AXXENT Announces Third Quarter Results: Revenues Increase By 73% Over Third Quarter 1999; Data Revenues Increase By 78% Over Second Quarter 2000.Business Editors TORONTO--(BUSINESS WIRE)--Aug. 16, 2000 AXXENT Inc. (TSE See Tokyo Stock Exchange. TSE 1. See Tokyo Stock Exchange (TSE). 2. See Toronto Stock Exchange (TSE). :AXI AXI Automated X-Ray Inspection (electronics) AXI Association Xpertise Inc (Calgary, AB, Canada) AXI Ada to X-Window System Interface .b), a leading Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. competitive local exchange carrier (CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) ) providing data, voice, and Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the services to small and medium-sized Me´di`um-sized` a. 1. Having a medium size; as, a medium-sized man s>. Adj. 1. medium-sized - intermediate in size medium-size, moderate-size, moderate-sized businesses, today announced that revenue grew 73% to $19.7 million in the third quarter fiscal 2000, compared to $11.4 million in the same period last year.
Highlights for the Third Quarter ended June 30, 2000
* 73% increase in year over year quarterly revenue
* High-speed data and Internet revenue grew by 78% over second
quarter 2000
* Installed on-net local access lines grew to 14,018 or 12% of
total access lines
* Total local access lines grew 15% during the quarter to 115,790
* More than doubled the number of co-locates in service during the
quarter from 23 to 51
* Official launch of Rhythms Canada, followed by subsequent
announcements of new high-speed data service agreements
* AXXENT named as one of Canada's Top 100 Employers
"We are extremely pleased with our third quarter results as our strong growth continues," said Robert Latham Robert Latham could refer to:
Revenues for the third quarter f2000 hit a record $19.7 million, a 73% increase over the third quarter of f1999, and a 25% increase over the prior quarter. High-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. data and Internet revenue was $3.2 million, a 78% increase over the second quarter. This significant increase is the result of the Company's continuing focus on the high growth data sector, and the acquisition of EDI (Electronic Data Interchange) The electronic communication of business transactions, such as orders, confirmations and invoices, between organizations. Third parties provide EDI services that enable organizations with different equipment to connect. Communications Networking The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. Inc. late in the second quarter. Installed on-net Connected to the Internet, or connected to a LAN or WAN. Contrast with off-net. local access lines grew 99% in the quarter to 14,018. Strong sales growth continued with 14,525 lines sold in the quarter. Total local access lines reached a record 115,790 lines in service, up from 100,581 lines at the end of last quarter. The number of co-locates in service during the quarter more than doubled from 23 to 51 and our network rollout continues on or ahead of schedule, with service scheduled to be available in Western Canada
Western Canada, commonly referred to as the West by the end of the year. As the Company's footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. continues to grow we will accelerate our on-net line growth, with increased on-net sales and migrations from previous off-net Not connected to the Internet, or not connected to a LAN or WAN. Contrast with on-net. areas. We are also able to offer high-speed data services to a larger customer and prospect base. Rhythms RHYTHMS Psychology A 2 yr controlled effectiveness trial funded by Pfizer, which randomized 242 Pts receiving only anti-depressants to receive either usual care–control arm or written instructional material on depression and effective treatment Canada Canada (kăn`ədə), independent nation (2001 pop. 30,007,094), 3,851,787 sq mi (9,976,128 sq km), N North America. Canada occupies all of North America N of the United States (and E of Alaska) except for Greenland and the French islands of Inc., our 50/50 joint venture with Rhythms NetConnections Rhythms NetConnections Inc. (Former NASDAQ: RTHM) was in the business of providing broadband local-access communication services to large enterprises, telecommunications carriers and their internet service provider (ISP) affiliates and other ISPs. Inc., was officially launched in April and began generating revenue during our third quarter. Several press releases indicated that business is growing as predicted, as significant new contracts have been announced. Staffing is well under way with 35 full time employees by quarter end including Rhythms Canada's new President, Norbert Dawalibi. The Rhythms Canada network build is also on schedule with 40 co-locates operational at June June: see month. 30. As recently announced, we were proud to be chosen as one of Canada's Top 100 Employers Canada's Top 100 Employers is an annual competition that recognizes the best places in Canada to work. First held in 1999, the project aims to single out the employers that lead their industries in offering exceptional working conditions and progressive human resources policies. by Mediacorp MediaCorp (Chinese: 新传媒; Pinyin: Xīn Chuánméi) is a conglomeration group of commercial media companies in Singapore specializing largely in television and radio broadcasting, and Canada Inc., as well as one of the top 10 employers for women. As mentioned above, our third quarter revenues were $19.7 million. EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become losses for the third quarter were $14.4 million compared to $3.8 million in the same period last year. This also compares to an EBITDA loss of $11.8 million in the second quarter of f2000. As previously outlined in our second quarter report, the increase in EBITDA losses are consistent with the accelerated growth of the business nationally and the Company's transition to a facilities-based provider. Third quarter f2000 net losses amounted to $21.7 million, or $0.82 per share, compared to a loss of $7.3 million in the third quarter of f1999, or $0.77 per share.
