Cogent Communications (CCOI)

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Cogent Communications Reports Second Quarter 2011 Results
http://www.prnewswire.com/news-releases/cogent-communications-reports-second-quarter-2011-results-126756698.html

WASHINGTON, Aug. 4, 2011 /PRNewswire/ --

Financial and Business Highlights

* Service revenue for Q2 2011 of $75.6 million – an increase of 2.9% from $73.5 million for Q1 2011 and an increase of 17.4% from $64.4 million for Q2 2010
o Foreign exchange positively impacts revenue growth from Q1 2011 to Q2 2011 by $0.9 million and positively impacts revenue growth from Q2 2010 to Q2 2011 by $2.2 million
* EBITDA, as adjusted, of $25.4 million for Q2 2011 - an increase of 4.8% from $24.2 million for Q1 2011 and an increase of 34.6% from $18.9 million for Q2 2010
* EBITDA, as adjusted, margin was 33.6% for Q2 2011, 33.0% for Q1 2011 and 29.3% for Q2 2010
* 27,724 customer connections on the Cogent network at the end of Q2 2011 - an increase of 6.0% from 26,145 customer connections at the end of Q1 2011 and an increase of 18.6% from 23,376 customer connections at the end of Q2 2010
* 1,669 on-net buildings on the Cogent network at the end of Q2 2011 - an increase of 60 on-net buildings and 3.7% from 1,609 on-net buildings at the end of Q1 2011 and an increase of 166 on-net buildings and 11.0% from 1,503 on-net buildings at the end of Q2 2010
* Operating income for Q2 2011 of $8.7 million – an increase of 17.8% from $7.4 million for Q1 2011 and an increase of 190.9% from $3.0 million for Q2 2010


Cogent Communications Group, Inc. (NASDAQ: CCOI) today announced service revenue of $75.6 million for the three months ended June 30, 2011, an increase of 2.9% over $73.5 million for the three months ended March 31, 2011 and an increase of 17.4% over $64.4 million for the three months ended June 30, 2010.

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On-net revenue was $58.0 million for the three months ended June 30, 2011 an increase of 2.2% over $56.8 million for the three months ended March 31, 2011 and an increase of 15.4% over $50.3 million for the three months ended June 30, 2010. On-net service is provided to customers located in buildings that are physically connected to Cogent's network by Cogent facilities.

Off-net revenue was $16.8 million for the three months ended June 30, 2011 an increase of 5.2% over $16.0 million for the three months ended March 31, 2011 and an increase of 25.5% over $13.4 million for the three months ended June 30, 2010. Off-net customers are located in buildings directly connected to Cogent's network using other carriers' facilities and services to provide the last mile portion of the link from the customers' premises to Cogent's network.

Non-core revenue was $0.8 million for the three months ended June 30, 2011, $0.7 million for the three months ended March 31, 2011 and $0.8 million for the three months ended June 30, 2010. Non-core services are legacy services, which Cogent acquired and continues to support but does not actively sell.

Gross profit, excluding equity-based compensation expense, increased 1.5% to $42.5 million for the three months ended June 30, 2011 from $41.8 million for the three months ended March 31, 2011 and increased 20.4% from $35.3 million for the three months ended June 30, 2010. Gross profit margin, excluding equity-based compensation expense, was 56.2% for the three months ended June 30, 2011, 56.9% for the three months ended March 31, 2011, and 54.8% for the three months ended June 30, 2010.

Earnings before interest, taxes, depreciation and amortization (EBITDA), as adjusted, increased 4.8% to $25.4 million for the three months ended June 30, 2011 from $24.2 million for the three months ended March 31, 2011 and increased 34.6% from $18.9 million for the three months ended June 30, 2010. EBITDA, as adjusted, margin was 33.6% for the three months ended June 30, 2011, 33.0% for the three months ended March 31, 2011, and 29.3% for the three months ended June 30, 2010.

Basic and diluted net income (loss) per share was $0.05 for the three months ended June 30, 2011, $(0.01) for the three months ended March 31, 2011 and $(0.02) for the three months ended June 30, 2010. A gain of $2.7 million on the release of a lease obligation is included in net income for the three months ended June 30, 2011.

Total customer connections increased 6.0% to 27,724 as of June 30, 2011 from 26,145 as of March 31, 2011 and increased 18.6% from 23,376 as of June 30, 2010. On-net customer connections increased 6.8% to 23,360 as of June 30, 2011 from 21,878 as of March 31, 2011 and increased 21.7% from 19,193 as of June 30, 2010. Off-net customer connections were 3,759 as of June 30, 2011, 3,642 as of March 31, 2011 and 3,408 as of June 30, 2010. Non-core customer connections were 605 as of June 30, 2011, 625 as of March 31, 2011 and 775 as of June 30, 2010.

The number of on-net buildings increased by 60 on-net buildings to 1,669 on-net buildings as of June 30, 2011 from 1,609 on-net buildings as of March 31, 2011, and increased by 166 on-net buildings from 1,503 on-net buildings as of June 30, 2010.

Conference Call and Website Information

Cogent will host a conference call with financial analysts at 8:30 a.m. (ET) on August 4, 2011 to discuss Cogent's operating results for the second quarter of 2011 and Cogent's expectations for full year 2011. Investors and other interested parties may access a live audio webcast of the earnings call under "Events" at the Investor Relations section of Cogent's website at www.cogentco.com/events. A replay of the webcast, together with the press release, will be available on the website following the earnings call.

About Cogent Communications

Cogent Communications (NASDAQ: CCOI) is a multinational, Tier 1 facilities-based ISP. Cogent specializes in providing businesses with high speed Internet access and point-to-point transport services. Cogent's facilities-based, all-optical IP network backbone provides IP services in over 165 markets located in North America and Europe.

Cogent Communications is headquartered at 1015 31st Street, NW, Washington, D.C. 20007. For more information, visit http://www.cogentco.com. Cogent Communications can be reached in the United States at [phone] or via email at [e-mail].