This compares to revenues of $65.0 million and pro forma net income of $5.6 million or $0.16 per share in the same period last year.
Pro forma net income for the second quarter this year excludes special charges of $7.0 million for additional reserves for uncollectible accounts receivable and a non-cash stock based compensation charge of $1.3 million. In the same period last year, pro forma net income excluded a non-cash stock based compensation charge of $2.2 million. After the above charges, Lexent reported a net loss of $1.1 million or ($0.03) per share in the second quarter this year versus net income of $4.2 million or $0.12 in the same period a year ago.
At the end of the first quarter 2001, Lexent announced an operational realignment plan designed to increase efficiency and enhance profitability. Implementation of that plan is ongoing and its successful execution to date is reflected in the Company’s second quarter results. Pro forma net income in the second quarter increased 35% from $2.8 million or $0.07 per share in first quarter of 2001. Pro forma operating margin rose to 10.2% from 7.1% in the first quarter. Gross margin also improved to 22.1% from 18.6% in the first quarter. In the first quarter of 2001, pro forma net income excluded special charges of $21.1 million and a non-cash stock based compensation charge of $2.2 million.
In March we realigned our business plan to adjust to the realities of the telecommunications marketplace by narrowing our focus to improve profitability and enhance long-term prospects. Our second quarter results reflect the early success of that effort, said Kevin O’Kane, CEO of Lexent.
To supplement that effort, we’ve also expanded our sales initiatives. While our priority focus will continue to be on maintaining our existing long-term relationships with well-established, fully funded telecommunications companies, we have also taken action to broaden our addressable market by targeting businesses in related areas.
Lexent’s priority focus on long-term relationships with established telecommunications companies continues to result in a significant portion of the Company’s revenue. Lexent’s top customers in the quarter included AT&T Local, Global Crossing, Level 3, Qwest Communications, and WorldCom. As a group, these companies contributed over 47% of second quarter revenue. In conjunction with its successful focus on these and other top accounts, Lexent has now taken action to expand its addressable market and diversify revenues by targeting attractive, but previously untapped, customers in related areas. These areas include commercial real estate owners, large enterprise clients, utility and other companies offering communications services.
