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WALL, NJ, Jan 08, 2008 (MARKET WIRE via COMTEX News Network) -- Centennial Communications Corp. (NASDAQ: CYCL) ("Centennial") today reported income from continuing operations of $1.5 million, or $0.01 per diluted share, for the fiscal second quarter of 2008 as compared to income from continuing operations of $1.0 million, or $0.01 per diluted share, in the fiscal second quarter of 2007. Consolidated adjusted operating income (AOI)(1) from continuing operations for the fiscal second quarter was $96.0 million, as compared to $86.6 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.
"Our U.S. wireless business continues to move forward at a solid pace as we head into the second-half of fiscal 2008," said Michael J. Small, Centennial's chief executive officer. "Our customers continue to choose us because we have a great network and an enhanced retail distribution presence that is staffed by front-line associates who are among the best trained in the industry."
Small continued, "In Puerto Rico, good progress in growing wireless customers, sustaining a robust ARPU and renewing revenue and cash flow growth has been dampened by a soft economy and difficult competitive environment. Despite these external challenges, we remain committed to our proven local market strategy and will continue to capitalize on our strong collection of assets and a great local team."
Centennial reported fiscal second-quarter consolidated revenue from continuing operations of $243.6 million, which included $132.8 million from U.S. wireless and $110.8 million from Puerto Rico operations. Consolidated revenue from continuing operations grew 7 percent versus the adjusted fiscal second quarter of 2007. The Company ended the quarter with 1,118,500 total wireless subscribers, which compares to 1,058,700 for the year-ago quarter and 1,109,900 for the previous quarter ended August 31, 2007. The Company reported 460,700 total access lines and equivalents at the end of the fiscal second quarter, which compares to 387,500 for the year-ago quarter.
OTHER HIGHLIGHTS
CENTENNIAL SEGMENT HIGHLIGHTS
U.S. Wireless Operations
Puerto Rico Wireless Operations
Puerto Rico Broadband Operations
REVISED FISCAL 2008 OUTLOOK
FY2007 FY2008 FY2008
Adjusted Results Previous Outlook Revised Outlook
---------------- ---------------- ---------------
Consolidated Adjusted $385 million - $395 million -
Operating Income (AOI) $365.1 million* $405 million $405 million
U.S. Wireless Roaming $15 million - Approximately
Revenue $65.5 million $20 million $10 million
decline decline
Consolidated Capital $130.1 million $140 million
Expenditures (Capex) including spectrum including spectrum No change
acquisition costs acquisition costs
Note: Excludes an aggregate $11.0 million USF charge in fiscal 2007 for an adjustment to USF revenue in Puerto Rico related to prior periods.
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) benefit, interest expense, net, loss 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 Six Months Ended
November 30, November 30,
2007 2006 2007 2006
--------- --------- --------- ---------
Adjusted operating income $ 95,983 $ 88,235 $ 196,020 $ 180,388
Depreciation and amortization (34,255) (32,695) (67,611) (64,913)
Stock-based compensation
expense (3,381) (2,869) (6,436) (4,818)
Strategic
alternatives/recapitalization
costs - (2) - (285)
Litigation settlement expense (2,950) - (2,950) -
Loss on disposition of assets (1,262) (88) (1,611) (293)
--------- --------- --------- ---------
Operating income 54,135 52,581 117,412 110,079
Interest expense, net (47,809) (51,689) (96,393) (102,403)
Income tax (expense) benefit (4,707) 48 (12,968) (7,033)
Minority interest in income of
subsidiaries (169) (233) (321) (441)
Income from equity investments - 293 - 546
--------- --------- --------- ---------
Income from continuing
operations 1,450 1,000 7,730 748
Loss from discontinued
operations (525) (34,352) (1,039) (36,259)
--------- --------- --------- ---------
Net income (loss) $ 925 $ (33,352) $ 6,691 $ (35,511)
========= ========= ========= =========
(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.
