"We have made substantial progress on integration and our remaining activities are on track," said Mark Peters , Time Warner Telecom's Executive Vice President and Chief Financial Officer. "We are pleased with our financial results this quarter. Our organic revenue growth and excellent integration progress, both in terms of cost synergies and efficiencies, are reflected in our margin growth. As in the past, we expect future quarterly margins will be impacted by the timing of sales, installations, seasonality and other normal business fluctuations, as well as integration synergies and costs. We anticipate reaching pre-acquisition M-EBITDA margins during the summer of 2008."
Capital Expenditures (excluding Integration capital investments)
Excluding integration capital investments, capital expenditures were
"We continue to leverage our leadership position in the enterprise marketplace by delivering customers innovative solutions with our customer service, network and product capabilities which we are extending throughout our expanded footprint with the successful integration of our acquired operations. We remain focused on delivering strong enterprise growth, driving sales momentum and growing cash flow," said Herda.
Time Warner Telecom Inc. plans to conduct a webcast conference call to discuss its earnings results on August 8 at 9:00 a.m. MDT ( 11:00 a.m. EDT ). To access the webcast and the financial and statistical information to be discussed in the webcast, visit http://www.twtelecom.com under "Investor Relations."
The Company provides financial measures using generally accepted accounting principles ("GAAP") as well as adjustments to GAAP measures to describe its business trends, including Modified EBITDA. Management believes that its definition of Modified EBITDA (see above) is a standard measure of operating performance and liquidity that is commonly reported and widely used by analysts, investors, and other interested parties in the telecommunications industry because it eliminates many differences in financial, capitalization, and tax structures, as well as non-cash and non-operating income or charges to earnings. Modified EBITDA is not intended to replace operating income (loss), net income (loss), cash flow, and other measures of financial performance and liquidity reported in accordance with GAAP. Management uses Modified EBITDA internally to assess on-going operations and it is the basis for various financial covenants contained in the Company's debt agreements. Modified EBITDA is reconciled to Net Loss, the most comparable GAAP measure, within the Consolidated Operations Highlights and in the supplemental information posted on the Company's website.
In addition, management uses unlevered and levered free cash flow, which measure the ability of M-EBITDA to cover capital expenditures. The Company uses these cash flow definitions to eliminate certain non-cash costs. Levered and unlevered free cash flow are reconciled to Net Cash provided by (used in) operating activities in the supplemental information posted on the Company's website. The Company also provides an adjustment to the measure gross margin by eliminating the impact of non-cash stock-based compensation expense related to the adoption of SFAS 123R. Management uses modified gross margin internally to assess on-going operations. Modified gross margin is reconciled to gross margin in the Consolidated Operations Highlights.
Forward Looking Statements
The statements in this press release concerning the outlook for 2007 and beyond, including expansion plans, growth prospects, expected margins, sales activity, expected customer disconnections, expected cost synergies, integration and branding costs, integration activities and results and expected capital expenditures are forward-looking statements that reflect management's views with respect to future events and financial performance. These statements are based on management's current expectations and are subject to risks and uncertainties. Important factors that could cause actual results to differ materially from those in the forward looking statements include the risks summarized in the Company's filings with the SEC, especially the section entitled "Risk Factors" in its 2006 Annual Report on Form 10-K. Time Warner Telecom undertakes no obligations to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.