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Courier-Journal.com: “Lightyear Network Solutions sets its sights on growth”

October 18, 2010

http://www.courier-journal.com/apps/pbcs.dll/article?AID=2010310160068

Lightyear Network Solutions sets its sights on growth
Recent merger doubled staff, paves way for acquisitions
By Jere Downs • jdowns@courier-journal.com • October 16, 2010

After many lean years at Lightyear Network Solutions, the Louisville-based telecommunications company is experiencing better times in 2010.

A provider of discount telephone landline, data and wireless service to business and residential customers, Lightyear’s staff more than doubled from 84 to 212 people with the recent $7.2 million acquisition of a phone company serving the Pikeville region in Eastern Kentucky.

The merger will not be the last for Lightyear, which became a public company earlier this year, chief executive J. Sherman Henderson III, predicted.

Adding SouthEast Telephone “is a great opportunity for us,” Henderson said. The sale rescues SouthEast from bankruptcy, transferring $3.8 million worth of the company’s debt to Lightyear.

Lightyear reported $22.5 million in revenue in the first six months of this year, with a net loss of $2.9 million. The merger with SouthEast, which provides service to 31,000 residents, will yield additional revenue of approximately $70 million annually, Henderson said.

2010 “has been quite a whirlwind year,” Henderson said, adding that Lightyear welcomed the opportunity to pick up assets such as fiber-optic networks and telecommunications switches.

“Our strategy has been changing,” he added of his company, whose mainstay consists of marketing discount telecommunications services purchased wholesale from larger providers. “Our belief is that we need to be in the network business. We need fiber in the ground.”

Working on commission, independent sales agents market Lightyear services in nearly every state. The company purchases bulk minutes of telecommunications time wholesale from giants like Sprint, Verizon and AT&T. Lightyear, based in Middletown near Interstate 265, then passes on the savings in the form of discounts to small and medium-size customers.

Instead of purchasing long-distance phone service from larger providers, the Bachman Auto Group saves up to 40 percent annually by using Lightyear service at Bachman Chevrolet, Bachman Volkswagen and Bachman Subaru, dealership IT administrator Rusty Lickliter said Monday.

“You can save a lot of money by going through them,” Lickliter said of the three-year contract with Lightyear. “It is much better than what AT&T would have given us.”

Lightyear also provides local and long-distance phone service at Tom Drexler Plumbing, helping it manage up to 50 trucks that roam the region.

“When we shopped for phone prices, they were a better deal,” company controller RJ Lechleiter said, estimating annual savings at 10 percent to 15 percent.

Founded in 1993 as UniDial, the company became Lightyear in 2000 and has grown to be one of the largest resellers of local and long-distance telecommunications services in America, serving primarily small to medium-size companies.

The company defaulted on $3.9 million in debt in 2002.

Two years later it completed a bankruptcy reorganization that included the layoff of 500 employees. It emerged as a reorganized company in 2004.

Henderson, who was CEO before the bankruptcy, led a group of investors who bought the company for $36.5 million.

Reporter Jere Downs can be reached at (502) 582-4669.

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