Broadband, Wireless Demand Propel Broadwing Growth; Solid Execution Yields Strong First Quarter Results.Business Editors CINCINNATI--(BUSINESS WIRE)--April 27, 2000 Broadwing Inc. (NYSE NYSE See: New York Stock Exchange :BRW BRW Business Review Weekly (business magazine; Melbourne, Victoria, Australia) BRW Business Report Writer BRW Barrow, AK, USA - Barrow (Airport Code) BRW Business Requirement Worksheet ) today reported $470 million in revenues and $85 million in EBITDA--Earnings Before Interest, Taxes, Depreciation and Amortization--for the first quarter of 2000. Rick Ellenberger, Broadwing's president 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. , said "These financial results--revenues up 17 percent from first quarter 1999 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 and increasing 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 even with substantial investments in brand-building--reflect the excellent operating progress we made during the quarter. They also show that we are capturing our full share of the exploding demand for data and Internet-based communications services."
That progress includes:
-- Broadwing Communications leveraged improved billing and
provisioning systems and strong demand for data and Internet
services across its nationwide fiber-optic network to grow
revenues 19 percent;
-- Cincinnati Bell Wireless added more than 37,000 customers and
delivered its first-ever positive EBITDA quarter less than two
years after launch;
-- 275,000 new Cincinnati Bell Any Distance long-distance
customers--40 percent of Cincinnati households--captured in
just 13 weeks through April 15, the fastest gain of
residential long distance share in the industry;
-- the best quarterly revenue growth for our local exchange
business since 1997, driven by strong data and Internet
demand, and its seventh consecutive quarter of EBITDA margin
improvement;
-- a 13-week national branding campaign that created unaided
awareness of the Broadwing name as strong or stronger than
that of any other next-generation communications carrier.
"In our first full quarter as Broadwing," Ellenberger added, "we said we would establish ourselves as a fast and accountable partner to data and Internet-focused businesses, capture synergies from the integration of Broadwing Communications, and energize en·er·gize v. en·er·gized, en·er·giz·ing, en·er·giz·es v.tr. 1. To give energy to; activate or invigorate: "His childhood our wireless and local exchange businesses for even greater performance. Once again, we executed against our commitments." Broadwing now has four operating segments--Broadband Services, Local Communications Services, Wireless Services and Other Communications Services. Except where noted, first-quarter 2000 results are compared with 1999 pro forma results that assume the combination of Broadwing's current businesses throughout 1999, and are adjusted to reflect the new segment structure. Broadband Services See broadband and broadband service provider. Broadwing Communications had a great quarter. Revenues increased 19 percent to $213 million. About two-thirds of those revenues came from data services as businesses, ISPs, dot-coms and other carriers relied on Broadwing for high-bandwidth transport, business communications solutions and network integration services. Broadwing Communications continued to focus its network, systems, and sales and marketing efforts on data and Internet growth, which produced first-quarter contract wins with customers such as Western and Southern Life Insurance, Sinclair Broadcast Group The Sinclair Broadcast Group (SBG) NASDAQ: SBGI is the operator of the largest number of local television stations in the United States with a total of 59 stations across the country in 38 primarily small and medium markets, many of which are located in the South and , Golfsmith and Widener University Widener University is a private, coeducational university located in Chester, Pennsylvania. Its main campus sits on 108 acres (.44 km²), just 14 miles south of Philadelphia. . During the quarter, Broadwing Communications also rolled out new eClass virtual private network services and expanded its relationship with Zeroplus.com for Voice over Internet Protocol See Internet and TCP/IP. (networking) Internet Protocol - (IP) The network layer for the TCP/IP protocol suite widely used on Ethernet networks, defined in STD 5, RFC 791. IP is a connectionless, best-effort packet switching protocol. (VoIP) services. IT Consulting, which grew 60 percent in the quarter, is being expanded to 20 U.S. locations and is teaming with Compaq to provide more comprehensive e-commerce and data solutions to businesses. To support its customers' expanding web and applications hosting requirements, Broadwing Communications will sharply increase its data and collocation collocation - co-location center space, opening eight new centers in May. Broadwing's strategic partner, Cisco Systems “Cisco” redirects here. For other uses, see Cisco (disambiguation). Cisco System,Inc. (NASDAQ: CSCO, HKSE: 4333 ) is an American multinational corporation with 54,000 employees and annual revenue of US $28.48 billion as of 2006. , has agreed to resell re·sell tr.v. re·sold , re·sell·ing, re·sells 1. To sell again. 