ATLANTA, Mar 03, 2010 (BUSINESS WIRE) — Cbeyond, Inc. (NASDAQ:CBEY, news, filings), (“Cbeyond”), a managed services provider that delivers integrated packages of communications and IT services to small businesses, today announced its results for the fourth quarter ended December 31, 2009.
Recent financial and operating highlights include the following:
- Fourth quarter revenue of $107.7 million, up 14.8% over the fourth quarter of 2008;
- Total adjusted EBITDA of $19.0 million in the fourth quarter of 2009 compared with $15.5 million in the fourth quarter of 2008 and $15.3 million in the third quarter of 2009 (see page 9 for reconciliation to net income);
- Net income of $0.9 million in the fourth quarter of 2009 compared with net income of $0.5 million in the fourth quarter of 2008;
- Total customers of 50,203 in Cbeyond’s 13 operating markets, reflecting net customer additions of 1,623 in the fourth quarter of 2009, an increase of 18.2% year-over-year;
- Average monthly revenue per customer location (ARPU) of $727 during the fourth quarter of 2009, compared with $744 in the third quarter of 2009 and $754 in the fourth quarter of 2008;
- Monthly customer churn of 1.5% in the fourth quarter of 2009 as compared to 1.4% in the third quarter of 2009, and;
- Cash and cash equivalents balance of $39.3 million at December 31, 2009, an increase of $8.0 million over the balance of $31.3 million at September 30, 2009.
Financial Overview and Key Operating Metrics
Financial and operating metrics, which include non-GAAP financial measures, for the three and twelve months ended December 31, 2008 and 2009, include the following:
| For the Three Months Ended December 31, | |||||||||||||||
| 2008 | 2009 | Change | % Change | ||||||||||||
| Selected Financial Data (dollars in thousands) | |||||||||||||||
| Revenue | $ | 93,872 | $ | 107,719 | $ | 13,847 | 14.8 | % | |||||||
| Operating expenses | $ | 93,017 | $ | 107,393 | $ | 14,376 | 15.5 | % | |||||||
| Operating income (loss) | $ | 855 | $ | 326 | $ | (529 | ) | (61.9 | %) | ||||||
| Net income (loss) | $ | 533 | $ | 925 | $ | 392 | 73.5 | % | |||||||
| Capital expenditures | $ | 22,357 | $ | 14,538 | $ | (7,819 | ) | (35.0 | %) | ||||||
| Key Operating Metrics and Non-GAAP Financial Measures | |||||||||||||||
| Customers at end of period | 42,463 | 50,203 | 7,740 | 18.2 | % | ||||||||||
| Net customer additions | 1,894 | 1,623 | (271 | ) | (14.3 | %) | |||||||||
| Average monthly churn rate | 1.4 | % | 1.5 | % | 0.1 | % | 7.1 | % | |||||||
| Average monthly revenue per customer location | $ | 754 | $ | 727 | $ | (27 | ) | (3.6 | %) | ||||||
| Adjusted EBITDA (in thousands) | $ | 15,508 | $ | 19,049 | $ | 3,541 | 22.8 | % | |||||||
| For the Twelve Months Ended December 31, | |||||||||||||||
| 2008 | 2009 | Change | % Change | ||||||||||||
| Selected Financial Data (dollars in thousands) | |||||||||||||||
| Revenue | $ | 349,700 | $ | 413,771 | $ | 64,071 | 18.3 | % | |||||||
| Operating expenses | $ | 343,532 | $ | 417,950 | $ | 74,418 | 21.7 | % | |||||||
| Operating income (loss) | $ | 6,168 | $ | (4,179 | ) | $ | (10,347 | ) | (167.8 | %) | |||||
| Net income (loss) | $ | 3,696 | $ | (2,220 | ) | $ | (5,916 | ) | (160.1 | %) | |||||
| Capital expenditures | $ | 69,940 | $ | 62,126 | $ | (7,814 | ) | (11.2 | %) | ||||||
| Key Operating Metrics and Non-GAAP Financial Measures | |||||||||||||||
| Customers at end of period | 42,463 | 50,203 | 7,740 | 18.2 | % | ||||||||||
| Net customer additions | 7,422 | 7,740 | 318 | 4.3 | % | ||||||||||
| Average monthly churn rate | 1.3 | % | 1.5 | % | 0.2 | % | 15.4 | % | |||||||
| Average monthly revenue per customer location | $ | 752 | $ | 744 | $ | (8 | ) | (1.1 | %) | ||||||
| Adjusted EBITDA (in thousands) | $ | 60,560 | $ | 63,126 | $ | 2,566 | 4.2 | % | |||||||
Management Comments
“We are pleased to report the attainment of Cbeyond’s goal for adjusted EBITDA in the fourth quarter,” said Jim Geiger, chief executive officer of Cbeyond. “The result of $19.0 million in quarterly adjusted EBITDA during the fourth quarter of 2009 represents an increase of approximately 25% over the third quarter of 2009 and 23% over the fourth quarter of 2008. We believe this marks an inflection point in our business that points to higher levels of adjusted EBITDA in 2010 than we have reported historically. This is largely a result of the success of our individual market performance, which came despite the recent decreases in ARPU. In the fourth quarter of 2009, 12 of our 13 markets showed improved adjusted EBITDA.”
