Here it is in fixed font - the tables are easier to read:
DENVER--(BUSINESS WIRE)--Oct. 20, 1998--
Record Revenue and EBITDA with Strong, Double-digit Sequential
Growth
HIGHLIGHTS:
-- Total revenue increased four-fold to $806.8 million
-- Data services revenue grew 780 percent
-- EBITDA increased 369 percent to $117.6 million
Qwest Communications (NASDAQ:QWST) today reported record third
quarter 1998 results with strong growth in all business segments.
For the three months ended September 30, 1998, total revenue was
$806.8 million, a four-fold increase over the third quarter of 1997.
During the quarter, communications services revenue grew
eighteen-fold to $601.8 million, with data services revenue growth of
780 percent, over the prior year. Earnings before interest, taxes,
depreciation and amortization (EBITDA) increased four-fold to $117.6
million, up from $25.1 million as reported in the third quarter of
the prior year.
The company narrowed its net loss from $876.3 million, or ($3.62)
per share reported in the second quarter of 1998, to a net loss of
$5.0 million, or ($0.02) per share in the current quarter. Excluding
one-time merger-related charges, the company posted a net loss of
$15.6 million, or ($0.06) per share in the previous quarter.
The company also said that results for the quarter exceeded the
consensus of analysts' expectations.
Commenting on the quarter, Qwest's President and CEO Joseph P.
Nacchio said, "We're pleased with the strong operational and
financial results achieved during the quarter. The customers,
partners and strategic initiatives announced during the last 90 days
epitomize Qwest's commitment to driving growth through the
convergence of data, video and voice services."
Total revenue of $806.8 million grew 23 percent from $653.6
million in the third quarter of 1997, on a pro forma basis
(reflecting the company's acquisitions for all previously reported
periods). EBITDA in the quarter grew to $117.6 million, compared to
$101.2 million in the previous year. Net loss for the quarter was
($0.02) per share, versus pro forma earnings per share of $0.03 a
year ago, reflecting increased depreciation and interest expenses
caused by the continued build out of the Qwest network and other
investments in infrastructure to support the companies rapid growth.
Total revenue grew sequentially by more than 16 percent to $806.8
million from $694.3 million in the second quarter of 1998, on a pro
forma basis. Communications services revenue of $601.8 million was
up over 11 percent from $540.4 million in the second quarter. The
company generated double-digit sequential growth in each of the
business, consumer and wholesale markets. Sequentially, EBITDA
increased 76 percent from $66.7 million in the second quarter to
$117.6 million. Strong growth in customer revenues enabled the
company to narrow its loss from ($0.06) per share in the second
quarter of 1998 (excluding one-time merger-related items), to ($0.02)
per share in the quarter.
"The financial results for the quarter reflect strong, double-
digit sequential gains that were achieved in all areas of the
business. While Qwest makes progress on its network construction,
invests for future growth and successfully integrates its recent
acquisitions, the company continues to realize improved EBITDA and
revenue," said Robert Woodruff, Qwest's executive vice president and
chief financial officer.
Rapid Growth in Data Services
The company expanded its data services presence with the
introduction of its native IP network and new multimedia services.
Domestic and international data revenue was up 50 percent from the
same quarter of last year, while sequential data revenue posted even
stronger gains, up nearly 20 percent from the previous quarter. The
company's frame relay revenues grew more than 150 percent on an
annual basis. All results reflected above are on a pro forma basis.
Qwest also took an important step to augment its data services
capability during the quarter by announcing that it will offer the
world's first commercially available native IP OC-48 network service
beginning next month. This network will offer customers virtually
unlimited high-speed bandwidth to support a wide range of multimedia,
e-commerce and data applications and a comprehensive package of
service level agreements.
During the quarter, Qwest announced the signing of a definitive
agreement to acquire Icon CMT Corp. The transaction, which will add
$75 million in revenue and more than 400 IP data technicians and
sales professionals, will further support Qwest's expansion into the
Web hosting and Web enabling market. The acquisition will also help
facilitate the creation of 10 new CyberCenters Qwest plans to open by
the end of 1999.
The acquisition is subject to certain shareholder and regulatory
approvals. The company expects to close the transaction by the end
of the year.
Expanded Sales Channels
To support the growing demand of data and Internet services,
the company expanded its distribution channels through a
strategic agreement with Netscape Communications Corporation.
