Exhibit 99.1
DAVEL COMMUNICATIONS, INC.
1001 Lakeside Avenue
Cleveland, Ohio 44114
(OTCBB: DAVL.OB)
FOR IMMEDIATE RELEASE
CONTACTS: JOHN D. CHICHESTER RICHARD P. KEBERT
(216) 241-2555 CHIEF EXECUTIVE OFFICER CHIEF FINANCIAL OFFICER
DAVEL COMMUNICATIONS, INC. REPORTS FINANCIAL RESULTS FOR THE YEAR ENDED
DECEMBER 31, 2002
Cleveland, Ohio - April 4, 2003 - Davel Communications, Inc. ("Davel" or
"Company") today announced financial results for the year ended December 31,
2002. The financial results include the results of PhoneTel Technologies, Inc.
("PhoneTel") since July 24, 2002, the date on which the Company acquired
PhoneTel.
Total revenues were $77.0 million (including revenues for PhoneTel for the post
July 24, 2002 period) compared to $90.6 million in the prior year. This decline
reflects the continuing impact of wireless communications on payphone usage as
well as a reduction in revenue of $3.8 million relating to an industry-wide true
up of "dial-around" revenues received from certain long-distance carriers in
prior years. The average number of installed pay telephones during 2002 reflects
the additional phones derived from PhoneTel as of the acquisition date offset by
the Company's continued strategic removal of low margin phones.
The Company's operating loss increased from $16.0 million in 2001 to $16.4
million in 2002 which includes $2.9 million of merger-related costs associated
with the closing of its redundant headquarters facility in Tampa, FL and related
personnel severance cost. Such losses were offset in part by reductions in
telephone charges of $7.8 million in 2002 and $2.4 million in 2001 resulting
from refunds received from Local Exchange Carriers under the FCC's "New Services
Test". Excluding the dial-around adjustment, New Services Test refunds and the
costs of closing the Tampa corporate headquarters, the Company's operating loss
would have been $1.7 million, or 8.9% lower than last year. The net income for
the year was $151.8 million, or $0.56 per common share, compared to a net loss
of $43.4 million, or $3.89 per common share, in 2001. The 2002 net income
includes a non-cash gain of $181.0 million relating to the Company's
debt-for-equity exchange immediately prior to the PhoneTel merger in which the
Company exchanged approximately $219 million of indebtedness for approximately
380.6 million shares of common stock. Following the debt-for-equity exchange and
the PhoneTel merger, the Company had approximately 615.0 million shares of
common stock outstanding.
Founded in 1979, Davel is the largest independent provider of pay telephones and
related services in the United States with operations in 48 states and the
District of Columbia. Davel serves a wide array of customers operating
principally in the shopping center, hospitality, health care, convenience store,
university, service station, retail and restaurant industries.
Forward-Looking Statements
Certain of the statements contained herein may be, within the meaning of the
federal securities laws, "forward-looking statements" that are subject to risks
and uncertainties that could cause actual results to differ materially from
those described in the forward-looking statements. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company
to be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. See the Company's Form
10-K for the year ended December 31, 2002 for a discussion of such risks,
uncertainties, and other factors. These forward-looking statements are based on
management's expectations as of the date hereof, and the Company does not
undertake any responsibility to update any of these statements in the future.
***
DAVEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for share and per share amounts)
- ------------------------------------------------------------------------------
YEAR ENDED
DECEMBER 31
--------------------------------
2002 2001
------------- -------------
REVENUES
Coin calls $ 56,952 $ 61,668
Non-coin calls 20,000 28,950
------------- -------------
TOTAL REVENUES 76,952 90,618
COSTS AND EXPENSES
Telephone charges 19,350 29,577
Commissions 15,767 22,168
Service, maintenance and network costs 22,998 23,519
Depreciation and amortization 20,392 19,241
Selling, general and administrative 11,959 12,115
Exit and disposal activities 2,919 --
------------- -------------
TOTAL OPERATING COSTS AND EXPENSES 93,385 106,620
------------- -------------
OPERATING LOSS (16,433) (16,002)
Interest expense (net) (13,037) (27,672)
Gain on debt extinguishment 180,977 --
Other income (expense) 244 260
------------- -------------
NET INCOME (LOSS) $ 151,751 $ (43,414)
============= =============
BASIC AND DILUTED EARNINGS (LOSS) PER SHARE $ 0.56 ($ 3.89)
============= =============
WEIGHTED AVERAGE SHARES OUTSTANDING 272,598,189 11,169,485
============= =============
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
- --------------------------------------------------------------------------------
DECEMBER 31
------------------------
2002 2001
--------- ---------
ASSETS
Total current assets $ 26,947 $ 17,719
Property and equipment 41,855 47,448
Location contracts, net 18,043 1,983
Goodwill 17,455 --
Other assets 2,316 1,175
--------- ---------
Total assets $ 106,616 $ 68,325
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Total current liabilities $ 44,697 $ 297,830
Long-term liabilities 118,229 308
Shareholders' deficit (56,310) (229,813)
--------- ---------
Total liabilities and shareholders' deficit $ 106,616 $ 68,325
========= =========