AirGate PCS, Inc. Surpasses 100,000 Customer Mark in Less Than 12 Months of Commercial Operations; Adds Over 46,700 New Subscribers in First Quarter Fiscal 2001.Business Editors & Technology Writers ATLANTA--(BUSINESS WIRE)--Jan. 31, 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 results for the first fiscal quarter ended December December: see month. 31, 2000. In the quarter, AirGate added 46,751 new subscribers representing an 82% quarterly increase in its customer base to finish the first 12 months of commercial operations with 103,440 subscribers. Net revenues for the first fiscal quarter ended December 31, 2000, totaled $22.0 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 (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.
The Company had $52.5 million in cash and cash equivalents at the end of the first fiscal quarter ended December 31, 2000, compared with $58.4 million at September September: see month. 30, 2000. Working capital at the end of the first quarter of fiscal 2001 was $48.0 million. The Company believes that the proceeds of the concurrent equity and debt offerings completed in September 1999, together with the undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely Lucent commitment of $98.0 million, will fund the Company's existing build-out Build-out is an urban planner’s estimate of the amount and location of potential development for an area. Build-out is one step of the land use planning process. Evaluation of potential development impacts begins with a build-out analysis. plan as well as expected capital expenditures and working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. through 2002, at which point the Company expects to achieve break-even operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. . "Our outstanding first quarter results mark an exceptional start for AirGate in fiscal 2001 as we added more subscribers than any other single Sprint PCS affiliate during this period," commented 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, president and chief executive officer of AirGate PCS. "We exceeded market expectations with a record 46,751 new subscribers, which represented growing our customer base 82% from the previous quarter ending September 30, 2000. Additionally, we reached an important milestone as we surpassed 100,000 subscribers and ended the first fiscal quarter with over 103,000 subscribers, an impressive performance for less than a full year of commercial service. The continuation of the positive momentum we witnessed in fiscal 2000 validates the strength of our Sprint PCS product offering and our emphasis on the sound execution of our sales strategy. As a result, we fully expect that our subscriber base will continue to rapidly expand. As we aggressively market Sprint PCS products and services in our territory, customer response has been tremendous and we have continued to exceed customer expectations in terms of voice quality and clarity. "Proven execution of the right operational, marketing and financial strategies have already positioned AirGate as a leading provider of wireless communications wireless communications System using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. in our territory. Our challenge for 2001 will be to continue to aggressively market Sprint PCS products and services and deliver exceptional value to our customers and shareholders," concluded Dougherty. Additional financial and operating highlights for the first quarter of fiscal 2001 include the following: -- AirGate added 46,751 net new customers in its fourth quarter of commercial PCS operations, a 141% sequential growth compared with 33,207 net new customers added in the prior quarter. As a result, the Company had a total of 103,440 subscribers as of December 31, 2000. -- Average revenue per subscriber (ARPU), excluding roaming, was $54 for the quarter, compared with $56 for the previous quarter. -- Total roaming revenue was $7.4 million for the first fiscal quarter of 2001, compared with $7.6 million for the previous quarter. -- The Company opened a total of five Sprint PCS stores in the first fiscal quarter, bringing the total number of stores to 21. -- Churn, net of 30-day returns, was 2.9%. -- The customer average minutes of use (MOU) were 395 in the first fiscal quarter. -- The EBITDA loss was greater than the consensus estimate, primarily as a result of the additional costs associated with over 11,000 more gross additions than the consensus. The Company also indicated that, based on current preliminary information and internal projections, it is providing guidance for the second fiscal quarter of 2001 ended March 31, 2001 as follows: -- Net subscriber additions ("net adds") are expected to be 26,000 to 28,000. -- 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 approximately $7.5 million. -- 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. is expected to be $53 - $56. -- Churn churn: see butter. , net of 30-day returns, is expected to be 2.9% - 3.1%. -- Capital expenditures are expected to be approximately $12 million, primarily due to additional cell sites. -- EBITDA losses, excluding non-cash stock option expense, are expected to be $12 - $14 million. AirGate PCS will hold a conference call to discuss this press release today at 10:00 a.m. Eastern time. A live broadcast of the conference call will be available online at www.airgatepcsa.com and 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 March 2, 2001. 