Centennial Communications Corp. Announces Results for Fiscal Year 2004

Business Wire, Sept 1, 2004

WALL, N.J. -- Centennial Communications Corp. (Nasdaq:CYCL) today announced results for the quarter and fiscal year ended May 31, 2004.

Consolidated revenues for fiscal year 2004 increased 11% from the prior year to $828.8 million. Net loss was $22.8 million for fiscal year 2004, as compared to a $111.6 million loss in the prior year. "Adjusted Operating Income" ("AOI") was $330.5 million, an 11% increase from the prior year. AOI is net income (loss) before minority interest in income of subsidiaries, income tax (expense) benefit, other income (expense), loss on extinguishment of debt, interest expense-net, income from equity investments, loss (gain) on disposition of assets, loss on impairment of assets, depreciation and amortization, and other non-cash charges. Please refer to Exhibit A -- "Non-GAAP Financial Measures."

During the fiscal fourth quarter ended May 31, 2004, the Company reported consolidated revenues of $214.8 million. Net income for the fourth quarter was $3.2 million, a decrease of $55.3 million from the same quarter last year. The Company reported AOI of $88.8 million for the fourth quarter, an increase of 8% from the same quarter last year.

Other significant events reported during and after fiscal 2004 include:

--The Company launched its global system for mobile communications ("GSM") network in every cell site in its Midwest cluster ahead of schedule and within budget. The Company began receiving GSM roaming traffic in late November and has gradually introduced GSM service features and phones in all of its Midwest markets. Over 80% of the Company's gross subscriber additions in its Midwest cluster are now subscribing to GSM services. The Company expects to launch GSM service in its Southeast cluster by the end of calendar year 2004.

--The Company's consolidated free cash flow (AOI minus capital expenditures) reached a record $198 million for fiscal 2004 up from $164 million in fiscal 2003, with contributions from Caribbean Wireless and Caribbean Broadband now approaching that of U.S. Wireless. Caribbean Wireless and Caribbean Broadband AOI for Fiscal 2004 exceeded that of U.S. Wireless for the first time in the Company's history.

--The Company consummated a series of refinancing transactions aggregating $1.6 billion during fiscal 2004 that significantly improved the Company's balance sheet. The new financings extended the weighted average maturities of the Company's long-term debt and eliminated approximately $600 million in scheduled amortization payments over the next four years. In addition, these transactions resulted in greater financial and operating flexibility through a reduced number of financial covenants and simplified capital structure. The Company also significantly improved the liquidity of its common stock through a 10 million share equity offering in November 2003.

--In August 2004, the Company announced that it had exercised its options to purchase 10 MHz of PCS spectrum from AT&T Wireless covering an aggregate of approximately 4.1 million population equivalents (POPs) contiguous to the Company's existing footprint in Michigan and Indiana. The aggregate exercise price of the spectrum is $19.5 million. At the same time, the Company also announced that it entered into a definitive agreement to sell to Verizon Wireless for $24 million in cash the Indianapolis and Lafayette, Indiana licenses that it expects to acquire from AT&T Wireless. If consummated, the net result of these transactions will be that the Company will obtain licenses covering approximately 2.2 million incremental POPS, and receive $4.5 million of cash. Both transactions are subject to customary closing conditions, including regulatory approvals and are expected to close before calendar year-end 2004.

--In May 2004, the Company announced its intention to seek strategic options for its Puerto Rico cable operations. The Company is currently in advanced negotiations regarding a potential sale of the cable operations. There can be no assurance that the Company will consummate any transaction with respect to its cable operations.

"I am delighted by the strength of our operating results for the quarter and fiscal year ended May 31, 2004. The results demonstrate the power of the Centennial brand and the positive customer experience it has come to signify. Centennial's focus on providing an outstanding customer experience is clearly paying dividends and bodes well for our prospects in fiscal 2005 and beyond", said Michael J. Small, Chief Executive Officer.

The Company's wireless subscribers at May 31, 2004 were 1,051,200, an increase of 12% over fiscal 2003. In the fourth quarter, Caribbean Wireless subscribers increased 21,600 as compared to the prior quarter, due to strong subscriber growth in both Puerto Rico and the Dominican Republic. In the fourth quarter, U.S. Wireless subscribers increased 2,900 from the prior quarter, aided by GSM and national rate plans. Postpaid churn for the quarter was 1.8% in U.S. Wireless and 2.4% in Caribbean Wireless. During fiscal year 2004, Caribbean Wireless subscribers increased by 97,600 as compared to 62,300 in fiscal 2003 and in U.S. Wireless by 16,500 as compared to no subscriber growth in fiscal 2003. Caribbean Broadband switched access lines reached 50,210 and dedicated access line equivalents were 213,920 at May 31, 2004, up 24% and 18%, respectively from May 31, 2003. Cable TV subscribers were 73,400 at May 31, 2004, down 4,800 from the prior year.