FairPoint sees $40M net income in Q2
FairPoint Communications Inc. (Nasdaq: FRP) reported net income Wednesday of $40.3 million in the second quarter of 2015 compared to a net loss of $45.2 million in the first quarter of 2015.
The change, according to a press release announcing FairPoint’s financial performance for the quarter ended June 30, was primarily due to a decrease in operating expenses that includes “elimination of post-employment health benefits for active employees.”
The elimination of retiree medical benefits and a limitation on the employees' benefit pension plan were two key elements of the contract the Charlotte, N.C.-based company reached in February with the International Brotherhood of Electrical Workers and the Communications Workers of America after a long and divisive strike. Ratification of the contract allowed 1,800 union members across Maine and two other states to return to work. Other features of the contract, as reported at that time, included a cheaper, union-administered health plan, provisions protecting jobs from outsourcing and slower wage increases for new hires.
The company reported total gross debt outstanding was $925.6 million as of June 30, compared to $927.2 million as of March 31, 2015.
“Our financial results in the quarter were in line with our expectations as we continue to transform revenue while actively managing costs,” FairPoint CEO Paul H. Sunu said in the release announcing the results. “We are also encouraged by the improving trends we are seeing in operational metrics as subscriber losses moderated from peaks experienced during the strike and our sales bookings returned close to pre-strike levels. We continue to make significant operational improvements and have established new expectations for service that we believe will improve the customer experience and reduce churn over time.”
As of June 30, FairPoint had 2,931 employees, a decrease of 229 employees versus a year ago. The company estimated workforce reductions would reduce its employee expenses by $7 million to $9 million over the remainder of 2015 compared to the first half of 2015.
Adjusted operating expenses were $150.4 million in the second quarter of 2015 compared to $161.4 million a year earlier.
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