NEXTLINK Beats Second Quarter Analyst Revenue and Line Installation Estimates -- NEXTLINK turns in record results with $140.6 million in 2Q revenue and 106,000+ installed access lines
MCLEAN, Va., Jul 26, 2000 (BUSINESS WIRE) -- NEXTLINK Communications, Inc. (NASDAQ: NXLK chart, msgs), one of the world's fastest growing providers of broadband communications services, today announced financial results for the quarter and six month period ended June 30, 2000.
Total revenue grew to $140.6 million in the second quarter of 2000, a 33 percent increase over revenue reported in the first quarter of 2000, and a 132 percent increase over revenue reported in the second quarter of 1999. Year-to-date revenue totaled $246.5 million as of June 30, 2000, a 126 percent increase over the comparable period in 1999. Of the total Company revenue reported, $10.6 million was contributed by Concentric Network's operations for the last two weeks of the quarter following completion of the NEXTLINK/Concentric merger on June 16, 2000. Excluding Concentric's contribution, revenue increased 23 percent over revenue reported in the first quarter 2000, and 114 percent over the second quarter of 1999. NEXTLINK's core services revenue, consisting of bundled local and long distance, as well as dedicated services, reached $115.4 million in the second quarter of 2000, up 26 percent over the first quarter of 2000.
The EBITDA loss (operating loss before depreciation, amortization, stock based compensation expense, and an in-process research and development charge associated with the Concentric Network acquisition accounting) totaled $68.6 million in the second quarter of 2000, compared to an EBITDA loss of $51.8 million in the second quarter of 1999. Year-to-date EBITDA loss totaled $131.8 million as of June 30, 2000 compared to an EBITDA loss of $99.3 million in the first six months of 1999. Of the total EBITDA loss reported in the second quarter of 2000, approximately $2 million was attributable to Concentric Network.
Growth in access line installations continued to accelerate as NEXTLINK added 106,023 access lines during the second quarter to bring the total installed base to 627,162 on June 30, 2000. These quarterly additions represent a 14 percent increase over net access lines installed in the first quarter of 2000, and a 79 percent increase over the 59,308 net access lines added in the second quarter of 1999. Digital Subscriber Lines (DSL) installed by Concentric during the second quarter totaled 4,016, an 11 percent increase from Concentric's installations during the first quarter of 2000. This brings the Company's DSL installed lines total to 17,759 as of June 30, 2000.
"We had a strong quarter both tactically and strategically and it continues to be important for NEXTLINK to remain relentlessly focused on delivering strong results, particularly at a time when operational execution is at a premium," said NEXTLINK Chairman and Chief Executive Officer Dan Akerson. "In addition to our very strong operational performance, we closed our merger with Concentric Network on schedule, announced an agreement in principle to acquire local, Pan-European and transatlantic networks in Europe, and recently closed an agreement with Forstmann Little for an additional $400 million of equity funding at a time when investors are being increasingly selective with investment dollars."
During the quarter NEXTLINK continued building out it's broadband backbone and metro networks announcing earlier this week that it has signed a contract, worth an anticipated $120 million in 2000-2001, to use CIENA Corporation's (NASDAQ: CIEN chart, msgs) LightWorks(TM) network architecture equipment to light its 16,000-mile, North American, inter-city, fiber-optic network. NEXTLINK also announced that the first segments of that inter-city network, connecting Dallas, Houston, and San Antonio are now operational.
Today, NEXTLINK updated its progress on its broadband wireless network deployment by announcing that broadband wireless service is now available in Chicago, Philadelphia, Newark, Los Angeles and Dallas. Additionally, the Company expects broadband wireless service to be available by the end of the third quarter in Boston, St. Louis, Washington D.C., San Francisco, Cleveland, Sacramento, Seattle and Memphis and fully expects to reach its goal of serving 25 markets via broadband wireless by year-end.
NEXTLINK also began testing consecutive point broadband wireless technology in Boston and Dallas. This technology, if successfully deployed, would allow NEXTLINK to build "fiber like" wireless sub-rings within the 20-40 square mile area that comprises the local network in most of its major metropolitan markets at a fraction of the time and cost to deploy fiber sub-rings, enabling NEXTLINK to dramatically extend the reach of its broadband networks.
In May, NEXTLINK announced plans to extend its broadband network presence into Europe with an agreement in principle to acquire five metro European networks, a Pan-European inter-city network and transatlantic capacity that will reach 10 Gbps in the next two years. The local networks are expected to consist of more than 80,000 metro fiber miles and empty conduits in Brussels, Amsterdam, Frankfurt, London and Paris and the inter-city network is planned connect 21 major European cities with more than 88,000 fiber miles.