Cbeyond also posted “free cash flow”, a non-GAAP measurement that Cbeyond defines as adjusted EBITDA less capital expenditures, of $4.5 million in the fourth quarter. Regarding this development, Geiger added, “We believe this further demonstrates the operating leverage and capital efficiency of our business model. Looking back on 2009, we are not only pleased with our milestones in adjusted EBITDA and free cash flow, but we are also encouraged by our 18% growth in revenue during a very difficult year for small business and feel confident about the future success of our company. In order to better position Cbeyond for continued growth in 2010, we are introducing a redesign of our packaged offerings to allow our customers greater flexibility to customize our services and applications to meet their needs.”
“In addition, today we are announcing that our 14th market will be Boston, where we expect to launch service in the summer of 2010,” added Geiger. “With its many technically savvy small businesses, Boston should be an excellent market for Cbeyond’s valuable packages of integrated communications and IT services.”
Fourth Quarter Financial and Business Summary
Revenues and ARPU
Cbeyond reported revenues of $107.7 million for the fourth quarter of 2009, an increase of 14.8% from the fourth quarter of 2008.
ARPU, or average monthly revenue per customer location, was $727 in the fourth quarter of 2009, compared to $754 in the fourth quarter of 2008 and $744 in the third quarter of 2009. The decline in ARPU from the third quarter of 2009 was primarily due to increases in credits and promotional incentives issued to new and existing customers, contract renewals at lower base prices, decreases in revenue from sales of mobile handsets and decreased levels of voice usage that normally contribute to overage charges above the Company’s base packages. Cbeyond believes that most of these factors are related to the effects of the economic environment on customers and increased competitive pressures, as well as seasonality resulting from fewer business days in the fourth quarter.
Cost of Service and Gross Margin
Cbeyond’s gross margin was 66.8% in the fourth quarter of 2009 as compared with 66.0% in the third quarter of 2009 and 67.6% in the fourth quarter of 2008.
Operating Income (Loss), Adjusted EBITDA, Income Taxes and Net Income (Loss)
Cbeyond reported operating income of $0.3 million in the fourth quarter of 2009 compared with operating income of $0.9 million in the fourth quarter of 2008. Total adjusted EBITDA for the fourth quarter of 2009 was $19.0 million, as compared to total adjusted EBITDA of $15.5 million in the fourth quarter of 2008. Total adjusted EBITDA for the fourth quarter of 2009 included adjusted EBITDA losses from early stage markets of ($3.1) million; in comparison, early stage markets contributed ($4.9) million of adjusted EBITDA losses for the fourth quarter of 2008. Total adjusted EBITDA would have been significantly higher without the impact of negative results from these early stage markets, which were entered to drive longer term growth in the business (see Selected Quarterly Financial Data and Operating Metrics, pages 7-8). Cbeyond reported net income of $0.9 million for the fourth quarter of 2009 as compared to net income of $0.5 million for the fourth quarter of 2008.
Cash and Cash Equivalents
Cash and cash equivalents amounted to $39.3 million at the end of the fourth quarter of 2009, as compared to $31.3 million at the end of the third quarter of 2009. The cash and cash equivalents balance rose due to the increase in adjusted EBITDA together with a moderate level of growth in capital expenditures in the fourth quarter of 2009.
Capital Expenditures
Capital expenditures were $14.5 million during the fourth quarter of 2009, compared with $13.4 million in the third quarter of 2009 and $22.4 million in the fourth quarter of 2008. Capital expenditures in the fourth quarter of 2009 increased from the third quarter of 2009 due to typical fluctuations in the timing of capital expenditures in Cbeyond’s markets.
