Crosswave Sees Cost Improvement and Revenue Growth in Line With Expectations In 2Q02.Business & High Tech Editors TOKYO and NEW YORK--(BUSINESS WIRE)--Nov. 11, 2002 Launch of Various 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 Maintain Crosswave's Leadership Position in the 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 Market Crosswave Communications Inc. (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 ) ("Crosswave"), 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 second quarter of its fiscal year ending March 31, 2003 ("fiscal 2002"). 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 November November: see month. 12, 2002 at 9 a.m. ET, 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:
in full Uniform Resource Locator Address of a resource on the Internet. The resource can be any type of file stored on a server, such as a Web page, a text file, a graphics file, or an application program. : http://www.cwc.co.jp/en/ . ---------------------------------------------------------------------- 2Q02 Results Summary ---------------------------------------------------------------------- - 2Q02 revenues grew steadily to JPY 4,317 million (US$ 35.5 million)(a), increasing 13.2% from JPY 3,813 million in 1Q02 and 124.8% from JPY 1,920 million in 2Q01. Increase in revenues from Platform-type Network services, including the Wide-area Ethernet Platform service and Wide-area IP Platform service, was the largest contributor to the increase in total revenues. - The contracted customer base for Platform-type Network services increased to 298 in 2Q02 from 252 in the previous quarter. Revenue for the quarter from the flagship service recorded a 16.0% increase from 1Q02 to JPY 2,292 million (US$ 18.8 million). - 2Q02 adjusted EBITDA(b) continued to improve as losses decreased to JPY 1,847 million (US$ 15.2 million) from a loss of JPY 2,208 million in 1Q02. The Company expects its adjusted EBITDA to turn positive in the next fiscal year. - 2Q02 net loss decreased to JPY 3,821 million (US$ 31.4 million) compared to JPY 4,145 million in 1Q02. The Company maintains its target to realize positive net income in fiscal year 2004. (a) 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 and have been made at the rate of 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. 121.74 = $1, the approximate rate of exchange on September September: see month. 30, 2002. (b) 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 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. ---------------------------------------------------------------------- Overview and Outlook ---------------------------------------------------------------------- Market Overview "The traditional telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. business in Japan has changed dramatically," said Koichi Suzuki, President of Crosswave. "It has been difficult for the incumbent carriers See ILEC. to maintain analog telephony The electronic transmission method used for carrying voice in the original telephone system. Analog telephony is still used in the last mile from the central office (CO) to the home or office. See POTS and analog. services because such services are generally no longer profitable in Japan. The number of users of broadband services See broadband and broadband service provider. in Japan has continued to expand rapidly with one of the highest penetration rates in the world. The expansion of broadband services has led to the rapid growth of data communications traffic, which has made it necessary for corporations to update their network systems in order to remain competitive in their respective market sectors. The trend we have seen in 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 corporate WAN segment is that companies are moving from traditional type point-to-point Refers to a communications line that provides a path from one location to another (point A to point B). Contrast with multipoint. network systems, such as the frame-relay or ATMs previously provided by the incumbent carriers, to broadband platform-type networks such as the Wide-area Ethernet Platform service or IP-VPN services. We believe this development has forced incumbent carriers to rapidly change their telecommunications business structure including business model, technology, and business scale in order to survive in the competitive market. "Crosswave, since its inception, has been exclusively providing broadband data communication services, a business model which is very well suited for the current market environment. With Crosswave's creation of the Wide-area Ethernet Platform service, we successfully expanded the new market. Our foresight (graphics, tool) Foresight - A software product from Nu Thena providing graphical modelling tools for high level system design and simulation. has given us a nearly two-year advantage over our competitors who have since followed our lead by offering similar Ethernet-based corporate WAN services. Crosswave has been successful in maintaining its unique leadership position as a new type of carrier in the telecom sector. Even as the competition in the market intensifies, we believe that Crosswave will continue to distinguish itself from the competition by developing new 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. with high customer confidence in all aspects of its business from service