Davel Communications, Inc. Reports Fourth Quarter And Year-End Results

Amendment To Credit Facility Waives Certain Interest And Principal Payments

Through January 11, 2002



Apr 02, 2001, 01:00 ET from Davel Communications, Inc.

    TAMPA, Fla., April 2 /PRNewswire/ -- Davel Communications, Inc.
 (OTC Bulletin Board:   DAVL.OB), the nation's largest independent provider of
 payphone services, today announced results for the fourth quarter and year
 ended December 31, 2000.
 
     Fourth Quarter 2000
     The Company reported an operating loss of $17.0 million for the fourth
 quarter ended December 31, 2000 before non-recurring, non-cash charges.
 Non-recurring charges in the quarter of $49.0 million reflect the impairment
 of long-lived assets, consisting of an adjustment in the value of installed
 and uninstalled telephones, location contracts and a write-down of goodwill
 related to the acquisition of Communications Central Inc. in 1998.  This
 compares with an operating loss of $2.5 million for the fourth quarter ended
 December 31, 1999 before non-recurring charges of $1.6 million relating to
 restructuring charges associated with the Peoples Telephone Company merger.
 The increase in operating loss occurred because efforts to reduce operating
 expense levels could not keep pace with the continuing decline in revenues.
 Including non-recurring charges and other expenses, the Company reported a net
 loss of $73.5 million, or $6.62 per share, for the fourth quarter ended
 December 31, 2000.  This compares to a net loss of approximately $8.4 million,
 or $0.77 per share, for the fourth quarter ended December 31, 1999.
     Total revenue in the fourth quarter ended December 31, 2000 decreased
 43.3% to $22.3 million from $39.4 million in the quarter ended December 31,
 1999.  The decrease is a result of the Company's ongoing strategy to remove
 unprofitable phones, a change in accounting estimate of dial-around revenue,
 lower call volumes arising from increased competition from wireless
 communication services and changes in call traffic.  Coin call revenue
 declined 26.8% to $17.9 million in the fourth quarter ended December 31, 2000
 from $24.5 million in the fourth quarter ended December 31, 1999.  Non-coin
 call revenue declined 43.0%, to $8.5 million in the quarter ended December 31,
 2000, before a $4.1 million charge for change in accounting estimate
 reflecting a reduction in the estimated number of dial-around calls from
 previous accounting periods.  Non-coin call revenue was $14.9 million in the
 quarter ended December 31, 1999.  Including the fourth quarter adjustment to
 dial-around revenue, non-coin revenue declined 70.5% to $4.4 million in the
 fourth quarter 2000 from the prior year fourth quarter.  Impacting both coin
 call and non-coin call revenue was a decrease in the number of installed
 payphones as the Company continued its strategy of removing unprofitable
 phones.
     The Company's direct costs are primarily telephone charges, commissions
 and service, maintenance and network costs.  Such costs during the fourth
 quarter ended December 31, 2000 were $27.4 million compared with $24.8 million
 incurred during the quarter ended December 31, 1999.  Increases occurred in
 telephone charges, service, maintenance and network costs due to property and
 franchise taxes, regulatory compliance, severance costs for staff reductions
 (approximately 100 employees) and cost initiatives in field operations, which
 are expected to realize annual cost savings in excess of $7 million during
 2001.  Such charges were partially offset by a decrease in commission expense
 resulting from lower commissionable revenues.
     Selling, general and administrative expenses increased 36.9% to
 $6.0 million for the fourth quarter ended December 31, 2000 from $4.4 million
 for the quarter ended December 31, 1999.  The increase was primarily
 attributable to fees for professional services, salaries and wages and
 regulatory compliance, partially offset by reductions in consultant services,
 payroll-related expenses and insurance.
 
