Question-and-Answer Session
Thank you. The question-and-answer session will be conducted electronically. [Operator Instructions]. We will take as many questions as time permits. And our first question today comes from John Hodulik with UBS.
John Hodulik - UBS
Great. Thank you. Two quick questions. First, I think Jim on the December call you guys said that the guidance was sort of bounded on the low end by the fact that if installations don't increase, you can hit the low end of the guidance. Now, I just want to... sort of looking back on that, considering that you're seeing improvements in the installation rates, does that mean that you guys should... or shooting more towards the high end of the guidance range, first of all? And then second of all, now that we’ve seemed to have uncovered some of the bottlenecks of the installation process, how fast do you think that Core Network business can grow? You are adding sales and new resources or asked a different way, how fast do you think the market is growing for your Core Network Services, now that we seem to have some runway here? Thanks.
James Q. Crowe - President and Chief Executive Officer
Yes, in some ways the two questions are related. First of all, the guidance range continues to appropriately bound we think the outcome, both in terms of revenues and EBITDA, as Sunit discussed in some detail. And I’m going to take a minute to describe a better math that I'm sure many are aware of, but it bears directly on your question. And it goes under the name of the rule of 78, it means in a recurring revenue business, the increase in billing that we enjoy in January, the incremental increase, we get to bill 12 times in February. If we increase by the same amount, we’ll use $1 million to make the point. We get to bill that 11 times or an incremental of $11 million and so forth, 10, 9, 8. What that says is, if you add an incremental $1 million each month, the total increment for the year is $78 million. It also means that the first... from a GAAP accounting point of view, the first three, four months, say four months of the year, my math is right, represent about 55% of the incremental billing units. 55% of that 78 increment. So, I go through this a bit of math to say that while we are very, very confident, as Sunit might well have detailed, that we are going to ramp up our sales and we think over time the 8 to 13 is a good range to think in terms of over the course of the year.
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