Crosswave Announces 4th Quarter and Full Fiscal Year 2002 Results; Crosswave Marks Continuous Improvement Throughout FY02.Business Editors/High-Tech Writers TOKYO & NEW YORK--(BUSINESS WIRE)--May 19, 2003 Crosswave Communications Inc. (Crosswave, 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 : CWCI CWCI California Workers' Compensation Institute ), a pioneer in 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). data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. in Japan, today announced its financial results for the fourth quarter and the full fiscal year 2002 ended March 31, 2003. All figures are unaudited and prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with accounting principles generally accepted in 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. for interim financial information. On May 20, 2003 at 9 a.m. (EST EST electroshock therapy. EST abbr. electroshock therapy ), Crosswave's President Koichi Koichi is a male Japanese given name. It can also be a surname. People with the given name Koichi
ever faithful to her mistress, especially in sorrow. [Ital. Opera: Puccini, Madama Butterfly, Westerman, 358] See : Loyalty , 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. Akio Onishi, and CFO See Chief Financial Officer. Yasuharu Fushimi Fushimi can refer to:
adj. 1. Happening, existing, or done at the same time. See Synonyms at contemporary. 2. Mathematics webcast at www.vcall.com and the replay will be available at their site to which Crosswave's website: www.cwc.co.jp/en/ has a link. FY02 & 4Q02 Results Summary FY02 revenue amounted to JPY JPY In currencies, this is the abbreviation for the Japanese Yen. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. 18,450 million (US$ 156.3 million) (*1), achieving a strong increase of 94.5 % from FY01 (JPY 9,488 million). Revenue for 4Q02 amounted to JPY 5,420 million (US$ 45.9 million), increasing 10.6 % from JPY 4,900 million in 3Q02 and 66.5 % compared to JPY 3,256 million in 4Q01. The increase is mainly due to the growth in sales for Platform-type Network services. The number of customers contracted for Platform-type Network services increased to 383 in 4Q02 from 348 in the previous quarter. Revenue for the quarter from the flagship This article is about the lead ship, store, or product of a group. For other uses, see Flagship (disambiguation). A flagship is the ship used by the commanding officer of a group of naval ships. service recorded an 11.3 % increase from 3Q02 to JPY 2,923 million (US$ 24.7 million). 4Q02 net loss decreased to JPY 3,191 million (US$ 27.0 million) compared to JPY 3,494 million in 3Q02. 4Q02 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 (*2) continued to improve for the fourth consecutive quarter as losses decreased to JPY 868 million (US$ 7.4 million) from a loss of JPY 1,439 million in 3Q02. The Company expects its adjusted EBITDA to turn positive in this fiscal year ending March 31, 2004. The equity capital financing for the capital improvement in a private placement to third parties will be completed by the end of May. (*1) The translations of Japanese yen “Yen” redirects here. For the other use, see Yen (disambiguation). “JPY” redirects here. For the Australian singer with the same moniker, see John Paul Young. amounts into US dollar amounts are included solely for the convenience of readers outside Japan and have been made at the rate of JPY 118.07 = $1, the approximate ap·prox·i·mate v. To bring together, as cut edges of tissue. adj. 1. Relating to the contact surfaces, either proximal or distal, of two adjacent teeth; proximate. 2. Close together. rate of exchange on March 31, 2003. (*2) Adjusted EBITDA represents operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. (loss) before depreciation and amortization. See also Reconciliation of Non-GAAP Financial Measures later in this press release. Overview and Outlook Business outlook "The Japanese Japanese (jăp'ənēz`), language of uncertain origin that is spoken by more than 125 million people, most of whom live in Japan. There are also many speakers of Japanese in the Ryukyu Islands, Korea, Taiwan, parts of the United States, and broadband market continues to see rapid growth," said Koichi Suzuki, President of Crosswave. "However, most of the growth has been driven by the residential sector while penetration The successful unauthorized breach of a security perimeter. See penetration test. in the corporate segment has been less rapid. In fact, the data communication traffic per Japanese company is much lower than that of US companies. This implies (logic) implies - (=> or a thin right arrow) A binary Boolean function and logical connective. A => B is true unless A is true and B is false. The truth table is A B | A => B ----+------- F F | T F T | T T F | F T T | T It is surprising at first that A => strong potential for significant growth in the Japanese corporate market. In FY2002, the market for Crosswave's Wide-area Ethernet Ethernet Telecommunications networking protocol introduced by Xerox Corp. in 1979. It was developed as an inexpensive way of sending information quickly between office machines connected together in a single room or building, but it rapidly became a standard computer service rapidly expanded as the service became more widely recognized in the market and awareness of the benefits of the service grew. This contributed to Crosswave's customer base expansion. We will continue to stimulate stimulate /stim·u·late/ (stim´u-lat) to excite functional activity. stim·u·late v. To arouse a body or a responsive structure to increased functional activity. the demand for network 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. by corporate customers and will meet the growing demand through our services and infrastructure, including our data centers. In FY2003, we will strengthen Crosswave's financial structure by maintaining high sales growth and realizing positive adjusted EBITDA." Overview of 4Q02 and FY2002 results "We attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. satisfactory performance in FY2002. Profitability continued to improve throughout the year," said Akio Onishi, CEO of Crosswave. "Crosswave achieved sales figures sales figures npl → cifras fpl de ventas in FY2002 that almost doubled those of FY2001. We believe that corporate demand for network reconstruction Reconstruction, 1865–77, in U.S. history, the period of readjustment following the Civil War. At the end of the Civil War, the defeated South was a ruined land. remains strong despite the fact that, due to the general economic conditions, decision making for investments tends to take longer than before and the timing of investment has been slightly delayed." "In 4Q02, Crosswave, aimed to differentiate differentiate /dif·fer·en·ti·ate/ (dif?er-en´she-at) 1. to distinguish, on the basis of differences. 