming revenue over the long term; our dependence on roaming agreements for our ability to offer our wireless customers competitively priced regional and nationwide rate plans that include areas for which we do not own wireless licenses; our ability to attract and retain qualified personnel; the effects of governmental regulation of the telecommunications industry; our ability to acquire, and the cost of acquiring, additional spectrum in our markets to support growth and advanced technologies; the effects of network disruptions and system failures; our ability to manage, implement and monitor billing and operational support systems; the results of litigation filed or which may be filed against us, including litigation relating to wireless billing, using wireless telephones while operating an automobile or possible health effects of radio frequency transmission; the relative liquidity and corresponding volatility of our common stock and our ability to raise future equity capital: the influence on us by our significant stockholder and anti-takeover provisions and other risks referenced from time to time in the Company's filings with the Securities and Exchange Commission. All forward-looking statements included in this release are based upon information available to Centennial as of the date of the release, and we assume no obligation to update or revise any such forward-looking statements.
CENTENNIAL COMMUNICATIONS CORP.
FINANCIAL DATA AND OPERATING STATISTICS
February 29, 2008
($000's, except per subscriber data)
Three Months Ended Nine Months Ended
------------------------ ------------------------
Feb-08 Feb-07 Feb-08 Feb-07
----------- ----------- ----------- -----------
CONSOLIDATED
Total Wireless
Subscribers 1,086,300 1,034,200 1,086,300 1,034,200
Net Gain - Total
Subscribers 18,000 26,800 36,700 53,800
Revenue per Average
Wireless Customer (1) $ 68 $ 66 $ 68 $ 67
Penetration - Wireless
(4) 8.4% 8.2% 8.4% 8.2%
Prepaid & Postpaid
Churn - Wireless (5) 2.3% 2.4% 2.4% 2.4%
Monthly MOU's per
Wireless Customer 1,334 1,185 1,322 1,150
U.S. WIRELESS
Postpaid Wireless
Subscribers 641,000 612,000 641,000 612,000
Prepaid Wireless
Subscribers 21,700 22,800 21,700 22,800
----------- ----------- ----------- -----------
Total Wireless
Subscribers 662,700 634,800 662,700 634,800
Total Wireless Gross
Adds 58,200 60,900 154,800 156,800
Net Gain - Wireless
Subscribers 12,600 19,700 19,600 37,900
GSM as a % of Wireless
Subscribers 97.1% 90.2% 97.1% 90.2%
Revenue per Average
Wireless Customer (1) $ 70 $ 67 $ 70 $ 67
Retail Revenue per
Average Wireless
Customer (2) $ 64 $ 60 $ 62 $ 58
Data Revenue per
Average Wireless
Customer (3) $ 5.45 $ 3.33 $ 4.81 $ 2.78
Retail Revenue $ 125,276 $ 112,292 $ 363,502 $ 317,912
Roaming Revenue $ 12,526 $ 14,195 $ 44,711 $ 50,510
Penetration - Wireless
(4) 7.4% 7.4% 7.4% 7.4%
Postpaid Churn -
Wireless (5) 2.0% 1.8% 2.0% 1.9%
Prepaid & Postpaid
Churn - Wireless (5) 2.3% 2.2% 2.3% 2.2%
Monthly MOU's per
Wireless Customer 1,067 944 1,052 901
Cost to Acquire (6) $ 288 $ 254 $ 314 $ 295
Capital Expenditures $ 16,156 $ 17,898 $ 34,974 $ 34,443
PUERTO RICO
Postpaid Wireless
Subscribers 420,900 395,000 420,900 395,000
Prepaid Wireless
Subscribers 2,700 4,400 2,700 4,400
----------- ----------- ----------- -----------
Total Wireless
Subscribers 423,600 399,400 423,600 399,400
Total Wireless Gross
Adds 35,400 38,900 108,300 112,100
Net Gain - Wireless
