EXHIBIT 99.1
Davel Communications, Inc. Reports Financial Results for the Year
Ended December 31, 2003
CLEVELAND--(BUSINESS WIRE)--March 30, 2004--Davel Communications,
Inc. (OTCBB:DAVL) ("Davel" or "Company") today announced financial
results for the year ended December 31, 2003. The financial results in
2003 and part of 2002 include the results of PhoneTel Technologies,
Inc. ("PhoneTel") which have been reflected in the Company's
operations since July 24, 2002, the date on which the Company acquired
PhoneTel.
Total revenues were $81.8 million compared to $77.0 million in
2002. Total revenues in 2003 include $8.3 million of revenue for the
recovery of prior years' dial-around compensation relating to a
mandatory industry-wide reconciliation among long-distance carriers
and payphone providers resulting from retroactive rate changes ordered
by the FCC. In 2002, the Company incurred $3.8 million of charges
relating to this reconciliation. Without these adjustments total
revenues decreased $7.3 million, or 9.0%, due to a reduction in the
average number of payphones in service and a decline in revenues per
phone. The decline in revenues per phone is attributable to the
decline in payphone usage arising from the impact of wireless
communications, which has resulted in the continuing strategic removal
of low revenue payphones.
Operating expenses were $94.2 million compared to $93.4 million
last year. Operating expenses reflect reductions in telephone charges
of $2.2 million in 2003 and $7.7 million in 2002 resulting from
refunds received from local exchange carriers under the FCC's "New
Services Test" and end user common line charges. In 2002, operating
expenses also include $2.9 million of merger related expenses
resulting from the elimination of the redundant headquarters facility
and personnel in Tampa, FL. Without these items, operating expenses
would have been slightly lower than last year.
The Company's operating loss increased from $16.4 million in 2002
to $39.5 million in 2003, primarily due to asset impairment charges of
$27.1 million in 2003 caused by the write-down of the carrying values
of the Company's payphone assets and goodwill to their fair values.
Excluding the asset impairment charges, the Company's operating loss
would have been $4.0 million, or 24.4%, lower than last year.
The net loss for the year was $46.2 million, or $0.08 per common
share, compared to net income of $151.8 million, or $0.56 per common
share, in 2002. 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 $219.0 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 February 24, 2004, the Company executed an amendment to its
secured credit agreement that waives compliance with certain financial
covenants through the date of the amendment and certain payments that
were previously due under the credit agreement. The amendment also
reduces the minimum amount of earnings (as defined in the credit
agreement) that the Company is required to maintain and reduces the
minimum payments due through the maturity date on December 31, 2005 to
$130,000 per month, plus 100% of any regulatory receipts (as defined
in the credit agreement) received by the Company. In addition, the
Company has engaged in discussions with its lenders regarding the
possible restructuring of its $126.7 million debt outstanding under
the secured credit agreement. Any such restructuring could potentially
include a debt-for-equity exchange that may substantially dilute the
interests of the Company's existing non-lender shareholders. There can
be no assurance that the Company's lenders, who own more than 95% of
the Company's common stock, will be willing to negotiate a reduction
in the outstanding balance due under the secured credit agreement.
Founded in 1979, Davel is the largest independent provider of pay
telephones and related services in the United States with operations
in 46 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, 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. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except for share and per share amounts)
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Year Ended
December 31
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2003 2002
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Revenues
Coin calls $50,132 $56,952
Non-coin calls 23,335 23,807
Dial-around compensation adjustments 8,306 (3,807)
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81,773 76,952
Operating expenses
Operating expenses 94,166 93,385
Asset impairment charges 27,141 -
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121,307 93,385
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Loss from operations (39,534) (16,433)
Interest expense (net) (6,559) (13,037)
Gain on debt extinguishment - 180,977
Other income (expense) (98) 244
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Net income (loss) $(46,191) $151,751
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Basic and diluted earnings (loss) per share ($0.08) $0.56
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Weighted average shares outstanding, basic
and diluted 615,018,963 272,598,189
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CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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December 31
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2003 2002
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Assets
Total current assets $18,672 $26,947
Property and equipment, net 22,878 41,855
Intangible assets, net 6,746 18,043
Goodwill - 17,455
Other assets 2,026 2,316
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Total assets $50,322 $106,616
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Liabilities and shareholders' deficit
Current liabilities $26,861 $44,697
Long-term debt 125,962 118,229
Shareholders' deficit (102,501) (56,310)
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Total liabilities and shareholders'
deficit $50,322 $106,616
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CONTACT: Davel Communications, Inc., Cleveland
Woody McGee or Donald L. Paliwoda, 216-241-2555