FINANCIAL HIGHLIGHTS
(UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS ARE ATTACHED)
Third Quarter Ended June 30, 2000
(000's except per share amounts)
f2000 Q3 f2000 Q2 F1999 Q3
Revenue $19,726 $15,775 $11,375
EBITDA ($14,411) ($11,787) ($3,822)
Net Loss ($21,680) ($16,074) ($7,291)
Net Loss per Common Share ($0.82) ($0.61) ($0.77)
Weighted Avg. A & B
Shares Outstanding *** 26,416 26,184 9,468
***Note: Since the end of June, the number of Class B shares has
changed materially, as announced in a press release on July 27th
(can be found on our corporate website under investor
relations/press releases), indicating the distribution of Class B
shares as follows:
Balance Class B non-voting shares June 30, 2000 19,584,343
Distribution re: Special Warrants 10,000,000
Distribution re: Series 3 Preference Shares 2,488,417
Distribution re: Acquisition of Pathway 33,333
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Total Class B non-voting Shares 32,106,093
Total Class A voting Shares 6,994,136
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Total Class A & B Shares Outstanding - Aug. 16, 2000 39,100,229
Quarterly statistical and operations data:
------------------------------------------
F2000 Q3 f2000 Q2 f2000 Q1 f1999 Q4
EMPLOYEES 695 634 535 452
TOTAL # ON-NET LINES 14,018 7,039 3,673 58
TOTAL # ACCESS LINES 115,790 100,581 79,478 71,939
TOTAL # BUSINESS
CUSTOMERS 29,864 24,192 19,249 17,342
SWITCHES DEPLOYED 4 4 4 3
CO-LOCATES IN SERVICE 51 23 14 3
ADVISORY AXXENT will hold a conference call to discuss the Company's third quarter results on Wednesday Wednesday: see week. , August 16th at 4:00 pm EST EST electroshock therapy. EST abbr. electroshock therapy . The audio of this call will be available on AXXENT's website, www.axxent.ca. This news release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties. Actual results may differ materially because of various risks. These risks and uncertainties and other factors may cause actual results, performance or achievements of AXXENT to be materially different from any future results, performance or achievements expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. by such forward-looking statements About AXXENT AXXENT Inc., (formerly OCI OCI Oracle Call Interface OCI Organisation de la Conférence Islamique (French: Organization of the Islamic Conference) OCI Other Comprehensive Income OCI Office of the Commissioner of Insurance OCI Organizational Conflict of Interest Communications Inc.), through its operating subsidiary An operating subsidiary is a business term frequently used within the United States railroad industry. In the case of a railroad, it refers to a company that is a subsidiary but operates with its own identity and rolling stock. AXXENT Corp., is a leading Canadian competitive local exchange carrier (CLEC) providing data, voice, and Internet services to meet the needs of small and medium-sized businesses. AXXENT serves more than 30,000 businesses with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 115,000 access lines. Visit our Web site at www.axxent.ca.
Unaudited Consolidated Financial Statements of
AXXENT INC.
(formerly "OCI Communications Inc.")
June 30, 2000
AXXENT INC.