CONFERENCE CALL INFORMATION
As previously announced, the Company will host a conference call to discuss results at 8:30 a.m. ET on Tuesday, January 8, 2008. Callers can dial (888) 677-8769 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 Tuesday, January 8 through Tuesday, January 22 at both Centennial's Investor Relations website and www.streetevents.com. Callers can also dial (888) 203-1112, Access Code 4395139 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 over 1.1 million wireless subscribers and 460,700 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
November 30, 2007
($000's, except per subscriber data)
Three Months Ended Six Months Ended
---------------------- ----------------------
Nov-07 Nov-06 Nov-07 Nov-06
---------- ---------- ---------- ----------
CONSOLIDATED
Total Wireless Subscribers 1,118,500 1,058,700 1,118,500 1,058,700
Net Gain - Total
Subscribers 8,600 17,200 17,500 27,200
Revenue per Average
Wireless Customer (1) $ 67 $ 67 $ 69 $ 67
Retail Penetration (4) 8.2% 8.0% 8.2% 8.0%
Prepaid & Postpaid Churn -
Wireless (5) 2.4% 2.5% 2.4% 2.4%
Monthly MOU's per Wireless
Customer 1,326 1,145 1,316 1,132
U.S. WIRELESS
Postpaid Wireless
Subscribers 626,100 594,800 626,100 594,800
Prepaid Wireless
Subscribers 24,000 20,300 24,000 20,300
---------- ---------- ---------- ----------
Retail Subscribers 650,100 615,100 650,100 615,100
Wholesale Subscribers 50,200 51,300 50,200 51,300
---------- ---------- ---------- ----------
Total Wireless Subscribers 700,300 666,400 700,300 666,400
Total Wireless Gross Adds 49,500 51,000 96,800 96,200
Net Gain - Retail
Subscribers 3,800 11,400 7,000 18,200
Net Gain - Wholesale
Subscribers (1,200) 100 (1,200) 200
---------- ---------- ---------- ----------
Net Gain - Total
Subscribers 2,600 11,500 5,800 18,400
GSM as a % of Retail
Subscribers 95.2% 86.0% 95.2% 86.0%
Revenue per Average
Wireless Customer (1) $ 68 $ 67 $ 70 $ 67
Retail Revenue per Average
Wireless Customer (2) $ 61 $ 57 $ 61 $ 57
Data Revenue per Average
Wireless Customer (3) $ 4.68 $ 2.61 $ 4.48 $ 2.51
Retail Revenue $ 118,574 $ 104,521 $ 238,226 $ 205,620
Roaming Revenue $ 14,233 $ 16,993 $ 32,185 $ 36,315
Retail Penetration (4) 7.3% 7.2% 7.3% 7.2%
Postpaid Churn - Wireless
(5) 2.0% 1.9% 2.0% 1.9%
Prepaid & Postpaid Churn -
Wireless (5) 2.4% 2.2% 2.3% 2.1%
Monthly MOU's per Wireless
Customer 1,051 895 1,046 879
Cost to Acquire (6) $ 336 $ 310 $ 330 $ 321
Capital Expenditures $ 11,767 $ 11,142 $ 18,818 $ 16,545
PUERTO RICO
Postpaid Wireless
Subscribers 415,500 386,800 415,500 386,800
Prepaid Wireless
Subscribers 2,700 5,500 2,700 5,500
---------- ---------- ---------- ----------
Total Wireless Subscribers 418,200 392,300 418,200 392,300
Total Wireless Gross Adds 37,900 39,400 72,900 73,200
Net Gain - Wireless
Subscribers 6,000 5,700 11,700 8,800
Revenue per Average
Wireless Customer (1) $ 65 $ 68 $ 66 $ 67
Data Revenue per Average
Wireless Customer (3) $ 6.37 $ 4.31 $ 6.26 $ 3.91
Penetration - Wireless (4) 10.4% 9.8% 10.4% 9.8%
Postpaid Churn - Wireless
(5) 2.6% 2.8% 2.4% 2.6%
Prepaid & Postpaid Churn -
Wireless (5) 2.6% 2.9% 2.5% 2.8%
Monthly MOU's per Wireless
Customer 1,758 1,536 1,741 1,527
Fiber Route Miles 1,322 1,261 1,322 1,261
Switched Access Lines 85,900 71,400 85,900 71,400
Dedicated Access Line
Equivalents (7) 374,800 316,100 374,800 316,100
On-Net Buildings 2,091 1,854 2,091 1,854
Capital Expenditures -
Wireless $ 9,285 $ 7,567 $ 16,758 $ 14,796
Capital Expenditures -
Broadband $ 4,374 $ 4,749 $ 9,846 $ 8,492
---------- ---------- ---------- ----------
Capital Expenditures -
Total Puerto Rico $ 13,659 $ 12,316 $ 26,604 $ 23,288
========== ========== ========== ==========
REVENUES
U.S. Wireless $ 132,807 $ 121,514 $ 270,411 $ 241,935
---------- ---------- ---------- ----------
Puerto Rico - Wireless $ 80,799 $ 78,893 $ 162,137 $ 156,433
Puerto Rico - Broadband $ 33,006 $ 31,831 $ 65,010 $ 62,142
Puerto Rico - Intercompany $ (3,044) $ (3,036) $ (6,020) $ (5,907)
---------- ---------- ---------- ----------
Total Puerto Rico $ 110,761 $ 107,688 $ 221,127 $ 212,668
---------- ---------- ---------- ----------
Consolidated $ 243,568 $ 229,202 $ 491,538 $ 454,603
========== ========== ========== ==========
ADJUSTED OPERATING INCOME
(8)
U.S. Wireless $ 51,372 $ 42,049 $ 104,511 $ 85,740
---------- ---------- ---------- ----------
Puerto Rico - Wireless $ 27,195 $ 28,249 $ 55,888 $ 59,862
Puerto Rico - Broadband $ 17,416 $ 17,937 $ 35,621 $ 34,786
---------- ---------- ---------- ----------
Total Puerto Rico $ 44,611 $ 46,186 $ 91,509 $ 94,648
---------- ---------- ---------- ----------
Consolidated $ 95,983 $ 88,235 $ 196,020 $ 180,388
========== ========== ========== ==========
NET DEBT
Total Debt Less Cash and
Cash Equivalents $1,932,100 $2,037,000 $1,932,100 $2,037,000
(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 retail 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 retail customers for such period.
