EXHIBIT 99.1
Published on November 6, 2008
November 5,
2008
John Lowber, (907)
868-5628; jlowber@gci.com
Bruce Broquet,
(907) 868-6660; bbroquet@gci.com
David Morris, (907)
265-5396; dmorris@gci.com
FOR IMMEDIATE
RELEASE
GCI
REPORTS PRELIMINARY THIRD QUARTER 2008 FINANCIAL RESULTS
|
·
|
Consolidated
revenue of $151.2 million
|
|
·
|
EBITDAS of
$46.7 million
|
|
·
|
Net income of
$0.6 million or $0.01 per diluted
share
|
ANCHORAGE, AK -- GCI
(NASDAQ:GNCMA) today reported preliminary third quarter 2008 revenues of $151.2
million, an increase of 12.8 percent over the third quarter of 2007. Third
quarter 2008 earnings before interest, taxes, depreciation, amortization and
share based compensation expense (EBITDAS) totaled $46.7 million and includes a
$0.6 million non-cash charge attributable to a charitable gift of broadband
capacity to the University of Alaska. EBITDAS increased $7.7 million or 19.9
percent from the third quarter of 2007. The increase in EBITDAS was attributable
to growth in all segments except network access.
GCI’s third quarter 2008 net income is $0.6
million, or earnings per diluted share of $0.01. The company’s third quarter net
income compares to net income of $3.0 million, or earnings per diluted share of
$0.05 in the same period of 2007. Net income for the third quarter of 2008 also
includes the $0.6 million non-cash charge.
GCI’s third quarter results are preliminary due
to the pending completion of certain depreciation calculations for the company’s
wireless subsidiary Alaska DigiTel as described below.
Third quarter 2008 revenue increased along all
products lines, excluding voice when compared to the prior year. Revenues for
the company increased $8.8 million, or 6.2 percent, over second quarter 2008
revenues of $142.5 million. Third quarter EBITDAS of $46.7 million increased 6.5
percent from $43.8 million in the second quarter of 2008.
“We are very pleased to report another quarter
of record revenue and EBITDAS,” said GCI president Ron Duncan. “GCI’s solid
third quarter financial results are accompanied by excellent customer metrics.
This continuing growth in customer and product counts is driving GCI’s
accelerating financial success. We are out pacing our EBITDAS guidance for 2008
and our stated goal of $200 million for 2009 should be achievable.”
“The third quarter was very busy. It is the
peak of our construction season and we deployed $75 million in capital building
our statewide wired and wireless networks. I am pleased to report that these
investments have already started to grow our EBITDAS. Our $33 million southeast
fiber system turned up with a $6 million annual run rate in cost savings and new
revenue and the new wireless service that we are rolling out in Alaska’s rural
communities is being met with a phenomenal reception.”
“During the quarter we closed on our purchase
of Alaska Wireless and acquired the remaining equity interest and operating
control of Alaska DigiTel. We are rapidly integrating these two investments and
they have contributed significantly to our wireless growth.”
“This quarter
marks the start of our wireless transition. We have begun switching customers
from the GSM resale platform to our own network. Significant EBITDAS is shifting
from our network access business to our consumer and commercial business
segments as a result of the transition of AT&T Mobility traffic off of our
carrier network and our transition of wireless customers to our own
network.”
“Our stock has not escaped the pressures of the
global financial crisis although it has recovered some in the last ten days. I
find comfort in the fact that GCI has ample liquidity and is backed by a strong
banking group. We ended the third quarter with $144 million in cash and undrawn
credit facilities. Approximately $100 million of that amount would be currently
available to us under our credit agreements. The Alaska economy continues to
perform well remaining largely unscathed by the current economic turmoil.
Employment continues to grow in Alaska, mortgage foreclosure rates are the
lowest in the nation and the commercial real estate market is still
strong.”
“Alaska appears to be uniquely positioned to
weather recessionary pressures despite the recent steep decline in energy
prices. The State has large cash reserves that should enable it to maintain its
budget for at least the next two fiscal years. This is important for Alaska’s
economy as the State is the largest employer and second largest source of gross
state product. We believe Alaska will play an increasing role in our national
energy policy and state’s economy will continue to grow as a direct
result.”
GCI is increasing 2008 guidance for revenues to
$560 million to $570 million, an increase of $10 million from previous guidance
of $550 million to $560 million and expects EBITDAS in excess of $170 million,
an increase of $5 million from previous guidance of more than $165 million.
Additionally GCI anticipates total cash receipts in excess of $45 million during
2008 as a result of fiber IRU agreements which are not otherwise reflected in
current guidance. GCI will provide 2009 revenue and EBITDAS guidance with its
fourth quarter 2008 earnings report. As previously discussed in management’s
quarterly conference calls, quarterly guidance will no longer be provided by the
company.
Highlights
|
·
|
Consumer
revenues totaled $66.5 million, an increase of 17.1 percent over the prior
year quarter and an increase of 7.0 percent over the second quarter of
2008. The increases were in video, data and wireless products and
services.
|
|
·
|
GCI local
access lines increased by 1,800 over the second quarter of 2008. Consumer,
network access, commercial and other local access lines totaled 139,500 at
the end of the third quarter of 2008, representing an estimated 33 percent
share of the total access line market in
Alaska.
|
|
·
|
GCI has
provisioned 94,500 access lines representing 68 percent of its total
access lines on its own facilities at the end of the third quarter of
2008, an increase of 4,800 lines over the second quarter of 2008 and an
increase of 34,100 lines when compared to the end of the third quarter of
the prior year. The company had provisioned 60,400 access lines on its own
facilities at the end of the third quarter of
2007.
|
|
·
|
GCI’s cable
plant will be 100 percent digital by the end of
2008.
|
|
·
|
GCI had
101,100 consumer and commercial cable modem access customers at the end of
the third quarter of 2008, an increase of 1,100 over the 100,000 cable
modem customers at the end of the second quarter 2008. Average monthly
revenue per cable modem totaled $39.23 for the third quarter of 2008 as
compared to $37.77 for the second quarter of 2008, an increase of 3.9
percent. The increase in average monthly revenues arises primarily from
customers upgrading to plans with increased levels of
service.
