EXHIBIT INDEX
Exhibit No. Description
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99.1 Press release of General Communication, Inc., Inc. dated
July 22, 2003.
Exhibit 99.1
July 22, 2003
John Lowber, (907) 868-5628; jlowber@gci.com
Bruce Broquet, (907) 868-6660; bbroquet@gci.com
David Morris, (907) 265-5396; dmorris@gci.com
FOR IMMEDIATE RELEASE
GCI ANNOUNCES SECOND QUARTER 2003 RESULTS
ANCHORAGE, AK -- GCI (NASDAQ:GNCMA) today announced its results for the
second quarter of 2003. For the second quarter of 2003, the company expects net
income will total $4.8 million or $0.08 per share on a diluted basis. The
expected second quarter 2003 net income compares to a net loss of $1.1 million
or $(0.03) per share for the second quarter of 2002. For the six months ended
June 30, 2003, GCI expects to report net income of $7.4 million or $0.11 per
share on a diluted basis, after the cumulative effect of a change in accounting
principle of $0.5 million or $(0.01) per share on a diluted basis, net of income
tax benefit. GCI recorded net income of $1.1 million or $0.00 per share on a
diluted basis for the six months ending June 30, 2002.
Revenues are expected to total $95.9 million for the second quarter of
2003, an increase of 3.5 percent as compared to $92.7 million in the second
quarter of 2002. Earnings before interest, taxes, depreciation, amortization,
and accretion (EBITDA) is expected to increase to $30.8 million for the second
quarter of 2003, an increase of $12.1 million or 64.7 percent when compared to
second quarter 2002 EBITDA of $18.7 million. EBITDA for the second quarter of
2002 included a charge of $9.7 million increasing the company's reserve for bad
debts due to the WorldCom bankruptcy. The expected EBITDA for the second quarter
of 2003 includes a net $861,000 non-recurring refund from an intrastate access
cost pool that previously overcharged the company for access services. Revenues
for the second quarter increased sequentially 3.3 percent to $95.9 million as
compared to revenues of $92.8 million in the first quarter of 2003. GCI's second
quarter EBITDA of $30.8 million compares to EBITDA of $28.9 million in the first
quarter of 2003. GCI's second quarter 2003 revenues of $95.9 million and EBITDA
of $30.8 million exceeded guidance for revenues of approximately $92 million to
$95 million and EBITDA in excess of $28.9 million, respectively.
"We are pleased with our results for the first half of 2003," said Ron
Duncan, GCI president. "Our revenue and customer counts continue to grow and the
events associated with the WorldCom bankruptcy are largely behind us. As
expected, EBITDA exceeded the first quarter and we remain on target to meet our
EBITDA guidance for the year. During the quarter we were pleased to announce
that we will be enhancing the quality of our Alaska network with the
construction of geographically diverse undersea fiber route which will provide
restoration capability, additional capacity and increased reliability for our
government and commercial customers and for all Alaskans who use GCI's long
distance, Internet and other services."
The company's local services business added 2,900 access lines during
the second quarter and now serves 101,900 local lines, an estimated 21 percent
share of the total access line market in Alaska. GCI's statewide dial-up
Internet
platform decreased 1,300 customers to 70,300 customers during the second quarter
as more customers continue to migrate to cable modems. More than 40,500 Internet
customers are using GCI cable modem service, an increase of 1,900 over the first
quarter of 2003. GCI cable television services now pass 200,405 homes and serve
137,230 basic subscribers. Basic subscribers increased sequentially by 947
subscribers from the first quarter of 2003. Digital subscribers increased
sequentially by 500 when compared to the first quarter of 2003. GCI serves
30,700 digital customers in Anchorage, Fairbanks, Juneau and Kenai.
Further detailed results and financial tables for the second quarter of
2003 will be released on July 30, 2003. GCI will also hold an institutional
investor and analyst conference call on July 31, 2003 at 2 p.m. Eastern time. To
access the briefing on July 31, dial 877-709-5341 (international callers should
dial 630-395-0019) and identify your call as "GCI." In addition to the
conference call, GCI will make available net conferencing. To access the call
via net conference, log on to www.gci.com and follow the instructions.
