Advanced Communications Announces Record Quarterly Results.ST. LOUIS--(BUSINESS WIRE)--Oct. 22, 1998--Advanced Communications (NYSE NYSE See: New York Stock Exchange : ADG ADG average daily gain. ADG Ambulatory diagnostic group ) today announced its operating results for the quarter ended September September: see month. 30, 1998, its second full quarter of operations since completing its initial public equity offering on February February: see month. 18, 1998. "Our sales force delivered big numbers this quarter, over 69,000 local access lines, more than twice the number of local lines sold during the first two quarters of the year. On a year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. basis, we have sold more than 100,000 lines. Sales are strong in newly opened markets, as well as more mature markets where we have reached business line penetration The successful unauthorized breach of a security perimeter. See penetration test. rates as high as the double-digits on a percentage basis," said Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a P. Anthony, chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Advanced Communications. "These results demonstrate the strength of our franchise and position us well for success in implementing our strategy of migrating to our own network facilities." Local access lines installed totaled 80,000 at September 30, 1998, an increase of 78 percent from 45,000 at June June: see month. 30, 1998. Revenue for the third quarter was $25.2 million, an increase of 38 percent over pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma revenue for the year ago quarter of $18.3 million. Net loss for the quarter was $3.7 million, or $0.19 per share, compared to a pro forma net loss of $2.1 million, or $0.11 per share, in the year ago quarter. 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 was negative $0.8 million compared to positive $0.6 million on a pro forma basis in the year ago quarter. Current results reflect the impact of building the sales, service and administrative organizations and a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. development cost of $0.4 million associated with expanding the yellow pages business to a new market. Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. revenue for the third quarter rose 69 percent to $16.9 million from pro forma telecom revenue of $10.0 million in the year ago quarter and rose 11 percent over the second quarter of 1998. Local service revenue accounted for all of the growth, as long distance revenue was essentially flat. Yellow pages directory revenue was $8.3 million; equivalent to pro forma yellow pages directory revenue in third quarter 1997 and 36 percent lower than in the second quarter of 1998 due to the seasonal trend. Commenting on operations, Anthony stated, "Not only are we extremely proud of our sales team, our service organization installed 35,000 local lines, almost double the 18,000 lines installed during second quarter. To better enable our service organization, we have re-engineered installation processes, set installation targets and added incentives. These actions will ensure orders are processed at a pace more consistent with our sales." Advanced Communications has presented its results for the nine months ended September 30, 1998, on a pro forma basis as if its initial public offering and the concurrent At the same time. It implies that multiple processes are taking place simultaneously. See concurrent operation. acquisitions of the acquired companies comprising its current operations had occurred on January January: see month. 1, 1997. Pro forma revenue for the first nine months of 1998 was $85.4 million, up 24 percent from $69.1 million in the year ago period. Pro forma telecommunications revenue and yellow pages directory revenue were $45.9 million and $39.5 million, respectively, for the first nine months of 1998, representing increases of 37 percent and 11 percent, respectively, over the year ago period. Pro forma net loss for the first nine months of 1998 was $4.3 million, or $0.22 per share, compared to a pro forma net loss of $2.4 million, or $0.12 per share in the year ago period. The results for the first nine months of 1998 include a nonrecurring charge Nonrecurring Charge An expense occurring only once on a company's financial statement. Notes: An extraordinary item is an example of a nonrecurring charge. Also known as "nonrecurring item". for stock-based compensation expense of $1.8 million. Excluding this nonrecurring Non`re`cur´ring a. 1. Nonrecurrent; as, the costs of a layoff are considered as a nonrecurring expense s>. item, the company's pro forma net loss for the nine months would have been $3.2 million, or $0.16 per share. Pro forma EBITDA, excluding the one-time item, was $7.8 million for the nine months ended September 30, 1998, representing a decline of 8 percent from $8.5 million during the first nine months of 1997. The