Carrier1 Reports Strong Second Quarter Results.Business Editors ZURICH, Switzerland--(BUSINESS WIRE)--Aug. 8, 2000 Second quarter revenues increased 185% over prior year; Backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of bandwidth and infrastructure orders grew 45% to $262 million over first quarter 2000; Solid cash position of $509 million, as 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. turns strongly positive for the second quarter; 2,370 km German fibre network completed and lit; Amsterdam city ring approaching completion, with Paris, Rotterdam and Milan on target; City ring construction announced and underway in Berlin and Munich; Eight large-scale European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. data center facilities announced by Carrier1 partner Digiplex All financial numbers are in US dollars Carrier1 International S.A. (Neuer Markt: CJN CJN Canadian Jewish News ; NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CONE), a leading European provider of end-to-end end-to-end 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. 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 , voice, bandwidth, data centre and access solutions, today reported second quarter revenues of $57.5 million, a 185% increase compared with $20.2 million for the second quarter 1999 and a 12% increase compared with $51.3 million for the first quarter 2000. 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 loss for the second quarter was $10.1 million and improved to (18%) of revenues, compared with an EBITDA loss of $5.3 million or (26%) of revenues in the second quarter 1999 and an EBITDA loss of $10.9 million or (21%) of revenues in the first quarter 2000. Commenting on the quarter and first-half results, Stig Johansson, President and Chief Executive Officer, stated: "This quarter, we signed major infrastructure services contracts and continued to grow Internet, bandwidth and voice traffic on our network. The completion of our 2,370-kilometre German ring allows us to speed up delivery of our large backlog and to continue to rapidly grow our revenue and customer base across Europe. I am especially pleased to report that we have achieved more revenues in the first six months of the year 2000 than during the whole of 1999 due to strong execution on the part of Carrier1's team." Mr. Johansson continued: "Carrier1 also enjoys an exceptionally strong financial position. Our unrestricted cash balance, at $509 million, benefited from positive cash flow from operating activities of $26.6 million during the quarter. In addition to being fully funded for our current business plan, we believe Carrier1 enjoys significantly lower debt levels compared to most of our competitors. And most importantly Adv. 1. most importantly - above and beyond all other consideration; "above all, you must be independent" above all, most especially , we have an exceptionally low embedded Inserted into. See embedded system. cost basis in our long haul Long distance. Long haul implies traversing a state or a country. Contrast with short haul. and local fibre infrastructure as a result of the capital efficient approach we have taken to developing our network and the significant amount of committed bandwidth and infrastructure sales we have in our backlog." Second Quarter Financial Results : Revenue for the second quarter 2000 was $57.5 million, of which $47.9 million, or 83%, came from voice services and $9.6 million, or 17%, came from Internet, bandwidth and infrastructure services. Total cost of services grew less than revenue during the second quarter, resulting in gross margin loss improving to $0.9 million or (2%) of revenues from $3.3 million or (6%) of revenues in the first quarter 2000 and $2.2 million or (11%) of revenues in the year-earlier quarter. Net loss was $12.8 million or (22%) of revenues this quarter, compared to a net loss of $19.0 million or (94%) of revenues in the second quarter 1999. This compares to a net loss of $48.0 million or (94%) of revenues in the first quarter 2000, of which net Interest expense and currency exchange loss together accounted for $30.9 million in that quarter. At the end of the second quarter 2000, cash and cash equivalents amounted to $508.8 million. Capital expenditures for the quarter totaled $44.4 million compared to $31.7 million in the first quarter 2000 and $43.6 million in the second quarter 1999. Carrier1's headcount grew to 247 in the second quarter, up from 215 in the first quarter 2000 and 103 in the second quarter last year. Joachim Bauer, Chief Financial Officer, commented, "We are aggressively ramping up our Internet, bandwidth and infrastructure revenues and backlog as demand for our services continues to increase and our addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be market expands through network extensions and city ring deployment. I am particularly pleased that Carrier 1 enjoys an exceptionally strong financial position