[ESPI 2Q99 results]
e.spire Results Show Continued Improvement
-- Revenue Up More Than 75%
-- Route Miles and Addressable Access Lines More Than Double
ANNAPOLIS JUNCTION, Md.--(BUSINESS WIRE)--Aug. 12, 1999--e.spire Communications, Inc., a leading integrated communications provider, today announced revenues of $63.3 million for the quarter ended June 30, 1999, a 77% increase over the year ago quarter.
In its second consecutive quarter of strong fundamental improvement since refocusing its strategy in late 1998, the Company delivered a 12% sequential gain in core telecommunications revenue, complemented by an additional $18.6 million from its Network Technologies group.
EBITDA (earnings before interest, taxes, depreciation and amortization) for the quarter was ($13.3) million, a 13% sequential improvement, which is on top of a 21% sequential EBITDA improvement in the prior quarter. This strong performance underscores the Company's success in improving gross margins while continuing to deliver solid revenue growth.
e.spire installed nearly 23,000 access lines during the quarter. In line with the Company's previously announced initiative to eliminate local switched resale, more than 36,000 resale lines were purged from the base through forced attrition and a multi-phase sale.
As of June 30, 1999, e.spire had a cumulative in-service line count of slightly more than 118,000 of which 83% are now on-switch, a remarkable improvement from the year ago quarter when the Company's in-service access line count was nearly 86,000 with only 33% on-switch.
''We're obviously very pleased with our results for the quarter,'' said Anthony J. Pompliano, e.spire chairman and CEO.
''When we decided to refocus the business late last year, our key priorities were to grow revenue, reduce expenses and enhance margins. Despite the obvious revenue impact of purging more than 50,000 low-margin resale lines from our base, we have been successful on all three counts, and have exceeded analysts' expectations for two consecutive quarters,'' he concluded.
Financial accomplishments in the quarter include:
-- Six month revenue totaled $121.4 million, nearly double the comparable 1998 period
-- Gross margin increased to 39%, a 320 basis point (bps) improvement over 1Q99
-- SG&A as a percent of revenue improved by 220 bps sequentially
-- Gross property, plant and equipment reached $714 million, up 80% over the year ago period
-- EPS beat First Call consensus by $0.02 per share
-- e.spire more than doubled its route miles over the quarter, bringing total route miles to 3,647.
This significant growth is the result of the Company's accelerated efforts in the New York, Philadelphia and San Antonio metro areas, as well as the deployment of more than 1,600 long haul route miles gained through long term IRUs (''indefeasible rights of use'') with Metromedia Fiber Network and Qwest.
These routes include connections between New York and Baltimore, Austin and Dallas, and two separate Florida rings intersecting in Orlando. ''The addition of these strategic assets doubles our addressable business lines, which now exceed 14 million,'' added Pompliano.
e.spireDATA and ACSI Network Technologies (ACSI NT), e.spire's wholly-owned network construction subsidiary, continued to deliver positive results during the quarter. e.spireDATA grew by 57% on a year-over-year basis, driven in part by a 34% increase in ''data-centric'' sales professionals versus year ago levels.
In addition, the Company established data nodes in Philadelphia, San Antonio and Washington, D.C.
ACSI NT contributed $18.6 million in revenue during the period, a 175% increase as compared to $6.8 million for the same period last year. The quarter also produced a significant milestone for ACSI NT, as the subsidiary crossed the $100 million threshold regarding awarded contract value since its inception just 15 months ago.
e.spire Communications, Inc.
Financial Highlights (unaudited)
(in thousands except share data)
Three Months Ended
-----------------------------
Statement of Operations 6/30/99 6/30/98
-------------------------------- ----------- -----------
Revenues:
Telecommunications services $ 44,755 $ 28,974
Network technologies services 18,565 6,778
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Total revenues 63,320 35,752
Cost of goods sold:
Telecommunications services 27,491 23,009
Network technologies services 11,064 1,335
----------- -----------
Total cost of goods sold 38,555 24,344
Gross margin:
Telecommunications services 17,264 5,965
Network technologies services 7,501 5,443
----------- -----------
Total gross margin 24,765 11,408
Operating expenses:
Selling, general and administrative 38,087 21,648
Noncash compensation expense 2,144 1,794
Depreciation and amortization 23,502 9,777
----------- -----------
Total operating expenses 63,733 33,219
Loss from operations (38,968) (21,811)
Interest income/(expense), net (20,409) (10,634)
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Net loss (59,377) (32,445)
Preferred stock dividends
and accretion 10,000 8,607
----------- -----------
Net loss applicable to common
stockholders $ (69,377) $ (41,052)
=========== ===========
Basic and diluted net loss per
common share $ (1.40) $ (0.91)
=========== ===========
Weighted avg. common shares
outstanding $49,696,463 45,281,794
EBITDA (a) $ (13,322) $ (10,240)
Six Months Ended
------------------------------
Statement of Operations 6/30/99 6/30/98
-------------------------------- ----------- ------------
Revenues:
Telecommunications services $ 84,788 $ 55,118
Network technologies services 36,605 8,103
----------- -----------
Total revenues 121,393 63,221
Cost of goods sold:
Telecommunications services 55,625 42,127
Network technologies services 20,167 1,470
----------- -----------
Total cost of goods sold 75,792 43,597
Gross margin:
Telecommunications services 29,163 12,991
Network technologies services 16,438 6,633
----------- -----------
Total gross margin 45,601 19,624
Operating expenses:
Selling, general and administrative 74,309 41,454
Noncash compensation expense 5,193 3,427
Depreciation and amortization 43,677 17,383
----------- -----------
Total operating expenses 123,179 62,264
Loss from operations (77,578) (42,640)
Interest income/(expense), net (38,987) (21,900)
----------- -----------
Net loss (116,565) (64,540)
Preferred stock dividends
and accretion 19,697 17,100
----------- -----------
Net loss applicable to common
stockholders $ (136,262) $ (81,640)
=========== ===========
Basic and diluted net loss per
common share $ (2.77) $ (1.97)
=========== ===========
Weighted avg. common shares
outstanding 49,191,841 41,495,538
EBITDA (a) $ (28,708) $ (21,830)
(a) EBITDA consists of net loss before net interest expense,
depreciation and amortization and non-cash compensation expense.
e.spire Communications, Inc.
Financial Highlights (unaudited)
(in thousands except statistical data)
June 30, June 30,
Condensed Balance Sheets 1999 1998
---------------------------------- ----------- ------------
Current assets $ 256,897 $ 357,229
Net property, plant and equipment 598,162 349,267
Other 53,525 75,946
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Total assets $ 908,584 $ 782,442
=========== ============
Current liabilities $ 93,735 $ 61,002
Long-term liabilities 787,258 499,634
----------- ------------
Total liabilities 880,993 560,636
Redeemable preferred
stock and options 260,684 222,259
Stockholders' deficit (233,093) (453)
----------- ------------
Total liabilities,
redeemable preferred stock
and options, and
stockholders' deficit $ 908,584 $ 782,442
=========== ============
Selected Statistical Data
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Fiber Networks 37 32
Fiber Networks Under Construction 2 3
Access Lines Installed 118,075 85,633
Total Buildings Connected 3,688 2,393
Route Miles 3,647 1,433
Fiber Miles 166,238 124,000
VGEs 1,618,722 1,233,988
Co-locations 103 68
Lucent 5ESS Voice Switches 25 17
Data Points-of-Presence (POPs) 387 223
Full-Time Employees 1,402 979 |
