Alaska Communications Systems Reports Third Quarter 2000 Results of Operations.Business Editors, High-Tech high-tech also hi-tech adj. Informal Of, relating to, or resembling high technology. high-tech Adjective same as hi-tech Adj. 1. Writers 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)--Nov. 2, 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. ("ACS (Asynchronous Communications Server) See network access server. ") (Nasdaq:ALSK) reported today 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: third quarter 2000 revenues of $74.9 million and a net loss of $10.9 million, or $0.33 per share compared to revenues of $75.5 million and a net loss of $4.9 million for the third quarter of 1999. Consolidated 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 , or 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.
After considering certain charges totaling $7.4 million that were recorded in the third quarter of 2000, the net loss would have been $3.5 million, or $0.10 per share -- a 30% improvement over the corresponding period in 1999. EBITDA adjusted for these same items would have been $28.5 million, or a $2.3 million increase over 1999. After considering the revenue impact of the adjustments totaling $5.3 million, revenue would have been $80.2 million, or a $4.7 million increase over 1999. Chuck chuck a hand grip to be attached to intramedullary pins to enable the surgeon to rotate or drive them into bone. 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, "The actions we have taken this quarter recognize outstanding issues and will provide a much clearer focus on the results of our operations going forward. Based on the progress we have made to date, we expect to achieve fourth quarter 2000 revenues in the range of $75 to $77 million and EBITDA in excess of $30 million. Strong cash flow will improve to take us to a free cash flow positive position in 2001. Future capital investments will focus on the creation of new products and services, and on the continued improvement of the existing network, especially to support data, video and wireless applications. The success of our high speed access products will continue to alleviate Alleviate To make something easier to be endured. Mentioned in: Kinesiology, Applied pressure on outside plant requirements as second line demand declines, freeing up loops to support wireline customer growth with minimal additional capital investment." During the quarter, ACS recorded certain charges totaling $7.4 million. This amount included $2.1 million of unusual charges, consisting of the write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. of approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $1.5 million of costs related to the attempted acquisition of Matanuska Matanuska may refer to:
The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when cost related to a reduction in force of approximately 100 personnel. The reduction in force, along with other cost structure improvements, is expected to result in annual expense reductions totaling approximately $10 million, beginning with the fourth quarter of 2000. Included in local telephone revenue for the quarter is a $5.3 million charge for revenue reserves. The revenue reserves include $3.6 million related to network access revenue and $1.7 million related to local network service revenue. The network access revenue reserve was recorded as a result of a complaint filed on August 24, 2000 with the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. related to the jurisdictional treatment 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. minutes in establishing interstate in·ter·state adj. Involving, existing between, or connecting two or more states. n. One of a system of highways extending between the major cities of the 48 contiguous United States. Noun 1. access rates, to which ACS expects a ruling by January January: see month. 2001. The local telephone revenue reserves recorded during the third quarter reflect historical deficiencies in back office collection operations. These deficiencies have been corrected and the Company expects future experience to move rapidly towards the industry average of 2% of locally billed revenue. Third Quarter 2000 Highlights:
-- Revenues, adjusted for the reserves recorded in the third quarter increased
to $80.2 million from $75.5 million in the prior year, or $4.7 million and
6.2%. Local telephone, cellular, and interexchange network, data services and
other revenues all increased compared to the third quarter 1999 combined
operating results.
-- Local telephone revenues, adjusted for the reserves recorded in the third
quarter, grew 2.6%, from $61.8 million in the third quarter of 1999 to $63.4
million in the third quarter of 2000. Access lines grew 2.9% to 332,022 in the
third quarter of 2000 over the corresponding quarter in 1999.
-- Cellular revenues grew to $10.9 million or 7.8% over the same quarter in
1999. Customer growth was 3.3% over the same period from 70,852 to 73,196. The
average monthly cellular revenue per unit ("ARPU") increased from $48.20 to
$49.72 over the same period as a result of the introduction of new statewide
and national pricing programs and the benefits of the digital upgrade completed
in the first quarter of 2000.
-- Interexchange network, data services and other revenues, which includes
primarily long distance, data and Internet services revenues, increased from
$3.6 million in 1999 to $5.8 million in 2000 -- an increase of $2.2 million, or
62.5%.
-- Long distance revenues rose from $2.4 million in 1999 to $3.0 million in
2000, or 22.6% as total customers grew to 39,734. Long distance minutes of use
increased from 17.1 million minutes to 18.8 million, or 10.0%, from 1999 to
2000.
-- Internet revenues grew from $1.2 million in the third quarter of 1999 to
$2.6 million in the third quarter of 2000.
-- Operating expenses, adjusted for unusual charges recorded in the third
quarter of 2000, increased $4.5 million, or 7.0%, from $64.9 million for the
third quarter of 1999 to $69.5 million for the third quarter of 2000. As a
percentage of revenues adjusted for the reserves discussed previously,
operating expenses for the third quarter were 86.6% compared to 86.0% for the
third quarter 1999 consolidated operating results.
-- Local telephone expenses decreased $886,000, or 2.3% from $38.5 million for
the third quarter of 1999 to $37.6 million for the third quarter of 2000. As a
percentage of revenues, operating expenses for the third quarter dropped to
59.2% as compared to 62.2% for the third quarter 1999 combined operating
results, adjusted for the charges recorded during 2000.
-- Cellular expenses increased $92,000, or 1.6%, for the third quarter of 2000
compared to the third quarter of 1999. As a percent of revenue, cellular
operating expenses declined from 57.3% in the third quarter of 1999 to 54.0% in
2000. Management expects that cellular expenses as a percentage of cellular
revenue will continue to decline as cellular penetration and subscribers
increase over time.
