Excel Communications Reports Third Quarter 1997 Results; Revenue Totals $325 Million; Minutes of Use Total 1.7 Billion; Operating Income Totals $51.2 Million.DALLAS--(BUSINESS WIRE)--Oct. 16, 1997--Excel Communications, Inc. (NYSE NYSE See: New York Stock Exchange :ECI ECI Employment Cost Index ECI Election Commission(er) of India ECI Enterprise Content Integration ECI Early Childhood Intervention ECI Environmental Change Institute ) today announced results of operations for the third quarter of 1997. The following comparison of operating highlights is presented on a pro-forma basis to reflect the first quarter 1997 change in accounting practice to fully expense customer acquisition costs in the period incurred and does not include Telco Communications Group's results of operations for the third quarter 1997. Third Quarter Operating Comparison: -- Communications revenue totaled $294.4 million, compared to $299.6 million for the third quarter of 1996 -- 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. totaled $51.2 million, compared to pro-forma operating income of $58.4 million for the third quarter of 1996 -- Net income totaled $33 million, compared to pro-forma net income of $39.8 million for the third quarter of 1996 -- Earnings per share were $.31, compared to pro-forma earnings Pro-Forma Earnings Projected earnings based on a set of assumptions and often used to present a business plan (in Latin pro forma means "for the sake of form"). It also refers to earnings which exclude non-recurring items. Pro-forma earnings are not derived by standard GAAP methods. per share of $.36 for the third quarter of 1996 -- Long distance minutes of usage totaled 1,694,600,000, compared to 1,679,957,000 for the third quarter of 1996 Total revenue for the third quarter declined 11% to $325.3 million from $366.7 million for the third quarter of 1996 due primarily to a decrease in marketing revenue. Communications revenue for the third quarter decreased slightly to $294.4 million over the prior year period due to a slight decrease in revenue per minute as a result of the introduction of the DimeDealsm in June June: see month. . Included in communications revenue is paging revenue of $6.3 million for the third quarter of 1997. Marketing revenue for the third quarter declined 54% to $30.9 million from $67.0 million for the prior year period as a result of fewer applications from new Independent Representatives (IRs). Despite, the year over year decrease, applications from new IRs has continued to grow sequentially se·quen·tial adj. 1. Forming or characterized by a sequence, as of units or musical notes. 2. Sequent. se·quen quarter over quarter during 1997 and has increased 69% from the first quarter of 1997. "We are very pleased that the renewed re·new v. re·newed, re·new·ing, re·news v.tr. 1. To make new or as if new again; restore: renewed the antique chair. 2. strength in the enrollment of both new IRs and new customers has continued throughout the third quarter. Excel's Dime Dealsm calling plan has proven to be one of the most competitive calling plans in the industry today and was a major contributor to the 5% sequential One after the other in some consecutive order such as by name or number. growth in our customer base and the 6% sequential growth in minutes of usage from the second quarter," said President and Chief Operating Officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. John J. McLaine. "The momentum in customer acquisition, the strength of our management team, our industry-leading margins, and the completion of the merger with Telco demonstrate that Excel A full-featured spreadsheet for Windows and the Macintosh from Microsoft. It can link many spreadsheets for consolidation and provides a wide variety of business graphics and charts for creating presentation materials. is on the right track," added McLaine. Industry Leading Gross Margin Even though revenue per minute declined slightly during the quarter from $0.182 to $.172, communications gross margin for the third quarter expanded to 48.0% from 45.8% for the third quarter of 1996 and 46.3% for the second quarter of 1997 as a result of a July July: see month. 1, 1997, reduction in LEC (1) (LAN Emulation Client) A software driver that provides LAN emulation (LANE) in an ATM network. It resides in an ATM end station or in a computer system that provides the LAN to ATM conversion, often known as a LAN access device. See LANE. access charges as mandated by the FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. . "Excel is one of the few carriers that has the cost structure in place today that allows us to pass access charge savings to the customer well in advance of the actual reductions," added McLaine. Stock Repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. Program Under its stock repurchase program announced on May 1, 1997, the Company has repurchased approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 2.8 million shares as of September September: see month. 30, 1997. EXCEL Merger With Telco Completed On October October: see month. 14, 1997, Excel completed its $1.2 billion merger with Telco Communications Group, Inc. The merger creates the fifth largest long distance company in the U.S. with proforma Proforma A financial projection based on assumptions. 