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Original Source: FD (FAIR DISCLOSURE) WIRE
OPERATOR: Good day, ladies and gentlemen, and welcome to the Second Quarter 2008 Earnings for Primus Telecommunications. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time.
I would now like to introduce the host of your call today, the Executive Vice President, Mr. John DePodesta.
JOHN DEPODESTA, EVP, PRIMUS TELECOMMUNICATIONS: Thank you very much, Patty, and good afternoon, ladies and gentlemen, and welcome to Primus's second quarter 2008 financial results conference call and webcast. For those who have not had a chance to review the earnings release, it has been posted and can be viewed on our website at www.primustel.com.
Joining me from Primus on today's conference call are Paul Singh, Chairman and Chief Executive Officer, and Tom Kloster, Chief Financial Officer. We will begin with formal remarks from management regarding the Company's second quarter. This will be followed by a question and answer session.
Before we begin, please be advised that statements made by the Company during this presentation that are not historical facts are forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. These statements may include, but are not limited to revenue and earnings projections, statements of business plans and objectives and capital structure and other financial matters.
Forward-looking statements may differ from actuality and relying on them is subject to risk. Factors that could cause forward-looking statements in this presentation to differ materially from actual results are discussed in the Company's Form 10-K and 10-Q and other periodic filings with the Securities and Exchange Commission. These filings may be obtained from our website at no cost. The Company is not necessarily obligated to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
I will now begin the management remarks. Encouraged by the operating and financial results reported today for the second quarter, I thought it would be useful to track our results against the specific goals we articulated when we announced our two-year transformation strategy over 16 months ago.
At the time we announced the transformation strategy, we were emerging from 2006, a critical transition year for the Company. You may recall that our annual adjusted EBITDA dipped to $21 million in 2005, and it was essential to improve that performance dramatically if we were to become financially self-sustaining.
Through a combination of initiatives, we were able to grow adjusted EBITDA to $61 million for the full year 2006 up more than 240% over the prior year. With the groundwork laid by that substantial progress, we launched our two-year transformation strategy in March 2007, targeting the following key objectives. First, a priority was to resume top-line revenue growth before the end of 2008.
Given the then-existing and continuing industry revenue declines, I am sure this goal was treated with some healthy skepticism. However, the Company has already had two successive quarters of revenue growth in 2008, and our adjusted guidance now targets positive revenue growth for the full year 2008 over the prior year, assuming constant currency rates. Thus, this key objective of the strategy appears to be on a trajectory for a successful outcome.
Another key objective was to strengthen our balance sheet significantly. At December 31, 2006, we had a $640 million of debt principal outstanding. Through a series of subsequent debt issuances and exchanges, we have reduced that figure to $584 million.
Significantly, that net debt reduction was accompanied with an improvement to liquidity from sales of debt and equity, a more favorable schedule of maturities and no material increase in cash interest obligations. Thus I believe it fair to assess that this strategic objective has been partially addressed, but we have more to accomplish.
Generating double-digit annual growth and adjusted EBITDA was another critical objective. For the full year 2007, we generated $67 million of adjusted EBITDA. With the revised guidance issued today, we now project full-year 2008 adjusted EBITDA to be in the $75 million range, which, if achieved, will represent a year-over-year growth of 12% in adjusted EBITDA.
At the time we announced our transformation strategy over 16 months ago, we candidly admitted that they were, and I quote, "an aggressive set of goals." We have to commend the Primus management team on their focus and effort on executing across a wide range of initiatives in a very challenging economic environment to get us to this point where progress on the major goals of the transformation strategy are either ahead of plan or on target to meet the 2000 year-end goals.
While gratified with this progress, we also realize that significantly more needs to be accomplished to get us to the point of being financially self-sustaining. With annual debt service of approximately $58 million, anticipated annual capital expenditures in the range of $25 million and some $3 million in cash taxes, we need to attain adjusted EBITDA levels in …