-- Interexchange network, data services and other expenses increased by $3.2
million, or 62.5%. The increase in interexchange network, data services and
other was primarily the result of the acquisition in June of 2000 of Internet
Alaska, Inc., which was not consolidated in the 1999 operations, and increases
in minutes of use for long distance as discussed above.
-- EBITDA, adjusted for certain charges recorded during 2000, was $28.5 million
for the third quarter of 2000 compared to the third quarter 1999 EBITDA of
$26.2 million -- an increase of $2.3 million or 8.8%. EBITDA margin, adjusted
for these same items, increased from 34.7% in the third quarter of 1999 to
35.6% in the third quarter of 2000.
ACS is the leading diversified diversified (di·verˑ·s , facilities based telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. carrier 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 , offering local telephone service, wireless, long distance, data, and Internet services to business and residential customers throughout Alaska. ACS currently serves approximately 330,000 access lines and 73,000 cellular customers throughout the State. 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. 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. Financial Tables Follow:
Schedule 1
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited, in Thousands, Except per Share Amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
----------------------------------------
Operating revenues:
Local telephone $ 58,074 $ 61,791 $ 189,550 $ 93,592
Cellular 10,947 10,153 29,657 14,720
Interexchange network,
data services and other 5,845 3,596 14,613 5,510
------ ------ ------- -----
Total operating revenues 74,866 75,540 233,820 113,822
Operating expenses:
Local telephone 37,570 38,456 113,487 60,440
Cellular 5,913 5,821 17,684 8,813
Interexchange network,
data services and other 8,201 5,046 21,593 7,885
Unusual charges 2,083 - 2,083 -
Depreciation and amortization 17,773 15,615 52,464 23,708
------- ------- ------- ------
Total operating expenses 71,540 64,938 207,311 100,846
Operating income 3,326 10,602 26,509 12,976
Other income and expense:
Interest expense (16,417) (15,680) (48,253) (23,532)
Interest income and other 2,195 160 5,033 (197)
Equity in earnings of
minority investments - (170) (153) (81)
------- ------- ------- ------
Total other income
and expense (14,222) (15,690) (43,373) (23,810)
Loss before income taxes (10,896) (5,088) (16,864) (10,834)
Income tax benefit (expense) 20 174 154 174
_________ ________ _________ _________
Net loss $(10,876) $(4,914) $(16,710) $(10,660)
========= ======== ========= =========
EBITDA $ 21,099 $ 26,217 $ 78,973 $ 36,684
Net loss per share -
basic and diluted $ (0.33) $ (0.23) $ (0.51) $ (0.51)
Weighted average shares
outstanding 32,927 21,598 32,806 21,085
Schedule 2
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEET DATA
September 30, 2000 and December 31, 1999
(Unaudited, in Thousands)
As of September 30, As of December 31,
2000 1999
------------------- -------------------
Cash and cash equivalents $ 83,568 $ 101,994
Property, plant and
equipment, net 453,733 449,827
Total assets 923,323 934,443
Long-term debt and capital
lease obligations 615,204 612,756
Stockholders' equity 233,170 247,968
Schedule 3
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
For the Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited, in Thousands)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2000 1999 2000 1999
Consolidated Consolidated Consolidated Combined
Operating revenues:
Local telephone $ 58,074 $ 61,791 $ 189,550 $ 183,415
Cellular 10,947 10,153 29,657 25,925
Interexchange
network, data
services and other 5,845 3,596 14,613 11,246
--------- --------- --------- --------
Total operating
revenues 74,866 75,540 233,820 220,586
Operating expenses:
Local telephone 37,570 38,456 113,487 114,374
Cellular 5,913 5,821 17,684 17,067
Interexchange network,
data services and other 8,201 5,046 21,593 15,214
Unusual charges 2,083 -- 2,083 --
Depreciation and
amortization 17,773 15,615 52,464 46,889
--------- --------- --------- --------
Total operating expenses 71,540 64,938 207,311 193,544
Operating income 3,326 10,602 26,509 27,042
Other income and expense:
Interest expense (16,417) (15,680) (48,253) (28,058)
Interest income and other 2,195 160 5,033 2,276
Equity in earnings of
minority investments -- (170) (153) (1,452)
--------- --------- --------- ---------
Total other income
and expense (14,222) (15,690) (43,373) (27,234)
Loss before income taxes (10,896) (5,088) (16,864) (192)
Income taxes (benefit) (20) (174) (154) 3,770
--------- --------- --------- ---------
Net loss $ (10,876) $ (4,914) $ (16,710) $ (3,962)
========= ========= ========= =========
EBITDA $ 21,099 $ 26,217 $ 78,973 $ 73,931
Net loss per share -
basic and diluted $ (0.33) $ (0.23) $ (0.51) --
Weighted average shares
outstanding 32,793 21,598 32,745 --
Note - The Combined Statement of Operations includes the operating
activity of ATU and Century's Alaska Properties from January 1, 1999
through May 14, 1999 and the consolidated operating activity of Alaska
Communications Systems Group, Inc. from May 15, 1999 through September
30, 1999. Share data is not applicable to combined information.
Schedule 4
ALASKA COMMUNICATIONS SYSTEMS GROUP, INC.
KEY OPERATING STATISTICS
Quarter Ended September 30, 2000 and 1999
As of September 30,
----------------------
2000 1999
-------- --------
Local telephone:
Access lines 332,022 322,788
Annual growth rate 2.9% 7.0%
Cellular:
Covered population 460,802 460,162
Ending subscribers 73,196 70,852
Annual growth rate 3.3% 18.4%
Penetration 15.9% 15.4%
Minutes of Use (000's) 35,614 28,980
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