05/06 20:30 Viatel Reports Record First-Quarter 1998 Revenue and Billable
Minutes; Circe N
e Solid Platform for Long-Term Growth
NEW YORK, May 6 /PRNewswire/ -- Viatel, Inc. (Nasdaq: VYTL), a provider of international and national long-distance telecommunications services, today announced record first-quarter revenue for the period ended March 31, 1998.
Viatel's first-quarter revenue rose 46% to $21.2 million from $14.6 million in the comparable 1997 quarter. Billable minutes of use increased 123% over the prior period to 52.4 million.
Viatel President and Chief Executive Officer Michael J. Mahoney said the Company in the first quarter made significant progress toward capitalizing on the evolving deregulation of certain Western European telecommunications markets. Viatel recently completed an $890 million financing with a portion of the proceeds to be used to construct the Circe Network, the first city-to-city Pan-European self-healing fiber optic network to offer IRU (Indefeasible Rights-of-Use) based connectivity to key cities in the U.K., Belgium, the Netherlands, France and Germany. With an initial capacity of 20 Gb/s, the Circe Network will have the largest capacity of any cross-border fiber optic network in Western Europe and will be upgradable to a minimum of 160 Gb/s without service interruption. Construction began this Spring with commercial service expected in the first quarter of 1999.
"The Company believes the Circe Network will serve the largest and fastest-changing markets in the European Union," Mahoney said. "Ownership of our own broadband network will allow Viatel to support the rapidly increasing and complex needs of our customers while giving us better control over pricing, costs and network reliability."
Mahoney noted that the Company's recent agreement with NMBS Telecom, a division of the Belgian National Railway, allowing the Company to secure fiber infrastructure for a portion of the Circe Network as well as providing for a complete fiber ring within Belgium, creating a national network within Belgium. He characterized the agreement as one of a series of steps the Company is taking to ensure the Circe Network is brought online by the first quarter of 1999.
"Use of NMBS Telecom fiber will provide us with immediate access to state-of-the-art infrastructure covering a key portion of the Circe Network while providing additional in-country fiber to expand national long-distance service in Belgium," Mahoney said.
Additionally, Mahoney said Viatel is moving aggressively to secure operating licenses and interconnection agreements in the major European markets which, when combined with ownership of the Circe Network, will provide the Company with a strong platform for revenue growth and long-term success.
"We fully expect that by the end of this year, Viatel will have the necessary licenses and agreements in most jurisdictions to take full advantage of the deregulation of the telecommunications industry in the countries in Western Europe in which it does business. We believe that our expanding infrastructure capability, coupled with our operating experience in Western Europe, should position Viatel to capture market share while driving down our costs." The Company now operates one of the largest alternative-long distance networks in Western Europe, with points of presence in 30 cities and sales organizations in approximately 100 locations.
The Company has been granted operating licenses in the Federal Republic of Germany, the United Kingdom and The Netherlands. Viatel has concluded interconnection agreements with PTT Telecom in The Netherlands, Deutsche Telecom and ECN in Germany, British Telecom and Cable & Wireless in the U.K. and Infostrada in Italy.
Viatel reported an EBITDA loss for the first quarter of 1998 of $6.8 million, compared with an EBITDA loss of $6.2 million in the comparable 1997 quarter. Net loss for the first quarter was $13.0 million, or $0.57 per share, compared with $9.4 million, or $0.42 per share, a year earlier.
"The Company posted strong growth in revenue and billable minutes in the first quarter, despite the impact of the instability in the Asian financial markets that resulted in a steep reduction in Asian traffic which decreased to 2.9% as a percentage of total revenue from 14.5% a year ago," said Allan L. Shaw, Viatel's Chief Financial Officer. "Meanwhile, the Company is experiencing higher customer usage, a trend we expect will continue as we are able to offer additional services via our own network."
"Viatel's EBITDA loss was adversely affected by static leased facilities costs as the Company continued to invest in its network and operating infrastructure," Shaw said. "With the Circe Network in place and operational, the Company's European gross margins would have been at least 2,000 basis points higher, which would have reduced EBITDA accordingly. Usage of the Circe Network should enhance Viatel's revenue, reduce our cost structure and lead to positive EBITDA."
SG&A expenses for the first quarter of 1998 were reduced to 42% of revenue from 60% in the year-earlier quarter as the Company "continued to manage costs aggressively," Shaw said, noting the Company has consistently reduced SG&A as a percentage of revenue during the past year.
The Company's European operations accounted for 53% of total revenue for the first quarter, rising 89% to $11.2 million from the year-ago quarter. Minutes of use for the quarter in the European markets rose 216% to 30.3 million. Viatel's Pacific Rim revenue in the first quarter decreased to $0.4 million from $2.1 million a year earlier. Minutes of use in the Pacific Rim for the first quarter of 1998 were 0.6 million compared with 2.2 million for the same period last year.
