TAMPA, Fla., Feb 15, 2000 (BUSINESS WIRE) --
Quarterly Revenue Grows 29% to $249 Million
EBITDA Increases 21% Sequentially to $16 Million
Investment Partners Strengthen Strategic Position
Intermedia Communications Inc. (Nasdaq:ICIX) today announced record
revenue of $248.8 million for the quarter and $906.0 million for the
full year ending December 31, 1999.
Consolidated EBITDA increased 21 percent sequentially to $15.6 million.
Full year consolidated EBITDA for 1999 increased 73% over 1998 to $53.7
million.
"The fourth quarter was a strong finish to an exciting year for
Intermedia," said David C. Ruberg, Intermedia's president, chairman,
and chief executive officer. "In 1999, we posted strong growth in
revenue and EBITDA. We unlocked the value of Digex by creating a public
company to pursue Web Hosting. And finally, a recent investment
commitment by KKR in Intermedia and investments by Compaq and Microsoft
in Digex validate our leadership positions and strengthen our
opportunities going forward."
SUMMARY OF FOURTH QUARTER AND FULL YEAR 1999 RESULTS Revenue for the
fourth quarter of $248.8 million was up 29 percent over fourth quarter
1998 revenue of $193.4 million. Full year revenue for 1999 increased by
27 percent to $906.0 million versus $712.8 million in 1998.
Consolidated EBITDA for the fourth quarter was positive $15.6 million,
after deducting EBITDA losses of $12.3 million at Digex. Consolidated
EBITDA for the quarter increased by 21 percent sequentially versus the
third quarter of 1999.
Full year consolidated EBITDA was positive $53.7 million, after
deducting EBITDA losses of $41.8 million at Digex. Consolidated EBITDA
for the year increased by 73 percent versus 1998.
"In the fourth quarter, we saw continued strength in Intermedia's core
business as well as at Digex," said Robert M. Manning, Intermedia's
chief financial officer. "Our focus on integrated services, and our
strengths in data and Internet services, are enabling us to drive
substantial revenue growth and margin expansion."
REVENUE ANALYSIS
Data, Internet and Web Hosting Data, Internet and Web Hosting
services continued its strong growth. Revenue for the fourth quarter
was $104.6 million, an increase of 12 percent sequentially and 42
percent over fourth quarter 1998.
Revenue grew in all categories, and was led by revenue growth at Digex,
which grew 34 percent sequentially to $21.7 million in the fourth
quarter versus $16.1 million in the third quarter of 1999, and was up
179 percent over the fourth quarter of 1998. Frame Relay and ATM
revenue grew 49 percent year over year as a function of strong demand
for higher bandwidth connections, customer migration to fully managed
networks, and rapid increases from Intermedia's strategic partner
channel.
Full year revenue for 1999 was up 38 percent, to $361.5 million versus
$261.4 million in 1998.
"Our strengths in data and Internet services put Intermedia in an
enviable position to benefit from the primary demand drivers of the
Internet Economy," said Manning. "We have focused our investments in
areas that will drive expanded opportunities going forward, and we are
seeing strong returns on those investments in terms of revenue growth
and margin expansion."
Local Access and Voice Local Access and Voice revenues for the fourth
quarter grew 11 percent year over year to $107.0 million versus $96.4
million in the fourth quarter of 1998.
In the fourth quarter, Intermedia increased access lines in service by
54,803, bringing the total in service at year-end to 501,094. 100
percent of the additions were on-switch. At the end of the fourth
quarter, 87 percent of the lines in service were on-switch, up from 85
percent at the end of the third quarter, and up from 69 percent one
year ago.
Full year revenue for 1999 was up 18 percent, to $414.2 million versus
$350.1 million in 1998.
"Market demand for our integrated service, unifiedvoice.net, is quite
strong," said Manning. "As a result, we are seeing an acceleration of
access line installations and our focus on providing services over our
own facilities is driving continued expansion in gross margins."
