Contact Information: MEDIA CONTACTS John Nee 503-453-8084 john.nee@integratelecom.com Shannon Riggs 503-546-7885 shannon@lanepr.com
Integra Telecom Reports 2008 Cash Flow Growth
Leading Business Telecom Provider Responds to Challenging Economic Times
| Source: Integra Telecom
PORTLAND, OR--(Marketwire - February 10, 2009) - Integra
Telecom Inc., a facilities-based, integrated communications provider
for business, reported nearly $700 million in revenue and more than $220
million in EBITDA (earnings before interest, taxes, depreciation, and
amortization) in 2008. These preliminary, unaudited results represent more
than 40 percent year over year growth in revenue and in excess of 50
percent year over year growth in EBITDA. Revenue growth in 2008 was
primarily from Integra's acquisition of Eschelon Telecom Inc., which was
completed in late 2007. The company's 2008 EBITDA growth was the result of
the EBITDA it acquired with Eschelon as well as the substantial network and
cost savings Integra has achieved in integrating the Eschelon acquisition.
"Integra has a proven track record of weathering difficult economic times,
growing through acquisition and producing results that exceed customer and
industry standards," said Dudley
Slater, CEO of Integra Telecom. "We are committed to providing
industry-leading service to our customers, and we continue to invest in our
network to deliver new, innovative services that will help businesses
increase productivity."
EBITDA, or cash from operations, grew at a faster pace than revenues as a
result of the extensive network savings and synergies Integra has generated
through its integration of Eschelon. Integra has moved substantial volumes
of traffic off of the legacy Eschelon network that relied on leased
circuits and on to its own extensive, fiber optic network. Additional 2008
integration milestones included: integrating a workforce of 2,300
employees; developing a strong management team to lead the combined
company; major capital investments in the network; and transitioning
services for the former Eschelon customer base from a centralized support
system to Integra's decentralized model. This model gave Integra's Eschelon
customers access to a higher grade of care, delivered by local teams of
customer care representatives and technicians.
The national economic downturn and increasing unemployment trends have
challenged Integra's long record of annual organic revenue growth.
According to Slater, Integra's revenues, pro-forma for the Eschelon
acquisition on a total year over year basis, are "essentially flat."
Integra attributes this to its service of the small and medium sized
business market, which has been greatly impacted by the current economic
crisis. As these businesses have faced employee layoffs and downsized their
operations, Integra has seen increasing levels of customer losses due to
the economy.
"Integra reported record levels of new sales in 2008, yet these successes
only allowed us to hold even against the headwinds of this current economic
storm," said Slater. Still, continuing flat trending revenues ensure that
the company will continue to operate on a free cash flow positive status --
a bellwether of success in the telecom industry.
"Just as our customers respond to the declining economy, Integra is taking
proactive steps with its investors and banks to realign its covenants to
the realities of today's environment," said Slater. "Our current loan
agreements were put in place nearly two years ago, before any of our banks
or investors could have imagined today's economic climate. These agreements
include loan covenants that contemplate significant revenue growth that is
not likely to happen in this economy."
"Integra is a privately-held company and we have worked with most of our
banks and investors for many years. This is the second recession we've
managed through and we feel fortunate to be free cash flow positive. Our
cash from operations, of more than $220 million, continues to be well above
our current cash debt service requirements of $100 million and we are
confident we will be able to amend our loan agreements in a manner that
accommodates all parties."
Integra continues to invest in its network, delivering reliable
telecommunications products and services that meet its customers' needs.
The company expects to see modest growth toward the end of 2009 as regional
businesses continue to demand its locally based, industry-leading telecom
products and services. "While the current economic environment has required
businesses everywhere to reevaluate their growth strategies, we are
planning for growth and are doing so with the interests of our employees
and customers as our top priorities," said Slater. "As a result, we expect
to be well positioned to benefit from growth opportunities when the broader
economy recovers."
About Integra Telecom
Integra Telecom Inc. provides
voice, data and Internet communications to thousands of business and
carrier customers in 11 Western states, including: Arizona, California,
Colorado, Idaho, Minnesota, Montana, Nevada, North Dakota, Oregon, Utah and
Washington. The company owns and operates a best-in-class fiber-optic
network comprised of metropolitan access networks, a nationally acclaimed
tier one Internet and data network, and a 4,700-mile high-speed long haul
network. The company has earned some of the highest customer loyalty and
customer satisfaction ratings in the telecommunications industry. Primary
equity investors in the company include Warburg Pincus, Banc of America
Capital Investors and Boston Ventures. Integra Telecom and Electric
Lightwave are registered trademarks of Integra Telecom Inc. For more
information, visit www.integratelecom.com.