2. to develop specialized form, character, or function differing from that surrounding it or from the original. its services from its competitors COMPETITORS, French law. Persons who compete or aspire to the same office, rank or employment. As an English word in common use, it has a much wider application. Ferriere, Dict. de Dr. h.t. by expanding its service line-up line-up Noun 1. people or things assembled for a particular purpose: Christmas TV line-up 2. for the Wide-area IP Platform Service and access line availability," continued Mr. Onishi. "We expanded the reach of our service through the launch of our "Private IP Service" which targets mid-size companies through our partners' sales channels. In addition, we put two new large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. data center facilities into operation, further positioning Crosswave as the premier total network provider for corporate customers." Forecast - financial performance for FY2003 "We are targeting FY2003 revenue to grow more than 50% from FY2002 revenue," said Yasuharu Fushimi, CFO of Crosswave. "We intend to improve profitability to turn adjusted EBITDA positive in FY2003, and to reach the break even point for net profit in FY2004." 4Q02 Operating Highlights Opening of Data Centers in Yokohama Yokohama (yō'kōhä`mä), city (1990 pop. 3,220,331), capital of Kanagawa prefecture, SE Honshu, Japan, on the western shore of Tokyo Bay. and Kawaguchi Kawaguchi (käwä`g  chē), city (1990 pop. 438,680), Saitama prefecture, central Honshu, Japan, on the Ajikawa and Kizagawa rivers. On February February: see month. 1, 2003, Crosswave celebrated the grand opening of its data center facilities in the cities of Yokohama and Kawaguchi, Japan, on the outskirts of Tokyo. The full-service full-ser·vice adj. Associated with or offering complete service: full-service gasoline pumps; full-service banks. data centers, constructed on Crosswave's broadband network, are designed to accomodate not only the systems but also provide the necessary office space to fully support the relocation RELOCATION, Scotch law, contracts. To let again to renew a lease, is called a relocation. 2. When a tenant holds over after the expiration of his lease, with the consent of his landlord, this will amount to a relocation. of customers' systems operations. Since February, the Company has received numerous business inquiries and several customers plan to relocate re·lo·cate v. re·lo·cat·ed, re·lo·cat·ing, re·lo·cates v.tr. To move to or establish in a new place: relocated the business. v.intr. their systems into the data centers in the near future. Launch of the new service, "Private IP Service" In March 2003, Crosswave announced the creation of its "Private IP Service" which was launched on April 1, 2003. The new service, utilizing IPSec technology, enables mid-sized customers with multiple sites nationwide, to construct secure and closed networks connecting to Crosswave's Ethernet-based backbone backbone: see spinal column. The part of a network that handles the major traffic. It employs the highest-speed transmission paths in the network and may also run the longest distances. using popular broadband access See broadband and wireless broadband. lines such as ADSL See DSL. ADSL - Asymmetric Digital Subscriber Line . The service is provided jointly with Crosswave's sales partners. This allows us to reach a greater number of customers nationwide including mid-size and smaller companies. Crosswave has succeeded in creating a service line-up which enables companies of various sizes to enjoy the benefits of a secure, reliable high-speed high-speed adj. 1. Operated or designed for operation at high speed: a high-speed food processor. 2. Taking place at high speed: a high-speed chase. 3. network. Further enhancement of "Wide-area IP Platform Service" Crosswave expanded the service line-up of its "Wide-area IP Platform Service" by adding its "Inter-prefectural ports service" as an additional access line option for its Premium type service beginning April 1, 2003. In conjunction conjunction, in astronomy conjunction, in astronomy, alignment of two celestial bodies as seen from the earth. Conjunction of the moon and the planets is often determined by reference to the sun. with the newly introduced service by NTT NTT Nippon Telegraph and Telephone Corporation NTT New Technology Telescope NTT National Technology Transfer, Inc NTT Name That Tune (TV game show) NTT National Tree Trust NTT Number Theoretic Transform East and West, Crosswave simultaneously facilitated the option with "Inter-prefectural ports" which covers several prefectures for the construction of a Wide-area Intra Network. Through the combination of the "Inter-prefectural ports" service and its existing "regional ports" service, customers will be able to construct more versatile For the use of the term "versatile" to describe the sexual role, see . Versatile is a Canadian brand of agricultural equipment that has produced augers, swathers, combine harvesters and most notably tractors. and efficient networks". Expansion of access line availability Crosswave has continuously expanded access Expanded access refers to the inclusion of patients in a clinical trial for a new therapeutic treatment or chemical entity, where those patients would not satisfy the enrolment criteria for the scientific study in progress. line availability. In February, the Company completed a network 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. with the Osaka Osaka (ō`säkä), city (1990 pop. 2,623,801), capital of Osaka prefecture, S Honshu, Japan, on Osaka Bay, at the mouth of the Yodo River. Media Port (OMP OMP orotidine 5' monophosphate. OMP decarboxylase enzyme catalyzing the synthesis of uridine monophosphate, the first pyrimidine nucleotide essential for RNA structure. ), a telecommunications company See telecom company. based in Osaka and the surrounding sur·round tr.v. sur·round·ed, sur·round·ing, sur·rounds 1. To extend on all sides of simultaneously; encircle. 