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: revenues of approximately $2 billion and 11 billion long distance minutes of usage on an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. basis, more than 6.0 million customers and 100,000 network miles of DS-3 fiber optic optic /op·tic/ (op´tik) ocular (1). op·tic or op·ti·cal adj. 1. Of or relating to the eye or vision. 2. capacity. Telco financial results will be included in Excel's reported financial statements commencing with the effective date of the merger. The results of operations presented in this press release do not include the results of operations of Telco Communications Group for the period ended September 30, 1997. Excel believes that Telco's results of operations for the period ended September 30, 1997, will be in line with analysts' expectations. "The two management teams have been working closely over the past several months to lay the groundwork for integration of the two companies and realization (specification) realization - A UML semantic relationship between a classifier that specifies a contract and another classifier that guarantees to carry it out. [Handout by Mr. David Gillibrand]. of the significant cost savings generated by network and operating synergies. Most significantly, the plan for migration of Excel traffic onto its own network, which will generate considerable cost savings in 1998 and beyond, is well underway. With the network migration, the combined company is evolving into a nationwide, facilities-based carrier serving both residential and commercial customers through a variety of distribution channels. This is an excellent platform for continued growth," added McLaine. 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. Certain statements made in the course of this press release may be forward-looking statements that involve a number of risks and uncertainties. Among many factors that could cause actual results to differ materially are the following: the Company's ability to manage rapid growth; the Company's ability to attract, maintain, and motivate a large base of IRs; litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. including that with existing IRs; regulation and management of IRs; competition in the long distance telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. and paging industries; the Company's ongoing relationship with its long distance carriers; dependence upon key personnel; subscriber subscriber, n the person, usually the employee, who represents the family unit in relation to the prepayment plan. Other family members are dependents. Also called certificate holders or enrollees. attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: ; federal and state governmental regulation of the long distance telecommunications industry; the Company's ability to maintain, operate, and upgrade its information systems; the Company's success in the offering of paging and other additional communications products and services; and possible claims relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the ownership of proprietary rights. Company Description Dallas-based Excel Communications Excel Communications was founded in 1988 by Dallas entrepreneur Kenny Troutt as a long distance reseller in the US telecom sector at the birth of telecom deregulation. , Inc. is the fifth largest long distance company 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. . The Company offers its subscribers a variety of communications products and services which include residential service, commercial service, paging service, dial-around service and calling cards. Excel presubscribed residential services are marketed exclusively through a nationwide network of Independent Representatives. Excel markets its residential dial around products and services through Dial and Savesm, Long Distance Wholesale Clubsm and Telco Choicesm programs and markets its commercial products and services through 450 sales representatives located in 31 regional offices in 16 states. Excel has more than 3,000 employees who support the corporate, network management, billing, teleservices (1) Refers to a variety of enhanced services via telephone, including fax-on-demand, voice mail and computer telephone integration. See CTI and IVR. (2) Services by human operators for taking orders and providing customer assistance and other tasks via telephone. and marketing functions of the Company. -0-
EXCEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands)
September 30, December 31,
1997 1996
------------- ------------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $168,621 $169,846
Accounts receivable, net 184,490 206,309
Inventories 9,084 16,263
Deferred income tax asset 1,938 1,897
Other current assets 6,069 2,517
-------- --------
370,202 396,832
-------- --------
Property and equipment, net 112,580 76,912
-------- --------
Deferred subscriber acquisition costs -- 104,765
-------- --------
Other assets 5,894 655
-------- --------
$488,676 $579,164
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $108,719 $132,770
Commissions payable 19,301 22,484
Accrued liabilities 35,197 32,112
Income taxes payable 4,126 --
Current maturities of long-term debt
and capital lease obligations 62 239