Viatel, which has its headquarters in New York, New York, is a rapidly growing provider of telecommunications services. The company offers a broad array of competitively priced, value-added international and national long-distance services primarily to small and medium-sized businesses. Viatel provides long-distance service to more than 230 countries and territories worldwide through its international network. The Company's Common Stock is listed on the Nasdaq stock market under the symbol "VYTL". For more information, visit Viatel's website at www.viatel.com.
Certain matters discussed in this release are forward-looking statements that involve risks and uncertainties, including the continued deregulation of the European Union member states in which the Company does business, construction risks and other risks detailed from time to time in the Company's reports filed with the Securities and Exchange Commission, including those contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1997. As a result, actual results, events or conditions, financial or otherwise, could differ materially from those statements. Viatel undertakes no duty to update such forward-looking statements.
VIATEL, INC. Unaudited Summary Consolidated Financial and Other Data (In 000s, except other operating and per share data)(1) Three Months Ended March 31, 1998 1997 Statement of Operations Data: Telecommunications revenue $ 21,238 $ 14,552 Operating expenses: Cost of telecommunications services 19,105 12,079 Selling, general and administrative expense 8,955 8,723 Depreciation and amortization 2,911 1,262 Total operating expenses 30,970 22,064 Operating loss (9,732) (7,512) Interest expense, net (3,271) (1,890) Net loss $(13,003) $(9,402) Net loss per share $ (0.57) $ (0.42) Weighted average shares outstanding 22,783 22,592 Other Financial Data: EBIDTA(2) $(6,822) $(6,250) Other Operating Data:(3) Billable minutes (000's)(4) 52,418 23,517 Average revenue per billable minute(5) $0.39 $0.62 Average cost per billable minute(6) $0.35 $0.51 Switches(7) 14 14 Customers(7) 17,090 20,224 European Customers(7) 11,712 10,585 Balance Sheet Data (000's): Cash, cash equivalents and marketable securities $28,150 $78,978 Working Capital 12,729 45,146 Property and equipment, net 56,997 24,480 Total assets 121,894 124,661 Long-term debt, excluding current installment 102,360 81,371 Stockholders' (deficit) equity (18,271) 27,284 (1) Amounts may not total due to rounding. (2) As used herein, "EBITDA" consists of earnings before interest (net), income taxes and depreciation and amortization. EBITDA is a measure commonly used in the telecommunications industry to analyze companies on the basis of operating performance. EBITDA is not a measure of financial performance under generally accepted accounting principles and should not be considered as an alternative to net income as a measure of performance nor as an alternative to cash flow as a measure of liquidity. (3) Information derived from operating records prepared by the Company. (4) Billable minutes are those minutes during which a call is connected at any Company switch and for which the Company bills a customer. (5) Represents the gross call usage revenue per billable minute. Amounts exclude other revenue related items such as hardware sales and software licensing. (6) Represents the cost associated with the Company's provision of telecommunication services per billable minute. Amounts exclude nontransmission costs such as hardware and software purchased for resale. (7) Information presented as of the end of the period indicated. VIATEL, INC. Unaudited Summary Pro Forma Financial Information
The following table presents the effects on the Company's selected balance sheet data of the recently completed Unit Offering as of March 31, 1998, on a pro forma basis, assuming the Unit Offering had occurred at that date.
As of March 31, 1998 Actual Pro Forma(1) Pro Forma Balance Sheet Data (000s): Cash, cash equivalents and marketable securities $28,150 $612,507 Restricted cash, current and non-current -- 153,347 Working capital 12,729 626,034 Property and equipment, net 56,997 56,997 Total assets 121,894 887,876 Series A redeemable convertible preferred stock -- 43,820 Long-term debt, excluding current installments 102,360 854,907 Stockholders' deficiency (18,271) (48,655) (1) Adjusted to give effect to approximately $856.6 million of net proceeds form the Unit Offering, capitalization of approximately $30.8 million of debt issue costs and the reduction of additional paid in capital of approximately $2.1 million for issuance costs associated with the Series A Preferred issued as part of certain of the units and the extinguishment of the Company's then existing 15% Senior Discount Notes due 2005 for approximately $118.9 million resulting in an extraordinary loss of approximately $28.3 million which includes the writeoff of deferred financing costs of approximately $2.6 million.
SOURCE Viatel, Inc.
-0- 05/06/98
/CONTACT: Allan L. Shaw, Chief Financial Officer, of Viatel, Inc., 212-350-9200, or allan_shaw@viatel.com; or Cindy Glynn, or Christine Davies, both of Stern & Co., 212-888-0044, or info@sternco.com, for Viatel/
/Web site: viatel.com
(VYTL)
CO: Viatel, Inc. ST: New York IN: TLS FIN SU: ERN
|