     2000 Results
     For the year ended December 31, 2000, the Company reported an operating
 loss of $35.3 million, excluding the effect of the $49.0 million non-recurring
 charge taken in the fourth quarter.  The net loss for the year ended
 December 31, 2000 was $111.5 million, or $10.02 per share.  This compares to a
 net loss of $78.7 million, or $7.40 per share, for 1999, which included
 $52.8 million of non-recurring charges primarily related to an impairment of
 the intangible assets purchased in the CCI acquisition.  Excluding the
 charges, the Company reported an operating loss of $4.3 million in 1999.
     Total revenue for the year ended December 31, 2000 declined to
 $126.3 million from $175.8 million for the year ended December 31, 1999.  Coin
 call revenue declined from $110.8 million for the year ended December 31, 1999
 to $82.2 million for the year ended December 31, 2000.  Non-coin call revenue
 declined to $44.1 million for the year ended December 31, 2000 from
 $65.1 million for the year ended December 31, 1999.  Impacting both coin call
 and non-coin call revenue was a 10.4% decrease in the number of Company-owned
 payphones during the period.  In addition to having fewer phones in service,
 the Company continued to experience lower call volumes as a result of
 competition from wireless communications services as well as changes in call
 traffic.
     Direct costs associated with telephone charges, commissions, and service,
 maintenance and network costs decreased 10.5% to $107.2 million for the year
 ended December 31, 2000 from $119.9 million for the year ended
 December 31, 1999.  Declines of $14.1 million in commissions and service,
 maintenance and network costs due to restructuring of field operations and
 removal of underperforming telephones were partially offset by a $1.5 million
 increase in telephone charges.
     Selling, general and administrative expenses increased 6.2% to
 $22.4 million for the year ended December 31, 2000, from $21.1 million for the
 year ended December 31, 1999.  The increase was primarily attributable to fees
 for professional advisors and legal services, an adjustment for allowance for
 doubtful accounts and operating software expenses.  These costs were partially
 offset by a reduction in salaries and related costs as well as most other
 expense categories related to the consolidation of administrative functions in
 Tampa, Florida.  The Company expects that such cost saving initiatives will
 have a greater impact on operating results in 2001.
     Raymond A. Gross, Davel's Chairman and Chief Executive Officer, commented,
 "While top line results continue to decline due to removal of unprofitable
 phones and competition from wireless communications service providers, we
 continue to work aggressively to rationalize our overall cost structure,
 improve route density and service quality by clustering our telephones, remove
 underperforming telephones, and emphasize expansion in economically favorable
 territories."
     Mr. Gross continued, "We are also encouraged by recent state regulatory
 decisions reducing line costs and providing refunds for historical overcharges
 by the local telephone companies.  We are hopeful that we will soon see
 meaningful improvements at the federal level with respect to both line cost
 guidelines and improvements in the dial-around compensation collection
 system -- which together should help restore needed vitality to the public
 communications industry sector, including Davel."
 
     Sixth Amendment to Credit Facility
     The Company also announced that it has executed a Sixth Amendment to the
 Credit Agreement and Waiver from the Lenders of its senior secured debt.  In
 the third quarter of 2000, Davel executed an amendment that waived certain
 interest and principal payments through January 12, 2001.  This new amendment,
 effective as of January 12, 2001, provides for a revised schedule of certain
 principal payments during 2001, with the remaining principal and interest due
 January 11, 2002.  In exchange for the payment relief, the Company agreed to
 certain budgetary restrictions on its expenses and imposition of restrictive
 covenants regarding capital expenditures, location signing bonuses and cash
 flow performance.
     Mr. Gross concluded, "Despite the industry-wide challenges that Davel and
 other independent payphone operators continue to face, we are pleased our
 banks continue to support our efforts.  The one-year extension replaces a
 series of quarterly extensions and should give us the added flexibility to
 execute our operating plan and address these challenges in an effective
 manner."
     The Company's ability to meet its debt service obligations may be
 dependent upon its ability to obtain additional modifications to the Senior
 Credit Facility.  There can be no assurance, however, that the Company will
 obtain any such additional amendments to its Senior Credit Facility, should
 any be necessary in the future, or that the Company will have the ability to
 fund operations, make capital expenditures and meet debt service obligations.
     Founded in 1971, Davel Communications, Inc. is the largest independent
 payphone provider in the United States.  Headquartered in Tampa, Florida,
 Davel operates more than 67,000 payphones in 44 states and the District of
 Columbia.
 
     Forward-Looking Statements
     Certain of the statements contained herein may be, within the meaning of
 Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934, forward-looking statements (rather than historical
 facts) that are subject to risks and uncertainties that could cause actual
 results to differ materially from those described in the forward-looking
 statements.  Such forward-looking statements involve known and unknown risks,
 uncertainties and other factors which may cause the actual results,
 performance or achievements of Davel Communications, Inc. to be materially
 different from any future results, performance or achievements expressed or
 implied by such forward-looking statements.  These forward-looking statements
 are based on management's expectations as of the date hereof, and the Company
 does not undertake any responsibility to update any of these statements in the
 future.  Information on significant potential risks and uncertainties are set
 forth more fully in the Company's Annual Report on Form 10-K for the year
 ended December 31, 2000 and in the Company's 2000 Proxy Statement.
 
 To receive further information about Davel Communications, Inc., via fax at no
 charge, dial 1-800-PRO-INFO and enter code DAVL.
 