Business Outlook for 2010
Cbeyond provides the following annual guidance for 2010:
- Revenue growth of 10%-13%;
- Adjusted EBITDA growth of 15%-20%, and;
- Capital expenditures growth of 2%-7%.
The revenue guidance reflects the Company’s assessment of the continuing impact of the sluggish economy on the small business sector and assumes decreased ARPU levels in 2010 and stable levels of customer churn. Cbeyond’s adjusted EBITDA guidance reflects continued growth in the profitability of its markets coupled with scale economies in its Corporate support operations. Cbeyond expects to post positive and growing free cash flow in 2010, although the level of capital expenditures is expected to vary by quarter, resulting in variable levels of free cash flow from quarter to quarter, rather than a consistent trend line during the year.
Conference Call
Cbeyond will hold a conference call to discuss this press release Wednesday, March 3, 2010, at 5:00 p.m. EST. A live broadcast of the conference call will be available on-line at www.cbeyond.net. To listen to the live call, please go to the web site at least 10 minutes early to register, download, and install any necessary audio software. The conference call will also be available by dialing (877) 303-9219 (for domestic U.S. callers) and (760) 666-3559 (for international callers). For those who cannot listen to the live broadcast, an on-line replay will be available shortly after the call and continue to be available for one year.
About Cbeyond
Cbeyond, Inc. (NASDAQ: CBEY) is a leading provider of IT and communications services to more than 50,000 small businesses throughout the United States. Recently named as the sixth fastest growing technology company by Forbes magazine, and added to Standard & Poor’s Small Cap S&P 600 Index, Cbeyond offers more than 30 productivity-enhancing applications including local and long-distance voice, broadband Internet, mobile, BlackBerry(R), broadband laptop access, voicemail, email, web hosting, fax-to-email, data backup, file-sharing and virtual private networking. Cbeyond delivers these services over a 100 percent private all IP network. For more information on Cbeyond, visit www.cbeyond.net.
Forward-Looking Statements
This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.Such statements include, but are not limited to statements identified by words such as “expectations,” “guidance,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “targets,” “projects” and similar expressions.Such statements are based upon the current beliefs and expectations of Cbeyond’s management and are subject to significant risks and uncertainties.Actual results may differ from those set forth in the forward-looking statements.Factors that might cause future results to differ include, but are not limited to, the following: finalization of operating data, the significant reduction in economic activity, which particularly affects our target market of small businesses; the risk that we may be unable to continue to experience revenue growth at historical or anticipated levels; final court approval of the settlement of pending litigation matters; the risk of unexpected increases in customer churn levels; changes in federal or state regulation or decisions by regulatory bodies that affect Cbeyond; periods of economic downturn or unusual volatility in the capital markets or other negative macroeconomic conditions that could harm our business, including the resulting inability of certain of our customers to meet their payment obligations; the timing of the initiation, progress or cancellation of significant contracts or arrangements; the mix and timing of services sold in a particular period; our ability to recruit and maintain experienced management and personnel; rapid technological change and the timing and amount of start-up costs incurred in connection with the introduction of new services or the entrance into new markets; our ability to maintain or attract sufficient customers in existing or new markets; our ability to respond to increasing competition; our ability to manage the growth of our operations; changes in estimates of taxable income or utilization of deferred tax assets which could significantly affect the Company’s effective tax rate; pending regulatory action relating to our compliance with customer proprietary network information; external events outside of our control, including extreme weather, natural disasters, pandemics or terrorist attacks that could adversely affect our target markets; and general economic and business conditions.You are advised to consult any further disclosures we make on related subjects in the reports we file with the SEC, including the “Risk Factors” in our most recent annual report on Form 10-K, together with updates that may occur in our quarterly reports on Form 10-Q and Current Reports on Form 8-K.Such disclosure covers certain risks, uncertainties and possibly inaccurate assumptions that could cause our actual results to differ materially from expected and historical results.We undertake no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.
Key Operating Metrics and Non-GAAP Financial Measures
In this press release, the Company uses several key operating metrics and non-GAAP financial measures. The Company defines each of these metrics and provides a reconciliation of non-GAAP financial measures to the most directly comparable generally accepted accounting principles in the United States, or GAAP, financial measure. These financial measures and operating metrics are a supplement to GAAP financial information and should not be considered as an alternative to, or more meaningful than, net income, cash flow or operating income as determined in accordance with GAAP.
