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"This quarter marked a great start for RCN," said Chairman and CEO David C. McCourt. "We established RCN as its own public company, continued to deploy network in all of our markets and raised $1 billion in two extremely successful high-yield offerings. We also connected a significant number of customers to our advanced fiber network. We began the quarter with 7,000 facilities-based customers and, in three short months, more than doubled that figure."
Consolidated fourth quarter revenue increased almost 14% to $35.4 million as compared to the previous quarter. Year-end revenue increased 21.3% to $127 million as compared to the previous year.
As anticipated, consolidated quarterly EBITDA, before non-recurring charges, was reduced to a loss of $8.3 million, as the company continued to invest in the deployment of its advanced fiber network in Boston, New York, Washington, D.C., and the Lehigh Valley of Pennsylvania. RCN's year-end EBITDA loss was $7.7 million, compared to a gain of $25.8 million in 1996.
"We are continuing to invest in tomorrow's network -- a robust fiber platform capable of delivering superior phone, cable and Internet service, as well as future applications," McCourt said.
During the quarter, RCN raised $570 million in a successful high-yield offering; closed on a previously announced joint venture with a Potomac Electric Power Company subsidiary to offer phone, cable and Internet service to the Washington, D.C. area; and received Open Video System certification from the city of New York, allowing RCN to offer cable television to city residents. This is RCN's fifth OVS certification, following prior approvals by the city of Boston and the surrounding municipalities of Somerville, Arlington and Newton, MA.
Subsequently, RCN acquired Boston and Washington's largest regional Internet service providers (ISPs), UltraNet communications, Inc. and Erol's Internet, Inc. The acquisitions established RCN as the Northeast's largest ISP, with more than 325,000 Internet customers from Boston to Washington. The company also raised an additional $350 million in a second high-yield offering, giving it $1 billion cash on hand to fund continued deployment of its advanced fiber optic network. |