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, Columbia 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. Sprint PCS operates the largest 100 percent digital, 100 percent PCS nationwide wireless network in the 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. , already serving the majority of the nation's metropolitan areas including more than 4,000 cities and communities across the country. Sprint PCS has licensed PCS coverage of nearly 270 million people in all 50 states, Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. and the U.S. Virgin Islands. For more information, visit the Sprint PCS web site at http://www.sprintpcs.com. Sprint PCS is a wholly-owned tracking group of Sprint Corporation trading on the NYSE NYSE See: New York Stock Exchange under the symbol "PCS." 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. - at the forefront of integrating long-distance, local and wireless communications services, and a large carrier of Internet traffic Internet traffic is the flow of data around the Internet. It includes web traffic, which is the amount of that data that is related to the World Wide Web, along with the traffic from other major uses of the Internet, such as electronic mail and peer-to-peer networks. . Sprint built and operates the United States' first nationwide all-digital, fiber-optic network and is a leader in advanced data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. services. Sprint has $20 billion in annual revenues and serves more than 20 million business and residential customers. Statements contained in this news release regarding expected financial results and other expected events should be considered 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 are subject to various risks and uncertainties. Such forward looking statements are made pursuant to the "safe-harbor" provisions of 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 and are made based on management's current expectations or beliefs as well as assumptions made by, and information currently available to, management. A variety of factors could cause actual results to differ materially from those anticipated in AirGate PCS' forward- looking statements, including the following factors: the competitiveness of Sprint PCS pricing plans, products and services; consumer purchasing patterns; potential fluctuations in quarterly results; our dependence on our affiliation with Sprint PCS; an adequate supply of subscriber equipment; new product development; risks related to our ability to compete with larger, more established businesses; rapid technological and market change; risks related to future growth and expansion and our 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. and volatility of our stock price. For a detailed discussion of these and other cautionary statements and factors that could cause actual results to differ from AirGate PCS' forward- looking statements, please refer to AirGate PCS' filings with the Securities and Exchange Commission, 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, and in subsequent filings with Securities and Exchange Commission.
AirGate PCS, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
(dollars in thousands, except share and per share amounts)
Three Months Ended
December 31,
2000 1999
----------- ------------
Revenues:
Service revenue $ 12,284 $ -
Roaming revenue 7,388 130
Equipment revenue 2,290 -
----------- ------------
Total revenues 21,962 130
Operating expenses:
Cost of services and roaming (15,913) (2,918)
Cost of equipment (5,072) -
Selling and marketing (16,678) (1,133)
General and administrative expenses (4,709) (1,488)
Non-cash stock compensation expense (332) (404)
Depreciation and amortization (6,662) (518)
----------- ------------
Operating Loss (27,404) (6,331)
Interest income 1,289 3,470
Interest expense (7,748) (6,967)
----------- ------------
Net Loss $ (33,863) $ (9,828)
=========== ============
Basic and diluted net loss per share of
common stock $ (2.64) $ (0.82)
=========== ============
Weighted average outstanding
common shares 12,835,296 11,967,009
=========== ============
Weighted average potentially dilutive
common stock equivalents:
Common stock options 556,674 725,709
Stock purchase warrants 135,605 857,538
----------- ------------
Weighted average outstanding
shares including potentially
dilutive common stock equivalents 13,527,575 13,550,256
=========== ============
AirGate PCS, Inc. and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
(dollars in thousands)
December 31, September 30,
2000 2000
------------ -------------
ASSETS
Current assets:
Cash and cash equivalents $ 52,465 $ 58,384
Trade receivables, net 19,549 8,696
Inventory 3,295 2,902
Prepaid expenses 3,576 2,106
Other current assets 2,640 2,227
------------ -------------
Total current assets 81,525 74,315
------------ -------------
Property and equipment, net 187,529 183,581
Financing costs 8,912 9,098
Other assets 2,798 1,954
------------ -------------
Total assets $ 280,764 $ 268,948
============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 3,557 $ 21,009
Accrued expenses 10,963 9,548
Payable to Sprint PCS 15,829 5,292
Deferred revenue 3,191 1,828
------------ -------------
Total current liabilities 33,540 37,677
Deferred revenue 1,318 671
Long-term debt 229,057 180,727
------------ -------------
Total liabilities 263,915 219,075
------------ -------------
Stockholders' 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;
12,861,526 and 12,816,783 shares
issued and outstanding at
December 31, 2000 and
September 30, 2000, respectively 129 128
Additional paid-in capital 162,081 161,575
Accumulated deficit (142,440) (108,577)
Unearned stock option compensation (2,921) (3,253)
------------ ------------
Total stockholders' equity 16,849 49,873
Commitments and contingencies
------------ ------------
Total liabilities and
stockholders' equity $ 280,764 $ 268,948
============ ============
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