announces that New Enterprise Associates, the original venture capital investor in Vonage, has distributed 9.3 million shares of Vonage common stock to the limited partners of its funds. NEA remains a major Vonage shareholder and following the distribution retains two-thirds of its original holdings, representing 8 percent of Vonage's outstanding stock.
Commenting on the announcement, Vonage's CEO, Marc Lefar said, "Stock distributions are a standard mechanism to distribute gains to limited partners. NEA has been a loyal, long-term investor over the past eight years and we value their continued support. We are pleased that NEA remains a substantial shareholder while providing its limited partners liquidity as provided for under the terms of its partnership agreements. With this distribution, Vonage's common stock will have greater public float, providing additional access to institutional investors."
Vonage recently reported record high financial results for the full year 2010 including adjusted EBITDA of $156 million and income from operations of $95 million, up 31 percent and 66 percent over the prior year, respectively. In addition, the Company completed a comprehensive refinancing of its balance sheet which will reduce annual interest expense by $23 million, or nearly 50 percent from $49 million to $26 million (assuming constant LIBOR), resulting in significant earnings accretion in 2011. Vonage stated that neither this distribution nor any future distribution of shares by NEA will have any effect upon the total number of shares outstanding.
Adjusted earnings before interest, taxes, depreciation and amortization ("adjusted EBITDA") is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to income from operations can be found on the Vonage Investor Relations website