Loss of .16 versus expected loss of .21
Wednesday May 10, 7:35 am Eastern Time
Company Press Release
Metromedia Fiber Network, Inc. Reports First Quarter 2000 Results
- Revenues increase 73% over Q1 1999 to $31.9M - Fiber miles in service increase to 742,000
NEW YORK--(BUSINESS WIRE)--May 10, 2000-- Metromedia Fiber Network, Inc. (MFN) (Nasdaq: MFNX - news), the leading provider of optical Internet infrastructure within key metropolitan areas, reported first quarter results for the period ended March 31, 2000. Revenues for the quarter ended March 31, 2000 increased 73% to $31.9 million compared with $18.4 million for the quarter ended March 31, 1999.
The company reported a net loss of $85.2 million, or $(.16) per share, for the quarter ended March 31, 2000, compared with a net loss of $5.8 million, or $(.02) per share, for the quarter ended March 31, 1999. The increased net loss was primarily attributable to the amortization of goodwill related to the AboveNet acquisition, the cost of additional debt acquired related to the issuance and sale of 10% senior notes in October 1999, as well as the convertible subordinated notes issued in March 2000, and to a change in accounting treatment for certain contracts.
``We are continuing to see high growth in revenue as the marketplace increasingly realizes the unique value of our offering,'' said Nick Tanzi, president and chief operating officer for Metromedia Fiber Network. ``We are well along in our strategy to build out 67 markets internationally and create our global optical IP network to bring advanced business and media-rich applications across the Internet to our customers.''
The company demonstrated aggressive business development in the first quarter, securing contracts to deploy optical networks for a host of leading companies including:
- Freddie Mac;
- ITC^DeltaCom;
- Yipes;
- American International Group Data Center, Inc.; and
- Cogent Communications.
Additional achievements in Q1 included:
being selected as a major Internet transit providers for America Online;
launching its intra-city optical networks in Boston, Houston and San Francisco; and
being selected by Electronic Arts selecting AboveNet for co-location and IP connectivity services.
For the first quarter of 2000, cost of sales was $35.6 million compared with $8.2 million for the same quarter in 1999. The increase was primarily the result of Internet connectivity costs associated with the acquisition of AboveNet Communications, which occurred during the 3rd quarter of 1999. Depreciation and amortization expense was $32.5 million for the quarter ended March 31, 2000, compared with $1.2 million for the quarter ended March 31,1999, resulting primarily from amortization of goodwill relating to the acquisition of AboveNet and increased investment in the company's completed fiber optic network and additional property and equipment acquired.
Interest income increased to $25.0 million for the quarter ended March 31, 2000, compared with $7.4 million for the quarter ended March 31, 1999. The increase is a result of the investment of a portion of the proceeds from the issuance and sale of the company's 10% senior notes due in 2008 and 2009, as well as from the convertible subordinated notes issued in March 2000.
Interest expense increased for the quarter ended March 31, 2000 to $45.2 million, compared with $15.9 million during the same period of 1999. The increase in interest expense reflects the issuance and sale of the company's 10% senior notes due in 2009, as well the subordinated notes issued in March 2000.
As the Company is in the early stage of development, it expects to generate significant operating and net losses as it continues to build out and market its fiber optic network and Internet infrastructure. Management believes that its goals will be achieved through the Company's successful implementation and execution of its growth strategy.
Metromedia Fiber Network, Inc., headquartered in White Plains, New York, the leading provider of end-to-end optical network and Internet infrastructure solutions, is revolutionizing the fiber optic industry. By offering virtually unlimited, unmetered bandwidth at a fixed cost, the Company is eliminating the bandwidth barrier and redefining the way broadband capacity is sold. Metromedia Fiber Network is extending metropolitan optical networking infrastructure to the end user in strategic top-tier markets, enabling its customers to implement the latest data, video, Internet and multimedia applications. In addition to its current expansion in 51 cities in North America, MFN is establishing an international presence with planned fiber optic network builds in 16 cities throughout Europe.
