Robert: Harvey says 02 CapEx budget for the 40 market plan is 300 million.
Protection builds would look like this:
Evansville, IN April 28, 2002
Jackson, MS April 28 ,2002
Lansing, MI April 28 ,2002
Owensboro, KY, April 28, 2002
Saginaw, MI, April 28, 2002
Utica, NY April 28, 2002
Vicksburg, MS, April 28, 2002
There are 17 other BTA's (covering 2.94 million POP's) that have had buildout deadlines extended until October 24th, 2002. Some of these BTA's have multiple licenses.
I have estimated about 30 million to just protection build these markets.
My view point is that LWIN will expand existing markets by including for example, Grand Rapids into the Kalamazoo Market. Lansing into the Jackson market, Saginaw into the Flint market and Utica into the Syracuse Market! This would increase covered POP's by as much as 1.79 million, and maintain the 40 market topology. LWIN has done this in the past by adding Clarksville to the Nashville market, and Pine Bluff to the Little Rock Market!
To do the protection builds and finish buildouts in the existing Michingan markets (better coverage) and expand the scope of the existing 40 markets . About 65 million! That leaves budgeted CapEx of 235 Million! With no where to go!
Current speculaton is that LWIN will launch Data Services (1XEV and/or 1XEV-DO) in several of their markets! It's hard to come up with any other explanation of what they would use the other 230 million on. Chances are that Harvey has simply padded the CapEx budget to beat it.
As far as funding goes. I think the market has mostly written LWIN off as a "Reorg". I take the opposite view.
LWIN has over 410 million in Cash and Equivs/Notes inclusive of the 85 million on deposit with the FCC.
Harvey says an EBITDA loss of 78 million this year, EBITDA positive in Q4, UFCF positive in 1H03.
If Harvey delivers on this plan. LWIN would end the year EBITDA positive, and soon UFCF posiitve with ~300 million in Financial assets!
By my own model, LWIN should be EBITDA positive by Q3!
I think we will know at the end of Q1. If LWIN is going to go from a 120 Million EBITDA loss in Q401 to EBITDA positive in Q402. They have to show absolute proof of this in Q1 now that the launch expenses are finished!
I expect a EBITDA loss of ~ 36 to 47 million on revenues of 145 million in Q1
EBITDA loss of 18 million in Q2
Positive EBITDA of ~1 million in Q3
By diversifying their product offerings with both Data and Voice. That should reduce the markets worries about competition being strictly in the voice segment.
Once Harvey proves he can turn new markets EBITDA positive in 12 to 15 months. There should be additional funding available for system expansion.
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