Adjusted EBITDA is not a substitute for operating income, net income, or cash flow from operating activities as determined in accordance with GAAP, as a measure of performance or liquidity. The Company defines adjusted EBITDA as net income before interest, income taxes, depreciation and amortization expenses, excluding, when applicable, non-cash share-based compensation, public offering expenses, loss on disposal of property and equipment and other non-operating income or expense. Information relating to total adjusted EBITDA is provided so that investors have the same data that management employs in assessing the overall operation of the Company’s business.
Total adjusted EBITDA allows the chief operating decision maker to assess the performance of the Company’s business on a consolidated basis that corresponds to the measure used to assess the ability of its operating segments to produce operating cash flow to fund working capital needs, to service debt obligations and to fund capital expenditures. In particular, total adjusted EBITDA permits a comparative assessment of the Company’s operating performance, relative to a performance based on GAAP results, while isolating the effects of depreciation and amortization, which may vary among segments without any correlation to their underlying operating performance, and of non-cash share-based compensation, which is a non-cash expense that varies widely among similar companies.
| CBEYOND, INC. AND SUBSIDIARY | ||||||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||||||
| (In thousands, except per share amounts) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||||
| Revenue: | ||||||||||||||||
| Customer revenue | $ | 92,186 | $ | 105,941 | $ | 342,874 | $ | 406,472 | ||||||||
| Terminating access revenue | 1,686 | 1,778 | 6,826 | 7,299 | ||||||||||||
| Total revenue | 93,872 | 107,719 | 349,700 | 413,771 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of revenue | 30,410 | 35,725 | 109,673 | 138,093 | ||||||||||||
| Selling, general and administrative | 51,566 | 57,050 | 192,354 | 228,506 | ||||||||||||
| Depreciation and amortization | 11,041 | 14,618 | 41,505 | 51,351 | ||||||||||||
| Total operating expenses | 93,017 | 107,393 | 343,532 | 417,950 | ||||||||||||
| Operating income (loss) | 855 | 326 | 6,168 | (4,179 | ) | |||||||||||
| Other income (expense): | ||||||||||||||||
| Interest income | 51 | 1 | 846 | 28 | ||||||||||||
| Interest expense | (56 | ) | (1 | ) | (224 | ) | (152 | ) | ||||||||
| Other income (expense), net | – | 48 | – | 9 | ||||||||||||
| Total other income (expense) | (5 | ) | 48 | 622 | (115 | ) | ||||||||||
| Income (loss) before income taxes | 850 | 374 | 6,790 | (4,294 | ) | |||||||||||
| Income tax (expense) benefit | (317 | ) | 551 | (3,094 | ) | 2,074 | ||||||||||
| Net income (loss) | $ | 533 | $ | 925 | $ | 3,696 | $ | (2,220 | ) | |||||||
| Earnings (loss) per common share | ||||||||||||||||
| Basic | $ | 0.02 | $ | 0.03 | $ | 0.13 | $ | (0.08 | ) | |||||||
| Diluted | $ | 0.02 | $ | 0.03 | $ | 0.12 | $ | (0.08 | ) | |||||||
| Weighted average number of common shares outstanding | ||||||||||||||||
| Basic | 28,430 | 28,967 | 28,339 | 28,753 | ||||||||||||
| Diluted | 29,294 | 30,079 | 29,589 | 28,753 | ||||||||||||
| CBEYOND, INC. AND SUBSIDIARY | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| December 31, | December 31, | |||||||
