MetroPCS Communications, Inc. (NYSE:PCS - News), the nation’s leading provider of no annual contract, unlimited, flat-rate wireless communications service, today announced financial and operational results for the quarter ended June 30, 2011. MetroPCS reported growth in quarterly Adjusted EBITDA of approximately 11% over the second quarter 2010 and finished the second quarter 2011 with approximately 9.1 million subscribers.
“We are pleased with our solid second quarter results in this seasonally slow quarter and with our continued strong sales of Android Smartphones. Momentum for no annual contract mobile broadband wireless service continues to be strong and has resulted in 19% year over year subscriber growth. Financially, we reported the highest Adjusted EBITDA in company history of $357 million, up approximately 11% from last year’s second quarter. The demand for no annual contract, affordable, predictable and flexible wireless service and Android Smartphones is accelerating, and we are well-positioned to continue to capture our share as the Android platform provides our subscribers with access to thousands of applications and greater access to multimedia and video,” said Roger D. Linquist, Chairman and Chief Executive Officer of MetroPCS.
“The first half of 2011 was exceptionally strong with nearly 1 million net subscriber additions and record Adjusted EBITDA of approximately $643 million. We anticipate introducing additional Android Smartphones later this year, and we look forward to updating you on our continued progress,” Linquist concluded.
Quarterly Consolidated Results
* Consolidated service revenues of $1.1 billion for the second quarter of 2011, an increase of $191 million, or 21%, when compared to the prior year’s second quarter.
* Income from operations increased approximately $12 million, or approximately 6%, for the second quarter of 2011 when compared to the prior year’s second quarter.
* Net income for the quarter was $84 million and includes approximately $6 million in charges related to the extinguishment of the Tranche B-1 Term Loans under the Company’s Senior Secured Credit Facility during the quarter. On a non-GAAP basis excluding the loss on extinguishment of debt, net income would have been $90 million, or $0.24 per common share, an increase of 13% and $0.02 per share respectively, when compared to the prior year’s second quarter.
* Adjusted EBITDA of $357 million increased by approximately $35 million for the second quarter of 2011, or approximately 11%, when compared to the same period in the previous year.
* Average revenue per user (ARPU) of $40.49 for the second quarter of 2011 represents an increase of $0.65 when compared to the second quarter of 2010 and an increase of $0.07 when compared to the first quarter of 2011. The increase in ARPU was primarily attributable to continued demand for our Wireless for All and 4G LTE rate plans.
* The Company’s cost per gross addition (CPGA) of $177.88 for the second quarter of 2011 represents an increase of $13.59 when compared to the prior year’s second quarter. The increase was primarily driven by increased promotional activities.
* Cost per user (CPU) increased to $18.94 in the second quarter of 2011, or 6%, when compared to the second quarter of 2010. The increase in CPU is primarily driven by the increase in retention expense on existing customers, costs associated with our 4G LTE network upgrade, and roaming expenses associated with Metro USA, offset by the continued scaling of our business.
* Churn increased 60 basis points from 3.3% to 3.9%, when compared to the second quarter of 2010. The increase in churn was primarily driven by an increase in gross additions, adjusted for false churn, in the first quarter 2011 over the first quarter 2010, and we believe continued economic pressures on our subscribers.
Updated Operational and Financial Guidance for 2011
MetroPCS currently expects to incur capital expenditures in the range of $0.9 billion to $1.0 billion on a consolidated basis for the full year ending December 31, 2011.