|
|
·
|
GCI began
converting its GSM wireless customers during September 2008. The total
number of conversions to-date is below plan but the conversion rate is
rapidly increasing. The company expects to have the conversion
completed before the end of the second quarter of 2009. Conversion
costs are expected to range between $6.0 million and $8.0
million.
|
|
·
|
GCI has
88,100 wireless subscribers, an increase of 4,000 subscribers from the
second quarter of 2008. This increase includes customers acquired with the
acquisition of Alaska Wireless offset by a database clean up of Alaska
DigiTel customers.
|
|
·
|
GCI is now
serving several communities in Southeast Alaska with its new $33 million
undersea fiber. The project was completed and turned up on October 1,
2008. Costs savings and new revenues from the project are already at a
$6.0 annual run rate.
|
|
·
|
GCI’s
business plan is fully financed by $460 million in senior credit
facilities, led by Calyon and supported by a strong group of nine other
major lending institutions. GCI’s short-term cash is primarily maintained
at Wells Fargo Bank, N.A., a participant in GCI credit facilities. GCI has
approximately $96 million in availability on its revolving line of credit,
$10 million available under other credit facilities and had cash and
marketable securities of $37.7 million at the end of the third quarter of
2008. GCI’s financial agreements, including the satellite capital lease
agreement, require annual principal payments of approximately $10 million.
The senior bank credit facility revolver is due August 31, 2011 and the
term loan is due in approximately equal amounts on December 31, 2011 and
August 31, 2012. GCI has not invested in any derivatives or currency
speculation contracts other than the purchase of a $180 million LIBOR cap
on July 1, 2008. The cap limits the company’s three month LIBOR exposure
to 4.5 percent until July 1, 2010.
|
Consumer
Consumer revenues increased 17.1 percent to
$66.5 million compared to $56.8 million in the third quarter of 2007 and
increased 7.0 percent over the second quarter of 2008. The increased revenue is
from video, data and wireless products.
Consumer voice revenues were down 1.4 percent
from the prior year and 4.4 percent from the second quarter of 2008. The
decrease in voice revenues is primarily due to a $0.6 million decrease in USF
support revenues, primarily due to a change in the accrual estimation during the
third quarter of 2008. Consumer local access lines in service for the third
quarter were up approximately 9,700 lines compared to the third quarter of 2007.
Access lines in the third quarter increased by 1,100 over the second quarter of
2008.
GCI serves 64,300 consumer access lines on its
own facilities, an increase of 3,800 lines from the second quarter of 2008. More
than 80 percent of total consumer access lines are completely provisioned on GCI
owned facilities.
Consumer video revenues increased 10.1 percent
over the prior year and were up 2.2 percent from the second quarter of 2008. The
increase in year over year revenue is due in part to an increase in video
subscribers, subscribers purchasing higher tier services including high
definition or digital service and renting high definition/digital video
recorders. Consumer video subscribers totaled 131,200, an increase of 5,600
subscribers over the third quarter of 2007 and 900 subscribers from the second
quarter of 2008.
Consumer data revenues increased 23.0 percent
over the prior year and 3.5 percent over the second quarter of 2008. The
increase in consumer data revenues is due to an increase in cable modem
customers and an increase in average monthly revenue per modem subscriber. The
increase in average monthly revenues arises in part from customers upgrading to
plans with increased levels of service. GCI added 8,000 consumer cable modem
customers over the prior year and 1,100 customers during the third quarter of
2008.
Consumer wireless revenues increased to $17.9
million, an increase of 43.6 percent over the third quarter of 2007. The
increase in wireless revenues is due in part to an increase in wireless
subscribers, including those of the company’s wireless subsidiaries and the
acquisition of Alaska Wireless on July 1, 2008.
Network
Access
Network access revenues decreased 9.1 percent
to $38.8 million as compared to $42.7 million in the third quarter of 2007 and
decreased 7.4 percent from the second quarter of 2008. The decrease is primarily
attributed to the previously announced transition of AT&T Mobility traffic
off of the GCI network.
Voice revenues, as expected, decreased 23.9
percent from the prior year and 15.3 percent from the second quarter of 2008.
The decrease in voice revenues from the prior year is primarily due to the
migration of AT&T Mobility traffic. Network access minutes decreased 20.4
percent to 255.8 million minutes for the third quarter of 2008 as compared to
the third quarter of 2007. Minutes for the third quarter of 2008 decreased 21.6
percent from the second quarter of 2008.
Data revenues for the third quarter of 2008
were up 21.6 percent compared to third quarter 2007 and increased 0.9 percent
over the second quarter of 2008. The increase in data revenues over the prior
year is primarily due to an increase in circuits sold.
Commercial
Commercial revenues increased 10.6 percent to
$30.2 million as compared to $27.3 million in the third quarter of 2007 and
increased 9.9 percent from $27.4 million in the second quarter of 2008.
Commercial revenues increased primarily due to an increase in video advertising
and time and materials revenues.
A third quarter decrease in voice revenues as
compared to the prior year was primarily due to a decrease in average revenue
per minute and a 0.6 percent decrease in long distance minutes. Sequentially,
commercial minutes increased 1.2 percent over the second quarter of 2008. GCI
increased commercial local access lines by 3,500 over the third quarter of 2007
and 800 when compared to the second quarter of 2008.
Commercial video revenues increased 39.6
percent on a year-over-year and sequential basis. The increase in revenues is
due mostly to an increase in advertising revenues.
Commercial data network revenues in the third
quarter of 2008 totaled $18.1 million, an increase of 13.7 percent when compared
to $16.0 million in the third quarter of 2007 and increased $1.6 million or 9.4
percent, when compared to $16.6 million in the second quarter of
2008.
Commercial data
network revenues comprise $9.8 million in monthly recurring charges for data
services and $8.3 million in charges billed on a time and materials basis
largely for personnel providing on-site customer support. This latter category
can vary significantly based on project activity. For the third quarter of 2008
monthly recurring data revenues increased by approximately $0.8 million when
compared to the third quarter 2007 and $0.3 million compared to the second
quarter 2008.