2. To sell (a product or service) to the public or to an end user, especially as an authorized dealer. a significant portion of that new capacity. Broadwing Communications also demonstrated the expanding strength and capacity of its back-office systems by provisioning all 275,000 Any Distance customers onto its national fiber network. It also continued to improve billing cycle Billing cycle The time elapsed between billing periods for goods sold or services rendered. performance and order intervals during the quarter, paving the way for introduction of a unique installation guarantee. Development of Broadwing Communications' advanced fiber-optic network will move to a new level through a strategic relationship with Corvis Corporation. Installation of CorWave all-optical network A communications network that works completely in the optical domain. It uses optical switches connected by optical fibers. See optical switch and optical computer. technology that enhances network speed and efficiency is already underway, proof of our commitment to be first with this leading-edge technology that will create a significant attacker's advantage for Broadwing. Broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). EBITDA was a negative $2 million for the first quarter. That includes the impact of $17 million in stepped-up advertising to build awareness and momentum for Broadwing. Excluding this investment, EBITDA would have been more than double the $6 million pro forma gain in the first quarter of 1999. Local Communications Services Broadwing's local-exchange company, Cincinnati Bell Cincinnati Bell is the dominant telephone company for Cincinnati, Ohio and its nearby suburbs in Ohio, Indiana and Kentucky. The parent company is named Cincinnati Bell Inc. Telephone (CBT (Computer-Based Training) Using the computer for training and instruction. CBT programs are called "courseware" and provide interactive training sessions for all disciplines. ), grew revenues 8 percent to $193 million in the first quarter. The company also posted its seventh consecutive quarter of EBITDA margin improvement, to 47 percent. Large businesses and carriers continued to drive up demand for bandwidth. CBT's data and broadband revenues increased 40 percent year over year, providing 66 percent of its first-quarter revenue growth. For example, high-capacity DS-3 facilities increased 36 percent from the first quarter last year, and LAN (Local Area Network) A communications network that serves users within a confined geographical area. The "clients" are the user's workstations typically running Windows, although Mac and Linux clients are also used. interconnection in·ter·con·nect v. in·ter·con·nect·ed, in·ter·con·nect·ing, in·ter·con·nects v.intr. To be connected with each other: The two buildings interconnect. v.tr. facilities increased 60 percent. Residence and small business customers in Cincinnati maintained their strong appetite for digital subscriber line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary ) services under the ZoomTown brand. CBT added 6,000 DSL subscribers in the first quarter, for a total of 24,000. To increase the value of the DSL experience for customers in Cincinnati, ZoomTown last week launched new online multimedia services featuring high-quality digital music and fast-paced interactive games, and plans to roll out more entertainment and information services See Information Systems. later this year. Revenues from high-margin value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. increased 26 percent, representing 30 percent of CBT's first-quarter revenue growth. The company's all-in-one bundle, Complete Connections, gained 39,000 subscribers, up from 24,000 adds in the fourth quarter. Demonstrating once again the power of the bundle, 34 percent of Cincinnati Bell Any Distance customers also have signed up for Complete Connections. Cincinnati Bell Telephone had $91 million in first-quarter EBITDA, driving its EBITDA margin up 6 points from a year ago and two points from the fourth quarter. Key drivers of that improvement were continued strong growth in high-margin services, coupled with aggressive cost management. Wireless Services Cincinnati Bell