Madison River Communications
Local Companies. Global Connectivity.
For Immediate Release: : January 22, 2001
Mebane, North Carolina
MADISON RIVER COMMUNICATIONS PRE-ANNOUNCES OPERATING RESULTS AND BALANCE SHEET ENHANCEMENTS
Contact: Paul Sunu, Chief Financial Officer at (919) 563-8222 or Rick Whitener, Vice President-Financial Reporting at (919) 563-8374
Madison River Communications announced today that it expects its fiscal year 2000 results to be in line with its plan of approximately $170 million in revenues and $53 million in adjusted EBITDA. The Company anticipates announcing its financial and operating results for 2000 by the end of February 2001. Madison River also reported that it entered into definitive agreements to refinance its existing debt with the Rural Telephone Finance Cooperative (the "RTFC") and to sell certain non-strategic assets. The Company also completed the funding of a previously announced equity commitment by its current financial investors. The debt refinancing and asset sale are subject to regulatory approvals.
Steve Vanderwoude, Madison River's Chairman and CEO stated, "We have continued to achieve our operating targets and we remain focused on the successful execution of our plan. We have also been successful in managing our balance sheet to more strongly support those operating plans."
The Company announced that on December 29, 2000, it entered into a definitive agreement with the RTFC to refinance its five existing loan agreements with the RTFC. Under the new structure, the Company consolidated its five existing loan agreements with the RTFC into one new loan agreement. Upon completion of the transaction, the outstanding debt amount owed to the RTFC would increase approximately $11.3 million, to $478.0 million due to the purchase of additional subordinated capital certificates with the RTFC. The blended interest rate of the new agreement is 7.98%, down from 8.13% on the previous agreements. Principal repayment terms and security provisions under the new agreement are substantially the same as under the previous agreements. Additionally, the new facility consolidated the four separate secured lines of credit which totaled $31 million into a new $31 million facility with no annual pay-down provisions.
"Our excellent relationship with the RTFC made it possible to enter into this transaction before our fiscal year-end," stated Paul Sunu, Madison River's Chief Financial Officer. He continued, "With the consolidation of the various agreements into one, we have achieved a new debt structure with the RTFC that is less complex and more manageable than our previous arrangements. The operating flexibility provided by the new agreement takes advantage of our ILECs as a group and not as individual entities as was the case under the separate agreements. We expect that this new structure will provide us with after tax cash flow benefits over the next three years of approximately $12 million." The transaction is subject to regulatory approval and is expected to be completed during the first quarter of 2001.
On December 27, 2000, the Company entered into a definitive agreement to sell over 4,200 access lines and other operating assets in the exchanges of Staunton and Livingston, Illinois to Madison Telephone Company. "This transaction will monetize non-strategic assets to help fund our rapidly growing expansion operations and the price is in line with the average price paid per access line over the last couple of years," stated Sunu. The transaction is subject to regulatory approval and is expected to be completed during the second quarter of 2001.
Finally, as expected, the Company received its planned $24 million equity contribution from affiliates of Madison Dearborn Partners, Goldman Sachs and Providence Equity Partners and members of management. The Company ended the year with approximately $63 million in cash and cash equivalents. For 2001, the Company anticipates revenues of approximately $200 million and an adjusted EBITDA in the range of $73 million.
The statements, other than statements of historical fact, included in this press release are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as ''may,'' ''will,'' ''expect,'' ''intend,'' ''estimate,'' ''anticipate,'' ''plan,'' ''seek'' or ''believe.'' We believe that the expectations reflected in such forward-looking statements are accurate. However, we cannot assure you that such expectations will occur. Our actual future performance could differ materially from such statements. Factors that could cause or contribute to such differences include, but are not limited to, the following:
For more information, see the "Risk Factors" section beginning on page 11 of our Registration Statement on Form S-4 (Registration No. 333-36804) filed with the Securities and Exchange Commission.
You should not unduly rely on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, we are not obligated to publicly release any revisions to these forward-looking statements to reflect events or circumstances occurring after the date of this press release or to reflect the occurrence of unanticipated events.
Madison River Capital, LLC operates as Madison River Communications and is a wholly owned subsidiary of Madison River Telephone Company, LLC. Madison River Communications operates and enhances rural telephone companies and uses advanced technology to provide competitive communications services in nearby markets. Madison River Telephone Company, LLC is owned by affiliates of Madison Dearborn Partners Inc., Goldman, Sachs & Co., Providence Equity Partners and members of management.