Exhibit 99.1
CONTACTS: | | Metro One Telecommunications, Inc. |
| | Duane Fromhart, Chief Financial Officer |
| | (503) 643-9500 |
| | |
| | Financial Dynamics |
| | Jason Golz (Investors) |
| | (415) 439-4532 |
METRO ONE REPORTS SECOND QUARTER 2006 FINANCIAL RESULTS
PORTLAND, Oregon – August 10, 2006 – Metro One Telecommunications, Inc. (Nasdaq: INFO) today reported financial results for the second quarter ended June 30, 2006.
Revenue for the second quarter of 2006 was $5.1 million, compared to $20.1 million in the second quarter of 2005. Net loss for the second quarter was $5.6 million, or a loss of $0.90 per share, which included a charge associated with the Company’s cost reduction plans of $0.8 million or $0.12 per diluted share. This compares to a net loss of $9.2 million, or a loss of $1.48 per share in the same quarter last year, which included a charge of $1.3 million or $0.20 per share.
Revenue for the six months ended June 30, 2006 was $20.3 million and included one-time payments of $5.75 million from Nextel in accordance with the “Settlement Agreement and Disentanglement Transition Plan” between the parties. This compares to $38.5 million for the same period in 2005. Net loss for the first half of 2006 was $11.3 million, or a loss of $1.81 per share, which included restructuring charges of $5.8 million, or $0.93 per share. Net loss for the same period in 2005 was $22.6 million, or a loss of $3.61 per share, which including the restructuring charge of $1.3 million, or $0.20 per share.
The decline in Metro One’s revenue in the second quarter was primarily due to reduced call volume as a result of the previously announced transition of the Nextel business. Much of the restructuring efforts that were part of the transition were completed during the second quarter, including workforce reductions, resolution of operating leases, reduced service provisioning costs and asset sales.
“We continue to execute on our detailed business plan with the goal of returning to profitability,” said Gary Henry, Metro One’s president and chief executive officer. “I am excited about our new customer wins and extending existing customer relationships. I believe this success is indicative of market confidence in Metro One and of demand that
continues to exist for high-quality voice-based directory assistance and information services to customers of telecom services providers. Our sales pipeline is growing, with prospective customers at various stages in our sales cycle.”
Recently, the Company renewed contracts with XO Communications, Midwest Wireless and SunCom Wireless and announced new customer contracts with Jingle Networks, Chinook Wireless and Mobi PCS. Excluding the effects of the Nextel business, revenues from new and on-going customers grew by 32% in the second quarter as compared to the first quarter of 2006.
“We remain focused on the objectives of growing our customer base, continuing to reduce the cost of service delivery, extending our reach into data services markets and intelligently investing in the right parts of the business at the right time. We made significant progress in our efforts to reduce our cost of delivery through reduced labor costs and improved operating efficiencies. We also continue to manage our cash and maintain a strong balance sheet. Our next key milestone is to achieve cash flow breakeven, while our long-term goal is to resume consistent profitable growth,” concluded Henry.
Teleconference and Webcast
Metro One will host a conference call and audio webcast today at 2:00 p.m. Pacific time to discuss financial results for the second quarter ended June 30, 2006. The conference call can be accessed by dialing 800-540-0559. The passcode is “Metro One.” A replay of this call will be available for seven days. This replay can be accessed by dialing 402-220-1117.
A live webcast of this conference call can be accessed at the Company’s website at www.metro1.com. An archive of the webcast will be available for approximately 90 days following the conclusion of the teleconference.
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 call centers in the United States. 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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(Tables follow)
METRO ONE TELECOMMUNICATIONS, INC
Balance Sheets
(Dollars in thousands)
| | 06/30/2006 | | 12/31/2005 | |
| | | | | |
Cash and cash equivalents | | $ | 15,725 | | $ | 17,769 | |
Restricted cash | | 6,160 | | 6,860 | |
Accounts receivable | | 3,746 | | 11,982 | |
Prepaid costs and other current assets | | 2,356 | | 1,759 | |
| | | | | |
Total current assets | | 27,987 | | 38,370 | |
| | | | | |
Furniture, fixtures and equipment, net | | 4,162 | | 7,963 | |
Intangible assets | | 5,004 | | 5,382 | |
Other assets | | 134 | | 302 | |
| | | | | |
Total assets | | $ | 37,287 | | $ | 52,017 | |
| | | | | |
| | | | | |
| | | | | |
Accounts payable | | $ | 756 | | $ | 534 | |
Accrued liabilities | | 2,462 | | 2,637 | |
Accrued payroll and related costs | | 5,256 | | 8,553 | |
| | | | | |
Total current liabilities | | 8,474 | | 11,724 | |
| | | | | |
Other long-term liabilities | | 445 | | 626 | |
| | | | | |
Total liabilities | | 8,919 | | 12,350 | |
| | | | | |
Common stock | | 119,937 | | 119,937 | |
Accumulated deficit | | (91,569 | ) | (80,270 | ) |
| | | | | |
Total shareholders’ equity | | 28,368 | | 39,667 | |
| | | | | |
Total liabilities and shareholders’ equity | | $ | 37,287 | | $ | 52,017 | |
METRO ONE TELECOMMUNICATIONS, INC
Statements of Operations
(Dollars in thousands, except per share data)
| | Three Months Ended | | Six Months Ended | |
| | 06/30/2006 | | 06/30/2005 | | 06/30/2006 | | 6/30/2005 | |
| | | | | | | | | |
Revenues | | $ | 5,118 | | $ | 20,149 | | $ | 20,347 | | $ | 38,528 | |
| | | | | | | | | |
Costs and expenses: | | | | | | | | | |
Direct operating | | 3,764 | | 14,743 | | 11,529 | | 31,963 | |
Selling, general and administrative | | 5,241 | | 12,108 | | 12,347 | | 25,325 | |
Depreciation and amortization | | 1,120 | | 1,593 | | 2,355 | | 3,205 | |
Restructuring charges | | 761 | | 1,275 | | 5,777 | | 1,275 | |
| | 10,886 | | 29,719 | | 32,008 | | 61,768 | |
| | | | | | | | | |
Loss from operations | | (5,768 | ) | (9,570 | ) | (11,661 | ) | (23,240 | ) |
| | | | | | | | | |
Other income | | 225 | | 273 | | 412 | | 568 | |
| | | | | | | | | |
Loss before income taxes | | (5,543 | ) | (9,297 | ) | (11,249 | ) | (22,672 | ) |
Income tax expense (benefit) | | 50 | | (50 | ) | 50 | | (81 | ) |
| | | | | | | | | |
Net loss | | $ | (5,593 | ) | $ | (9,247 | ) | $ | (11,299 | ) | $ | (22,591 | ) |
| | | | | | | | | |
Loss per common share: | | | | | | | | | |
Basic | | $ | (0.90 | ) | $ | (1.48 | ) | $ | (1.81 | ) | $ | (3.61 | ) |
Diluted | | $ | (0.90 | ) | $ | (1.48 | ) | $ | (1.81 | ) | $ | (3.61 | ) |
| | | | | | | | | |
Shares used in per share calculation: | | | | | | | | | |
Basic | | 6,233 | | 6,265 | | 6,233 | | 6,256 | |
Diluted | | 6,233 | | 6,265 | | 6,233 | | 6,256 | |
