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FairPoint reports net loss for second quarter, revenues down

first_imgAs previously announced, FairPoint will host a conference call and simultaneous webcast to discuss its second quarter results at 8:30 a.m. (EDT) on August 6, 2009. Participants should call (888) 562-3356 (US/Canada) or (973) 582-2700 (international) at 8:20 a.m. (EDT) and request the FairPoint Communications Second Quarter 2009 Earnings Call or Conference ID# 22824129. A telephonic replay will be available for anyone unable to participate in the live call. To access the replay, call (800) 642-1687 (US/Canada) or (706) 645-9291 (international) and enter confirmation code 22824129. The recording will be available from Thursday, August 6, 2009 at 11:30 a.m. (EDT) through Thursday, August 13, 2009 at 11:59 p.m. (EDT). During the second quarter, the Company repurchased $12.0 million aggregate principal amount of its senior notes for $4.2 million in cash. The Company has a highly leveraged capital structure and has essentially fully drawn all borrowings available under its credit facility. In the future, the Company expects that the primary sources of liquidity will be cash flow from operations and cash on hand. Because of systems cutover issues that have prevented the Company from executing fully on its operating plan for 2009, revenue has continued to decline. In addition, cash collections have remained below pre-cutover levels and the Company has incurred significant incremental costs as a result of the cutover issues in its northern New England operations, causing further stress on the Company’s liquidity position. During the conference call, representatives of the Company may discuss and answer one or more questions concerning the Company’s business and financial matters. The responses to these questions may contain information that has not been previously disclosed. While FairPoint uses Adjusted EBITDA in managing and analyzing its business and financial condition and believes it is useful to its management and investors for the reasons described above, Adjusted EBITDA has certain shortcomings. In particular, Adjusted EBITDA does not represent the residual cash flows available for discretionary expenditures, since items such as debt repayment and interest payments are not deducted from such measure. FairPoint’s management compensates for the shortcomings of Adjusted EBITDA by utilizing it in conjunction with its comparable GAAP financial measures. FairPoint Communications, Inc. is an industry leading provider of communications services to communities across the country. Today, FairPoint owns and operates local exchange companies in 18 states offering advanced communications with a personal touch, including local and long distance voice, data, Internet, television and broadband services. FairPoint is traded on the New York Stock Exchange under the symbols FRP and FRP.BC. Learn more at www.fairpoint.com(link is external)This press release may contain forward-looking statements by FairPoint that are not based on historical fact, including, without limitation, statements containing the words “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and similar expressions and statements. Because these forward-looking statements involve known and unknown risks and uncertainties, there are important factors that could cause actual results, events or developments to differ materially from those expressed or implied by these forward-looking statements. Such factors include those risks described from time to time in FairPoint’s filings with the SEC, including, without limitation, the risks described in FairPoint’s most recent Annual Report on Form 10-K on file with the SEC. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. All information is current as of the date this press release is issued, and FairPoint undertakes no duty to update this information.                FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES                Unaudited Condensed Consolidated Balance Sheets                                             June 30,   December 31,                                               2009        2008                                               —-        —-                                             (Dollars in thousands)              Assets    Current assets:      Cash                                   $80,964     $70,325      Restricted cash                          1,981       8,144      Accounts receivable, net               190,551     173,589      Materials and supplies                  36,871      38,694      Other                                   30,268      28,747      Deferred income tax, net                29,241      31,418                                              ——      ——    Total current assets                     369,876     350,917                                             ——-     ——-    Property, plant and equipment, net     1,996,335   2,013,515    Intangibles assets, net                  223,105     234,481    Prepaid pension asset                      9,741       8,708    Debt issue costs, net                     23,617      26,047    Restricted cash                            1,378      60,359    Other assets                              16,432      21,094    Goodwill                                 595,120     619,372                                             ——-     ——-    Total assets                          $3,235,604 $3,334,493                                          ========== ==========          Liabilities and       Stockholders’ Equity    Current liabilities:      Current portion of long term debt      $45,000     $45,000      Current portion of capital lease       obligations                             2,046       2,231      Accounts payable                       158,863     147,778      Dividends payable                            –      23,008      