Managed
Broadband
Managed
broadband revenues totaled $9.9 million in the third quarter of 2008, an
increase of 33.9 percent from $7.4 million in the third quarter of 2007. Revenue
for the third quarter was up 8.0 percent from the $9.1 million reported in the
second quarter of 2008. A significant portion of the increased revenues are a
result of the acquisition of the United Companies.
Regulated
Operations
Regulated operations revenues totaled $5.9
million and its EBITDAS totaled $1.3 million for the third quarter of 2008.
Regulated operations has 12,300 local access lines at the end of the third
quarter of 2008, an increase of 100 access lines over the second quarter of
2008.
Other
Items
During the third quarter of 2008 GCI’s capital
expenditures totaled $68.1 million as compared to $167.4 million in the second
quarter of 2008. GCI’s capital expenditures total $288.2 million for the first
nine months of 2008. GCI received an amendment on October 17, 2008 increasing
total allowable capital expenditures by $15 million to $340 million for 2008.
The increase was required primarily to meet customer requirements related to
approximately $60 million in fiber capacity agreements.
In late December 2007, Alaska DigiTel committed
to a substantial upgrade of its wireless network during 2008 and expected to
decommission certain assets at or near the end of 2008. As a result of this
decision the estimated useful life of these assets changed, and the net book
value at the date the decision was determined should have been depreciated over
the remaining period the assets were expected to be used. GCI has recently
determined that Alaska DigiTel’s depreciation expense was understated
approximately $1.9 million and $1.8 million, respectively, in the first and
second quarters of 2008 or approximately $0.5 million and $0.6 million,
respectively, net of income tax and minority interest, for the first and second
quarters of 2008. GCI expects to restate its first and second quarter results by
filing amended Forms 10Q as soon as practicable. The adjustments are expected to
result in a slight increase in previously reported EBITDAS resulting from the
related effect on minority interest.
While the company
believes that the financial results included in this press release are
materially correct, the company's auditors have not yet concluded all aspects of
their review of our financial statements. Accordingly, the financial results
included herein should be considered preliminary and may be subject to change
following conclusion of the review.
GCI will hold a conference call to discuss the
quarter’s results on Thursday, November 6, 2008 beginning at 2 p.m. (Eastern).
To access the briefing on November 6, dial 888-323-9725 (International callers
should dial 517-308-9003) and identify your call as “GCI.” In addition to the
conference call, GCI will make available net conferencing. To access the call
via net conference, log on to www.gci.com and follow the instructions. A replay
of the call will be available for 72-hours by dialing 866-376-2452, access code
7461 (International callers should dial 203-369-0302).
GCI is the largest telecommunications company
in Alaska. The company’s cable plant, which provides voice, video, and broadband
data services, passes 90 percent of Alaska households. GCI operates Alaska’s
most extensive terrestrial/subsea fiber optic network, which by the end of 2008,
will connect not only Anchorage but also Fairbanks, and Juneau/Southeast to the
lower 48 states with a diversely routed,
protected fiber
network. The company’s satellite network provides communications services to
small towns and villages throughout rural Alaska. GCI is now in the process of
constructing Alaska’s first truly statewide mobile wireless network, which will
seamlessly link urban and rural Alaska for the first time in the state’s
history.
A pioneer in
bundled services, GCI is the top provider of voice, data, and video services to
Alaska consumers with a 70 percent share of the consumer broadband market. GCI
is also the leading provider of communications services to enterprise customers,
particularly large enterprise customers with complex data networking needs. More
information about the company can be found at www.gci.com.
The foregoing contains forward-looking
statements regarding the company’s expected results that are based on
management’s expectations as well as on a number of assumptions concerning
future events. Actual results may differ materially from those projected in the
forward looking statements due to uncertainties and other factors, many of which
are outside GCI’s control. Additional information concerning factors that could
cause actual results to differ materially from those in the forward looking
statements is contained in GCI’s cautionary statement sections of Form 10-K and
10-Q filed with the Securities and Exchange Commission.
# # #
|
GENERAL
COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
(Amounts in
thousands)
|
||||||||
|
(Unaudited,
|
||||||||
|
preliminary)
|
||||||||
|
September
30,
|
December
31,
|
|||||||
|
Assets
|
2008
|
2007
|
||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 32,408 | 13,074 | |||||
|
Receivables
|
110,724 | 97,913 | ||||||
|
Less
allowance for doubtful receivables
|
1,946 | 1,657 | ||||||
|
Net
receivables
|
108,778 | 96,256 | ||||||
|
Deferred
income taxes
|
8,101 | 5,734 | ||||||
|
Investment
securities
|
5,276 | - | ||||||
|
Inventories
|
5,266 | 2,541 | ||||||
|
Prepaid
expenses
|
5,255 | 5,356 | ||||||
|
Other
current assets
|
713 | 717 | ||||||
|
Total
current assets
|
165,797 | 123,678 | ||||||
|
Property and
equipment in service, net of depreciation
|
743,274 | 504,273 | ||||||
|
Construction
in progress
|
100,657 | 69,409 | ||||||
|
Net
property and equipment
|
843,931 | 573,682 | ||||||
|
Cable
certificates
|
191,565 | 191,565 | ||||||
|
Goodwill
|
62,387 | 42,181 | ||||||
|
Wireless
licenses
|
26,007 | 25,757 | ||||||
|
Other
intangible assets, net of amortization
|
20,419 | 11,769 | ||||||
|
Deferred loan
and senior notes costs, net of amortization
|
6,388 | 6,202 | ||||||
|
Other
assets
|
11,594 | 9,399 | ||||||
|
Total
other assets
|
318,360 | 286,873 | ||||||
|
Total
assets
|
$ | 1,328,088 | 984,233 | |||||
|
(Continued)
|
||||||||
|
Note:
|
||||||||
|
Our results
as of September 30, 2008 are preliminary as our auditors have not
completed their review due to a restatement of our Forms 10-Q for March
31, 2008 and June 30, 2008. We are in the process of assessing the impact
of the restatement and we expect to file Forms 10-Q/A for March 31, 2008
and June 30, 2008 as soon as practicable. The financial information
presented includes the anticipated effects of the
restatement.
