Metro One Reports 2004 Fourth Quarter and Full Year Financial Results

    Business Editors/High-Tech Editors

    PORTLAND, Ore.--(BUSINESS WIRE)--Feb. 25, 2005--Metro One Telecommunications, Inc. (Nasdaq:INFO), the leading provider of Enhanced Directory Assistance(R) and other enhanced telecom services, today reported financial results for the fourth quarter and year ended December 31, 2004.
    Revenue for the fourth quarter of 2004 was $25.6 million, compared to $45.7 in the preceding year's fourth quarter, reflecting reduced call volume. Net loss for the fourth quarter was $44.8 million, or $1.80 per share, including a one time, non-cash asset write-down of approximately $32.2 million, or approximately $1.29 per share, to adjust the book value of fixed assets pursuant to Statement of Financial Accounting Standards No. 144. This compares to a net loss of $17.6 million, or a loss of $0.71 per share, in the preceding year's fourth quarter. The 2003 figure included a one-time, non-cash write-off of goodwill of $4.7 million, or $0.19 per share, relating to an acquisition. During the fourth quarter of 2004, Metro One incurred approximately $3.1 million in advertising expenses to promote its premium Infone(R) service and has generated approximately 126,000 registered users to date.
    Revenue for the year ended December 31, 2004 was $140.4 million, compared to revenue of $201.6 million for 2003. Respective net losses were $66.0 million, or a loss of $2.66 per share in 2004 and $33.3 million, or a loss of $1.35 per share in 2003. The net losses attributable to the aforementioned 2004 and 2003 asset charges were $32.2 million, or $1.29 per share and $4.7 million, or $0.19 per share, respectively.
    "We continue to work at improving operational efficiencies, while focusing our business development efforts with partners whose large numbers of customers are best served by our product features," said Timothy A. Timmins, Metro One's president and chief executive officer. "The relationship announced earlier this week is one example of what we expect to achieve in the coming months and we are optimistic about the results that can be generated from such relationships."
    Metro One will host a webcast conference call on Friday, February 25th, 2005 at 10:00 a.m. Pacific Time to review fourth quarter and full year 2004 results. To access the webcast, go to Metro One's website at www.metro1.com. An archived webcast replay of the call will also be available at that website.

    About Metro One Telecommunications

    Metro One Telecommunications, Inc. is the leading developer and provider of Enhanced Directory Assistance and other enhanced telecom services. The Company operates a network of call centers located strategically throughout the U.S. Infone is Metro One's premium personal assistant telephone service, for which consumers can sign up by visiting www.infone.com or by calling 888-411-1111. Infone(R) is a registered trademark of Metro One Telecommunications, Inc. For more information, please visit www.metro1.com or www.infone.com.

    This press release contains forward-looking statements that are made pursuant to the safe harbor provisions of The Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements, including, but not limited to, factors detailed in the Company's Securities and Exchange Commission filings. The forward-looking statements should be considered in light of these risks and uncertainties.

    (Tables follow)

METRO ONE TELECOMMUNICATIONS, INC. Statements of Operations (Dollars in thousands, except per share data)

Three Months Ended Year Ended ------------------ ---------- 12/31/2004 12/31/2003 12/31/2004 12/31/2003 ---------- ---------- ---------- ----------

Revenues $ 25,607 $ 45,750 $ 140,369 $ 201,636

Costs and expenses: Direct operating 17,029 27,364 84,331 117,126 Selling, general and administrative 22,104 37,614 94,207 128,271 Impairment loss on long-lived assets 32,193 4,715 32,193 4,715 ---------- ---------- ---------- ---------- 71,326 69,693 210,731 250,112 ---------- ---------- ---------- ----------

Loss from operations (45,719) (23,943) (70,362) (48,476)

Other income 273 146 3,808 678 ---------- ---------- ---------- ----------

Loss before income taxes (45,446) (23,797) (66,554) (47,798) Income tax benefit (647) (6,210) (522) (14,489) ---------- ---------- ---------- ----------

Net loss $ (44,799) $ (17,587) $ (66,032) $ (33,309) ========== ========== ========== ==========

Loss per common share: Basic $ (1.80) $ (0.71) $ (2.66) $ (1.35) Diluted $ (1.80) $ (0.71) $ (2.66) $ (1.35)

Shares used in per share calculation: Basic 24,957 24,749 24,869 24,706 Diluted 24,957 24,749 24,869 24,706

METRO ONE TELECOMMUNICATIONS, INC. Balance Sheets (Dollars in thousands)

12/31/2004 12/31/2003 ---------- ----------

Cash and cash equivalents $ 24,093 $ 44,381 Short-term investments, available for sale 25,375 - Restricted cash 4,900 4,900 Accounts receivable 17,524 32,078 Prepaid costs and other current assets 4,926 15,944 ---------- ----------

Total current assets 76,818 97,303

Furniture, fixtures and equipment, net 12,701 62,187 Intangible assets 5,916 4,819 Other assets 471 575 ---------- ----------

Total assets $ 95,906 $ 164,884 ========== ==========

Accounts payable $ 1,107 $ 3,146 Accrued liabilities 2,079 3,580 Accrued payroll and related costs 12,125 12,297 ---------- ----------

Total current liabilities 15,311 19,023

Deferred tax liability 2,867 2,853 Other long-term liabilities 1,157 670 ---------- ----------

Total liabilities 19,335 22,546

Common Stock 119,948 119,683 Retained earnings (43,377) 22,655 ---------- ----------

Total shareholders' equity 76,571 142,338 ---------- ----------

Total liabilities and shareholders' equity $ 95,906 $ 164,884 ========== ==========

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CONTACT: Metro One Telecommunications, Inc. Duane Fromhart, 503-643-9500 or Financial Dynamics Jim Byers, 415-439-4504 (Investors & financial media)

KEYWORD: OREGON INDUSTRY KEYWORD: TELECOMMUNICATIONS EARNINGS CONFERENCE CALLS SOURCE: Metro One Telecommunications, Inc.

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