| 2008 | 2009 | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | $ | 36,975 | $ | 39,267 | ||||
| Accounts receivable, gross | 28,759 | 30,467 | ||||||
| Less: Allowance for doubtful accounts | (2,374 | ) | (2,867 | ) | ||||
| Accounts receivable, net | 26,385 | 27,600 | ||||||
| Other assets | 13,470 | 12,706 | ||||||
| Total current assets | 76,830 | 79,573 | ||||||
| Property and equipment, gross | 299,738 | 353,616 | ||||||
| Less: Accumulated depreciation and amortization | (173,052 | ) | (216,722 | ) | ||||
| Property and equipment, net | 126,686 | 136,894 | ||||||
| Other assets | 8,971 | 12,424 | ||||||
| Total assets | $ | 212,487 | $ | 228,891 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ | 10,796 | $ | 12,121 | ||||
| Other accrued liabilities | 48,353 | 47,651 | ||||||
| Total current liabilities | 59,149 | 59,772 | ||||||
| Non-current liabilities | 9,803 | 10,514 | ||||||
| Stockholders’ equity | ||||||||
| Common stock | 284 | 290 | ||||||
| Additional paid-in capital | 266,053 | 283,337 | ||||||
| Accumulated deficit | (122,802 | ) | (125,022 | ) | ||||
| Total stockholders’ equity | 143,535 | 158,605 | ||||||
| Total liabilities and stockholders’ equity | $ | 212,487 | $ | 228,891 | ||||
| CBEYOND, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Selected Quarterly Financial Data and Operating Metrics | ||||||||||||||||||||
| (Dollars in thousands, except for Other Operating Data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Dec. 31 | Mar. 31 | Jun. 30 | Sept. 30 | Dec. 31 | ||||||||||||||||
| 2008 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
| Revenues | ||||||||||||||||||||
| Established Markets | ||||||||||||||||||||
| Atlanta | $ | 20,918 | $ | 21,107 | $ | 21,260 | $ | 21,539 | $ | 21,421 | ||||||||||
| Dallas | $ | 18,064 | $ | 18,446 | $ | 18,668 | $ | 19,010 | $ | 18,973 | ||||||||||
| Denver | $ | 17,957 | $ | 18,178 | $ | 17,841 | $ | 17,733 | $ | 17,264 | ||||||||||
| Houston | $ | 12,224 | $ | 12,344 | $ | 12,598 | $ | 12,692 | $ | 12,638 | ||||||||||
| Chicago | $ | 9,594 | $ | 9,653 | $ | 9,823 | $ | 9,943 | $ | 9,740 | ||||||||||
| Los Angeles | $ | 6,971 | $ | 7,920 | $ | 8,793 | $ | 9,861 | $ | 10,583 | ||||||||||
| San Diego | $ | 3,539 | $ | 4,084 | $ | 4,487 | $ | 4,805 | $ | 4,954 | ||||||||||
| Established Markets | 89,267 | 91,732 | 93,470 | 95,583 | 95,573 | |||||||||||||||
| Emerging Markets | ||||||||||||||||||||
| Detroit | 1,860 | 2,054 | 2,280 | 2,546 | 2,766 | |||||||||||||||
| San Francisco Bay Area | 1,530 | 2,380 | 2,994 | 3,544 | 3,982 | |||||||||||||||
| Miami | 838 | 1,432 | 2,008 | 2,545 | 3,042 | |||||||||||||||
| Minneapolis | 377 | 645 | 909 | 1,188 | 1,398 | |||||||||||||||
| Greater Washington, D.C. Area | – | 17 | 176 | 539 | 871 | |||||||||||||||
| Seattle | – | – | – | 10 | 87 | |||||||||||||||
| Emerging Markets | 4,605 | 6,528 | 8,367 | 10,372 | 12,146 | |||||||||||||||
| Total Revenues | $ | 93,872 | $ | 98,260 | $ | 101,837 | $ | 105,955 | $ | 107,719 | ||||||||||
| Adjusted EBITDA | ||||||||||||||||||||
| Established Markets | ||||||||||||||||||||
| Atlanta | $ | 11,347 | $ | 11,559 | $ | 11,560 | $ | 11,531 | $ | 12,116 | ||||||||||
| Dallas | $ | 9,149 | $ | 9,281 | $ | 9,263 | $ | 9,508 | $ | 9,862 | ||||||||||
