Metrocall Generates Free Cash Flow, Pays Down Debt
4th Quarter Marks Record EBITDA and Strong Subscriber Growth
ALEXANDRIA, Va., Feb. 8 /PRNewswire/ -- Metrocall, Inc., (Nasdaq: MCLL) today announced record operating cash flow (EBITDA) of $41.5 million for the quarter ended December 31, 1999, compared to $39.6 million for the third quarter ended September 30, 1999. Metrocall's EBITDA margin during the quarter rose to 30.2%. The company reported quarterly net subscriber additions of 50,564. Total subscriber units increased to 5,927,939 at December 31, 1999.
In 1999, Metrocall produced $156.5 million of EBITDA, $571.1 million of net revenue and 268,389 net subscriber additions.
William L. Collins III, President and Chief Executive Officer of Metrocall, said, "Metrocall completed one of the most remarkable years in the history of our company. We set out to use 1999 as a set up year for 2000 and clearly we accomplished a great deal. We promised to de-lever through operations, reduce capital expenditures, reduce overall expenses, increase cash flow margin, develop and initiate new product offerings and generate free cash flow. On all accounts, we delivered on our promises."
"1999 was also a year that we completed the integration of the Advanced Messaging Division of AT&T Wireless which we acquired in October of 1998. Additionally, we conceived and began development of a new business unit, Inciscent, to harness the growing demand in wireless data and focused the company on setting a course for growing cash flow, generating new revenue opportunities and strengthening the value of our customer base. The launch pad has been set in place and we look to 2000 to be a time when Metrocall can continue to drive the overall messaging side of our business as well as create opportunity in the wireless data market and web-enabled wireless data," said Collins.
"In many respects Metrocall is well ahead of our competitors in the wireless data market. We have the customer base segmented; one of the largest direct sales forces in all of telecommunications; and financial and strategic partners such as AT&T Wireless, PSINet, Aether Systems and Hicks, Muse, Tate & Furst to leverage and support our efforts going forward. The team we have assembled is focused on achieving the renaissance many of us have been speaking about in terms of industry consolidation and the rollout of web- enabled short messaging service (SMS). We will continue to develop new initiatives in wireless communications," Collins added.
With the initiation of a new business venture named Inciscent during the fourth quarter, Metrocall anticipates having the ability to leverage its embedded customer base with its partners to offer a suite of technology services to small office/home office (SOHO) customers and middle-market business-to-business enterprises. The service offerings will include, but not be limited to high-speed broadband Internet access, paging, two-way wireless data solutions and e-mail hosting.
During the fourth quarter, Metrocall sold the assets of Electronic Tracking Systems, d.b.a. ProNet Tracking System, to Spectrum Management LLC of Dallas Texas. Metrocall acquired the tracking business as a result of the merger with ProNet Inc. in 1997. The tracking system generated approximately $1.9 million in revenues during the third quarter. Proceeds of the sale were $12.7 million, including $8.7 million in cash. Metrocall used the cash proceeds to pay down a portion of its credit facility.
Metrocall's Chief Financial Officer, Vincent D. Kelly stated, "For the third consecutive quarter Metrocall did not increase its borrowings and total debt declined from third quarter balances of $786.7 million to $777.6 million at December 31, 1999. Metrocall's leverage ratio (net debt divided by annualized EBITDA) ended the quarter at 4.67; an industry best." Availability under the company's $200 million credit facility at December 31, 1999 as calculated by the facility covenants would allow Metrocall to access $125 million (the remaining undrawn balance of the facility), leaving Metrocall in an extremely strong liquidity position.
Free cash flow is defined as EBITDA minus capital expenditures and minus interest expense.
While EPS for the year was a loss of $4.47, Metrocall's operations are profitable before (non-cash) acquisition related expenses. For the twelve months ended December 31st net loss was approximately $186.7 million, but there was $210.4 million in (non-cash) acquisition related amortization expenses. This means that Metrocall's net income (loss) from operations, before non-cash amortization related expenses, was $23.7 million or a positive EPS from operations for 1999 of $0.56.
Metrocall, Inc., headquartered in Alexandria, Virginia, is one of the largest paging and wireless messaging company's in the United States serving over 6.0 million subscribers (pro forma for the NationPage acquisition), through its Nationwide Wireless Network. For more information on Metrocall please visit www.metrocall.com or AOL Keyword: Metrocall.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
The statements contained in this release which are not historical facts, such as those concerning future financial performance and growth and achievement of operating synergies and cost reductions, are forward-looking statements that are subject to risks and uncertainties, including the risk factors identified in Metrocall's Annual Report on Form 10-K, and in Metrocall's periodic reports under the Securities and Exchange Act of 1934, and could differ materially from those set forth in the forward-looking statements. |