Wireless generated $37 million in revenues and $2 million in EBITDA, achieving profitability on an EBITDA basis in only its seventh full quarter of operation. It ended the first quarter with nearly 200,000 subscribers, representing 9 percent penetration of covered POPs in its Cincinnati/Dayton region. Postpaid post·paid adj. With the postage having been paid in advance. postpaid Adverb, adj with the postage prepaid Adj. 1. subscriber growth was more than 20,000. Postpaid generated $66 in average monthly revenue per user (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. ), essentially unchanged from the first quarter of 1999 despite adding 101,000 subscribers. Churn churn: see butter. declined to a record-low 1.1 percent from 1.4 percent a year ago, despite intense competition from six other wireless providers. Prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. subscribers grew 17,000 as the company's I-Wireless
offer remained the wireless product of choice for teens and preteens in
the Cincinnati and Dayton, Ohio Dayton is a city in southwestern Ohio, United States. It is the county seat and largest city of Montgomery County. As of the 2005 census estimate, the population of Dayton was 158,873. , markets. Incremental Additional or increased growth, bulk, quantity, number, or value; enlarged.Incremental cost is additional or increased cost of an item or service apart from its actual cost. revenues from I-Wireless require minimal additional network investment and have significantly lower customer acquisition costs than postpaid. Other Communications Services This segment includes results of our Any Distance, directory, communications equipment and payphone payphone Noun a coin-operated telephone payphone pay n → Münztelefon nt; (card phone) → Kartentelefon nt businesses. Any Distance exemplifies the aggressive marketing culture at Broadwing, combining the resources of our local and national businesses to achieve rapid capture of household long distance share and more sales of high-margin services without significant incremental fixed cost. Revenues for this segment increased 10 percent. EBITDA was negative, principally reflecting advertising and other startup costs for Any Distance.
Other non-recurring events in the quarter included:
-- Sale of a portion of Broadwing's equity investment in
PurchasePro, which generated about $7 million of additional
cash and a gain of 3 cents per share.
-- A March 21 conversion or redemption offer to holders of
Broadwing's 7.25% convertible preferred shares. Nearly all of
the shares were converted into common on April 6, creating 9.5
million additional common shares and reducing Broadwing's
annual dividend requirement by $8 million.
Earnings per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share for Broadwing was a negative 28 cents in both the first quarter of 2000 and in the first quarter of 1999 pro forma. On an as-reported basis, Broadwing's first-quarter 2000 revenues increased 94 percent and EBITDA increased 10 percent. Reported earnings per diluted share of negative 28 cents in the first quarter compares with 18 cents positive in the first quarter of 1999. "I couldn't be more pleased with the progress that Broadwing is making on all fronts as we complete our first quarter as a combined company," Ellenberger said. "As we look ahead, I am optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op that our strong focus on growth will generate more success in a rapidly growing but extremely competitive market environment." About Broadwing Broadwing Inc. (NYSE:BRW) delivers advanced voice, data, and Internet communications solutions to customers nationwide. Focused on customer service, Broadwing's reliable high-bandwidth data and Internet capabilities give businesses a competitive advantage. Broadwing can be found on the World Wide Web at broadwing.com. Note: Information included in this news release contains 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 potential risks and uncertainties. Broadwing's future results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, Broadwing's ability to maintain its market position in communications services, and its ability to develop and successfully launch new products and services. More information on potential risks and uncertainties is available in the company's recent filings with the Securities and Exchange Commission, including 1999 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. reports for Broadwing Inc. and Broadwing Communications.
Broadwing Inc.
Consolidated Statements of Income
(Unaudited)
(in millions except per share amounts)
As Reported Pro Forma
For the Three Months For the Three Months
Ended Mar. 31, % Ended Mar. 31, %
2000 1999 Chg. 2000 1999 Chg.