| Denver | $ | 9,488 | $ | 9,614 | $ | 8,979 | $ | 9,336 | $ | 9,038 | ||||||||||
| Houston | $ | 5,759 | $ | 5,847 | $ | 5,548 | $ | 5,797 | $ | 6,162 | ||||||||||
| Chicago | $ | 3,793 | $ | 3,788 | $ | 3,689 | $ | 3,706 | $ | 3,874 | ||||||||||
| Los Angeles | $ | 1,286 | $ | 1,640 | $ | 1,891 | $ | 2,517 | $ | 3,146 | ||||||||||
| San Diego | $ | 143 | $ | 631 | $ | 740 | $ | 1,040 | $ | 1,328 | ||||||||||
| Established Markets | 40,965 | 42,360 | 41,670 | 43,435 | 45,526 | |||||||||||||||
| Emerging Markets | ||||||||||||||||||||
| Detroit | (472 | ) | (376 | ) | (349 | ) | (175 | ) | 20 | |||||||||||
| San Francisco Bay Area | (1,322 | ) | (839 | ) | (452 | ) | 60 | 347 | ||||||||||||
| Miami | (1,530 | ) | (1,501 | ) | (1,303 | ) | (1,013 | ) | (666 | ) | ||||||||||
| Minneapolis | (1,124 | ) | (1,008 | ) | (1,177 | ) | (969 | ) | (727 | ) | ||||||||||
| Greater Washington, D.C. Area | (469 | ) | (1,019 | ) | (1,603 | ) | (1,445 | ) | (1,280 | ) | ||||||||||
| Seattle | (11 | ) | (10 | ) | (104 | ) | (694 | ) | (821 | ) | ||||||||||
| Emerging Markets | (4,928 | ) | (4,753 | ) | (4,988 | ) | (4,236 | ) | (3,127 | ) | ||||||||||
| Corporate | ||||||||||||||||||||
| Corporate | (20,529 | ) | (22,623 | ) | (22,879 | ) | (23,909 | ) | (23,350 | ) | ||||||||||
| Corporate | (20,529 | ) | (22,623 | ) | (22,879 | ) | (23,909 | ) | (23,350 | ) | ||||||||||
| Total Adjusted EBITDA | $ | 15,508 | $ | 14,984 | $ | 13,803 | $ | 15,290 | $ | 19,049 | ||||||||||
| Adjusted EBITDA Margin (Market-Level) | ||||||||||||||||||||
| Established Markets | ||||||||||||||||||||
| Atlanta | 54.2 | % | 54.8 | % | 54.4 | % | 53.5 | % | 56.6 | % | ||||||||||
| Dallas | 50.6 | % | 50.3 | % | 49.6 | % | 50.0 | % | 52.0 | % | ||||||||||
| Denver | 52.8 | % | 52.9 | % | 50.3 | % | 52.6 | % | 52.4 | % | ||||||||||
| Houston | 47.1 | % | 47.4 | % | 44.0 | % | 45.7 | % | 48.8 | % | ||||||||||
| Chicago | 39.5 | % | 39.2 | % | 37.6 | % | 37.3 | % | 39.8 | % | ||||||||||
| Los Angeles | 18.4 | % | 20.7 | % | 21.5 | % | 25.5 | % | 29.7 | % | ||||||||||
| San Diego | 4.0 | % | 15.5 | % | 16.5 | % | 21.6 | % | 26.8 | % | ||||||||||
| Established Markets | 45.9 | % | 46.2 | % | 44.6 | % | 45.4 | % | 47.6 | % | ||||||||||
| Emerging Markets | ||||||||||||||||||||
| Detroit | (25.4 | %) | (18.3 | %) | (15.3 | %) | (6.9 | %) | 0.7 | % | ||||||||||
| San Francisco Bay Area | (86.4 | %) | (35.3 | %) | (15.1 | %) | 1.7 | % | 8.7 | % | ||||||||||
| Miami | (182.6 | %) | (104.8 | %) | (64.9 | %) | (39.8 | %) | (21.9 | %) | ||||||||||
| Minneapolis | N/M | (156.3 | %) | (129.5 | %) | (81.6 | %) | (52.0 | %) | |||||||||||
| Greater Washington, D.C. Area | N/M | N/M | N/M | N/M | (147.0 | %) | ||||||||||||||
| Seattle | N/M | N/M | N/M | N/M | N/M | |||||||||||||||
| Emerging Markets | (107.0 | %) | (72.8 | %) | (59.6 | %) | (40.8 | %) | (25.7 | %) | ||||||||||
| Adjusted EBITDA margin (as % of total revenue) | ||||||||||||||||||||
| Corporate | (21.9 | %) | (23.0 | %) | (22.5 | %) | (22.6 | %) | (21.7 | %) | ||||||||||
| Total | 16.5 | % | 15.2 | % | 13.6 | % | 14.4 | % | 17.7 | % | ||||||||||
| CBEYOND, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Selected Quarterly Financial Data and Operating Metrics | ||||||||||||||||||||
| (Dollars in thousands, except for Other Operating Data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Dec. 31 | Mar. 31 | Jun. 30 | Sept. 30 | Dec. 31 | ||||||||||||||||
