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Press Release -- March 3rd, 2010
Source: Cbeyond
Tags: Earnings, Equipment

Cbeyond Reports Fourth Quarter 2009 Results

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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