|
||||||||
|
GENERAL
COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
(Continued)
|
||||||||
|
(Amounts in
thousands)
|
||||||||
|
(Unaudited,
|
||||||||
|
preliminary)
|
||||||||
|
September
30,
|
December
31,
|
|||||||
|
Liabilities,
Minority Interest, and Stockholders' Equity
|
2008
|
2007
|
||||||
|
Current
liabilities:
|
||||||||
|
Current
maturities of obligations under long-term debt and capital
leases
|
$ | 13,792 | 2,375 | |||||
|
Accounts
payable
|
51,831 | 35,747 | ||||||
|
Deferred
revenue
|
21,181 | 16,600 | ||||||
|
Accrued
payroll and payroll related obligations
|
18,542 | 16,329 | ||||||
|
Accrued
liabilities
|
11,174 | 7,536 | ||||||
|
Accrued
interest
|
2,977 | 8,927 | ||||||
|
Subscriber
deposits
|
1,143 | 877 | ||||||
|
Total
current liabilities
|
120,640 | 88,391 | ||||||
|
Long-term
debt
|
703,390 | 536,115 | ||||||
|
Obligations
under capital leases, excluding current maturities
|
95,151 | 2,290 | ||||||
|
Obligation
under capital lease due to related party, excluding current
maturity
|
1,866 | 469 | ||||||
|
Deferred
income taxes
|
91,071 | 84,294 | ||||||
|
Long-term
deferred revenue
|
37,117 | 845 | ||||||
|
Other
liabilities
|
15,579 | 12,396 | ||||||
|
Total
liabilities
|
1,064,814 | 724,800 | ||||||
|
Minority
interest
|
- | 6,478 | ||||||
|
Commitments
and contingencies
|
||||||||
|
Stockholders’
equity:
|
||||||||
|
Common
stock (no par):
|
||||||||
|
Class
A. Authorized 100,000 shares; issued 49,974 and
50,437
shares
at September 30, 2008 and December 31, 2007, respectively;
outstanding
49,505 and 49,425 shares at September 30, 2008 and
December
31, 2007, respectively
|
150,935 | 155,980 | ||||||
|
Class
B. Authorized 10,000 shares; issued 3,247 and 3,257 shares
at
September
30, 2008 and December 31, 2007, respectively; outstanding
3,245
and 3,255 shares at September 30, 2008 and December 31, 2007,
respectively;
convertible on a share-per-share basis into Class A
common
stock
|
2,742 | 2,751 | ||||||
|
Less
cost of 471 and 473 Class A and Class B common shares held in
treasury
at September 30, 2008 and December 31, 2007, respectively
|
(3,423 | ) | (3,448 | ) | ||||
|
Paid-in
capital
|
25,310 | 20,132 | ||||||
|
Retained
earnings
|
87,710 | 77,540 | ||||||
|
Total
stockholders' equity
|
263,274 | 252,955 | ||||||
|
Total
liabilities, minority interest, and stockholders' equity
|
$ | 1,328,088 | 984,233 | |||||
|
Note:
|
||||||||
|
Our results
as of September 30, 2008 are preliminary as our auditors have not
completed their review due to a restatement of our Forms 10-Q for March
31, 2008 and June 30, 2008. We are in the process of assessing the impact
of the restatement and we expect to file Forms 10-Q/A for March 31, 2008
and June 30, 2008 as soon as practicable. The financial information
presented includes the anticipated effects of the
restatement.
|
||||||||
|
GENERAL
COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||
|
CONSOLIDATED
INCOME STATEMENTS
|
||||||||||||||||
|
(Unaudited)
|
||||||||||||||||
|
Three Months
Ended
|
Nine Months
Ended
|
|||||||||||||||
|
September
30,
|
September
30,
|
|||||||||||||||
|
(Amounts in
thousands, except per share amounts)
|
2008
(preliminary)
|
2007
(as
restated)
|
2008
(preliminary)
|
2007
(as
restated)
|
||||||||||||
|
Revenues
|
$ | 151,233 | 134,090 | 428,368 | 389,011 | |||||||||||
|
Cost of goods
sold (exclusive of depreciation and amortization shown
separately
below)
|
50,401 | 52,213 | 154,160 | 145,782 | ||||||||||||
|
Selling,
general and administrative expenses
|
56,410 | 44,735 | 151,076 | 131,770 | ||||||||||||
|
Depreciation
and amortization expense
|
28,552 | 21,970 | 78,821 | 64,273 | ||||||||||||
|
Operating
income
|
15,870 | 15,172 | 44,311 | 47,186 | ||||||||||||
|
Other income
(expense):
|
||||||||||||||||
|
Interest
expense
|
(13,693 | ) | (8,620 | ) | (33,277 | ) | (25,495 | ) | ||||||||
|
Loan
and senior notes fees
|
(441 | ) | (751 | ) | (1,543 | ) | (1,147 | ) | ||||||||
|
Interest
income
|
386 | 82 | 869 | 427 | ||||||||||||
|
Minority
interest
|
(455 | ) | 37 | 389 | 26 | |||||||||||
|
Other
expense, net
|
(14,203 | ) | (9,252 | ) | (33,562 | ) | (26,189 | ) | ||||||||
|
Income
before income tax expense
|
1,667 | 5,920 | 10,749 | 20,997 | ||||||||||||
|
Income tax
expense
|
1,103 | 2,964 | 6,044 | 9,817 | ||||||||||||
|
Net
income available to common shareholders
|
$ | 564 | 2,956 | 4,705 | 11,180 | |||||||||||
|
Basic net
income available to common shareholders per common share
|
$ | 0.01 | 0.06 | 0.09 | 0.21 | |||||||||||
|
Diluted net
income available to common shareholders per common share
|
$ | 0.01 | 0.05 | 0.09 | 0.19 | |||||||||||
|
Common shares
used to calculate basic EPS
|
52,371 | 52,852 | 52,317 | 53,103 | ||||||||||||
|
Common shares
used to calculate diluted EPS
|
53,318 | 54,203 | 52,986 | 54,611 | ||||||||||||
|
Note:
|
||||||||||||||||
|
(1) We
reclassified $4.3 million and $12.6 million of network maintenance and
operations expense from selling, general and administrative expense to
Cost of Goods Sold for the three and nine months ended September 30, 2007,
respectively, to make our income statement classification more consistent
with that of our peers.