 
                  DAVEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (Unaudited)
                       (In thousands, except share data)
 
                              Three Months Ended             Year Ended
 
                            Dec. 31,      Dec. 31,     Dec. 31,      Dec. 31,
     Revenues                 2000         1999          2000          1999
     Coin calls             $17,946       $24,505      $82,205      $110,790
     Non-coin calls           4,393        14,908       44,066        65,056
 
     Total revenues          22,339        39,413      126,271       175,846
 
     Costs and expenses
      Telephone charges       8,968         7,737       38,290        36,783
      Commissions             8,887        10,036       34,619        41,014
      Service, maintenance
       and network costs      9,542         7,072       34,333        42,077
      Depreciation and
       amortization           5,903        12,756       32,004        39,204
      Asset valuation charge
       and other             49,002         1,570       49,002        52,794
      Selling, general and
       administrative         5,970         4,360       22,365        21,063
 
     Total operating costs
      and expenses           88,272        43,531      210,613       232,935
 
     Operating loss         (65,933)       (4,118)     (84,342)      (57,089)
 
      Interest expense        7,784         5,973       27,420        23,183
      Other (income) expense    (96)           55         (282)          229
     Loss from operations
      before income taxes  $(73,621)     $(10,146)    (111,480)      (80,501)
 
      Income tax benefit
       (expense)                 72         1,755           --         1,755
 
     Net loss              $(73,549)      $(8,391)   $(111,480)     $(78,746)
 
     Basic and diluted
      loss per share         $(6.62)       $(0.77)     $(10.02)       $(7.40)
 
     Weighted average
      shares
      outstanding        11,169,683    10,835,221   11,125,582    10,659,594
 
 
 
                  DAVEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                          SELECTED BALANCE SHEET DATA
                                  (Unaudited)
                                 (In thousands)
 
                                                 Dec. 31, 2000   Dec. 31, 1999
     Total current assets                             $21,037        $31,981
     Property and equipment                            64,702        115,558
     Intangibles                                        2,571         27,142
     Other assets                                       4,877          6,080
     Total assets                                     $93,187       $180,761
 
     Total current liabilities                        278,615         49,019
     Long-term liabilities                                964        206,821
     Stockholders' equity (deficit)                  (186,392)       (75,079)
     Total liabilities and stockholders'
      equity (deficit)                                $93,187       $180,761
 
 
 

SOURCE Davel Communications, Inc.
    TAMPA, Fla., April 2 /PRNewswire/ -- Davel Communications, Inc.
 (OTC Bulletin Board:   DAVL.OB), the nation's largest independent provider of
 payphone services, today announced results for the fourth quarter and year
 ended December 31, 2000.
 
     Fourth Quarter 2000
     The Company reported an operating loss of $17.0 million for the fourth
 quarter ended December 31, 2000 before non-recurring, non-cash charges.
 Non-recurring charges in the quarter of $49.0 million reflect the impairment
 of long-lived assets, consisting of an adjustment in the value of installed
 and uninstalled telephones, location contracts and a write-down of goodwill
 related to the acquisition of Communications Central Inc. in 1998.  This
 compares with an operating loss of $2.5 million for the fourth quarter ended
 December 31, 1999 before non-recurring charges of $1.6 million relating to
 restructuring charges associated with the Peoples Telephone Company merger.
 The increase in operating loss occurred because efforts to reduce operating
 expense levels could not keep pace with the continuing decline in revenues.
 Including non-recurring charges and other expenses, the Company reported a net
 loss of $73.5 million, or $6.62 per share, for the fourth quarter ended
 December 31, 2000.  This compares to a net loss of approximately $8.4 million,
 or $0.77 per share, for the fourth quarter ended December 31, 1999.
     Total revenue in the fourth quarter ended December 31, 2000 decreased
 43.3% to $22.3 million from $39.4 million in the quarter ended December 31,
 1999.  The decrease is a result of the Company's ongoing strategy to remove
 unprofitable phones, a change in accounting estimate of dial-around revenue,
 lower call volumes arising from increased competition from wireless
 communication services and changes in call traffic.  Coin call revenue
 declined 26.8% to $17.9 million in the fourth quarter ended December 31, 2000
 from $24.5 million in the fourth quarter ended December 31, 1999.  Non-coin
 call revenue declined 43.0%, to $8.5 million in the quarter ended December 31,
 2000, before a $4.1 million charge for change in accounting estimate
 reflecting a reduction in the estimated number of dial-around calls from
 previous accounting periods.  Non-coin call revenue was $14.9 million in the
 quarter ended December 31, 1999.  Including the fourth quarter adjustment to
 dial-around revenue, non-coin revenue declined 70.5% to $4.4 million in the
 fourth quarter 2000 from the prior year fourth quarter.  Impacting both coin
 call and non-coin call revenue was a decrease in the number of installed
 payphones as the Company continued its strategy of removing unprofitable
 phones.
     The Company's direct costs are primarily telephone charges, commissions
 and service, maintenance and network costs.  Such costs during the fourth
 quarter ended December 31, 2000 were $27.4 million compared with $24.8 million
 incurred during the quarter ended December 31, 1999.  Increases occurred in
 telephone charges, service, maintenance and network costs due to property and
 franchise taxes, regulatory compliance, severance costs for staff reductions
 (approximately 100 employees) and cost initiatives in field operations, which
 are expected to realize annual cost savings in excess of $7 million during
 2001.  Such charges were partially offset by a decrease in commission expense
 resulting from lower commissionable revenues.
     Selling, general and administrative expenses increased 36.9% to
 $6.0 million for the fourth quarter ended December 31, 2000 from $4.4 million
 for the quarter ended December 31, 1999.  The increase was primarily
 attributable to fees for professional services, salaries and wages and
 regulatory compliance, partially offset by reductions in consultant services,
 payroll-related expenses and insurance.
 
