Centennial Communications Corp. Announces Record Third Quarter Results.Business Editors NEPTUNE Neptune, in Roman religion and mythology Neptune, in Roman religion and mythology, god of water. He was presumably an indigenous god of fertility, but in later times he was identified with the Greek Poseidon, god of the sea. , NJ--(BUSINESS WIRE)--March 22, 2000 Centennial Communications Centennial Communications (NASDAQ: CYCL) and its subsidiaries (Centennial Wireless (U.S.), Centennial Dominicana and Centennial de Puerto Rico) provide wireless and broadband telecommunications services to wireless telephone subscribers in the United States, Puerto Rico, the Corp. ("Centennial" or "the Company")(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 :CYCL) announced record results for revenues and earnings for the quarter ended February 29, 2000. Consolidated revenues grew 30% from the same quarter last year to $127.6 million, and earnings before interest, taxes, depreciation, amortization and recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. costs ("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 ") increased 9% from the same quarter last year to $53.3 million. For the nine months ended February 29, 2000 compared to the same period in the prior year, revenues and adjusted EBITDA increased 40% and 31%, respectively. Diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of for the nine months were $.10. The Company's wireless subscribers at February 29, 2000 were 585,500, compared to 426,700 on the same date last year, an increase of 37%. Domestic cellular subscribers increased by 53,200 during the quarter compared to an increase of 23,400 during the same quarter last year. 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. wireless subscribers increased 7,200 during the quarter compared to an increase of 18,700 during the same quarter last year. "The subscriber growth in Domestic Cellular was tremendous," said Michael J. Small, president and chief executive officer. "Centennial also created the largest single-technology wireless footprint in the Caribbean when we announced a transaction to enter the Dominican Republic Dominican Republic (dəmĭn`ĭkən), republic (2005 est. pop. 8,950,000), 18,700 sq mi (48,442 sq km), West Indies, on the eastern two thirds of the island of Hispaniola. The capital and largest city is Santo Domingo. ." In January 2000, Centennial acquired a 70% interest in All America Cables and Radio Inc. in the Dominican Republic. The remaining 30% interest is held by local partner, Abraham Selman. AACR AACR American Association for Cancer Research AACR Anglo-American Cataloging Rules AACR Australasian Association of Cancer Registries AACR African Armed Conflicts Resolved is an international long distance provider that also holds a 30MHz (MegaHertZ) One million cycles per second. It is used to measure the transmission speed of electronic devices, including channels, buses and the computer's internal clock. A one-megahertz clock (1 MHz) means some number of bits (16, 32, 64, etc. 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. license, a Local Multipoint Distribution System (wireless) Local Multipoint Distribution System - (LMDS) A broadband wireless technology. (LMDS (Local Multipoint Distribution Service) A digital wireless transmission system that works in the 28 GHz range in the U.S. and 24-40 GHz overseas. It requires line of sight between transmitter and receiving antenna, which can be from one to four miles apart ) license and a certificate to provide a broad range of telecommunications services In telecommunication, the term telecommunications service has the following meanings: 1. Any service provided by a telecommunication provider. 2. in the Dominican Republic. The Dominican Republic is one of Latin America's fastest growing economies and has a population of 8.9 million. The purchase price was $25 million, subject to adjustment, of which $14 million has been paid to date and $11 million will be paid upon completion of due diligence Research; analysis; your homework. This term has caught on in all industries, because it sounds so "wired." Who would want to do analysis or research when they can do due diligence. See wired. . In the event that we are not satisfied with the results of our due diligence, we are not obligated ob·li·gate tr.v. ob·li·gat·ed, ob·li·gat·ing, ob·li·gates 1. To bind, compel, or constrain by a social, legal, or moral tie. See Synonyms at force. 2. To cause to be grateful or indebted; oblige. to pay the remaining $11 million and we would not own the long distance and undersea cable businesses, but would continue to own the PCS license, the LMDS license and the certificate to provide a broad range of telecommunications services in the Dominican Republic. On January 11, 2000, the Company entered into a letter of intent to acquire the cable television assets of Pegasus Communications for $170 million in cash subject to certain closing conditions. Pegasus' cable systems serve various communities in the western region of Puerto Rico, passing 170,000 homes with their 123 route-miles of fiber optic and 1,268 route-miles of coaxial co·ax·i·al adj. Having or mounted on a common axis. coaxial Adjective 1. Electronics (of a cable) transmitting by means of two concentric conductors separated by an insulator cable. The Pegasus cable system has approximately 55,000 subscribers. On March 10, 2000, Centennial announced the purchase of an international gateway switch located in Miami, Florida “Miami” redirects here. For the Native American tribe, see Miami tribe. Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. from Worldport Communications. The Company expects to connect this switch with its network in Puerto Rico utilizing capacity it owns on Americas II undersea fiber optic cable Noun 1. fiber optic cable - a cable made of optical fibers that can transmit large amounts of information at the speed of light fibre optic cable transmission line, cable, line - a conductor for transmitting electrical or optical signals or electric power . This switch will reduce the Caribbean operations' cost of delivering calls to 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. . On February 29, 2000, Centennial Communications completed an amendment and $200 million expansion of its bank facility to finance the announced transactions. A charge of $2.5 million was recorded to Puerto Rico's general and administrative expense as a result of the amendment to the bank facility. For the quarter, domestic operations revenues were $76.4 million and adjusted EBITDA was $33.1 million, up 23% and 6% respectively from the same quarter last year. The increases are due to subscriber growth and strong growth in 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. EBITDA was negatively impacted by the sales and marketing expenses resulting from record net internal subscriber additions of 47,000. Also for the quarter, Puerto Rico revenues were $51.2 million and adjusted EBITDA was $20.2 million, up 43% and 15% respectively from the same quarter last year. CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) revenues for the quarter reached $9.9 million from $5.1 million in the same quarter last year. In November, the Company received a letter from the Puerto Rico Telephone Company Puerto Rico Telephone (PRT), is the largest Puerto Rican telecommunications services company. It is headquartered in Guaynabo, Puerto Rico and has operated for almost a century offering voice, data, long distance, broadband, directory publishing and wireless services for the disputing amounts owed for ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. traffic that terminated on Centennial's network. Centennial believes that this money is due under a valid tariff tariff, tax on imported and, more rarely, exported goods. It is also called a customs duty. Tariffs may be distinguished from other taxes in that their predominant purpose is not financial but economic—not to increase a nation's revenue but to protect domestic . Pending a resolution of this matter, the Company has increased its reserve for bad debt. Centennial is one of the largest independent wireless telecommunications service providers A Telecommunications Service Provider or TSP is a type of Communications Service Provider that has traditionally provided telephone and similar services. This category includes ILECs, CLECs, and mobile wireless companies. in the United States, Puerto Rico and the Dominican Republic with approximately 17.4 million Net Pops. Centennial's domestic Rural Cellular operation has 6.1 million Net Pops and serves over 416,500 customers. Centennial de Puerto Rico, is a fully integrated provider of communications services in Puerto Rico, utilizing a PCS license that covers 3.9 million Pops in Puerto Rico and the U.S. Virgin Islands and a Competitive Local Exchange Carrier license to operate in Puerto Rico. In addition, the Company now owns 70% of a PCS license in the Dominican Republic representing approximately 6.2 million Net Pops, and holds minority shares representing approximately 1.2 million Net Pops in U.S. cellular U.S. Cellular (NYSE: USM) is a super-regional cellular telephone provider, serving 5.8 million customers in 189 markets in 26 U.S. states. The company was created in 1983 as a subsidiary of Telephone and Data Systems, Inc. Since April 2000, John E. operations controlled and managed by other operators. Welsh, Carson, Anderson & Stowe (WCAS WCAS Weinberg College of Arts and Sciences WCAS Warfighter Communication Assessment System (US DoD) ) and an affiliate of The Blackstone Group Blackstone Group L.P. (NYSE: BX) is a prominent private equity and investment management firm founded in 1985 by Peter G. Peterson and Stephen A. Schwarzman. The company is based in New York City, in River House on Park Avenue at Fifty-first Street, with offices in Atlanta, are controlling shareholders of Centennial. WCAS is a private investment firm based 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 and founded in 1979. WCAS currently manages over $8 billion in private equity capital and focuses primarily on the information services See Information Systems. and healthcare industries. The Blackstone Group is a New York based private investment bank whose current corporate investment vehicle, Blackstone Capital Partners III Merchant Banking Fund, LP, has approximately $3.8 billion in committed capital. 'Safe Harbor" Statement Under 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 1995: Information in this release that involves Centennial's expectations, beliefs, hopes, plans, intentions or strategies regarding the future 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 risks and uncertainties. All forward-looking statements included in this release are based upon information available to Centennial as of the date of the release, and we assume no obligation to update any such forward-looking statement. These statements are not guarantees of future performance, and actual results could differ materially from our current expectations.