(3) Data Revenue per Average Wireless Customer is determined for each
period by dividing data revenue by the average retail customers for
such period.
(4) The penetration rate equals the percentage of total population in our
service areas who are retail subscribers to our wireless service as of
period-end.
(5) Churn is calculated by dividing the aggregate number of retail
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) November 2007 and November 2006 excludes 96,800 and 82,700 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) benefit,
interest expense, net, loss 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 Six Months Ended
-------------------- --------------------
November November November November
30, 30, 30, 30,
2007 2006 2007 2006
--------- --------- --------- ---------
REVENUE:
Service revenue $ 230,737 $ 216,743 $ 465,096 $ 429,779
Equipment sales 12,831 12,459 26,442 24,824
--------- --------- --------- ---------
243,568 229,202 491,538 454,603
--------- --------- --------- ---------
COSTS AND EXPENSES:
Cost of services
(exclusive of
depreciation and
amortization shown below) 44,367 43,499 90,941 86,741
Cost of equipment sold 30,262 32,411 61,784 61,095
Sales and marketing 26,728 24,115 52,314 46,793
General and administrative 52,559 43,813 99,865 84,689
Depreciation and
amortization 34,255 32,695 67,611 64,913
Loss on disposition of
assets 1,262 88 1,611 293
--------- --------- --------- ---------
189,433 176,621 374,126 344,524
--------- --------- --------- ---------
OPERATING INCOME 54,135 52,581 117,412 110,079
--------- --------- --------- ---------
INTEREST EXPENSE, NET (47,809) (51,689) (96,393) (102,403)
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS
BEFORE
INCOME TAX EXPENSE,
MINORITY INTEREST IN
INCOME OF SUBSIDIARIES
AND INCOME FROM
EQUITY INVESTMENTS 6,326 892 21,019 7,676
INCOME TAX (EXPENSE) BENEFIT (4,707) 48 (12,968) (7,033)
--------- --------- --------- ---------
INCOME FROM CONTINUING
OPERATIONS
BEFORE MINORITY INTEREST
IN INCOME OF SUBSIDIARIES
AND INCOME FROM EQUITY
INVESTMENTS 1,619 940 8,051 643
MINORITY INTEREST IN INCOME OF
SUBSIDIARIES (169) (233) (321) (441)
INCOME FROM EQUITY INVESTMENTS - 293 - 546
--------- --------- --------- ---------
INCOME FROM CONTINUING OPERATIONS 1,450 1,000 7,730 748
Discontinued operations:
Loss - (1,464) - (2,829)
Loss on disposition (525) (31,995) (1,039) (31,995)
Income tax expense - (893) - (1,435)
--------- --------- --------- ---------
Net loss from discontinued
operations (525) (34,352) (1,039) (36,259)
========= ========= ========= =========
NET INCOME (LOSS) $ 925 $ (33,352) $ 6,691 $ (35,511)
========= ========= ========= =========
EARNINGS (LOSS) PER SHARE:
BASIC
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS $ 0.01 $ 0.01 $ 0.07 $ 0.01
LOSS PER SHARE FROM
DISCONTINUED OPERATIONS $ (0.00) $ (0.33) $ (0.01) $ (0.35)
--------- --------- --------- ---------
NET INCOME (LOSS) PER
SHARE $ 0.01 $ (0.32) $ 0.06 $ (0.34)
========= ========= ========= =========
DILUTED
EARNINGS PER SHARE FROM
CONTINUING OPERATIONS $ 0.01 $ 0.01 $ 0.07 $ 0.01
LOSS PER SHARE FROM
DISCONTINUED OPERATIONS $ (0.00) $ (0.32) $ (0.01) $ (0.34)
--------- --------- --------- ---------
NET INCOME (LOSS) PER
SHARE $ 0.01 $ (0.31) $ 0.06 $ (0.33)
========= ========= ========= =========
WEIGHTED-AVERAGE SHARES
OUTSTANDING DURING THE PERIOD:
BASIC 107,556 105,408 107,526 105,309
========= ========= ========= =========
DILUTED 110,725 107,512 110,585 107,363
========= ========= ========= =========
For investor and media inquiries please contact:
Steve E. Kunszabo
Executive Director
Investor Relations
732-556-2220
SOURCE: Centennial Communications Corp.