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[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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Delaware
(State of incorporation) |
23-2827736
(I.R.S. Employer Identification No.) |
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12020 Sunrise Valley Drive, Suite 250, Reston, Virginia
(Address of principal executive offices) |
20191
(Zip Code) |
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Page |
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PART I - FINANCIAL INFORMATION |
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Item 1. Consolidated Financial Statements |
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Consolidated Statements of Operations - Three Months Ended March 31, 2004 and 2003 (unaudited) |
2 |
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Consolidated Balance Sheets March 31, 2004 and December 31, 2003 (unaudited) |
3 |
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Consolidated Statements of Cash Flows Three Months Ended March 31, 2004 and 2003 (unaudited) |
4 |
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Notes to Consolidated Financial Statements (unaudited) |
5 |
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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |
9 |
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Item 3. Quantitative and Qualitative Disclosure About Market Risk |
16 |
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Item 4. Controls and Procedures |
16 |
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PART II - OTHER INFORMATION |
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Item 6. Exhibits and Reports on Form 8-K |
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(a) Exhibits |
17 |
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(b) Reports on Form 8-K |
17 |
| 1 | ||
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Three Months Ended March 31, | |||||||
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2004 |
2003 | |||||
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Revenue |
$ |
109,321 |
$ |
87,843 |
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Costs and expenses: |
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Network and line costs |
54,220 |
43,884 |
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General and administrative expenses |
15,162 |
12,879 |
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Provision for doubtful accounts |
3,421 |
2,223 |
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Sales and marketing expenses |
17,284 |
9,371 |
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Depreciation and amortization |
5,131 |
4,307 |
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Total costs and expenses |
95,218 |
72,664 |
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Operating income |
14,103 |
15,179 |
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Other income (expense): |
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Interest income |
101 |
110 |
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Interest expense |
(817 |
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(2,479 |
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Other income, net |
-- |
2,151 |
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Income before provision for income taxes |
13,387 |
14,961 |
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Provision for income taxes |
5,031 |
5,835 |
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Net income |
$ |
8,356 |
$ |
9,126 |
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Income per share Basic: |
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Net income per share |
$ |
0.31 |
$ |
0.35 |
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Weighted average common shares outstanding |
26,674 |
26,376 |
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Income per share Diluted: |
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Net income per share |
$ |
0.29 |
$ |
0.32 |
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Weighted average common and common equivalent shares outstanding |
28,862 |
29,940 |
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| 2 | ||
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March 31, 2004 |
December 31, 2003 | ||||||
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Assets |
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Current assets: |
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Cash and cash equivalents |
$ |
29,749 |
$ |
35,242 |
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Accounts receivable, trade (net of allowance for uncollectible accounts of $10,032 and $9,414 at March 31, 2004 and December 31, 2003, respectively) |
42,660 |
40,321 |
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Deferred income taxes |
24,568 |
24,605 |
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Prepaid expenses and other current assets |
5,941 |
5,427 |
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Total current assets |
102,918 |
105,595 |
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Property and equipment, net |
65,390 |
68,069 |
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Goodwill |
19,503 |
19,503 |
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Intangibles, net |
3,955 |
4,666 |
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Deferred income taxes |
36,528 |
40,543 |
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Other assets |
7,850 |
7,547 |
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$ |
236,144 |
$ |
245,923 |
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Liabilities and Stockholders Equity |
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Current liabilities: |
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Accounts payable |
$ |
39,470 |
$ |
35,296 |
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Sales, use and excise taxes |
14,131 |
14,551 |
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Deferred revenue Legal settlements |
12,599 |
10,873 |
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Current portion of long-term debt |
16,797 |
16,806 |
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Accrued compensation |
2,905 |
9,888 |
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Other current liabilities |
5,769 |
7,027 |
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Total current liabilities |
91,671 |
94,441 |
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Long-term debt |
16,351 |
31,791 |
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Deferred income taxes |
19,920 |
19,904 |
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Commitments and contingencies |
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Stockholders' equity: |
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Preferred stock - $.01 par value, 5,000,000 shares authorized; no shares outstanding |
-- |
-- |
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Common stock - $.01 par value, 100,000,000 shares authorized; 26,683,094 and 26,662,952 issued and outstanding at March 31, 2004 and December 31, 2003, respectively |
280 |
280 |
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Additional paid-in capital |
354,906 |
354,847 |
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Accumulated deficit |
(241,984 |
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(250,340 |
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Treasury stock - $.01 par value, 1,315,789 shares at March 31,2004 and December 31, 2003, respectively |
(5,000 |
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(5,000 |
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Total stockholders' equity |
108,202 |
99,787 |
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$ |
236,144 |
$ |
245,923 |
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| 3 | ||
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Three Months Ended March 31, | ||||||
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2004 |
2003 | |||||
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Cash flows from operating activities: |
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Net income |
$ |
8,356 |
$ |
9,126 |
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Adjustments to reconcile net income to net cash provided by operating activities: |
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Provision for doubtful accounts |
3,421 |
2,223 |
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Depreciation and amortization |
5,131 |
4,307 |
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Non-cash compensation |
9 |
-- |
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Non-cash interest and amortization of accrued interest liabilities |
(65 |
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(65 |
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Gain from extinguishment of debt |
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(2,154 |
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Deferred income taxes |
4,068 |
5,835 |
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Changes in assets and liabilities: |
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Accounts receivable, trade |
(5,760 |
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(5,343 |
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Prepaid expenses and other current assets |
(514 |
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(145 |
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Other assets |
(13 |
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1,114 |
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Accounts payable |
4,174 |
3,325 |
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Sales, use and excise taxes |
(420 |
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332 |
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Deferred revenue |
1,726 |
1,154 |
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Accrued compensation |
(6,983 |
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(2,251 |
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Other current liabilities |
(1,258 |
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(2,849 |
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Net cash provided by operating activities |
11,872 |
14,609 |
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Cash flows from investing activities: |
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Capital expenditures |
(1,220 |
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(2,691 |
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Capitalized software development costs |
(811 |
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(663 |
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Net cash used in investing activities |
(2,031 |
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(3,354 |
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Cash flows from financing activities: |
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Payments of borrowings |
(15,000 |
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(10,793 |
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Payments of capital lease obligations |
(384 |
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(16 |
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Proceeds from exercise of options and warrants |
50 |
12 |
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Purchase of treasury stock |
-- |
(5,000 |
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Net cash used in financing activities |
(15,334 |
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(15,797 |
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