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Hawaiian Telcom Reports Fourth Quarter And Full Year 2012 Results

Strong Hawaiian Telcom TV Sales Drive Quarterly & Annual Consumer Revenue Growth

Third Consecutive Year of Profitability

HONOLULU, March 14, 2013 (GLOBE NEWSWIRE) -- Hawaiian Telcom Holdco, Inc. (Nasdaq:HCOM) reported financial results for the fourth quarter and full year of 2012. The highlights of 2012 are as follows:
  • Revenue was $96.6 million for the fourth quarter and $385.5 million for the year:
  • Consumer revenue increased quarter-over-quarter and for the full year 2012 driven by growth in video revenue of $1.6 million and $4.6 million, respectively.
  • Hawaiian Telcom TV subscriber penetration increased to approximately 15 percent of the 65,000 households enabled at year-end, up from approximately 14 percent of the 59,400 households enabled at the end of the third quarter.
  • Added approximately 1,800 high-speed Internet ("HSI") subscribers during the quarter, ending the year with approximately 107,600 subscribers, up 4.2 percent year-over-year.
  • Business data revenue increased 6.4 percent and 4.5 percent year-over-year for the fourth quarter and full year, respectively, driven by growth in switched Ethernet, IP-VPN and dedicated Internet access revenue.
  • Fourth quarter and full year 2012 Adjusted EBITDA (1) of $33.3 million and $122 million, grew $3.5 million and $0.9 million year-over-year, respectively. The fourth quarter 2012 included a $2.5 million net settlement gain associated with the acquisition of Wavecom Solutions Corporation ("Wavecom").  
  • Generated fourth quarter and full year 2012 net income of $98.6 million and $110.0 million, or $9.21 and $10.32 per diluted share, respectively. Both the fourth quarter and full year net income and earnings per share amounts were favorably impacted by a one-time, non-cash tax benefit of $90.8 million to reverse the Company's tax valuation allowance.  
  • Adjusting for the $90.8 million one-time, non-cash tax benefit related to the reversal of the tax valuation allowance, fourth quarter and full year 2012 Pro-forma Net Income (2) was $7.8 million and $19.2 million, or $0.73 and $1.80 per diluted share, respectively.   
  • On December 31, completed the acquisition of Wavecom for $8.3 million, net of cash acquired and final purchase price adjustments.  
  • Ratified a new five-year collective bargaining agreement with IBEW 1357 on December 28, 2012.

"In 2012, we made solid progress in executing our strategic plan and investing in key growth areas of our business," said Eric K. Yeaman, Hawaiian Telcom's president and CEO. "We continued to invest in our broadband network, expanding the footprint of our Hawaiian Telcom TV service to over 65,000 households on Oahu in 2012 and increasing subscriber penetration to approximately 15 percent at year-end with over 25 percent penetration in certain neighborhoods.  Hawaiian Telcom TV is generating great excitement and strong demand in its addressable market and was the key driver of quarterly and annual consumer revenue growth in 2012."

"In the business channel, we leveraged our broadband network to deliver IP-based solutions like our hosted VoIP and broadband Internet bundle for small- and medium-sized businesses. We saw a two and one-half times increase in the number of customers on these products in 2012, which helped drive a 6.5 percent year-over-year increase in business HSI subscribers.

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