Alaska Communications Systems Group, Inc. Reports Operating Results for the Year Ended Dec. 31, 1999.Business Editors ANCHORAGE Anchorage (ăng`kərĭj), city (1990 pop. 226,338), Anchorage census div., S central Alaska, a port at the head of Cook Inlet; inc. 1920. , Alaska--(BUSINESS WIRE)--Feb. 28, 2000 Alaska Communications Systems This article is about the current telecommunications company. For the historical "Alaska Communications System", see AT&T Alascom. Alaska Communications Systems, (or ACS) is a telecommunications corporation, headquartered in Anchorage, Alaska. Group, Inc. (Nasdaq:ALSK) announced today its first year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. operating results since its acquisition on May 14, 1999 of the two largest local exchange companies in Alaska Alaska (əlă`skə), largest in area of the United States but third smallest (exceeding only Vermont and Wyoming) in population, occupying the northwest extremity of the North American continent, separated from the coterminous United States . Alaska Communications Systems Group, Inc. ("ACS (Asynchronous Communications Server) See network access server. ") reported consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: 1999 operating revenues operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. of $193.6 million and a net loss per share from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.95. Adjusted for one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. and non-recurring costs as discussed below, net loss per share from continuing operations would have been $0.70. The 1999 results included the operations of the two companies acquired by ACS from May 15 through December December: see month. 31, 1999. If these two acquired companies had been combined with ACS for the entire year ended December 31, 1999, operating revenues would have been $300.5 million-a growth rate of 6.7% over 1998 combined results. On a combined basis, Adjusted 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 for the year ended December 31, 1999 is $108.1 million. Adjusted EBIDTA EBIDTA Earnings Before Interest Depreciation Taxes and Amortization is 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.
Chuck Robinson, 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. of ACS said, "We are pleased with the progress made in the first period of ACS' operations. 1999 EBITDA performance fully achieved our plan. Revenue growth was strong, and our newly developed marketing programs and product development initiatives should reinforce that trend in 2000." Year Ended December 31, 1999 Combined Financial Highlights: The twelve months ended December 31, 1999 includes the operating results of ACS's acquired companies (ATU (ADSL Transceiver Unit) A device that provides ADSL modulation of the telephone line. The device at the telco side is the ATU-C (Central), which is a line card plugged into the DSLAM. and Century's Alaska Properties) from January January: see month. 1, 1999 through May 14, 1999 plus the Alaska Communications Systems Group, Inc. consolidated results for the entire year ended December 31, 1999. The year ended December 31, 1998 includes the combined operating results of ATU, Century's Alaska Properties and ACS. -- Consolidated revenues for the quarter ended December 31, 1999 were $79.5 million compared with combined revenues of $73.6 million for the quarter ended December 31, 1998 -- an increase of 8.0%. -- Consolidated operating expenses increased to $74.4 million compared with combined operating expenses of $61.4 million in 1998. Adjusted for $6.6 million of one-time and non-recurring costs associated with transitioning and integrating the acquisitions and costs associated with the completion of ACS's initial public offering, 1999 operating expenses would have been $67.8 million, or 85.3% of operating revenues compared with 83.5% in 1998. -- Adjusted EBITDA rose to $26.9 million from EBITDA of $25.8 million in the prior year, which is in line with Company expectations. -- In November 1999, ACS completed its initial public offering, the net proceeds of which were approximately $127.9 million. As of December 31, 1999, $102.0 million of cash remained on the balance sheet. Quarter Ended December 31, 1999 and 1998 Consolidated and Combined Financial Highlights: The three months ended December 31, 1999 includes the consolidated results of Alaska Communications Systems Group, Inc. The three months ended December 31, 1998 includes the combined