Accrued interest payable in cash         3,834      18,844      Interest rate swaps                     43,438      41,274      Other non-operating accrued liability        –      19,000      Other accrued liabilities               68,234      70,887                                              ——      ——    Total current liabilities                321,415     368,022                                             ——-     ——-     Long term liabilities:      Capital lease obligations                6,584       7,522      Accrued pension obligation              49,507      46,801      Employee benefit obligations           239,152     225,840      Deferred income taxes                  117,184     154,757      Unamortized investment tax credits       5,068       5,339      Accrued interest payable in kind        14,423           –      Other long term liabilities             18,006      35,492      Long term debt, net of current       portion                             2,443,647   2,425,253      Interest rate swap agreements           19,386      41,681                                              ——      ——    Total long term liabilities            2,912,957   2,942,685                                           ———   ———    Stockholders’ equity:      Common stock                               895         890      Additional paid-in capital             736,469     735,719      Retained earnings (deficit)           (604,914)   (578,319)      Accumulated other comprehensive loss (131,218)   (134,504)                                            ——–    ——–    Total stockholders’ equity                 1,232      23,786                                               —–      ——    Total liabilities and stockholders’     equity                               $3,235,604 $3,334,493                                          ========== ==========             FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES                      Unaudited Condensed Consolidated                          Statements of Operations                          Three months ended   Six months ended                               June 30,            June 30,                               ——–            ——–                            2009      2008      2009 2008 (1)                            —-      —-      —- ——–                                   (Dollars in thousands)     Revenues              $299,611 $344,690 $611,241 $627,104    ——–              ——– ——– ——– ——–    Operating expenses:      Cost of services       and sales,       excluding       depreciation and       amortization        122,707   133,900   267,854   269,737      Selling, general       and administrative       expense, excluding       depreciation and       amortization         97,986   102,290   190,398   165,406      Depreciation and       amortization         68,629    69,741   136,496   123,666    ——————      ——    ——   ——-   ——-    Total operating     expenses              289,322   305,931   594,748   558,809    —————        ——-   ——-   ——-   ——-    Income from     operations             10,289    38,759    16,493    68,295    ———–             ——    ——    ——    ——    Other income (expense):      Interest expense     (54,809) (45,123) (108,288) (59,645)      Gain on derivative       instruments           7,233    43,123    20,131    43,123      Gain on early       retirement of debt    7,494         –    12,357         –      Other                    (58)      264    15,857     1,250    ——-                    —       —    ——     —–    Total other expense    (40,140)   (1,736) (59,943) (15,272)    ——————-    ——-    ——   ——-   ——-    Income (loss) before     income taxes          (29,851)   37,023   (43,450)   53,023    Income tax (expense)     benefit                12,033   (13,909)   16,855   (20,366)    ——————–    ——   ——-    ——   ——-    Net income (loss)     $(17,818) $23,114 $(26,595) $32,657    —————–     ——–   ——- ——–   ——-     Weighted average shares     outstanding:      Basic                 89,364    88,725    89,168    62,077      —–                 ——    ——    ——    ——      Diluted               89,364    89,190    89,168    62,483      ——-               ——    ——    ——    ——     Earnings per share:      Basic                 $(0.20)    $0.26    $(0.30)    $0.53      —–                 ——     —–    ——     —–      Diluted                (0.20)     0.26     (0.30)     0.52      ——-                —–      —-     —–      —-    (1) FairPoint completed its acquisition of Verizon        Communication’s wireline and related operations in Maine,        New Hampshire and Vermont (the “Northern New England        business”) on March 31, 2008. As a result of that        transaction, which was treated as a “reverse acquisition”        for accounting purposes, the statement of operations for        the six months ended June 30, 2008 reflects the operating        results of the Northern New England business for the three        month period ending March 31, 2008 and the combined operating        results of Spinco and Legacy FairPoint for the three month period        ended June 30, 2008.             FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES       Unaudited Condensed Consolidated Statements of Cash Flows                                                   Six months ended                                                      June 30,                                                      ——–                                                  2009       2008                                                  —-       —-                                                (Dollars in thousands)    Cash flows from operating activities:      Net income (loss)                         $(26,595)    $32,657                                                 ——–     ——-    Adjustments to reconcile net income to     net cash provided by operating activities     excluding impact of acquisitions:        Deferred income taxes                    (18,970)     24,489        Provision for uncollectible revenue       14,314       7,543        Depreciation and amortization            136,496     123,666        Non-cash interest expense                 14,423           –        SFAS 106 post-retirement accruals         15,908      29,103        Gain on derivative instruments           (20,131)    (43,123)        Gain on early retirement of debt, net of         cash fees                               (12,477)          –        Other non-cash items                       6,429     (26,406)        Changes in assets and liabilities         arising from operations:          Accounts receivable                    (29,094)    (24,287)          Prepaid and other assets                (3,350)    (40,750)          Accounts payable and other           accrued liabilities                   (31,286)    (38,965)          Accrued interest payable               (15,011)     18,476          Other assets and liabilities, net       (2,585)      4,113        Other                                          –     (16,221)                                                 ——-     ——-            Total adjustments                     54,666      17,638                                                  ——      ——              Net cash provided by operating               activities                         28,071      50,295                                                  ——      ——    Cash flows from investing activities:      Acquired cash balance, net                       –      11,552      Net capital additions                      (90,493)    (98,348)      Net proceeds from sales of investments       and other assets                            1,230         235                                                   —–         —        Net cash used in investing activities    (89,263)    (86,561)                                                 ——-     ——-    Cash flows from financing activities:      Loan origination costs                        (521)    (29,238)      Proceeds from issuance of long term debt    50,000   1,676,000      Repayments of long term debt               (18,673)   (687,491)      Contributions from Verizon                       –     344,629      Restricted cash                             65,143     (80,886)      Repayment of capital lease obligations      (1,122)     (1,637)      Dividends paid to stockholders             (22,996) (1,173,961)                                                 ——- ———-        Net cash provided by         financing activities                     71,831      47,416                                                  ——      ——        Net increase in cash                      10,639      11,150    Cash, beginning of period                     70,325           –                                                  ——      ——    Cash, end of period                          $80,964     $11,150                                                 =======     =======                FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES                   Revenue and Operating Metrics (unaudited)                             (Dollars in thousands)                                      Three Months Ended                                     ——————                   June 30, March 31, December 31, September 30, June 30,                    2009      2009        2008          2008       2008                  ——– ——— ———— ————- ——–    Revenues:    ———    Local     calling     services     $126,017 $129,032     $135,610     $143,415 $149,591    Network     access (1) (2) 98,515    97,038       96,295       94,094   101,402    Long     distance     services       34,754    45,375       46,312       50,161    49,090    Data and     Internet     services       29,062    28,405       29,461       32,873    30,552    Other     services (2) 11,263    11,780       11,582        7,712    14,055                   ——– ——–     ——–     ——– ——–    Total revenue $299,611 $311,630     $319,260     $328,255 $344,690                  ======== ========     ========     ======== ========    Operating     Metrics:    ———    Residential     voice access     lines         869,698   903,965      926,610      958,324   996,531    Business     voice access     lines         382,404   390,418      392,496      403,939   412,633    Wholesale     Access lines 102,163   105,408      107,243      112,131   116,731                   ——-   ——-      ——-      ——-   ——-       Total        voice        access        lines    1,354,265 1,399,791    1,426,349    1,474,394 1,525,895     HSD     subscribers   296,107   300,882      295,360      294,134   294,412                   ——-   ——-      ——-      ——-   ——-   Total     access     line     equivalents 1,650,372 1,700,673    1,721,709    1,768,528 1,820,307                 ========= =========    =========    ========= =========     Long     distance     subscribers   605,468   623,497      631,458      643,844   656,599                   =======   =======      =======      =======   =======    (1) During the first quarter of 2009, the Company reclassified certain         revenues from network access revenues to local calling services         revenue. Prior period revenues were also reclassified for comparison         purposes.    (2) During the third and fourth quarters of 2008, the Company recorded         certain revenue adjustments/reclassifications that related to prior         periods. The table below shows the revenue for the affected category         as if the adjustments were reflected in the appropriate period:                                     Three Months Ended                                    ——————                        Normalized      Normalized       Normalized                       December 31,    September 30,       June 30,                           2008             2008             2008                       ————    ————-   ————–         Revenues:         Local calling          services        $135,610         $143,415        $149,591         Network          access            96,295           96,094          99,402         Long distance          services          46,312           50,161          49,090         Data and          Internet          services          30,814           31,520          30,552         Other          services          11,582           10,994          10,773                           ——–         ——–        ——–         Total revenue    $320,613         $332,184        $339,408                          ========         ========        ========                FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES     Unaudited Reconciliation of Net Income under GAAP to Adjusted EBITDA                                  (Non-GAAP)                            (Dollars in thousands)                                      Three Months Ended                                      ——————                       June 30, March 31, Dec. 31, Sept. 30,   June 30,                        2009       2009       2008     2008       2008                        —-       —-       —-     —-       —-     Net Income      $(17,818)    $(8,777) $(76,072) $(25,109)   $23,114    Depreciation     and amortization 68,629      67,867    70,598    60,768     69,741    Interest expense 54,809      53,479    52,730    49,665     45,123    Income taxes     (12,033)     (4,822) (46,598) (17,176)    13,909                      ——       —–     —–     —–      —–                      93,587     107,747       658    68,148    151,887                      ——       —–     —–     —–      —–    Non-cash (gain)     loss on     derivatives      (7,233)    (12,898)   49,909     5,014    (43,123)    Non-cash gain     on repurchase     of debt          (7,614)     (4,863)        –         –          –    Transition     services agreement    –      15,895    49,597    49,550     49,476    Other merger and     cutover related     costs (1)             –       9,618    26,871    15,191     10,095    Other non-cash     items (2)        12,152       9,589     9,128     5,723      5,723                      ——       —–     —–     —–      —–     Adjusted EBITDA     (Covenant) (3) $90,892    $125,088 $136,163 $143,626   $174,058                       =====       =====     =====     =====      =====    Other adjustments     to EBITDA:       Cutover costs        in excess of        cumulative        cap (4)        8,653       9,743         –         –          –       Restructuring        and        severance        costs          1,330         451         –         –          –       Non-cash        accrual        for        compensated        absences (5)    (989)      2,966         –         –          –       Revenue and        expense        adjustments        related to        prior        periods (6)        –           –     1,353     4,956     (6,309)       Other income (7)    –     (15,000)        –         –          –                      ——       —–     —–     —–      —–    Adjusted EBITDA $99,886    $123,248 $137,516 $148,582  $167,749                       =====       =====    =====      =====      =====    (1) Other one-time items related to the merger and systems cutover         primarily include training costs, recruiting and relocation costs,         brand and promotional marketing costs, systems development costs and         travel costs.    (2) Includes non-cash pension, OPEB and stock based compensation         expenses.    (3) Adjusted EBITDA is defined in FairPoint’s credit facility as net         income (loss) before interest expense and provision (benefit) for         income taxes and depreciation and amortization, excluding unusual or         one-time non-recurring items (including costs related to the use of         Verizon’s systems and services under the transition services         agreement as well as other costs related to the cutover to         FairPoint’s newly developed systems platform), non-cash items related         to pension and OPEB, stock based compensation and other costs and         adjustments related to the acquisition of the Northern New England         business.    (4) Represents one-time costs incurred in connection with the systems         cutover which exceeded the cumulative cap of $61 million for allowed         cutover related add-backs as provided in the Company’s credit         facility.    (5) Reflects a non-cash accrual recorded in the first quarter of 2009 for         vacation pay for the full year 2009 for employees of the northern New         England operations which fully vested on January 1, 2009. The non-         cash accrual will be relieved throughout 2009 as employees use their         accrued vacation.    (6) Includes certain revenue and expense adjustments related to prior         quarters.    (7) Other income for the three months ended March 31, 2009 represents a         gain resulting from the one-time payment made by Verizon to the         Company pursuant to the transition agreement entered into on January         30, 2009.                  