WASHINGTON, Feb. 22 /PRNewswire/ --
Pathnet, a privately-held next generation carrier's carrier of long-haul transport and competitive local access services to under-served markets, today announced its financial and operating results for the year ending December 31, 1999.
Fourth quarter revenue doubled to $1.0 million as compared to revenue of $0.5 million in the fourth quarter of 1998, and was up 67% sequentially from $0.6 million in the prior quarter. As expected, given the development stage of the company's operations, earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter resulted in a loss of $8.3 million, up from a loss of $4.5 for the year-ago quarter.
During the quarter, Pathnet announced landmark strategic investment agreements valued at $250 million with Colonial Pipeline, BNSF and CSX. As part of these agreements, Pathnet will receive the right to develop over 12,000 miles of the investors' right-of-way holdings. These investment agreements require the approval of the company's bondholders before execution, and the applicable consent solicitation process is currently underway.
"We're hoping to wrap the consent process up in the near term and we're certainly excited to begin working with our three new partners," said president and chief executive officer Richard Jalkut. "Our ability to pick and choose from their extensive rights-of-way clearly facilitates our strategy of reaching under-served markets through unique corridors while enhancing our 'smart build' approach."
Revenue for the year ended December 31, 1999 was $3.3 million, more than double 1998 revenue of $1.6 million. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the year was a loss of $25.1 million versus a loss of $15.6 million in the prior year.
During the fourth quarter, Pathnet increased its gross plant and equipment by $28.2 million, bringing total plant and equipment acquired to $138.8 million at year-end. For the full year, total plant and equipment increased by $90.2 million. The company also completed 4,800 route miles of network and 40 collocations, bringing its total network to 6,800 route miles with 40 collocations in 30 cities.
"Our wholesale customers gain competitive advantage and increased return on investment by subscribing to our innovative solution for their needs in second and third tier markets," said Chuck Liggett, Pathnet chief marketing officer. "We made tremendous progress last year in developing our unique VPOP Plus Service, which combines competitive local private line access with long haul transport. We continue to aggressively move ahead by developing two exciting new VPOP Plus options: xDSL and PRI local access. We look forward to rolling out these enhanced services to our growing customer base during the course of the year" he added.
Fourth Quarter Highlights and Recent Developments
* Announced investment agreements valued at $250 million from Colonial
Pipeline, BNSF and CSX
* Launched the Pathnet VPOP Plus Service - Private Line Access Option
combining competitive local access with long haul transport
* Completed 20 collocations, bringing total to 40
* Signed agreement with Caprock Communications to co-develop route from
Albuquerque to El Paso
* Announced long term dark fiber contract valued at $5.2 million
* Signed third Master Services Agreement (MSA) with a major global
telecommunications provider
Pathnet is a next generation carriers' carrier providing high capacity, long-haul transport and competitive local access services to under-served and second- and third-tier U.S. markets. It provides service to inter-exchange carriers, local exchange carriers, Internet service providers, Regional Bell Operating Companies, cellular operators and resellers. Pathnet currently has 6,800 route miles of completed network and 700 route miles of network under construction. The company's headquarters are located at 1015 31st Street, NW, Washington, D.C., 20007. For additional information about Pathnet, visit the company Web site at www.pathnet.net.
The statements made by Pathnet in this press release may be forward- looking in nature. No assurance can be given that future results will be achieved; actual results may differ materially from those projected in forward-looking statements. Pathnet believes that its primary risk factors include, but are not limited to: signing additional agreements with private network operators and others; offering services to telecommunication service providers; entering into partnering arrangements; and building a digital network. Additional information concerning these and other potential important factors can be found within Pathnet's periodic reports filed with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. Statements in this release should be evaluated in light of these important factors.
PATHNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
For the three For the twelve
months ended months ended
December 31, December 31,
1999 1998 1999 1998
(unaudited) (unaudited)
Revenue $1,036 $534 $3,311 $1,584
Expenses:
Cost of revenue 3,116 2,162 12,695 7,548
Selling, general and
administrative 5,169 2,894 14,670 9,616
Contribution &
Reorganization expenses 1,023 0 1,023 0
Depreciation 2,490 418 6,204 733
Total expenses 11,798 5,474 34,592 17,897
Net operating loss (10,762) (4,940) (31,281) (16,313)
Interest expense (10,692) (10,710) (41,010) (32,572)
Interest income 2,600 4,366 13,112 13,940
Other 227 2 143 (1,352)
Net loss $(18,627) $(11,282) $(59,036) $(36,297)
Basic and diluted loss per
Common share $(6.23) $(3.89) $(20.14) $(12.51)
Weighted average number of
Common shares outstanding 2,991 2,902 2,932 2,902
Other Data:
EBITDA (1) $(8,272) $(4,522) $(25,077) $(15,580)
(1) EBITDA comprises earnings before interest, taxes, depreciation and
amortization
PATHNET, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except route miles)
December 31, December 31,
1999 1998
ASSETS
Cash and cash equivalents $90,662 $57,322
Marketable securities available
for sale, at market 42,652 97,896
Other current assets 2,486 7,261
Total current assets 135,800 162,479
Property and equipment, net 131,928 47,971
Marketable securities available
for sale, at market 5,088 71,900
Pledged marketable securities
held to maturity 21,265 61,825
Other assets 26,455 21,239
Total assets $320,536 $365,414
LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Total current liabilities 30,588 20,280
Bonds payable, net of unamortized bond
discount of $3,378 and $3,788 346,622 346,212
Other non-current liabilities 3,093 --
Total mandatorily redeemable
preferred stock 35,970 35,970
Total stockholders' equity (deficit) (95,737) (37,048)
Total liabilities, mandatorily
redeemable preferred stock and
stockholders' equity (deficit) $320,536 $365,414
Selected statistical data:
Route miles complete 6,800 2,000
Route miles under construction 700 5,000