operating results of ATU, Century's Alaska Properties and ACS. -- Consolidated revenues for the quarter ended December 31, 1999 were $79.5 million compared with combined revenues of $73.6 million for the quarter ended December 31, 1998 -- an increase of 8.0%. -- Consolidated operating expenses increased to $74.4 million compared with combined operating expenses of $61.4 million in 1998. Adjusted for $6.6 million of one-time and non-recurring costs associated with transitioning and integrating the acquisitions and costs associated with the completion of ACS's initial public offering, 1999 operating expenses would have been $67.8 million, or 85.3% of operating revenues compared with 83.5% in 1998. -- Adjusted EBITDA rose to $26.9 million from EBITDA of $25.8 million in the prior year, which is in line with Company expectations. -- In November 1999, ACS completed its initial public offering, the net proceeds of which were approximately $127.9 million. As of December 31, 1999, $102.0 million of cash remained on the balance sheet. The Year in Review: In May of 1999, ACS acquired the local exchange operations in Anchorage, Fairbanks Fairbanks, city (1990 pop. 30,843), Fairbanks North Star Borough, E central Alaska, on the Chena River near its confluence with the Tanana; inc. 1903. Fairbanks is the only sizable urban center in the vast Alaskan interior. , Juneau Juneau (j  `nō), city (1990 pop. 26,751), state capital, SE Alaska, in the Alaska Panhandle; settled by gold miners 1880, inc. 1900. , Sitka Sitka (sĭt`kə), city (1990 pop. 8,588), Sitka census div., SE Alaska, in the Alexander Archipelago, on Baranof Island; inc. 1971. Fishing, its first industry, remains important; salmon, halibut, red snapper, crab, herring, abalone, and clams , Kenai Kenai may refer to:
a pattern of anastomosis in which severed ends are matched and united, in contrast with other patterns such as end-to-side or side-to-side. Usually applied to anastomosis of the intestine. telecommunications, enhanced, and information services See Information Systems. . Chuck Robinson, Chairman and CEO of ACS said, "We have clear opportunities to further improve our cost structure in the coming year, and we intend to take advantage of them. Most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , we have established a platform for expanding the scope and quality of services and support being offered to our Alaskan customers. The significant investments we made this past year in information systems, back office support, and service improvement programs should benefit our present and future customers and should translate (1) To change one language into another; for example, assemblers, compilers and interpreters translate source language into machine language. (2) In computer graphics, to move an image on screen without rotating it. into improved financial performance in 2000." Robinson also noted, "ACS' successful initial public offering in November November: see month. of 1999 reduced our leverage and significantly improved our financial flexibility. The residual Residual See:Residual value proceeds of the offering, totaling approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $102 million in cash at December 31, 1999, provide ACS with the financial capacity to expand advanced technologies infrastructure in Alaska and to pursue any strategic opportunities that may arise." ACS is the leading diversified diversified (di·verˑ·s , facilities based telecommunications provider in Alaska, offering local service, wireless, long distance, data, and internet services to business and residential customers throughout Alaska. ACS currently serves approximately 326,000 access lines and 73,000 cellular customers throughout the State. Members of the ACS senior management team have played significant roles in bringing advanced technology to Alaska for more than four decades. ACS is traded on NASDAQ under the symbol "ALSK." Statements contained in this press release that are not historical fact 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. " that involve a number of known and unknown risks or uncertainties. Additional factors which may affect actual results are contained in the Company's filings with the SEC, including the report on Form S-1, dated November 18, 1999. Forward-looking statements in this release are made pursuant to the 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. provisions contained in 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.