|
||||||||||||||||
|
(2) Our
results for the three and nine months ended September 30, 2008 are
preliminary as our auditors have not completed their review due to a
restatement of our Forms 10-Q for the three months ended March 31, 2008
and for the three and six months ended June 30, 2008. We are in the
process of assessing the impact of the restatement and we expect to file
Forms 10-Q/A for March 31, 2008 and June 30, 2008 as soon as practicable.
The financial information presented includes the anticipated effects of
the restatement.
|
||||||||||||||||
|
GENERAL
COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
SUPPLEMENTAL
SCHEDULES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Amounts in
thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Third Quarter
2008 (preliminary)
|
Third Quarter
2007 (as restated)
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Network
|
Managed
|
Regulated
|
Network
|
Managed
|
Regulated
|
|||||||||||||||||||||||||||||||||||||||||||
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
|||||||||||||||||||||||||||||||||||||
|
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Voice
|
$ | 11,582 | 19,671 | 7,597 | - | 5,938 | 44,788 | 11,750 | 25,856 | 7,838 | - | - | 45,444 | |||||||||||||||||||||||||||||||||||
|
Video
|
26,241 | - | 2,999 | - | - | 29,240 | 23,834 | - | 2,148 | - | - | 25,982 | ||||||||||||||||||||||||||||||||||||
|
Data
|
10,745 | 18,148 | 18,140 | 9,866 | - | 56,899 | 8,736 | 14,920 | 15,961 | 7,369 | - | 46,986 | ||||||||||||||||||||||||||||||||||||
|
Wireless
|
17,917 | 959 | 1,430 | - | - | 20,306 | 12,475 | 1,881 | 1,322 | - | - | 15,678 | ||||||||||||||||||||||||||||||||||||
|
Total
|
66,485 | 38,778 | 30,166 | 9,866 | 5,938 | 151,233 | 56,795 | 42,657 | 27,269 | 7,369 | - | 134,090 | ||||||||||||||||||||||||||||||||||||
|
Cost of
goods
sold
(exclusive
of
depreciation
and
amortization)
|
20,574 | 10,501 | 15,283 | 2,651 | 1,392 | 50,401 | 23,076 | 12,409 | 14,117 | 2,611 | - | 52,213 | ||||||||||||||||||||||||||||||||||||
|
Contribution
|
45,911 | 28,277 | 14,883 | 7,215 | 4,546 | 100,832 | 33,719 | 30,248 | 13,152 | 4,758 | - | 81,877 | ||||||||||||||||||||||||||||||||||||
|
Less
SG&A
|
28,794 | 11,398 | 9,356 | 3,636 | 3,226 | 56,410 | 23,199 | 9,549 | 9,035 | 2,952 | - | 44,735 | ||||||||||||||||||||||||||||||||||||
|
Add
other
income
(expense)
|
(200 | ) | (178 | ) | (77 | ) | - | - | (455 | ) | 14 | 16 | 7 | - | - | 37 | ||||||||||||||||||||||||||||||||
|
EBITDA
|
16,917 | 16,701 | 5,450 | 3,579 | 1,320 | 43,967 | 10,534 | 20,715 | 4,124 | 1,806 | - | 37,179 | ||||||||||||||||||||||||||||||||||||
|
Add
share-based
compensation
|
1,075 | 920 | 488 | 211 | - | 2,694 | 603 | 641 | 370 | 128 | - | 1,742 | ||||||||||||||||||||||||||||||||||||
|
EBITDAS
|
$ | 17,992 | 17,621 | 5,938 | 3,790 | 1,320 | 46,661 | 11,137 | 21,356 | 4,494 | 1,934 | - | 38,921 | |||||||||||||||||||||||||||||||||||
|
Note:
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1) We
reclassified $4.3 million of network maintenance and operations expense
from selling, general and administrative expense to Cost of Goods Sold for
the three months ended September 30, 2007 to make our income statement
classification more consistent with that of our peers.
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(2) Our
results for the three and nine months ended September 30, 2008 are
preliminary as our auditors have not completed their review due to a
restatement of our Forms 10-Q for the three months ended March 31, 2008
and for the three and six months ended June 30, 2008. We are in the
process of assessing the impact of the restatement and we expect to file
Forms 10-Q/A for March 31, 2008 and June 30, 2008 as soon as practicable.
The financial information presented includes the anticipated effects of
the restatement.