and that its current business plan is fully funded". Second Quarter Operating Results: Internet, Bandwidth and Infrastructure Services In the second quarter, 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. in 2mbit equivalents increased 148% over the first quarter 2000 and increased more than seven-fold over the second quarter last year. Internet, bandwidth and infrastructure customer contracts increased significantly to 154 at the end of June 2000, up from 110 at the end of the prior quarter and 46 at the end of June 1999. Carrier1's Internet services were well received in markets newly reached by Carrier1, such as the Nordics, Italy and Spain. Carrier1 announced new Internet See Web 2.0 and Internet2. service offerings during the second quarter in collaboration with leading Internet companies to provide its Internet customer base with the best connectivity in Europe. Carrier1 is deploying Digital Island's Footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. content distributors, Mirror Image's caching caching - cache and content delivery solutions, Yahoo!'s multicast (1) To transmit data to multiple recipients on the network at the same time using one transmission stream to the switches, at which point data are distributed out to the end users on separate lines. streaming media See streaming audio, streaming video and digital media hub. , and Zero Knowledge System's privacy-enabled solutions. Carrier1's objective is to be the preferred supplier of customized Internet solutions for ISPs, ASPs, portals and content providers. In addition, Carrier1's VISP VISP Virtual Internet Service Provider VISP Vitamin Intervention for Stroke Prevention Trial VISP Video Imagery Standards Profile VISP Visual Information Systems Program offering includes dial-up platforms, access services, functionalities such as email, storage, news and other content feeds. During the second quarter, Carrier1 signed an agreement with EPXNet.com, a leading European online electricity marketplace, to provide advanced hosting, e-commerce e-commerce, commerce conducted over the Internet, most often via the World Wide Web. E-commerce can apply to purchases made through the Web or to business-to-business activities such as inventory transfers. infrastructure and connectivity services including equipment hosting, data back-up and management services, dedicated IP connectivity and a number of other 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. . This contract, initially valued at $500,000, calls for extending the service into more functionalities and additional platforms as EPX's business grows and matures. The EPX EPX Enterprise Private Exchange contract is an example of the type of outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. solution Carrier1 provides to large scale communications users and demonstrates Carrier1's ability to deliver advanced hosting and e-commerce infrastructure services to new economy enterprises. Voice and Access Services In the second quarter, voice traffic reached 343 million minutes, an 11% increase over the first quarter 2000 and a 181% increase over the second quarter last year. The run rate at the end of June was an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. 1.5 billion minutes. Contracts with voice customers increased to 352, up from 310 at the end of the prior quarter and 142 at the end of June 1999. City Ring Fibre Network Deployment During the second quarter, significant progress was made on completing previously-announced city rings and in commencing construction of new city rings. In Amsterdam, the first city ring announced by Carrier1, major sections are now complete, with the balance of the 114-route kilometre network expected to be completed over the next several months. Construction of Carrier1's previously-announced city rings in Paris (39 route kilometres), Milan (60 route kilometres) and Rotterdam (40 route kilometres) are progressing on schedule. New city rings in Berlin and Munich, announced today, are presently under construction. Both the Berlin build (35 route kilometres) and the Munich build (16 route kilometres) will be high capacity, multi-duct infrastructures and will address two of the most important telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. markets in Germany. Both the Berlin and the Munich city rings will be connected to Carrier1's German fibre network and both rings are expected to be completed during the first half of 2001. Carrier1's city ring deployment is designed to extend its long haul pan-European network into major European city centres by connecting major telecommunications points-of-presence in these cities. This strategy will enable Carrier1 to offer a greater percentage of services on-net, thereby reducing expensive leased lines A private communications channel leased from a common carrier. Most digital lines require four wires (two pairs) for full-duplex transmission. (communications, networking) leased