CENTENNIAL CELLULAR CORP.
STATISTICS
February 29, 2000
($000's, except per subscriber data)
------------------ -----------------
Three Months Ended Nine Months Ended
Feb-00 Feb-99 Feb-00 Feb-99
------------------ -----------------
DOMESTIC
Subscribers 416,500 309,300 416,500 309,300
Net Gain - Subscribers 53,200 23,400 95,900 56,600
Revenue per Average
Customer $64 $68 $68 $69
Roaming Revenue $27,293 $21,717 $83,905 $59,596
Penetration 6.9% 5.2% 6.9% 5.2%
Monthly Churn 1.8% 2.1% 1.9% 1.9%
Monthly MOU's per
Customer 120 100 116 107
Cost to Acquire per
Activation $248 $281 $273 $297
Capital Additions $9,455 $6,389 $33,435 $22,981
PUERTO RICO
Wireless Revenue $41,338 $30,764 $118,184 $76,093
Wireline Revenue $9,903 $5,085 $27,112 $11,518
Wireless Subscribers 169,000 117,400 169,000 117,400
Net Gain - Subscribers 7,200 18,700 35,500 48,600
Revenue per Average
Wireless Customer $84 $95 $86 $91
Penetration 4.3% 3.0% 4.3% 3.0%
Monthly Churn 4.2% 3.3% 3.8% 3.5%
Monthly MOU's per
Wireless Customer 512 461 481 433
Capital Additions $28,245 $21,372 $66,744 $45,277
Fiber Route Miles 391 314 391 314
Access Lines 15,337 6,410 15,337 6,410
REVENUES
Consolidated $127,621 $97,993 $368,423 $262,591
Domestic $76,380 $62,144 $223,127 $174,980
Puerto Rico $51,241 $35,849 $145,296 $87,611
ADJUSTED EBITDA (1)
Consolidated $53,347 $48,778 $171,299 $130,349
Domestic $33,138 $31,254 $110,024 $91,521
Puerto Rico $20,209 $17,524 $61,275 $38,828
LIQUIDITY
Total Debt Less
Cash Equivalents $1,470,353 $1,372,000 $1,470,353 $1,372,000
(1) Adjusted EBITDA for the three and nine months ended February 1999
excludes one time charges associated with the recapitalization.