quality to reliability." Business Outlook "Due to the competitive nature of the Japanese corporate WAN market, we are launching many value-added services to differentiate our service offering from those of our competitors," said Akio Onishi, CEO of Crosswave. "So far we believe this is a successful strategy which has been well-received by the market. Various value-added features have increased interest in our services, resulting in many new customers such as Japanese leading pharmaceutical and electronics companies. As a pioneer in offering Ethernet services, we aim to keep exceeding our customers' expectations." "We are pleased to see continuous improvements in cost structure in 2Q02," said Yasuharu Fushimi, CFO of Crosswave. "Following the bottom out of the loss of our adjusted EBITDA in 4Q01, we maintain our target that our adjusted EBITDA and net income will turn positive in FY2003 and FY2004, respectively. To meet these targets, we will continue to expand our customer base, raise our revenues and closely manage costs." ---------------------------------------------------------------------- 2Q02 Operating Highlights ---------------------------------------------------------------------- Discussion with PoweredCom for Possible Integration of Operations In July July: see month. 2002, Crosswave, along with 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, ("IIJ IIJ Internet Initiative Japan IIJ Internet Initiative Japan Inc. (Internet Service Provider) IIJ Indo-Iranian Journal IIJ Is It Jazz (Boston band) ") announced that Crosswave and IIJ have had discussions with PoweredCom, Inc., a 32.06% owned affiliate of Tokyo Electric Power Company, Inc. regarding possible integration of operations. Discussions among the parties are progressing and the parties expect to come to an agreement by the end of December December: see month. 2002. Advancement of "Platform-type Network Services" Following the launch of features such as the External connectivity/Internet feature and the IP-routing port feature in October October: see month. 2001 and in April 2002, respectively, Crosswave announced several additional value-added service features that will enhance its flagship, Wide-area Ethernet Platform service. In August 2002, Crosswave began offering 10Mbps and 100Mbps, the largest bandwidth bandwidth Measurement of the capacity of a communications signal. For digital signals, the bandwidth is the data speed or rate, measured in bits per second (bps). For analog signals, it is the difference between the highest and lowest frequency components, measured in hertz offered in the Ethernet Platform service. In September 2002, Crosswave launched Japan's first SLA (1) (StereoLithography Apparatus) See 3D printing. (2) (Service Level Agreement) A contract between the provider and the user that specifies the level of service expected during its term. "Service Level Agreement" for this service guaranteeing the monthly average service delay time within Crosswave's network to be no more than 40 milliseconds, providing customers with additional assurance. With an aim to attract and bring in more corporate customers, for example companies with multiple locations, Crosswave launched a new Platform-type Network service, Wide-area IP Platform service, in June June: see month. 2002 by utilizing broadband access See broadband and wireless broadband. available in Japan. In August 2002, Crosswave launched the new feature connecting our Wide-area IP Platform service with the Wide-area Ethernet Platform service, to provide more tailored private networks. Furthermore, in October 2002, Crosswave launched a Network Monitoring The term network monitoring describes the use of a system that constantly monitors a computer network for slow or failing systems and that notifies the network administrator in case of outages via email, pager or other alarms. feature, a Managed Router router Portable electric power tool used in carpentry and furniture making that consists of an electric motor, a base, two handle knobs, and bits (cutting tools). A router can cut fancy edges for shelving, grooves for storm windows and weather stripping, circles and ovals feature, a "Tag-Through" option, and a QoS (Quality Of Service) A defined measure of performance in a data communications system. For example, to ensure that real time voice and video are delivered without annoying blips, a traffic contract is negotiated between the customer and network provider that (Quality of Service) feature, to enhance our Wide-area Ethernet Platform service, and has thus firmly differentiated its services from competitors in the market. Expanded and Diversified diversified (di·verˑ·s Customer Base In 2Q02, the total number of customers grew to 313 from 271 in 1Q02. Of the 313 customers, some of which use multiple Crosswave services, 276 use Crosswave's Platform-type Network services such as the Wide-area Ethernet Platform service as of September 30, 2002. The Platform-type Network service had an additional 22 contracted customers for whom services will begin in 3Q02. Strong 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 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 Data, Fujitsu (company) Fujitsu - A Japanese elecronics corporation. Fujitsu owns ICL, Amdahl Corporation, and DMR. Home USA, Japan. , and IIJ continuously contributed to diversifying and expanding the customer base.