Revenues
Broadband $ 213.0 $ 17.2 -- $ 213.0 $ 178.5 19
Local Communications 192.8 179.1 8 192.8 179.1 8
Wireless 36.6 15.2 141 36.6 15.2 141
Other Communications 39.1 35.8 9 39.1 35.8 9
Intersegment (11.3) (5.1) -- (11.3) (5.0) --
------ ------ ------ ------
Total Revenues 470.2 242.2 94 470.2 403.6 17
Costs & Expenses
Cost of Providing
Services &
Products Sold 226.2 107.9 110 226.2 212.8 6
Selling, General
& Administrative 158.9 56.7 180 158.9 108.5 47
------ ------ ------ ------
EBITDA 85.1 77.6 10 85.1 82.3 3
Deprec. & Amort. 110.6 32.3 242 110.6 89.3 24
------ ------ ------ ------
Operating Income (Loss) (25.5) 45.3 -- (25.5) (7.0) --
Equity Loss in
Unconsolidated Entities 2.0 -- -- 2.0 2.9 (31)
Minority Interest
Expense (Income) 10.9 (2.3) -- 10.9 9.4 --
Other Income 7.0 -- -- 7.0 5.8 --
Interest Expense 36.4 8.7 318 36.4 26.4 38
------ ------ ------ ------
Income (Loss)
Before Income Taxes (67.8) 38.9 -- (67.8) (39.9) --
Income Tax
Provision (Benefit) (12.4) 14.2 -- (12.4) 15.5 --
------ ------ ------ ------
Net Income (Loss) $ (55.4) $ 24.7 -- $ (55.4) $ (55.4) --
------ ------ ------ ------
Dividends and Accretion
Applicable to
Preferred Stock 0.3 -- -- 0.3 1.6 (81)
Net Income (Loss)
Applicable to
Common Shares $ (55.7) $ 24.7 -- $ (55.7) $ (57.0) --
------ ------ ------ ------
Basic and Diluted Earnings (Loss) Per Common Share
Net Income (Loss) $ (0.28) $ 0.18 $ (0.28) $ (0.28)
------ ------ ------ ------
Dividends Declared
Per Common Share $ - $ 0.10 $ - $ 0.10
------ ------ ------ ------
Weighted Average Common Shares Outstanding (millions)
- Basic 202.3 136.4 202.3 204.9
- Diluted 202.3 140.1 202.3 204.9
Market Price Per Share
High $ 41.063 $ 23.438
Low $ 28.813 $ 16.063
Close $ 37.188 $ 22.438
Broadwing Inc.
Consolidated Balance Sheets
(Unaudited)
(Dollars in millions)
Mar. 31, Dec. 31,
2000 1999
Assets
Cash and Cash Equivalents $ 19.7 $ 80.0
Receivables - Net 250.5 231.0
Other Current Assets 88.4 102.4
Property, Plant and Equipment - Net 2,526.3 2,500.9
Intangible Assets - Net 2,637.3 2,679.9
Investments 866.3 843.3
Other Assets 72.9 71.1
Total Assets $ 6,461.4 $ 6,508.6
Liabilities & Shareowners' Equity
Debt Maturing in One Year $ 10.5 $ 9.2
Other Current Liabilities 410.7 558.9
Long-Term Debt, Less Current Portion 2,209.1 2,136.0
Unearned Revenue, Less Current Portion 634.7 633.5
Deferred Credits & Other 419.3 375.6
Minority Interest 425.9 434.0
Redeemable Preferred Stock 224.5 228.6
Common Shareowners' Equity 2,126.7 2,132.8
Total Liabilities & Shareowners' Equity $ 6,461.4 $ 6,508.6
Other Data
Net Debt
(Debt & Redeemable
Preferred Stock less Cash) $ 2,424.4 $ 2,293.8
Common Shares Outstanding (millions) 203.7 208.7
NOTE: Broadwing will hold a conference call to discuss its first-quarter results at 12:30 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT today. News media and the investing public are welcome to listen to the call over the Internet live or via replay. Select "Conference Call" at http://investor.broadwing.com. |
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