As part of the company's previously stated objective for
continued growth and penetration into the multinational and
Fortune 1000 business sectors, the company also created a
National Accounts sales division during the quarter.
Merger Integration/Synergies
With respect to Qwest's acquisition of LCI, the company
continues to expect that it will realize projected merger
synergies and strategic objectives that were originally
outlined when the transaction was announced. The financial
results of the quarter already reflect the revenue and
administrative cost synergies from the transaction.
Since the close of the LCI transaction, the companies aligned
their sales organizations, consolidated product portfolios,
created a new product development process, and established a
uniform sales incentive program. A common order
entry/customer provisioning platform has also been implemented.
Billing migration has been completed for private line services
with scheduled completion for all services in early '99. In
addition, a consolidated network plan has been created and is
being implemented.
Construction Services
The company continued to make significant progress on the
construction of its planned 18,449-mile nationwide network in
the third quarter. To date, the company has secured 99.5
percent of its rights of way, commenced construction on 17,955
miles of network, placed 16,100 route miles of conduit in the
ground, installed 12,900 miles of fiber-optic cable and lit
nearly 50 percent of the network.
Continued progress on the completion of the network and recent
higher-margin contracts with customers helped boost
construction revenue to $205.0 million, up 33 percent from the
second quarter of 1998.
The Qwest Macro Capacity Fiber Network
Qwest's planned domestic 18,449-mile network will serve over 130
cities, which represent approximately 80 percent of the data and
voice traffic originating in the United States, upon its scheduled
completion in the second quarter of 1999. To date, approximately
9,100 miles of the Qwest Macro Capacity Fiber Network are activated,
and construction has commenced on 17,955 miles. Qwest's
transcontinental segment extends from Los Angeles to Sacramento and
across to New York. Additionally, Qwest owns transatlantic submarine
capacity linking the United States to Europe and will jointly own a
transpacific submarine cable system connecting the U.S. to the
Pacific Rim. Qwest is also extending its network 1,400 miles into
Mexico with completion slated for late 1998.
The Qwest Macro Capacity Fiber network is designed with highly
reliable and secure bi-directional, line switching OC-192 SONET ring
architecture. Upon completion, the network will offer a self-healing
system that provides the ultimate security and reliability by
allowing instantaneous re-routing in the event of a fiber cut.
This release may contain forward-looking statements that involve
risks and uncertainties. These statements may differ materially from
actual future events or results. Readers are referred to the
documents filed by Qwest with the SEC, which identify important risk
factors that could cause actual results to differ from those
contained in the forward-looking statements, including, but not
limited to, (a) failure by Qwest to construct the Qwest Network on
schedule and on budget, (b) failure by Qwest to maintain all
necessary rights-of-way, (c) intense competition in Qwest's
communications services markets, (d) rapid and significant changes in
technology and markets, (e) dependence on new product development,
(f) operating and financial risks related to managing rapid growth,
integrating acquired businesses, being highly leveraged and
sustaining operating cash deficits and (g) adverse changes in the
regulatory environment and (h) volatility of stock price. These
cautionary statements should be considered in connection with any
subsequent written or oral forward-looking statements that may be
issued by Qwest or persons acting on its behalf. Qwest undertakes no
obligation to review or confirm analysts' expectations or estimates
or to release publicly any revisions to any forward looking
statements to reflect events or circumstances after the date hereof
or to reflect the occurrence of unanticipated events.
This announcement is not an offer to sell or a solicitation to buy
any securities of Qwest. The offering with respect to the proposed
acquisition of Icon will be made only by the proxy
statement/prospectus that will be distributed to stockholders of Icon
in connection with their consideration of the transaction.
The Qwest logo is a registered trademark of Qwest Communications
International Inc. in the U.S. and certain other countries.
