Covad Communications Announces 1998 Results; Homes and Businesses Passed Increases 82% in Fourth Quarter to 6.0 Million
March 2, 1999 08:18 AM
SANTA CLARA, Calif.--(BUSINESS WIRE)--March 2, 1999--Covad Communications Group, Inc. COVD announced fourth quarter and 1998 results.
Revenues for the year ended December 31, 1998 were $5.3 million, compared to $26,000 for the year ended December 30, 1997. The net loss for the year increased to $48.1 million from $2.6 million in 1997. Earnings before interest, taxes, depreciation and amortization (or "EBITDA") for 1998 was a loss of $30.2 million versus an EBITDA loss of $2.4 million for the year ended December 31, 1997.
Revenues for the fourth quarter ended December 31, 1998 were $2.8 million, representing a 77% sequential increase over quarter ended September 30, 1998 revenues of $1.6 million. The net loss for the fourth quarter 1998 increased to $19.9 million, from a loss of $16.6 million in the third quarter of 1998. EBITDA for the fourth quarter 1998 was a loss of $13.2 million versus a loss of $10.5 million for the three months ended September 30, 1998.
During the fourth quarter, homes and businesses passed increased 82% to 6.0 million from 3.3 million at September 30, 1998. Service ready central offices increased 105% to 168 at the end of the fourth quarter from 82 service ready central offices at September 30, 1998. Subscriber lines increased 105% during the fourth quarter to over 3,900 lines from approximately 1,950 lines at September 30, 1998.
"We made significant progress as a Company since the end of the third quarter. We raised over $435 million during January and February in the form of equity investments from strategic partners, an initial public offering of common stock and our private high yield debt offering. This capital will enable us to expand our nation-wide DSL network to 22 major metropolitan areas and cover over 25% of the US population," stated Bob Knowling, president and chief executive officer of Covad. Mr. Knowling continues, "Our increase in client lines and new strategic relationships with AT&T, NEXTLINK, Qwest and Concentric illustrate the strong demand for Covad's broadband access."
During the last two months the Company entered into strategic relationships with AT&T T , Qwest Communications QWST , NEXTLINK NXLK and Concentric Network Corporation CNCX . In these relationships each company made an equity investment in Covad and agreed to market and resell Covad's DSL lines to their customers. In turn Covad agreed to purchase backbone capacity for its network from AT&T, NEXTLINK and Qwest.
Also, during the fourth quarter, Covad launched its service in Washington D.C. and Seattle, bringing its regional footprint to a total of six major metropolitan areas. This rollout coincides with Covad's current plan to cover 22 regions by the first quarter of 2000.
About Covad
Covad Communications Company is a leading high-speed Internet and network access provider to Internet Service Providers and enterprise customers, utilizing DSL technology. The Company has launched its services in the San Francisco Bay Area, Los Angeles, New York, Boston, Washington D.C. and Seattle metropolitan areas and has announced plans to deploy its networks in a total of 22 regions encompassing 51 metropolitan statistical areas nationwide. Covad Communications Company and its affiliates doing business as Covad Communications Company, are wholly owned subsidiaries of Covad Communications Group, Inc. COVD . Corporate headquarters is located at 2330 Central Expressway, Santa Clara, CA, 95050. Telephone: 408-844-7500 or 1-888-GO-COVAD; FAX: 408-844-7501. Web Site: www.covad.com.
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained in this release which are not historical facts may be deemed to contain forward-looking statements, including but not limited to statements regarding deployment of the Company's network in new and existing regions, the timing and breadth of coverage in each region, demand for the Company's services and the success of strategic relationships. Actual results may differ materially from those anticipated in any forward-looking statements as a result of certain risks and uncertainties, including, without limitation, the Company's dependence on strategic third parties to market and resell its services, intense competition for the Company's service offerings, dependence on growth in demand for DSL-based services and other risks and uncertainties detailed in the Company's Securities and Exchange Commission filings.
COVAD COMMUNICATIONS GROUP, INC.
Financial Highlights
(Dollars in thousands, except share and per share data)
(Unaudited)
Three Months Ended Year Ended
Dec. 31, Dec. 31,
1998 1997 1998 1997
Revenues $ 2,766 $ 26 $ 5,326 $ 26
Operating Expenses:
Network and
products costs 2,246 44 4,562 54
S,G & A expenses 13,812 1,334 31,043 2,374
Amortization of
deferred
compensation 1,302 161 3,997 295
Depreciation and
amortization 2,058 70 3,406 70
Total
operating
expenses 19,418 1,609 43,008 2,793
Income (loss) from
operations (16,652) (1,583) (37,682) (2,767)
Net interest income
(expense) (3,208) 75 (10,439) 155
Net income (loss) $ (19,860) $ (1,508) $ (48,121) $ (2,612)
Basic and diluted
net income (loss)
per common share (2.96) (0.37) (8.43) (0.80)
Weighted average
shares used in
computing net loss
per share 6,708,365 4,058,150 5,708,535 3,271,546
Pro forma net income
(loss) per common
share (1) (0.47) (0.04) (1.17) (0.07)
Shares used in
computing pro forma
net loss per
share (1) 42,103,704 39,453,489 41,103,874 38,666,885
Other Data:
EBITDA (2) $ (13,167) $ (1,352) $ (30,154) $ (2,402)
As of
Dec. 31,
1998 1997
Selected Balance Sheet Data:
Cash and cash equivalents $ 64,450 $ 4,378
Net property and equipment 59,145 3,014
Total assets 139,419 8,074
Current liabilities 21,509 1,022
Long-term obligations 142,616 554
Total stockholder's equity
(net capital deficiency) (24,706) 6,498
(1) Pro forma net income (loss) per common share gives full period
effect to the issuance of 8,970,000 shares from the initial
public offering, 1,800,000 shares of common stock issued pursuant
to the exercise of warrants, 6,379,177 shares of class B common
stock, and 18,246,162 shares of common stock issued on conversion
of preferred stock.
(2) EBITDA is defined as earnings (losses) before interest, taxes,
depreciation, amortization, non-cash stock based compensation and
other non-operating income or expenses. |
