[Teligent Reports Second Quarter Financial Results]
Raises '98 Launch Goal to 15 Markets
VIENNA, Va., Aug. 11 /PRNewswire/ -- Teligent, an integrated
communications company, today announced results for the second quarter of 1998
and raised its target for launching commercial service this year from 10 to 15
markets.
"The great progress we made in the second quarter, coupled with our
success in deploying people and equipment in our initial markets, have enabled
us to increase to 15 the number of markets where we intend to launch full
commercial service by the end of this year," said Teligent Chairman and Chief
Executive Officer Alex J. Mandl.
The 15 markets include 45 cities with populations of 100,000 or more and
comprise nearly 300 municipalities with a combined population of more than 50
million.
In addition to the 10 previously announced markets, Teligent expects to
begin offering full commercial service this year over its digital, fixed-
wireless networks in New York City, San Francisco-Oakland, San Jose, Miami and
Jacksonville. Earlier, the company announced that it would begin service this
year in Austin, Chicago, Dallas-Fort Worth, Denver, Houston, Los Angeles,
Orlando, San Antonio, Tampa and Washington, DC.
"We've made remarkable headway so far this year," Mandl said. "We recently
completed $800 million in bank financing and we installed the latest
commercial point-to-multipoint technology from Nortel in Los Angeles. In
addition, we began offering "phase one" commercial, facilities-based service
to initial customers in five of our markets, and we now have members of the
Teligent team in a total of 23 markets working on network development and
construction.
"With a current workforce of more than 900, we believe we are well on our
way toward meeting our new goal of launching commercial, facilities-based
service in 15 markets by the end of the year. We're excited about the
infrastructure we've put in place, and we're excited about the opportunity
that lies before us," Mandl said.
Teligent reported a net loss of $59.1 million for the second quarter on
revenues of approximately $143,000, reflecting the company's continued
expenditures for network engineering, sales and marketing, information
technology and headquarters and field personnel.
For the first half of the year, Teligent reported a net loss of $97.7
million on revenues of approximately $241,000. The company reported total
assets of $813.3 million as of June 30, with cash and cash equivalents of
$587.0 million. Investment in property and equipment rose to $79.5 million as
of June 30, up from $64.7 million at the end of the first quarter.
In the operations arena, the company achieved major goals in recent weeks.
-- In Los Angeles, Teligent integrated the latest commercial point-to-
multipoint radio and network equipment from Nortel (Northern Telecom)
into its digital, fixed-wireless local network.
-- The company began serving its first "phase one" customers, which are
receiving commercial service over Teligent's point-to-point networks in
Chicago, Dallas, Houston, Orlando and San Antonio. These customers
complement Teligent's existing base of dedicated access Internet
customers already receiving service over Teligent's point-to-point
networks in more than 30 markets around the country.
-- Teligent has put in place the key systems and processes needed to
successfully acquire, install, serve and bill new customers. The
company has issued bills to its initial "phase one" customers,
accelerated its acquisition of building site leases, implemented a
permanent number portability solution in Texas, put in place its
customer service systems, assembled regional sales forces and secured
necessary legal and regulatory authority for all initial markets.
In Los Angeles, Teligent integrated into its local, fixed-wireless network
the latest, most advanced version of commercial point-to-multipoint radio and
network equipment manufactured by Nortel's Broadband Wireless Access unit. The
deployment initially included the installation of three point-to-multipoint
base stations and 19 customer building antennas in the Mid-Wilshire and
Westside areas.
"We fully expect to meet our publicly-stated goal of having initial
commercial customers up and running on the integrated point-to-multipoint
network in Los Angeles by the end of the third quarter," said Teligent
President and Chief Operating Officer Kirby G. "Buddy" Pickle. "We intend to
follow that with the launch of a national marketing and advertising campaign
later this Fall, as we commercialize our initial markets.
"As we have tested our initial point-to-multipoint network in Los Angeles
during the past few months, we've learned a great deal about how we can
maximize the efficiency of our deployment and our systems," Pickle said.
"We'll be putting that knowledge to good use as we move forward with the
integration of point-to-multipoint equipment into other markets in the coming
weeks and months." Teligent has ordered commercial point-to-multipoint
equipment for its initial 15 markets, and expects shipments to arrive in time
to deploy point-to-multipoint service in those markets on schedule.
Another significant achievement was the initiation of commercial service
to "phase-one" customers in Florida, Illinois and Texas, Pickle said. "These
customers are receiving commercial voice and data services over the point-to-
point segments of our integrated digital wireless networks," Pickle said.
"They're critical to our success, because they are helping us perfect our
operating systems so that we are fully prepared to meet the high service
standards that we have set for ourselves when we formally launch service later
this year."
Teligent's customers are receiving Teligent bills and are being supported
by Teligent's customer services team, based at the Teligent Operations Center
in Herndon, Virginia.
Working with Southwestern Bell, Teligent has implemented a permanent local
number portability solution in Houston, Dallas and San Antonio. That system
cuts over customers from the existing Bell company network to Teligent's
network while maintaining the customers' existing telephone numbers - without
using a temporary "call forwarding" fix.
