AirGate PCS, Inc. Announces Outstanding Fourth Quarter and Fiscal Year-End 2001 Results; Company Again Exceeds Expectations With Record 55,600 Net New Subscribers.Business Editors ATLANTA--(BUSINESS WIRE)--Nov. 13, 2001 AirGate PCS (1) (Personal Communications Services) Refers to wireless services that emerged after the U.S. government auctioned commercial licenses in 1994 and 1995. This radio spectrum in the 1. , Inc., (Nasdaq/NM:PCSA PCSA Primary Care Service Area PCSA Personal Computing Systems Architecture PCSA Power Crane and Shovel Association PCSA Peel Committee on Sexual Assault (Canada) PCSA Presbyterian Church of Southern Africa ), a Sprint PCS Network Partner, today announced financial and operating results for the fourth fiscal quarter and year ended September September: see month. 30, 2001. The quarter was highlighted by exceptionally strong subscriber growth as AirGate added over 55,600 new subscribers, reaching over 235,000 subscribers at the end of fiscal 2001. Net revenues for the fourth fiscal quarter ended September 30, 2001, totaled $62.3 million, a 25% sequential improvement over $49.7 million for the third fiscal 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 (earnings before interest, taxes, depreciation and amortization Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP metric that can be used to evaluate a company's profitability.
For the fiscal year ended September 30, 2001, the Company reported net revenues of $172.1 million. EBITDA, excluding non-cash stock option compensation expense, was ($52.2) million for fiscal 2001, compared with ($50.8) million a year ago. AirGate PCS reported a net loss of ($111.0) million, or ($8.48) per share, in the fiscal year ended September 30, 2001, compared with a net loss of ($81.3) million, or ($6.60) per share, for fiscal 2000. "We are very pleased to report another outstanding quarter for AirGate PCS, capping off an extraordinary year of unprecedented growth and progress," said Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs M. Dougherty Dougherty may refer to:
As previously announced on August 28, 2001, AirGate PCS has signed a definitive agreement to merge with iPCS, Inc., a Sprint PCS Network Partner providing Sprint PCS wireless personal communication services (communications) Personal Communication Services - (PCS) Telecommunications services that bundle voice communications, numeric and text messaging, voice-mail and various other features into one device, service contract and bill. PCS are carried over cellular links, most often digital. in the mid-western United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. . iPCS has the exclusive right to provide mobile wireless personal communication network services under the Sprint PCS brand to a total population of more than 7.4 million in 37 markets located in Illinois Illinois, river, United States Illinois, river, 273 mi (439 km) long, formed by the confluence of the Des Plaines and Kankakee rivers, NE Ill., and flowing SW to the Mississippi at Grafton, Ill. It is an important commercial and recreational waterway. , Michigan Michigan (mĭsh`ĭgən), upper midwestern state of the United States. It consists of two peninsulas thrusting into the Great Lakes and has borders with Ohio and Indiana (S), Wisconsin (W), and the Canadian province of Ontario (N,E). , Iowa and eastern 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). . AirGate and iPCS will combine in a tax-free tax-free adj. Not subject to taxation; tax-exempt. tax-free Adjective not needing to have tax paid on it: a tax-free lump sum Adj. 1. , stock for stock transaction for 13.5 million shares of AirGate common stock, which includes 1.1 million shares reserved for issuance upon the exercise of outstanding iPCS options and warrants. As a result of the merger, iPCS will become a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. of AirGate. Completion of the merger is subject to shareholder approval by both companies, and customary regulatory and closing conditions. A special meeting of AirGate shareholders has been set for November November: see month. 27, 2001 and the transaction is expected to close by the end of the month. "We look forward to the completion of our proposed merger with iPCS," continued Dougherty. "This transaction brings together two of the leading Sprint PCS Network Partners, both of which enjoy favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. market demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. for wireless service and a track record of superior subscriber growth. We are excited about the opportunity to leverage the expertise of both companies to more effectively penetrate our combined territories. Together, with our attractive markets, greater scale and operating efficiencies, and additional financial flexibility, we believe we will enjoy continued success as the largest Sprint PCS Network Partner based on covered POPs. We are excited about the many opportunities before us and clearly believe this strategic combination will result in greater value for our shareholders." Additional financial and operating highlights for the fourth quarter of fiscal 2001 include the following: -- AirGate added 55,622 net new customers in its seventh quarter of commercial PCS operations, net of an adjustment for subscribers not expected