Esprit Telecom Announces Results for the Fourth Quarter and Year Ended 30 September 1998.READING, UK--(BUSINESS WIRE)--Nov. 20, 1998--Esprit Telecom Group plc (Nasdaq: ESPRY) (Easdaq: ESPR ESPR European Society of Paediatric Radiology ESPR Espressivo (music) ESPR Ethnicity and Social Policy Research Unit (University of Bradford) ESPR European Society of Paediatric Research ) one of Europe's leading independent telecommunications companies See telecom company. , today announced its financial results for the fourth quarter and financial year ended 30 September September: see month. 1998. Commenting on the company's exceptionally strong figures, David L. Oertle, chief executive officer at Esprit Telecom, said: "Our performance for the quarter has genuinely exceeded all expectations. This reflects our success in rapidly implementing our strategic business plan and the growing demand for the full range of Esprit Telecom products and services across our entire pan-European footprint The amount of geographic space covered by an object. A computer footprint is the desk or floor surface it occupies. A satellite's footprint is the earth area covered by its downlink. See form factor. 1. ." Revenue for the fourth quarter ended 30 September 1998 was 33.3 million pounds sterling, an increase of 53% over revenue of 21.7 million pounds sterling for the third quarter ended 30 June June: see month. 1998, reflecting exceptional growth across the entire business. Compared to the fourth quarter ended 30 September 1997, revenue increased by approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 162% from 12.7 million pounds sterling. For the financial year ended 30 September 1998, revenue was 82.6 million pounds sterling, an 82% increase over the previous financial year ended 30 September 1997. Retail revenue for the fourth quarter increased by 36% over the third quarter to 20.3 million pounds sterling. Compared to the fourth quarter ended 30 September 1997, retail revenue increased by approximately 222% from 6.3 million pounds sterling. For the year ended 30 September 1998, retail revenue of 51.6 million pounds sterling showed a 173% increase over retail revenue of 18.9 million pounds sterling for the previous financial year. Gross margin showed equally strong gains. For the quarter ended 30 September 1998, gross margin was 23.5%, a significant increase over gross margin of 19.4% for the third quarter and the fifth consecutive quarter of gross margin gain. Compared to the fourth quarter ended 30 September 1997, gross margin increased by approximately eight percentage points from 15.7% to 23.5%. For the financial year ended 30 September 1998, gross margin increased by approximately four percentage points to 20.7% compared to gross margin of 16.5% for the financial year ended 30 September 1997. Esprit Telecom continues to maintain one of the highest gross margins of all competitive operators in its peer group. The strong revenue and margin performance during the fourth quarter resulted in gross profit of 7.8 million pounds sterling, an 86% increase over gross profit of 4.2 million pounds sterling for the third quarter ended 30 June 1998. For the financial year ended 30 September 1998, gross profit was 17.1 million pounds sterling, more than double the gross profit of 7.5 million pounds sterling for the previous financial year. Sir Robin Biggam, who joined the company as non-executive non-executive adj non-executive director → direttore m senza potere esecutivo Chairman in October October: see month. 1998, said: "The strong and sustained growth shown by Esprit Telecom Group during the quarter and the 1998 financial year confirm that the strategic direction in which the Company is moving is the right one, and that the right senior management team is in place to realise the potential created by Esprit Telecom's early lead in the growing European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. market. The Company remains in a strong financial position, with the cash on hand to fund continued expansion through 1999. Germany Germany (jûr`mənē), Ger. Deutschland, officially Federal Republic of Germany, republic (2005 est. pop. 82,431,000), 137,699 sq mi (356,733 sq km). was once again the fastest growing Esprit Telecom country operation. German revenue was 10.1 million pounds sterling for the fourth quarter ended 30 September 1998." David Oertle added: "Retail customers connected and network minutes carried both showed record gains for the quarter and the year. We have also become much better and smarter at managing the capacity, cost, risk, and margin issues that are critical to a successful wholesale business in Europe Europe (y  r`əp), 6th largest continent, c.4,000,000 sq mi (10,360,000 sq km) including adjacent islands (1992 est. pop. 512,000,000). . As a result, wholesale revenues grew to
8.0 million pounds sterling in the fourth quarter and accounted for
