WCII-Moving quick..on strong Earnings..News just out...
Winstar Reports Strong Fourth Quarter Results
NEW YORK, Feb 27, 2001 (BUSINESS WIRE) --
BROADBAND REVENUE: Double-digit Sequential Increase
- 15th Straight Quarter
ON-NET PERCENTAGE: Over 85% for Quarter
- Another Industry Record
GROSS MARGIN: Sharp Increase
- 8th Consecutive Quarter
EBITDA: Strong Improvement
- 6th Consecutive Quarter
Winstar Communications, Inc. (NASDAQ: WCII), a leading broadband services
company, today reported total revenue of $225.1 million for the quarter ended
December 31, 2000, a 59.1% increase over the year-ago quarter. Winstar's
broadband services revenue for the quarter rose to $197.3 million, up 74.6% from
the prior year and up 12.2% from the previous quarter. The company has now
delivered double-digit percentage increases in broadband services revenue for 15
consecutive quarters.
Winstar's stronger than expected revenue performance was augmented by its eighth
consecutive quarter of sharp improvement in gross margin. The company posted an
all-time high gross margin of 50.3% for the quarter, as compared to 47.3% in the
prior quarter, 35.4% a year ago, and 10.5% as recently as two years ago. The
company expects execution of its on-net strategy to continue to drive gross
margin improvement throughout 2001.
The combination of strong revenue growth and margin improvement enabled Winstar
to narrow its EBITDA loss for the quarter to $19.9 million, a $41.9 million
improvement from the year-ago quarter, and a $12.0 million, or 37.7%,
improvement from the prior quarter. This is the company's sixth consecutive
quarter of significant improvement since posting its peak EBITDA loss in the
second quarter of 1999. Winstar expects its EBITDA losses to continue to decline
until it reaches EBITDA breakeven, which is expected to occur during the second
quarter of 2001.
The company reported a net loss for the quarter applicable to common
shareholders of $255.1 million, or $2.76 per share, $0.02 better than consensus
analyst earnings expectations. For the full year ended December 31, 2000 Winstar
reported total revenue of $759.3 million, a 70.4% increase over 1999. Broadband
services revenue increased to $659.5 million, up 85.2% from the prior year.
EBITDA losses for the year were $153.4 million, down over 48% from $297.3
million in 1999.
Winstar added a record total of 120,000 customer lines during the fourth
quarter, bringing cumulative installed lines to 1,040,000. Of the new lines
added, over 85% were fully on-network, up from 82% in the prior quarter, and 57%
a year ago. On a cumulative basis, Winstar has now more than tripled its on-net
percentage to an industry-leading 52% - up from only 15% when the company
launched its focused strategy of selling primarily on its own network.
"Solid and sustained execution of our business strategy has enabled us to
deliver another quarter of results that exceed consensus expectations," said
William J. Rouhana, Jr., Winstar chairman and chief executive officer. "Our
performance in two key areas has driven much of that success. First, consistent
execution of our strategy to accelerate the build-out of our broadband network,
while enhancing its value with a wide range of broadband services, continues to
pay dividends. Second, the unprecedented success of our disciplined on-net
strategy has resulted in sharply improved financial performance for eight
consecutive quarters."
Winstar added approximately 1,600 new building access rights during the fourth
quarter, bringing its cumulative total to over 14,700, including approximately
400 hub sites. A total of 250 of those hub sites are now operational, up from
225 last quarter, and 142 a year ago.
The company increased its total on-net buildings (those directly connected to
its broadband network) by 1,000 buildings during the quarter, bringing its
cumulative total to 4,400 - an increase of more than 29% from the prior quarter.
As a result, the company's "addressable businesses" (businesses located in
on-net buildings, where it can provide its full suite of product offerings)
increased by 32%, to 125,000, during the quarter. For the full year, Winstar
more than doubled on-net buildings, growing from approximately 1,700 to 4,400.
This performance more than tripled the company's On-net addressable market from
38,000 to 125,000 businesses.
"Execution is driving our results - pure and simple," said Nathan Kantor,
Winstar president and chief operating officer. "With both network expansion and
product development on track or ahead of schedule, we continue to broaden and
enrich the market for our sales force. The resulting sales momentum has enabled
us to deliver strong revenue growth across all channels. Given our goal of
doubling our addressable market again in 2001, we clearly expect that momentum
to continue."
Selected Metrics
- Weighted Average Revenue Per Customer rose to more than $1,850 per
month, up from approximately $1,700 in the preceding quarter.
- Percentage of New Customers Ordering Bundled Voice and Data
Services increased to over 73%, up from 62% in the previous
quarter, 40% in the first quarter of 2000 and approximately 5%
only five quarters ago.
