US LEC grows customer base, loss

Virtually all of US LEC's reporting metrics grew in 2005, including its revenue, customer base, employee headcount, network size and net loss, the company reported this week.

US LEC reported a net loss of $55.5 million (or $1.83 per share) for 2005, a 55% increase from 2004. The company's annual revenue grew 9% to nearly $388 million in the year.

Excluding a one-time charge of $23 million related to carrier access charges, the company reported adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $52.1 million for 2005, a 14% improvement from 2004.

The company also added 3900 business customers during the year, a 17% increase that brought the company's total customer base to more than 26,000. Roughly three-fourths of those new customers were previously served by BellSouth, Verizon Communications and Sprint, the company said, while US LEC's own customer churn consistently stays below 1% per month.

After launching in April 2005, the company's virtual private network service based on multiprotocol label switching (MPLS) is now available in 20 of its 27 switching centers. The company expects to extend that service, and its MPLS backbone network, to all of its 120 markets by the end of this year's first quarter.

At the same time, the company's carrier access revenue declined $17 million in 2005.

The company also added 60 new employees in 2005, increasing productivity at the same time. In the fourth quarter of 2005, the company collected an average of $76,000 in revenue per employee, a nearly 150% improvement from the fourth quarter of 2001.