US LEC announces Q2 results with $106.7M in revenue and adjusted EBITDA of over $15M
August 14, 2006
CHARLOTTE, N.C. -- US LEC Corp. (Nasdaq: CLEC), a full-service provider of IP, data and voice solutions to businesses and enterprise organizations throughout the Eastern United States, today announced strong results for the second quarter and six months ending June 30, 2006. The second quarter was highlighted by:
Achieving total revenue of $106.7 million, an $11.4 million increase over the second quarter of 2005
Reaching end customer revenue of $92.5 million, an increase of $11.1 million or 14%, compared with the same period last year
Growing data revenue to $34.3 million, accounting for 32% of total revenue
Achieving positive operating income of $1.7 million
Achieving adjusted EBITDA of $15.0 million, a 14% EBITDA margin for the quarter (see definition and reconciliation of adjusted EBITDA to net cash flow from operations below)
Expanding the Company's business class customer base to approximately 27,800 and its data customer base to approximately 21,500
Continuing the roll out of US LEC's Ethernet Local Loop transport to 14 of 26 switching facilities in US LEC's network and MPLS VPN to 25 switching centers
Being chosen to be the communications partner of choice by the Florida Auto Dealers Group Buying LLC and its 550 member dealerships throughout Florida
Providing MegaPOP(TM) Internet access to the entire North American dial-up access customer base of Canadian-based IP Applications Corp. and MegaPOP(TM) VoIP services to Vienna, Virginia-based SunRocket
Revenues for the quarter ended June 30, 2006, were $106.7 million, compared with $95.3 million for the quarter ended June 30, 2005, and $102.8 million reported in the first quarter of 2006. For the three months ended June 30, 2006, end customer revenue increased 14% to $92.5 million from $81.4 million in the same period of 2005. The Company reported a net loss attributable to common stockholders of ($7.6) million, or ($0.25) per share, on 30.8 million weighted average shares outstanding for the quarter ended June 30, 2006, compared with net loss attributable to common stockholders of ($8.9) million, or ($0.30) per share, on 30.3 million weighted average shares outstanding for the quarter ended June 30, 2005. Adjusted EBITDA for the second quarter was $15.0 million, compared to adjusted EBITDA of $12.2 million in the second quarter of 2005 and $14.7 million in the first quarter of 2006.
Revenues for the six months ended June 30, 2006 were $209.5 million, compared with $188.9 million for the six months ended June 30, 2005. For the six months ended June 30, 2006, end customer revenue increased 14% to $182.2 million from $160.5 million in the same period of 2005. The net loss attributable to common stockholders was ($14.7) million, or ($0.48) per share on 30.8 million weighted average shares outstanding for the six months ended June 30, 2006, compared with net loss attributable to common stockholders of ($17.9) million, or ($0.59) per share on 30.3 million weighted average shares outstanding for the six months ended June 30, 2005. Adjusted EBITDA for the six months ended June 30, 2006, was $29.8 million compared with $24.0 million in the first six months of 2005.
Commenting on the Company's second quarter 2006 results, Aaron D. Cowell, president and chief executive officer of US LEC, said, "US LEC had another strong quarter and we are pleased with our continuing financial and operational successes. Total revenue increased sequentially by approximately $4.0 million over the first quarter of 2006 to $106.7 million. This trend reflects strong new customer growth, strong sales into our base of approximately 28,000 business class customers and continued customer loyalty, as evidenced by our 99 percent retention rate. Notably, we also achieved 33% and 16% growth in active data and voice channels, respectively, over the same period last year. In addition, our customers continue to have strong demand for our products and our average product take rate is now 5.1 compared to 4.8 in June of 2005."
Cowell continued, "We also have continued to make remarkable progress in our IP evolution as we expanded our IP product suite into several new markets. Dynamic T, which includes our BIGVoice(SM), Dynamic T SIP, BIGData(SM) and Voice Messaging and Mobility Pak features is now available in 10 switching centers and our Ethernet Local Loop transport service is now available in more than half of our 26 switching centers with network wide availability by year- end. Our customers have been very receptive to our IP product suite as they provide the ability to manage all of their telecom needs efficiently, reliably and with the opportunity for significant cost savings. Finally, we have completed the conversion of our network to IP and, with the upcoming rollout of New York City, our MPLS VPN product will be available throughout our network."
US LEC Corp. (Nasdaq: CLEC)
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