FTGX Fibernet Telecom Grp. (MM)

First Quarter of 2009 Revenues Increase 15.2% and EBITDA Increases 21.3% Over Comparable Period in 2008 NEW YORK, May 15 /PRNewswire-FirstCall/ -- FiberNet Telecom Group, Inc. (NASDAQ:FTGX), a leading provider of complex interconnection services, today announced its results for the first quarter ended March 31, 2009. Revenues for the first quarter of 2009 increased to $15.6 million, up 15.2% from $13.6 million for the first quarter of 2008 and up 1.3% from $15.4 million for the fourth quarter of 2008. EBITDA (as defined) for the first quarter of 2009 was $3.2 million, up 21.3% from $2.6 million for the first quarter of 2008 and up 2.2% from $3.1 million for the fourth quarter of 2008. FiberNet continued to achieve consistent revenue growth in its core product offerings of transport and colocation services. For the first quarter of 2009, revenues from transport and colocation services grew by 16.0% over the first quarter of 2008. Transport services remained the most significant component of FiberNet's revenues, accounting for 76.7% of total revenues generated in the first quarter of 2009. On-net transport revenues were 45.3% and off-net transport revenues were 31.4% of total revenues. Colocation services represented 22.7% of total revenue generated in the first quarter of 2009. Colocation revenues increased by 15.9% from the first quarter of 2008 and by 2.6% from the fourth quarter of 2008. Off-net transport revenues were the fastest growing area for the Company in the first quarter of 2009, increasing by 21.0% in the first quarter of 2009 from the first quarter of 2008 and by 2.1% from the fourth quarter of 2008. FiberNet's customer count also increased to 296 as of March 31, 2009, up from 265 at the end of the first quarter of 2008. Jon A. DeLuca, President and CEO, stated, "We are proud of our results for the first quarter of this year. As we navigate a challenging economic environment, our financial performance confirms the value that we are providing to our customers. We are particularly pleased with the strong cash flow generation of our business, as well." Cost of services for the first quarter of 2009 was $8.1 million, compared to $6.9 million for the first quarter of 2008 and $7.4 million for the fourth quarter of 2008. Selling, general and administrative expenses for the first quarter of 2009 were $4.7 million, compared to $4.4 million in the first quarter of 2008 and $5.3 million in the fourth quarter of 2008. The net loss applicable to common stockholders for the first quarter of 2009 was $(0.2) million, or $(0.03) per share, compared to $(0.6) million, or $(0.08) per share, for the first quarter of 2008. The net loss applicable to common stockholders for the fourth quarter of 2008 was $(73,000) or $(0.01) per share. Capital expenditures for the first quarter of 2009 were $0.7 million, compared to $3.2 million in the fourth quarter of 2008 and $1.1 million in the first quarter of 2008. More specifically for first quarter of 2009, $0.6 million was invested for the implementation of customer specific orders and the implementation of network infrastructure to support new initiatives, and $0.1 million were invested in national network expansion projects. These projects include capacity expansions to the Company's metro networks in New York / New Jersey and Los Angeles, a capacity expansion to its metro Ethernet network and an extension of its network reach to the new markets of Chicago, Miami and San Francisco. For 2009, the Company expects to invest approximately $4.0 million in general capital expenditures, and $1.5 million in colocation expansion projects. As of March 31, 2009, FiberNet had total assets of $68.7 million and total stockholders' equity of $37.3 million. As of May 15, 2009, the Company had approximately 7.7 million shares of common stock outstanding or 8.1 million shares of common stock outstanding on a fully-diluted basis, assuming the exercise of all outstanding options and warrants. Of the approximately 0.4 million outstanding options and warrants, approximately 0.1 million are out-of-the-money as of May 15, 2009. The Company presents the financial metric EBITDA (as defined) because it is utilized in the determination of the majority of the financial covenants in its credit agreement, and the metric is calculated in accordance with its credit agreement. As of March 31, 2009, FiberNet was in full compliance with all of the financial covenants in its credit agreement. FiberNet Teleconference: FiberNet will hold a teleconference today, Friday, May 15, 2009, at 11:00 a.m. EDT. To participate in the teleconference please call: 800-659-1942 and enter pass code 94535176, and from outside the U.S. call 617-614-2710 and enter the pass code. A replay of the teleconference will be available beginning Friday, May 15, 2009 at 1:00 p.m. EDT through Friday, May 29, 2009. To listen to the replay by phone, call 888-286-8010 and enter pass code 33359080, and from outside the U.S. call 617-801-6888 and enter the pass code. A webcast of the call will also be held today, beginning at 11:00 a.m. EDT. To listen, go to http://www.ftgx.com/investors-press/events/. The 1st quarter 2009 earnings results webcast will be archived for one year. About FiberNet Telecom Group, Inc. Celebrating its 10th anniversary, FiberNet Telecom Group, Inc. owns and operates integrated colocation facilities and diverse transport routes in the gateway markets of New York/New Jersey, Los Angeles, Chicago and Miami, designed to provide comprehensive broadband interconnectivity enabling the exchange of traffic over multiple networks. FiberNet's customized connectivity infrastructure provides an advanced, high bandwidth, fiber-optic solution to support the demand for network capacity and to facilitate the interconnection of multiple carriers' and customers' networks. For additional information about FiberNet, visit the company's website at http://www.ftgx.com/. Financial Information and Forward Looking Statements: This partial discussion of the statements of financial condition and operations of