NEXTLINK has made significant progress during the past several months in deploying IP infrastructure. With the addition of Concentric's switches, NEXTLINK operated 43 ATM switches as of June 30, 2000 throughout the U.S. and Europe, and has currently deployed more than 30 Unisphere IP routers that support Internet Access products and allow large scale termination of customers' services for traditional private line and ATM technology.
During the quarter, NEXTLINK continued progress on the expansion of its data services by launching a full suite of integrated voice and data offerings via its NEXTLINK direct sales force in late April. Last month, NEXTLINK/Concentric expanded its combined DSL service-offering footprint into 28 new markets and now offers service in a total of 53 markets across the United States. Concentric also earned the Grand Prix Customer Service Award for superior customer service and their ConcentricAIP product, was awarded Network Magazine's prestigious 2000 Product of the Year in the Web Hosting/ASP category.
In other NEXTLINK data news, the Company announced yesterday a strategic business alliance with Deloitte Consulting to deliver a unique multi-channel retail e-commerce solution that will integrate customer interactions across all sales channels, including storefronts, call centers and the Internet. Long's Drug Stores, the nation's sixth largest drug store chain, has begun implementing the solution for the chain of more than 400 stores in California, Hawaii, Washington, Nevada, Colorado and Oregon.
NEXTLINK Communications is one of the world's leading providers of broadband communications services offering local and long distance voice communication services, Digital Subscriber Line (DSL) access, Web hosting and e-commerce service, Virtual Private Networks (VPNs), dedicated access, global transit and application infrastructure services for delivering applications over the Internet or a VPN.
NEXTLINK has assembled an unrivaled set of facilities-based broadband networks that, when complete, and will serve much of the United States, Canada and Europe. In the United States, NEXTLINK has more than 430,000 metro fiber miles in operation and a 384,000 fiber-mile inter-city network under construction. The Company is also North America's largest holder of fixed broadband wireless spectrum, with licenses covering 95 percent of the population of the 30 largest U.S. cities and a partnership with licenses covering all of the top cities in Canada. NEXTLINK has also agreed in principle to acquire more than 80,000 metro fiber miles in Europe to serve the London, Frankfurt, Brussels, Amsterdam and Paris markets and an 88,000 fiber-mile pan-European fiber network connecting 21 major European cities and transatlantic capacity that will eventually expand to 10 Gbps.
The statements contained in this release that are not historical facts are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements include those describing NEXTLINK's planned European and domestic networks and fixed wireless deployment. Management wishes to caution the reader that these forward-looking statements are only predictions and are subject to risks and uncertainties and actual results may differ materially from those indicated in the forward-looking statements as a result of a number of factors. These factors include, but are not limited to, the ability of NEXTLINK to negotiate and reach definitive agreements relating to the purchase of the European network on satisfactory terms, the ability of NEXTLINK to integrate its pre-merger business and operations with those of Concentric, NEXTLINK's ability to design and construct fiber optic networks, install cable and facilities, including switching electronics, to develop, install and provision LMDS equipment and interconnect that equipment with NEXTLINK's fiber networks and connect the networks, including LMDS equipment, to customers and on satisfactory terms and conditions, and risks related to NEXTLINK's national network strategy. NEXTLINK's business is subject to other risks and uncertainties described from time to time in NEXTLINK's reports filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 1999 and its Quarterly Report on Form 10-Q for the quarter ended March 31, 2000.
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NEXTLINK COMMUNICATIONS, INC.
Financial Highlights
(Dollars in thousands, except per share data)
Three Months Ended Six Months Ended
June 30, June 30,
2000 (1) 1999 2000 (1) 1999
Revenue $140,649 $60,657 $246,498 $109,243 Costs and
expenses:
Operating 96,884 53,368 172,907 97,067
Selling,
general and
administrative 112,405 59,099 205,370 111,433
Stock based
compensation 17,228 1,117 26,213 2,176
Depreciation and
amortization 76,411 27,297 122,407 50,150
In-process
research and
development(2) 36,166 -- 36,166 --
Loss from
operations (198,445) (80,224) (316,565) (151,583) Interest income 46,067 17,522 91,098 37,285 Interest expense (107,305) (60,063) (215,664) (110,753) Other Income
(loss)(3) 885 -- 225,576 --
Net loss $(258,798) $(122,765) $(215,555) $(225,051)
Preferred stock
dividends and
accretion of
preferred stock
redemption
obligation,
including
issue costs (31,764) (17,054) (65,199) (33,654)
Loss applicable
to common
shares (4) $(290,562) $(139,819) $(280,754) $(258,705)
Basic loss per
share(4),(5) $(0.95) $(0.56) $(0.98) $(1.10)
Basic weighted average shares outstanding (5) 305,145,306 249,763,592 286,982,516 234,687,928
EBITDA (6) $(68,640) $(51,810) $(131,779) $(99,257)
(1) On June 16, 2000, the Company completed the acquisition of
Concentric Network Corporation (Concentric). The Concentric
acquisition was accounted for as a purchase: accordingly, the
operating results of Concentric are included from date of
acquisition.
