Restructuring charge hurts HawTel’s net

An increase in sales of business data services helped Hawaiian Telcom’s revenue hold steady in the first quarter, but charges related to debt restructuring cut into its earnings, the state’s largest phone company reported Thursday.

Hawaiian Telcom earned $207,000, or 2 cents a share, for the January-through-March period, down from $5.54 million, or 51 cents a share, during the same period a year earlier.

The first-quarter financial results included a one-time, $5.1 million prepayment penalty incurred by the company as part of its move to refinance $300 million in debt. The refinancing allowed Hawaiian Telcom to reduce its interest rate and extend the repayment period, a company spokes­man said.

Excluding the expense, Hawaiian Telcom’s net income was $5.3 million in the first quarter, the company said in a news release.

The company, which emerged from bankruptcy in October 2010, generated $97.6 million in revenue during the first quarter compared with $98.5 million in the first quarter of 2011.

"I am pleased with our first-quarter results and the progress we are making to improve our revenue composition and transform our growth profile from legacy (traditional) to next-generation services," said Eric Yeaman, Hawaiian Telcom’s president and chief executive officer.

Hawaiian Telcom’s shares rallied on the news, closing up 45 cents, or 2.2 percent, at $20.50 on the Nasdaq Global Market.

Revenue from business data services rose 9.1 percent in the first quarter from a year earlier as demand for Internet-based products remained strong, Yeaman said.

The company continued to lose land-line customers but gained subscribers for its new television product, he added.

Hawaiian Telcom had 408,883 local voice service, or land-line accounts, at the end of March, down 6.1 percent from the same time a year earlier.

The number of subscribers buying the company’s Internet television service reached 3,900 on Oahu at the end of the first quarter, more than double the previous quarter. Hawaiian Telcom launched the service in July 2011.

"We remain excited by the opportunity video gives us to drive growth in consumer revenues, and we will continue to focus on execution to ensure the success of this important initiative," Yeaman said.

Correction:  Hawaiian Telcom had 408,883 voice access lines at the end of the first quarter, down 6.1 percent from the same period a year ago. An earlier version of this story and the story in the print edition said they had 35,697 voice access lines, down 4.5 percent from a year ago.