2. To enclose or confine on all sides so as to bar escape or outside communication. n. area, to access its Wide-area Ethernet Platform Service. In April, Crosswave added two additional options for the Wide-area Ethernet Platform Service to access the Company's Ethernet backbone. The first is the introduction of "Ether-Access", which applies to both the "Wide-area Ethernet Platform Service" and the "High-Speed Backbone Service". The other is the interconnection with "Ethernet 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 " provided by KVH KVH Keith Van Horn (basketball player) KvH Katrina vanden Heuvel (editor; The Nation) Telecom Co., Ltd. Launch of INS INS abbr. 1. Immigration and Naturalization Service 2. International News Service Noun 1. INS Backup Additional resources or duplicate copies of data on different storage media for emergency purposes. See backup types, LAN free backup and back up. (operating system) backup for "Wide-area IP Platform Service, Standard type" Crosswave launched an INS backup for the "Wide-area IP Platform Service, Standard type" in May. With this service, customers can maintain a continuous connection for their network system with the Standard type service. Crosswave continuously strives to introduce new service provisions, which enable customers to make full use of the "Wide-area IP Platform Service" and to construct a highly reliable corporate network. Solid Expansion of Customer Base The total number of our customers grew to 412 in 4Q02, increasing 7.3 % from 384 in 3Q02. The majority of these customers use the Wide-area Ethernet Platform Service and most of them concurrently con·cur·rent adj. 1. Happening at the same time as something else. See Synonyms at contemporary. 2. Operating or acting in conjunction with another. 3. Meeting or tending to meet at the same point; convergent. use the 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. . Crosswave has been continuously expanding its service line-ups and providing services to meet the diverse needs of its customers. In addition, close relationships with sales partners, including Hitachi Hitachi (hētä`chē), city (1990 pop. 202,141), Ibaraki prefecture, E central Honshu, Japan, on the Kashima Sea. The city is a leading producer of Japan's electrical equipment. , NEC (NEC Corporation, Tokyo, www.nec.com, www.necus.com) An electronics conglomerate known in the U.S. for its monitors. In Japan, it had the lion's share of the PC market until the late 1990s (see PC 98). NEC was founded in Tokyo in 1899 as Nippon Electric Company, Ltd. , NTT Data, Fujitsu (company) Fujitsu - A Japanese elecronics corporation. Fujitsu owns ICL, Amdahl Corporation, and DMR. Home USA, Japan. , and IIJ IIJ Internet Initiative Japan IIJ Internet Initiative Japan Inc. (Internet Service Provider) IIJ Indo-Iranian Journal IIJ Is It Jazz (Boston band) , will help our customer base to grow further.
Number of Customers
4Q02 4Q01 3Q02
----------------------------------------------------------------------
Total Number of contracted Customers 412 224 384
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Number of Customers for Platform-type Network Services:
Number of customers contracted for service 383 208 348
Number of customers using service 361 188 314
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ADR Ratio ADR ratio The number of foreign shares represented by one American Depositary Receipt. Change Crosswave changed its ADR ratio exchange from one ordinary share per two hundred ADRs to one ordinary share per twenty ADRs on February 18, 2003. The Company took this measure to meet its continued listing requirements Listing requirements Requirements, including minimum shares outstanding, market value, and income, that are laid down by an exchange for any stock to be listed for trading. on the NASDAQ National Stock Market and to make the stock more attractive to institutional shareholders. Capital Injection Crosswave expects to complete additional equity capital financing by the end of May 2003. The new shares will be issued as 683,400 shares of common stock at a price of JPY 6,292 per share in a proposed private placement to third parties. The subscription and payment date for the new shares is expected to be May 29, 2003. The capital improvement will secure Crosswave's financial position for further growth. 4Q02 Financial Results Revenues: 4Q02 total revenues amounted to JPY 5,420 million, a steady increase of 10.6 % from 3Q02 and of 66.5 % compared to 4Q01.
Revenue Breakdown (JPY million)
4Q02 4Q01 3Q02
----------------------------------------------------------------------
Total Network services 4,810 2,863 4,428
Platform-type Network services 2,923 1,601 2,627
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Data Center and related services 610 393 472
----------------------------------------------------------------------
Total Revenues 5,420 3,256 4,900
----------------------------------------------------------------------
Total Network services revenues increased to JPY 4,810 million in 4Q02 from JPY 4,428 million in 3Q02 and compared to JPY 2,863 million in 4Q01. The increase is due to the solid increase in sales of Platform-type Network services, growing 11.3% growth from JPY 2,627 million in 3Q02 to JPY 2,923 million in 4Q02. We expect further growth of the Wide-area IP Platform service as we continuously enhance our service line-up and expand access line availability. Data Center and related service revenues increased to JPY 610 million in 4Q02 from JPY 472 million in 3Q02. The increase is due to the sale of equipment mainly related to the two data centers opened in February 2003, in Yokohama and Kawaguchi. The Company is anticipating revenue growth from those sites in FY03 when customers fully move their business systems to the data centers. Operating costs operating costs npl → gastos mpl operacionales and expenses: The cost of data communication services decreased by 2.8 % to JPY 5,491 million in 4Q02 from JPY 5,650 million in 3Q02. Although data center related expenses increased along with the grand opening of two data centers, the total cost of data communication services decreased due to seasonal adjustments and refunds which were mainly 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. via NTT East and West local access charges. Depreciation and amortization expenses slightly increased by 4.5 % from 3Q02 to JPY 1,675 million in 4Q02. The increase is mainly due to data center related expenses that were incurred in connection with the launch of new data centers. Sales and marketing expenses increased 3.9 % from 3Q02 to JPY 423 million in 4Q02. The increase primarily reflects increased commission fees for sales partners in line with revenue growth. General and administrative expenses increased 32.7 % from 3Q02 to JPY 374 million in 4Q02. This increase primarily reflects temporary expenses related to the move to new Headquarters. Other income/expenses: The increase in other expenses primarily reflected an increase in interest expenses. Net loss: Net loss for 4Q02 narrowed to JPY 3,191 million from JPY 3,494 million in 3Q02, an 8.7 % improvement as compared to 3Q02. The improvement was offset partially by an increase in interest expense. Adjusted EBITDA: Adjusted EBITDA for 4Q02 improved to a loss of JPY 868 million compared to a loss of JPY 1,439 million in 3Q02. The improvement was accelerated by the continuous revenue growth and by decrease in operating costs and expenses.
