Madison River Communications, a diversified telecommunications and data service provider, released some mixed news with its first quarter 2002 earnings report.

Documents filed with the Securities and Exchange Commission show that although Madison River posted a first quarter to first quarter 52 percent increase on earnings before interest, taxation, depreciation and amortization, from $13.9 million to $21.1 million, the company also recorded a net income loss of $8.4 million.

The net loss is down tremendously from the $29.1 million it recorded during first quarter 2001. Yet Madison River’s cash flow sharply decreased from $31.4 million during the same period last year to $14.5 million so far this year. At the same time the company’s long-term debt increased from $676.2 million to $679.1 million.

Madison River also maintains an untapped credit facility worth $17.8 million.

Revenues for the first quarter slightly increased from $45.2 million to $45.9 million from first quarter 2001 to first quarter 2002. Local telephone service accounts for $32.1 million of that revenue.

In a prepared statement Chief Executive Officer Stephen Vanderwoude says: “We have a strong start to 2002 — We also gained additional financial flexibility in April from the resolution of the negotiations with the former shareholders of Coastal Utilities.” Coastal Utilities is a wholly owned Madison River subsidiary.

Terms of that agreement allowed the former shareholders of Coastal Utilities to exchange all of their shares of series B stock and 40 percent, or 120 shares, of series A stock for an aggregate principle amount of $20 million. The money will be paid during the next eight years and will bear 8.4 percent interest, according to the SEC documents.

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