(formerly, "OCI Communications Inc.")
Consolidated Balance Sheets
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As at June 30,
----------------------------
2000 1999
----------------------------
(unaudited) (unaudited)
ASSETS
CURRENT
Cash and short-term investments $149,581,741 $43,639,781
Accounts receivable 18,015,977 7,128,434
Other receivables 9,071,808 900,979
Prepaid expenses and deposits 2,048,189 4,741,922
Inventory 133,790 -
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178,851,505 56,411,116
INVESTMENT IN JOINT VENTURE 7,250,000 -
DEFERRED ASSETS 5,341,299 2,334,831
CAPITAL ASSETS 129,837,388 9,734,823
GOODWILL 29,617,848 1,113,015
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$350,898,040 $69,593,785
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LIABILITIES
CURRENT
Accounts payable and accrued
liabilities $50,071,637 $15,327,377
Deferred revenue and
customer deposits 5,012,275 25,438
Capital lease obligations -
current portion 215,616 -
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55,299,528 15,352,815
OTHER LONG TERM LIABILITIES 100,002 -
SENIOR NOTES PAYABLE 63,719,576 55,278,645
CAPITAL LEASE OBLIGATIONS - long term 217,711 -
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119,336,817 70,631,460
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SHAREHOLDERS' EQUITY (DEFICIT)
Share capital 162,125,834 4,974,875
Special warrants 171,278,387 33,332,719
Deficit (101,842,998) (39,345,269)
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231,561,223 (1,037,675)
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$350,898,040 $69,593,785
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AXXENT INC.
(formerly, "OCI Communications Inc.")
Consolidated Statement of Operations and Deficit
--------------------------------------------------------------------
Three months ended June 30,
2000 1999
(unaudited) (unaudited)
REVENUES $ 19,725,549 $ 11,375,257
COST OF SERVICES 15,596,042 8,711,819
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GROSS PROFIT 4,129,507 2,663,438
Selling, general and
administrative expense 18,540,696 6,485,233
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LOSS BEFORE THE UNDERNOTED 14,411,189 3,821,795
Depreciation and amortization 4,785,568 912,953
Foreign exchange (gain) loss (70,316) 20,610
Interest expense 2,402,567 2,059,248
Financing and other costs 2,812,653 974,102
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24,341,661 7,778,708
INTEREST INCOME 2,661,422 497,663
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NET LOSS FOR THE PERIOD 21,680,239 7,291,045
DEFICIT, BEGINNING OF PERIOD 80,162,759 32,054,224
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DEFICIT, END OF PERIOD $ 101,842,998 $ 39,345,269
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BASIC LOSS PER SHARE $ (0.82) $ (0.77)
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WEIGHTED AVERAGE SHARES OUTSTANDING 26,416,770 9,468,441
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Nine months ended June 30,
2000 1999
(unaudited) (unaudited)
REVENUES $ 49,577,454 $ 32,683,434
COST OF SERVICES 38,099,930 24,302,657
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GROSS PROFIT 11,477,524 8,380,777
Selling, general and administrative
expense 46,862,552 15,934,685
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LOSS BEFORE THE UNDERNOTED 35,385,028 7,553,908
Depreciation and amortization 10,375,773 2,076,023
Foreign exchange (gain) loss (197,461) 159,971
Interest expense 7,072,557 5,893,391
Financing and other costs 2,812,653 974,102
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55,448,550 16,657,395
INTEREST INCOME 4,669,322 1,126,518
--------------------------------------------------------------------
NET LOSS FOR THE PERIOD 50,779,228 15,530,877
DEFICIT, BEGINNING OF PERIOD 51,063,770 23,814,392
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DEFICIT, END OF PERIOD $ 101,842,998 $ 39,345,269
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BASIC LOSS PER SHARE $ (2.21) $ (1.64)
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WEIGHTED AVERAGE SHARES OUTSTANDING 23,018,784 9,469,026
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AXXENT INC.
(formerly, "OCI Communications Inc.")