(Unit: JPY million)
4Q02 3Q02 2Q02 1Q02 4Q01
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Adjusted EBITDA -868 -1,439 -1,847 -2,208 -2,467
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Capital expenditures (*3): Capital expenditures for the quarter amounted to JPY 10,633 million in 4Q02. Capital expenditures were primarily for the investment related to the new data centers in Yokohama and Kawaguchi. (*3) Crosswave defines capital expenditures as expenditures for property and equipment and initial obligations under capital leases and installment loans Noun 1. installment loan - a loan repaid with interest in equal periodic payments installment credit consumer credit - a line of credit extended for personal or household use loan - the temporary provision of money (usually at interest) adjusted for sale and lease/installment back transactions. See also Reconciliation of Non-GAAP Financial Measures later in this press release. Full Fiscal Year 2002 Financial Results FY02 revenue increased to JPY 18,450 million from JPY 9,488 million in FY01, almost doubling the revenue figure from the previous year. The cost of data communication services increased to JPY 22,051 million, up 36.5 % from FY01. The increase reflected payments for local access lines and other revenue driven related items in line with the increase in revenues. However the cost/revenue ratio subsequently decreased to 119.5 % in FY02 from 170.2 % in FY01. Depreciation and amortization increased 63.2 % from FY01 to JPY 6,272 million. This increase is due to capital investments in nationwide information boxes, NNI (1) (Network-to-Network Interface) In ATM networking, the interface between two ATM devices (typically ATM switches). In frame relay networking, the interface between two separate frame relay networks. Contrast with UNI. and data centers. Sales and marketing expenses increased to JPY 1,505 million, up 37.5 % from FY01. The increase reflects higher personnel and outsourcing expenses, commission fees for sales partners and advertisement ADVERTISEMENT. A 'notice' published either in handbills or in a newspaper. 2. The law in many instances requires parties to advertise in order to give notice of acts which are to be done; in these cases, the advertisement is in general equivalent to notice. expenses. General and administrative expenses decreased 0.7% from FY01 to JPY 1,255 million. Net loss increased 9.4 % to JPY 14,651 million in FY02 from JPY 13,397 million in FY01. Despite the improvement in operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. , net loss increased primarily due to foreign currency exchange loss and an increase in interest expense. Adjusted EBITDA improved to a loss of JPY 6,362 million in FY02 compared to a loss of JPY 9,022 million in FY01. Capital expenditures amounted to JPY 26,338 million in FY02. This amount includes capital investments in nationwide information boxes, NNI, and data centers. Reconciliation of Non-GAAP Financial Measures: The following table summarizes the reconciliation of adjusted EBITDA to operating loss per the 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: statements of operations prepared and presented in accordance with the U.S. generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in Appendix appendix, small, worm-shaped blind tube, about 3 in. (7.6 cm) long and 1-4 in. to 1 in. (.64–2.54 cm) thick, projecting from the cecum (part of the large intestine) on the right side of the lower abdominal cavity. 1 and 2:
(Unit: JPY million)
4Q02 3Q02 FY02 FY01
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Adjusted EBITDA -868 -1,439 -6,362 -9,022
Depreciation and amortization -1,675 -1,604 -6,272 -3,843
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Operating loss -2,543 -3,043 -12,634 -12,865
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The following table summarizes the reconciliation of capital expenditures to purchase of property and equipment per the condensed con·dense v. con·densed, con·dens·ing, con·dens·es v.tr. 1. To reduce the volume or compass of. 2. To make more concise; abridge or shorten. 3. Physics a. consolidated statements of cash flows prepared and presented in accordance with the U.S. generally accepted accounting principles in Appendix 4 and 5:
(Unit: JPY million)
4Q02 3Q02 FY02 FY01
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Capital expenditures 10,633 2,307 26,338 17,707
Initial obligation under capital
leases and installment loans
adjusted for sale and
lease/installment back
transaction 7,161 5 8,064 74
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Purchase of property and equipment 3,472 2,302 18,274 17,633
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Company Information Crosswave Communications Inc. (Crosswave, NASDAQ:CWCI) is a data communications carrier offering customers reliable and versatile broadband networks  This article or section needs copy editing for grammar, style, cohesion, tone and/or spelling.You can assist by [ editing it] now. and network services, enabling them to streamline streamline, path of a fluid flowing steadily and without appreciable turbulence. A body is said to be streamlined if its shape offers the least possible resistance to a current of air, water, or other fluid. and innovate in·no·vate v. in·no·vat·ed, in·no·vat·ing, in·no·vates v.tr. To begin or introduce (something new) for or as if for the first time. v.intr. To begin or introduce something new. their business infrastructure. Founded in 1998 by 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 Initiative Japan (NASDAQ: IIJI IIJI Internet Initiative Japan, Inc. ), Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) Corporation (NYSE