Number of Customers
---------------------------------------- ---------- ---------- -------
2Q02 1Q02 2Q01
---------------------------------------- ---------- ---------- -------
Total Number
of Customers (already used) 313 271 136
---------------------------------------- ---------- ---------- -------
Number of Customers to
Platform-type Network Services
Number of customers contracted 298 252 139
Number of customers already used 276 234 109
---------------------------------------- ---------- ---------- -------
Development of Other Network services Crosswave announced in September 2002 that it would add new features to its 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. Backbone service as of October 1, 2002, that connect over a Gigabit Ethernet An Ethernet standard that transmits at 1 Gbps. Used mostly to connect high-end workstations and servers as well as for network backbones, Gigabit Ethernet transmits full duplex from point to point using switches and half duplex in a shared environment (CSMA/CD) using a hub. interface. The new features have been offered nationwide over 1000 Base-LX and 1000 Base-SX interfaces, providing bandwidths of 150Mbps and 600Mbps throughout Japan. Opening of 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. Liaison Office In August 2002, Crosswave announced the opening of a new liaison office located in Toyota City, Aichi Aichi (ī`chē), prefecture (1990 pop. 6,690,440), 1,962 sq mi (5,082 sq km), central Honshu, Japan. Bounded on the S and W by Ise Bay, Aichi consists of a coastal plain (the Nobi Plain) and a mountainous, forested interior. Prefecture in Japan. Toyota City is a well-known well-known adj. 1. Widely known; familiar or famous: a well-known performer. 2. Fully known: well-known facts. industrial base, especially for automobiles where Toyota Motor, one of Crosswave's major shareholders, has had factories for more than 60 years. Crosswave expects that the new liaison office will help expand its business in the region. ---------------------------------------------------------------------- 2Q02 Financial Results ---------------------------------------------------------------------- Revenues: 2Q02 total revenues amounted to JPY 4,317 million, an increase of 13.2% from 1Q02 and of 124.8% from 2Q01.
Revenue Breakdown (Unit: JPY million)
-----------------
--------------------------------------------- ----------- ------------
2Q02 1Q02 2Q01
--------------------------------------------- ----------- ------------
Total Network services 3,906 3,418 1,647
Platform-type Network services 2,292 1,976 736
===================================
--------------------------------------------- ----------- ------------
Data Center and related services 411 395 273
--------------------------------------------- ----------- ------------
Total Revenues 4,317 3,813 1,920
--------------------------------------------- ----------- ------------
Total Network services revenues increased to JPY 3,906 million in 2Q02 from JPY 3,418 million in 1Q02 and from JPY 1,647 million in 2Q01. In 2Q02, the Company continued to realize significant revenues from the Platform-type Network services, including the Wide-area Ethernet Platform service, which amounted to JPY 2,292 million, up 16.0% from 1Q02 and up 211.4% from 2Q01. In 2Q02 Platform-type Network services accounted for 53.1% of the total revenues. Data Center and related service revenues increased to JPY 411 million in 2Q02 from JPY 395 million in 1Q02. The Company expects to see growth in Data Center and related revenues starting in 4Q02 when its two 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 centers located 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. , suburbs of