line from the PTT's and other alternative carriers, lowering unit costs, improving service delivery times and quality and increasing the addressable market for Carrier1's services. "The opportunity for us to cost-effectively extend our pan-European fibre optic network into city rings in major European cities dramatically increases the value of our network," said Mr. Johansson. "Importantly, all of our city ring builds will be completed on a highly capital efficient basis, with Carrier1 taking advantage of a combination of trench-sharing arrangements, joint builds, swaps and/or pre-sales to minimize overall cost and maximize time to market," he continued. Long Haul Fibre Network Deployment With the completion of Carrier1's 2,370 route kilometre German ring, Carrier1 is now able to begin delivering on a significant portion of its accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. $262 million backlog of bandwidth and infrastructure services contracts. Carrier1's German network is a high-capacity, self-healing 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). fibre ring connecting 14 principal cities in Germany Complete list of 2,073 cities in Germany (as of September 1, 2005) Only municipalities with independent administration and that have the Stadtrecht (city rights) are included. . Carrier1's previously-announced 600 kilometre extension to Hanover Hanover, city, Germany Hanover, Ger. Hannover, city (1994 pop. 524,820), capital of Lower Saxony, N Germany, on the Leine River and the Midland Canal. , which will bring its overall German long haul network to nearly 3,000 kilometres, is expected to be completed in the fourth quarter 2000. Carrier1 has secured an extensive UK network as part of an agreement announced during the second quarter between Carrier1 and 360networks. In this agreement, Carrier1 has agreed to purchase approximately $85 million of infrastructure and bandwidth capacity from 360networks and 360networks in turn has agreed to purchase approximately $150 million of infrastructure and bandwidth capacity from Carrier1. As a part of this agreement, 360networks will provide Carrier1 with trans-Atlantic and North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. capacity, as well as 12 strands of dark fibre on its diversely-routed 1,150-kilometre UK network between Liverpool and London, connecting Manchester, Sheffield, Birmingham, Bristol, Nottingham and Cambridge. "We continue to aggressively pursue capital efficient approaches to further extend our network's geographic reach and to increase fibre capacity in our existing markets in Europe," said Mr. Johansson. "Through this approach, Carrier1 has secured a 11,000 route kilometer kilometer one thousand (103) meters; 3280.83 feet; five-eighths of a mile; abbreviated km. , world class, state-of-the-art pan-European fibre optic network for a fraction of the capital spent by many of our competitors. This capital efficiency will enable Carrier1 to have one of the lowest cost networks in Europe, which we expect will enable us to price our services competitively while still enjoying attractive margins over the long term," Mr. Johansson continued. Digiplex S.A. Joint Venture Since March 2000, Digiplex has announced the construction of eight large-scale data centres. Carrier1 has a 15% ownership interest in Digiplex, has access to 10% of Digiplex's data centre space across Europe at preferential pref·er·en·tial adj. 1. Of, relating to, or giving advantage or preference: preferential treatment. 2. rates, and will be connecting the Digiplex facilities to its city ring and long haul networks. Digiplex's facilities announced to date and that are scheduled to be ready-for-service during 2000, including the total size of each facility, are as follows: Frankfurt (550,000 sq ft/55,000 sq m), Oslo (80,000 sq ft /8,000 sq m), Geneva Geneva, canton and city, Switzerland Geneva (jənē`və), Fr. Genève, canton (1990 pop. 373,019), 109 sq mi (282 sq km), SW Switzerland, surrounding the southwest tip of the Lake of Geneva. (175,000 sq ft/17,500 sq m), and Munich (220,000 sq ft/22,000 sq m). During 2001, the following facilities are scheduled to be ready-for-service: Milan (200,000 sq ft/20,000 sq m), Amsterdam (98,000 sq ft/9,800 sq m), London (84,000 sq ft/8,400 sq m), and Stockholm (199,000 sq ft/19,900 sq m). Carrier 1's share of these eight data centres amount to at least 160,000 sq ft /16,000 sq m in key European centres during the next 18 months. "Our capital-efficient local loop fibre networks and our cost-effective cost-effective, n the minimal expenditure of dollars, time, and other elements necessary to achieve the health care result deemed necessary and appropriate. pan-European data centre initiative through Digiplex together are enabling us both to dramatically expand the number of high margin services we are able to provide our customers and to deliver these services on an accelerated basis," said Mr. Johansson.