the Company should be read in conjunction with the consolidated financial statements and related notes contained in the Company's annual report on Form 10-K for the year ended December 31, 2008 as filed with the Securities and Exchange Commission on March 18, 2009. Investors are cautioned that EBITDA (as defined) is not a financial measure under generally accepted accounting principles. EBITDA (as defined) is defined as net loss before income taxes, net interest expense, depreciation and amortization, stock related expense and other non-cash or non-recurring charges. The Company does not, nor does it suggest investors should, consider such a non-GAAP financial measure in isolation from, or as a substitute for, financial information prepared in accordance with GAAP. EBITDA (as defined) should not be construed as an alternative to operating income or cash flows from operating activities, both of which are determined in accordance with GAAP, or as a measure of liquidity. Because it is not calculated under GAAP, FiberNet's EBITDA (as defined) may not be comparable to similarly titled measures used by other companies. EBITDA (as defined) is commonly used in the communications industry and by financial analysts, and others who follow the industry, as a measure of operating performance. The Company believes that it is appropriate to present this financial measure because certain of the financial covenants in the Company's credit agreement are based upon it. Various remarks about the Company's future expectations, plans and prospects constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Such remarks are valid only as of today, and the Company disclaims any obligation to update this information. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the Company's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission. Reconciliation of Non-GAAP Financial Metric: Consolidated Financial Data (in thousands) (unaudited) Three Months Ended March 31, March 31, December 31, 2009 2008 2008 Calculation of EBITDA (as defined): Net loss $ (229) $ (614) $ (73) Plus: Operating expenses: Stock related expense for selling, general, and administrative matters 386 347 368 Depreciation and amortization 2,653 2,439 2,426 Income taxes (1) 62 62 62 Interest expense, net 287 370 309 EBITDA (as defined) $ 3,159 $ 2,604 $ 3,092 (1)Quarterly effect of reclassification of incomes tax provisions. FIBERNET TELECOM GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except for per share amounts) Three months ended March 31, 2009 2008 Revenues $15,618 $13,556 Operating expenses: Cost of services (exclusive of items shown separately below) 8,112 6,889 Selling, general and administrative expense 4,733 4,410 Depreciation and amortization 2,653 2,439 Total operating expenses 15,498 13,738 Income (Loss) from operations 120 (182) Interest income 1 47 Interest expense (288) (417) Net loss before provision for income taxes $(167) $(552) Provision for income taxes (62) (62) Net loss $(229) $(614) Net loss per share-basic and diluted $(0.03) $(0.08) Weighted average shares outstanding-basic and diluted 7,510 7,578 FIBERNET TELECOM GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) March 31, December 31, 2009 2008 (unaudited) ASSETS Current Assets: Cash and cash equivalents $9,115 $5,992 Accounts receivable, net of allowance of $861 4,107 4,841 Prepaid expenses 557 587 Total current assets 13,779 11,420 Property, plant and equipment, net 51,692 52,579 Other Assets: Deferred charges, net of accumulated amortization of $413 and $362 614 665 Goodwill 1,613 1,613 Other assets 952 900 TOTAL ASSETS $68,650 $67,177 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $4,464 $3,064 Accrued expenses 5,108 5,572 Notes payable, current portion 1,889 1,750 Deferred revenues, current portion 1,173 1,200 Total current liabilities 12,634 11,586 Long-Term Liabilities: Notes payable 12,320 11,550 Deferred revenue, long-term 3,515 3,578 Other long-term liabilities 2,867 2,783 Total Long-Term Liabilities 18,702 17,911 Total Liabilities 31,336 29,497 Stockholders' Equity: Common stock, $0.001 par value, 2,000,000,000 shares authorized and 7,678,579 and 7,422,918 shares issued and outstanding 8 7 Additional paid-in-capital 445,056 445,238 Deferred rent (warrants) (1,169) (1,213) Accumulated deficit (406,581) (406,352) Total stockholders' equity 37,314 37,680 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $68,650 $67,177 FIBERNET TELECOM GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Three months ended March 31, 2009 2008 Cash flows from operating activities: Net loss $(229) $(614) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 2,653 2,439 Stock related expense 386 347 Deferred rent expense 43 43 Other non-cash items 52 49 Change in assets and liabilities: Decrease (Increase) in accounts receivables 734 (232) Decrease in prepaid expenses 29 59 (Increase) decrease in other assets (82) 1 Increase in accounts payable 318 51 Decrease in accrued expenses and other long-term liabilities (380) (733) Decrease in deferred revenues (91) (220) Cash provided by operating activities 3,433 1,190 Cash flows from investing activities: Common stock repurchases (565) (1,529) Capital expenditures (654) (1,130) Cash used in investing activities (1,219) (2,659) Cash flows from financing activities: Proceeds from debt financings 1,500 - Repayment of debt financings (591) - Payment of financing costs of debt financings - (22) Cash provided by (used in) financing activities 909 (22) Net increase (decrease) in cash and cash equivalents 3,123 (1,491) Cash and cash equivalents at beginning of period 5,992 8,220 Cash and cash equivalents at end of period $9,115 $6,729 Supplemental disclosures of cash flow information: Interest paid $249 $662 Income taxes paid $166 $154 Acquisition of property, plant, and equipment not paid $1,081 $1,302 DATASOURCE: FiberNet Telecom Group, Inc. CONTACT: Norma I. Salcido, Director, Marketing and Communications, FiberNet Telecom Group, Inc., +1-212-405-6200, Web Site: http://www.ftgx.com/

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