Tokyo, launch operations.Operating costs operating costs npl → gastos mpl operacionales and expenses: Cost of data communication services increased 2.0% to JPY 5,510 million in 2Q02 from JPY 5,400 million in 1Q02. The sequential One after the other in some consecutive order such as by name or number. increase in the cost of data communication services was primarily due to increases in local access charges, but the local access charges, which vary in relation to revenues, increased at a slower pace because of the effect of the shift to 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. (Network-Network-Interface) connections. Accompanied by the shift to NNI, some local access lines that Crosswave previously leased for back-up In cartography, an image printed on the reverse side of a map sheet already printed on one side. Also the printing of such images. use were terminated ter·mi·nate v. ter·mi·nat·ed, ter·mi·nat·ing, ter·mi·nates v.tr. 1. To bring to an end or halt: and decreased the cost of data communication services, which resulted in the overall increase in this cost item to be minimal. Depreciation and amortization expenses increased 10.0% from 1Q02 to JPY 1,568 million in 2Q02. The sequential increase is mainly due to equipment relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the nationwide network including the facilities for NNI connections. Sales and marketing expenses decreased 2.2% from 1Q02 to JPY 333 million in 2Q02. The decrease in advertising expenses and 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. expenses more than offset the increase in sales personnel expenses and the sales commission expenses, and resulted in the slight decrease sequentially. General and administrative expenses increased 14.4% from 1Q02 to JPY 320 million in 2Q02 primarily due to the increase in general and administrative outsourcing expenses. Net loss: Net loss for 2Q02 improved to JPY 3,821 million from JPY 4,145 million in 1Q02. Following the improvement of operating losses 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. , the improvement on foreign currency exchange, more than offset the increase in interest expenses, which resulted in a sequential improvement of 7.8%. Adjusted EBITDA: Adjusted EBITDA for 2Q02 improved to a loss of JPY 1,847 million compared to a loss of JPY 2,208 million in 1Q02.
(Unit: JPY million)
--------------- ---------- ---------- ----------- --------- ----------
2Q02 1Q02 4Q01 3Q01 2Q01
--------------- ---------- ---------- ----------- --------- ----------
--------------- ---------- ---------- ----------- --------- ----------
Adjusted EBITDA - 1,847 - 2,208 - 2,467 - 2,176 - 2,246
--------------- ---------- ---------- ----------- --------- ----------
Capital expenditures (c): Capital expenditures for the quarter amounted to JPY 7,643 million. Capital expenditures were primarily payments for the assets purchased for nationwide network and data centers in the previous quarter. (c) 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. ---------------------------------------------------------------------- Company Information ---------------------------------------------------------------------- Crosswave offers broadband data communications services through Japan's first nationwide fiber-optic See fiber optics. network specifically designed for the high-speed transmission of data traffic. Crosswave currently operates six data centers nationwide. The Company was established in October 1998 by Internet Initiative Japan Inc., Sony SONY Standard Oil of New York (common, but untrue; it's an urban legend) Corporation and Toyota Motor Corporation with the goal of providing advanced, 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. data communications services to customers in Japan and to take advantage of demand for broadband data communications networks. Crosswave's executive offices are located at Crest Yasuda Yasuda (安田) was formed by Yasuda Zenjiro. Yasuda founded the third national bank of Japan in 1876. It is currently operating as Fuji Bank Ltd. It is Japan's sixth largest bank. Bldg., 3-21, Kanda Kanda can mean:-
Certain 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 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 Sep 30, 2002,
Sep 30, 2001 and Jun 30, 2002
(Expressed in Thousands of Japanese Yen (JPY) and U.S.