to pay their initial PCS bill. As a result, the Company had a total of 235,025 subscribers as of September 30, 2001, which translates into a covered POP penetration rate of 3.9%. -- Average revenue per subscriber (ARPU), gross of bad debt and excluding roaming, was $62 for the quarter, compared with $63 for the previous quarter. -- Total roaming revenue was $19.8 million for the fourth fiscal quarter of 2001, compared with $17.1 million for the previous quarter. Roaming expense was $13.4 million for the quarter, compared with $11.0 million for the previous quarter. Thus, net roaming margin increased to $6.4 million in the fourth fiscal quarter compared to $6.1 million in the third fiscal quarter. -- Churn, net of 30-day returns, was 2.8% in the fiscal fourth quarter, consistent with 2.8% in the prior quarter. -- Capital expenditures were $15.3 million, reflecting additional cell site and switch expansion expenditures. The Company also indicated that, based on current preliminary information and internal projections, it is providing guidance for the first fiscal quarter ending December December: see month. 31, 2001, for stand-alone (jargon) stand-alone - Capable of operating without other programs, libraries, computers, hardware, networks, etc. Exactly what is absent is presumed to be obvious from context. "We only run Windows on stand-alone PCs because it's too dangerous to run it on networked ones." AirGate PCS as follows: -- Net subscriber additions ("net adds") are expected to be 60,000 to 65,000. -- ARPU (Average Revenue Per User) A calculation often used to determine the overall value of an application. It is also used to rate particular customers, especially in the wireless space, by comparing someone's account to the overall average. , gross of bad debt, is expected to be $59 to $61, reflecting seasonality. -- Roaming The ability to use a communications device such as a cellphone or PDA and be able to move from one cell or access point to another without losing the connection. revenue is forecasted to be $14 million to $16 million. Conversely con·verse 1 intr.v. con·versed, con·vers·ing, con·vers·es 1. To engage in a spoken exchange of thoughts, ideas, or feelings; talk. See Synonyms at speak. 2. , roaming expense is expected to be $12 million to $14 million, given our strong projected subscriber growth. -- Capital expenditures are expected to be approximately $9 million to $10 million. -- EBITDA losses, excluding non-cash stock option compensation expense, are expected to be $13 million to $15 million. AirGate PCS will hold a conference call to discuss this press release tomorrow, November 14, 2001 at 11:00 a.m. ET. A live broadcast of the conference call will be available online at www.airgatepcsa.com or www.streetevents.com. To listen to the live call, please go to the web site at least fifteen minutes early to register, download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. , and install any necessary audio software. For those who cannot listen to the live broadcast, a replay will be available shortly after the call through the close of business on December 14, 2001. iPCS will hold a conference call to discuss its third quarter 2001 results tomorrow, November 14, 2001 at 10:00 a.m. ET. A live broadcast of the conference call will be available online at www.companyboardroom.com. To listen to the live call, please go to the web site at least fifteen minutes early. For those who cannot listen to the live broadcast, a replay will be available shortly after the call. About AirGate PCS AirGate PCS, Inc. is the exclusive manager and operator of Sprint PCS products and services throughout most of the state of South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , including Charleston Charleston, cities, United States Charleston. 1 City (1990 pop. 20,398), seat of Coles co., E Ill.; inc. 1835. Charleston is an industrial, rail, and trade center located in an agricultural area; shoes are also made. Eastern Illinois Univ. , Columbia Columbia, cities, United States Columbia (kəlŭm`bēə). 1 City (1990 pop. 75,883), Howard co., central Md., between Washington, D.C., and Baltimore. and Greenville-Spartanburg, parts of North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , including Asheville, Wilmington and Hickory Hickory, city, United States Hickory, city (1990 pop. 28,301), Burke and Catawba counties, W N.C., at the foot of the Blue Ridge Mts.; inc. 1870. It is a processing and trade center for an abundant agricultural region (grain, soybeans, poultry, hogs, , and the eastern Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. cities of Augusta and Savannah Savannah, city, United States Savannah, city (1990 pop. 137,560), seat of Chatham co., SE Ga., a port of entry on the Savannah River near its mouth; inc. 1789. . With a territory that includes more than 7.1 million POPs covering 62,000 contiguous Adjacent or touching. Contrast with fragmentation. See contiguous file. square miles A square mil is a unit of area, equal to the area of a square with sides of length one mil. A mil is one thousandth of an international inch. This unit of area is usually used in specifying the area of the cross section of a wire or cable. , AirGate PCS is one of the largest Sprint PCS affiliates based on the size of the population in its territory. As a