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Paetec Releases 3Q 2008 Results(Wireless News Via Acquire Media NewsEdge) Paetec Holding Corp. announced third quarter 2008 financial and operating results, which included: - Revenue of $406.1 million, which represented a 43.0 percent increase over third quarter 2007 revenue of $283.9 million; - Adjusted EBITDA of $57.8 million, which represented a 7.4 percent increase over third quarter 2007 adjusted EBITDA of $53.8 million; - Net loss, including a preliminary non-cash goodwill impairment charge of $340 million, of $(355.8) million compared to a net loss of $(5.1) million for third quarter 2007; - Net cash provided by operating activities of $24.8 million for third quarter 2008 compared to $39.5 million for the 2007 quarter; - Free cash flow of $26.4 million, which represented the 23rd consecutive quarter in which Paetec or its predecessor generated positive free cash flow; and - An increase of 52.8 percent in the number of access line equivalents in service, from 2.92 million as of December 31, 2007 to 4.47 million as of September 30. In commenting on the quarter, Paetec Chairman and CEO, Arunas A. Chesonis, said, "Third quarter results came in as expected in light of the difficult macroeconomic environment. We continue to be encouraged by solid new sales, strength in our data offerings, and our overall positioning as a leading communications alternative to the incumbent operators. Our financial position remains strong, and Paetec continues to take the necessary steps to better align its business to the current operating environment." During the third quarter 2008, Paetec said it recorded a preliminary non-cash goodwill impairment charge of $340 million following its consideration of various factors, including a decline in the market price of Paetec's common stock and continued adverse conditions in the financial markets and the general economy. Paetec will record any adjustments to the preliminary charge during fourth quarter 2008. Total revenue for third quarter 2008 increased 43.0 percent to $406.1 million from $283.9 million for third quarter 2007, principally due to the addition of the operating results of McLeodUSA, which Paetec acquired on February 8. Network services revenue, which accounted for 78.7 percent of third quarter 2008 total revenue, increased 36.9 percent year-over-year to $319.7 million. In addition to the inclusion of McLeodUSA's operations for the 2008 third quarter, network services revenue in the 2008 quarter benefited from growth in Paetec's Dynamic IP, MPLS VPN, and network security products. Growth of the network services business on a year-over-year basis, as in second quarter 2008 compared to second quarter 2007, was tempered primarily by slower growth in billable minutes of use, pressure on carrier access, and an increase in disconnects. Integrated solutions accounted for the remaining 4.0 percent of third quarter 2008 revenue, increasing 58.5 percent over third quarter 2007 to $16.1 million. The addition of the results of Allworx Corp., which Paetec acquired during the fourth quarter of 2007, contributed $2.9 million to the increase, the company noted in a release. ((Comments on this story may be sent to [email protected])) ((Distributed on behalf of 10Meters via M2 Communications Ltd - http://www.m2.com)) ((10Meters - http://www.10meters.com)) Copyright ? 2008 Wireless News |