ITC^DeltaCom reported total operating revenues of $123.8M, a net loss of $11.7M

August 15, 2006

3 Min Read

HUNTSVILLE, Ala. -- ITC^DeltaCom, Inc. (Pink Sheets: ITCD.PK), a leading provider of integrated communications services to customers in the southeastern United States, today reported its operating and financial results for the quarter ended June 30, 2006.

For the quarter ended June 30, 2006, ITC^DeltaCom reported total operating revenues of $123.8 million, a net loss of $11.7 million, and net loss before interest, taxes, depreciation and amortization (EBITDA)* of $16.3 million.

Among its operating highlights for the second quarter, ITC^DeltaCom:

  • Increased total operating revenues by $3.9 million, or 13% on an annualized basis, over the first quarter of 2006;

  • Demonstrated strong quarter-over-quarter growth in its total retail local lines in service, resulting in a net increase in total lines in service of approximately 7,400 lines;

  • Increased the business local, data and internet revenue components of its integrated revenues by $2.5 million, or 13.2% on an annualized basis, over the first quarter of 2006;

  • Increased its core, facilities-based retail business lines in service (including both UNE-T and UNE lines) by approximately 11,900 net lines, which represented an 18.1% annualized increase over the first quarter of 2006, and increased those lines as a percentage of total retail business lines from 70% to 72% in the same period;

  • Managed customer attrition levels in its core, facilities-based retail business voice lines to an average of 1.1% per month; and,

  • Increased its sequential EBITDA* by $4.4 million, or 37.0%, from $11.9 million for the first quarter of 2006 to $16.3 million for the second quarter of 2006.

* EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States. For a quantitative reconciliation of the differences between EBITDA and net loss, as net loss is calculated in accordance with generally accepted accounting principles, see the accompanying table captioned "EBITDA Reconciliation."

"We're encouraged by the progress we've made during the second quarter in growing our total operating revenues," said Randall E. Curran, ITC^DeltaCom's Chief Executive Officer. "We've made significant progress in increasing our facilities-based retail lines in service, as our customers have responded positively to our enhanced focus on customer retention efforts and the expansion of our suite of products to provide our customers with outstanding solutions to their communication needs."

In addition, other operating highlights for the second quarter include:

  • Produced record revenues from sales of equipment and related services to its customers, which increased 50% over the first quarter of 2006;

  • Successful launch of its SimpliBusiness product in 30 of its markets, providing its customers with a managed solution that combines the power of ITC^DeltaCom's network with NEC's IPK Elite phone system and Lexmark's multi-function devices;

  • Continued stability in its wholesale revenues;

  • Improving gross margin from 48.0% in the first quarter of 2006 to 48.5% in the second quarter of 2006; and,

  • Expanded its sales force by 12% over the first quarter of 2006 while reducing total selling, operations and administration expenses by $1.5 million from the first quarter of 2006 by continuing to prioritize the company's resources on customer acquisition and retention functions.



"In the second quarter, our efforts to grow our core integrated communications business yielded positive results as our total quarterly revenues increased by 13% on an annualized basis, despite the continued industry-wide pressure on long distance and other non-core revenues. We're pleased to be able to report the first quarterly growth in total operating revenues for a couple of years and to have combined stronger revenue performance with improved margins," said Richard E. Fish, Executive Vice President and Chief Financial Officer. "We've got a lot of work yet to do, but the recent progress is very encouraging."

ITC^DeltaCom Inc. (Nasdaq: ITCD)

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