     2000 Results
     For the year ended December 31, 2000, the Company reported an operating
 loss of $35.3 million, excluding the effect of the $49.0 million non-recurring
 charge taken in the fourth quarter.  The net loss for the year ended
 December 31, 2000 was $111.5 million, or $10.02 per share.  This compares to a
 net loss of $78.7 million, or $7.40 per share, for 1999, which included
 $52.8 million of non-recurring charges primarily related to an impairment of
 the intangible assets purchased in the CCI acquisition.  Excluding the
 charges, the Company reported an operating loss of $4.3 million in 1999.
     Total revenue for the year ended December 31, 2000 declined to
 $126.3 million from $175.8 million for the year ended December 31, 1999.  Coin
 call revenue declined from $110.8 million for the year ended December 31, 1999
 to $82.2 million for the year ended December 31, 2000.  Non-coin call revenue
 declined to $44.1 million for the year ended December 31, 2000 from
 $65.1 million for the year ended December 31, 1999.  Impacting both coin call
 and non-coin call revenue was a 10.4% decrease in the number of Company-owned
 payphones during the period.  In addition to having fewer phones in service,
 the Company continued to experience lower call volumes as a result of
 competition from wireless communications services as well as changes in call
 traffic.
     Direct costs associated with telephone charges, commissions, and service,
 maintenance and network costs decreased 10.5% to $107.2 million for the year
 ended December 31, 2000 from $119.9 million for the year ended
 December 31, 1999.  Declines of $14.1 million in commissions and service,
 maintenance and network costs due to restructuring of field operations and
 removal of underperforming telephones were partially offset by a $1.5 million
 increase in telephone charges.
     Selling, general and administrative expenses increased 6.2% to
 $22.4 million for the year ended December 31, 2000, from $21.1 million for the
 year ended December 31, 1999.  The increase was primarily attributable to fees
 for professional advisors and legal services, an adjustment for allowance for
 doubtful accounts and operating software expenses.  These costs were partially
 offset by a reduction in salaries and related costs as well as most other
 expense categories related to the consolidation of administrative functions in
 Tampa, Florida.  The Company expects that such cost saving initiatives will
 have a greater impact on operating results in 2001.
     Raymond A. Gross, Davel's Chairman and Chief Executive Officer, commented,
 "While top line results continue to decline due to removal of unprofitable
 phones and competition from wireless communications service providers, we
 continue to work aggressively to rationalize our overall cost structure,
 improve route density and service quality by clustering our telephones, remove
 underperforming telephones, and emphasize expansion in economically favorable
 territories."
     Mr. Gross continued, "We are also encouraged by recent state regulatory
 decisions reducing line costs and providing refunds for historical overcharges
 by the local telephone companies.  We are hopeful that we will soon see
 meaningful improvements at the federal level with respect to both line cost
 guidelines and improvements in the dial-around compensation collection
 system -- which together should help restore needed vitality to the public
 communications industry sector, including Davel."
 