Sprint PCS affiliate, AirGate PCS built its own PCS network to exclusively provide 100% digital, 100% PCS products and services under the Sprint and Sprint PCS brand names in its territory. About Sprint Sprint is a global communications company Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. serving 23 million business and residential customers in more than 70 countries. With more than 80,000 employees worldwide and $23 billion in annual revenues, Sprint is widely recognized for developing, engineering and deploying state of the art network technologies, including the United States' first nationwide all-digital, fiber-optic network. Sprint's award-winning Tier 1 Internet backbone (communications, networking) Internet backbone - High-speed networks that carry Internet traffic. These communications networks are provided by companies such as AT&T, GTE, IBM, MCI, Netcom, Sprint, UUNET and consist of high-speed links in the T1, T3, OC1 and OC3 ranges. is being extended to key global markets to provide customers with a broad portfolio of scalable IP products. Sprint's high-capacity, high-speed network gives customers fast, dependable, non-stop access to the vast majority of the world's 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 content. Sprint also operates the largest 100-percent digital, nationwide PCS wireless network in the United States, already serving the majority of the nation's metropolitan areas including more than 4,000 cities and communities. For more information, visit the Sprint PCS web site at http://www.sprintpcs.com. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 Certain statements contained in this news release, such as statements concerning AirGate PCS' or the combined company's anticipated performance, plans for growth and anticipated financial results and other factors that could affect future operations or performance, and other non-historical facts, are forward looking statements made pursuant to the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Since these forward looking statements are based on factors that involve risks and uncertainties, actual results may differ materially from those expressed or implied by such forward looking statements. Such factors include: the ability to successfully integrate the two businesses; the competitiveness and impact of Sprint PCS pricing plans, products and services; the ability of Sprint PCS to provide back office, customer care and other services; consumer purchasing patterns; potential fluctuations in quarterly results; an adequate supply of subscriber equipment; risks related to our ability to compete with larger, more established businesses; rapid technological and market change; risks related to future growth and expansion; the potential need for additional capital, anticipated future losses, the significant level of indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. of the combined companies and the volatility of AirGate PCS' stock price. For a detailed discussion of these and other cautionary statements and factors that could cause actual results to differ from those contained in this news release, please refer to AirGate PCS' and iPCS' filings with the Securities and Exchange Commission ("SEC"), especially in the "investment considerations" section of AirGate PCS' Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended September 30, 2000, AirGate PCS' Form 10-Q Form 10-Q See 10-Q. for the fiscal quarter ended June 30, 2001, iPCS' Form 10-K for the fiscal year ended December 31, 2000, iPCS Form 10-Q for the fiscal quarter ended June 30, 2001, and in subsequent filings with SEC. In addition, EBITDA is a financial measure used in the financial community. It is not, however, a measure of financial performance under generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States. Additional Information In connection with the proposed merger, AirGate PCS, Inc. has filed a proxy statement/prospectus with the SEC. INVESTORS AND SECURITY HOLDERS ARE URGED TO CAREFULLY READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION, BECAUSE IT CONTAINS IMPORTANT INFORMATION. The proxy statement/prospectus has been filed with the SEC by AirGate PCS, Inc. Investors and security holders may obtain a free copy of the proxy statement/prospectus and other documents containing information about AirGate PCS, Inc. and iPCS, Inc., without charge, at the SEC's web site at www.sec.gov. Copies of the proxy statement/prospectus and the SEC filings that are incorporated by reference in the proxy statement/prospectus may also be obtained for free by directing a request to: Sharon Kushner, AirGate PCS, Inc., 233 Peachtree St. NE, Harris Tower Suite 1700, Atlanta, Georgia 30303, Phone: 404 525-7272, Fax: 404 525-7922. This press release shall not constitute an offer to sell or the solicitation solicitation In criminal law, the act of asking, inducing, or directing someone to commit a crime. The person soliciting another becomes an accomplice to the crime. The term also refers to the act of obtaining bribes, as well as to the crime of a prostitute who offers sexual of an offer to buy shares of AirGate which may be issued in the proposed merger with iPCS nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Offers to sell securities of AirGate will be made only by means of a prospectus.
