Exhibit 99.1
Davel Communications, Inc. Reports First
Quarter 2003 Financial Results
CLEVELAND--(BUSINESS WIRE)--May 15, 2003--Davel Communications,
Inc. (OTCBB:DAVL.OB) ("Davel" or the "Company") today announced
financial results for the three-month period ended March 31, 2003. The
first quarter 2003 financial results include the results of PhoneTel
Technologies, Inc. ("PhoneTel"), which has been reflected in the
Company's operations since July 24, 2002, the date on which the
Company acquired PhoneTel.
Total revenues were $22.9 million (including revenue for PhoneTel)
compared to $17.3 million in the prior year's first quarter. This
increase includes a $3.9 million adjustment to dial-around revenue
relating to the sale of a portion of the Company's bankruptcy claim
due from WorldCom for $4.9 million. Without this sale, total revenues
increased by $1.7 million, or 10%, compared to last year's first
quarter. This increase reflects a 24% increase in the average number
of payphones in service as a result of the PhoneTel acquisition,
offset by the continuing impact of wireless communications on payphone
usage and revenues per phone. The decline in revenues per phone has
contributed to the continued strategic removal of low revenue phones.
A significant reduction in the number of payphones is expected in the
second quarter of 2003 in an effort to improve profit margins on the
Company's payphones.
Operating expenses increased by $5.6 million over last year
primarily due to the PhoneTel merger. Operating expenses in both
quarters reflect net reductions in telephone charges of $0.8 million
in 2003 and $1.9 million in 2002, primarily due to regulatory refunds
received from local exchange carriers under the FCC's "New Services
Test". The Company's operating loss decreased from $3.3 million in the
first quarter of 2002 to $3.2 million in 2003 as a result of the
revenue and expense increases.
The net loss for the quarter was $4.7 million, or $0.01 per common
share, compared to a net loss of $7.8 million, or $0.70 per common
share, in 2002. The decrease in net loss was due to the revenue and
expense increases described above and a $3.0 million reduction in
interest expense. This decrease in interest expense related 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.
On May 2, 2003, the Company paid the remaining balance due under
the Company's $10 million Senior Credit Facility obtained in the first
quarter of 2002 to fund certain payables and acquisition costs. The
early retirement of this debt, that was originally due June 30, 2003,
was funded from the proceeds of certain regulatory receipts and the
sale of the WorldCom bankruptcy claim.
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 and
its Form 10-Q for the quarter ended March 31, 2003 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.
Condensed Consolidated Statements of Operations
(In thousands except for share and per share amounts)
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(Unaudited)
Three Months Ended March 31
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2003 2002
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Revenues:
Coin calls $13,179 $12,222
Non-coin calls 5,811 5,040
Dial-around compensation adjustment 3,928 -
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22,918 17,262
Operating expenses: 26,120 20,554
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Loss from operations (3,202) (3,292)
Interest expense, net (1,586) (4,553)
Other income 46 4
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Net loss $(4,742) $(7,841)
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Net loss per common share, basic and
diluted ($0.01) ($0.70)
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Weighted average number of shares,
basic and diluted 615,018,963 11,169,440
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Condensed Consolidated Balance Sheets
(In thousands)
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(Unaudited)
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March 31 December 31
2003 2002
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Current assets $22,269 $26,947
Property and equipment, net 37,349 41,855
Intangible assets, net 34,324 35,498
Other assets 2,525 2,316
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Total assets $96,467 $106,616
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Current liabilities $41,302 $44,697
Long-term debt 116,217 118,229
Shareholders' equity (deficit) (61,052) (56,310)
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Total liabilities and shareholders'
equity (deficit) $96,467 $106,616
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CONTACT: Davel Communications, Inc., Cleveland
John D. Chichester or Donald L. Paliwoda, 216/241-2555