HAMILTON, Bermuda and NEW YORK, Oct. 13 /PRNewswire/ -- RSL
Communications, Ltd. (Nasdaq: RSLC), a premier provider of data, Internet, and
voice services focused on small and medium enterprises in Europe and the
United States, announced that third quarter 2000 revenues are expected to have
been approximately $375 to $380 million, and EBITDA(1), excluding
deltathree.com, is expected to be negative $40-$45 million.
Third quarter revenues were negatively impacted by the traditionally slow
European summer holiday period and the continuing strength of the U.S. dollar
versus the major foreign currencies. Adjusted for foreign currency impacts,
the Company expects revenue to have been approximately flat compared to the
second quarter of 2000. Gross margins were negatively affected by a seasonal
decrease in higher margin corporate revenues in Europe as well as continued
competitive pricing pressures in several markets. The Company also expects
selling, general and administrative expenses to increase primarily due to
severance expenses in conjunction with the Company's effort to reduce
headcount, primarily in headquarters, an increase in data sales efforts in
several operations to support the Company's focus on higher margin
data/Internet products, and increased customer acquisition costs.
RSL COM's recently appointed Chief Executive Officer, Paul Domorski,
commented: "While the third quarter has been challenging, my arrival at the
end of the period has brought a fresh look and new leadership to the Company.
I immediately embarked upon an intense strategic and operational review of
every country, market segment and product line. Over the next several weeks we
expect to announce important actions that should alter and significantly
improve the Company's long-term profile. Also under development is a new
business model that will reflect the current realities of the
telecommunications marketplace."
Mr. Domorski continued, "The Company expects that certain operations which
are not expected to generate positive returns in the near term will be sold,
restructured or discontinued and a related charge is expected in the fourth
quarter. The amount of the charge will be quantified upon completion of the
review."
The Company has successfully enhanced controls on its cash resources and
has reduced its cash burn rate in the third quarter versus historical levels,
primarily due to the reduction of non-critical capital expenditures and
working capital management.
The Company expects to announce third quarter 2000 results on November 9,
2000.
RSL Communications, Ltd., is a facilities based communications company
that provides a broad range of data/Internet, voice and value-added product
and service solutions primarily to small and medium sized businesses and
residential customers in selected markets around the globe. Through its
subsidiary, deltathree.com, RSL COM also owns and operates a privately managed
Internet Protocol (IP) telephony network with 107 points of presence in over
40 countries around the world. RSL COM is headquartered in Hamilton, Bermuda
with executive offices in New York City. The web address is
rslcom.com.
(1) EBITDA, as used herein, consists of loss from operations before
depreciation and amortization. EBITDA has also been normalized to exclude
non-cash compensation expense and to exclude the EBITDA loss of
deltathree.com, the Company's publicly held internet telephony unit.
This press release contains forward-looking statements within the meaning of
the "Safe Harbor" provisions of the Private Securities Litigation Reform Act
of 1995. These statements are based on management's current expectations or
beliefs and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those set forth in such
statements. Factors which may affect actual results include, but are not
limited to, the Company's capital requirements, general economic factors, the
impact of rapid industry changes, increased competition, pricing pressures,
government regulation, the integration of acquisitions and new operations, as
well as other risks referenced from time to time in the Company's filings with
the Securities and Exchange Commission. For a detailed discussion of these and
other risk factors, please refer to the Company's filings with the SEC,
including the Company's Form 10-K for the fiscal year ended December 31, 1999
and the Company's registration statement on Form S-4 filed with the Securities
and Exchange Commission in July 2000. All subsequent written and oral forward-
looking statements attributable to the Company or persons acting on its behalf
are expressly qualified in their entirety by these risk factors. The Company
does not undertake any obligation to release publicly any revisions to such
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
CONTACT: Jim Magrone, Vice President, Treasury and Investor Relations,
212-445-7443, or Kathleen Makrakis, Director of Investor Relations,
212-445-7463, both of RSL Communications.
SOURCE RSL Communications, Ltd.
-0- 10/13/2000
/CONTACT: Jim Magrone, Vice President, Treasury and Investor Relations,
212-445-7443, or Kathleen Makrakis, Director of Investor Relations,
212-445-7463, both of RSL Communications/
/Web site: rslcom.com
(RSLC)
CO: RSL Communications, Ltd.
ST: Bermuda
IN: CPR MLM
SU: ERP
SK
-- NYF044 --
6949 10/13/2000 07:46 EDT prnewswire.com
//Begin Meta Data//
Selector Code: ..m.c
Copyright 2000, PR Newswire |