Dollars (USD) Except for Per Share and ADS Data) (a)
Year-over-year Comparison
----------------------------------------------------------------------
Sep 30, 2002 Sep 30, 2001
------------------------------------------------
% of % of
Total Total YOY
USD (1) JPY Revenues JPY Revenues Chg %
-------------------------------------------------------
Revenues:
Data
communication
services 35,461 4,316,974 100.0% 1,920,080 100.0% 124.8%
Cost and
expenses:
Cost of data
communication
services 45,261 5,510,027 127.6 3,576,631 186.3 54.1
Depreciation
and
amortization 12,876 1,567,545 36.3 879,273 45.8 78.3
Sales and
marketing 2,737 333,242 7.8 273,385 14.2 21.9
General and
administrative 2,631 320,245 7.4 315,992 16.5 1.3
-------------------------------------------------------
Total cost and
expenses 63,505 7,731,059 179.1 5,045,281 262.8 53.2
-------------------------------------------------------
Operating gain
(loss) (28,044) (3,414,085) (79.1) (3,125,201) (162.8) 9.2
-------------------------------------------------------
Other income
(expenses):
Gain (loss) on
foreign
currency
exchange 118 14,425 0.4 (171,443) (8.9)(108.4)
Other (3,495) (425,489) (9.9) (152,485) (7.9) 179.0
-------------------------------------------------------
Income (loss)
before
minority
interests
and income
taxes (31,421) (3,825,149) (88.6) (3,449,129) (179.6) 10.9
-------------------------------------------------------
Minority
interests in
consolidated
subsidiaries 37 4,439 0.1 1,739 0.1 155.3
Income taxes - - - - - -
-------------------------------------------------------
Net
income(loss) (31,384) (3,820,710) (88.5%) (3,447,390)(179.5%) 10.8%
=======================================================
Basic and
Dilutive Net
Loss Per Share (7,612) (6,868)
Basic and
Dilutive Net
Loss Per ADS
Equivalent (b) (38.06) (34.34)
Weighted
Average Number
of Shares 501,960 501,960
Weighted
Average Number
of ADS
Equivalents
(b) 100,392,000 100,392,000
Sequential Comparison
Jun 30, 2002
---------------------
% of
Total QOQ
JPY Revenues Chg %
-------------------- -------
Revenues:
Data
communication
services 3,812,652 100.0% 13.2%
Cost and
expenses:
Cost of data
communication
services 5,400,162 141.6 2.0
Depreciation
and
amortization 1,425,376 37.4 10.0
Sales and
marketing 340,780 8.9 (2.2)
General and
administrative 280,035 7.4 14.4
-------------------- -------
Total cost and
expenses 7,446,353 195.3 3.8
-------------------- -------
Operating gain
(loss) (3,633,701) (95.3) (6.0)
-------------------- -------
Other income
(expenses):
Gain (loss) on
foreign
currency
exchange (167,590) (4.4) (108.6)
Other (344,958) (9.0) 23.3
-------------------- -------
Income (loss)
before
minority
interests
and income
taxes (4,146,249) (108.7) (7.7)
-------------------- -------
Minority
interests in
consolidated
subsidiaries 1,113 0.0 298.8
Income taxes - - -
-------------------- -------
Net
income(loss) (4,145,136)(108.7%) (7.8%)
==================== =======
Basic and
Dilutive Net
Loss Per Share (8,258)
Basic and
Dilutive Net
Loss Per ADS
Equivalent (b) (41.29)
Weighted
Average Number
of Shares 501,960
Weighted
Average Number
of ADS
Equivalents
(b) 100,392,000
Note (a):The translations of Japanese yen amounts into US dollar
amounts with respect to the three months ended Sep 30, 2002 are
included solely for the convenience of readers outside Japan and have
been made at the rate of JPY 121.74 = $1, the approximate rate of
exchange on Sep 30, 2002.
Note (b):Each ADS is equal to 1/200th of a share of common stock.
CROSSWAVE COMMUNICATIONS INC.
