[Advanced Radio Telecom Reports Fourth Quarter, Year End Results]
(loss was (0.57) vs. consensus of (0.74) -- mark)
ART Successfully Redirects Business Strategy and Achieves Key Milestones
Bellevue, Wash. (March 2, 1999) -- Advanced Radio Telecom Corp. today announced its fourth quarter and 1998 year end results, and summarized an eventful year highlighted by the successful implementation of a new business strategy providing integrated, Internet business communications services to small and mid-sized businesses that do not have fiber connectivity.
1998 fourth quarter and year end financial results Total revenues for the fourth quarter ended December 31, 1998, were $211,700 compared with $230,400 for the same period last year. Total revenues for the twelve months ended December 31, 1998, were $840,800, compared to $1.1 million last year.
Operating costs and expenses for the fourth quarter of 1998 were $10,091,800, compared with $19,672,500 for the same period last year. Operating costs and expenses for 1998 were $35,212,300, down from $47,372,800 in 1997.
Operating loss for the fourth quarter of 1998 was $9,880,100 compared to $19,442,100 for the same period last year. Operating losses for 1998 were $34,371,500 down from $46,267,000 last year. The net loss for the fourth quarter of 1998 was $15,270,100 or $0.57 loss per share, compared to $23,574,900 or $1.12 loss per share for the fourth quarter of 1997. Net loss for 1998 was $51,243,300 or $2.06 loss per share, compared to $61,728,900 or $3.23 loss per share last year.
"I am very pleased with the progress this company has made since we redirected its strategy in the spring of 1998," said Henry "Harry" C. Hirsch. "Although we were capital constrained throughout the year, we were able to significantly reduce our spending, especially on SG&A, while improving the skill set of our people necessary to effectively implement our new data services strategy."
Summary of 1998 accomplishments:
In March 1998, ART announced its new business strategy to become the leading provider of broadband data services to the vast number of businesses that are without fiber connectivity. Within a week, ART and Lucent Technologies announced a letter of intent naming Lucent as the supplier and integrator of ART's planned wireless broadband data network. That agreement was completed in July 1998.
"In our view, Lucent is simply the best in the business," said Hirsch. "We were aware early on that Lucent had identified this sector as one of tremendous growth potential and, knowing how they operate, we were sure that they would make some very meaningful commitments to broadband fixed wireless technology."
In May, ART and Lucent began building a pilot network in Bellevue intended to test data services using ART's existing point-to-point wireless assets combined with a fiber optic and IP/ATM backbone. More than 20 businesses participated in the eight-week pilot providing feedback critical to building a solid network configuration that allowed for rapid deployment of services in other markets. During this period, ART also forged a number of alliances that resulted in a comprehensive suite of Internet-based services. The companies include .comfax, InterNAP Network Services, Microsoft Explorer 4.01 and Web 3000 NetSonic Internet Accelerator.
In July, Lucent agreed to provide ART with $25 million of operating capital allowing ART to conduct a pilot program in Bellevue. In September, Lucent agreed to provide $200 million in purchase money financing subject to certain financial and operating performance requirements. This financing will allow ART to further its data network development. ART successfully launched commercial services in the Seattle metropolitan area, converting 85 percent of the pilot businesses to commercial service.
By year end ART had:
· Introduced commercial service in the Portland, Phoenix and Seattle metropolitan areas;
· Acquired access to 155 buildings in its initial three markets.
· Provisioned 85 buildings with full connectivity to its regional network including network management capability; and
· Received 142 customer service orders.
"It has been an exciting year for ART. Utilizing our nationwide 38GHz spectrum and our broadband wireless technology to deliver services directly to our customer, we entered the market as a facilities-based Internet Service Provider offering a complete suite of world-class Internet services," said Hirsch. "This year is shaping up to be just as exciting as we grow our customer base in existing markets, expand into more markets on the West coast, and finalize raising the capital required to fund the growth of our business."
The coming year will capitalize on ART's deployment of a point-to-multipoint solution from its supplier and systems integrator, Lucent Technologies. The companies currently are conducting a technical evaluation of the ATM-based radio system in Milpitas, Calif., and plan to begin installing the solution in ART's network in the third quarter of 1999. At the same time, ART will continue development of its operations support systems architecture to provide a complete electronic platform for interfacing with its customers including electronic billing, ordering, provisioning, and trouble ticket tracking.
Advanced Radio Telecom Corp.
Consolidated Statement of Operations
For the Three Months Ended December 31, 1998 and 1997
1998 1997
REVENUES:
Service revenue $211,739 $190,360
Equipment sales and construction revenue -- 40,000
Total revenue 211,739 230,360
COSTS and EXPENSES:
Technical and network operations 3,976,455 3,495,266
Cost of equipment sales and construction -- 40,045
Sales and marketing 1,194,970 3,136,152
General and administrative 2,201,105 4,009,403
Research and development 184,124 207,959
Equipment Impairment 70,302 7,166,720
Depreciation and amortization 2,464,851 1,616,938
Total operating costs and expenses
10,091,807 19,672,483
Operating loss (9,880,068) (19,442,123)
Interest expense 5,745,649 4,995,800
Financing commitment expense 593,353 --
Other 75,406 --
Interest income (519,427) (967,822)
Loss before income taxes (15,775,049) (23,470,101)
Deferred income tax benefit (expense) 504,968 (104,774)
Net loss (15,270,081) (23,574,875)
Net loss per common share ( 0.57) ( 1.12)
Weighted average common shares 26,707,036 20,998,484
Advanced Radio Telecom Corp.
Consolidated Statement of Operations
For the Years Ended December 31, 1998 and 1997
1998 1997
(unaudited)
REVENUES:
Service revenue $840,822 $708,883
Equipment sales and construction revenue -- 396,970
Total revenue 840,822 1,105,853
COSTS and EXPENSES:
Technical and network operations 8,603,576 7,252,512
Cost of equipment sales and construction -- 254,444
Sales and marketing 5,679,222 13,469,898
General and administrative 10,228,401 12,789,866
Research and development 593,595 421,236
Equipment impairment 2,753,105 7,166,720
Depreciation and amortization 7,354,378 6,018,172
Total operating costs and expenses
35,212,277 47,372,848
Operating loss (34,371,455) (46,266,995)
Interest expense 21,173,374 18,931,303
Financing commitment expense 1,004,393 2,699,881
Other 494,484 --
Interest income (2,693,257) (4,814,004)
Loss before income taxes (54,350,449) (63,084,175)
Deferred income tax benefit 3,107,165 1,355,249
Net loss (51,243,284) (61,728,926)
Net loss per common share ( 2.06) ( 3.23)
Weighted average common shares 24,890,177 19,083,304 |
