FTGX Fibernet Telecom Grp. (MM)

Second Quarter of 2009 Revenues Increase 9.9% and EBITDA Increases 16.1% Over Comparable Period in 2008 NEW YORK, Aug 13 /PRNewswire-FirstCall/ -- FiberNet Telecom Group, Inc. (NASDAQ:FTGX), a leading provider of complex interconnection services, today announced its results for the second quarter ended June 30, 2009. Revenues for the second quarter of 2009 increased to $15.8 million, up 9.9% from $14.4 million for the second quarter of 2008 and up 1.3% from $15.6 million for the first quarter of 2009. EBITDA (as defined) for the second quarter of 2009 was $3.4 million, up 16.1% from $2.9 million for the second quarter of 2008 and up 6.1% from $3.2 million for the first quarter of 2009. FiberNet continued to achieve consistent revenue growth in its core product offerings of transport and colocation services. For the second quarter of 2009, revenues from transport and colocation services grew by 10.4% over the second quarter of 2008. Transport services remained the most significant component of FiberNet's revenues, accounting for 76.1% of the total revenues generated in the second quarter of 2009. On-net transport revenues were 45.1% and off-net transport revenues were 31.0% of the total revenues. Colocation services represented 23.3% of total revenue generated in the second quarter of 2009. Colocation revenues were the fastest growing area for the Company in the second quarter of 2009, increasing by 15.9% from the second quarter of 2008 and by 4.1% from the first quarter of 2009. Off-net transport revenues increased by 6.7% in the second quarter of 2009 from the second quarter of 2008. FiberNet's customer count also increased to 290 as of June 30, 2009, up from 284 at the end of the second quarter of 2008. Jon A. DeLuca, President and CEO, stated, "We are proud of our results for the second quarter of this year. The business continues to perform well in a challenging economic environment." Cost of services for the second quarter of 2009 was $8.2 million, compared to $7.4 million for the second quarter of 2008 and $8.1 million for the first quarter of 2009. Selling, general and administrative expenses for each of the second quarters of 2009 and 2008 were $4.7 million, and $4.7 million in the first quarter of 2009. The net loss applicable to common stockholders for the second quarter of 2009 was $(42,000), or $(0.01) per share, compared to $(0.7) million, or $(0.09) per share, for the second quarter of 2008. The net loss applicable to common stockholders for the first quarter of 2009 was $(0.2) million or $(0.02) per share. Capital expenditures for the second quarter of 2009 were $2.2 million, compared to $0.7 million in the first quarter of 2009 and $3.2 million in the second quarter of 2008. More specifically for the second quarter of 2009, $1.0 million were invested for the implementation of customer specific orders and the implementation of network infrastructure to support new initiatives. The Company also invested $1.2 million in colocation expansion projects. 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 June 30, 2009, FiberNet had total assets of $67.4 million and total stockholders' equity of $37.6 million. As of Aug 13, 2009, the Company had approximately 7.9 million shares of common stock outstanding, or 8.0 million shares of common stock outstanding on a fully-diluted basis, assuming the exercise of all outstanding options and warrants. Of the approximately 0.1 million outstanding options and warrants, approximately 24 thousand are out-of-the-money as of Aug 13, 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 June 30, 2009, FiberNet was in full compliance with all of the financial covenants in its credit agreement. FiberNet Teleconference: The Company will not conduct a teleconference to discuss its results for the second quarter of 2009. 