Appendix 2
----------------------------
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
----------------------------
As of Sep 30, 2002, Sep 30, 2001 and Jun 30, 2002
(Expressed in Thousands of Japanese Yen (JPY) and
U.S. Dollars (USD)) (a)
Sep 30, 2002 Sep 30, 2001
------------------------------- --------------------
USD (a) JPY % JPY %
--------- ------------ ------- ------------ -------
ASSETS
----------------
Current assets:
Cash and cash
equivalents 25,671 3,125,212 4.9 % 16,408,664 28.1 %
Accounts
receivable-net 21,333 2,597,139 4.1 1,702,045 2.9
Receivable of
proceeds from
sale and
lease back
transactions 2,130 259,254 0.4 661,036 1.1
Other current
assets 10,088 1,228,060 1.9 1,220,246 2.1
--------- ------------ ------- ------------ -------
Total current
assets 59,222 7,209,665 11.3 19,991,991 34.2
Property and
equipment-net 445,668 54,255,695 84.9 36,550,577 62.5
Deposits and
other assets 19,868 2,418,693 3.8 1,941,123 3.3
--------- ------------ ------- ------------ -------
Total 524,758 63,884,053 100.0 % 58,483,691 100.0 %
========= ============ ======= ============ =======
LIABILITIES AND
----------------
SHAREHOLDERS'
EQUITY
----------------
Current
liabilities:
Short-term
borrowings 4,107 500,000 0.8 - -
Capital lease
obligations-
current portion 42,877 5,219,857 8.2 2,652,443 4.5
Long-term debt-
current portion 3,172 386,159 0.6 294,427 0.5
Accounts payable 38,881 4,733,405 7.4 4,618,580 7.9
Accrued expenses 60,307 7,341,689 11.5 6,108,149 10.5
Other current
liabilities 5,693 693,085 1.1 957,378 1.6
--------- ------------ ------- ------------ -------
Total current
liabilities 155,037 18,874,195 29.6 14,630,977 25.0
Capital lease
obligations-
noncurrent 173,185 21,083,496 33.0 12,354,676 21.1
Long-term debt-
noncurrent 122,224 14,879,570 23.3 7,774,881 13.3
Other noncurrent
liabilities 597 72,707 0.1 29,446 0.1
--------- ------------ ------- ------------ -------
Total
liabilities 451,043 54,909,968 86.0 34,789,980 59.5
--------- ------------ ------- ------------ -------
Minority
interest 611 74,365 0.1 77,721 0.1
Shareholders'
equity:
Common stock 250,489 30,494,526 47.7 30,494,526 52.1
Additional paid-
in capital 152,314 18,542,796 29.0 18,317,795 31.4
Accumulated
deficit (329,734) (40,141,843) (62.8) (25,198,952) (43.1)
Accumulated
other
comprehensive
income 35 4,241 0.0 2,621 0.0
--------- ------------ -------------------- -------
Total
shareholders'
equity 73,104 8,899,720 13.9 23,615,990 40.4
--------- ------------ ------- ------------ -------
Total 524,758 63,884,053 100.0 % 58,483,691 100.0 %
========= ============ ======= ============ =======
Jun 30, 2002
---------------------
JPY %
------------ --------
ASSETS
----------------
Current assets:
Cash and cash
equivalents 6,832,076 10.2 %
Accounts
receivable-net 2,172,991 3.3
Receivable of
proceeds from
sale and
lease back
transactions 1,772,545 2.7
Other current
assets 1,388,133 2.1
------------ --------
Total current
assets 12,165,745 18.3
Property and
equipment-net 51,944,556 78.0
Deposits and
other assets 2,492,780 3.7
------------ --------
Total 66,603,081 100.0 %
============ ========
LIABILITIES AND
----------------
SHAREHOLDERS'
EQUITY
----------------
Current
liabilities:
Short-term
borrowings - -
Capital lease
obligations-
current portion 4,497,912 6.8
Long-term debt-
current portion 354,031 0.5
Accounts payable 8,351,683 12.5
Accrued expenses 7,165,636 10.8
Other current
liabilities 604,007 0.9
------------ --------
Total current
liabilities 20,973,269 31.5
Capital lease
obligations-
noncurrent 19,939,879 29.9
Long-term debt-
noncurrent 12,832,465 19.3
Other noncurrent
liabilities 58,361 0.1
------------ --------
Total
liabilities 53,803,974 80.8
------------ --------
Minority
interest 78,804 0.1
Shareholders'
equity:
Common stock 30,494,526 45.8
Additional paid-
in capital 18,542,796 27.8
Accumulated
deficit (36,321,133) (54.5)
Accumulated
other
comprehensive
income 4,114 0.0
------------ --------
Total
shareholders'
equity 12,720,303 19.1
------------ --------
Total 66,603,081 100.0 %
============ ========
Note (a): The translations of Japanese yen amounts into US dollar
amounts with respect to Sep 30, 2002 are included solely for the
convenience of readers outside Japan and have been made at the rate of
JPY121.74 =$1, the approximate rate of exchange on Sep 30, 2002.