"This marks a major operational accomplishment. We are among the first to
successfully implement true local number portability," Pickle said. Teligent
also has put in place and tested its customer service systems at the Teligent
Operations Center, and has assembled trained sales forces in each of its
initial markets.
The company also has made significant progress in securing access rights
to customer buildings, with leases or lease options currently in place
covering more than 1,000 buildings.
Teligent now has a total of more than 900 employees, up from 221 at year-
end 1997 and 830 at the end of the second quarter. The sales and marketing
staff numbers more than 200, approximately half of which are salespeople.
About half of all employees currently are working in field offices in 23 of
the Teligent's planned 74 markets.
To date, Teligent has installed 10 Nortel DMS 500 switches, with
installation of another three currently in progress. That represents an
increase of five installed switches from the end of the first quarter.
The company so far has received authority to offer competitive local
telephone services in 31 states and the District of Columbia, comprising 63 of
Teligent's markets. That compares to 45 markets in which authority had been
granted at the end of the first quarter and 27 at the beginning of the year.
Teligent has successfully negotiated interconnection agreements covering
58 markets with all of the major local exchange carriers, including Ameritech,
Bell Atlantic, BellSouth, GTE, Pacific Bell, Southwestern Bell, Sprint
(Centel) and U S WEST. At the end of the first quarter, Teligent's
interconnection agreements covered 27 markets.
On the financial front, Teligent Senior Vice President and Chief Financial
Officer Abraham L. Morris cited the July 2 closing of Teligent's $800 million
bank credit facility as "a significant milestone in our financial
development." Morris said, "This new facility gives us greater financial and
operating flexibility on an attractive, cost-effective basis." The facility
effectively replaces an earlier letter of commitment for $780 million in
vendor financing from Nortel.
Morris noted that Teligent's revenue increased slightly in the second
quarter, rising to $143,000 from $98,000 in the first quarter. "We continue to
ramp up our hiring and associated spending as anticipated in preparation for
our commercial launch this Fall," Morris said. Total costs and expenses
increased to $53.2 million in the second quarter, up from $34.8 million in the
previous quarter.
Net property and equipment increased to $71.7 million from $58.0 million,
largely as a result of acquiring additional switches and deploying the
company's operating systems, including network monitoring, billing and
customer care.
"Overall, Teligent's spending during the first half of 1998 was in line
with management's expectations. Operating costs and capital expenditures
reflected continued infrastructure investment in the personnel, operating
systems and network equipment that are necessary to commercialize operations,"
Morris said.
Based in Vienna, Va., Teligent, Inc. (NASDAQ:TGNT) is a full-service,
integrated communications company that will offer small and medium-sized
businesses local, long distance, high-speed data and Internet services over
its own, digital wireless networks in 74 major metropolitan areas throughout
the United States.
For more information, visit the Teligent Web site at:
teligent.com
Teligent is a registered trademark.
Except for any historical information contained herein, the matters
discussed in this press release contain forward-looking statements that
involve risks and uncertainties, including but not limited to economic, key
employee, competitive, governmental, regulatory and technological factors
affecting the company's growth, operations, markets, products, services,
licenses and other factors discussed in the company's filings with the
Securities and Exchange Commission. Actual results may vary materially due to
these and other risks and uncertainties.
Financial Tables Follow
TELIGENT, INC.
(a development stage company)
STATEMENT OF OPERATIONS (unaudited)
(Dollars In Thousands Except Per Share Information)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Revenues:
Communications services $143 $ -- $241 $ --
Management fees and
other services -- 1,079 -- 1,714
Total revenues 143 1,079 241 1,714
Costs and expenses:
Cost of services 17,942 1,167 25,333 1,713
Sales, general and
administrative
expenses 26,229 7,546 45,457 12,103
Stock-based compensation 6,923 35,790 13,554 37,873
Depreciation and
amortization expense 2,080 80 3,653 167
Total costs and
expenses 53,174 44,583 87,997 51,856
Loss from operations (53,031) (43,504) (87,756) (50,142)
Interest and other income 10,170 46 18,266 49
Interest expense (16,274) (405) (28,204) (533)
Net loss $ (59,135) $ (43,863) $ (97,694) $ (50,626)
Net loss per share (b) $(1.12) $(0.99) $(1.86) $(1.14)
Weighted average
common shares
outstanding (b) 52,591,864 44,426,299 52,588,640 44,426,299
SELECTED FINANCIAL AND OTHER DATA:
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
EBITDA (a) $ (42,762) $ (6,884) $ (68,534) $ (11,352)
Cash used in operations (33,794) (8,895) (53,984) (13,408)
June 30, December 31,
1998 1997
Cash and cash equivalents $ 586,976 $ 424,901
Total assets 813,264 596,380
Total stockholders' equity 191,563 274,146
Number of employees 830 221
(a) EBITDA (earnings before interest, taxes, depreciation and
amortization) excludes noncash charges for stock-based compensation
and for amortization of notes receivable from executives.
(b) Pro forma for the three and six month periods ended June 30, 1997
SOURCE Teligent
-0- 08/11/98
/CONTACT: Media, Robert W. Stewart, 703-762-5175, or Investors, Robert H.
Schwartz, 703-762-5237, both of Teligent/
/Web site: teligent.com |