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, Miami and San Francisco 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 June 30, June 30, March 31, 2009 2008 2009 Calculation of EBITDA (as defined): Net loss $ (42) $ (667) $ (229) Plus: Operating expenses: Stock related expense for selling, general, and administrative matters 394 580 386 Depreciation and amortization 2,669 2,549 2,653 Income taxes (1) 62 62 62 Interest expense, net 268 362 287 EBITDA (as defined) $ 3,351 $ 2,886 $ 3,159 (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) Six months ended June 30, 2009 2008 Revenues $ 31,443 $ 27,960 Operating expenses: Cost of services (exclusive of items shown separately below) 16,262 14,283 Selling, general and administrative expense 9,451 9,115 Depreciation and amortization 5,322 4,988 Total operating expenses 31,035 28,386 Income (Loss) from operations 408 (426) Interest income 1 69 Interest expense (556) (801) Net loss before provision for income taxes $ (147) $ (1,158) Provision for income taxes (124) (123) Net loss $ (271) $ (1,281) Net loss per share-basic and diluted $ (0.04) $ (0.17) Weighted average shares outstanding-basic and diluted 7,589 7,540 FIBERNET TELECOM GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (in thousands, except for per share amounts) Three months ended June 30, 2009 2008 Revenues $ 15,825 $ 14,405 Operating expenses: Cost of services (exclusive of items shown separately below) 8,150 7,394 Selling, general and administrative expense 4,718 4,705 Depreciation and amortization 2,669 2,549 Total operating expenses 15,537 14,648 Income (Loss) from operations 288 (243) Interest income - 23 Interest expense (268) (385) Net loss before provision for income taxes $ 20 $ (605) Provision for income taxes (62) (62) Net loss $ (42) $ (667) Net loss per share-basic and diluted $ (0.01) $ (0.09) Weighted average shares outstanding-basic and diluted 7,676 7,501 FIBERNET TELECOM GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands) June 30, December 31, 2009 2008 (unaudited) ASSETS Current Assets: Cash and cash equivalents $ 8,960 $ 5,992 Accounts receivable, net of allowance of $861 4,144 4,841 Prepaid expenses 737 587 Total current assets 13,841 11,420 Property, plant and equipment, net 50,361 52,579 Other Assets: Deferred charges, net of accumulated amortization of $464 and $362 564 665 Goodwill 1,613 1,613 Other assets 1,009 900 TOTAL ASSETS $ 67,388 $ 67,177 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Accounts payable $ 3,765 $ 3,064 Accrued expenses 4,655 5,572 Notes payable, current portion 2,061 1,750 Deferred revenues, current portion 1,198 1,200 Total current liabilities 11,679 11,586 Long-Term Liabilities: Notes payable 11,805 11,550 Deferred revenue, long-term 3,370 3,578 Other long-term liabilities 2,946 2,783 Total Long-Term Liabilities 18,121 17,911 Total Liabilities 29,800 29,497 Stockholders' Equity: Common stock, $0.001 par value, 2,000,000,000 shares authorized and 7,667,368 and 7,422,918 shares issued and outstanding 8 7 Additional paid-in-capital 445,329 445,238 Deferred rent (warrants) (1,126) (1,213) Accumulated deficit (406,623) (406,352) Total stockholders' equity 37,588 37,680 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 67,388 $ 67,177 FIBERNET TELECOM GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (in thousands) Six months ended June 30, 2009 2008 Cash flows from operating activities: Net loss $ (271) $ (1,281) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 5,322 4,988 Stock related expense 780 928 Deferred rent expense 87 87 Other non-cash items (119) 99 Change in assets and liabilities: Decrease (Increase) in accounts receivables 697 (522) Increase in prepaid expenses (150) (81) Increase in other assets (138) (130) Increase in accounts payable 701 382 (Decrease) Increase in accrued expenses and other long-term liabilities (754) 170 (Decrease) Increase in deferred revenues (210) 115 Cash provided by operating activities 5,945 4,755 Cash flows from investing activities: Common stock repurchases (689) (2,470) Capital expenditures (2,854) (4,338) Cash used in investing activities (3,543) (6,808) Cash flows from financing activities: Proceeds from debt financings 1,500 - Repayment of debt financings (934) - Payment of financing costs of debt financings - (22) Cash provided by (used in) financing activities 566 (22) Net increase (decrease) in cash and cash equivalents 2,968 (2,075) Cash and cash equivalents at beginning of period 5,992 8,220 Cash and cash equivalents at end of period $ 8,960 $ 6,145 Supplemental disclosures of cash flow information: Interest paid $ 456 $ 810 Income taxes paid $ 353 $ 295 Acquisition of property, plant, and equipment not paid $ 219 $ 223 DATASOURCE: Fibernet Telecom Group Inc. CONTACT: Norma I. Salcido, Director, Marketing & Communications, FiberNet Telecom Group, Inc., +1-212-405-6200, Web Site: http://www.ftgx.com/

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