^{Oxford Networks Announces Second Quarter Earnings and $10 million round of financing}


Download PDF of Second Quarter earnings report in full detail

Lewiston, Maine – July 25th, 2008
Oxford County Telephone and Telegraph Company (dba Oxford Networks) today reported financial results for the 3-month period ended June 30, 2008. Revenues were $6.0 million, up 8% from $5.6 million for the previous year. Net income was $168,000, down 34% from the same period in 2007. Earnings before interest, taxes, depreciation and amortization (EBITDA) were $1.9 million, a decrease of 4% over 2007 second quarter EBITDA of $1.95 million.

The Company also reported financial results for the first six months of 2008. Revenue was $11.9 million, up 8% from $11.0 million. Net income was $108,000, down 69% from $350,000 in the first six months of 2007 and EBITDA was $3.4 million, down 6% from $3.58 million.

Craig Gunderson, Oxford Networks’ President and CEO, explained that operating expenses increased by 12% due to increased marketing activity, new hires, and other growth driving investments designed to support previously announced network expansion plans. These added expenses depressed net income and EBITDA during the first six months of 2008. While operating expenses will remain unusually high during the next 18 month investment period, Gunderson stated that the Company is on track to achieve its longer term financial targets.

The continued strength in revenue growth is being fueled by the competitive telephone company and data transport backbone network which grew a combined 16% during the first half of the year. While the traditional telephone company continues to produce strong cash flows, revenues remain flat and are expected to decline as competition increases. Demand for Oxford’s high-speed Internet and unlimited long distance calling plans off-set access line losses.

The previously announced fiber builds in Bangor/Brewer, and from Lewiston through Lisbon, Topsham, Brunswick, Freeport, Yarmouth, and Falmouth and down to Portland were completed in the quarter. Initial sales results are trending ahead of plan. The builds in South Portland, Scarborough and Waterville are on track to be completed by year’s end with the build to Boston, Westbrook and Gorham expected to be completed in the second quarter of 2009.

At the company’s annual meeting on June 19, 2008, a $10 million round of additional investment financing was announced. Oxford County Telephone and Telegraph Company (OTT) increased its CoBank senior debt revolver by $5 million. On that same day, Oxford sold 5,000 shares of nonvoting, cumulative, non-convertible Series B Preferred Stock to MCSC Partners One LLC, a Maine based investment group headed by Richard Schotte, and David Flanagan; two exceptionally talented and well respected business leaders in Maine