High Speed Access Corp. Reports Second Quarter Results
================================================================
Quarterly Revenues Increased 330% to $2.8 Million
Residential Cable Modem Subscribers Now At 41,000
DENVER, Aug. 9 /PRNewswire/ -- High Speed Access Corp. (NASDAQ:HSAC), a
leading broadband services provider, today announced net revenue of $2,757,000
for the quarter ended June 30, 2000, an increase of 330% over net revenue of
$641,000 generated for the second quarter of 1999.
(Photo: newscom.com )
HSA's residential broadband subscriber base increased 58% from 26,000 at
March 31, 2000 to approximately 41,000 at the end of the second quarter. As
of June 30, 2000, HSA had the right to offer services to more than 6.6 million
homes passed under contracts or letters of intent, and had deployed its
high-speed Internet service on local broadband networks passing approximately
2.9 million homes.
"In the second quarter, we accelerated our deployments of broadband
infrastructure, expanding our deployed footprint to over 2.9 million homes
passed," said Dan O'Brien, President and CEO of HSA. "We also enjoyed our
biggest quarter ever in terms of subscriber gains, adding approximately 15,000
residential broadband subscribers. We continue to execute against our
original business plan, while we expand our offering of value-added services.
This enhances HSA's position in the rapidly shifting broadband landscape."
Mar. 31 June 30
2000 2000
Homes under contract or letter of intent 2,165,000 6,600,000
Homes deployed 2,291,000 2,900,000
Subscribers:
Residential 26,000 41,000
Commercial 781 900
Dial Up 7,979 8,700
O'Brien continued, "In the second quarter we announced a definitive
agreement to acquire Digital Chainsaw, Inc., a Florida-based web hosting and
systems integration company doing business as NetPerformance. As we increase
our focus on the small and medium enterprises in our markets -- using both
cable modem and DSL connectivity -- web hosting, web design and systems
integration capabilities will become increasingly important in gaining
subscribers and expanding our revenue stream. With approximately 65 employees
and 8,000 clients, NetPerformance will give HSA an installed base of customers
as well as a strong talent base upon which to rapidly grow our value-added
services business. We anticipate that NetPerformance will post approximately
$3 million in annual pro forma revenue in 2000, and we expect to close the
transaction in the third quarter."
NetPerformance shareholders will receive approximately 3.1 million HSA
shares as consideration for the transaction, and will have the opportunity to
earn additional shares based on performance over the next 12 months.
NetPerformance is expected to continue its Florida operations under current
management, and will operate as a Florida subsidiary of HSA.
"HSA has continued to invest in building a national, high-quality
infrastructure, both to serve its existing cable partners, and to prepare for
what we believe will be a rapid roll-out of fully-integrated video, voice and
data services over the next several years." Mr. O'Brien added, "We continue
to invest in best-in-class systems and practices to meet our scaling
initiatives. In July, we celebrated the launch of our new national customer
care facility and Network Operations Center in Louisville, Kentucky. We
believe that customer focus and superior network management will be a primary
value driver for HSA, especially as we approach the arrival of open access."
The net loss available to common stockholders for the second quarter was
$28.5 million, or 52 cents per share, compared with a net loss available to
common stockholders of $139.8 million, or $7.47 per share, for the quarter
ended June 30, 1999. (See Attached Unaudited Condensed Consolidated
Statements of Operations)
The net loss before certain non-cash charges for the current quarter was
$27.3 million, or a pro forma net loss before non-cash charges of 49 cents per
share. This compares with a net loss of $10.5 million before non-cash charges
for the quarter ended June 30, 1999 or a pro forma net loss before non-cash
charges of 27 cents per share.
Non-cash charges for the second quarter of 2000 included $24,000 of non-
cash compensation expense from the issuance of stock options, $891,000 for the
amortization of distribution agreement costs and $276,000 of amortization of
goodwill and other intangible assets. Non-cash charges for the amortization
of distribution agreement costs during the quarter related to the issuance of
warrants to strategic partners. From time to time, HSA will incur these
charges as strategic partners earn the right to purchase additional shares and
HSA is provided with additional homes passed. For the second quarter of 1999,
non-cash charges included $1.2 million of non-cash compensation expense from
the issuance of stock options, $3.3 million for the amortization of
distribution agreement costs and $252,000 for the amortization of goodwill and
other intangible assets.
About High Speed Access Corp.
