PhoneTel Technologies, Inc. Reports Financial Results for Twelve Months Ended December 31, 2001
CLEVELAND--(BUSINESS WIRE)--March 29, 2002--PhoneTel Technologies, Inc. (OTCBB:PHTE) today reported financial results for year ended December 31, 2001.
Revenues for 2001 were $45.0 million compared to $58.8 million in 2000. The decline in revenue is a result of the Company's ongoing strategy to remove unprofitable payphones, lower call volumes from increased wireless competition and continued migration of payphone traffic to lower revenue "dial-around" calling.
For the years ended December 31, EBITDA from recurring operations decreased $1.4 million from $1.8 million in 2000 to $0.4 million in 2001. The decline in EBITDA from recurring operations was due to the decline in revenue offset by the decrease in operating expenses, including substantial reductions in field operating costs resulting from the previously announced shared payphone servicing agreement with Davel Communications, Inc. Operating expenses were also lower in 2001 as a result of a $4.4 million write-off of dial-around compensation accounts receivable in the fourth quarter of 2000. The loss from operations decreased from $37.5 million to $31.1 million in 2001 primarily due to the decrease in charges relating to payphone location contracts, which resulted from asset impairment and the removal of unprofitable payphones and a reduction in the related depreciation and amortization. The Company's net loss decreased by $5.8 million, or 12.0% from $48.4 million in 2000 to $42.6 million in 2001. The Company's net loss per share declined from $4.75 to $4.18 per common share in 2001.
On February 21, 2002, the Company announced that it had executed a definitive merger agreement with Davel Communications, Inc. in which PhoneTel will become a wholly owned subsidiary of Davel. The merger agreement is subject to approval by the shareholders of both companies and the receipt of material third party and governmental approvals and consents.
In connection with the merger, the existing secured lenders of both PhoneTel and Davel have agreed to exchange a substantial amount of debt for equity securities issued by the respective companies and to restructure the remaining debt. In addition, on February 19, 2002 PhoneTel and Davel have each executed amendments to their existing credit agreements and have entered into a new combined $10 million senior credit facility, the proceeds of which will be used to finance certain operating and transaction expenses.
In connection with the debt exchange, immediately prior to the Davel merger, PhoneTel's secured lenders will own 87% of PhoneTel's outstanding common stock, with the remaining secured debt not to exceed $36.5 million (compared to $62.6 million outstanding at December 31, 2001). Immediately prior to the Davel merger, existing shareholders of PhoneTel's common stock will own 9% of PhoneTel's outstanding shares, and 4% of the common stock will be reserved for issuance of stock options and awards to PhoneTel employees.
Immediately following the merger, current PhoneTel shareholders will own approximately 3.28% of the shares of Davel common stock, and current Davel shareholders will own approximately 1.91%. Of the remaining shares, 4.00% are intended to be reserved for issuance of employee stock options and awards, and the companies' current lenders will own approximately 90.81%. In connection with the merger, the then outstanding debt of the existing secured lenders of both entities (approximately $337 million at December 31, 2001) will be reduced to $100 million in debt of the merged entity through the exchange of debt for equity securities.
The merger is currently expected to close in the third quarter of 2002. |