NYSE See: New York Stock Exchange : SNE SNe Supernovae (astronomy) SNE Sony Corporation (stock symbol) SNE Syndicat National de l'edition (French Publisher's Association) SNE Society for Nutrition Education ) and Toyota Toyota (toi-ō`tə, Jap. tōyō`tä), city (1990 pop. 332,336), Aichi prefecture, central Honshu, Japan. It is a major industrial center dominated by the Toyota Motor Company, which produces passenger vehicles and auto parts there. Motor Corporation (NYSE: TM), the Company has made groundbreaking changes in the Japanese telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market by offering a completely data-centric network. Currently, 90% of the traffic on Crosswave's nationwide network infrastructure is Ethernet-based, provided mainly through its flagship, Wide-area Ethernet Platform Service. Launched in 1999, the Wide-area Ethernet Platform service introduced a brand new type of network service to the market. The Company's fully integrated data centers and other services have redefined the role of carrier services by accommodating entire corporate system requirements To be used efficiently, all computer software needs certain hardware components or other software resources to be present on a computer system. These pre-requisites are known as (computer) system requirements and are often used as a guideline as opposed to an absolute rule. . With the quality of its networks and its wide-ranging wide-rang·ing adj. Covering a wide area; including much: a pianist's wide-ranging repertoire; a wide-ranging interview. value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: features, the company has been a pioneer in the development of the data communications market in Japan. The Company offers its services to a diverse base of over 400 customers including many blue-chip companies Blue-chip company Used in the context of general equities. Large and creditworthy company. Company renowned for the quality and wide acceptance of its products or services, and for its ability to make money and pay dividends. Gilt-edged security. in Japan. Crosswave's executive offices are located at Jinbocho Mitsui Mitsui: see zaibatsu. Bldg., 1-105 Kanda Kanda can mean:-
Statements made in this press release that state Crosswave's or its management's intentions, beliefs, expectations, or predictions for 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 are based on Crosswave's and its management's current expectations, assumptions, estimates and projections about its business and the industry in which it operates. These forward-looking statements are subject to various risks, uncertainties and other factors that could cause Crosswave's actual results to differ materially from those contained in any forward-looking statements. These risks, uncertainties and other factors include: that we have incurred significant losses since our establishment in 1998 and expect to incur To become subject to and liable for; to have liabilities imposed by act or operation of law. Expenses are incurred, for example, when the legal obligation to pay them arises. An individual incurs a liability when a money judgment is rendered against him or her by a court. losses in the future: that we may need additional cash to further develop our network and fund our operations and if we are unable to obtain it, we will not be able to complete our network development plans as scheduled or we will be forced to modify or abandon abandon v. to intentionally and permanently give up, surrender, leave, desert, or relinquish all interest or ownership in property, a home or other premises, a right of way, and even a spouse, family, or children. some or all of our plans; that prices for data communication services we offer will continue to decline which may reduce our revenues or limit our ability to grow our revenues; and other risks referred to from time to time in Crosswave's filings with the Securities and Exchange Commission.
CROSSWAVE COMMUNICATIONS INC. Appendix 1
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Three Months Ended Mar 31, 2003, Mar 31, 2002 and Dec 31, 2002
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)
Except for Per Share and ADS Data) (1)
Year-over-year Comparison
-----------------------------
Mar 31, 2003
--------------------
% of
Total
USD (1) JPY Revenues
-------- ----------- --------
Revenues:
Data communication services 45,907 5,420,212 100.0%
Cost and expenses:
Cost of data communication services 46,508 5,491,194 101.3
Depreciation and amortization 14,190 1,675,464 30.9
Sales and marketing 3,586 423,386 7.8
General and administrative 3,164 373,523 6.9
-------- ----------- --------
Total cost and expenses 67,448 7,963,567 146.9
-------- ----------- --------
Operating gain (loss) (21,541) (2,543,355) (46.9)
-------- ----------- --------
Other income (expenses):
Gain (loss) on foreign currency exchange (4) (482) 0.0
Other (5,461) (644,780) (11.9)
-------- ----------- --------
Income (loss) before minority interests
and income taxes (27,006) (3,188,617) (58.8)
-------- ----------- --------
Minority interests in consolidated
subsidiaries (19) (2,255) (0.1)
Income taxes - - -
-------- ----------- --------
Net income(loss) (27,025) (3,190,872) (58.9%)
======== =========== ========
Basic and Dilutive Net Loss Per Share (6,357)
Basic and Dilutive Net Loss Per ADS
Equivalent (2) (317.84)
Weighted Average Number of Shares
outstanding 501,960
Weighted Average Number of ADS
Equivalents outstanding(2) 10,039,200
Year-over-year Comparison
----------------------------
Mar 31, 2002
--------------------
% of
Total YOY
JPY Revenues Chg %
----------- --------- ------
Revenues:
Data communication services 3,256,270 100.0% 66.5%
Cost and expenses:
Cost of data communication services 5,050,590 155.1 8.7
Depreciation and amortization 1,218,787 37.4 37.5
Sales and marketing 359,166 11.0 17.9
General and administrative 313,315 9.7 19.2
----------- --------- ------
Total cost and expenses 6,941,858 213.2 14.7
----------- --------- ------
Operating gain (loss) (3,685,588) (113.2) (31.0)
----------- --------- ------
Other income (expenses):
Gain (loss) on foreign currency exchange 21,642 0.7 (102.2)
Other (343,097) (10.5) 87.9
----------- --------- ------
Income (loss) before minority interests
and income taxes (4,007,043) (123.0) (20.4)
----------- --------- ------
Minority interests in consolidated
subsidiaries (3,032) (0.1) (25.6)
Income taxes - - -
----------- --------- ------
Net income(loss) (4,010,075) (123.1%) (20.4%)
=========== ========= ======
Basic and Dilutive Net Loss Per Share (7,989)
Basic and Dilutive Net Loss Per ADS
Equivalent (2) (399.44)
Weighted Average Number of Shares
outstanding 501,960
Weighted Average Number of ADS
Equivalents outstanding(2) 10,039,200
Sequential Comparison
----------------------------
Dec 31, 2002
--------------------
% of
Total QOQ
JPY Revenues Chg %
----------- --------- ------
Revenues:
Data communication services 4,900,014 100.0% 10.6%
Cost and expenses:
Cost of data communication services 5,649,918 115.3 (2.8)
Depreciation and amortization 1,603,634 32.7 4.5
Sales and marketing 407,396 8.4 3.9
General and administrative 281,575 5.7 32.7
----------- --------- ------
Total cost and expenses 7,942,523 162.1 0.3
----------- --------- ------
Operating gain (loss) (3,042,509) (62.1) (16.4)
----------- --------- ------
Other income (expenses):
Gain (loss) on foreign currency exchange (4,916) (0.1) (90.2)
Other (457,102) (9.3) 41.1
----------- --------- ------
Income (loss) before minority interests
and income taxes (3,504,527) (71.5) (9.0)
----------- --------- ------
Minority interests in consolidated
subsidiaries 10,369 0.2 (121.7)
Income taxes - - -
----------- --------- ------
Net income(loss) (3,494,158) (71.3%) (8.7%)
=========== ========= ======
Basic and Dilutive Net Loss Per Share (6,961)
Basic and Dilutive Net Loss Per ADS
Equivalent (2) (348.05)
Weighted Average Number of Shares
outstanding 501,960
Weighted Average Number of ADS Equivalents
outstanding(2) 10,039,200
Note (1):The translations of Japanese yen amounts into US dollar
amounts with respect to the three months ended Mar 31, 2003 are
included solely for the convenience of readers outside Japan and
have been made at the rate of JPY 118.07 = $1, the approximate
rate of exchange on Mar 31, 2003.
Note (2):Each ADS is equal to 1/20th of a share of common stock. The
ADR ratio was changed to 1/20th on February 18, 2003.
CROSSWAVE COMMUNICATIONS INC. Appendix 2
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the Year Ended Mar 31, 2003 and Mar 31, 2002
(Expressed in Thousands of Japanese Yen (JPY) and U.S. Dollars (USD)
Except for Per Share and ADS Data) (1)
Year-over-year Comparison
-------------------------------
Mar 31, 2003
----------------------
% of
Total
USD (1) JPY Revenues
--------- ------------ --------
Revenues:
Data communication services 156,262 18,449,852 100.0%
Cost and expenses:
Cost of data communication services 186,765 22,051,301 119.5
Depreciation and amortization 53,121 6,272,019 34.0
Sales and marketing 12,745 1,504,804 8.2
General and administrative 10,632 1,255,378 6.8
--------- ------------ --------
Total cost and expenses 263,263 31,083,502 168.5
--------- ------------ --------
Operating gain (loss) (107,001) (12,633,650) (68.5)
--------- ------------ --------
Other income (expenses):
Gain (loss) on foreign currency
exchange (1,343) (158,563) (0.9)
Other (15,858) (1,872,329) (10.1)
--------- ------------ --------
Income (loss) before income taxes (124,202) (14,664,542) (79.5)
--------- ------------ --------
Minority interests in consolidated
subsidiaries 116 13,666 0.1
Income taxes - - -
--------- ------------ --------
Net income (loss) (124,086) (14,650,876) (79.4%)
========= ============ ========
Basic Net Loss Per Share (29,187)
Basic Net Loss Per ADS Equivalent (2) (1,459.37)
Weighted Average Number of Shares 501,960
Weighted Average Number of ADS
Equivalents (2) 10,039,200
Year-over-year Comparison
-----------------------------
Mar 31, 2002
---------------------
% of YOY
Total Chg
JPY Revenues %
------------ -------- -------
Revenues:
Data communication services 9,487,603 100.0% 94.5%
Cost and expenses:
Cost of data communication services 16,150,915 170.2 36.5
Depreciation and amortization 3,842,815 40.5 63.2
Sales and marketing 1,094,193 11.6 37.5
General and administrative 1,264,492 13.3 (0.7)
------------ -------- -------
Total cost and expenses 22,352,415 235.6 39.1
------------ -------- -------
Operating gain (loss) (12,864,812) (135.6) (1.8)
------------ -------- -------
Other income (expenses):
Gain (loss) on foreign currency exchange 270,473 2.9 (158.6)
Other (806,810) (8.5) 132.1
------------ -------- -------
Income (loss) before income taxes (13,401,149) (141.2) 9.4
------------ -------- -------
Minority interests in consolidated
subsidiaries 4,623 0.0 195.6
Income taxes - - -
------------ -------- -------
Net income (loss) (13,396,526) (141.2%) 9.4%
============ ======== =======
Basic Net Loss Per Share (26,688)
Basic Net Loss Per ADS Equivalent (2) (1,334.42)
Weighted Average Number of Shares 501,960
Weighted Average Number of ADS
Equivalents (2) 10,039,200
Note (1):The translations of Japanese yen amounts into US dollar
amounts with respect to the year ended Mar 31, 2003 are included
solely for the convenience of readers outside Japan and have been
made at the rate of JPY 118.07 = $1, the approximate rate of
exchange on Mar 31, 2003.