Consolidated Statement of Cash Flows
-----------------------------------------------------------------
-----------------------------------------------------------------
Three months ended June 30,
-----------------------------------------------------------------
2000 1999
-----------------------------------------------------------------
(unaudited) (unaudited)
NET (OUTFLOW) INFLOW OF CASH
RELATED TO THE FOLLOWING ACTIVITIES
OPERATING
Net loss for the period $ (21,680,239) $ (7,291,045)
Item not affecting cash
Depreciation and amortization 4,785,568 912,953
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(16,894,671) (6,378,092)
Changes in non-cash working capital
items
Accounts receivable and other
receivables (6,855,761) 653,194
Prepaid expenses and deposits 1,216,012 (3,267,504)
Inventory (105,563) -
Accounts payable and accrued
liabilities 9,958,547 4,507,784
Deferred revenue and customer
deposits (312,954) (2,560,867)
Increase in interest payable 3,167,427 4,140,571
-----------------------------------------------------------------
(9,826,963) (2,904,914)
-----------------------------------------------------------------
FINANCING
Issuance of share capital 72,569 14,500
Issuance of special warrants (241,605) 32,707,719
Increase of capital lease obligations - -
Payment of capital lease obligations (171,825) -
-----------------------------------------------------------------
(340,861) 32,722,219
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INVESTING
Purchase of capital assets (44,831,731) (6,967,790)
Proceeds from sale of capital assets 877 -
Acquisition of subsidiaries net of
cash acquired (2,614,867) (488,015)
Acquisition of subsidiaries net
assets acquired 650,627 (5,654)
Investment in joint venture - -
Increase in deferred assets (2,323,249) (362,037)
-----------------------------------------------------------------
(49,118,343) (7,823,496)
-----------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS (59,286,167) 21,993,809
CASH AND SHORT-TERM INVESTMENTS,
BEGINNING OF PERIOD 208,867,908 21,645,972
-----------------------------------------------------------------
CASH AND SHORT-TERM INVESTMENTS,
END OF PERIOD $ 149,581,741 $ 43,639,781
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AXXENT INC.
(formerly, "OCI Communications Inc.")
Consolidated Statement of Cash Flows
-----------------------------------------------------------------
Nine months ended June 30,
-----------------------------------------------------------------
2000 1999
-----------------------------------------------------------------
(unaudited) (unaudited)
NET (OUTFLOW) INFLOW OF CASH RELATED
TO THE FOLLOWING ACTIVITIES
OPERATING
Net loss for the period $(50,779,228) $(15,530,877)
Item not affecting cash
Depreciation and amortization 10,375,773 2,076,023
-----------------------------------------------------------------
(40,403,455) (13,454,854)
Changes in non-cash working capital
items
Accounts receivable and other
receivables (13,094,181) 75,026
Prepaid expenses and deposits 352,963 (3,874,045)
Inventory (105,563) -
Accounts payable and accrued
liabilities 4,270,600 4,641,123
Deferred revenue and customer deposits 751,611 (2,115,115)
Increase in interest payable 7,151,824 7,974,715
-----------------------------------------------------------------
(41,076,201) (6,753,150)
-----------------------------------------------------------------
FINANCING
Issuance of share capital 114,370,340 17,750
Issuance of special warrants 170,253,387 32,707,719
Increase of capital lease obligations - -
Payment of capital lease obligations (201,418) -
-----------------------------------------------------------------
284,422,309 32,725,469
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INVESTING
Purchase of capital assets (89,121,599) (7,688,501)
Proceeds from sale of capital assets 1,273,238 -
Acquisition of subsidiaries net of cash
acquired (17,514,584) (488,015)
Acquisition of subsidiaries net assets
acquired 1,187,203 (5,654)
Investment in joint venture (7,250,000) -
Increase in deferred assets (3,731,006) (1,427,154)
-----------------------------------------------------------------
(115,156,748) (9,609,324)
-----------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND
SHORT-TERM INVESTMENTS 128,189,360 16,362,995
CASH AND SHORT-TERM INVESTMENTS,
BEGINNING OF PERIOD 21,392,381 27,276,786
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CASH AND SHORT-TERM INVESTMENTS,
END OF PERIOD $149,581,741 $43,639,781
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