Pro forma net income for the quarter excludes special charges of $21.1 million reflecting the impact of recent developments in the telecommunications industry, particularly as related to some of the Company’s major customers. These charges include $15.2 million in additional reserves for uncollectible accounts receivable and $5.9 million in restructuring costs associated with right-sizing several of the Company’s regional operations. Pro forma net income for the quarter also excludes a non-cash stock based compensation charge of $2.2 million. In the same period last year, pro forma net income excluded a non-cash stock based compensation charge of $19.4 million. After the above charges, Lexent reported a net loss of $9.9 million or ($0.24) per share in the first quarter of 2001 versus a loss of $8.9 million or ($0.39) in the same period a year ago.
The realities of the current industry environment have resulted in our undertaking an in-depth review and evaluation of our current business plan and the assumptions upon which it was based, said Kevin O’Kane, chief executive officer of Lexent. While the economy and capital market considerations dictate a tighter focus in the short term, our underlying conclusion is that the outlook for Lexent and its industry is fundamentally strong.
We are well positioned in an essential industry with an excellent reputation for delivering on our commitments to customers, added Mr. O’Kane. We’re further strengthened by our historical record of profitability, a $49 million cash balance, availability of $48 million under our credit line and an unlevered balance sheet. With these strengths as a foundation, we have elected to take action now to increase operational efficiency and to better position Lexent for profitable growth going forward. I am confident that these actions will make us an even stronger company.