FAIRPOINT COMMUNICATIONS, INC. AND SUBSIDIARIES          Unaudited Pro Forma Combined Statement of Operations (Non-GAAP)                      For the Six Months Ended June 30, 2008                       (in thousands, except per share data)                                                                     Pro Forma                         Results of                                 Results                         Operations Legacy   Merger                for                         Under GAAP FairPoint Related   Pro Forma   Combined                            (a)        (b)    Costs(c) Adjustments Businesses                         ———- ——— ——— ———– ———-     Revenues              $627,104    67,927     –       (923)(e)    $694,108                          ——–    ——   —       —-        ——–    Operating     expenses:       Cost of        services        and sales,        excluding        depreciation        and        amortization       269,737    27,511     –    (10,131)(d)(e) 287,117       Selling,        general        and        administrative        expense            165,406    59,010     –    (50,286)(e)(f) 174,130       Depreciation        and        amortization       123,666    13,299     –      5,436(g)      142,401       Gain on        sale of        operating        assets                   –         –     –          –              –                               —       —   —        —            —         Total          operating          expenses         558,809    99,820     –    (54,981)       603,648                          ——–    ——   —    ——-        ——-         Income from          operations        68,295   (31,893)    –     54,058         90,460                          ——–    ——   —     ——         ——    Other     income     (expense):       Interest        expense           (59,645)   (11,083)    –    (21,510)(h)(i) (92,238)       Interest        and        dividend        income                  –        713     –          –            713       Gain        (loss)        on        derivative        instruments        43,123    (22,259)    –          –         20,864       Other        nonoperating,        net                 1,250    (32,419)    –     32,419(j)       1,250                            —–    ——-   —     ——          —–         Total          other          expense         (15,272)   (65,048)    –     10,909        (69,411)                          ——-    ——-   —     ——        ——-     Income     before     income     taxes                 53,023    (96,941)    –     64,967         21,049    Income     tax    (expense)     benefit              (20,366)    31,567     –    (18,650)(k)     (7,449)                          ——-     ——   —    ——-         ——         Net          income          $32,657    (65,374)    –     46,317        $13,600                          =======    =======   ===     ======        =======    Basic     weighted     average     shares     outstanding         62,077.0                                   88,669.0    Diluted     weighted     average     shares     outstanding         62,483.0                                   89,539.0     Basic     earnings     per common     share                  $0.53                                      $0.15     Diluted     earnings     per common     share                  $0.52                                      $0.15    Note: The unaudited pro forma combined financial statements have been    prepared using the purchase method of accounting as if the transaction    with Verizon had been completed as of January 1, 2008. The unaudited pro    forma combined financial statements give effect to (1) the contribution by    Verizon of assets comprising its local exchange business in Maine, New    Hampshire and Vermont to Spinco, a subsidiary of Verizon, (2) the spin-off    of Spinco to Verizon stockholders and (3) the merger of Spinco with    FairPoint accounted for as a reverse acquisition of FairPoint by    Spinco, with Spinco considered the accounting acquirer.    The accompanying notes are an integral part of these unaudited pro forma    combined condensed financial statements.    (a) Reflects the GAAP results of FairPoint Communications, Inc. and         subsidiaries for the six months ended June 30, 2008.    (b) Reflects the standalone results for the Legacy FairPoint business for         the quarter ended March 31, 2008.    (c) Reflects nonrecurring transition and transaction costs incurred by         FairPoint prior to the closing of the merger.    (d) This adjustment reflects revenues and related expenses associated         with VoIP and wireless directory assistance services which were not         transferred to Spinco. For the three months ended March 31, 2008,         the Northern New England business recorded approximately $923         thousand in revenue and $847 thousand in expenses associated with         VoIP and wireless directory assistance services. In addition, it         reflects certain revenues and related expenses associated with         customers of VSSI-CPE that were not transferred to Spinco.    (e) This adjustment reflects the reduction in pension and OPEB expense of         $11,905 thousand for the three months ended March 31, 2008 for the         Northern New England business, determined using an actuarial study of         employees to eliminate the pension and OPEB expenses that were not         transferred to Spinco. Of the $11,905 thousand adjustment, $9,284         thousand was included in cost of services and sales and $2,621         thousand was included in selling, general and administrative         expenses.    (f) This adjustment is to eliminate merger related costs of $47,665         thousand incurred by Legacy FairPoint prior to the consummation of         the merger during the three months ended March 31, 2008 which are         directly related to the merger and related transactions.     (g) This adjustment reflects the amortization of the finite-lived         identifiable intangible assets recorded in this transaction. The         weighted average estimated life of FairPoint’s customer relationships         is estimated to be 9.7 years and amortization expense is $5,436         thousand for the three months ended March 31, 2008.    (h) This adjustment reflects the removal of allocated interest expense of         $14,522 thousand recorded by the Northern New England business during         the three month period ended March 31, 2008 associated with affiliate         notes payables and long term debts held by Verizon.    (i) This adjusts reported interest expense to the pro forma interest         expense to be recognized on the debt structure of the combined         company following the spin-off and merger. The adjustment considers         (1) the interest expense for the three months ended March 31, 2008         recognized on the newly issued debt of the combined company, (2) the         amortization of capitalized debt issuance costs associated with the         newly issued debt, and (3) the elimination of interest expense and         amortization of debt issuance costs related to the debt of Legacy         FairPoint that was repaid upon consummation of the merger.    (j) This adjustment consists of fees and charges incurred in connection         with the closing of the spin-off and merger, principally including         investment banking fees, write-off of debt issuance costs on Legacy         FairPoint’s old credit facility and other costs incurred at the         closing of the merger.    (k) This adjustment reflects the income tax impact on adjustments         described above.  Non-GAAP Financial Measures The information in this press release should be read in conjunction with the financial statements and footnotes contained in FairPoint’s Quarterly Report on Form 10-Q which will be filed with the Securities and Exchange Commission (“SEC”). FairPoint’s results for the quarter ended June 30, 2009 are subject to the completion and filing with the SEC of its Quarterly Report on Form 10-Q. Adjusted EBITDA (including Adjusted EBITDA as calculated under FairPoint’s credit facility) is a non-GAAP financial measure (i.e., it is not a measure of financial performance under generally accepted accounting principles) and should not be considered in isolation or as a substitute for consolidated statements of operations and cash flow data prepared in accordance with GAAP. In addition, the non-GAAP financial measures used by FairPoint may not be comparable to similarly titled measures of other companies. For a definition of and additional information regarding Adjusted EBITDA, and a reconciliation of such measure to the most comparable financial measure calculated in accordance with GAAP, please see the attachments to this press release.center_img A live broadcast of the earnings conference call will be available via the Internet at www.fairpoint.com(link is external) under the Investors section. An online replay will be available beginning later in the morning on August 6, 2009 and will remain available for one year. FairPoint believes Adjusted EBITDA is useful to investors because Adjusted EBITDA is commonly used in the communications industry to analyze companies on the basis of operating performance, liquidity and leverage. FairPoint believes Adjusted EBITDA allows a standardized comparison between companies in the industry, while minimizing the differences from depreciation policies, financial leverage and tax strategies. In addition, certain covenants in FairPoint’s credit facility and the indenture governing its senior notes as well as the regulatory orders issued in connection with the acquisition of the Northern New England business contain ratios based on Adjusted EBITDA. The restricted payment covenants in such agreements and orders regulating the payment of dividends on FairPoint’s common stock are also based on Adjusted EBITDA. If FairPoint’s Adjusted EBITDA were to decline below certain levels, covenants in FairPoint’s credit facility that are based on Adjusted EBITDA may be violated and could cause, among other things, a default under such credit facility. Consolidated Communications,FairPoint Communications, Inc. (NYSE: FRP, FRP.BC) announced Wednesday its financial results for the three and six months ended June 30, 2009. Net income for the quarter showed a $17.8 million loss, or 20 cents per diluted share. For the first six months, net income showed a loss of $26,595 or 30 cents per diluted share. Revenue totaled $299.6 million for the second quarter of 2009, a 3.9 percent decline compared with $311.6 million in the first quarter of 2009. Highlights Successfully completed an exchange offer for nearly 83 percent of outstanding senior notes enabling the Company to reduce cash interest expense for the second quarter of 2009 by approximately $14.4 million.After giving effect to the conversion of a portion of the Company’s cash interest expense to non-cash as a result of the exchange offer, the Company maintained compliance with all financial covenants contained in the Company’s senior secured credit facility.Access line equivalents declined by 3.0 percent during the second quarter of 2009 to 1,650,372 compared to 1,700,673 at March 31, 2009.Revenue totaled $299.6 million for the second quarter of 2009, a 3.9 percent decline compared with $311.6 million in the first quarter of 2009.Operating expenses, excluding depreciation, declined by $16.9 million, or 7.1 percent, to $220.7 million during the second quarter of 2009 compared to the first quarter of this year.Adjusted EBITDA (a non-GAAP financial measure as defined herein) totaled $99.9 million for the second quarter of 2009, compared with $123.2 million in the first quarter of 2009.  “Operationally, we continued to make steady progress during the second quarter,” stated David Hauser, Chairman and CEO of FairPoint. “The issues experienced with the systems cutover are continuing to improve and most of them are behind us. Going forward, we will be focusing on three primary areas: improving customer service, growing business and broadband revenue and reducing costs.” “Financially, while we were pleased with the successful completion of the exchange offer with our bondholders in July, this represented only the first step in a more comprehensive debt restructuring. While the exchange offer provides us with additional time, we remain fully committed to permanently deleveraging our current capital structure. Once completed, we will be able to focus all of our attention toward profitably growing the business,” concluded Hauser.Second Quarter ResultsRevenue for the second quarter of 2009 totaled $299.6 million, a decline of $12.0 million, or 3.9%, compared to the first quarter of 2009 reflecting the continued decrease in access line equivalents and the weak economic environment. Operating expenses, excluding depreciation, for the second quarter of 2009 totaled $220.7 million, a decline of $16.9 million, or 7.1%, compared to the first quarter of 2009. Cutover related costs totaled $8.7 million in the second quarter of 2009, a decline of $26.6 million from the first quarter which included costs under the transition services agreement with Verizon. Excluding cutover related costs, operating expenses increased by $9.7 million in the second quarter of 2009.Adjusted EBITDA totaled $99.9 million for the three months ended June 30, 2009, compared with $123.2 million for the first quarter of 2009. The decline in Adjusted EBITDA primarily reflects the reduced level of revenue and higher operating expenses incurred for services that were previously covered under the transition services agreement with Verizon, as well as higher bad debt expenses and costs related to the exchange offer.Operating MetricsTotal access line equivalents were 1,650,372 at June 30, 2009, compared with 1,820,307 at June 30, 2008, a decline of 9.3%. During the second quarter, total access line equivalents declined by 3.0% compared with a decline of 1.6% during the first quarter of 2009 (normalizing for a previously reported one-time first quarter adjustment to access lines identified during the systems cutover).HSD subscribers totaled 296,107 as of June 30, 2009, a decrease of 1.6% compared with 300,882 at March 31, 2009 and an increase of 0.6% compared with 294,412 at June 30, 2008. HSD subscribers increased by 3.4% in Legacy FairPoint during the second quarter, while declining by 3.3% in the northern New England operations. We believe the decline in northern New England reflects the absence of promotional activity during the first half of 2009 as a result of cutover related issues. Total HSD penetration was 21.9% as of June 30, 2009, compared with 21.5% at March 31, 2009 and 19.3% at June 30, 2008.Long distance subscribers totaled 605,468 at June 30, 2009, down 2.9% from 623,497 as of March 31, 2009 and down 7.8% compared with a year ago. Long distance penetration was 44.7% at June 30, 2009, compared with 44.5% as of March 31, 2009 and 43.0% a year ago. Access Line Equivalents                                                        % change % change                                                        6/30/08 to 3/31/09 to                         6/30/2009 3/31/2009 6/30/2008 6/30/09    6/30/09                         ——— ——— ——— ———- ———     Residential access      lines     ——————     Legacy FairPoint      160,065   162,059   176,891     (9.5%)    (1.2%)     Northern New England 709,633   741,906   819,640    (13.4%)    (4.4%)                         ——— ——— ———                           869,698   903,965   996,531    (12.7%)    (3.8%)     Business access      lines     ——————     Legacy FairPoint       51,235    51,344    54,619     (6.2%)    (0.2%)     Northern New England 331,169   339,074   358,014     (7.5%)    (2.3%)                         ——— ——— ———                           382,404   390,418   412,633     (7.3%)    (2.1%)      Wholesale access      lines                102,163   105,408   116,731    (12.5%)    (3.1%)        Total voice        access lines     1,354,265 1,399,791 1,525,895    (11.2%)    (3.3%)                         ——— ——— ———      HSD subscribers     —————     Legacy FairPoint       79,210    76,619    73,326      8.0%      3.4%     Northern New      England              216,897   224,263   221,086     (1.9%)    (3.3%)                         ——— ——— ———     Total HSD       subscribers         296,107   300,882   294,412       0.6%    (1.6%)      Total access line      equivalents        1,650,372 1,700,673 1,820,307     (9.3%)    (3.0%)                         ========= ========== =========      Long distance      subscribers          605,468    623,497   656,599     (7.8%)    (2.9%)                         ========= ========== ========= Cash Flow and LiquidityFor the six months ended June 30, 2009, operating cash flow totaled $28.1 million. Cash flow from operations for the first six months of 2009 was negatively impacted by $43.9 million of expenses related to the systems cutover activities and an increase in accounts receivable, before allowance for uncollectibles, of $29.1 million, largely resulting from cutover related issues. Excluding the impact of these cutover related items, cash flow from operations would have been $101.1 million. The Company also made cash interest payments totaling $107.3 million during the six months ended June 30, 2009 which reduced cash flow from operations. Capital expenditures totaled $90.5 million for the first half of 2009. Conference Call and Webcast Cash and cash equivalents at June 30, 2009 totaled $81.0 million and $2.4 million remained available under the Company’s revolving credit facility. As of June 30, 2009, after giving effect to the conversion of a portion of the Company’s cash interest expense to non-cash as a result of the exchange offer, the Company was in compliance with all of the financial covenants contained in its credit facility.The Company currently believes that the reduction in its cash interest expense resulting from the consummation of the exchange offer may not be sufficient to prevent a breach of the interest coverage ratio maintenance covenant for the measurement period ending September 30, 2009. In addition, the Company currently expects that it may exceed the leverage ratio maintenance covenant limit contained in its credit facility as early as the measurement period ending September 30, 2009. As a result, the Company has initiated discussions with its bondholders regarding a more comprehensive and permanent restructuring of its current capital structure to reduce its indebtedness and debt service obligations. About FairPoint Source: FairPoint Communicatioins.  CHARLOTTE, N.C., Aug. 5, 2009 /PRNewswire-FirstCall/ —last_img read more

 