Note (2):Each ADS is equal to 1/20th of a share of common stock. The
ADR ratio was changed to 1/20th on February 18, 2003.
CROSSWAVE COMMUNICATIONS INC. Appendix 3
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
As of Mar 31, 2003, Mar 31, 2002 and Dec 31, 2002
(Expressed in Thousands of Japanese Yen (JPY)
and U.S. Dollars (USD)) (1)
Mar 31,2003 Mar 31, 2002
------------------------------ --------------------
USD (1) JPY % JPY %
--------- ------------ ------- ------------ -------
ASSETS
Current assets:
Cash and cash
equivalents 8,275 977,083 1.3 % 8,675,543 13.8 %
Accounts
receivable-net 23,136 2,731,691 3.8 1,903,894 3.0
Receivable of
proceeds from
sale and lease
back transactions 1,599 188,769 0.3 941,373 1.5
Other current
assets 13,771 1,625,856 2.2 796,163 1.3
--------- ------------ ------- ------------ -------
Total current
assets 46,781 5,523,399 7.6 12,316,973 19.6
Property and
equipment-net 542,985 64,110,221 88.7 48,599,299 77.3
Deposits and other
assets 22,490 2,655,398 3.7 1,923,237 3.1
--------- ------------ ------- ------------ -------
Total 612,256 72,289,018 100.0 % 62,839,509 100.0 %
========= ============ ======= ============ =======
LIABILITIES AND
SHAREHOLDERS'
EQUITY
Current
liabilities:
Short-term
borrowings - - - - -
Capital lease
obligations-
current portion 49,481 5,842,215 8.1 3,814,719 6.1
Long-term debt-
current portion 23,091 2,726,359 3.8 340,672 0.5
Accounts payable 44,123 5,209,635 7.2 9,537,552 15.2
Accrued expenses 67,730 7,996,852 11.1 6,870,406 10.9
Other current
liabilities 5,694 672,288 0.9 632,821 1.0
--------- ------------ ------- ------------ -------
Total current
liabilities 190,119 22,447,349 31.1 21,196,170 33.7
Capital lease
obligations-
noncurrent 180,395 21,299,266 29.4 17,003,002 27.1
Long-term debt-
noncurrent 221,566 26,160,284 36.2 7,869,864 12.5
Other noncurrent
liabilities 850 100,334 0.1 50,657 0.1
--------- ------------ ------- ------------ -------
Total liabilities 592,930 70,007,233 96.8 46,119,693 73.4
--------- ------------ ------- ------------ -------
Minority interest 561 66,251 0.1 79,917 0.1
Shareholders'
equity:
Common stock 258,275 30,494,526 42.2 30,494,526 48.5
Additional paid-in
capital 157,049 18,542,796 25.7 18,317,795 29.2
Accumulated
deficit (396,602) (46,826,873) (64.8) (32,175,997) (51.2)
Accumulated other
comprehensive
income 43 5,085 0.0 3,575 0.0
--------- ------------ ------- ------------ -------
Total
shareholders'
equity 18,765 2,215,534 3.1 16,639,899 26.5
--------- ------------ ------- ------------ -------
Total 612,256 72,289,018 100.0 % 62,839,509 100.0 %
========= ============ ======= ============ =======
Dec 31,2002
--------------------
JPY %
------------ -------
ASSETS
Current assets:
Cash and cash equivalents 4,696,445 7.2 %
Accounts receivable-net 2,344,398 3.6
Receivable of proceeds from
sale and lease back transactions - -
Other current assets 1,110,204 1.7
------------ -------
Total current assets 8,151,047 12.5
Property and equipment-net 55,000,292 84.1
Deposits and other assets 2,229,059 3.4
------------ -------
Total 65,380,398 100.0 %
============ =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Short-term borrowings 1,000,000 1.5
Capital lease obligations-current portion 5,310,343 8.1
Long-term debt-current portion 1,028,718 1.6
Accounts payable 6,032,868 9.3
Accrued expenses 7,723,402 11.8
Other current liabilities 681,084 1.0
------------ -------
Total current liabilities 21,776,415 33.3
Capital lease obligations-noncurrent 19,987,440 30.6
Long-term debt- noncurrent 18,059,356 27.6
Other noncurrent liabilities 87,054 0.1
------------ -------
Total liabilities 59,910,265 91.6
------------ -------
Minority interest 63,996 0.1
Shareholders' equity:
Common stock 30,494,526 46.6
Additional paid-in capital 18,542,796 28.4
Accumulated deficit (43,636,001) (66.7)
Accumulated other comprehensive income 4,816 0.0
------------ -------
Total shareholders' equity 5,406,137 8.3
------------ -------
Total 65,380,398 100.0 %
============ =======
Note (1): The translations of Japanese yen amounts into US dollar
amounts with respect to Mar 31, 2003 are included solely for the
convenience of readers outside Japan and have been made at the
rate of JPY118.07 =$1, the approximate rate of exchange on Mar
31, 2003.
