Exhibit 99.1
Davel Communications, Inc. Reports Financial Results for the Quarter Ended March
31, 2004
CLEVELAND--(BUSINESS WIRE)--May 14, 2004--Davel Communications, Inc.
(OTCBB:DAVL) today announced financial results for the quarter ended March 31,
2004.
The net loss for the quarter was $5.0 million, or $0.01 per common share,
compared to a net loss of $4.7 million, or $0.01 per common share, in 2003. The
reported net loss for both periods include adjustments to dial-around revenues
of $1.2 million and $3.9 million in the quarters ended March 31, 2004 and 2003,
respectively. These adjustments represent 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. Without these adjustments, the Company's net
loss would have declined by $2.4 million, or 27.9%.
Total revenues for the first quarter of 2004 were $13.2 million compared to
$22.9 million in the same period of 2003. A portion of the decline in total
revenues relates to the dial-around compensation adjustments described above.
Without these adjustments total revenues decreased $7.0 million, or 36.8%,
primarily due to a reduction in the average number of payphones in service as
well as a 7% decline in average 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 prompted the Company to aggressively pursue
its previously announced strategy to remove low revenue payphones during 2003.
Total operating expenses declined by $9.4 million, or 36.0%, due to the
decrease in the average number of payphones in service during the first quarter
of 2004 and the cost saving measures initiated by the Company during 2003 and
2004. The Company expects further cost savings during 2004 as a result of its
efforts to reduce telephone charges by utilizing competitive local exchange and
alternate carriers, by outsourcing certain payphone collection and maintenance
activities and other operating expense reductions.
The Company's first quarter losses from operations, which include the
dial-around compensation adjustments described above, increased from $3.2
million in 2003 to $3.5 million in 2004. Without these adjustments, the
Company's loss from operations would have declined by $2.4 million or 33.8%.
The Company has continued discussions with its lenders regarding the
possible restructuring of its $125.7 million secured debt. 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 and its Form 10-Q for the quarter
ended March 31, 2004 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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Quarter Ended
March 31
(Unaudited)
--------------------------
2004 2003
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Revenues
Coin calls $ 8,831 $ 13,179
Non-coin calls 3,136 5,811
Dial-around compensation adjustments 1,216 3,928
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13,183 22,918
Operating expenses 16,681 26,120
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Loss from operations (3,498) (3,202)
Interest expense, net (1,612) (1,586)
Other income 78 46
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Net loss $ (5,032) $ (4,742)
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Basic and diluted loss per share ($0.01) ($0.01)
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Weighted average shares outstanding, basic
and diluted 615,018,963 615,018,963
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CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
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March 31
2004 December 31
(Unaudited) 2003
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Assets
Total current assets $ 13,570 $ 18,672
Property and equipment, net 20,162 22,878
Intangible assets, net 5,923 6,746
Other assets 1,956 2,026
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Total assets $ 41,611 $ 50,322
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Liabilities and shareholders' deficit
Current liabilities $ 24,194 $ 26,861
Long-term debt 124,950 125,962
Shareholders' deficit (107,533) (102,501)
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Total liabilities and shareholders'
deficit $ 41,611 $ 50,322
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CONTACT: Davel Communications, Inc., Cleveland
Woody McGee or Donald L. Paliwoda, 216-241-2555