PAGE 2nd Qtr. Results
Thursday August 10, 4:38 pm Eastern Time
Press Release
PageNet Announces Second Quarter 2000 Results
DALLAS--(BUSINESS WIRE)--Aug. 10, 2000--Paging Network, Inc. (OTC:PAGE - news), which in November 1999 announced an agreement to merge with Arch Communications Group Inc., today reported financial results for the quarter ended June 30, 2000.
Second quarter 2000 consolidated total revenues were $203.5 million, a 20.1 percent decrease from 1999 levels of $254.6 million. Consolidated Adjusted EBITDA(1) for the quarter ending June 30, 2000 was $32.6 million compared to $70.4 million in the 1999 corresponding period. PageNet's second quarter net loss was $72.4 million compared to a second quarter 1999 net loss of $95.3 million.
The Company's traditional paging business generated total revenues of $196.2 million in the second quarter of 2000, compared to traditional paging total revenues of $251.1 million in the second quarter of 1999. The Company's traditional paging business generated Adjusted EBITDA of $47.2 million in the second quarter of 2000 compared to $81.5 million in the corresponding period in 1999.
PageNet experienced a net reduction of 566,042 units in service in the second quarter. The Company reported that as of July 31, 2000, it had a cash balance of $66 million. On July 24, 2000, PageNet filed for voluntary reorganization under Chapter 11 with the U.S. Bankruptcy Court for the District of Delaware. The Company made this filing with the goal of expediting the completion of its previously announced merger with Arch Communications. The Company expects to close its merger with Arch in the fourth quarter of 2000.
PageNet is a leading provider of wireless messaging and information services in all 50 states, the District of Columbia, the U.S. Virgin Islands, Puerto Rico and Canada. The company offers a full range of paging and advanced messaging services, including guaranteed-delivery messaging and two-way wireless e-mail. PageNet's wholly-owned subsidiary, Vast Solutions, develops integrated wireless solutions to increase productivity and improve performance for major corporations. Detailed information for PageNet services are available on the Internet at www.pagenet.com. Detailed information on Vast Solutions is available at www.vast.com.
(1) PageNet defines Adjusted EBITDA as earnings before interest, income taxes, depreciation, amortization, provision for asset impairment, other non-operating income (expense), and cumulative effect of a change in accounting principle.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Statements contained in, or made in conjunction with, this release which are not historical fact, such as forward-looking statements concerning future financial performance and growth of the business of PageNet, Arch and the future combined company, involve risks and uncertainties, including those described in Arch's and PageNet's most recent Annual Reports on Form 10-K and other filings with the Securities and Exchange Commission. Although Arch and PageNet believe the expectations reflected in any forward-looking statements are based on reasonable assumptions, they can give no assurance that their expectations will be attained. Factors that could cause actual results to differ materially from their expectations include the recapitalization of the combined companies, challenges of integrating the businesses of Arch and PageNet, competitive pricing pressures, the introduction of products and services by competitors, the performance of vendors and independent contractors, costs and timing associated with post-merger synergies and cost reductions, the timing, performance and market acceptance of new products and services, including the construction, testing and placement into operation of the Company's advanced messaging network, future capital needs following the merger, the financial condition of the Company and the uncertainty of additional funding, and other risks. Any forward-looking statements represent the best judgment of both Arch and PageNet as of the date of this release. The companies disclaim any intent or obligation to update any forward-looking statements.