CROSSWAVE COMMUNICATIONS INC. Appendix 4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months Ended Mar 31, 2003, Mar 31, 2002 and Dec 31, 2002
(Expressed in Thousands of Japanese Yen (JPY)
and U.S. Dollars (USD)) (1)
Mar 31, 2003 Mar 31, 2002 Dec 31, 2002
--------------------- ------------ ------------
USD (1) JPY JPY JPY
--------- ----------- ------------ ------------
Operating Activities:
Net income (loss) (27,025) (3,190,872) (4,010,075) (3,494,158)
Depreciation and
amortization 14,190 1,675,464 1,218,787 1,603,634
Unrealized foreign
currency exchange
(gain) loss (2) (268) (31,689) (2,461)
Minority interest in
net income (loss) of
consolidated
subsidiaries 19 2,255 3,032 (10,369)
Decrease (increase) in
accounts receivable (3,280) (387,293) (294,202) 252,741
Decrease (increase) in
other current assets (1,847) (218,084) 162,654 130,201
Decrease (increase) in
other assets 791 93,442 - (4,050)
Increase (decrease) in
accounts payable (11,982) (1,414,686) 665,648 1,127,274
Increase (decrease) in
accrued expenses and
other current
liabilities 2,242 264,654 206,180 369,712
Increase (decrease) in
other noncurrent
liabilities 112 13,280 13,929 14,347
--------- ----------- ------------ ------------
Net cash provided by
(used in) operating
activities (26,782) (3,162,108) (2,065,736) (13,129)
--------- ----------- ------------ ------------
Investing Activities:
Purchase of property
and equipment (29,405) (3,471,864) (7,049,714) (2,301,849)
Decrease (increase) in
other assets, net (3,203) (378,196) 342,561 145,524
Proceeds from sale and
lease/installment
back 72,474 8,557,075 5,526,539 1,653,473
--------- ----------- ------------ ------------
Net cash provided by
(used in) investing
activities 39,866 4,707,015 (1,180,614) (502,852)
--------- ----------- ------------ ------------
Financing Activities:
Increase in short-term
borrowings, net (8,470) (1,000,000) - 500,000
Proceeds from long-
term borrowings - - - 3,000,000
Principal payments
under capital leases (11,091) (1,309,572) (874,391) (1,317,519)
Principal payments
under installment
loans (25,031) (2,955,409) (81,080) (99,881)
--------- ----------- ------------ ------------
Net cash provided by
(used in)
financing activities (44,592) (5,264,981) (955,471) 2,082,600
--------- ----------- ------------ ------------
Effect of Exchange
Rate Changes on Cash 6 712 26,674 4,614
--------- ----------- ------------ ------------
Net Increase
(Decrease) in Cash
and Cash equivalents (31,502) (3,719,362) (4,175,147) 1,571,233
--------- ----------- ------------ ------------
Cash and Cash
equivalents at
Beginning of Period 39,777 4,696,445 12,850,690 3,125,212
--------- ----------- ------------ ------------
Cash and Cash
equivalents at End of
Period 8,275 977,083 8,675,543 4,696,445
========= =========== ============ ============
Note (1): The translations of Japanese yen amounts into US dollar
amounts with respect to the three months ended Mar 31, 2003 are
included solely for the convenience of readers outside Japan and
have been made at the rate of JPY118.07 =$1, the approximate rate
of exchange on Mar 31, 2003.
CROSSWAVE COMMUNICATIONS INC. Appendix 5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Year Ended Mar 31, 2003 and Mar 31, 2002
(Expressed in Thousands of Japanese Yen (JPY)
and U.S. Dollars (USD)) (1)
Mar 31, 2003 Mar 31, 2002
---------------------- ------------
USD (1) JPY JPY
--------- ------------ ------------
Operating Activities:
Net income (loss) (124,086) (14,650,876) (13,396,526)
Depreciation and amortization 53,121 6,272,019 3,842,815
Unrealized foreign currency
exchange (gain) loss 1,274 150,419 (282,688)
Minority interest in net income
(loss) of consolidated
subsidiaries (116) (13,666) (4,623)
Decrease (increase) in accounts
receivable (4,096) (483,632) (987,940)
Decrease (increase) in other
current assets (4,549) (537,099) 33,602
Decrease (increase) in other
assets (4,156) (490,624) -
Increase (decrease) in accounts
payable (5,243) (618,979) 2,149,641
Increase (decrease) in accrued
expenses and other current
liabilities 9,875 1,165,914 2,338,841
Increase (decrease) in other
noncurrent liabilities 421 49,677 35,777
--------- ------------ ------------
Net cash provided by (used in)
operating activities (77,555) (9,156,847) (6,271,101)
--------- ------------ ------------
Investing Activities:
Purchase of property and equipment (154,772) (18,273,958) (17,632,536)
Decrease (increase) in other
assets, net (1,781) (210,287) (1,093,373)
Proceeds from sale and
lease/installment back 152,239 17,974,875 12,362,936
--------- ------------ ------------
Net cash provided by (used in)
investing activities (4,314) (509,370) (6,362,973)
--------- ------------ ------------
Financing Activities:
Proceeds from issuance of stock
acquisition right 1,905 225,000 -
Proceeds from long-term borrowings 84,696 10,000,000 -
Principal payments under capital
leases (41,279) (4,873,823) (2,719,529)
Principal payments under
installment loans (27,380) (3,232,760) (287,737)
--------- ------------ ------------
Net cash provided by (used in)
financing activities 17,942 2,118,417 (3,007,266)
--------- ------------ ------------
Effect of Exchange Rate Changes on
Cash (1,276) (150,660) 277,032
--------- ------------ ------------
Net Increase (Decrease) in Cash
and Cash equivalents (65,203) (7,698,460) (15,364,308)
--------- ------------ ------------
Cash and Cash equivalents at
Beginning of Period 73,478 8,675,543 24,039,851
--------- ------------ ------------
Cash and Cash equivalents at End
of Period 8,275 977,083 8,675,543
========= ============ ============
Note (1): The translations of Japanese yen amounts into US dollar
amounts with respect to the year ended Mar 31, 2003 are included
solely for the convenience of readers outside Japan and have been
made at the rate of JPY118.07 =$1, the approximate rate of
exchange on Mar 31, 2003.
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