Good News for Wireless One
Wednesday April 1, 8:24 am Eastern Time
Company Press Release
SOURCE: Wireless One, Inc.
Wireless One, Inc. Announces 1997 Financial Results
JACKSON, Miss., April 1 /PRNewswire/ -- Wireless One, Inc. (Nasdaq: WIRL - news) today announced 1997 financial
results. For the year ended December 31, 1997, revenues were up 204% to $34.6 million compared to $11.4 million for
1996. Revenues for the fourth quarter rose 85% to $10.0 million compared to $5.4 million for the same period last year. Net
loss for the year ended December 31, 1997, was $89.1 million or $5.26 per share, compared to $39.7 million, or $2.65 per
share for 1996. Net loss for the fourth quarter was $27.1 million, or $1.60 per share compared to $16.7 million, or $1.04 per
share, for the fourth quarter of 1996.
Consolidated EBITDA (i) was negative $17.1 million and $4.8 million, for the year and fourth quarter ended December 31,
1997. The fourth quarter and year end results include non-recurring charges of $1.8 million related to the consolidation of
Baton Rouge and Jackson operations, professional fees for projects completed in the fourth quarter and charges from
management and employment changes associated with the refocus towards data services and multiple dwelling units products.
The Company had 114,934 subscribers at December 31, 1997, of which 111,474 are single family and 3,460 are multiple
dwelling unit subscribers compared to a total of 69,825 at December 31, 1996, an increase of 45,109 subscribers or 65% for
the year.
Henry M. Burkhalter, President and CEO stated, ''When the Company purchased Wireless Communications Spectrum
(WCS) in the 1997 FCC auction, we envisioned a licensed two-way broadband alternative for wireless services. This business
direction change added a unique new product opportunity -- a high-speed, two-way licensed wireless data service. This
product eliminates the need for connection to traditional telephone services, since both transmit and receive signal are wireless.
In the last six months we have successfully field-tested the use of our exclusive WCS and MMDS spectrum for wireless
broadband services. Our first data product, marketed under the name Warp One(SM), provides high-speed Internet access to
commercial accounts. Field test sites included a Competitive Local Exchange Carrier (CLEC), a Competitive Access Provider
(CAP) and small, medium and large commercial entities. Their responses to the test have been enthusiastic. We will
commercially launch the product in April, 1998.''
Burkhalter added, ''The Company previously announced our alliance with DIRECTV(R) that provides us with a competitive
product to offer MDU managers. This segment of the video market is a natural extension of our single-family business and
leverages off the infrastructure that is already serving our single-family subscribers.''
The Company gained major cost reductions and improved operational efficiencies from the strategic refocus of its SFU video
business. Five of them include:
Reduced personnel from over 900 employees to less than 500.
Eliminated all outside install contractors.
Consolidated 18 of the operating systems into 8 geographic clusters.
Raised the basic rate for television service $3.00 per month effective January 1, 1998.
Increased the monthly rate for each premium service $2.00 effective March 1, 1998.
As a result of the Company's anticipated decline in its SFU subscriber growth rate in the fourth quarter, churn exceeded our
historical 2.4% rate to 3.2%.
The Company strengthened its senior management January 1, 1998, with the addition of Ernest D. Yates as Executive Vice
President and Chief Operating Officer. Yates' entire career has been in the telecommunication industry, where he has extensive
experience in telecommunications technology in traditional switching and networks, video, wireless, fiber optics and advanced
data networks and services. His expertise will be instrumental in the Company's development of new methods for the delivery
of broadband data services over its wireless networks. Yates' background in telecommunications spans over 30 years with
Southwestern Bell and Electric Lightwave, a leading CLEC.
Yates commented, ''The potential of two-way wireless technology in the delivery of broadband data services was one of the
drivers in my move to Wireless One, Inc. My background and experience in the problems associated with the ''last mile''
delivery of data and other bandwidth intensive local loop services convinced me that the use of licensed MMDS and WCS
spectrum is a viable alternative to traditional, as well as planned methods, for delivery of high-speed services. My first goal has
been to realign the human resources of the Company to accomplish our MDU video goals and to build the back office
organization to support our broadband Internet service offerings. We are now moving more aggressively forward with plans to
introduce our Warp One product and to assess opportunities to broaden use of our MMDS and WCS spectrum.''
Yates continued, ''The opportunity to bundle Internet service with our video product for our MDU clients appears to offer an
additional source for new revenues on our existing investment with minimal additional capital requirements. We are also
assessing the market demand for ''last mile'' delivery of other network services and additional commercial business offerings.''
Burkhalter concluded, ''Wireless One is positioning itself to grow its video and data services businesses and to accomplish its
long-term financial objectives. However, in order to realize the full potential of these exceptional opportunities, it is necessary
for the Company to access additional capital. To meet our needs for additional capital, the Company has retained the
investment banking firm of BT Alex Brown as our financial advisor. They will evaluate the Company's existing capital structure
and make recommendations that include a full breadth of financial options that are available to the Company.''
Mssrs. Burkhalter, Yates, and Henry G. Schopfer, will be available for an investor conference call scheduled to be held on
Wednesday, April 1, 1998, at 4:30 PM (EST). You may participate by calling 1-800-621-5170. A 24 hour replay will be
available by calling 1-800-633-8284, enter reservation number 4083596. The replay will be available from April 1 at 7pm
EST until April 2 at 7pm EST. |