Systems Integration Systems Integration revenue for the quarter was
$37.1 million, down 2 percent sequentially as a function of
seasonality. Revenue for the fourth quarter was up 58 percent versus
fourth quarter 1998 as a function of sales force expansion and market
share gains.
Full year revenue for 1999 was up 29 percent, to $130.3 million, versus
$101.4 million in 1998.
STRATEGIC FINANCINGS In January of 2000, Intermedia announced a
strategic investment commitment of $200 million by an affiliate of
Kohlberg Kravis Roberts & Co. in the form of convertible preferred
stock and warrants. Intermedia also announced a commitment for $800
million in bank financing.
Also in January, Digex announced a strategic investment of $100 million
from Compaq and Microsoft.
Finally, in January Intermedia and Digex announced the sale of Digex
(Nasdaq:DIGX) common stock. A total of 12.65 million shares were sold
at $90.00 per share. 10.65 million shares were sold by Intermedia, and
2.0 million shares were issued by Digex. For Digex, the proceeds will
be used to fund the growth of the business. For Intermedia, the
proceeds will primarily be utilized to reduce Intermedia's current debt
levels. After the completion of this transaction, Intermedia will hold
39.35 million shares of Digex stock.
"In aggregate, these transactions fund our business plan," said
Manning. "The investments by these well regarded firms are strong
endorsements and strengthen Intermedia's and Digex's abilities to
pursue the growth opportunities ahead. Furthermore, the market demand
for the Digex share offering is proof of Digex's leadership position in
one of the most valuable parts of the information technology
marketplace. Finally, by reducing Intermedia's level of debt, we
believe that substantial benefits will accrue to Intermedia's
investors."
OUTLOOK "Growth in demand for services that support the Internet
Economy continue to outpace expectations," said Manning. "We believe
that our early lead in data and Internet services will enable us to
continue to grow at rates which are substantially better than market
averages and to expand margins."
EBITDA before certain charges consists of earnings before interest
expense, interest and other income, income taxes, deferred
compensation, depreciation, amortization and charges for in-process R &
D and business restructuring, integration and other expenses. EBITDA
before certain charges does not represent funds available for
management's discretionary use and is not intended to represent cash
flow from operations. EBITDA before certain charges should not be
construed as a substitute for operating income or a better measure of
liquidity than cash flow from operating activities, which are
determined in accordance with generally accepted accounting principles.
This caption excludes components that are significant in understanding
and assessing the results of operations and cash flows. In addition,
EBITDA before certain charges is not a term defined by generally
accepted accounting principles and as a result, EBITDA before certain
charges may not be comparable to similarly titled measures used by
other companies. However, the Company believes EBITDA before certain
charges is relevant and useful information that is often reported and
widely used by analysts, investors and other interested parties in the
telecommunications industry. Accordingly, the Company is disclosing
this information to permit a more comprehensive analysis of the
Company's operating performance, as an additional meaningful measure of
performance and liquidity, and to provide additional information with
respect to the Company's ability to meet future debt service, capital
expenditures and working capital requirements.
Statements contained in this news release regarding expected financial
results and other planned events are forward-looking statements,
subject to uncertainties and risks, including, but not limited to, the
demand for Intermedia's services and the ability of the Company to
successfully implement its strategies, each of which may be impacted,
among other things, by economic, competitive or regulatory conditions.
These and other applicable risks are summarized under the caption "Risk
Factors" in the Company's Form 10-K Annual Report for its fiscal year
ended December 31, 1998, and are updated periodically through the
filing of reports and registration statements with the Securities and
Exchange Commission.
About Intermedia Intermedia Communications Inc. is one of the nation's
fastest growing communications companies and is focused on the next
generation of integrated, data-centric solutions for business
customers. Intermedia's unique perspective on the dynamic business
communications marketplace allows it to tailor a suite of voice, data,
Internet and advanced network services to the individual needs of more
than 90,000 small and medium sized business customers.