(Tables to Follow)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share information)
(Unaudited)
Three Months Ended Six Months Ended
--------- ---------- ---------------------
June 30, 2000 June 30, 2000
--------------------- ---------------------
1999 2000 1999 2000
---------- ---------- ---------- ----------
Services, rent and
maintenance revenues $ 231,635 $ 184,884 $ 473,503 $ 396,157
Product sales 22,930 18,635 44,622 42,999
---------- ---------- ---------- ----------
Total revenues 254,565 203,519 518,125 439,156
Cost of products sold (10,462) (13,043) (26,639) (26,236)
---------- ---------- ---------- ----------
244,103 190,476 491,486 412,920
Operating expenses:
Services, rent and
maintenance 63,782 62,541 130,672 125,240
Selling 21,962 15,221 45,992 35,322
General and
administrative 87,939 80,164 176,229 159,934
Depreciation and
amortization 128,668 58,988 195,548 121,825
Provision for
asset impairment -- -- 17,798 --
---------- ---------- ---------- ----------
Total operating
expenses 302,351 216,914 566,239 442,321
---------- ---------- ---------- ----------
Operating loss (58,248) (26,438) (74,753) (29,401)
Other income (expense):
Interest expense (37,770) (46,768) (73,801) (93,123)
Interest income 715 824 1,305 938
Other non-operating
income (expense) (8) (25) 180 (49)
---------- ---------- ---------- ----------
Total other
expense (37,063) (45,969) (72,316) (92,234)
---------- ---------- ---------- ----------
Loss before cumulative
effect of a change in
accounting principle (95,311) (72,407) (147,069) (121,635)
Cumulative effect of a
change in accounting
principle -- -- (37,446) --
---------- ---------- ---------- ----------
Net loss $ (95,311) $ (72,407) $(184,515) $(121,635)
========== ========== ========== ==========
Net loss per share
(basic and diluted):
Loss before cumulative
effect of a change in
accounting principle $ (0.92) $ (0.69) $ (1.42) $ (1.17)
Cumulative effect of a
change in accounting
principle -- -- (0.36) --
---------- ---------- ---------- ----------
Net loss per share $ (0.92) $ (0.69) $ (1.78) $ (1.17)
========== ========== ========== ==========
The following table presents certain information related to the
Company's business segments for the three and six months ended June
30, 1999 and 2000.
Three Months Ended Six Months Ended
June 30, 2000 June 30, 2000
--------------------- ------------------------
1999 2000 1999 2000
---------- ---------- ---------- ----------
Total Revenues:
Traditional Paging(1) $ 251,142 $ 196,170 $ 511,808 $ 424,655
Advanced Messaging 3,423 7,349 6,317 14,501
---------- ---------- ---------- ----------
$ 254,565 $ 203,519 $ 518,125 $ 439,156
========== ========== ========== ==========
Operating loss:
Traditional Paging(1) $ (46,525) $ (1,000) $ (54,246)(2) $ 12,101
Advanced Messaging (11,723) (25,438) (20,507) (41,502)
---------- ---------- ---------- ----------
$ (58,248) $ (26,438) $ (74,753) $ (29,401)
========== ========== ========== ==========
Adjusted EBITDA(3):
Traditional Paging(1) $ 81,506 $ 47,186 $ 157,857 $ 114,534
Advanced Messaging (11,086) (14,636) (19,264) (22,110)
---------- ---------- ---------- ----------
$ 70,420 $ 32,550 $ 138,593 $ 92,424
========== ========== ========== ==========
(1) The international operations of the Company currently consist entirely of traditional paging services and accordingly are included in the Company's traditional paging business segment.
(2) Operating loss for the traditional paging business segment for the first six months of 1999 includes a provision for asset impairment of $18 million.
(3) Adjusted EBITDA, as determined by the Company, does not reflect other non-operating income (expense), provision for asset impairment, and cumulative effect of a change in accounting principle.
Adjusted EBITDA is not defined in generally accepted accounting principles and should not be considered in isolation or as a substitute for a measure of performance in accordance with generally accepted accounting principles.
Subscriber Highlights
Net Gains Q2 00 Total Q2 99 Total Year to Year
(Reductions) Installed Installed % Increase
Q2 00 Base Base (Decrease)
------------ ----------- ----------- -----------
Domestic
--------
Traditional Paging (579,373) 7,550,167 9,476,825 (20.3)%
Advanced Messaging(1) 6,209 21,809 11,090 96.7 %
---------- ---------- ------------ -----------
Total Domestic (573,164) 7,571,976 9,487,915 (20.2)%
International(2)
----------------
Pagers 7,122 286,420 278,400 2.9 %
PageNet Consolidated(2) (566,042) 7,858,396 9,766,315 (19.5)%
-----------------------
Nationwide service (35,552) 679,708 734,267 (7.4)%
Alphanumeric(3) (55,087) 1,278,311 1,426,077 (10.4)%
Sure Page 1.5 way 3,680 93,415 55,446 68.5 %
Direct Channel (216,485) 3,836,846 4,614,728 (16.9)%
Indirect Channel (349,557) 4,021,550 5,151,587 (21.9)%
(1) Represents PageNet's® Two-Way messaging, Content Services, Advanced Wireless Integration service offerings, and PageNet's VoiceNow® service.
(2) PageNet of Canada began service in April 1996.
(3) Includes alphanumeric and PageNet® Two-Way wireless e-mail. |
