PR News Wire via Dow Jones
Industry-Leading Third Quarter Digital Subscriber Unit Additions
Expanded Distribution Channels
Brazilian SMR Regulations Released
Pittencrieff Transaction Closes
MCLEAN, Va., Nov. 13 /PRNewswire/ -- Nextel Communications, Inc. (Nasdaq:
NXTL), today announced record results for the third quarter, including a 315
percent increase in digital subscriber units and a 143 percent increase in radio
service revenue as compared with the third quarter last year. During the third
quarter, Nextel led the U.S. wireless industry with approximately 322,200
digital subscriber unit net additions.
Dan Akerson, Nextel's chairman and chief executive officer said, "Strong
customer acceptance of our differentiated approach to offering wireless services
produced industry leading growth, expanded revenue and improved operating cash
flow trends during the third quarter. In October, nearly thirteen months after
launching our first market with our newly enhanced services, Nextel achieved the
significant milestone of our millionth digital unit in service. Through
continued network expansion, Nextel's digital wireless service area now
encompasses thousands of communities across the U.S. including 72 of the top 100
metropolitan service areas with service also available in select Canadian
markets."
Total revenue for the third quarter of 1997 was $207,224,000 as compared with
$91,040,000 for the same period last year, and $145,938,000 for the second
quarter of 1997. Radio service revenue, which reflects airtime usage and
monthly fees, increased 143 percent to $201,060,000 for the third quarter ended
September 30, 1997, compared with $82,884,000 for the same period last year, and
44 percent over second quarter's radio service revenue of $139,845,000. Monthly
average revenue per digital unit in service (ARPU) increased significantly
during the quarter to approximately $70, an increase of 25 percent over last
year's third quarter ARPU of $56.
Digital subscriber units in service increased 322,200 during the quarter to
approximately 946,600 at September 30, 1997. This represents an increase of 315
percent over last year's third quarter total of 228,000 and 52 percent greater
than the second quarter 1997 total of 624,400. The record third quarter 1997
additions represent a 60 percent increase over second quarter additions of
201,500.
The operating cash flow loss (earnings before interest, taxes, depreciation
and amortization) for the third quarter of 1997 was $118,956,000 as compared
with $100,534,000 for the second quarter of 1997. The consolidated net loss for
the third quarter of 1997 was $318,956,000 ($1.26 per share). Third quarter's
consolidated net loss includes charges of approximately $18,672,000 ($0.07 per
share) for international operating activities; a non-cash charge of $12,822,000
($0.05 per share) for cumulative preferred dividends; and a decreased income tax
benefit of $12,787,000 ($0.05 cents per share) as compared with second quarter's
tax benefit. The tax rate for the third quarter declined due to strong
subscriber growth. Results are based upon the weighted average shares
outstanding during the third quarter of 253,483,000.
"It was a solid quarter in terms of operating cash flow," said Steven
Shindler, Nextel's chief financial officer. "Significant improvement in the
revenue generated from each unit in service coupled with a reduction in the cost
per digital subscriber unit additions, produced favorable results in terms of
operating cash flow. Adjusting for non-cash charges related to preferred stock
dividends and a reduction in the tax rate, the domestic operating loss was $1.09
per share. With the recent highly successful placements of an additional $1.2
billion in new high yield securities, our financial course has been afforded
greater flexibility."
Consolidated capital expenditures (less capitalized interest) were
approximately $987.8 million year to date and include approximately $58.7
million related to international capital expenditures to build wireless networks
in Shanghai, China, Brazil, Argentina, Mexico and the Philippines. For the third
quarter, consolidated capital expenditures were approximately $477.5 million and
include a significant amount of construction work in progress necessary to meet
strong customer demand. Capital expenditures related to international
activities were approximately $43.2 million during the third quarter.
Separately, on November 12, 1997, Nextel and Pittencrieff Communications, Inc.
(Nasdaq: PITC) closed the previously announced acquisition resulting in Nextel's
ownership of additional SMR operations, licenses and other assets, predominately
in the states of Texas, Oklahoma, New Mexico and Arizona. Based on the 20-day
average Nextel closing price of $27.19 per share, stock will be exchanged at a
basic rate of 1 registered Nextel share for each 4.47 Pittencrieff shares.
Nextel will issue a total of approximately 6.235 million shares for a current
value of the transaction of $169,558,546. Nextel's analog SMR units in service
as of September 30, 1997 were approximately 618,700. The transaction with
Pittencrieff Communications is expected to add approximately 92,000 analog SMR
units to Nextel's subscriber base during the fourth quarter.
On the international front, Nextel recently announced the name change of its
wholly owned subsidiary, McCaw International, Ltd. to Nextel International, Inc.
and an increase in Nextel International's equity stake in Corporacion Mobilcom,
S.A. de C.V., its Mexican subsidiary, to approximately 77 percent. Last week in
Brazil, final revised SMR regulations were released, which were substantially
consistent with the previously released draft regulations. The final
regulations set out the regulatory operating environment for SMR operators in
Brazil and clarify Nextel International's ability to offer digital interconnect
service, with certain limitations in Brazil. Nextel International expects to
launch service during the first quarter of 1998 in Sao Paulo, Brazil and has
recently secured $125 million in vendor financing from Motorola for the purchase
of infrastructure equipment and related services in Brazil.
Nextel's record growth in the third quarter was helped by the launch of
Houston, Miami/Ft. Lauderdale, Tampa/St. Petersburg, Orlando, Jacksonville,
Pittsburgh, Cleveland, Columbus, and Salt Lake City/Provo. During October,
Nextel launched service in Phoenix, Tucson, Spokane, Cincinnati and Dayton. In
addition, Nextel recently announced an expansion in national distribution
channels through new agreements to market its services and products to customers
with the following companies: Ritz Camera Centers, Inc., Hello Direct, BearCom,
TIC Enterprises, LLC, Pana Pacific and Brightpoint, Inc. In total, indirect
distribution channels accounted for more than 40% of the third quarter's 322,200
new digital subscriber unit additions.
Nextel's service advantages include: its own national all-digital network,
the elimination of roaming charges, per second billing after the first minute on
digital cellular calls, flat rate long distance charges and Nextel Direct
Connect(SM) service for instant contact with other communications group members
in the customer's home market, at the touch of a button, and at a fraction of
the cost of traditional cellular.
Nextel Communications, based in McLean, Virginia, is the only national
provider of all-digital wireless networks where the full benefits of digital are
always ensured and has built the largest guaranteed all-digital wireless network
in the United States. Nextel International, Inc. has wireless operations and
investments in Canada, Mexico, Argentina, Brazil, Indonesia, Philippines and
Shanghai, China.
To learn more about Nextel visit the company's Web site at
nextel.com. |