Subscribers 5,400 7,100 17,100 15,900
Revenue per Average
Wireless Customer (1) $ 65 $ 63 $ 66 $ 66
Data Revenue per
Average Wireless
Customer (3) $ 7.06 $ 5.40 $ 6.53 $ 4.42
Penetration - Wireless
(4) 10.6% 10.0% 10.6% 10.0%
Postpaid Churn -
Wireless (5) 2.4% 2.5% 2.4% 2.6%
Prepaid & Postpaid
Churn - Wireless (5) 2.4% 2.7% 2.5% 2.8%
Monthly MOU's per
Wireless Customer 1,750 1,574 1,744 1,543
Fiber Route Miles 1,333 1,283 1,333 1,283
Switched Access Lines 91,600 72,500 91,600 72,500
Dedicated Access Line
Equivalents (7) 382,900 325,300 382,900 325,300
On-Net Buildings 2,146 1,920 2,146 1,920
Capital Expenditures -
Wireless $ 10,264 $ 10,558 $ 27,022 $ 25,354
Capital Expenditures -
Broadband $ 3,753 $ 6,355 $ 13,599 $ 14,847
----------- ----------- ----------- -----------
Capital Expenditures -
Total Puerto Rico $ 14,017 $ 16,913 $ 40,621 $ 40,201
=========== =========== =========== ===========
REVENUES
U.S. Wireless $ 137,802 $ 126,487 $ 408,213 $ 368,422
----------- ----------- ----------- -----------
Puerto Rico - Wireless $ 82,681 $ 75,209 $ 244,818 $ 231,642
Puerto Rico - Broadband $ 33,919 $ 30,336 $ 98,929 $ 92,478
Puerto Rico -
Intercompany $ (3,249) $ (2,920) $ (9,269) $ (8,827)
----------- ----------- ----------- -----------
Total Puerto Rico $ 113,351 $ 102,625 $ 334,478 $ 315,293
----------- ----------- ----------- -----------
Consolidated $ 251,153 $ 229,112 $ 742,691 $ 683,715
=========== =========== =========== ===========
ADJUSTED OPERATING
INCOME (8)
U.S. Wireless $ 50,497 $ 44,713 $ 155,008 $ 130,453
----------- ----------- ----------- -----------
Puerto Rico - Wireless $ 30,958 $ 23,600 $ 86,846 $ 83,462
Puerto Rico - Broadband $ 17,653 $ 16,286 $ 53,274 $ 51,072
----------- ----------- ----------- -----------
Total Puerto Rico $ 48,611 $ 39,886 $ 140,120 $ 134,534
----------- ----------- ----------- -----------
Consolidated $ 99,108 $ 84,599 $ 295,128 $ 264,987
=========== =========== =========== ===========
NET DEBT
Total Debt Less Cash
and Cash Equivalents $ 1,924,100 $ 2,038,600 $ 1,924,100 $ 2,038,600
(1) Revenue per Average Wireless Customer is determined for each period by
dividing total monthly revenue per wireless subscriber including
roaming revenue by the average customers for such period.
(2) Retail Revenue per Average Wireless Customer is determined for each
period by dividing retail revenue (total revenue excluding roaming
revenue) by the average customers for such period.
(3) Data Revenue per Average Wireless Customer is determined for each
period by dividing data revenue by the average customers for such
period.
(4) The penetration rate equals the percentage of total population in our
service areas who are subscribers to our wireless service as of
period-end.
(5) Churn is calculated by dividing the aggregate number of subscribers
who cancel service during each month in a period by the total number
of subscribers as of the beginning of the month. Churn is stated as
the average monthly churn rate for the period.
(6) Cost to Acquire a new customer is calculated by dividing the sum of
the cost of phones and marketing expenses less the related
equipment sales by the gross activations for the period. Cost to
acquire excludes costs relating to phones used for customer
retention.
(7) February 2008 and 2007 exclude 84,700 and 82,700, respectively,
dedicated access line equivalents related to short term contracts.
