[NEXTLINK Exceeds Expectations; Fast Growing McCaw Company Emerging as a Broadband Communications Leader]
BELLEVUE, Wash.--(BUSINESS WIRE)--July 22, 1999--NEXTLINK Communications, Inc., one of the nation's fastest growing providers of competitive telecommunications services, today announced financial results for the three and six month periods ended June 30, 1999.
Total revenue reached a new high of $60.7 million in the second quarter of 1999, an increase of 25 percent over the previous sequential quarter, and up 89 percent from revenue reported in the second quarter of 1998. Year to date revenue totaled $109.2 million, an increase of 87 percent over the comparable period in 1998. Core revenue, which includes revenue from bundled local and long distance as well as dedicated services, rose 37 percent over the previous sequential quarter to $47.8 million in the second quarter of 1999.
NEXTLINK also announced continued growth in its access line installed base, which reached 284,021 as of June 30, 1999 after adding 59,308 access lines during the second quarter. Second quarter access line additions surpassed access line additions in the first quarter of 1999 by 17 percent, and exceeded access line additions in the second quarter of 1998 by 97 percent.
The EBITDA loss (operating loss before depreciation, amortization and deferred compensation expense) totaled $51.8 million in the second quarter of 1999, compared to a $32.1 million loss in the comparable period of 1998. The year to date EBITDA loss as of June 30, 1999 totaled $99.3 million, compared to $62.1 million in 1998.
"During this past quarter it has become increasingly clear that NEXTLINK is evolving from a CLEC to a rapidly growing broadband communications services company," said NEXTLINK Chairman and Chief Executive Officer Steve Hooper. "Operationally, we continue to successfully execute our business plan. This quarter we exceeded our own expectations in adding new customers and revenues, and we continue to grow, launching new markets every quarter."
On July 15, 1999, NEXTLINK announced its Board of Directors approved a two-for-one stock split of the Company's Class A and Class B common stock effected in the form of a stock dividend. Shareholders of record at the close of business on August 18, 1999 will receive one additional share of NEXTLINK common stock for each share held. Distribution of the additional shares will take place on or about August 27, 1999. The split is subject to shareholder approval of an increase in the Company's authorized number of shares.
NEXTLINK continued its expansion into local markets across the United States by launching service in Washington D.C. and Seattle during the second quarter of 1999. NEXTLINK also launched service in Newark, N.J. in July 1999, and expects to offer service in Boston, Detroit, Houston and Phoenix by the end of the year. By the end of 2000, NEXTLINK intends to serve most of the top 30 markets in the United States.
In June 1999, NEXTLINK reached an agreement with SPEEDUS.com to purchase 150 MHz of broadband wireless spectrum in New York City for $20.0 million, providing NEXTLINK with 300 MHz of contiguous spectrum in this major market.
More recently, NEXTLINK announced that it would team with Microsoft and Westbank Projects Corporation of Vancouver B.C. to create a state-of-the-art technology environment in a new mixed-use development in its hometown of Bellevue, Washington. In this "smart" community, NEXTLINK will carry Microsoft's most advanced, commercially available technology throughout the complex on its fiber-optic broadband networks and broadband wireless facilities. NEXTLINK will also design the intra-building, broadband infrastructure and operate the voice, data and video devices required to serve the commercial office, retail, hotel and residential tenants of the property.
During the second quarter of 1999, NEXTLINK also completed its largest combined financing to date, receiving net proceeds of approximately $1.3 billion. This financing included the sale of 7,600,000 shares of Class A common stock, 3,367,950 of which were offered by selling stockholders associated with WNP Communications, which was acquired by NEXTLINK in April 1999. In addition, NEXTLINK completed the sale of $675.0 million of 10 3/4 percent Senior Notes due 2009 and $588.9 million of 12 1/4 percent Senior Discount Notes due 2009.
NEXTLINK COMMUNICATIONS, INC.
