XOXOQ profitable Q just out. Communications Reports Third Quarter Results
Wednesday November 13, 1:19 pm ET
Company Reports Positive EBITDA for Second Consecutive Quarter
RESTON, Va.--(BUSINESS WIRE)--Nov. 13, 2002--XO Communications, Inc. (OTCBB:XOXOQ - News) today announced financial results for the three and nine month periods ended September 30, 2002.
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Total revenue was $301.5 million in the third quarter of 2002 compared to $331.5 million for this same period in 2001. This decrease resulted from a combination of economic factors, as well as the sale of XO's European operations in February 2002. Year-to-date revenue for the nine months ended September 30, 2002 totaled $960.4 million, a 4.9% increase over the comparable period in 2001.
Of the total revenue reported in the third quarter of 2002, $158.0 million was derived from voice services, which includes revenue from local, long distance and other enhanced voice services, and $109.9 million was attributable to data services, which includes Internet access, network access, and web hosting.
Revenue from integrated voice and data services totaled $33.4 million and other revenue totaled $0.2 million in the third quarter of 2002.
The company reported positive EBITDA of $0.3 million in the third quarter of 2002, compared to an EBITDA loss of $53.5 million in the third quarter of 2001. This is the second consecutive quarter that XO has reported positive EBITDA results.
As of September 30, 2002, XO had approximately $554.5 million in cash and marketable securities on hand, a slight increase from the $535.9 million in cash and marketable securities on hand as of the end of the second quarter.
This increase primarily resulted from improvements in the collection of accounts receivable and the deferral or avoidance of certain payments as a result of the Company's bankruptcy proceedings.
Under its existing business plan, and assuming that the company's restructuring is implemented in late 2002, XO currently estimates that the cash and marketable securities on hand as of September 30, 2002 will be sufficient to fund its operations for the remainder of 2002 and throughout 2003.
Throughout its restructuring period, it has been business as usual for XO, offering the same high quality products and services that its business customers have come to expect. In particular, XO has seen significant growth in its XOptions services, which combines traditional Internet/data and voice services into a series of easy-to-buy packages with monthly flat rate pricing.
More than 10,000 XOptions bundles have been sold to businesses across the United States since their introduction in September 2000.
Additionally, in August 2002, XO agreed to amend various agreements with Level 3 Communications, Inc. related to XO's acquisition of its inter-city fiber networks in the United States from Level 3 and the recurring maintenance expenses relating to that network.
Under the amendments, XO will surrender its right to six of its 24 fibers and an empty conduit in the inter-city network.
In exchange, beginning in 2003 and continuing over the remaining term of the agreement, the operating and maintenance fees and fiber relocation charges payable by XO under the agreements with Level 3 will be reduced from the current rate of approximately $17.0 million annually to a fixed rate of $5.0 million annually.
Closing of these transactions is subject to several conditions, including receipt of regulatory approvals. XO recorded a $477.3 million non-cash write-down of these assets during the third quarter of 2002. The write-down is based on the book value of the surrendered facilities and does not reflect the future benefits of the related expense reductions described above.
The bankruptcy court in XO's bankruptcy proceeding has scheduled a hearing on November 15, 2002 to consider XO's request for an order confirming its stand-alone reorganization plan.
Receipt of that confirmation order will set the stage for XO to implement the stand-alone reorganization plan and emerge from its Chapter 11 bankruptcy proceedings upon receipt of necessary state and federal regulatory approvals.
About XO Communications
XO Communications is a leading broadband communications service provider offering a complete set of communications services, including: local and long distance voice, Internet access, Virtual Private Networking (VPN), Ethernet, Wavelength, Web Hosting and Integrated voice and data services.
XO has assembled an unrivaled set of facilities-based broadband networks and Tier One Internet peering relationships in the United States. XO currently offers facilities-based broadband communications services in more than 60 markets throughout the United States.
The statements contained in this release that are not historical facts are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995).
These statements include those describing the expected future operations of XO, the expectations regarding the outcome of the restructuring transactions and the related Bankruptcy Court proceedings described in this release, and XO's estimate of the length of time that is current cash and marketable securities will fund its operations.
Management wishes to caution the reader that these forward-looking statements are only predictions and are subject to risks and uncertainties and actual results may differ materially from those indicated in the forward-looking statements as a result of a number of factors.
These factors include, but are not limited to, risks associated with XO's ability to complete the transactions described in this release and those risks and uncertainties described from time to time in the reports filed by XO Communications with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2001 and in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2002.
Other important factors that could cause actual events or results to be materially different from the forward-looking statements include: the ability of the Company to consummate its stand-alone plan of reorganization, including obtaining necessary regulatory approvals; and court approval of motions prosecuted by the Company from time to time in the chapter 11 case.
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