(8) Adjusted operating income is defined as net income (loss) before loss
from discontinued operations, income from equity investments, minority
interest in income of subsidiaries, income tax expense, gain on sale
of equity investments, interest expense, net, (loss) gain on
disposition of assets, litigation settlement expense, strategic
alternatives/recapitalization costs, stock-based compensation expense
and depreciation and amortization.
CENTENNIAL COMMUNICATIONS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
-------------------- --------------------
February February February February
29, 2008 28, 2007 29, 2008 28, 2007
--------- --------- --------- ---------
REVENUE:
Service revenue $ 233,361 $ 212,434 $ 698,457 $ 642,213
Equipment sales 17,792 16,678 44,234 41,502
--------- --------- --------- ---------
251,153 229,112 742,691 683,715
--------- --------- --------- ---------
COSTS AND EXPENSES:
Cost of services (exclusive
of depreciation and
amortization shown below) 45,034 42,388 135,975 129,129
Cost of equipment sold 34,047 34,852 95,831 95,947
Sales and marketing 25,503 24,643 77,817 71,436
General and administrative 49,573 44,481 149,438 129,170
Depreciation and amortization 35,262 32,624 102,873 97,537
Loss (gain) on disposition of
assets 120 (265) 1,731 28
--------- --------- --------- ---------
189,539 178,723 563,665 523,247
--------- --------- --------- ---------
OPERATING INCOME 61,614 50,389 179,026 160,468
--------- --------- --------- ---------
INTEREST EXPENSE, NET (47,508) (50,540) (143,901) (152,943)
GAIN ON SALE OF EQUITY
INVESTMENT - 4,730 - 4,730
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS BEFORE INCOME TAX
EXPENSE, MINORITY INTEREST
IN INCOME OF SUBSIDIARIES AND
INCOME FROM EQUITY INVESTMENTS 14,106 4,579 35,125 12,255
INCOME TAX EXPENSE (7,302) (4,252) (20,270) (11,285)
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS BEFORE MINORITY
INTEREST IN INCOME
OF SUBSIDIARIES AND INCOME
FROM EQUITY INVESTMENTS 6,804 327 14,855 970
MINORITY INTEREST IN INCOME OF
SUBSIDIARIES (171) (264) (492) (705)
INCOME FROM EQUITY INVESTMENTS - 258 - 804
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS 6,633 321 14,363 1,069
Discontinued operations:
Gain (loss) - 2,170 - (659)
Loss on disposition (1,218) (266) (2,257) (32,261)
Income tax expense - (3,573) - (5,008)
--------- --------- --------- ---------
Net loss from discontinued
operations (1,218) (1,669) (2,257) (37,928)
========= ========= ========= =========
NET INCOME (LOSS) $ 5,415 $ (1,348) $ 12,106 $ (36,859)
========= ========= ========= =========
EARNINGS (LOSS) PER SHARE:
BASIC
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS $ 0.06 $ 0.00 $ 0.13 $ 0.01
LOSS PER SHARE FROM
DISCONTINUED OPERATIONS $ (0.01) $ (0.01) $ (0.02) $ (0.36)
--------- --------- --------- ---------
NET INCOME (LOSS) PER
SHARE $ 0.05 $ (0.01) $ 0.11 $ (0.35)
========= ========= ========= =========
DILUTED
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS $ 0.06 $ 0.00 $ 0.13 $ 0.01
LOSS PER SHARE FROM
DISCONTINUED OPERATIONS $ (0.01) $ (0.01) $ (0.02) $ (0.35)
--------- --------- --------- ---------
NET INCOME (LOSS) PER
SHARE $ 0.05 $ (0.01) $ 0.11 $ (0.34)
========= ========= ========= =========
WEIGHTED-AVERAGE SHARES
OUTSTANDING DURING THE PERIOD:
BASIC 107,755 105,698 107,457 105,437
========= ========= ========= =========
DILUTED 109,987 108,637 110,240 107,786
========= ========= ========= =========
For investor and media inquiries please contact:
Steve E. Kunszabo
Executive Director, Investor Relations
732-556-2220
SOURCE: Centennial Communications Corp.