| 2008 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
| Operating Income (Loss) | ||||||||||||||||||||
| Established Markets | ||||||||||||||||||||
| Atlanta | $ | 10,291 | $ | 10,515 | $ | 10,409 | $ | 10,375 | $ | 10,940 | ||||||||||
| Dallas | 8,230 | 8,392 | 8,368 | 8,607 | 8,818 | |||||||||||||||
| Denver | 8,661 | 8,840 | 8,208 | 8,553 | 8,225 | |||||||||||||||
| Houston | 4,933 | 5,084 | 4,820 | 5,074 | 5,396 | |||||||||||||||
| Chicago | 2,976 | 2,977 | 2,862 | 2,898 | 3,005 | |||||||||||||||
| Los Angeles | 622 | 935 | 1,147 | 1,650 | 2,186 | |||||||||||||||
| San Diego | (241 | ) | 231 | 309 | 580 | 790 | ||||||||||||||
| Established Markets | 35,472 | 36,974 | 36,123 | 37,737 | 39,360 | |||||||||||||||
| Emerging Markets | ||||||||||||||||||||
| Detroit | (781 | ) | (717 | ) | (717 | ) | (564 | ) | (431 | ) | ||||||||||
| San Francisco Bay Area | (1,630 | ) | (1,181 | ) | (835 | ) | (379 | ) | (158 | ) | ||||||||||
| Miami | (1,751 | ) | (1,750 | ) | (1,582 | ) | (1,264 | ) | (1,089 | ) | ||||||||||
| Minneapolis | (1,288 | ) | (1,187 | ) | (1,380 | ) | (1,196 | ) | (988 | ) | ||||||||||
| Greater Washington, D.C. Area | (477 | ) | (1,075 | ) | (2,002 | ) | (1,733 | ) | (1,613 | ) | ||||||||||
| Seattle | (11 | ) | (30 | ) | (114 | ) | (705 | ) | (971 | ) | ||||||||||
| Emerging Markets | (5,938 | ) | (5,940 | ) | (6,630 | ) | (5,841 | ) | (5,250 | ) | ||||||||||
| Corporate | ||||||||||||||||||||
| Corporate | (28,679 | ) | (31,643 | ) | (31,341 | ) | (33,944 | ) | (33,784 | ) | ||||||||||
| Corporate | (28,679 | ) | (31,643 | ) | (31,341 | ) | (33,944 | ) | (33,784 | ) | ||||||||||
| Total Operating Income (Loss) | $ | 855 | $ | (609 | ) | $ | (1,848 | ) | $ | (2,048 | ) | $ | 326 | |||||||
| Capital Expenditures | ||||||||||||||||||||
| Established Markets | ||||||||||||||||||||
| Atlanta | $ | 2,178 | $ | 1,024 | $ | 1,222 | $ | 732 | $ | 695 | ||||||||||
| Dallas | $ | 643 | $ | 855 | $ | 932 | $ | 440 | $ | 704 | ||||||||||
| Denver | $ | 1,756 | $ | 904 | $ | 593 | $ | 317 | $ | 263 | ||||||||||
| Houston | $ | 715 | $ | 1,038 | $ | 547 | $ | 600 | $ | 310 | ||||||||||
| Chicago | $ | 474 | $ | 359 | $ | 422 | $ | 585 | $ | 376 | ||||||||||
| Los Angeles | $ | 922 | $ | 1,800 | $ | 1,037 | $ | 929 | $ | 1,320 | ||||||||||
| San Diego | $ | 717 | $ | 575 | $ | 500 | $ | 444 | $ | 325 | ||||||||||
| Established Markets | 7,405 | 6,555 | 5,253 | 4,047 | 3,993 | |||||||||||||||
| Emerging Markets | ||||||||||||||||||||
| Detroit | $ | 485 | $ | 285 | $ | 287 | $ | 282 | $ | 345 | ||||||||||
| San Francisco Bay Area | $ | 596 | $ | 629 | $ | 548 | $ | 446 | $ | 569 | ||||||||||
| Miami | $ | 455 | $ | 607 | $ | 722 | $ | 534 | $ | 462 | ||||||||||
| Minneapolis | $ | 261 | $ | 268 | $ | 296 | $ | 360 | $ | 234 | ||||||||||
| Greater Washington, D.C. Area | $ | 1,645 | $ | 191 | $ | 250 | $ | 242 | $ | 570 | ||||||||||
| Seattle | $ | 397 | $ | 164 | $ | 1,216 | $ | 1,306 | $ | 317 | ||||||||||
| Boston | $ | – | $ | – | $ | – | $ | – | $ | 167 | ||||||||||
| Emerging Markets | 3,839 | 2,144 | 3,319 | 3,170 | 2,664 | |||||||||||||||
| Corporate | ||||||||||||||||||||
| Corporate | $ | 11,113 | $ | 8,617 | $ | 8,314 | $ | 6,169 | $ | 7,881 | ||||||||||
| Corporate | 11,113 | 8,617 | 8,314 | 6,169 | 7,881 | |||||||||||||||
