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Cbeyond Reports Third Quarter 2013 Results

ATLANTA, Nov. 6, 2013 (GLOBE NEWSWIRE) -- Cbeyond, Inc. (Nasdaq:CBEY), ("Cbeyond"), the technology ally for small and mid-sized businesses, today announced its results for the third quarter ended September 30, 2013.

Recent financial and operating highlights include:

  • Third quarter 2013 total revenue of $113.7 million compared with $121.5 million in the third quarter of 2012 and $118.2 million in the second quarter of 2013;  
  • Cbeyond 2.0 revenue was $17.8 million, or 15.7% of total revenue in the third quarter of 2013, an increase of 87% from the third quarter of 2012 and an increase of 11% from the second quarter of 2013;   
  • Average monthly revenue per customer (ARPU) of $653 during the third quarter of 2013 compared with $640 in the third quarter of 2012 and $662 in the second quarter of 2013 (see selected quarterly operating metrics table for ARPU definition);  
  • Adjusted EBITDA of $18.0 million in the third quarter of 2013 compared with $25.2 million in the third quarter of 2012 and $21.9 million in the second quarter of 2013 (see reconciliation tables for reconciliation to net loss);  
  • Free cash flow (defined as adjusted EBITDA less cash capital expenditures) of $3.2 million in the third quarter of 2013 compared with $7.7 million in the third quarter of 2012 and $7.1 million in the second quarter of 2013;  
  • Net loss of $5.3 million in the third quarter of 2013, which includes a $2.0 million charge to depreciation related to certain fiber assets, compared with net income of $2.0 million in the third quarter of 2012 and a net loss of less than $0.1 million in the second quarter of 2013; and,  
  • Board of Directors forms Strategy Committee to explore ways to accelerate Cbeyond 2.0 growth and explore strategic alternatives (see "Strategy Committee" section below).

Financial Overview and Key Operating Metrics

Financial and operating metrics, which include non-GAAP financial measures, for the three and nine months ended September 30, 2013, include:

  For the Three Months Ended September 30,
  2012 2013 Change % Change
Selected Financial Data (dollars in thousands)        
Total Revenue  $ 121,491  $ 113,731  $ (7,760) (6.4%)
Operating Expenses  $ 117,431  $ 118,589  $ 1,158 1.0%
Operating Income (Loss)  $ 4,060  $ (4,858)  $ (8,918) (219.7%)
Net Income (Loss)  $ 1,953  $ (5,338)  $ (7,291) (373.3%)
Total Capital Expenditures  $ 17,516  $ 17,430  $ (86) (0.5%)
         
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)  60,876  55,482  (5,394) (8.9%)
Net Network Access Customer Additions  (1,139)  (1,531)  (392) (34.4%)
Average Monthly Churn Rate 1.6% 1.7% 0.1% 6.3%
Average Monthly Revenue Per Network Access Customer  $ 640  $ 653  $ 13 2.0%
Adjusted EBITDA  $ 25,207  $ 18,035  $ (7,172) (28.5%)
Cash Capital Expenditures  $ 17,516  $ 14,878  $ (2,638) (15.1%)
         
Selected Revenue Presentation (dollars in thousands)        
1.0 Customer Revenue  $ 111,958  $ 95,902  $ (16,056) (14.3%)
2.0 Customer Revenue  $ 9,533  $ 17,829  $ 8,296 87.0%
Total Revenue  $ 121,491  $ 113,731  $ (7,760) (6.4%)
   
  For the Nine Months Ended September 30,
  2012 2013 Change % Change
Selected Financial Data (dollars in thousands)        
Total Revenue  $ 369,096  $ 351,892  $ (17,204) (4.7%)
Operating Expenses  $ 360,718  $ 356,544  $ (4,174) (1.2%)
Operating income (loss)  $ 8,378  $ (4,652)  $ (13,030) (155.5%)
Net income (loss)  $ 3,453  $ (5,935)  $ (9,388) (271.9%)
Total Capital Expenditures  $ 50,474  $ 52,946  $ 2,472 4.9%
         
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)  60,876  55,482  (5,394) (8.9%)
Net Network Access Customer Additions  (1,293)  (4,210)  (2,917) (225.6%)
Average Monthly Churn Rate 1.5% 1.6% 0.1% 6.7%
Average Monthly Revenue Per Network Access Customer  $ 648  $ 658  $ 10 1.5%
Adjusted EBITDA  $ 75,417  $ 60,797  $ (14,620) (19.4%)
Cash Capital Expenditures  $ 47,117  $ 42,092  $ (5,025) (10.7%)
         
Selected Revenue Presentation (dollars in thousands)        
1.0 Customer Revenue  $ 344,731  $ 304,223  $ (40,508) (11.8%)
2.0 Customer Revenue  $ 24,365  $ 47,669  $ 23,304 95.6%
Total Revenue  $ 369,096  $ 351,892  $ (17,204) (4.7%)

Management Comments

"I am pleased with the progress we are continuing to make with our 2.0 business, but the third quarter was challenging from a revenue perspective given increased pricing pressure on our 1.0 customer base," said Jim Geiger, chief executive officer of Cbeyond, Inc.

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