CROSSWAVE COMMUNICATIONS INC.
Appendix 3
---------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
-----------------------------------------------------------
For the Three Months Ended Sep 30, 2002, Sep 30, 2001 and
Jun 30, 2002
(Expressed in Thousands of Japanese Yen (JPY) and
U.S. Dollars (USD)) (a)
Sep 30, 2002 Sep 30, 2001 Jun 30, 2002
-------------------- ----------- -----------
USD (a) JPY JPY JPY
-------- ----------- ----------- -----------
Operating
Activities:
Net income (loss) (31,384) (3,820,710) (3,447,390) (4,145,136)
Depreciation and
amortization 12,876 1,567,545 879,273 1,425,376
Unrealized foreign
currency exchange
(gain) loss (117) (14,224) 170,399 167,372
Minority interest
in net income
(loss) of
consolidated
subsidiaries (37) (4,439) (1,739) (1,113)
Decrease
(increase) in
accounts
receivable (3,484) (424,148) (893,721) 75,068
Decrease
(increase) in
other current
assets 1,887 229,732 (111,040) (678,948)
Decrease
(increase) in
other assets 260 31,637 - (611,653)
Increase
(decrease) in
accounts payable 1,317 160,304 297,824 (491,871)
Increase (decrease)
in accrued
expenses and
other current
liabilities 2,178 265,131 945,574 266,417
Increase
(decrease) in
other noncurrent
liabilities 118 14,346 7,283 7,704
-------- ----------- ----------- -----------
Net cash provided
by (used in)
operating
activities (16,386) (1,994,826) (2,153,537) (3,986,784)
-------- ----------- ----------- -----------
Investing
Activities:
Purchase of
property and
equipment (55,458) (6,751,496) (4,116,790) (5,748,749)
Decrease
(increase) in
other assets, net 210 25,572 15,361 (3,187)
Proceeds from sale
and
lease/installment
back 30,992 3,772,921 4,498,053 3,991,406
-------- ----------- ----------- -----------
Net cash provided
by (used in)
investing
activities (24,256) (2,953,003) 396,624 (1,760,530)
-------- ----------- ----------- -----------
Financing
Activities:
Proceeds from
issuance of stock
acquisition right - - - 225,000
Increase in short-
term borrowings,
net 4,107 500,000 - -
Proceeds from
long-term
borrowings 16,428 2,000,000 - 5,000,000
Principal payments
under capital
leases (9,711) (1,182,216) (620,974) (1,064,516)
Principal payments
under installment
loans (769) (93,670) (69,392) (83,800)
-------- ----------- ----------- -----------
Net cash provided
by (used in)
financing
activities 10,055 1,224,114 (690,366) 4,076,684
-------- ----------- ----------- -----------
Effect of Exchange
Rate Changes on
Cash 138 16,851 (170,632) (172,837)
-------- ----------- ----------- -----------
Net Increase
(Decrease) in
Cash and Cash
equivalents (30,449) (3,706,864) (2,617,911) (1,843,467)
-------- ----------- ----------- -----------
Cash and Cash
equivalents
at Beginning of
Period 56,120 6,832,076 19,026,575 8,675,543
-------- ----------- ----------- -----------
Cash and Cash
equivalents
at End of Period 25,671 3,125,212 16,408,664 6,832,076
======== =========== =========== ===========
Note (a): The translations of Japanese yen amounts into US dollar
amounts with respect to the three months ended Sep 30, 2002 are
included solely for the convenience of readers outside Japan and have
been made at the rate of JPY121.74 =$1, the approximate rate of
exchange on Sep 30, 2002.
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