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TWST: I'd like to begin, if you will, with a brief historical sketch of the
company, particularly of the year 2005, which I understand was a very good one
for you, and a picture of the things you are doing right now.
Mr. Guth: Thank you for the opportunity to talk this morning. 2005, as you said,
was a very good year for TelCove. I think it's fair to characterize it as the
first full year, in several years, that we had a chance to focus strictly on our
business strategy and on growth. The result is very solid growth in all of our
core products, both in terms of revenues and EBITDA. So, we really came out of
2005 with a solid base of revenues and profitability, and a bright future moving
into 2006.
2005 represented a kind of consolidation year for TelCove; a year of putting all
the strategies and discussions that we'd been having for the prior couple of
years into execution. In the end, we came through it with some very nice
results. TWST: You mentioned your core products, could you tell us something about them?
Mr. Guth: Certainly. TelCove in the industry is somewhat unique in our product
and sales strategy. We primarily sell data services and transport services as
opposed to the switched services that are commonly proposed by CLECs. So, for
example, in 2005 our fastest growing product was Ethernet, which is used in
industries such as healthcare and banking, as well as quite a few other
verticals. These types of companies use Ethernet to connect their critical
business locations together and give everybody transparent connectivity.
Separate from that, we also saw a lot of nice growth in our traditional
transport products, the old fashion dedicated services such as DS-3 and OCx
speed transport, both with our metro as well as our intercity options.
So, really, the vast majority of our growth came from those kinds of core data
transport products as well as our Internet products. Internet services, of
course, remain an important part of TelCove's service offering.
Conversely, we saw little growth on the lower margin and less differentiated
switched services side of our product portfolio, where we intentionally just
didn't have quite as much focus this past year.
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