- On-Net Customers Installed increased by over 22% to approximately
13,900, up from approximately 11,500 at September 30, 2000. This
reflects an addressable customer penetration rate of approximately
11.1%.
For a full presentation of the company's metrics and other operating data, see
the attached table.
Recent Highlights
- In early November, Winstar completed a $1.02 billion financing
package, composed of $270 million in private equity from
Microsoft, Compaq, CSFB and Welsh Carson; additional vendor
financing from Compaq Computer Corporation and Cisco Systems,
Inc.; and the expansion of its Senior Credit Facility. This
financing complements the strategic financing completed earlier in
the year, which raised $1.6 billion of high-yield debt and
established a $1.15 billion Senior Credit Facility. In conjunction
with the earlier financing, the company put in place a $2 billion
vendor finance facility with Lucent Technologies, of which $1.0
billion is available at any one time.
- In October, Winstar launched its Business Essentials marketing
initiative for small and medium-sized businesses. Business
Essentials features seven different flat-rate plans, all of which
include "always-on" Internet access, unlimited local telephony
services, and competitively priced long-distance services. Upgrade
packages include other data services such as Web hosting, Web
design, higher speed Internet connectivity, frame, ATM and IP
services.
- Also in October, the Federal Communications Commission (FCC)
issued a ruling that was designed to provide greater and quicker
access to multi-tenant buildings. Winstar praised the efforts of
the FCC, and reaffirmed its commitment to work with the real
estate community to continue to refine the process that promotes
the delivery of new, high-speed broadband communications services
to all businesses that desire them.
About Winstar
Winstar is a leading broadband services company. The company is rapidly building
one of the world's most widely available, end-to-end broadband networks. Winstar
makes this network important and useful to businesses by providing a
comprehensive set of high-quality, digital-age broadband services. These
services include high-speed Internet and data, Web hosting and design, phone
services, Web-based applications, e-commerce, professional services and
Office.com(R), A Service From Winstar, the top-ranked online business service
for small and medium-sized businesses.
For more information, visit www.winstar.com.
Statements in this release contain forward-looking information about management
expectations, strategic objectives, business prospects, anticipated financial or
operational performance, and other similar matters. These statements are based
on current expectations, forecasts and assumptions that involve risks and
uncertainties. A variety of factors, many of which are beyond Winstar's control,
could cause actual results and experience to differ materially from the
expectations expressed in these statements. These factors include, but are not
limited to, volatility in the financial and capital markets and the impact on
access to and the terms of additional capital, actions and initiatives by
current and potential competitors, events or circumstances impacting major
customers, suppliers or financing sources, the effect of current and future
legislation or regulation, the ability of the company to design and construct
its broadband network and to sell and provision services, and additional factors
described in the reports filed by Winstar with the Securities and Exchange
Commission (SEC), including Winstar's Annual Report on Form 10-K for the year
ended December 31, 1999, which is available on the SEC's Web site, at
www.sec.gov. Winstar undertakes no responsibility to update or revise any
statements in this release, whether as a result of new information, future
events or otherwise.
Winstar and Office.com are registered trademarks of Winstar Communications, Inc.
Winstar Communications, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
For the three months ended For the year ended
December 31, December 31,
2000 1999 2000 1999
Operating revenue
Broadband services $ 197,306 $ 113,011 $ 659,493 $ 356,073
Other 27,819 28,493 99,831 89,564
Total operating revenue 225,125 141,504 759,324 445,637
Operating expenses
Cost of revenue 111,998 91,412 409,869 316,262
Selling, general and
administrative expenses 133,044 111,915 502,807 426,679
Depreciation, amortization
and non-cash expenses 111,985 48,972 337,911 155,224
Total operating
expenses 357,027 252,299 1,250,587 898,165
Operating loss (131,902) (110,795) (491,263) (452,528)
Other income (expense)
Interest expense (109,893) (57,733) (342,252) (211,744)
Interest income 6,749 5,236 38,185 21,995
Other income 6,666 - 25,610 -
Loss before income tax
benefit and
extraordinary item (228,380) (163,292) (769,720) (642,277)
Income tax (expense)
benefit (283) 1,000 4,358 4,000
Loss before extraordinary
item (228,663) (162,292) (765,362) (638,277)
Extraordinary loss on debt
extinguishment - - (104,804) -
Net loss (228,663) (162,292) (870,166) (638,277)
Preferred stock
dividends (26,447) (18,126) (107,965) (61,490)
Preferred stock
redemption premiums - - (23,988) -
Net loss applicable to
common stockholders $(255,110)$(180,418)$(1,002,119)$(699,767)
Basic and diluted loss per share:
Before extraordinary item
(excluding non-recurring debt
modification fees and
preferred stock redemption
premiums) $ (2.76) $ (2.18) $ (9.67) $ (9.15)
Debt modification fees - - (0.08) -
Preferred stock
redemption premiums - - (0.27) -
Loss before extraordinary item (2.76) (2.18) (10.02) (9.15)
Extraordinary loss on debt
extinguishment - - (1.17) -
Net loss per share $ (2.76) $ (2.18) $ (11.19) $(9.15)
Weighted average shares
outstanding 92,422 82,599 89,548 76,478
EBITDA $ (19,917) $(61,823)$ (153,352)$(297,304)
Winstar Communications, Inc.
Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)
December 31, December 31,
2000 1999
ASSETS
Current assets
Cash and cash equivalents $ 290,983 $ 93,331
Short term investments 24,702 152,640
Cash, cash equivalents and
short term investments 315,685 245,971
Accounts receivable, net of
allowance for doubtful accounts 225,720 139,725
Inventories and assets held for
sale 98,644 26,146
Prepaid expenses and other
current assets 150,350 86,930
Total current assets 790,399 498,772
Investments in marketable equity
securities 1,425 80,267
Investments, at cost 174,877 17,478
Property and equipment, net 2,891,957 1,773,707
Licenses, net 477,261 317,386
Other intangible assets, net 186,865 193,399
Deferred financing costs, net 89,357 54,759
Other assets 310,034 129,525
Total assets $ 4,922,175 $ 3,065,293
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Current portion of long-term
debt $ 25,345 $ 18,512
Current portion of capitalized
lease obligations 124,443 121,747
Accounts payable and accrued
expenses 456,830 376,501
Deferred revenues - current 22,172 11,699
Total current liabilities 628,790 528,459
CAPITALIZED LEASE OBLIGATIONS, LESS
CURRENT PORTION 240,328 179,600
Long-term debt, less current
portion 3,637,616 2,144,782
Deferred revenues - non current 238,688 164,238
Other liabilities 25,220 16,604
Deferred income taxes 7,700 14,500
Total liabilities 4,778,342 3,048,183
Series C cumulative exchangeable
redeemable preferred stock - 231,212
Series D senior cumulative
convertible redeemable preferred
stock 200,000 200,000
Stockholders' deficit
Series F preferred stock 3 3
Series G preferred stock 9 -
Series H preferred stock 3 -
Series A preferred stock 47 44
Series E preferred stock 1 1
Common stock, par value $.01;
authorized 400,000 shares,
issued and outstanding 93,160 and
83,640, respectively 932 836
Additional paid-in-capital 2,280,868 1,022,229
Accumulated deficit (2,327,685) (1,457,519)
Accumulated other comprehensive
(loss) income (10,345) 20,304
Total stockholders' deficit (56,167) (414,102)
Total liabilities, redeemable
preferred stock and
stockholders' deficit $ 4,922,175 $ 3,065,293
Winstar Communications, Inc.
Metrics and Other Operating Data (rounded)
Quarter Ended December 31, 2000
12/31/00 9/30/00 6/30/00 3/31/00
METRICS
Addressable Market:
Pre-Factory Leases 4,700 4,500 4,200 3,600
Field Review 800 1,000 1,000 800
In-Factory 3,800 3,200 2,800 2,300
On-Net Buildings 4,400 3,400 2,400 2,000
CAP (other revenue
generating) 1,000 1,000 1,000 1,000
Total Building Access
Rights 14,700 13,100 11,400 9,700
Addressable Market
(on-net tenants) 125,000 95,000 66,300 50,000
Addressable Desktops 2,900,000 2,400,000 1,900,000 1,400,000
Customers:
Total Customers 32,200 29,700 27,500 25,500
On-Net Customers 13,900 11,500 9,400 7,500
On-Net Building
Penetration 11.1% 12.1% 14.2% 15.0%
Bundled Data Take Rate
(current additions) 73% 62% 48% 40%
Revenue:
Monthly Revenue/Customer $ 1,875 $ 1,700 $ 1,650 $ 1,600
On-Facilities Revenue % 97% 95% 93% 92%
Lines:
Total Lines 1,040,000 920,000 810,000 709,000
On-Net % (current additions) 85% 82% 73% 62%
On-Net % (cumulative) 52% 47% 42% 38%
OTHER OPERATING DATA
Fiber:
Long-haul Dark Fiber -
Contracted (route miles) 16,000 16,000 16,000 16,000
Long-haul Dark Fiber -
Lit (route miles) 8,735 6,767 5,725 4,813
Short-haul - Contracted 50 50 50 50
Markets
Rings 65 65 65 65
Short-haul - Lit
Markets 14 11 9 7
Rings 25 17 12 10
Markets in Operation:
Domestic 60 60 60 60
International 15 13 12 10
Total 75 73 72 70
Winstar Communications, Inc.