High Speed Access Corp. (NASDAQ:HSAC) is a leading provider of broadband
Internet access and related communications services to residential customers
and small and medium enterprises, or SMEs, nationwide primarily using cable
modem technology. HSA primarily focuses on residential and commercial end
users in exurban areas, although it has recently begun to provide broadband
services in some urban markets. HSA's core service offering currently
consists of cable modem Internet access, which HSA offers at several speeds
and prices to residential end users through partnerships with cable multiple
system operators. HSA provides a comprehensive turnkey service to cable
operators in exurban markets that seek to outsource the services required to
provide Internet access and other services. HSA also provides its services on
an unbundled or "partial turnkey" basis for cable operators not requiring the
full range of HSA services. HSA is actively expanding its offering of
services to include DSL Internet access on a reseller basis as well as
expanded web site hosting and a range of other value-added and ongoing support
services primarily for commercial customers. HSA is conducting technical and
customer trials for Internet Telephony service in collaboration with major
telecommunication vendors.
This press release contains statements about future events and
expectations, which are "forward-looking statements." Any statement in this
press release that is not a statement of historical fact may be deemed to be a
forward-looking statement. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors which may cause the company's
actual results, performance or achievements to be materially different from
any future results, performance or achievements expressed or implied by such
forward-looking statements. Specific factors that might cause such a
difference include, but are not limited to: the company may not complete its
proposed financing with Vulcan or Charter on acceptable definitive terms or at
all; the company's unproven and evolving business model; rapid technological
change and evolving industry standards in the markets for our services; the
company's history of losses and anticipation of future losses and need for
additional capital; the potential fluctuations in the company's operating
results; the company's competition; the company's potential inability to
attract and retain end users; the company's potential inability to establish
or maintain relationships with cable operators, including Charter; and those
risks and uncertainties discussed in filings made by the Company with the
Securities and Exchange Commission, including those risks and uncertainties
contained under the heading "Risk Factors" in the Company's Registration
Statement on Form S-1 as filed with the Securities and Exchange Commission.
High Speed Access Corp.
Condensed Consolidated Statements of Operations
For the three and six months ended June 30, 2000 and 1999
(Dollars in thousands, except per share data)
Unaudited
Three Months Ended Six Months Ended
2000 1999 2000 1999
Net revenue $2,757 $641 $4,751 $940
Costs and expenses:
Operating 14,844 4,027 30,790 6,150
Engineering 5,479 2,071 10,391 3,556
Sales and marketing 6,249 3,619 12,465 5,657
General and
administrative
(excluding non-cash
compensation expense
from stock options) 5,107 2,361 9,140 3,647
Non-cash compensation
expense from stock
options 24 1,157 48 2,680
Amortization of
distribution
agreement costs 891 3,305 1,116 3,305
Total costs and
expenses 32,594 16,540 63,950 24,995
Loss from operations (29,837) (15,899) (59,199) (24,055)
Investment income 1,866 647 3,991 766
Interest expense (530) (1,020)
Net loss (28,501) (15,252) (56,228) (23,289)
Mandatorily redeemable
convertible preferred
stock dividends -- (604) -- (1,122)
Accretion to redemption
value of mandatorily
redeemable convertible
preferred stock -- (123,916) -- (229,148)
Net loss available to
common stockholders $(28,501) $(139,772) $(56,228) $(253,559)
Basic and diluted net
loss available to
common stockholders
per share $(0.52) $(7.47) $(1.03) $(20.30)
Weighted average
shares used in
computation of basic
and diluted net loss
available to common
stockholders per
share 55,232,317 18,711,305 54,780,674 12,490,214
Supplemental Information:
Net loss before non-cash charges:
Net loss including
non-cash charges $(28,501) $(15,252) $(56,228) $(23,289)
Non-cash charges:
Compensation expense
from stock options 24 1,157 48 2,680
Amortization of
distribution agreement
costs 891 3,305 1,116 3,305
Amortization of
intangible assets 276 252 552 239
Net loss before
non-cash charges $(27,310) $(10,538) $(54,512) $(17,065)
Pro forma basic and
diluted net loss
before non-cash
charges $(0.49) $(0.27) $(1.00) $(0.49)
Weighted average shares
used in computation of
pro forma basic and
diluted net loss
before non-cash
charges 55,232,317 39,719,003(*) 54,780,674 34,612,869
(*) Assumes conversion of mandatorily redeemable convertible preferred
stock into common stock at the beginning of the period or at issuance,
whichever is earlier. |
