Covad Communications Announces Second Quarter
Results; Lines Installed Increase 94% to 16,700
Business Wire - July 26, 1999 16:28
SANTA CLARA, Calif.--(BUSINESS WIRE)--July 26, 1999--Today Covad Communications
Group, Inc. (Nasdaq: COVD) announced second quarter 1999 results.
Revenues for the second quarter ended June 30, 1999 were $10.8 million, representing a 93%
increase over quarter ended March 31, 1999 revenues of $5.6 million. The net loss for the second
quarter 1999 increased to $41.9 million, from a loss of $28.9 million in the first quarter of 1999.
EBITDA for the second quarter ended June 30, 1999 was negative $24.7 million versus negative
$17.5 million for the quarter ended March 31, 1999.
Revenues for the six months ended June 30, 1999 were $16.4 million compared to $1.0 million for the
six months ended June 30, 1998. The net loss for the six months ended June 30, 1999 increased to
$70.8 million, from a loss of $11.7 million for the six months ended June 30, 1998. EBITDA for the
six months ended June 30, 1999 was negative $42.2 million versus negative $6.5 for the six months
ended June 30, 1998.
During the second quarter, subscriber lines increased 94% to over 16,700, from approximately 8,600
lines at March 31, 1999. Homes and businesses passed increased 38% during the quarter to 15.4
million from 11.2 million at March 31, 1999. Service ready central offices increased during the second
quarter by 43%, to 534 from 373 at March 31, 1999.
"We continue to exceed our aggressive growth milestones which is being driven by our focus on
performance excellence," stated Robert E. Knowling, Jr., president and chief executive officer of
Covad. "Broadband service is getting tremendous attention from businesses and consumers, and we
are aggressively going after line count to build upon our lead in meeting the explosively growing
demand for the service."
During the second quarter and early in the third quarter, Covad added seven new metropolitan regions,
to bring its total to 16, covering a total of 37 metropolitan statistical areas or ("MSAs"), by launching
service in Atlanta, Baltimore, Chicago, Denver, Detroit, Minneapolis/St.Paul and Portland. This rollout
coincides with Covad's plan to cover 22 metropolitan regions or 51 MSAs by the end of the year.
About Covad
Covad Communications Company is the leading provider of high-speed Internet access made possible
by offering DSL services to large enterprise customers and through Internet Service Providers to small
and medium-sized businesses and home users. Covad services are currently on-line in 16 metropolitan
regions, encompassing 37 MSAs. Service is available in the San Francisco Bay Area, Los Angeles,
Seattle, Sacramento, New York, Boston, Washington D.C., Baltimore, Chicago, Philadelphia, San
Diego, Atlanta, Detroit, Minneapolis/St.Paul, Denver, and Portland metropolitan regions. Covad has
announced its plans to offer its services in a total of 22 metropolitan regions, which would encompass
51 MSAs nationwide. Covad Communications Company and its affiliates doing business as Covad
Communications Company, are wholly owned subsidiaries of Covad Communications Group, Inc.
(Nasdaq: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 overall market demand
for the Company's services, the ability to continue to build out central offices with deployment of the
Company's network in new and existing regions and the timing and breadth of coverage in each region.
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, dependence on incumbent local exchange
carriers for collocation, unbundled network elements and transport, ability to manage growth of our
operations 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 Six Months Ended
June 30, June 30,
1999 1998 1999 1998
Revenues $ 10,833 $ 809 $ 16,429 $ 995
Operating Expenses:
Network and
products costs 10,565 758 15,525 961
S,G & A expenses 24,976 4,606 43,089 6,550
Amortization
of deferred
compensation 1,234 631 2,887 858
Depreciation
and amortization 8,671 446 13,318 610
Total operating
expenses 45,446 6,441 74,819 8,979
Income (loss)
from operations (34,613) (5,632) (58,390) (7,984)
Net interest
income (expense) (7,239) (3,291) (12,366) (3,720)
Net income (loss) $ (41,852) $ (8,923) $ (70,756) $(11,704)
Basic and
diluted net income
(loss) per
common share $ (0.61) $ (1.11) $ (1.18) $ (1.54)
Weighted average
shares used
in computing
net loss per share 68,157,273 8,050,771 60,930,856 7,584,501
Other Data:
EBITDA (1) $ (24,708) $ (4,555) $ (42,185) $ (6,516)
As of
June 30,
1999 1998
Selected Balance Sheet Data:
Cash and cash equivalents $ 257,471 $ 121,885
Net property and equipment 143,562 14,805
Total assets 593,816 146,541
Current liabilities 58,240 5,559
Long-term obligations 363,572 132,917
Total stockholder's equity 172,004 8,065
(1) EBITDA is defined as earnings (losses) before interest,
taxes, depreciation, amortization, non-cash stock based compensation
and other non-operating income or expenses.
CONTACT: Covad
Timothy Laehy, VP Finance and CFO, 408/844-7500
or
Nick Kormeluk, VP Investor Relations, 408/844-7500
InvestorRelations@covad.com |