The foregoing contains forward-looking statements regarding the
company's expected results which are based on management's expectations as well
as on a number of assumptions concerning future events. Actual results might
differ materially from those projected in the forward looking statements due to
uncertainties and other factors, many of which are outside GCI's control.
Additional information concerning factors that could cause actual results to
differ materially from those in the forward looking statements is contained in
GCI's cautionary statement sections of Form 10-K and 10-Q filed with the
Securities and Exchange Commission.
Based on revenues, GCI is the largest Alaska-based and operated
integrated telecommunications provider. The company provides local, wireless,
and long distance telephone, cable television, Internet and data communication
services. More information about the company can be found at www.gci.com.
Non-GAAP Financial Reconciliation Schedule
(Amounts in Millions)
Three Months Ended
June 30, 2003 June 30, 2002 March 31, 2003
---------------- --------------- ----------------
EBITDA (Note 1) $ 30.8 18.7 28.9
Depreciation, amortization and accretion
expense 12.8 13.9 13.5
---------------- --------------- ----------------
Operating income 18.0 4.8 15.4
---------------- --------------- ----------------
Other income (expense):
Interest expense (9.1) (6.2) (9.2)
Deferred loan and senior notes fee
expense (0.6) (0.4) (1.1)
Interest income 0.1 0.1 0.2
---------------- --------------- ----------------
Other expense, net (9.6) (6.5) (10.1)
---------------- --------------- ----------------
Net income (loss) before income
taxes and cumulative effect of a
change in accounting principle 8.4 (1.7) 5.3
Income tax (expense) benefit (3.6) 0.6 (2.2)
---------------- --------------- ----------------
Net income (loss) before cumulative
effect of a change in accounting
principle 4.8 (1.1) 3.1
Cumulative effect of a change in
accounting principle, net of income tax
benefit of $0.4 --- --- (0.5)
---------------- --------------- ----------------
Net income (loss) $ 4.8 (1.1) 2.6
================ =============== ================
Non-GAAP Financial Reconciliation Schedule (continued)
(Amounts in Millions)
Six Months Ended
June 30, 2003 June 30, 2002
---------------- ---------------
EBITDA (Note 1) $ 59.7 43.8
Depreciation, amortization and accretion
expense 26.3 27.9
---------------- ---------------
Operating income 33.4 15.9
---------------- ---------------
Other income (expense):
Interest expense (18.3) (12.8)
Deferred loan and senior notes fee
expense (1.7) (1.1)
Interest income 0.3 0.2
---------------- ---------------
Other expense, net (19.7) (13.7)
---------------- ---------------
Net income before income taxes and
cumulative effect of a change in
accounting principle 13.7 2.2
Income tax expense (5.8) (1.1)
---------------- ---------------
Net income before cumulative effect
of a change in accounting principle 7.9 1.1
Cumulative effect of a change in accounting
principle, net of income tax benefit of
$0.4 (0.05) ---
---------------- ---------------
Net income $ 7.4 1.1
================ ===============
Notes:
(1) EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) is
the sum of Net Income (Loss), Net Other Expense, Taxes, and Depreciation,
Amortization and Accretion. EBITDA is not presented as an alternative measure of
Net Income (Loss), Operating income or cash flow from operations, as determined
in accordance with Generally Accepted Accounting Principals (GAAP.) GCI's
management uses EBITDA to evaluate the operating performance of its business,
and as a measure of performance for incentive compensation purposes. GCI
believes EBITDA is a measure used as an analytical indicator of income generated
to service debt and fund capital expenditures. In addition, multiples of current
or projected EBITDA are used to estimate current or prospective enterprise
value. EBITDA does not give effect to cash used for debt service requirements,
and thus does not reflect funds available for investment or other discretionary
uses. EBITDA as presented herein may not be comparable to similarly titled
measures reported by other companies.