(2) In connection with the Concentric acquisition, the Company
allocated $36,166 of the purchase price to in-process research and
development.
(3) Other income (loss) for the six months ended June 30, 2000
includes $225,112 associated with a realized gain from the sale of
equity securities.
(4) Excluding the aforementioned in-process research and development
charge of $36,166, loss applicable to common shares and basic loss
per share for the three months ended June 30, 2000 was ($254,396)
and ($0.83), respectively. Excluding the in-process research and
development charge and the aforementioned gain of $225,112, loss
applicable to common shares and basic loss per share for the six
months ended June 30, 2000 was ($469,700) and ($1.64),
respectively.
(5) The net loss per share data and weighted average shares
outstanding have been adjusted for stock splits for all the
periods presented.
(6) EBITDA consists of net loss before other income (loss), interest
expense and income, in-process research and development charge,
depreciation, amortization and deferred compensation expense.
EBITDA is commonly used to analyze companies on the basis of
operating performance, leverage and liquidity.
NEXTLINK COMMUNICATIONS, INC.
Condensed Consolidated Statements of Financial Position
(Dollars in thousands)
As of
June 30, December 31,
2000 (1) 1999
Cash, cash equivalents, and marketable
securities $2,795,487 $1,881,764 Other current assets 183,487 105,244 Pledged securities 11,776 40,759
Total current assets 2,990,750 2,027,767 Property and equipment, net 1,754,657 1,180,021 Investment in fixed wireless licenses 985,867 933,128 Other long-term assets, net 519,726 404,135 Goodwill, net 2,836,916 52,057
Total assets $9,087,916 $4,597,108
Current liabilities $449,071 $249,217 Long-term debt 4,346,613 3,733,342 Other long-term liabilities 39,295 15,319 Redeemable preferred stock,
net of issuance costs 1,635,727 612,352
Total shareholders' equity (deficit) 2,617,210 (13,122)
Total liabilities
and shareholders' equity (deficit) $9,087,916 $4,597,108
(1) The balance sheet includes the consolidation of Concentric
Network Corporation (Concentric), which was acquired by the
Company on June 16, 2000. The Concentric acquisition was
accounted for as a purchase.
NEXTLINK COMMUNICATIONS, INC.
Operating Data (1)
As of As of As of As of
June 30, March 30, Dec. 31, Sept. 30,
2000 2000 1999 1999
Route miles (2) 5,380 4,356 4,285 3,905 Fiber miles (3) 435,992 413,407 378,200 338,705 On-net buildings connected (4) 1,738 1,485 1,320 1,163 Off-net buildings connected (5) 43,264 31,797 28,656 20,047 Voice switches installed (6) 32 32 32 28 ATM switches installed 43 -- -- -- Access lines in service (7) 627,162 521,139 428,035 349,154 Employees (8) 6,155 3,872 3,500 3,254
(1) The operating data for all periods presented include the
statistics of the Las Vegas network, which the Company manages and
in which the Company has a 40% membership interest.
(2) Route miles refers to the number of miles of the
telecommunications path in which the Company-owned or leased fiber
optic cables are installed.
(3) Fiber miles refers to the number of route miles installed along a
telecommunications path, multiplied by the Company's estimate of
the number of fibers along that path.
(4) Represents buildings physically connected to the Company's
networks, excluding those connected by unbundled incumbent local
exchange carrier (ILEC) facilities.
(5) Represents buildings connected to the Company's networks through
leased or unbundled ILEC facilities.
(6) Switches installed include two long distance switches acquired in
a business acquisition and the switch installed in the Company's
testing facility.
(7) Represents the number of access lines for which the Company is
billing services. The Company defines an access line as a
telephone connection between a customer purchasing local telephone
services and NEXTLINK. This connection does not include the
concept of access line equivalents (ALEs), and is a one-for-one
relationship with no multipliers used for trunk ratios, except for
those trunks over which primary rate interface (PRI) service is
provided, which are counted as 23 access lines.
(8) Employees as of June 30, 2000 include the employee base of
Concentric and Nextlink combined. |