Financial Highlights
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
Revenue $ 60,657 $ 32,030 $ 109,243 $ 58,575
Costs and expenses:
Operating 53,368 28,070 97,067 52,620
Selling, general
and administrative 59,099 36,077 111,433 68,034
Deferred compensation 1,117 760 2,176 1,384
Depreciation and
amortization 27,297 12,180 50,150 22,363
----------- ----------- ----------- -----------
Loss from operations (80,224) (45,057) (151,583) (85,826)
Interest income 17,522 22,822 37,285 34,557
Interest expense (60,063) (38,338) (110,753) (61,616)
----------- ----------- ----------- -----------
Net loss $ (122,765) $ (60,573) $ (225,051) $ (112,885)
=========== =========== =========== ===========
Preferred stock
dividends and
accretion of
preferred stock
redemption obligation,
including issue
costs (17,054) (15,328) (33,654) (26,879)
----------- ----------- ----------- -----------
Net loss applicable
to common shares $ (139,819) $ (75,901) $ (258,705) $ (139,764)
=========== =========== =========== ===========
Net loss per share $ (2.24) $ (1.42) $ (4.41) $ (2.61)
=========== =========== =========== ===========
Weighted average
shares
outstanding 62,440,898 53,609,120 58,671,982 53,545,671
=========== =========== =========== ===========
EBITDA (1) $ (51,810) $ (32,117) $ (99,257) $ (62,079)
(1) EBITDA consists of net loss before net interest expense, depreciation, amortization and deferred compensation expense. EBITDA is commonly used to analyze companies on the basis of operating performance, leverage and liquidity.
NEXTLINK COMMUNICATIONS, INC.
Condensed Consolidated Statements of Financial Position
(Dollars in thousands)
As of
June 30, December 31,
1999 1998
----------- -----------
Cash, cash equivalents, and marketable
securities $ 1,842,955 $ 1,478,062
Other current assets 71,102 52,595
Pledged securities -- 21,500
----------- -----------
Total current assets 1,914,057 1,552,157
Property and equipment, net 823,190 594,408
Investment in fixed wireless licenses 900,627 67,352
Other long-term assets, net 452,187 269,189
----------- -----------
Total assets $ 4,090,061 $ 2,483,106
=========== ===========
Current liabilities $ 136,068 $ 143,656
Long-term debt 3,036,639 2,013,192
Other long-term liabilities 15,019 16,553
Redeemable preferred stock,
net of issuance costs 583,322 556,168
Total shareholders' equity (deficit) 319,013 (246,463)
----------- -----------
Total liabilities and shareholders'
equity (deficit) $ 4,090,061 $ 2,483,106
=========== ===========
NEXTLINK COMMUNICATIONS, INC.
Operating Data (1)
As of As of As of As of
June 30, March 31, Dec. 31, Sep. 30,
1999 1999 1998 1998
------- ------- ------- -------
Route miles (2) 3,228 2,897 2,477 2,150
Fiber miles (3) 263,559 223,463 195,531 158,987
On-net buildings connected (4) 986 854 801 736
Off-net buildings connected (5) 16,850 13,950 13,443 9,688
Switches installed (6) 25 22 21 18
Access lines in service (7) 284,021 224,713 174,182 134,107
Employees 2,952 2,539 2,299 2,065
(1) The operating data for all periods presented include the statistics of the Las Vegas network, which the Company manages and in which the Company has a 40% membership interest.
(2) Route miles refers to the number of miles of the telecommunications path in which the Company-owned or leased fiber optic cables are installed.
(3) Fiber miles refers to the number of route miles installed along a telecommunications path, multiplied by the Company's estimate of the number of fibers along that path.
(4) Represents buildings physically connected to the Company's networks, excluding those connected by unbundled incumbent local exchange carrier (ILEC) facilities.
(5) Represents buildings connected to the Company's networks through leased or unbundled ILEC facilities.
(6) Switches installed include two long distance switches acquired in a business acquisition and the switch installed in the Company's testing facility.
(7) Represents the number of access lines in service, including those lines which are provided through resale of Centrex services, for which the Company is billing services. The Company serviced 2,673 resold access lines as of June 30, 1999. The Company defines an access line as a telephone connection between a customer purchasing local telephone services and NEXTLINK. This connection does not include the concept of access line equivalents (ALEs), and is a one-for-one relationship with no multipliers used for trunk ratios, except for those trunks over which primary rate interface (PRI) service is provided, which are counted as 23 access lines. |