-------- --------
167,405 187,605
-------- --------
Long-term debt and capital lease
obligations 118 100
-------- --------
Deferred management services fees 1,111 25,279
-------- --------
Deferred income taxes payable 4,624 43,899
-------- --------
Commitments and contingencies -- --
-------- --------
Stockholders' equity:
Preferred stock, $0.001 par value,
10,000,000 shares authorized,
none outstanding -- --
Common stock, $0.001 par value,
500,000,000 shares authorized,
109,717,365 and 108,800,000 issued;
106,964,693 and 108,800,000 outstanding 110 109
Additional paid-in capital 148,562 139,880
Treasury stock, 2,752,672 shares
at cost (55,716) --
Retained earnings 222,462 182,292
------- -------
Total stockholders' equity 315,418 322,281
------- -------
$488,676 $579,164
======== ========
EXCEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
1997 1996 1997 1996
------------------ -----------------
Revenues:
Communication services $294,430 $299,623 $891,029 $776,823
Marketing services 30,892 67,036 96,234 215,991
-------- -------- -------- --------
Total revenues 325,322 366,659 987,263 992,814
-------- -------- -------- --------
Operating expenses:
Communication 153,061 162,299 475,546 427,234
Marketing services 68,522 101,894 190,723 272,653
General and administrative 52,533 42,312 158,764 122,736
-------- -------- -------- --------
Total operating expenses 274,116 306,505 825,033 822,623
-------- -------- -------- --------
Operating income 51,206 60,154 162,230 170,191
-------- -------- -------- --------
Interest income, net 2,099 2,068 6,314 3,754
Other income (expense) 43 2,106 (18) 6,516
-------- -------- -------- --------
Income before income taxes 53,348 64,328 168,526 180,461
-------- -------- -------- --------
Provision for income taxes 20,059 23,401 63,142 67,128
-------- -------- -------- --------
Income before cumulative effect
of change in accounting
principle 33,289 40,927 105,384 113,333
Cumulative effect of change in
accounting principle, net of
income taxes -- -- 65,214 --
-------- -------- -------- --------
Net income $ 33,289 $ 40,927 $ 40,170 $113,333
======== ======== ======== ========
Net income per common and
equivalent share:
Income before cumulative
effect of change in
accounting principle $ 0.31 $ 0.37 $ 0.96 $ 1.07
Cumulative effect of change in
accounting principle,
net of income taxes -- -- (0.59) --
-------- -------- -------- --------
Net income per share $ 0.31 $ 0.37 $ 0.37 $ 1.07
======== ======== ======== ========
Weighted average shares and share
equivalents outstanding 109,098 110,925 109,884 105,931
======== ======== ======== ========
EXCEL COMMUNICATIONS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
Nine Months Ended
September 30,
-------------------
1997 1996
-------------------
Operating activities:
Net income $ 40,170 $113,333
Adjustments to reconcile net income to
net cash provided by operating activities:
Cumulative effect of change in
accounting principle 65,214 --
Depreciation and amortization 12,641 3,697
Employee stock plan compensation -- 4,662
Loss on disposal of assets 152 91
Deferred income taxes 235 22,667
Changes in assets and liabilities:
Accounts receivable, net 21,819 (91,691)
Deferred subscriber acquisition costs -- (42,359)
Accounts payable (24,051) 48,573
Commissions payable (3,183) 15,232
Deferred management services fees (24,168) 13,843
Accrued liabilities 3,085 17,280
Income taxes payable 4,126 (4,974)
Inventories and other (1,612) (3,108)
-------- --------
Net cash provided by operating activities 94,428 97,246
-------- --------
Investing activities:
Proceeds from sale of assets 20 28
Purchase of property and equipment (48,481) (61,642)
-------- --------
Net cash used in investing activities (48,461) (61,614)
-------- --------
Financing activities:
Payments of debt and capital lease obligations (159) (407)
Payments of dividends -- (20,000)
Net proceeds from issuance of common stock 8,683 133,870
Purchase of treasury stock (55,716) --
-------- --------
Net cash provided by (used in) financing
activities (47,192) 113,463
-------- --------
Net increase (decrease) in cash (1,225) 149,095
Cash, beginning of period 169,846 30,387
-------- --------
Cash, end of period $168,621 $179,482
======== ========
Supplemental disclosure:
Interest paid during the period $ 44 $ 248
Income taxes paid during the period $ 42,838 $ 53,035
CONTACT: Excel Communications, Inc., Dallas Dallas, city (1990 pop. 1,006,877), seat of Dallas co., N Tex., on the Trinity River near the junction of its three forks; inc. 1871. The second largest Texas city, after Houston, and the eighth largest U.S. Kenneth Kracmer, Public Relations public relations, activities and policies used to create public interest in a person, idea, product, institution, or business establishment. By its nature, public relations is devoted to serving particular interests by presenting them to the public in the most , 214/863-8400 or Mary Bell
Mary Flora Bell (born on May 26 1957 in Newcastle upon Tyne, England) was convicted in December 1968 of the murders of two boys, Martin Brown (four years old) and Brian Howe , Investor Relations Investor relations The process by which the corporation communicates with its investors. , 214/863-8730 |
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