about 24% of our total revenue."Our very rapid progress during the quarter in developing our pan-European optical fibre allowed us to make the recent announcement that we have accelerated the completion schedule for our entire 9,000 route kilometre network by six months to mid 1999. As a result, we have launched Esprit Telecom Networks, a new business entity to focus exclusively on exploiting our early advantage in the European 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). Carrier's Carrier market. That network will also give us the vehicle to continue driving up the quality and range of retail services while steadily driving down our per minute costs." Esprit Telecom billed 262 million minutes during the fourth quarter of 1998, more than tripling the 77 million minutes billed during the fourth quarter of 1997 and an increase of 51% over the 174 million minutes billed during the third quarter ended 30 June 1998. Customer numbers grew to 7,657 during the fourth quarter of 1998, a 30% increase over the 5,902 customers reported at the end of the third quarter and more than triple the 2,350 customers reported at the end of financial year 1997. Key milestones for the fourth quarter -- Completed the integration of the business of PLUSNET PlusNet is an Internet Service Provider (ISP) based in Sheffield in the UK and owned as of January 30th 2007 by BT Group. PlusNet also operate other brands in the UK Internet marketplace; Force9, Free-Online and Metronet. GmbH GmbH Gesellschaft mit Beschränkter Haftung (German: limited liability company; business entity) (acquired from Thyssen Telecom in May 1998). Dr. Jurgen Jurgen regaining his lost youth, he has strange “adventures with a host of mythical persons. [Am. Lit.: Jurgen in Magill I, 464] See : Fantasy Jurgen Hernichel, formerly managing director of PLUSNET, became managing director for all German operations -- Esprit Telecom became the first independent telecommunications company in Belgium Belgium (bĕl`jəm), Du. België, Fr. La Belgique, officially Kingdom of Belgium, constitutional kingdom (2005 est. pop. 10,364,000), 11,781 sq mi (30,513 sq km), NW Europe. to receive a national public network operator (PTO PTO abbr. 1. Parent Teacher Organization 2. or p.t.o. please turn over 3. power takeoff PTO or pto please turn over Noun 1. ) license -- Purchased and began initial deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. of an advanced billing and customer care system. The system will provide for a single, consistent billing and customer care platform across Europe -- Became the first European telecommunications company to offer services priced in Euros and launched the first calling card denominated in Euros -- Increased the number of broadband customers on London/Paris fibre network to nine -- Signed strategic agreement with Fibernet to extend broadband fibre network reach across the UK -- Launched national SDH (Synchronous Digital Hierarchy) The European counterpart to SONET. See SONET. SDH - Synchronous Digital Hierarchy microwave microwave, electromagnetic wave having a frequency range from 1,000 megahertz (MHz) to 300,000 MHz, corresponding to a wavelength range from 300 mm (about 12 in.) to 1 mm (about 0.04 in.). Like light waves, microwaves travel essentially in straight lines. network in the Netherlands Netherlands (nĕth`ərləndz), Du. Nederland or Koninkrijk der Nederlanden, officially Kingdom of the Netherlands, constitutional monarchy (2005 est. pop. 16,407,000), 15,963 sq mi (41,344 sq km), NW Europe. Subsequent Events -- Dr. Hans HANS Head and Neck Support/System (brace worn by motor sport drivers; trademark of Hubbard/Downing, Inc.) HANS Health Action Network Society HANS Heavy Aromatic Naphtha Solvent Peter Kohlhammer, formerly Chairman of Thyssen Telecom, joined the executive management team as managing director, sales and marketing, on 1 October 1998. Kohlhammer remains president of Germany's leading telecommunications industry body, VATM VATM Verband der Anbieter Von Telekommunikations und Mehrwertdiensten (German) (The Association of Providers of Telecom and Value Added Value Added The enhancement a company gives its product or service before offering the product to customers. Notes: This can either increase the products price or value. Services) and brings 27 years of senior management and telecommunications experience -- Signed major deal with Nortel Networks (Nortel Networks Limited, Brampton, Ontario, www.nortelnetworks.com) A world leader in telecommunications products, which includes switching, wireless and broadband systems for service providers and carriers, telephones and systems for residential and business users, computer telephony for SDH and DWDM (Dense WDM) The term given to wavelength division multiplexing (WDM) when significantly more channels were being added. Since WDM is increasingly more "dense" all the time, both terms are used synonymously. See WDM. DWDM - wavelength division multiplexing equipment, network development and support, and the rapid completion of the remaining phases of the Company's very high capacity, pan-European telecommunications network A telecommunications network is a of telecommunications links and nodes arranged so that messages may be passed from one part of the network to another over multiple links and through various nodes. -- Accelerated the rollout of the Company's 9,000-km pan-European broadband network by at least six months and announced the creation of Esprit Telecom Networks as an independent operating subsidiary to focus on the European Carrier's Carrier market -- Hired Peter Mitchell Notable people called Peter Mitchell include:
Ltd, as managing director of Esprit Telecom Networks. -- Sir Robin Biggam joined the Company as non-executive chairman and director on 5 October 1998. About Esprit Telecom Esprit Telecom Group plc, a NASDAQ and EASDAQ quoted company trading under the symbols "ESPRY"and "ESPR" respectively, is one of the largest independent European 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. . Established in 1992, the company has sales offices and network points of presence in more than 30 major cities in the United Kingdom, Germany, The Netherlands, Spain Spain, Span. España (āspä`nyä), officially Kingdom of Spain, constitutional monarchy (2005 est. pop. 40,341,000), 194,884 sq mi (504,750 sq km), including the Balearic and Canary islands, SW Europe. , France, Belgium and Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. . Except for the historical information contained herein, there are matters discussed in this news release that 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. . Such statements are only predictions and actual events or results may differ materially. For a discussion of important factors including, but not limited to, the development of the Company's business, actions of regulatory authorities Noun 1. regulatory authority - a governmental agency that regulates businesses in the public interest regulatory agency administrative body, administrative unit - a unit with administrative responsibilities and 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. , and other factors, which could cause actual results to differ materially from the forward-looking statements, refer to the Company's Senior Notes prospectus A document, notice, circular, advertisement, letter, or communication in written form or by radio or television that offers any security for sale, or confirms the sale of any security. dated December December: see month. 12, 1997. -0-
ESPRIT TELECOM GROUP PLC
Unaudited Financial Highlights (UK GAAP) (1)
(In thousands, except per ordinary share, per ADS and per minute
amounts, number of customers and numbers of employees and route
kilometres)
Three Months Ended Twelve Months Ended
September 30 September 30
------------------ -------------------
1998 1997 1998 1997
---- ---- ------ -------
Consolidated Profit and Loss
Account Data: pounds pounds pounds pounds
sterling sterling sterling sterling
Revenue 33,273 12,724 82,588 45,466
Cost of revenue (25,440) (10,716) (65,529) (37,949)
-------- -------- -------- -------
Gross profit 7,833 2,008 17,059 7,517
Other operating expenses:
Selling, general and
administrative (14,529) (5,559) (35,178) (15,505)
Restructuring costs - 65 - (312)
Stock option compensation
costs (2) - (10) (112) (417)
Depreciation and
amortization (4,607) (951) (10,382) (2,836)
European network
depreciation (992) - (1,519) -
-------- -------- -------- -------
Operating loss before
interest (12,295) (4,447) (30,132) (11,553)
Profits on the sale
of investment - - 200 -
Net interest
income/(expense) (3,885) 244 (12,212) 695
-------- -------- -------- -------
Loss on ordinary activities
before taxation (16,180) (4,203) (42,144) (10,858)
Taxation on loss on ordinary
activities (2) (2) (4) (2)
-------- -------- -------- -------
Loss for the period (16,182) (4,205) (42,148) (10,860)
-------- -------- -------- -------
-------- -------- -------- -------
Pro forma loss
per Ordinary Share (0.13) (0.03) (0.34) (0.10)
-------- -------- -------- -------
-------- -------- -------- -------
Pro forma weighted average number
of shares (3) 125,266 121,369 124,095 104,912
Equivalent pro forma loss
per ADS (4) (0.90) (0.24) (2.38) (0.72)
-------- -------- -------- -------
-------- -------- -------- -------
Other Financial Data
EBITDA (5) (6,696) (3,486) (18,031) (8,717)
Summary Operating Data:
Number of billable minutes
(000s) (6) 262,362 77,505 652,847 254,401
Average revenue per billable
minute 0.127 0.164 0.127 0.179
Average gross margin per
billable minute 0.030 0.026 0.026 0.030
Number of customers
(at period-end) 7,657 2,350
Number of employees
(at period-end) 746 306
European Network - Route
Kilometres (7) 1,420 n/a
1. The Company prepares its financial statements in accordance with
accounting principles generally accepted in the United Kingdom (UK
GAAP), which differ in certain significant respects from the
accounting principles generally accepted in the United States. The
financial results set forth above represent the Company's financial
results under UK GAAP. All amounts derive from continuing
operations.
