Viasource Communications Reports Third Quarter 2000 Results and Announces Strategic 5-Year Relationship With DIRECTV
November 02, 2000 6:12:00 PM ET
FT. LAUDERDALE, Fla., Nov. 2 /PRNewswire/ -- Viasource Communications, Inc. VVVV, a leading broadband technology deployment organization, today reported financial results for the three months, and nine months ended September 30, 2000 and announced a five-year strategic relationship with DIRECTV.
Total revenues for the three months ended September 30, 2000 were $61.3 million compared with pro forma revenues of $35.6 million in the third quarter of 1999, an increase of 72% for the period. For the nine-month period ended September 30, 2000, pro forma revenues were $170.5 million compared to $93.9 million for the same period last year, an increase of 82%. Excluding wireless sector revenue deferrals, total revenues were $65.1 million and $186.1 million for the quarter-ended and nine-month period ended, respectively. "The dramatic rise in top-line growth for the company signifies a strong demand for the products and services of Viasource. Our clients within the communications sector realize the importance of time-to-market initiatives and rely on Viasource to deliver end-user connections," said Craig Russey, President and CEO of Viasource.
For the quarter ended September 30, 2000, EBITDA (earnings before interest, taxes, depreciation and amortization) was $(2.1) million compared with proforma EBITDA of $2.9 million for the same period the prior year. Net loss per share was $(.24) for the quarter ended September 2000 versus proforma $(.09) for the same period last year. For the nine-month period ended September 30, 2000, proforma EBITDA was $(19.9) million, compared with proforma EBITDA of $7.0 million for the same period last year. Proforma net loss per share for the nine-month period ended September 2000, was $(1.07) versus $(0.26) for the same period last year. Adjusted EBITDA before special compensation charges and expenses related to acquisitions (earnings before interest expense, income taxes, depreciation and amortization, revenue deferrals, special compensation charges and one-time costs incurred related to the acquired companies in the year 2000) was $1.7 million for the quarter ended September 30, 2000 and $8.7 million for the nine-month period ended September 2000.
Russey stated, "Third quarter was a watershed period in the Company's history. Our IPO on August 18, 2000 signaled a new revolution in the telecommunications sector as Viasource drove home the importance of end-user connectivity in the value proposition of carriers and providers. The volatility in the capital markets is increasing the focus of the carriers on the necessity to convert significant capital investments in infrastructure and technology to revenue by connecting the end-user."
"We believe that we are becoming the predominant "go-to" partner for the carriers, evidenced by our top-line achievements. Despite the volatility of the communications sector as a whole, we feel the diversity of product and carrier mix we have developed continues to be the cornerstone of our success."
"Integration of our acquired companies in the premise networking, DSL and Satellite sectors has greatly diversified and increased our revenue base. During the quarter, Viasource started 44 new initiatives, including 31 in cable, 3 in wireless, 9 in telephony and 1 in DSL. These significant core investments were necessary to continue the Company's commitment to product-line diversity, long-term client relationships and continued national footprint expansion. However, our expansion in these areas, softer DSL sector expectations and a major new relationship have contributed to increased costs in the quarter that will likely affect the fourth quarter as well."
"In addition to our new initiatives, I am pleased to announce that we have signed a letter of agreement with DIRECTV that extends our current agreement to 5 years. This landmark alliance, which significantly expands our existing relationship and provides for deep commitments to one another, is built on the premise of delivering greater customer care, lessening time-to-market and furthering DIRECTV's dedication to a professional installation platform."
Viasource is also pleased to announce its strategic relationship with Flashcom for the retail distribution of DSL services the continued expansion of broadband telephony with AT&T Broadband in Chicago and its service provider relationship with Copper Mountain.
Russey added, "We believe that we are the nation's leader when it comes to full-solution end-user connectivity. Our strategy to build the nation's largest fulfillment platform is certainly paying off with the broadband providers. Their growth, when levered across our infrastructure, permits greater focus on core business and provides a certain nimbleness to their technology roll-out plans and commitments. As the only pure play in this large and rapidly growing market, Viasource is uniquely positioned as the company that connects the world's most sophisticated technologies -- initiating the revenue production cycle on behalf of carriers and providers."
The third quarter also marked a major new initiative in business development as the company announced the hiring of Colin McWay as its Executive Vice President of Corporate and Business Development. McWay was the former Chief Executive Officer of Connecticut Telephone and has initiated an organic growth strategy that will deepen existing client relationships and lever new and creative business platforms on behalf of Viasource clients that are centered around unique "end-user" programs.