pro forma financial information does not purport To convey, imply, or profess; to have an appearance or effect. The purport of an instrument generally refers to its facial appearance or import, as distinguished from the tenor of an instrument, which means an exact copy or duplicate. PURPORT, pleading. to represent the financial position or results of operations of Advanced Communications that would have actually occurred if the initial public offering and the concurrent acquisitions had in fact occurred on January 1, 1997. Additionally, the pro forma financial information is not necessarily representative of the financial position or results of operations of Advanced Communications for any future period. Since the acquired companies were not under common control or management, historical combined results of operations may not be comparable to, or indicative indicative: see mood. of future performance. Statements contained in this news release expressing management's intentions, hopes, beliefs, expectations or predictions of future results are 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. . It is important to note that the company's actual results could differ materially from those projected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained periodically in the company's SEC filings, including, but not limited to, the company's report on Form 10K for the year ended December December: see month. 31, 1997. Copies of this document may be obtained from the company or the SEC. Advanced Communications, headquartered in St. Louis Louis, titular duke of Burgundy Louis, 1682–1712, titular duke of Burgundy; grandson of King Louis XIV of France. He became heir to the throne on the death (1711) of his father, Louis the Great Dauphin. , Mo., is a regional 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) ) that provides a portfolio of integrated telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. to business and residential customers in selected service areas and publishes yellow pages directories. Currently operating principally in Kansas Kansas, state, United States Kansas (kăn`zəs), midwestern state occupying the center of the coterminous United States. It is bordered by Missouri (E), Oklahoma (S), Colorado (W), and Nebraska (N). , Minnesota Minnesota, state, United States Minnesota (mĭn'ĭsō`tə), upper midwestern state of the United States. It is bordered by Lake Superior and Wisconsin (E), Iowa (S), South Dakota and North Dakota (W), and the Canadian provinces , Nebraska Nebraska (nəbrăs`kə), Great Plains state of the central United States. It is bordered by Iowa and Missouri, across the Missouri R. (E), Kansas (S), Colorado (SW), Wyoming (NW), and South Dakota (N). , the Dakotas Da·ko·tas The Dakota Territory or (after 1889) the states of North Dakota and South Dakota. , Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). and Texas, Advanced Communications and subsidiaries have nearly 1,000 employees, over one-third of whom are quota quota In international trade, a government-imposed limit on the quantity of goods and services that may be exported or imported over a specified period of time. Quotas are more effective than tariffs in restricting trade, since they limit the availability of goods rather bearing salespeople sales·peo·ple pl.n. Persons who are employed to sell merchandise in a store or in a designated territory. . The company also holds a 49 percent interest in KIN Relation by blood or consanguinity; relatives by birth. The term kin is ordinarily applied to relationships through ties of blood; however, it is sometimes used generally to include family relationships by affinity. Kindred is a synonym for kin. Network, Inc., which operates the largest fiber optic optic /op·tic/ (op´tik) ocular (1). op·tic or op·ti·cal adj. 1. Of or relating to the eye or vision. 2. network in Kansas. Advanced Communications is currently the only CLEC listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . Please consult www.acginc.net.
Advanced Communications Group, Inc.
Statement of Operations
(In thousands, except per share amounts)
Three Months Ended Sept 30
Actual Pro Forma
Revenues: 1998 1997 % Change
------------ ------------ --------
Telecommunications $ 16,904 $ 10,009 68.9%
Directory 8,255 8,258 0.0%
------------ ------------
Total revenues 25,159 18,267 37.7%
Cost of services 16,399 10,945 49.8%
Selling, general and
administrative 9,736 6,785 43.5%
Depreciation and
amortization 2,921 2,313 26.3%
Nonrecurring stock based
compensation -- -- NM
------------ ------------
Income from operations (3,897) (1,776) 119.4%
Other income (expense):
Other income, net 222 82 170.7%
Interest expense (361) 71 -608.5%
Equity in loss of KINNET (171) (164) 4.3%
------------ ------------
Income before income taxes (4,207) (1,787) 135.4%
Income taxes (516) 359 -243.7%
------------ ------------
Net income (loss) $ (3,691) $ (2,146) 72.0%
------------ ------------
