RCN Reports Record Results for Third Quarter 1998 Company Posts Record Revenues, 72% Increase in On-Net Connections
October 29, 1998 07:18 AM
PRINCETON, N.J., Oct. 29 /PRNewswire/ -- RCN Corporation RCNC today reported third quarter results for the period ending Sept. 30, 1998, reflecting record revenues and strong increases in both advanced fiber connections and homes passed.
Pro Forma Total RCN revenues for the quarter were $68.6 million, up more than 15% from the previous quarter. For the nine months ended September 30, Pro Forma Total RCN revenues were $171 million, up more than 86% from $91.8 million over the same period a year ago.
Advanced fiber-optic network connections grew 72% to 82,842 in the quarter ended September from 48,212 at the end of June. On-net voice, video and Internet connections increased 83%, 66% and 131%, respectively. Total customer connections increased 98,199 to 808,177.
RCN's homes passed increased to 213,983 in September, an increase of 91,006 or 74% from the last quarter. Homes passed is an important construction measure of the Company's advanced fiber rollout. Additionally, RCN has begun to report marketable homes, which represents that segment of homes passed which are being marketed the full suite of on-net products. The distinction between homes passed and marketable homes recognizes the transition from network construction to service penetration. As of September 30, marketable homes were 181,353, an increase of 70,166 from last quarter.
"We surpassed 800,000 total connections this quarter, a target we originally set for RCN to achieve in the year 2000. Now that we have proven our ability to build a quality customer base quickly and a high-capacity, local broadband fiber network, we are focusing all of our energies on gaining full end-to-end control of our customers. At this stage in our growth, our priorities are to deploy on-net services and to develop a sophisticated customer care infrastructure. We are confident that this will result in a better quality, higher revenue customer base," said David C. McCourt, Chairman and CEO.
As expected, third quarter EBITDA loss before a non-recurring charge and acquired research and development increased to a loss of $12.7 million, compared to an EBITDA loss of $10.4 million in the previous quarter. EBITDA losses reflect the company's continued development of its markets.
Capital expenditures during the quarter totaled $86.5 million, bringing year-to-date capital expenditures to $190.4 million.
The company reported a net loss for the quarter ended September 30, 1998 of $52.8 million, or 81 cents per outstanding share, compared to a loss of $49.1 million, or 84 cents per outstanding share, in the previous quarter ended June. The net loss reflects increases in EBITDA loss, net interest expense and depreciation and amortization.
RCN's Network Deployment is Well-Capitalized
RCN ended the quarter with nearly $1.2 billion in cash, enabling the company to fund its growth until early-to-mid-2000. The company's pre-funded growth strategy is intended to allow it to build all of its current markets to economic viability. Just last quarter, RCN successfully raised $250 million in accordance with this plan, placing the company in a position to aggressively pursue its expansion in the Northeast and in the West.
RCN Becomes First Competitive Video Provider in D.C.
In the Northeast, RCN officially launched its Washington D.C. operation, Starpower, a joint venture between RCN Corporation and Pepco Communications, a wholly owned subsidiary of Potomac Electric Power Company, on October 26,1998. The company signed an Open Video System (OVS) agreement giving District residents their first ever alternative choice in video programming. In addition, Starpower offers local and long distance phone and high-speed Internet access.
Starpower opened a product showcase center in downtown Washington D.C. and announced a broad marketing agreement under which it will become the exclusive provider of video programming to the MCI Center.
West Coast Expansion On-Target
RCN continued to pursue its plans to serve residents in the Silicon Valley area of California. The company has secured federal approval to offer competitive video services under the Open Video System provision in the Telecommunications Act of 1996, and recently received Competitive Local Exchange Carrier (CLEC) certification from the state of California.
RCN Corporation RCNC is the nation's first and largest single-source, facilities based provider of telecommunications services to the residential market, the largest regional Internet service provider (ISP) in the Northeast and the nation's seventh largest ISP. The company is currently providing local and long distance phone, cable television and Internet services in several markets from Boston to Washington, D.C. RCN has expanded its target market to include California's San Francisco to San Diego corridor. Additional information about RCN's services may be found on the company's web site at rcn.com. |