Three Months Three Months Six Months Six Months
Figures prepared in
accordance with Ended Ended Ended Ended
U.S. GAAP June 30, June 30, June 30, June 30,
($ 000, except per 2000 1999 2000 1999
share data)
Revenue 57,531 20,194 108,798 32,487
Operating Expenses:
Cost of services 58,467 22,346 113,003 39,361
Selling, general
and administrative 9,165 3,147 16,803 6,465
Depreciation and
amortisation 7,228 2,298 13,379 3,634
------- -------- -------- --------
Total operating
expenses 74,860 27,791 143,185 49,460
------- -------- -------- --------
Loss from Operations (17,329) (7,597) (34,387) (16,973)
Other Income
(Expense):
Interest expense (5,712) (8,400) (19,625) (12,605)
Interest income 6,406 2,099 9,090 3,078
Other Income
(expense) (3) (413) (6) (413)
Currency exchange
loss, net 3,862 (4,721) (15,825) (7,149)
------- -------- -------- --------
Total other
income (expense) 4,553 (11,435) (26,366) (17,089)
Loss before Income
Tax Benefit (12,776) (19,032) (60,753) (34,062)
Income tax benefit 0 0 0 0
Net Loss (12,776) (19,032) (60,753) (34,062)
Earnings (Loss) per
Share
Loss from operations
in $ (0.42) (0.25) (0.88) (0.61)
Net loss in $ (0.31) (0.63) (1.56) (1.23)
Weighted average
shares 41,663,000 30,170,000 39,047,000 27,618,000
Other Financial
Data
EBITDA (1) (10,101) (5,299) (21,009) (13,339)
EBITDA adjusted (2)
Balance Sheet Data
Unrestricted Cash 508,814 48,105
Restricted cash 21,202 2,815
Restricted investments 47,246 135,486
Working Capital 520,019 122,020
Property and equipment, net 277,435 82,909
Investment in Joint Venture 27,931 4,681
Total Assets 1,008,039 325,289
Deferred Revenue 31,633 0
Long term debt 241,333 253,979
Equity 585,672 12,946
(1) EBITDA is not a U.S. GAAP measure. EBITDA stands for earnings
before interest, taxes, depreciation, amortization and foreign
currency exchange gains or losses, other income/expense.
About Carrier1 Carrier1 International S.A. is a Pan European facilities-based provider of end-to-end Internet, voice, bandwidth, data center, and access solutions. Carrier1 provides its clients with carrier-grade transport and network solutions as well as end-user ready value added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. services. Carrier1 customers brand and market these solutions and services to their respective end-users. The Carrier1 pan-European inter-city fibre network connects 12 countries and currently spans over approximately 11,000 route kilometres connecting our points-of-presence in over 20 European cities. Carrier1 is operational in all 12 countries and has secured all the necessary interconnects and operational licenses that allow it to provide network solutions and end-user ready value added services. Carrier1 is also constructing 6 city ring fibre networks and plans to build at least another 14 city ring fibre networks. Through its investment in the joint venture Digiplex, Carrier1 is building 8 full-service data center facilities and plans to build at least another 12 data center facilities. Carrier1's principal management services subsidiary are located in Zurich, Switzerland. Carrier1 is listed on the Neuer Market in Frankfurt under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "CJN" and on the NASDAQ in New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of under the ticker symbol "CONE". More information is available at www.carrier1.com. Forward Looking Statements: The information contained in this press 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. " within the meaning of the U.S. Federal Securities Laws. These statements relate to our future growth in: our revenues, demand for our services and our network (including our city rings, data centers and other infrastructure) development. These statements are based on the current expectations of the management of Carrier 1 International S.A., and performance is subject to risks, uncertainties and other factors that could cause actual results to differ materially from these statements. Such risks include, but are not limited to, adverse regulatory, technological or competitive developments, decline in demand for the company's services or products, inability to timely develop and introduce new technologies, products and services, pressure on pricing resulting from competition, unforeseen construction delays, and failure to receive on a timely basis necessary permits or other governmental approvals, and failure to obtain any necessary financing. For a more detailed discussion of these risks, uncertainties and other factors affecting the company, please refer to the company's prospectuses and 10-K,10-Q and 8-K reports filed with the U.S. Securities and Exchange Commission, including its 10-K for the year ended 31 December 1999 and its 10-Q for the 3-month period ended 31 March 2000 and the 3-month period ended 30 June 2000. |
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