Eight qualify for quarter-finals of Corona Futsal

first_imgEIGHT teams have qualified for the quarter-final stage of the Corona Futsal tournament after action on Saturday evening at the National Gymnasium.The eight teams are Back Circle, Bent Street, Sparta Boss, Future Stars, Tiger Bay, California Square North-East La Penitence and West Front Road.In the first of last Saturday’s games, California Square thrashed Beacon 7-0 with David George scoring in the 2nd, 3rd, 5th and 18th minutes, while there were single strikes from Mishack Baritta (14th), Travis Hercules (17th) and Jamal Adams (16th)In the second game, Mocha trampled Future Stars 9-2, thanks to Jamal Cozier (3rd, 5th, 8th & 13th) and William Europe (12th, 14th & 19th min). Keran Salomon (13th) Sgamar Fraser (3rd) were the other two scorers.Mocha had Amos Ramsay (7th) and Delroy Lowenfield (6th) on target.Tucville went down 1-5 to West Front Road after Carl Griffith’s 10th minute strike was overturned by Hubert Perdo’s (3rd and 9th) and Colin Nelson’s (7th & 20th) doubles. Randolph Wagner also scored in the 20th minute.North-East played to a goalless draw against Tiger Bay, while Bent Street had to fight in their 3-2 win over Leopold Street. Leopold Street had a double from Okenny Fraser (19th & 20th), while Sheldon Holder’s brace in the 1st & 16th minutes along with Pernel Shultz 15th minute strike sent them through.Trayon Bobb’s 13th minute strike did not stand long for Back Circle, as Jermaine Junior’s 14th minute strike brought Sparta Boss to a 1-1 result.The quarter finals are set for May 27, 2019last_img read more

 

LAPD to begin protecting bikers’ rights

first_imgFor this first time, the Los Angeles Police Department is pledging to take an active role in protecting bikers’ safety on the streets of Los Angeles.Rolling · Though LAPD is pushing to enhance bikers’ rights, officials say bikers at USC also need to be sure to observe traffic laws. – Tim Tran | Daily Trojan LAPD Chief Charlie Beck announced last week that LAPD will work to heighten awareness of bikers’ rights and regulate officers’ conduct regarding bicycle accidents. The announcement came as a result of growing discontent among bicyclists who want to be able to share the roadways with motorists in a safe manner.Previously, the officer’s discretion would determine whether an incident between a bike and a car became a collision report or a crime report. LAPD plans to change this policy to include a full, documented report for each collision. The report will be sent to a specific department, which will then determine if the collision was incidental.LAPD officers will also be better trained in bikers’ safety and rights.LAPD Cmdr. David R. Doan said the LAPD hopes to create a website where bikers can identify areas in Los Angeles that are particularly problematic.One area that can be troublesome for both bicyclists and motorists is around USC.Because all motor vehicles abide by the same California vehicle code, bikers at USC have the same rights as bikers everywhere statewide as well as the same responsibilities.Department of Public Safety Capt. David Carlisle said bicycle collisions often occur because students are not observing traffic laws. Carlisle said he has noticed that many students at USC tend to not yield to pedestrians as is the law.According to Carlisle, bikers were previously cited at USC for riding bikes on sidewalks and crosswalks, but it is now permissible to ride bikes on both as long as it is done in a safe manner.Still, the large number of bicyclists in the USC area creates a potential for problems.“With the proliferation of bicycles in a campus that was not designed for bike traffic, it has created a hazardous situation for bikers and pedestrians,” Carlisle said.Although most bike accidents are minor and not reported to DPS, there have been more than 60 bicycle-related incidents reported since January 2008, according to Carlisle.“I’m always afraid I’m going to hit someone … In the areas where it is congested, it’s almost not worth it to have a bike because you have to walk it,” said Roseanna Jamison, a senior majoring in architecture.Last year, DPS created a bicycle task force, which aims to find solutions for the numerous bikes on campus and how to manage traffic flow. The bike task force is preparing to release a report soon, Carlisle said.Though campus is crowded with bicyclists, many students find bikes to be a convenient mode of transportation.“[Biking] is faster and makes it easier to get to class,” said Bryn Kressin, a senior majoring in communication. “I don’t have to wake up as early.”Though Elizabeth Castro, a junior majoring in health promotion and disease prevention, has not been involved in a serious biking accident, she is conscious of how dangerous it can be to bike around USC.“I always bump into pedestrians, and there’s always the awkward ‘which way are you going?’ kind of thing,” Castro said. “You have to bike really slowly. [Biking around USC] is like a game of Frogger.”Doan cautioned bicyclists to be aware of the pedestrians around campus.“Bicyclists share pathways with pedestrians and should remember to maneuver in a manner that is consistent with pedestrians because they rule in these situations,” Doan said.Ryan Nunez, a senior majoring in communication, does not own a bike but must still face bikers who do not follow the rules of the road.“[Campus] is a nightmare. Bikers feel that they get the right of way and most of the time they don’t,” he said.Carlisle cautions pedestrians and drivers on campus to “look left, look right and left again” to prepare for oncoming bicyclists.last_img read more