2. Since September 1997, the Company's financial information has been
restated from that previously published in order to give effect to
a change in UK GAAP relating to the granting of employee stock
options at a discount to the market price. The financial value of
such discounts are now recognised as employee compensation and
charged against net income. As required by UK GAAP, this accounting
change has been effected by restating the results of previous
periods.
3. Under UK GAAP, pro forma loss per Ordinary Share is calculated
based upon the weighted average number of shares outstanding during
the period, adjusted to reflect the redesignation of the "A"
ordinary shares as Ordinary Shares and the fifty for one Share
Split that occurred in February 1997.
4. Each ADS represents seven Ordinary Shares.
5. Earnings before interest and similar items, taxes, depreciation and
amortisation ("EBITDA") is presented because it is a measure
commonly used in the telecommunications industry and is presented
solely to enhance the understanding of the Company's operating
results. EBITDA, however, should not be considered as an
alternative to operating income or income for the periods as an
indicator of the operating performance of the Company. Similarly,
EBITDA should not be considered as an alternative to cash flows
from operating activities as a measure of liquidity.
6. Billable minutes are those minutes during which a call is connected
to any Company switch and for which the Company bills a customer.
7. Route Kilometres is the number of kilometres of distance of
physically diverse controlled infrastructure operating at STM1
capacity or above within Esprit Telecom's European Network. The
total excludes Transatlantic cable capacity.
ESPRIT TELECOM GROUP PLC
SUMMARIZED CONSOLIDATED BALANCE SHEET DATA (Unaudited)
AS AT SEPTEMBER 30, 1998 (UK GAAP)
As at As at
September 30, September 30,
1998 1997
---------------- ---------------
(Unaudited) (Audited)
pounds sterling '000 pounds sterling '000
Fixed Assets
Intangible Assets 99,029 3,312
Tangible Assets 55,071 14,284
Investments -- 131
---------------- ---------------
154,100 17,727
Current Assets
Trade debtors 29,444 15,395
Other debtors, prepayments
and accrued income 26,244 1,896
Restricted securities 48,969 --
Short term cash deposits 131,547 22,876
Bank balances and cash 4,233 1,649
---------------- ---------------
240,437 41,816
Creditors: amounts falling due
within one year (62,352) (25,295)
---------------- ---------------
Net current
(liabilities)/assets 178,085 16,521
Total assets less current
liabilities 332,185 34,248
Creditors: amounts falling due
in more than one year (19,721) (2,874)
Senior Notes due
2007 and 2008 (320,017) --
---------------- ---------------
Net Assets (7,553) 31,374
---------------- ---------------
---------------- ---------------
Capital and Reserves
Called up share capital 1,255 1,219
Other capital reserves 54,941 50,108
Reserve for stock option
compensation 1,532 3,295
Profit and loss account (65,281) (23,248)
---------------- ---------------
Total shareholders' funds (7,553) 31,374
---------------- ---------------
---------------- ---------------
1. The Company prepares its financial statements in accordance with
accounting principles generally accepted in the United Kingdom (UK
GAAP), which differ in certain significant respects from the
accounting principles generally accepted in the United States. The
financial results set forth above represent the Company's financial
results under UK GAAP. All amounts derive from continuing
operations.
2. Since September 1997, the Company's financial information has been
restated from that previously published in order to give effect to
a change in UK GAAP relating to the granting of employee stock
options at a discount to the market price. The financial value of
such discounts are now recognised as employee compensation and
charged against net income. As required by UK GAAP, this accounting
change has been effected by restating the results of previous
periods.
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