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Condensed Consolidated Statements of Operations
For the Three and Twelve Months Ended December 31, 1999
(Unaudited, in Thousands, Except per Share Amounts)
Three
Months Year
Ended Ended
Dec. 31, Dec. 31,
1999 1999
Operating revenues:
Local telephone $65,558 $159,151
Cellular 10,147 24,882
Interexchange network, data
services and other 3,836 9,586
--------- ---------
Total operating revenues 79,541 193,619
--------- ---------
Operating expenses:
Local telephone 45,825 106,266
Cellular 6,869 15,922
Interexchange network, data
services and other 6,938 14,838
Depreciation and amortization 14,743 36,090
--------- ---------
Total operating expenses 74,375 173,116
--------- ---------
Operating income 5,166 20,503
--------- ---------
Other income and expense:
Interest expense (16,092) (39,624)
Interest income and other 1,103 824
Amortization of goodwill and
organization costs (1,855) (4,216)
--------- ---------
Total other income and expense (16,844) (43,016)
--------- ---------
Loss before income tax benefit and
extraordinary charge (11,678) (22,513)
Income tax benefit 127 301
--------- ---------
Loss from continuing operations (11,551) (22,212)
Extraordinary charge - early
extinguishment of debt 3,267 3,267
--------- ---------
Net loss $(14,818) $(25,479)
========= =========
EBITDA $19,909 $56,593
Adjusted EBITDA $26,873 $66,598
Loss per share from continuing operations
- basic and diluted $(0.43) $(0.95)
Net loss per share
- basic and diluted $(0.55) $(1.09)
Weighted average shares outstanding 26,888 23,396
Note: The three and twelve months ended December 31, 1999
includes the operating activity of ATU and Century's Alaska properties
for the period from May 15, 1999 through December 31, 1999. These
operations were acquired on May 14, 1999.
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Condensed Consolidated Balance Sheet Data
December 31, 1999
(Unaudited, in Thousands)
Cash and cash equivalents $101,994
Property, plant and equipment, net 449,087
Total assets 927,956
Long-term debt and capital lease obligations 612,016
Stockholders' equity 247,090
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
Supplementary Information
Condensed Consolidated and Combined Statements of Operations
For the Three and Twelve Months Ended December 31, 1999 and 1998
(Unaudited, in Thousands)
Three Months Ended Year Ended
December 31, December 31,
--------------------------------------------
1999 1998 1999 1998
Consolidated Combined Combined Combined
--------------------------------------------
Operating revenues:
Local telephone $65,558 $61,362 $248,974 $237,808
Cellular 10,147 8,591 36,090 31,801
Interexchange network,
data services and other 3,836 3,616 15,461 11,997
------- ------- ------- -------
Total operating revenues 79,541 73,569 300,525 281,606
------- ------- ------- -------
Operating expenses:
Local telephone 45,825 36,782 160,200 141,933
Cellular 6,869 6,077 24,315 22,089
Interexchange network,
data services and other 6,938 4,871 22,170 14,710
Depreciation and
amortization 14,743 13,642 56,898 53,741
------- ------- ------- -------
Total operating expenses 74,375 61,372 263,583 232,473
------- ------- ------- -------
Operating income 5,166 12,197 36,942 49,133
------- ------- ------- -------
Other income and expense:
Interest expense (16,092) (3,178) (44,150) (12,982)
Interest and other income 1,103 (77) 1,927 2,610
Amortization of goodwill (1,855) (1,581) (4,216) (6,326)
------- ------- ------- -------
Total other income
and expense (16,844) (4,836) (46,439) (16,698)
------- ------- ------- -------
Income (loss) before income taxes
and extraordinary charge (11,678) 7,361 (9,497) 32,435
Income tax expense (benefit) (127) 1,782 3,643 9,218
------- ------- ------- -------
Income (loss) from
continuing operations (11,551) 5,579 (13,140) 23,217
Extraordinary item - early
extinguishment of debt 3,267 -- 3,267 --
------- ------- ------- -------
Net income (loss) $(14,818) $5,579 $(16,407) $23,217
======= ======= ======= =======
EBITDA $19,909 $25,839 $93,840 $102,874
Adjusted EBITDA $26,873 $108,086
Note: The Combined Statement of Operations includes the operating
activity of ATU and Century's Alaska Properties from January 1, 1998
through December 31, 1998, and January 1, 1999 through May 14, 1999
plus Alaska Communications Systems Group, Inc. Consolidated Statement
of Operations from May 15, 1999 through December 31, 1999.
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING METRICS
AS OF DECEMBER 31, 1999 and 1998
1999 1998
---- ----
Local telephone:
Access lines 325,608 300,394
Growth 8.4% 6.0%
Cellular:
Covered population 460,802 460,162
Ending subscribers 73,068 66,572
Growth 9.8% 20.8%
Penetration 15.9% 14.5%
Minutes of Use 99,420,213 82,079,100
Average Revenue Per Unit $43.08 $43.55
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