| Total Capital Expenditures | $ | 22,357 | $ | 17,316 | $ | 16,886 | $ | 13,386 | $ | 14,538 | ||||||||||
| Other Operating Data | ||||||||||||||||||||
| Customers (at period end) | 42,463 | 44,342 | 46,405 | 48,580 | 50,203 | |||||||||||||||
| Net customer additions | 1,894 | 1,879 | 2,063 | 2,175 | 1,623 | |||||||||||||||
| Average monthly churn rate (1) | 1.4 | % | 1.5 | % | 1.5 | % | 1.4 | % | 1.5 | % | ||||||||||
| Average monthly revenue per customer location (2) | $ | 754 | $ | 755 | $ | 748 | $ | 744 | $ | 727 | ||||||||||
| (1) Calculated for each period as the average of monthly churn, which is defined for a given month as the number of customer locations disconnected in that month divided by the number of customer locations on our network at the beginning of that month. | ||||||||||||||||||||
| (2) Calculated as the revenue for a period divided by the average of the number of customer locations at the beginning of the period and the number of customer locations at the end of the period, divided by the number of months in the period. | ||||||||||||||||||||
| CBEYOND, INC. AND SUBSIDIARY | ||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measure to GAAP Financial Measure | ||||||||||||||||||||
| (In thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Dec. 31 | Mar. 31 | Jun. 30 | Sept. 30 | Dec. 31 | ||||||||||||||||
| 2008 | 2009 | 2009 | 2009 | 2009 | ||||||||||||||||
| Reconciliation of Adjusted EBITDA to Net income: | ||||||||||||||||||||
| Total Adjusted EBITDA for reportable segments | $ | 15,508 | $ | 14,984 | $ | 13,803 | $ | 15,290 | $ | 19,049 | ||||||||||
| Depreciation and amortization | (11,041 | ) | (11,529 | ) | (12,028 | ) | (13,176 | ) | (14,618 | ) | ||||||||||
| Non-cash share-based compensation | (3,612 | ) | (4,064 | ) | (3,623 | ) | (4,162 | ) | (4,105 | ) | ||||||||||
| Interest income | 51 | 18 | 7 | 2 | 1 | |||||||||||||||
| Interest expense | (56 | ) | (89 | ) | (21 | ) | (41 | ) | (1 | ) | ||||||||||
| Other income (expense), net | – | (2 | ) | 30 | (67 | ) | 48 | |||||||||||||
| Income tax (expense) benefit | (317 | ) | 741 | (374 | ) | 1,156 | 551 | |||||||||||||
| Net income (loss) | $ | 533 | $ | 59 | $ | (2,206 | ) | $ | (998 | ) | $ | 925 | ||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| Dec. 31, | Dec. 31, | |||||||||||||||||||
| 2008 | 2009 | 2008 | 2009 | |||||||||||||||||
| Reconciliation of Adjusted EBITDA to Net income: | ||||||||||||||||||||
| Total Adjusted EBITDA for reportable segments | $ | 15,508 | $ | 19,049 | $ | 60,560 | $ | 63,126 | ||||||||||||
| Depreciation and amortization | (11,041 | ) | (14,618 | ) | (41,505 | ) | (51,351 | ) | ||||||||||||
| Non-cash share-based compensation | (3,612 | ) | (4,105 | ) | (12,887 | ) | (15,954 | ) | ||||||||||||
| Interest income | 51 | 1 | 846 | 28 | ||||||||||||||||
| Interest expense | (56 | ) | (1 | ) | (224 | ) | (152 | ) | ||||||||||||
| Other income (expense), net | – | 48 | – | 9 | ||||||||||||||||
| Income tax (expense) benefit | (317 | ) | 551 | (3,094 | ) | 2,074 | ||||||||||||||
| Net income (loss) | $ | 533 | $ | 925 | $ | 3,696 | $ | (2,220 | ) | |||||||||||
CBEY-F CBEY-G
SOURCE: Cbeyond, Inc.
Cbeyond, Inc. Kurt Abkemeier, Vice President, Finance and Treasurer 678-370-2887
Copyright Business Wire 2010
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