*T
Attachment A
QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For The Three and Nine Months Ended September 30, 1998 and 1997
(In Millions, except Per Share Information)
(Unaudited)
Three Months Ended Nine Months Ended
1998 1997 1998 1997
Revenue:
Communications services $601.8 $32.5 $884.2 $77.1
Construction services 205.0 156.5 493.4 413.2
Total revenue 806.8 189.0 1,377.6 490.3
Operating expenses:
Access and network
operations 371.6 25.0 556.1 61.8
Construction services 128.2 107.5 333.8 292.0
Selling, general and
administrative -
communications 178.7 24.3 312.3 105.6
Selling, general and
administrative -
construction 10.7 7.1 29.2 17.6
EBITDA 117.6 25.1 146.2 13.3
Depreciation and
amortization 76.6 5.1 115.6 13.1
Merger related costs - - 880.5 -
Earnings (loss) from
operations 41.0 20.0 (849.9) 0.2
Interest expense and
other, net 31.9 0.2 50.7 (4.3)
Earnings (loss) before income
taxes 9.1 19.8 (900.6) 4.5
Income tax expense
(benefit) 14.1 7.0 (12.5) 2.2
Net earnings (loss) $(5.0) $12.8 $(888.1) $2.3
Net earnings (loss) per
share - basic $(0.02) $0.06 $(3.42) $0.01
Net earnings (loss) per
share - diluted $(0.02) $0.06 $(3.42) $0.01
Weighted average shares
outstanding - basic 330.7 206.6 259.9 185.1
Weighted average shares
outstanding - diluted 346.1 211.6 273.9 189.0
Earnings from operations
before merger related
charges $41.0 $20.0 $30.6 $0.2
Net earnings (loss) before
merger related charges $(5.0) 12.8 (28.2) 2.3
Net earnings (loss) per share
before merger related
charges $(0.02) $0.06 $(0.11) $0.01
Attachment B
QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - Pro Forma
For the Three and Nine Months Ended September 30, 1998 and 1997
(In millions, except Per Share Information)
(Unaudited)
Pro Forma (1) Pro Forma (1)
Three Months ended Nine Months Ended
1998 1997 1998 1997
Revenue:
Communications services $601.8 $497.1 $1,665.4 $1,377.5
Construction services 205.0 156.5 493.4 413.1
Total revenue 806.8 653.6 2,158.8 1,790.6
Operating expenses:
Access and network operations 371.6 308.7 1,027.3 859.8
Construction services 128.2 109.4 333.8 292.0
Selling, general and
administrative - 178.7 127.2 500.0 402.3
communications
Selling, general and
administrative -
construction 10.7 7.1 29.2 17.6
EBITDA 117.6 101.2 268.5 218.9
Depreciation and
amortization 76.6 60.3 205.1 170.8
Earnings from operations 41.0 40.9 63.4 48.1
Interest expense and other,
net 31.9 9.7 64.5 19.8
Earnings (loss) before
income taxes 9.1 31.2 (1.1) 28.3
Income tax expense (benefit) 14.1 22.5 30.0 41.3
Net earnings (loss) $(5.0) $8.7 $(31.1) $(13.0)
Net earnings (loss) per share
- basic $(0.02) $0.03 $(0.09) $(0.04)
Net earnings (loss) per share
- diluted $(0.02) $0.03 $(0.09) $(0.04)
Weighted average shares outstanding
- basic 330.7 325.6 327.5 323.9
Weighted average shares outstanding
- diluted 346.1 332.2 341.5 329.4
(1) Pro forma numbers reflect results as if each acquisition had
been included from January 1, 1997 and exclude one-time merger
related charges.
Attachment C
QWEST COMMUNICATIONS INTERNATIONAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 1998 and December 31, 1997
(In Millions)
1998 1997
ASSETS
Cash $225.4 $379.8
Other current assets 903.0 344.1
Total current assets 1,128.4 723.9
Property and equipment, net 2,043.9 614.6
Excess of cost over net assets
acquired 3,215.4 21.2
Other, net 327.6 38.4
TOTAL ASSETS $6,715.3 $1,398.1
LIABILITIES AND STOCKHOLDERS' EQUITY
Total current liabilities 1,179.8 315.4
Long-term debt and capital lease
obligations 1,387.1 630.5
Other long-term liabilities 461.9 70.5
Total stockholders' equity 3,686.5 381.7
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY 6,715.3 1,398.1
*T
CONTACT: For Investors: For Media:
Lee Wolfe Tyler Gronbach
800-567-7296 703-363-4494
KEYWORD: COLORADO
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS
INTERACTIVE/MULTIMEDIA/INTERNET EARNINGS
Today's News On The Net - Business Wire's full file on the Internet
with Hyperlinks to your home page.
URL: businesswire.com
Copyright 1998, Business Wire
|