Intermedia's enhanced data portfolio includes the densest frame relay
network available, optical networking, a full range of business
Internet connectivity and Web hosting services and offers seamless
end-to-end service to virtually anywhere in the world. Intermedia is
headquartered in Tampa, Florida and can be found at www.intermedia.com
Internet Users: Intermedia news releases, investor contacts and other
useful information are available on Intermedia's Web site at
www.intermedia.com. To receive news releases by e-mail or to request
that information be mailed to you, please visit the Investor Relations
section of the Web site, and go to the "Request Information" link.
INTERMEDIA COMMUNICATIONS INC.
Financial Highlights
(In thousands, except share and other data)
Three Months Ended Twelve Months Ended
December 31, December 31,
1999 1998 1999 1998
(unaudited) (unaudited) (unaudited)
Revenues:
Local Access and Voice $ 107,005 $ 96,398 $ 414,242 $ 350,060
Data, Internet and Web
Hosting 104,605 73,544 361,457 261,369
Integration Services 37,149 23,472 130,336 101,354
Total revenues 248,759 193,414 906,035 712,783
Expenses:
Network operations 87,163 94,288 371,180 337,625
Facilities administration
and maintenance 30,744 17,558 103,417 66,061
Cost of goods sold 24,207 15,171 83,362 65,094
Selling, general and
administrative 91,090 52,878 294,382 213,023
Depreciation and
amortization 102,610 84,183 329,303 229,747
Deferred compensation 832 -- 1,540 2,086
Charge-off of purchased
in process R & D -- -- -- 63,000
Business restructuring,
integration and other
charges 13,574 1,581 27,922 53,453
Total operating expenses 350,220 265,659 1,211,106 1,030,089
Loss from operations (101,461) (72,245) (305,071) (317,306)
Other income (expense):
Interest expense (94,392) (54,660) (295,900) (205,760)
Interest and other income 6,504 9,758 35,752 35,837
Net loss before minority
interest (189,349) (117,147) (565,219) (487,229)
Minority interest in net
loss of subsidiary 4,185 -- 6,793 --
Net loss (185,164) (117,147) (558,426) (487,229)
Preferred stock dividends
and accretions (23,669) (22,226) (92,455) (90,344)
Net loss attributable to
common stockholders $(208,833) $(139,373) $(650,881) $(577,573)
Loss per common share:
Net loss attributable to
common stockholders before
charge for in-process R&D
and restructuring $ (3.79) $ (2.84) $ (12.36) $ (10.57)
Charge for in-process R&D -- -- -- (1.44)
Charge for business
restructuring, integration
and other charges (0.26) (0.03) (0.55) (1.22)
Basic and diluted net loss
per common share $ (4.05) $ (2.87) $ (12.91) $ (13.23)
Shares used in computing
basic and diluted net
loss per share 51,595,856 48,622,975 50,431,324 43,645,067
EBITDA (1) $ 15,555 $ 13,519 $ 53,694 $ 30,980
Other Data:
December 31, September 30,
1999 1999
Local and Long Distance Services (2)
Buildings (3) 4,398 4,390
Voice switches in operation 29 27
Access line equivalents 501,094 446,291
Enhanced Data Services (2)
Data switches in operation 185 176
Nodes in service (4) 48,973 46,083
NNI connections 881 827
Employees 5,073 4,575
(1) EBITDA before certain charges consists of earnings (net loss
before minority interest) before interest expense, interest and other
income, income taxes, depreciation, amortization, charges for
in-process R&D and business restructuring and integration expenses,
and deferred compensation. EBITDA before certain charges does not
represent funds available for management's discretionary use and is
not intended to represent cash flow from operations. EBITDA before
certain charges should not be considered as an alternative to net loss
as an indicator of the Company's operating performance or to cash
flows as a measure of liquidity. In addition, EBITDA before certain
charges is not a term defined by generally accepted accounting
principals, and,and, as a result, the measure of EBITDA before certain
charges presented herein may not be comparable to similarly titled
measures used by other companies.
(2) Amounts reflected in the table are based upon information
contained in the Company's operating records.
(3) Includes both on-net direct connections with Intermedia-owned
fiber optic cable and on-net extended connections with leased
circuits.
(4) Amount represents an individual point of origination and
termination of data served by the Company's enhanced network. |