Metrics and Other Operating Data (rounded)
Quarter Ended December 31, 2000
12/31/00 9/30/00 6/30/00 3/31/00
-------- ------- ------- -------
METRICS
Addressable Market:
Pre-Factory Leases 4,700 4,500 4,200 3,600
Field Review 800 1,000 1,000 800
In-Factory 3,800 3,200 2,800 2,300
On-Net Buildings 4,400 3,400 2,400 2,000
CAP (other revenue generating) 1,000 1,000 1,000 1,000
------ ------ ------ ------
Total Building Access Rights 14,700 13,100 11,400 9,700
====== ====== ====== ======
Addressable Market
(on-net tenants) 125,000 95,000 66,300 50,000
Addressable Desktops 2,900,000 2,400,000 1,900,000 1,400,000
Customers:
Total Customers 32,200 29,700 27,500 25,500
On-Net Customers 13,900 11,500 9,400 7,500
On-Net Building Penetration 11.1% 12.1% 14.2% 15.0%
Bundled Voice and Data
Take Rate (current additions) 73% 62% 48% 40%
Revenue:
Monthly Revenue / Customer $ 1,850 $ 1,700 $ 1,650 $ 1,600
On-Facilities Revenue % 97% 95% 93% 92%
Lines:
Total Lines 1,040,000 920,000 810,000 709,000
On-Net %
(current additions) 85% 82% 73% 62%
On-Net %
(cumulative) 52% 47% 42% 38%
OTHER OPERATING DATA
Fiber:
Long-haul Dark Fiber
- Contracted (route miles) 16,000 16,000 16,000 16,000
Long-haul Dark Fiber
- Delivered (route miles) 8,735 6,767 5,725 4,813
Short-haul - Contracted
Markets 50 50 50 50
Rings 65 65 65 65
Short-haul - Lit
Markets 14 11 9 7
Rings 25 17 12 10
Markets in Operation:
Domestic 60 60 60 60
International 15 13 12 10
--- --- --- ---
Total 75 73 72 70
=== === === ===
CONTACT: Winstar Communications, Inc.
Financial Community:
Daniel Briggs, 212/792-9032
dbriggs@winstar.com
or
Press:
Kevin Cavanaugh, 212/792-9671
kcavanaugh@winstar.com
URL: businesswire.com
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
Copyright (C) 2001 Business Wire. All rights reserved.
-0-
KEYWORD: NEW YORK
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS
NETWORKING
INTERNET
E-COMMERCE
TELECOMMUNICATIONS
EARNINGS
****************** TO EDIT YOUR EQUITY ALERTS ********************
To unsubscribe or edit your alerts, visit
equityalert.com
******************************************************************
***IMPORTANT NOTICE AND DISCLAIMER REGARDING THIS COURTESY EMAIL**
At your request, as a subscriber to our service, this email alert
is being sent to you as a courtesy and is for information purposes
only. We are a financial news re-distributor. We are not an
investment advisory and do not purport to tell or suggest which
companies you should monitor or which securities you should
purchase or sell.
In addition to the information regarding the company you are
monitoring (the “Monitored Company”), this email contains an
advertisement describing a product, service or company for which we
received a fee, at our normal advertising rates of $55 per 1,000 e-
mails (subject to volume and other discounts), from the advertising
company. In addition, not withstanding our policy of prohibiting
employees from buying or selling securities of an advertising
company for a period of 20 days following dissemination of the
advertisement, we may not be able to effectively monitor our
employees to ensure compliance with the same. Consequently, there
may be sales and/or purchases of such securities by our employees
prior to, during and immediately following the dissemination of the
advertisement.
Please note that (1) this email may not contain the full text of
the press release issued by, or the research or other reports
regarding, the Monitored Company; and (2) the text of the
advertisement, the press release and/or reports were obtained from
third party sources and were not written, generated or edited by
us; accordingly, we make no representations or give any assurance
as to the accuracy or completeness, nor have we conducted any
independent investigations of, the disclosures regarding the
subject matter of such releases and reports.
Please note that links to the advertising company and/or Monitored
Company are provided for your convenience. We assume no obligation
for the content of such sites.
All information contained herein should be independently verified
by you with the advertising company or with Monitored Company or
any other sources you prefer.
Raging Bull Advertisements Tomorrow, the market closed at:
Quote.com: Powerful tools for serious investors.
Meet the top deal-makers. Visit Forbes.com. |