Revenue Mix
Further diversification in Viasource's product, geographic and client mix was a major accomplishment during the third quarter. "Meeting our diversity objectives makes us a more resilient company that is able to satisfy the heavy deployment demands of the carrier community. We have increased our product and service offerings, added geography and initiated new client relationships during the quarter, all of which contribute significantly to our mix objectives," added Russey.
Revenue from operations during the quarter was widely distributed between Viasource product and service lines as cable contributed 37%, wireless 34%, telephony 14%, DSL 13%, and premise networking 2%.
Revenue from cable operations was $24.3 million in the third quarter, compared to pro forma second quarter 2000 revenue of $21.4 million, a quarter over quarter increase of 14%. "Our core cable business experienced excellent growth in the quarter, despite a relatively flat overall core cable market. Our long-term relationships with the major cable providers and our nationwide brand has enabled us to rapidly expand our presence in this sector. Growth in this sector proves that the shift of fulfillment services from an in-house environment to an outsourced platform is underway," stated Russey.
Revenue from wireless operations was $22.2 million in the third quarter ended September 2000, compared to pro forma second quarter 2000 revenue of $30.6 million. Revenue decreased in line with expectations due to the near completion of the Primestar to DIRECTV conversion program in the month of August 2000. On a pro forma basis, wireless sector revenues actually increased over 300% when comparing third quarter 2000 revenue to third quarter 1999 revenue of $5.4 million. "We are delighted by our relationship with the folks at DIRECTV. The alliance between DIRECTV and Viasource establishes a new standard in the industry and will provide the basis by which DIRECTV will be able to lever its subscriber penetration and quality initiatives across the country. They have been extremely forward-thinking in their customer care initiatives. During the quarter we made a strategic decision to maintain our wireless infrastructure and workforce in anticipation of this alliance and the unanticipated costs associated with that decision were approximately $1.8 million," noted Russey. Viasource led the way with more Primestar to DIRECTV conversions than any other company in DIRECTV's HOME SERVICES Providers (HSPs) network.
Advanced telephony, data and Internet revenue was $8.8 million for the third quarter ended September 2000, up 29% when compared to pro forma revenue of $6.8 million in the second quarter of this year. "During the quarter, we experienced significant growth in the sector as our relationship with the high speed carriers expanded. We began 9 new initiatives around the country in California, Utah, Iowa, Nebraska, Colorado, Nevada, Texas, Indiana and Massachusetts, as the underlying elements of broadband demand remain very strong," said Russey.
DSL sector revenue for the quarter ended September 2000 was $8.8 million compared with pro forma revenue for the prior quarter of $9.1 million, a decrease of 3.4%. "While meeting our revenue expectations for the quarter, we are experiencing softness in the DSL sector due to the continuing line provisioning and equipment issues experienced by the DLEC's and ILEC's. Although the sector is experiencing change in the way of consolidation and reforecasting which could impact short-term growth, we continue to believe this will be a significant business line for us as pent-up demand gets met by the resolution of the line and equipment difficulties the sector has faced," said Russey.
Premise networking revenue was $1.0 million during the quarter ended September 30, 2000, as compared with pro forma revenue of $1.8 million in the same quarter of 1999. Revenue for the quarter reflects the completion of a major assignment for our project-based wiring business.
Viasource (http://www.viasource.net) is a leading broadband technology deployment organization providing video, voice and data fulfillment and long-term support infrastructure to many of the nation's leading broadband providers. Viasource is well positioned to solve the last mile bottleneck and first-to-market goals of communication providers. Viasource has more than 3,500 employees connecting digital converters, network interface units, high speed modems, Ethernet switches, routers and d-slams allowing end-users access to streaming voice, video, and data through today's most sophisticated broadband technologies. Viasource's corporate headquarters is located in Ft. Lauderdale, Florida, and it serves clients through more than 180 offices throughout the United States.
Some of the statements in this press release, including statements regarding Viasource's business strategy and expectations, plans for growth and business relationships, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainties, which could cause Viasource's actual results to differ materially from those anticipated in such statements. Factors that could cause such results to differ include Viasource's limited operating history, competitive pricing pressures in Viasource's industry, provisions in Viasource's agreements with clients that permit cancellation on short notice and other factors discussed in Viasource's filings with the Securities and Exchange Commission ("SEC"), including the "Risk Factors" section of Viasource's Final Prospectus dated August 18, 2000. Viasource does not assume any obligation to update any such forward-looking statements.
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