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
GENERAL
COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
SUPPLEMENTAL
SCHEDULES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Amounts in
thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Third Quarter
2008 (preliminary)
|
Second
Quarter 2008 (preliminarily restated)
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Network
|
Managed
|
Regulated
|
Network
|
Managed
|
Regulated
|
|||||||||||||||||||||||||||||||||||||||||||
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
|||||||||||||||||||||||||||||||||||||
|
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Voice
|
$ | 11,582 | 19,671 | 7,597 | - | 5,938 | 44,788 | 12,117 | 23,213 | 7,280 | - | 1,879 | 44,489 | |||||||||||||||||||||||||||||||||||
|
Video
|
26,241 | - | 2,999 | - | - | 29,240 | 25,668 | - | 2,149 | - | - | 27,817 | ||||||||||||||||||||||||||||||||||||
|
Data
|
10,745 | 18,148 | 18,140 | 9,866 | - | 56,899 | 10,386 | 17,988 | 16,584 | 9,134 | - | 54,092 | ||||||||||||||||||||||||||||||||||||
|
Wireless
|
17,917 | 959 | 1,430 | - | - | 20,306 | 13,942 | 690 | 1,431 | - | - | 16,063 | ||||||||||||||||||||||||||||||||||||
|
Total
|
66,485 | 38,778 | 30,166 | 9,866 | 5,938 | 151,233 | 62,113 | 41,891 | 27,444 | 9,134 | 1,879 | 142,461 | ||||||||||||||||||||||||||||||||||||
|
Cost of
goods
sold
(exclusive
of
depreciation
and
amortization)
|
20,574 | 10,501 | 15,283 | 2,651 | 1,392 | 50,401 | 23,689 | 11,529 | 13,912 | 3,020 | 298 | 52,448 | ||||||||||||||||||||||||||||||||||||
|
Contribution
|
45,911 | 28,277 | 14,883 | 7,215 | 4,546 | 100,832 | 38,424 | 30,362 | 13,532 | 6,114 | 1,581 | 90,013 | ||||||||||||||||||||||||||||||||||||
|
Less
SG&A
|
28,794 | 11,398 | 9,356 | 3,636 | 3,226 | 56,410 | 26,054 | 9,579 | 8,312 | 3,093 | 1,222 | 48,260 | ||||||||||||||||||||||||||||||||||||
|
Add
other
income
(expense)
|
(200 | ) | (178 | ) | (77 | ) | - | - | (455 | ) | 197 | 176 | 76 | - | - | 449 | ||||||||||||||||||||||||||||||||
|
EBITDA
|
16,917 | 16,701 | 5,450 | 3,579 | 1,320 | 43,967 | 12,567 | 20,959 | 5,296 | 3,021 | 359 | 42,202 | ||||||||||||||||||||||||||||||||||||
|
Add
share-based
compensation
|
1,075 | 920 | 488 | 211 | - | 2,694 | 637 | 522 | 317 | 117 | - | 1,593 | ||||||||||||||||||||||||||||||||||||
|
EBITDAS
|
$ | 17,992 | 17,621 | 5,938 | 3,790 | 1,320 | 46,661 | 13,204 | 21,481 | 5,613 | 3,138 | 359 | 43,795 | |||||||||||||||||||||||||||||||||||
|
Note:
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Our results
for the three and nine months ended September 30, 2008 are preliminary as
our auditors have not completed their review odue to a restatement of our
Forms 10-Q for the three months ended March 31, 2008 and for the three and
six months ended June 30, 2008. We are in the process of assessing the
impact of the restatement and we expect to file Forms 10-Q/A for March 31,
2008 and June 30, 2008 as soon as practicable. The financial information
presented includes the anticipated effects of the
restatement.
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
GENERAL
COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
SUPPLEMENTAL
SCHEDULES
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(Amounts in
thousands)
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Nine Months
Ended September 30, 2008 (preliminary)
|
Nine Months
Ended September 30, 2007 (as restated)
|
|||||||||||||||||||||||||||||||||||||||||||||||
|
Network
|
Managed
|
Regulated
|
Network
|
Managed
|
Regulated
|
|||||||||||||||||||||||||||||||||||||||||||
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
Consumer
|
Access
|
Commercial
|
Broadband
|
Operations
|
Totals
|
|||||||||||||||||||||||||||||||||||||
|
Revenues
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
Voice
|
$ | 35,559 | 64,826 | 22,092 | - | 7,817 | 130,294 | 34,711 | 74,704 | 23,740 | - | - | 133,155 | |||||||||||||||||||||||||||||||||||
|
Video
|
77,556 | - | 6,968 | - | - | 84,524 | 71,372 | - | 5,918 | - | - | 77,290 | ||||||||||||||||||||||||||||||||||||
|
Data
|
31,227 | 52,975 | 50,933 | 26,526 | - | 161,661 | 24,953 | 45,317 | 44,476 | 21,243 | - | 135,989 | ||||||||||||||||||||||||||||||||||||
|
Wireless
|
45,638 | 2,042 | 4,209 | - | - | 51,889 | 34,490 | 4,578 | 3,509 | - | - | 42,577 | ||||||||||||||||||||||||||||||||||||
|
Total
|
189,980 | 119,843 | 84,202 | 26,526 | 7,817 | 428,368 | 165,526 | 124,599 | 77,643 | 21,243 | - | 389,011 | ||||||||||||||||||||||||||||||||||||
|
Cost of
goods
sold
(exclusive
of
depreciation
and
amortization)
|
68,965 | 32,284 | 43,266 | 7,955 | 1,690 | 154,160 | 67,410 | 32,368 | 38,640 | 7,364 | - | 145,782 | ||||||||||||||||||||||||||||||||||||
|
Contribution
|
121,015 | 87,559 | 40,936 | 18,571 | 6,127 | 274,208 | 98,116 | 92,231 | 39,003 | 13,879 | - | 243,229 | ||||||||||||||||||||||||||||||||||||
|
Less
SG&A
|
80,201 | 30,564 | 26,279 | 9,584 | 4,448 | 151,076 | 67,265 | 28,812 | 27,221 | 8,472 | - | 131,770 | ||||||||||||||||||||||||||||||||||||
|
Add
other
income
(expense)
|
170 | 153 | 66 | - | - | 389 | 10 | 11 | 5 | - | - | 26 | ||||||||||||||||||||||||||||||||||||
|
EBITDA
|
40,984 | 57,148 | 14,723 | 8,987 | 1,679 | 123,521 | 30,861 | 63,430 | 11,787 | 5,407 | - | 111,485 | ||||||||||||||||||||||||||||||||||||
|
Add
share-based
compensation
|
2,209 | 1,863 | 1,057 | 418 | - | 5,547 | 1,199 | 1,234 | 782 | 275 | - | 3,490 | ||||||||||||||||||||||||||||||||||||
|
EBITDAS
|
$ | 43,193 | 59,011 | 15,780 | 9,405 | 1,679 | 129,068 | 32,060 | 64,664 | 12,569 | 5,682 | - | 114,975 | |||||||||||||||||||||||||||||||||||
|
Note:
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(1) We
reclassified $12.6 million of network maintenance and operations expense
from selling, general and administrative expense to Cost of Goods Sold for
the nine months ended September 30, 2007 to make our income statement
classification more consistent with that of our peers.
