DD... Sorry for the long post, but just saw this come across the wire after close. Just did a quickie dd on it, so you need to check it yourself. But it looked interesting, so you may want to put it on your watch list. Seems ISP's are hot nowadays.
Snerd
STGC
quote.yahoo.com
Startec Reports Record Revenues for Q1 99
(PR Newswire 05/06 15:12:53)
- Quarter-Over-Quarter Revenue Growth of 93%
- Sequential Quarterly Revenue Growth of 15%
- Gross Property & Equipment Growth to $57.8 Million
- 45 Operating Agreements in 39 Countries
- 10 International Telecommunications Licenses
- Over 131,000 customers
BETHESDA, Md., May 6 /PRNewswire/ -- Startec Global Communications
Corporation (Nasdaq: STGC), a facilities-based provider of international
communications services to ethnic communities in North America and Western
Europe, announced record revenues for the first quarter of 1999 of
$57.7 million, a growth of 93% over first quarter 1998 revenues of
$29.9 million.
Startec's goal is to become the dominant provider of communications
services to ethnic communities located in major metropolitan areas in the
United States, Canada and Europe. The Company is deploying an ATM/IP network
extending from North America and Western Europe into the emerging economies to
serve these specific communities. With this network the Company plans to
offer a complete array of high quality and affordable communications services,
including voice, data, Internet and multimedia. Combined with Startec's focus
on in-language, responsive customer care, this network will allow the Company
to serve the distinct cultural needs of ethnic consumers and expand
geographically to capture ethnic markets globally.
First Quarter Financial Highlights:
Revenue:
Revenue in the first quarter of 1999 grew 93% to $57.7 million versus
$29.9 million in the first quarter of 1998. Revenue grew 15% over fourth
quarter 1998 revenues of $50.4 million. Retail and wholesale revenues grew 8%
and 17% over fourth quarter revenues, respectively. The number of retail
customers increased approximately 7.4% to 131,000 at the end of the first
quarter of 1999, from approximately 122,000 at the end of the fourth quarter
of 1998. The Company expanded its wholesale customers to 60 in the first
quarter of 1999 from 53 in the fourth quarter of 1998.
In order to maintain its high quality of service, the Company is
restraining its retail customer growth to the 3 - 7% range until its new Call
Centers in Bethesda, Maryland and Guam are brought on line during the second
quarter of 1999.
Gross margin:
The Company reported gross margin in the first quarter of $5.1 million, or
approximately 9% of revenues, compared to a gross margin of $4.2 million, or
14%, for the first quarter of 1998. Two events impacted gross margin: 1) In
the last two quarters, the Company signed 17 operating agreements and has now
implemented a total of 27 agreements. This is significantly more
international operating agreements than was anticipated. In the long term,
these agreements are expected to add considerable value to the Company's
termination options and contribute to gross margin. In the short term,
however, these agreements carry traffic in only one direction, resulting in
higher termination costs. The Company, typically, expects to receive traffic
from the signatories of these agreements two quarters after commencement of
one-way traffic. 2) The Company has moved to establish an interconnect in
France and has implemented a network between the U.K., France, Germany,
Switzerland and the Netherlands. Most of the European network is leased
capacity. This creates short-term pressure on gross margins until European
revenue becomes significant.
Selling, general and administrative expenses:
The Company's selling, general and administrative expenses grew to
$13.9 million, or 24% of revenues for the first quarter of 1999, as compared
to $3.3 million, or 11% of revenues for the first quarter of 1998. The
Company has expanded its work force to 584 employees from 177 at the end of
the first quarter of 1998.
The Company's organizational and marketing structure now includes a work
force of employees focused on 1) expansion of services into Europe and 2)
expansion into the Internet space. The Company believes that these expenses
are strategically necessary in order to expand geographical scope and
accelerate services to its target market.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA"):
The Company's EBITDA for the quarter was negative $8.8 million as compared
to positive EBITDA in the first quarter of 1998 of approximately $897,000.
The negative EBITDA is consistent with the Company's expansion strategy.
Negative EBITDA is due to increased expenses associated with 1)
significant acceleration of operating agreements, 2) rapid expansion into
Europe and 3) acceleration in the delivery of Internet services to ethnic
customers. The Company expects negative EBITDA to continue through the first
quarter of 2000. The Company believes it has adequate funding to support the
negative EBITDA throughout the period.