CENTENNIAL CELLULAR CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Amounts in thousands, except per share data)
Three Months Ended Nine Months Ended
------------------ -----------------
Feb. 29, Feb. 28, Feb. 29, Feb. 28,
2000 1999 2000 1999
-------- ------- ------- -------
REVENUE:
Service revenue
- Domestic $ 72,185 $ 60,876 $ 212,077 $ 171,787
Service revenue
- Puerto Rico 49,451 34,661 141,089 85,422
Equipment sales
- Domestic 4,195 1,268 11,050 3,193
Equipment sales
- Puerto Rico 1,790 1,188 4,207 2,189
-------- -------- --------- ---------
127,621 97,993 368,423 262,591
-------- -------- --------- ---------
COSTS AND EXPENSES:
Cost of equipment
sold - Domestic 9,621 5,455 21,919 13,658
Cost of equipment
sold - Puerto Rico 963 1,305 3,629 2,564
Cost of services
- Domestic 8,928 6,471 23,920 18,961
Cost of services
- Puerto Rico 7,063 5,966 22,487 15,600
Sales and marketing
- Domestic 13,700 8,614 35,659 22,304
Sales and marketing
- Puerto Rico 7,437 5,829 22,476 16,027
General and
administrative
- Domestic 10,993 10,350 31,605 28,537
General and
administrative
- Puerto Rico 15,569 5,225 35,429 14,592
Depreciation and
amortization
- Domestic(1) 9,430 20,886 25,791 62,385
Depreciation and
amortization
- Puerto Rico 12,254 12,273 34,532 35,317
Recapitalization
costs - 58,852 - 58,852
-------- -------- --------- ---------
95,958 141,226 257,447 288,797
-------- -------- --------- ---------
OPERATING INCOME (LOSS) 31,663 (43,233) 110,976 (26,206)
-------- -------- --------- ---------
INCOME FROM EQUITY
INVESTMENTS 3,667 1,862 11,007 9,352
(LOSS) GAIN ON
DISPOSITION OF ASSETS (51) (1,197) (51) 8,414
INTEREST EXPENSE - NET (37,918) (26,613) (110,347) (48,553)
-------- -------- --------- ---------
(LOSS) INCOME BEFORE
INCOME TAX
(EXPENSE) BENEFIT,
MINORITY INTEREST
AND EXTRAORDINARY
ITEM (2,639) (69,181) 11,585 (56,993)
INCOME TAX (EXPENSE)
BENEFIT (630) 15,950 (2,186) 10,114
-------- -------- --------- ---------
(LOSS) INCOME BEFORE
MINORITY INTEREST AND
EXTRAORDINARY ITEM (3,269) (53,231) 9,399 (46,879)
MINORITY INTEREST IN
LOSS OF SUBSIDIARIES 26 151 86 142
-------- -------- --------- ---------
(LOSS) INCOME FROM
BEFORE EXTRAORDINARY
ITEM (3,243) (53,080) 9,485 (46,737)
EXTRAORDINARY LOSS ON
EARLY EXTINGUISHMENT OF
DEBT, NET OF INCOME
TAXES OF ($11,251) - (40,526) - (40,526)
-------- -------- --------- ---------
NET (LOSS) INCOME (3,243) (93,606) 9,485 (87,263)
DIVIDEND REQUIREMENT ON
PREFERRED STOCK - (1,680) - (9,906)
-------- -------- --------- ---------
(LOSS) INCOME
APPLICABLE TO
COMMON SHARES $ (3,243) $(95,286) $ 9,485 $ (97,169)
======== ======== ========= =========
BASIC (LOSS) EARNINGS
PER COMMON SHARE:
(LOSS) INCOME FROM
CONTINUING
OPERATIONS $ (0.03) $ (0.48) $ 0.10 $ (0.41)
======== ======== ========= =========
EXTRAORDINARY LOSS
ON EXTINGUISHMENT
OF DEBT $ - $ (0.35) $ - $ (0.30)
======== ======== ========= =========
NET (LOSS) INCOME
APPLICABLE TO
COMMON SHARES $ (0.03) $ (0.83) $ 0.10 $ (0.71)
======== ======== ========= =========
DILUTED (LOSS) EARNINGS
PER COMMON SHARE:
(LOSS) INCOME FROM
CONTINUING
OPERATIONS $ (0.03) $ (0.48) $ 0.10 $ (0.41)
======== ======== ========= =========
EXTRAORDINARY LOSS
ON EXTINGUISHMENT
OF DEBT $ - $ (0.35) $ - $ (0.30)
======== ======== ========= =========
NET (LOSS) INCOME
APPLICABLE TO
COMMON SHARES $ (0.03) $ (0.83) $ 0.10 $ (0.71)
======== ======== ========= =========
(1) Effective March 1, 1999, Centennial prospectively changed its
amortization period for cellular telephone licenses from ten years
to forty years to better reflect the period over which the
economic benefits of the cellular licenses are expected to be
realized. The Company also prospectively changed its amortization
period for the difference between the cost of its equity
investments and the underlying book value from ten years to forty
years to better reflect the period over which the economic
benefits of the equity investments are expected to be realized.
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