Together with its subsidiaries, AboveNet Communications, Inc., a leading provider of co-location and Internet connectivity solutions, and PAIX.NET, Inc., the leading neutral Internet Exchange, MFN is unleashing full potential of the Internet. The combined company facilitates the explosive growth of e-commerce and advanced Internet applications by delivering secure, reliable and scalable optical networks and IP services to Internet content and service providers, carriers and enterprise users worldwide. For more information about MFN, please visit the company's Web site at www.mmfn.com.
This partial discussion of the statements of financial condition and operations of the Company should be read in conjunction with the consolidated financial statements and related notes contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1999.
This news release contains forward-looking statements that involve risks and uncertainties. Factors that could cause or contribute to such risks and uncertainties include, but are not limited to, general economic and business conditions, competition, changes in technology and methods of marketing, and various other factors beyond the Company's control. This also includes such factors as are described from time to time in the SEC reports filed by Metromedia Fiber Network, including the most recently filed Form S-3 and Form 10-K, and its quarterly report on Form 10-Q for the quarter ended March 31, 2000.
Metromedia Fiber Network, Inc. & Subsidiaries
Consolidated Statements of Operations (Unaudited)
(in 000's, except per share amounts)
Three Months Ended
March 31,
-------------------
2000 1999
-------- --------
Revenue $ 31,921 $ 18,379
Expenses:
Cost of sales 35,576 8,258
Selling, general and administrative 27,660 6,073
Depreciation and amortization 32,489 1,195
-------- --------
Income (loss) from operations (63,804) 2,853
Interest income 25,057 7,437
Interest expense (45,180) (15,904)
Loss from joint ventures (1,233) (200)
-------- --------
Net loss $(85,160) $ (5,814)
======== ========
Net loss per share, basic $ (0.16) $ (0.02)
======== ========
Net loss per share, diluted N/A N/A
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Weighted average number of shares
outstanding, basic 533,410 378,004
======== ========
Weighted average number of shares
outstanding, diluted N/A N/A
======== ========
See accompanying notes.
Metromedia Fiber Network, Inc. & Subsidiaries
Consolidated Balance Sheets
(in 000's, except share amounts)
March 31, December 31,
2000 1999
--------- -----------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 2,535,829 $ 1,262,391
Pledged securities 32,312 31,960
Accounts receivable 83,501 72,166
Prepaid expenses and other current assets 15,485 10,948
----------- -----------
Total current assets 2,667,127 1,377,465
Fiber optic transmission network
and related equipment, net 1,127,417 796,684
Property and equipment, net 16,869 9,215
Restricted cash 69,355 82,193
Marketable securities 119,639 29,628
Investment in/advances to joint venture 35,043 23,130
Other assets 97,558 102,573
Goodwill, net 1,582,230 1,539,097
----------- -----------
Total assets $ 5,715,238 $ 3,959,985
=========== ===========
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 48,678 $ 43,344
Accrued expenses 235,898 186,528
Deferred revenue, current portion 16,598 12,867
Capital lease obligations and
notes payable, current portion 7,409 6,781
----------- -----------
Total current liabilities 308,583 249,520
Senior notes payable 1,660,900 1,660,900
Convertible subordinated notes payable 975,281 -
Capital lease obligations and notes payable 37,291 38,414
Deferred revenue 191,331 176,475
Commitments and contingencies (see notes)
Stockholders' equity:
Class A common stock, $.01 par value;
4,808,062,482 shares authorized;
476,696,386 and 411,116,800 shares
issued and outstanding, respectively 4,766 4,111
Class B common stock, $.01 par value;
1,044,509,564 shares authorized;
67,538,544 shares issued and outstanding 676 676
Additional paid-in capital 2,792,217 1,995,741
Accumulated deficit (242,335) (157,175)
Cumulative comprehensive loss (13,472) (8,677)
----------- -----------
Total stockholders' equity 2,541,852 1,834,676
----------- -----------
Total liabilities and
stockholders' equity $ 5,715,238 $ 3,959,985
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