------------ ------------
Weighted average shares
outstanding 19,615,865 19,615,865
Basic and dilutive
net income (loss) per share $ (0.19) $ (0.11) 72.0%
EBITDA $ (754) $ 619 -221.8%
Pro Forma(1)
Nine Months Ended Sept 30
Revenues: 1998 1997 % Change
------------ ------------ --------
Telecommunications $ 45,876 $ 33,455 37.1%
Directory 39,493 35,624 10.9%
------------ ------------
Total revenues 85,369 69,079 23.6%
Cost of services 50,631 37,637 34.5%
Selling, general and
administrative 27,566 23,172 19.0%
Depreciation and amortization 7,827 6,876 13.8%
Nonrecurring stock based
compensation 1,760 -- NM
------------ ------------
Income from operations (2,415) 1,394 -273.2%
Other income (expense):
Other income, net 597 253 136.0%
Interest expense (1,029) (581) 77.1%
Equity in loss of KINNET (446) (658) -32.2%
------------ ------------
Income before income taxes (3,293) 408 -907.1%
Income taxes 981 2,778 -64.7%
------------ ------------
Net income (loss) $ (4,274) $ (2,370) 80.3%
------------ ------------
------------ ------------
Weighted average shares
outstanding 19,615,865 19,615,865
Basic and dilutive
net income (loss) per share $ (0.22) $ (0.12) 80.3%
EBITDA $ 6,009 $ 8,523 -29.5%
Actual Nine
Months Ended(2)
Revenues: Sept 30, 1998
----------------
Telecommunications $ 38,661
Directory 30,247
------------
Total revenues 68,908
Cost of services 41,328
Selling, general and
administrative 24,329
Depreciation and amortization 6,686
Nonrecurring stock based
compensation 1,760
------------
Income from operations (5,195)
Other income (expense):
Other income, net 568
Interest expense (919)
Equity in loss of KINNET (360)
------------
Income before income taxes (5,906)
Income taxes (60)
Net income (loss) $ (5,846)
------------
------------
Weighted average shares
outstanding 18,179,968
Basic and dilutive
net income (loss) per share $ (0.32)
EBITDA $ 2,059
(1) The Company completed its initial public offering concurrently
with the acquisition of 10 operating companies on February 18,
1998. The pro forma results were prepared from historical
financial results as if the offering and the acquisitions
occurred on January 1, 1997.
(2) Actual results include the operations of the parent company for
the nine months ended June 30, 1998, and the results of
operations of the acquired companies only for the period from
February 18, 1998 to September 30, 1998.
Condensed Consolidated Balance Sheets
(In thousands)
ASSETS Sept 30, 1998
--------------
Cash and cash equivalents $ 5,911
Accounts receivable, net 26,967
Other current assets 4,239
--------------
Total current assets 37,117
Property and equipment, net 12,952
Intangible assets, net 106,352
Equity investment in KINNET 17,681
Other noncurrent assets 5,757
--------------
Total assets $ 179,859
--------------
--------------
LIABILITIES AND
STOCKHOLDERS' EQUITY Sept 30, 1998
-------------
Accounts payable and accrued expenses $ 18,038
Current portion of notes payable 10,120
Other current liabilities 2,353
-------------
Total current liabilities 30,511
Notes payable to related parties 17,233
Other long-term obligations 314
Stockholders' equity 131,801
-------------
Total liabilities and stockholders' equity $ 179,859
-------------
-------------
Q2 1998 vs Q1 1998
Pro Forma (1)
Three Months Ended
Revenues: 9/30/98 6/30/98
--------- ---------
Telecommunications $ 16,904 $ 15,206
Directory 8,255 12,809
--------- ---------
Total revenues 25,159 28,015
Cost of services 16,399 17,281
Selling, general and administrative 9,736 8,631
Depreciation and amortization 2,921 2,563
Nonrecurring stock based compensation - -
--------- ---------
Income from operations (3,897) (460)
Other income (expense): -
Other income, net 222 316
Interest expense (361) (276)
Equity in loss of KINNET (171) (121)
--------- ---------
Income before income taxes (4,207) (541)
Income taxes (516) 490
--------- ---------
Net income (loss) $ (3,691) $ (1,031)
--------- ---------
--------- ---------
Weighted average shares outstanding 19,624,920 19,624,920
Basic and dilutive
net income (loss) per share $ (0.188) $ (0.0525)
Pro forma net income per share
excluding nonrecurring item $ (0.188) $ (0.0525)
EBITDA $ (754) $ 2,419
1998
% % of Total
Revenues: Increase Revenues
Telecommunications 11.2% 54.3%
Directory -35.6% 45.7%
Total revenues -10.2% 100.0%
Cost of services -5.1% 61.7%
Selling, general and administrative 12.8% 30.8%
Depreciation and amortization 14.0% 9.1%
Nonrecurring stock based compensation no.DIV/0! 0.0%
Income from operations 747.2% -1.6%
Other income (expense):
Other income, net -29.7% 1.1%
Interest expense 30.8% -1.0%
Equity in loss of KINNET 41.3% -0.4%
Income before income taxes 677.6% -1.9%
Income taxes -205.3% 1.7%
Net income (loss) 258.0% -3.7%
Weighted average shares outstanding 0.0%
Basic and dilutive
net income (loss) per share 258.0%
Pro forma net income per share
excluding nonrecurring item 258.0%
EBITDA -131.2%
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