GCI Reports Preliminary Second Quarter 2008 Financial Results

- Consolidated revenue of $142.5 million

ANCHORAGE, Alaska, July 31 /PRNewswire-FirstCall/ -- GCI (Nasdaq: GNCMA)
today reported preliminary second quarter 2008 revenues of $142.5 million, an
increase of 9.7 percent over the second quarter of 2007. Second quarter 2008
earnings before interest, taxes, depreciation, amortization and share based
compensation expense (EBITDAS) totaled $43.4 million. EBITDAS increased
$1.8 million or 4.2 percent from the second quarter of 2007. The increase in
EBITDAS was attributable to growth in all segments except network access.
GCI's second quarter 2008 net income is expected to be $3.6 million, or
earnings per diluted share of $0.07. The company's second quarter net income
compares to net income of $5.9 million, or earnings per diluted share of $0.11
in the same period of 2007.
Second quarter 2008 revenue increased along all products lines when
compared to the prior year. Second quarter results include the acquisition of
the United companies as of June 1, 2008.
Revenues for the company increased $7.8 million, or 5.8 percent, over
first quarter 2008 revenues of $134.7 million. Second quarter EBITDAS of
$43.4 million increased 13.6 percent from $38.2 million in the first quarter
of 2008.
"We just concluded another excellent quarter," said GCI president Ron
Duncan. "GCI's second quarter results set new records for both revenue and
EBITDAS. Our strong financial results are being driven by solid and growing
customer metrics across all categories. We are on target to achieve our goals
for 2008 and 2009."
"GCI achieved a number of important milestones since the end of the first
quarter. We closed our acquisition of the United companies. We successfully
transitioned all our rural telecommunications traffic to the Galaxy 18
satellite. Shortly after the end of the quarter we closed our acquisition of
Alaska Wireless, LLC. This acquisition jump starts GCI's rural wireless
initiative and along with our own rural wireless build-out will allow GCI to
provide wireless service in more than 40 rural communities before the end of
the year and more than 200 rural communities within the next 24 months. The
build-out plans for our urban wireless networks are proceeding and we hope to
close our acquisition of the remaining interest in Alaska DigiTel prior to the
end of the third quarter."
"The third quarter marks the start of our wireless transition. Significant
amounts of EBITDAS will be shifted from our network access business to our
consumer and commercial business units as a result of the transition of AT&T
Mobility traffic off of our carrier network and our transition of wireless
customers from the AT&T network to our own," said Duncan. This process will
add significantly to EBITDAS when it is complete by this time next year. I
anticipate continued improvement in customer counts and operating metrics
during the third quarter. Financial results should be similar to the just
completed quarter. Third quarter EBITDAS may be burdened some by the costs and
pace of the wireless transition. I am confident, however, that we will hit our
announced goals for both 2008 and 2009."
GCI reaffirms 2008 guidance for revenues of $550 million to $560 million
and EBITDAS 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. Second
quarter 2008 results exceeded guidance for revenues of $133 million to
$136 million and for EBITDAS in excess of the first quarter. Third quarter
revenues are expected to total $138 million to $141 million, not including
revenues from the amortization of fiber sales.
Highlights
-- Consumer revenues totaled $62.1 million, an increase of 12.7 percent
over the prior year quarter and an increase of 1.2 percent over the first
quarter of 2008. The increases were across all products and services.
-- GCI local access lines increased by 14,800 over the first quarter of
2008. The increase includes access lines from the acquisition of the United
companies. Consumer, network access, commercial and other local access lines
totaled 137,700 at the end of the second quarter of 2008, representing an
estimated 32 percent share of the total access line market in Alaska. GCI
began providing local access services on its own facilities in the Nome market
during the second quarter of 2008.
-- GCI has provisioned 89,700 access lines on its own facilities at the
end of the second quarter of 2008, an increase of 18,600 lines over the first
quarter of 2008 and an increase of 35,000 lines when compared to the end of
the second quarter of the prior year. The increase in provisioned lines
includes 12,200 lines acquired from the United companies. The company had
provisioned 54,700 access lines on its own facilities at the end of the second
quarter of 2007. Plant upgrades were completed in the Fairbanks, Seward and
Homer markets during the second quarter.
-- GCI had 100,000 consumer and commercial cable modem access customers
at the end of the second quarter of 2008, an increase of 300 over the 99,700
cable modem customers at the end of the first quarter 2008. Average monthly
revenue per cable modem totaled $37.77 for the second quarter of 2008 as
compared to $36.71 for the first quarter of 2008, an increase of 2.9 percent.
The increase in average monthly revenues arises primarily from customers
upgrading to plans with increased levels of service.
-- GCI has 84,100 wireless subscribers, an increase of 3,900 subscribers
from the first quarter of 2008.
-- GCI's contractors began laying 750 miles of undersea fiber that will
connect 50,000 residents in several communities in Southeast Alaska. The
$33 million project is expected to be completed before the end of 2008.
-- GCI is on track with its redundant fiber route to Fairbanks and with
its diverse fiber route along Turnagain Arm near Anchorage. The Turnagain Arm
project eliminates a current bottleneck where all of the fiber routes out of
Alaska come unacceptably close together and when completed will allow GCI's
lower 48 fiber ring to fully meet the diversity requirements of the United
States Department of Defense.
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, July 31, 2008 beginning at 2 p.m. (Eastern). To access the briefing
on July 31, dial 888-791-1856 (International callers should dial 210-234-0001)
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 http://www.gci.com and follow the instructions. A replay of the call will
be available for 72-hours by dialing 866-413-9161, access code 7461
(International callers should dial 203-369-0666.)
Full text and tables can be found at http://www.gci.com.
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
http://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.
SOURCE GCI

John Lowber, +1-907-868-5628, jlowber@gci.com, or Bruce Broquet,
+1-907-868-6660, bbroquet@gci.com, or David Morris, +1-907-265-5396,
dmorris@gci.com