Exhibit 99.1
CONTACTS: | | Metro One Telecommunications, Inc. |
| | Duane Fromhart, Chief Financial Officer |
| | (503) 643-9500 |
| | |
| | Financial Dynamics |
| | Jordan Goldstein (Investors & Financial media) |
| | (415) 439-4520 |
METRO ONE REPORTS 2005 FOURTH QUARTER AND FULL YEAR FINANCIAL RESULTS
Company Resolves Nextel Contract Dispute and Continues to Evaluate Strategic Alternatives
PORTLAND, Oregon — March 2, 2006 — Metro One Telecommunications, Inc. (Nasdaq: INFO), a developer and provider of Enhanced Directory Assistance® and other enhanced telecom services, today reported financial results for the fourth quarter and twelve months ended December 31, 2005.
Revenue for the fourth quarter of 2005 was $20.1 million, including $2.5 million received from Nextel under the Settlement Agreement described below, compared to $19.2 million in the third quarter of 2005 and $25.6 in the fourth quarter of 2004. Net loss for the fourth quarter of 2005 was $5.3 million, including $2.8 million of restructuring expenses, or a loss of $0.21 per share, compared to a net loss of $11.9 million, or a loss of $0.48 per share, including $2.7 million of restructuring expenses, in the third quarter of 2005 and a net loss of $41.9 million, or a loss of $1.68 per share, in the fourth quarter of 2004. The fourth quarter 2004 loss included a non-cash impairment charge of $32.2 million to write down certain long-lived assets.
Revenue for the twelve months ended December 31, 2005 was $77.8 million, compared to revenue of $140.4 million for the same period in 2004. Net loss for full year 2005 was $39.8 million, including $6.8 million of restructuring expenses, or a loss of $1.59 per share, compared to a net loss of $63.2 million, including the non-cash impairment charge, or a loss of $2.54 per share, for 2004.
On February 14, 2006, the Company announced that it had entered into a Settlement Agreement and Disentanglement Transition Plan with Sprint Nextel Corporation that resolves certain disputed matters in connection with the earlier termination of the Directory Assistance agreement between the two parties. As a result, Metro One will continue to provide services to Nextel callers through March 31, 2006 in consideration for up to $5.75 million paid to Metro One in three installments, subject to meeting certain performance targets. These payments are in addition to $2.5 million previously paid by Nextel in connection with the transition and in
addition to the contractual payments by Nextel for normal service provided by Metro One to Nextel callers through the transition period.
James M. Usdan, president and chief executive officer of Metro One, commented, “We are pleased to have resolved our settlement with Sprint Nextel. We can now fully focus on reviewing all strategic alternatives available to Metro One. Throughout 2005, we have worked diligently to restructure our operations and reduce costs by scaling back product offerings, reducing headcount and real estate costs while closing underutilized call centers. We are confident the Board of Directors will determine the course of action in the best interest of shareholders and we will provide additional information about our plans as they are finalized.”
Credit Suisse LLC, Metro One’s financial advisor, continues to assist the Company in reviewing its financial plans and exploring all avenues available.
About Metro One Telecommunications:
Metro One Telecommunications, Inc. is a developer and provider of Enhanced Directory Assistance and other enhanced telecom services. The Company operates a network of call centers located strategically throughout the U.S. Metro One handled approximately 231 million requests for information in 2005. For more information, visit the Metro One Telecommunications website at www.metro1.com.
This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, but not limited to, factors detailed in the Company’s Securities and Exchange Commission filings. The forward-looking statements should be considered in light of these risks and uncertainties.
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METRO ONE TELECOMMUNICATIONS, INC
Statements of Operations
(Dollars in thousands, except per share data)
| | Three Months Ended | | Year Ended | |
| | | | | | | | | |
| | 12/31/2005 | | 12/31/2004 | | 12/31/2005 | | 12/31/2004 | |
| | | | | | | | | |
Revenues | | $ | 20,071 | | $ | 25,607 | | $ | 77,810 | | $ | 140,369 | |
| | | | | | | | | |
Costs and expenses: | | | | | | | | | |
Direct operating | | 11,890 | | 17,029 | | 59,243 | | 84,331 | |
Selling, general and administrative | | 10,657 | | 22,104 | | 51,969 | | 94,208 | |
Restructuring charges | | 2,793 | | — | | 6,814 | | — | |
Impairment loss on long-lived assets | | — | | 32,193 | | — | | 32,193 | |
| | 25,340 | | 71,326 | | 118,026 | | 210,732 | |
| | | | | | | | | |
Loss from operations | | (5,269 | ) | (45,719 | ) | (40,216 | ) | (70,363 | ) |
| | | | | | | | | |
Other income | | 191 | | 273 | | 995 | | 3,808 | |
| | | | | | | | | |
Loss before income taxes | | (5,078 | ) | (45,446 | ) | (39,221 | ) | (66,555 | ) |
Income tax expense | | 195 | | (3,514 | ) | 538 | | (3,389 | ) |
| | | | | | | | | |
Net loss | | $ | (5,273 | ) | $ | (41,932 | ) | $ | (39,759 | ) | $ | (63,166 | ) |
| | | | | | | | | |
Loss per common share: | | | | | | | | | |
Basic | | $ | (0.21 | ) | $ | (1.68 | ) | $ | (1.59 | ) | $ | (2.54 | ) |
Diluted | | $ | (0.21 | ) | $ | (1.68 | ) | $ | (1.59 | ) | $ | (2.54 | ) |
| | | | | | | | | |
Shares used in per share calculation: | | | | | | | | | |
Basic | | 24,948 | | 24,957 | | 25,002 | | 24,869 | |
Diluted | | 24,948 | | 24,957 | | 25,002 | | 24,869 | |
| | | | | | | | | |
METRO ONE TELECOMMUNICATIONS, INC
Balance Sheets
(Dollars in thousands)
| | 12/31/2005 | | 12/31/2004 | |
| | | | | |
Cash and cash equivalents | | $ | 17,769 | | $ | 24,093 | |
Short-term investments, available for sale | | — | | 25,375 | |
Restricted cash | | 6,860 | | 4,900 | |
Accounts receivable | | 11,982 | | 17,524 | |
Prepaid costs and other current assets | | 1,759 | | 4,850 | |
| | | | | |
Total current assets | | 38,370 | | 76,742 | |
| | | | | |
Furniture, fixtures and equipment, net | | 7,963 | | 12,701 | |
Intangible assets | | 5,382 | | 5,916 | |
Other assets | | 302 | | 471 | |
| | | | | |
Total assets | | $ | 52,017 | | $ | 95,830 | |
| | | | | |
| | | | | |
| | | | | |
Accounts payable | | $ | 534 | | $ | 1,107 | |
Accrued liabilities | | 2,637 | | 2,003 | |
Accrued payroll and related costs | | 8,553 | | 12,125 | |
| | | | | |
Total current liabilities | | 11,724 | | 15,235 | |
| | | | | |
Other long-term liabilities | | 626 | | 1,158 | |
| | | | | |
Total liabilities | | 12,350 | | 16,393 | |
| | | | | |
Common stock | | 119,937 | | 119,948 | |
Retained deficit | | (80,270 | ) | (40,511 | ) |
| | | | | |
Total shareholders’ equity | | 39,667 | | 79,437 | |
| | | | | |
Total liabilities and shareholders’ equity | | $ | 52,017 | | $ | 95,830 | |
| | | | | |
