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TheStreet Open House

Cbeyond Reports Fourth Quarter 2012 Results

Stock quotes in this article: CBEY

ATLANTA, Feb. 27, 2013 (GLOBE NEWSWIRE) -- Cbeyond, Inc. (Nasdaq:CBEY), ("Cbeyond"), the technology ally for small and mid-sized businesses, today announced its results for the fourth quarter ended December 31, 2012.

Recent financial and operating highlights include:

  • Fourth quarter 2012 total revenue of $118.9 million compared with $123.3 million in the fourth quarter of 2011 and $121.5 million in the third quarter of 2012;
  • Adjusted EBITDA of $18.8 million in the fourth quarter of 2012 compared with $22.6 million in the fourth quarter of 2011, and $25.2 million in the third quarter of 2012 (see reconciliation tables for reconciliation to net income);
  • Free cash flow (defined as adjusted EBITDA less cash capital expenditures) of $4.3 million in the fourth quarter of 2012, compared with $4.2 million in the fourth quarter of 2011, and $7.7 million in the third quarter of 2012;
  • Net loss of $5.8 million in the fourth quarter of 2012, compared with a net loss of $5.0 million in the fourth quarter of 2011, and net income of $2.0 million in the third quarter of 2012;
  • Cbeyond 2.0 revenue was 9.5% of total revenue in the fourth quarter, an increase from 7.8% last quarter;
  • Average monthly revenue per customer (ARPU) of $638 during the fourth quarter of 2012 compared with $640 in the third quarter of 2012 and $650 in the fourth quarter of 2011 (see selected quarterly operating metrics table for an ARPU definition); and,
  • Annual guidance for 2013 of $475 million to $485 million of revenue, $75 million to $82 million of adjusted EBITDA, $60 million to $65 million of cash capital expenditures, and $15 million to $20 million of free cash flow.

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, 2012, include:

  For the Three Months Ended December 31,
  2011 2012 Change % Change
Selected Financial Data (dollars in thousands)        
Revenue (total)  $ 123,321  $ 118,870  $ (4,451) (3.6%)
Operating expenses  $ 123,293  $ 122,402  $ (891) (0.7%)
Operating income (loss)  $ 28  $ (3,532)  $ (3,560) N/M
Net income (loss)  $ (5,026)  $ (5,775)  $ (749) (14.9%)
Capital expenditures (total)  $ 18,369  $ 19,464  $ 1,095 6.0%
         
Key Operating Metrics and Non-GAAP Financial Measures        
(dollars in thousands, except Average Monthly Revenue Per Network Access Customer)        
Network Access Customers (At Period End)  62,169  59,692  (2,477) (4.0%)
Net Network Access Customer Additions  1,044  (1,184)  (2,228) (213.4%)
Average Monthly Churn Rate 1.4% 1.6% 0.2% 14.3%
Average Monthly Revenue Per Network Access Customer  $ 650  $ 638  $ (12) (1.8%)
Adjusted EBITDA  $ 22,559  $ 18,828  $ (3,731) (16.5%)
Cash capital expenditures  $ 18,369  $ 14,488  $ (3,881) (21.1%)
   
  For the Twelve Months Ended December 31,
  2011 2012 Change % Change
Selected Financial Data (dollars in thousands)        
Revenue (total)  $ 485,422  $ 487,966  $ 2,544 0.5%
Operating expenses  $ 488,941  $ 483,120  $ (5,821) (1.2%)
Operating income (loss)  $ (3,519)  $ 4,846  $ 8,365 N/M
Net income (loss)  $ (7,984)  $ (2,322)  $ 5,662 70.9%
Capital expenditures (total)  $ 77,691  $ 69,938  $ (7,753) (10.0%)
         
Key Operating Metrics and Non-GAAP Financial Measures        
(dollars in thousands, except Average Monthly Revenue Per Network Access Customer)
Network Access Customers (At Period End)  62,169  59,692  (2,477) (4.0%)
Net Network Access Customer Additions  5,197  (2,477)  (7,674) (147.7%)
Average Monthly Churn Rate 1.4% 1.6% 0.2% 14.3%
Average Monthly Revenue Per Network Access Customer  $ 661  $ 649  $ (12) (1.8%)
Adjusted EBITDA  $ 80,163  $ 94,245  $ 14,082 17.6%
Cash capital expenditures  $ 77,604  $ 61,605  $ (15,999) (20.6%)

Management Comments

"Over the past twelve months we made significant progress in evolving our business model to provide services at the intersection of cloud, network and security," said Jim Geiger, chief executive officer of Cbeyond, Inc. "In addition, I'm proud to note that we met or exceeded our public guidance while pursuing these important changes in our business. Going forward, we intend to build on last year's progress with a focus on improving sales productivity and driving further refinement to our service delivery processes to address the emerging needs of our technology dependent customers."

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