     Sixth Amendment to Credit Facility
     The Company also announced that it has executed a Sixth Amendment to the
 Credit Agreement and Waiver from the Lenders of its senior secured debt.  In
 the third quarter of 2000, Davel executed an amendment that waived certain
 interest and principal payments through January 12, 2001.  This new amendment,
 effective as of January 12, 2001, provides for a revised schedule of certain
 principal payments during 2001, with the remaining principal and interest due
 January 11, 2002.  In exchange for the payment relief, the Company agreed to
 certain budgetary restrictions on its expenses and imposition of restrictive
 covenants regarding capital expenditures, location signing bonuses and cash
 flow performance.
     Mr. Gross concluded, "Despite the industry-wide challenges that Davel and
 other independent payphone operators continue to face, we are pleased our
 banks continue to support our efforts.  The one-year extension replaces a
 series of quarterly extensions and should give us the added flexibility to
 execute our operating plan and address these challenges in an effective
 manner."
     The Company's ability to meet its debt service obligations may be
 dependent upon its ability to obtain additional modifications to the Senior
 Credit Facility.  There can be no assurance, however, that the Company will
 obtain any such additional amendments to its Senior Credit Facility, should
 any be necessary in the future, or that the Company will have the ability to
 fund operations, make capital expenditures and meet debt service obligations.
     Founded in 1971, Davel Communications, Inc. is the largest independent
 payphone provider in the United States.  Headquartered in Tampa, Florida,
 Davel operates more than 67,000 payphones in 44 states and the District of
 Columbia.
 
     Forward-Looking Statements
     Certain of the statements contained herein may be, within the meaning of
 Section 27A of the Securities Act of 1933 and Section 21E of the Securities
 Exchange Act of 1934, forward-looking statements (rather than historical
 facts) that are subject to risks and uncertainties that could cause actual
 results to differ materially from those described in the forward-looking
 statements.  Such forward-looking statements involve known and unknown risks,
 uncertainties and other factors which may cause the actual results,
 performance or achievements of Davel Communications, Inc. to be materially
 different from any future results, performance or achievements expressed or
 implied by such forward-looking statements.  These forward-looking statements
 are based on management's expectations as of the date hereof, and the Company
 does not undertake any responsibility to update any of these statements in the
 future.  Information on significant potential risks and uncertainties are set
 forth more fully in the Company's Annual Report on Form 10-K for the year
 ended December 31, 2000 and in the Company's 2000 Proxy Statement.
 
 To receive further information about Davel Communications, Inc., via fax at no
 charge, dial 1-800-PRO-INFO and enter code DAVL.
 
 
                  DAVEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF OPERATIONS
                                  (Unaudited)
                       (In thousands, except share data)
 
                              Three Months Ended             Year Ended
 
                            Dec. 31,      Dec. 31,     Dec. 31,      Dec. 31,
     Revenues                 2000         1999          2000          1999
     Coin calls             $17,946       $24,505      $82,205      $110,790
     Non-coin calls           4,393        14,908       44,066        65,056
 
     Total revenues          22,339        39,413      126,271       175,846
 
     Costs and expenses
      Telephone charges       8,968         7,737       38,290        36,783
      Commissions             8,887        10,036       34,619        41,014
      Service, maintenance
       and network costs      9,542         7,072       34,333        42,077
      Depreciation and
       amortization           5,903        12,756       32,004        39,204
      Asset valuation charge
       and other             49,002         1,570       49,002        52,794
      Selling, general and
       administrative         5,970         4,360       22,365        21,063
 
     Total operating costs
      and expenses           88,272        43,531      210,613       232,935
 
     Operating loss         (65,933)       (4,118)     (84,342)      (57,089)
 
      Interest expense        7,784         5,973       27,420        23,183
      Other (income) expense    (96)           55         (282)          229
     Loss from operations
      before income taxes  $(73,621)     $(10,146)    (111,480)      (80,501)
 
      Income tax benefit
       (expense)                 72         1,755           --         1,755
 
     Net loss              $(73,549)      $(8,391)   $(111,480)     $(78,746)
 
     Basic and diluted
      loss per share         $(6.62)       $(0.77)     $(10.02)       $(7.40)
 
     Weighted average
      shares
      outstanding        11,169,683    10,835,221   11,125,582    10,659,594
 
 
 
                  DAVEL COMMUNICATIONS, INC. AND SUBSIDIARIES
                          SELECTED BALANCE SHEET DATA
                                  (Unaudited)
                                 (In thousands)
 
                                                 Dec. 31, 2000   Dec. 31, 1999
     Total current assets                             $21,037        $31,981
     Property and equipment                            64,702        115,558
     Intangibles                                        2,571         27,142
     Other assets                                       4,877          6,080
     Total assets                                     $93,187       $180,761
 
     Total current liabilities                        278,615         49,019
     Long-term liabilities                                964        206,821
     Stockholders' equity (deficit)                  (186,392)       (75,079)
     Total liabilities and stockholders'
      equity (deficit)                                $93,187       $180,761
 
 
 SOURCE  Davel Communications, Inc.