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
(2) Our
results for the three and nine months ended September 30, 2008 are
preliminary as our auditors have not completed their review due to a
restatement of our Forms 10-Q for the three months ended March 31, 2008
and for the three and six months ended June 30, 2008. We are in the
process of assessing the impact of the restatement and we expect to file
Forms 10-Q/A for March 31, 2008 and June 30, 2008 as soon as practicable.
The financial information presented includes the anticipated effects of
the restatement.
|
||||||||||||||||||||||||||||||||||||||||||||||||
|
GENERAL
COMMUNICATION, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||
|
KEY
PERFORMANCE INDICATORS
|
||||||||||||||||||||||||||||
|
(Unaudited)
|
||||||||||||||||||||||||||||
|
September 30,
2008
|
September 30,
2008
|
|||||||||||||||||||||||||||
|
as compared
to
|
as compared
to
|
|||||||||||||||||||||||||||
|
September
30,
|
September
30,
|
June
30,
|
September
30,
|
June
30,
|
September
30,
|
June
30,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||
|
Voice
|
||||||||||||||||||||||||||||
|
Long-distance
subscribers
|
89,300 | 89,700 | 89,800 | (400 | ) | (500 | ) | -0.4 | % | -0.6 | % | |||||||||||||||||
|
Total local
access lines in service
|
79,200 | 69,500 | 78,100 | 9,700 | 1,100 | 14.0 | % | 1.4 | % | |||||||||||||||||||
|
Local access
lines in service on GCI facilities
|
64,300 | 45,900 | 60,500 | 18,400 | 3,800 | 40.1 | % | 6.3 | % | |||||||||||||||||||
|
Video
|
||||||||||||||||||||||||||||
|
Basic
subscribers
|
131,200 | 125,600 | 130,300 | 5,600 | 900 | 4.5 | % | 0.7 | % | |||||||||||||||||||
|
Digital
programming tier subscribers
|
70,100 | 62,600 | 68,200 | 7,500 | 1,900 | 12.0 | % | 2.8 | % | |||||||||||||||||||
|
HD/DVR
converter boxes
|
62,900 | 43,600 | 56,900 | 19,300 | 6,000 | 44.3 | % | 10.5 | % | |||||||||||||||||||
|
Homes
passed
|
227,400 | 222,100 | 226,900 | 5,300 | 500 | 2.4 | % | 0.2 | % | |||||||||||||||||||
|
Data
|
||||||||||||||||||||||||||||
|
Cable modem
subscribers
|
92,100 | 84,100 | 91,000 | 8,000 | 1,100 | 9.5 | % | 1.2 | % | |||||||||||||||||||
|
Wireless
|
||||||||||||||||||||||||||||
|
Wireless
lines in service
|
81,200 | 66,100 | 77,000 | 15,100 | 4,200 | 22.8 | % | 5.5 | % | |||||||||||||||||||
|
Network
Access Services
|
||||||||||||||||||||||||||||
|
Data:
|
||||||||||||||||||||||||||||
|
Total ISP
access lines in service
|
1,800 | 2,600 | 2,000 | (800 | ) | (200 | ) | -30.8 | % | -10.0 | % | |||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||
|
Voice:
|
||||||||||||||||||||||||||||
|
Long-distance
subscribers
|
10,200 | 10,800 | 10,400 | (600 | ) | (200 | ) | -5.6 | % | -1.9 | % | |||||||||||||||||
|
Total local
access lines in service
|
46,200 | 42,700 | 45,400 | 3,500 | 800 | 8.2 | % | 1.8 | % | |||||||||||||||||||
|
Local access
lines in service on GCI facilities
|
17,900 | 11,900 | 15,400 | 6,000 | 2,500 | 50.4 | % | 16.2 | % | |||||||||||||||||||
|
Video
|
||||||||||||||||||||||||||||
|
Hotels and
mini-headend
subscribers
|
15,000 | 15,200 | 15,700 | (200 | ) | (700 | ) | -1.3 | % | -4.5 | % | |||||||||||||||||
|
Basic
subscribers
|
2,000 | 1,900 | 2,000 | 100 | - | 5.3 | % | 0.0 | % | |||||||||||||||||||
|
Total
basic subscribers
|
17,000 | 17,100 | 17,700 | (100 | ) | (700 | ) | -0.6 | % | -4.0 | % | |||||||||||||||||
|
Data
|
||||||||||||||||||||||||||||
|
Cable modem
subscribers
|
9,000 | 8,300 | 9,000 | 700 | - | 8.4 | % | 0.0 | % | |||||||||||||||||||
|
Wireless
|
||||||||||||||||||||||||||||
|
Wireless
lines in service
|
6,900 | 7,200 | 7,100 | (300 | ) | (200 | ) | -4.2 | % | -2.8 | % | |||||||||||||||||
|
Regulated
Operations
|
||||||||||||||||||||||||||||
|
Voice:
|
||||||||||||||||||||||||||||
|
Total local
access lines in service
|
12,300 |
NA
|
12,200 |
NA
|
NA
|
NA
|
NA
|
|||||||||||||||||||||
|
Three
Months
|
September 30,
2008
|
September 30,
2008
|
||||||||||||||||||||||||||
|
Ended
|
as Compared
to
|
as Compared
to
|
||||||||||||||||||||||||||
|
September
30,
|
September
30,
|
June
30,
|
September
30,
|
June
30,
|
September
30,
|
June
30,
|
||||||||||||||||||||||
|
2008
|
2007
|
2008
|
2007
|
2008
|
2007
|
2008
|
||||||||||||||||||||||
|
Consumer
|
||||||||||||||||||||||||||||
|
Voice
|
||||||||||||||||||||||||||||
|
Long-distance
minutes carried
(in
millions)
|
31.2 | 33.2 | 32.0 | (2.0 | ) | (0.8 | ) | -6.0 | % | -2.5 | % | |||||||||||||||||
|
Video
|
||||||||||||||||||||||||||||
|
Average
monthly gross revenue per
subscriber
|
$ | 67.18 | $ | 63.44 | $ | 65.86 | $ | 3.74 | $ | 1.32 | 5.9 | % | 2.0 | % | ||||||||||||||
|
Wireless
|
||||||||||||||||||||||||||||
|
Average
monthly gross revenue per
subscriber
|
$ | 56.48 | $ | 58.25 | $ | 57.39 | $ | (1.77 | ) | $ | (0.91 | ) | -3.0 | % | -1.6 | % | ||||||||||||
|
Network
Access Services
|
||||||||||||||||||||||||||||
|
Voice
|
||||||||||||||||||||||||||||
|
Long-distance
minutes carried
(in
millions)
|
255.8 | 321.4 | 326.2 | (65.6 | ) | (70.4 | ) | -20.4 | % | -21.6 | % | |||||||||||||||||
|
Commercial
|
||||||||||||||||||||||||||||
|
Voice:
|
||||||||||||||||||||||||||||
|
Long-distance
minutes carried
(in
millions)
|
33.3 | 33.5 | 32.9 | (0.2 | ) | 0.4 | -0.6 | % | 1.2 | % | ||||||||||||||||||
|
Total
|
||||||||||||||||||||||||||||
|
Long-distance
minutes carried
(in
millions)
|
320.3 | 388.1 | 391.1 | (67.8 | ) | (70.8 | ) | -17.5 | % | -18.1 | % | |||||||||||||||||
General
Communication, Inc.