By sustaining negative EBITDA, the Company expects to be able to deliver
voice, data and Internet services to its ethnic customers by year end 1999,
thus becoming an integrated services provider and significantly expanding its
scope well beyond that of a basic voice provider.
Net Income (Loss):
In the first quarter of 1999, the net loss was $13.8 million, or $1.51 per
diluted share, compared to net income in the first quarter of 1998 of
approximately $899,000, or $0.10 per diluted share.
Cash Reserves, Capital Expenditures and P&E:
The Company has cash and cash equivalents of $103.5 million (inclusive of
pledged securities) and has signed definitive agreements with vendors for an
additional $55 million of financing. Capital expenditures for the quarter
were $10.1 million. Gross property and equipment increased to $57.8 million,
as compared to $47 million at the end of the fourth quarter of 1998. The
Company continues to aggressively seek additional vendor and bank financing.
First Quarter Operational Highlights:
The Company currently originates traffic from 26 major metropolitan areas
in North America and Western Europe. The Company is ahead of schedule to
complete its network to a total of 30 major cities.
The Company currently owns capacity on 13 cable systems in the Atlantic,
Pacific and Indian Oceans. The Company has 45 operating agreements with
foreign PTTs and other licensed operators providing access to 39 different
countries, located primarily in developing regions of the world.
The Company has received ten international telecommunications licenses in
Canada, the Netherlands, Switzerland, the U.K., Germany, Austria, Ireland,
Australia, New Zealand, and France and is interconnected with France Telecom.
The Company owns and operates a total of seven switches, 14 Points of Presence
(POPs) and two data co-location centers.
"We are creating stockholder value by developing two key strategic assets
-- a core ethnic retail customer base and an ATM/IP-based network connecting
developed countries to key countries in the emerging economies," said Ram
Mukunda, President and Chief Executive Officer of Startec.
About Startec Global Communications:
Startec Global Communications is a dual-sided facilities-based long
distance carrier, which markets its services to select ethnic U.S., European
and Canadian residential communities. The Company provides its services
through a flexible network of owned and leased transmission facilities, resale
arrangements and a variety of operating agreements and termination
arrangements, allowing the Company to terminate traffic worldwide.
For more information, visit Startec's Web site at www.startec.com.
Other than historical information contained herein, certain statements in
this release are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1994. Forward-looking statements
in this release involve a number of risks and uncertainties including, but not
limited to, changes in market conditions, government regulation, technology,
the international telecommunications industry, and the global economy,
availability of transmission facilities, management of rapid growth, entry
into new and developing markets, competition, customer concentration and
attrition, and the expansion of the global network. These risk factors are
discussed in further detail in the Company's SEC filings.
STARTEC GLOBAL COMMUNICATIONS CORPORATION AND SUBSIDIARIES
(unaudited, in thousands, except per share amounts)
Consolidated Statements of Operations
For the Three Months
Ended March 31,
1999
1998
Net revenues $57,714 $ 29,891
Cost of services 52,659 25,655
Gross margin 5,055 4,236
General and administrative expenses 9,725 2,691
Selling and marketing expenses 4,128 648
Depreciation and amortization 1,375 184
Income (loss) from operations (10,173) 713
Interest expense (5,199) (153)
Interest income 1,647 359
Equity in loss from affiliates (102) --
Income (loss) before income taxes (13,827) 919
Income tax provision -- (20)
Net income (loss) $(13,827) $899
Basic earnings (loss) per common share $(1.51) $0.10
Diluted earnings (loss) per common share $(1.51) $0.10
Weighted average shares outstanding
-basic and diluted 9,144 8,909
Weighted average shares outstanding
-diluted 9,144 9,365
Balance Sheet Data:
March 31, December 31,
1999 1998
Cash and cash equivalents $59,451 $81,456
Working capital 47,455 81,414
Property and equipment, net 53,038 43,525
Long term obligations 165,417 165,490
SOURCE Startec Global Communications Corporation
-0- 05/06/99
/CONTACT: Prabhav V. Maniyar, Chief Financial Officer of Startec,
301-767-3944/
/Web site: startec.com
(STGC)
CO: Startec Global Communications Corporation
ST: Maryland
IN: TLS
SU: ERN
S.PN STGC |
