PAETEC Holding Corp. (NASDAQ GS: PAET) today announced fourth quarter 2009 and full year 2009 financial and operating results. “We are pleased to have met our revenue guidance and exceeded our adjusted EBITDA guidance for full year 2009,” said Arunas A. Chesonis, chairman and CEO.
“Our opportunistic issuance in January 2010 of $300.0 million of senior secured notes for the purpose of refinancing a portion of our existing debt strategically positions PAETEC financially for the next several years.”
Financial results for full year 2009 included the following:
- Full year 2009 revenue of $1,580.2 million, a $9.8 million increase over full year 2008 revenue.
- Full year 2009 adjusted EBITDA* of $256.9 million, an increase of 8.1% or $19.2 million over full year 2008 adjusted EBITDA of $237.7 million.
- Full year 2009 net loss of $28.7 million compared to a $487.9 million net loss for full year 2008.
- 28th consecutive quarter of positive free cash flow,* which increased by $17.2 million for full year 2009 to $135.4 million.
- Full year 2009 net cash provided by operating activities of $152.2 million
- A cash balance of $152.9 million at December 31, 2009
Revenue
- Total revenue of $1,580.2 million for 2009 increased 0.6% or $9.8 million over 2008 primarily due to 12.9% growth in PAETEC’s data revenue and the inclusion of McLeodUSA results for full year 2009.
- Core network services revenue for 2009 increased 3.1% or $34.3 million over 2008 primarily due to 13.0% growth in PAETEC’s data revenue related to network services, generated principally by sales of its Dynamic IP and MPLS VPN products, and the inclusion of McLeodUSA results for full year 2009.
- Core carrier services revenue for 2009 increased 2.5% or $4.6 million over 2008 due to the inclusion of McLeodUSA result for full year 2009.
- Integrated solutions revenue of $61.7 million increased 0.4% or $0.2 million over 2008.
Adjusted EBITDA and Margins
Adjusted EBITDA for 2009 increased 8.1% to $256.9 million over adjusted EBITDA of $237.7 million for 2008. Adjusted EBITDA margin, which represents adjusted EBITDA as a percentage of total revenue, improved to 16.3% for 2009 compared to 15.1% for 2008. Cost of goods sold for 2009 increased 0.1% or $1.0 million. Gross margin for 2009 increased to 50.5% from 50.2% for 2008 due in part to attrition of customers purchasing lower margin products and the positive effects of network grooming efforts.
Selling, general and administrative (“SG&A”) expenses for 2009 were $540.8 million, excluding stock-based compensation of $18.8 million, and decreased 1.7% or $9.4 million in 2009 from 2008 due to initiatives instituted by management over the past several quarters to better align costs more closely with revenue performance and expectations. As a percentage of total revenue, SG&A expenses, excluding stock-based compensation, were 34.2% for full year 2009 compared to 35.0% for full year 2008.
Complete report: link (PDF)
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