Non-GAAP
Financial Reconciliation Schedule
(Unaudited, Amounts
in Millions)
|
Three Months
Ended
|
||||||||||||
|
September
30,
2008
(preliminary)
|
September
30,
2007 (as
restated)
|
June
30,
2008
(preliminarily restated)
|
||||||||||
|
Net
income
|
$ | 0.6 | 3.0 | 3.0 | ||||||||
|
Income tax
expense
|
1.1 | 3.0 | 2.3 | |||||||||
|
Income before
income tax expense
|
1.7 | 6.0 | 5.3 | |||||||||
|
Other
(income) expense:
|
||||||||||||
|
Interest
expense
|
13.7 | 8.6 | 10.9 | |||||||||
|
Loan and
senior notes fees
|
0.4 | 0.7 | 0.8 | |||||||||
|
Interest
income
|
(0.4 | ) | (0.1 | ) | (0.4 | ) | ||||||
|
Minority
interest
|
0.5 | --- | (0.4 | ) | ||||||||
|
Other
expense, net
|
14.2 | 9.2 | 10.9 | |||||||||
|
Operating
income
|
15.9 | 15.2 | 16.2 | |||||||||
|
Depreciation
and amortization expense
|
28.6 | 22.0 | 25.5 | |||||||||
|
Minority
interest
|
(0.5 | ) | --- | 0.4 | ||||||||
|
EBITDA (Note
2)
|
44.0 | 37.2 | 42.1 | |||||||||
|
Share-based
compensation expense
|
2.7 | 1.7 | 1.7 | |||||||||
|
EBITDAS (Note
1)
|
$ | 46.7 | 38.9 | 43.8 | ||||||||
|
Nine Months
Ended
|
||||||||
|
September 30,
2008
(preliminary)
|
September 30,
2007 (as restated)
|
|||||||
|
Net
income
|
$ | 4.7 | 11.2 | |||||
|
Income tax
expense
|
6.0 | 9.8 | ||||||
|
Income before
income tax expense
|
10.7 | 21.0 | ||||||
|
Other
(income) expense:
|
||||||||
|
Interest
expense
|
33.3 | 25.5 | ||||||
|
Loan and
senior notes fees
|
1.5 | 1.1 | ||||||
|
Interest
income
|
(0.9 | ) | (0.4 | ) | ||||
|
Minority
interest
|
(0.3 | ) | --- | |||||
|
Other
expense, net
|
33.6 | 26.2 | ||||||
|
Operating
income
|
44.3 | 47.2 | ||||||
|
Depreciation
and amortization expense
|
78.8 | 64.3 | ||||||
|
Minority
interest
|
0.4 | --- | ||||||
|
EBITDA (Note
2)
|
123.5 | 111.5 | ||||||
|
Share-based
compensation expense
|
5.6 | 3.5 | ||||||
|
EBITDAS (Note
1)
|
$ | 129.1 | 115.0 | |||||
Notes:
|
|
(1) EBITDA
(as defined in Note 2 below) before deducting share-based compensation
expense.
|
|
|
(2) EBITDA
(Earnings Before Interest, Taxes, Depreciation and Amortization) is the
sum of Net Income, Interest Expense, Loan and Senior Notes Fees, Interest
Income, Income Tax Expense, and Depreciation and Amortization
Expense. EBITDA is not presented as an alternative measure of
net income, operating income or cash flow from operations, as determined
in accordance with accounting principles generally accepted in the United
States of America. GCI's management uses EBITDA to evaluate the
operating performance of its business, and as a measure of performance for
incentive compensation purposes. GCI believes EBITDA is a
measure used as an analytical indicator of income generated to service
debt and fund capital expenditures. In addition, multiples of
current or projected EBITDA are used to estimate current or prospective
enterprise value. EBITDA does not give effect to cash used for
debt service requirements, and thus does not reflect funds available for
investment or other discretionary uses. EBITDA as presented
herein may not be comparable to similarly titled measures reported by
other companies.
|
|
|
(3) Our
results for the three and nine months ended September 30, 2008 are
preliminary as our auditors have not completed their review due to a
restatement of our Forms 10-Q for the three months ended March 31, 2008
and for the three and six months ended June 30, 2008. We are in the
process of assessing the impact of the restatement and we expect to file
Forms 10-Q/A for March 31, 2008 and June 30, 2008 as soon as
practicable. The financial information presented includes the
anticipated effects of the
restatement.
|