>earnings out May 12 in am.|
indeed, the muffin is served in the morning.
Metromedia Fiber Network, Inc. Reports First Quarter 1999 Results; Total Contracts Signed Reach Half Billion Dollar Mark
May 12, 1999 10:15 AM
NEW YORK--(BUSINESS WIRE)--May 12, 1999--Metromedia Fiber Network, Inc., (MFNX), a provider of dedicated fiber optic networks within major metropolitan areas, today reported first quarter 1999 results. Revenues for the three months ended March 31, 1999 increased to $18.4 million from $1.7 million for the comparable period in 1998.
Metromedia Fiber Network's total contracts signed to date will provide for payments of more than $500 million. In the first quarter of 1999, the Company announced major new contracts with a variety of customers including established communications providers like Bell Atlantic Global Networks and new entrants in the competitive field such as Level 3 and Time Warner Telecom and Internet leaders including AOL, PSINet and AboveNet. The Company also announced an important alliance with Cisco Systems.
Howard M. Finkelstein, President and Chief Operating Officer of Metromedia Fiber Network, Inc., said, "We continued to expand our diverse customer base, remaining focused on our strategy of becoming the fiber optic infrastructure provider of choice for carriers, corporations and government customers. Our independent position in the competitive telecommunications marketplace makes us a compelling alternative for a wide range of technologically sophisticated customers looking for a long-term communications solution.
"Not only is our customer base growing, but our network reach is expanding at a rapid pace. In the first quarter, we announced the expansion of our intra-city reach across geographical borders with a metropolitan area network in Frankfurt, Germany. We also officially launched our Philadelphia operations and our completed northeast corridor network between New York and Washington, DC."
The Company reported income from operations of $2.9 million for the three months ended March 31, 1999 compared with a loss from operations of $5.9 million for the three months ended March 31, 1998. This improvement is primarily attributable to the increase in revenue and the reduction, as a percentage of sales, of cost of goods sold, selling, general and administrative expenses and depreciation. Included in the 1998 loss is a settlement agreement of $3.4 million. Net loss for the three months ended March 31, 1999 was $5.8 million compared with a net loss for the three months ended March 31, 1998 of $4.2 million.
For the three months ended March 31, 1999, cost of sales was $8.3 million compared with $1.2 million for the three months ended March 31, 1998. Cost of sales as percentages of revenue were 45% and 71%, respectively, decreasing as a result of the significant increase in the number of customers and revenues. Depreciation and amortization expense was $1.2 million for the three months ended March 31, 1999 compared with $0.2 million during the comparable period in 1998, increasing as a result of increased investment in the Company's completed fiber optic network and property and equipment.
Interest income, derived from investment of excess cash from the proceeds of the Company's $650 million note issuance in November 1998, increased to $7.4 million for the three months ended March 31, 1999 from $1.7 million for the three months ended March 31, 1998. Interest expense increased to $15.9 million from $0.7 million for the respective periods, reflecting the cost of additional debt acquired related to the issuance and sale of senior notes.
As the Company is in the early stage of development, the Company expects to generate significant operating and net losses as it continues to build out and market its fiber optic network. Management believes that its goals will be achieved through the Company's successful implementation and execution of its growth strategy.