Event Brief of Q1 2004 Pac-West Telecomm, Inc. Earnings Conference Call - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

CORPORATE PARTICIPANTS

. Reid Cox, Pac-West Telecomm, Inc., Director, IR . Ravi Brar, Pac-West Telecomm, Inc., CFO . Hank Carabelli, Pac-West Telecomm, Inc., President, CEO . John Sumpter, Pac-West Telecomm, Inc., VP, Regulatory & Human

Resources

OVERVIEW

Total revenues for 1Q04 were $29.4m, an increase of 5% from 4Q03 which was $28.1m, but a decrease of 4% from 1Q03 of $30.5m. Network expense for 1Q04 was $10.5m, an increase of 7% from 4Q03, which was $9.8m. SG&A for 1Q04 was only $14.2m, 3% lower than 4Q03 and 7% lower YoverY. Q&A Focus: Financials and FCC.

FINANCIAL DATA

A. Key Data From Call 1. 1Q04 total revenue = $29.4m. 2. 1Q04 network expense = $10.5m. 3. 1Q04 SG&A = $14.2m. 4. 1Q04 EBITDA = $4.7m

5. 1Q04 net loss = $7.2m.

PRESENTATION SUMMARY

S1. Financial Review (R.B.) 1. Revenues: 1. Total revenues for 1Q04 were $29.4m, an increase of 5% from 4Q03 which was $28.1m, but a decrease of 4% from 1Q03 of $30.5m. 2. As discussed on previous calls, intercarrier revenues have been impact by the FCC's ISP order, which was introduced in 2001. 3. The direct impact of the order is a schedule of lower reciprocal compensation rates over the course of the three-year FCC plan while an indirect impact of the order is action by carriers such as Verizon and SBC who have been withholding payments due to the implementation of growth caps. 4. 1Q04 revenues declined YoverY due primarily to the impact of lower reciprocal compensation rates. 1. In 1Q03, the co. was able to collect reciprocal compensation, the second lowest rate tier contemplated by the FCC order. 2. In 1Q04, the co. collected reciprocal compensation at the lowest rate tier implemented by the FCC order. 5. PACW is very pleased that it has been able to offset these declining prices with growth. 6. Since the introduction of the FCC order in 2Q01, rates have declined by 42%, while the co. has been able to grow lines by 72% and quarterly minutes of use by 79% during the same

period. 7. PACW plans to continue to aggressively grow its lines and service and associated minutes of use to continue to compensate for this price compression. 8. 1Q04 revenues increased from preceding quarter due primarily to lower levels of withheld intercarrier compensation by the ILECs. 9. During 1Q04, intercarrier compensation was $1.9m higher than 4Q03.

10. PACW believes that growth caps are being incorrectly imposed

by the ILECs. 1. The co. anticipates regulatory clarity on this matter in 2004. 11. There can be no assurance that the ILECs will not attempt to withhold reciprocal compensation in 2004. 2. Network Expense: 1. Network expense for 1Q04 was $10.5m, an increase of 7% from 4Q03, which was $9.8m. 2. However, it was 2% lower than the $10.7m the co. spent on network expense in 1Q03. 3. PACW continues to make efforts to reduce its network expenses and continue to realize cost savings resulting from improved efficiency. 4. Network expenses decreased 2% YoverY while minutes of use and traffic on the network increased 20%.

5. In addition, PACW expects its recently announced upgrade to

Lucent modems and (Indiscernible) switching infrastructure to

contribute to its efforts to achieve further network efficiency. 3. SG&A: 1. SG&A for 1Q04 was only $14.2m, 3% lower than 4Q03 and 7% lower YoverY. 2. The co. continues to find ways of increasing its efficiencies and growing its business while doing more with less. 4. Balance Sheet: 1. EBITDA for 1Q04 was $4.7m. 1. Obviously this is higher than the zero EBITDA for 4Q03. 2. Net loss for 1Q04 was $7.2m, a 27% improvement against a net loss of $9.8m in 4Q03. 1. 4Q03 included a $3.7m charge related to a loss on redemption of bonds and a debt and equity investment by Deutsche Bank in December 2003. 2. Without the impact of these charges and with reasonable growth in its core business, PACW has ended 1Q04 with higher EBITDA and lower net loss. 3. Total cash balance at the end of 1Q04 was approximately $32m,

a decrease of $2.7m from 4Q03. 4. Though the co.'s operations generated cash in 1Q04, it used cash to pay interest on its senior notes, make capital lease payments, and in order to fund the previously announced acquisition of the assets of the Sentient Group in order to jump-start its IP Centrex and voice efforts in the enterprise market.

S2. Corporate Strategy (H.C.) 1. Overview: 1. PACW crafted a three-phase plan to take it through the downturn and position itself for renewed growth. 2. Phase 1 which spanned 2001 through 2003 was all about survival. 3. Phase II which spans 2004 and into 2005, is termed, `build density and scale.` 4. Phase III which will commence in 2005 to 2006 time frame is called, `owning California.` 2. Competitive Advantage: 1. In California, PACW was able to provide …