AirGate PCS, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(dollars in thousands, except share and per share amounts)
Three Months Ended Fiscal Year Ended
September 30, September 30,
---------------------- ----------------------
2001 2000 2001 2000
Revenues: --------- --------- --------- ---------
Service revenue $ 39,057 $ 7,090 $ 105,976 $ 9,746
Roaming revenue 19,813 7,621 55,329 12,338
Equipment revenue 3,382 1,940 10,782 2,981
--------- --------- --------- ---------
$ 62,252 $ 16,651 $ 172,087 $ 25,065
Operating expenses:
Cost of services
and roaming (40,275) (11,822) (116,732) (27,770)
Cost of equipment (5,810) (3,711) (20,218) (5,685)
Selling and
marketing (22,447) (14,634) (71,617) (28,357)
General and
administrative
expenses (3,593) (4,553) (15,742) (14,078)
Non-cash stock
compensation
expense (440) (598) (1,665) (1,665)
Depreciation and
amortization (9,204) (5,239) (30,667) (12,034)
--------- --------- --------- ---------
Operating expenses (81,769) (40,557) (256,641) (89,589)
--------- --------- --------- ---------
Operating loss (19,517) (23,906) (84,554) (64,524)
Interest income 113 1,238 2,463 9,321
Interest expense (5,608) (6,527) (28,899) (26,120)
--------- --------- --------- ---------
Net loss $ (25,012) $ (29,195) $(110,990) $ (81,323)
========= ========= ========= =========
Basic and diluted
net loss per share
of common stock $ (1.88) $ (2.30) $ (8.48) $ (6.60)
========= ========= ========= =========
Weighted average
outstanding
common shares 13,333,127 12,676,620 13,089,285 12,329,149
========== ========== ========== ==========
Weighted average
potentially dilutive
common stock equivalents:
Common stock
options 657,721 788,502 510,620 777,594
Stock purchase
warrants 61,322 142,483 94,078 142,492
---------- ---------- ---------- ----------
Weighted average
outstanding
shares including
potentially
dilutive common
stock
equivalents 14,052,170 13,607,605 13,693,983 13,249,235
========== ========== ========== ==========
AirGate PCS, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(dollars in thousands)
Sept. 30, Sept. 30,
2001 2000
ASSETS --------- ----------
Current assets:
Cash and cash equivalents $ 14,290 $ 58,384
Trade receivables, net 23,798 4,928
Receivable from Sprint PCS 10,200 3,768
Inventories, net 4,639 2,902
Prepaid expenses 3,428 2,106
Direct customer activation costs 3,693 627
Other current assets 1,291 1,600
--------- ---------
Total current assets 61,339 74,315
--------- ---------
Property and equipment, net 209,326 183,581
Financing costs 7,888 9,098
Other assets 2,457 1,954
--------- ---------
Total assets $ 281,010 $ 268,948
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable $ 15,286 $ 21,009
Accrued expenses 13,840 9,548
Payable to Sprint PCS 27,488 5,292
Deferred revenue 10,485 1,828
--------- ---------
Total current liabilities 67,099 37,677
Deferred revenue 309 671
Long-term debt 266,326 180,727
--------- ---------
Total liabilities 333,734 219,075
--------- ---------
Stockholders' (deficit) equity:
Preferred stock, par value, $0.01 per
share; 5,000,000 shares authorized;
no shares issued and outstanding -- --
Common stock, par value, $0.01 per
share; 150,000,000 shares authorized;
13,364,980 and 12,816,783 shares
issued and outstanding at
September 30, 2001 and
September 30, 2000, respectively 134 128
Additional paid-in capital 168,255 161,575
Accumulated deficit (219,567) (108,577)
Unearned stock option compensation (1,546) (3,253)
--------- ---------
Total stockholders' equity (deficit) (52,724) 49,873
Commitments and contingencies -- --
--------- ---------
Total liabilities and stockholders'
equity (deficit) $ 281,010 $ 268,948
========= =========
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