Fast Growing NEXTLINK Communications Reports Strong 2Q Revenue Growth.BELLEVUE, Wash.--(BUSINESS WIRE)--July 30, 1998-- NEXTLINK announces larger expansion plan to build networks in markets with 27 million addressable Reachable. When something is addressable, it can be identified and manipulated independently of its surroundings. For example, screen pixels and RAM memory are addressable. Each of the screen's picture elements can be individually turned on and off, and each of the memory's bytes can be business lines NEXTLINK Communications Inc. (Nasdaq:NXLK), a local facilities-based telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. provider, today announced financial results for the quarter and six months ended June 30, 1998. Second quarter revenue climbed 21 percent from the first quarter in 1998 to a record $32.0 million, a 176 percent increase from the $11.6 million reported in the second quarter of 1997. Year-to-date revenue totaled $58.6 million, a 170 percent increase from the comparable six-month period in 1997. NEXTLINK also reported access line installations of 30,053 during the second quarter of 1998, results that exceeded first-quarter access line additions by 32 percent and raised the total number of access lines installed to 102,887 as of June 30, 1998. The increasing growth in access linesdrove CLEC (Competitive Local Exchange Carrier) An organization offering local telephone service that is not one of the traditional telephone companies. The Telecommunications Act of 1996 allowed competition to the incumbent telcos (ILECs), enabling new companies (CLECs) revenues (revenues generated from NEXTLINK's competitive local exchange services including revenue from its dedicated services) to $16.7 million for the second quarter of 1998, up 52 percent from CLEC revenues reported in the first quarter. CLEC revenues for the six months ended June 30, 1998, totaled $27.7 million, or 47 percent of total revenue. The 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 loss (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. before depreciation, amortization and deferred compensation expense) for the second quarter of 1998 totaled $32.1 million, compared to a $16.3 million EBITDA loss in the comparable period of 1997. The year-to-date EBITDA loss as of June 30, 1998, totaled $62.1 million, compared to $29.4 million for the comparable six-month period in 1997. "We posted a very strong second quarter and are moving closer toward our goal of being a national leader in building and operating local telephone networks," said Wayne Perry, NEXTLINK chief executive officer. "Earlier this quarter, we announced our involvement with INTERNEXT, which under its agreement with Level 3 will give us fibers and conduit conduit /con·du·it/ (kon´doo-it) channel. ileal conduit the surgical anastomosis of the ureters to one end of a detached segment of ileum, the other end being used to form a stoma on the on Level 3's national inter-city fiber network. This venture gives us a huge opportunity to leverage these local networks even further by connecting them to a nationwide long-haul network as it is completed over the next few years." "The second quarter included a number of significant operational milestones for NEXTLINK including the successful launch of a major new market and several important operational support systems successes," said George Tronsrue, NEXTLINK 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. . "During the quarter we issued our first bill on our new billing system and we continue to make strides in our provisioning and workflow process system." In a related announcement today, NEXTLINK announced further expansion of its business plan from that announced earlier this year. NEXTLINK now intends to expand its network development to cover the majority of the nation's top 30 markets and to increase the number of addressable business lines in markets served by the company to 27 million by the end of 2000. This exceeds NEXTLINK's original expansion plan, announced in February, targeting network development in markets that have 21 million addressable business lines by the end of 1999. NEXTLINK launched switched services in Chicago and San Francisco San Francisco (săn frănsĭs`kō), city (1990 pop. 723,959), coextensive with San Francisco co., W Calif., on the tip of a peninsula between the Pacific Ocean and San Francisco Bay, which are connected by the strait known as the Golden in the first half of 1998, and Atlanta in July 1998. New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of and New Jersey are scheduled to be launched during the third quarter of this year. Today NEXTLINK announced it will launch service in Dallas, Denver and Miami in the fourth quarter of 1998; San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. and Washington, D.C., in the first quarter of 1999; and Seattle in the second quarter of 1999. NEXTLINK Communications Inc. was founded by Craig McCaw Craig McCaw (b. August 11, 1949 in Centralia, Washington) is the second of four sons of Marion and John Elroy McCaw. The Seattle-area businessman and entrepreneur achieved success as a pioneer in the cellular phone industry. in 1994 to provide local, long distance and enhanced communications services to commercial customers and is one of the fastest growing competitive telecommunications providers in the nation. Headquartered in Bellevue, Wash., NEXTLINK currently operates 18 facilities-based networks providing switched local and long distance services in 32 markets in nine states. The statements contained in this release which are not historical facts 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. " (as such term is defined in the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995). Management wishes to caution the reader that these forward-looking statements, regarding matters that are not historical facts, are only predictions and are subject to risks and uncertainties. No assurance can be given that the future results will be achieved. Such risks include those identified in the company's S-1 on file with the Securities and Exchange Commission, and also include, but are not limited to, the company's ability to successfully market its services to current and new customers, to design and construct fiber optic networks, install cable and facilities, including switching electronics, connect the networks to customers and interconnect (1) To attach one device to another. (2) A physical port (plug, socket) or wireless port (transmitter, receiver) used to attach one device to another. with existing local exchange carriers, all in a timely manner, at reasonable costs and on satisfactory terms and conditions. -0-
NEXTLINK COMMUNICATIONS, INC.
Financial Highlights
(Dollars in thousands, except per-share data)
Three Months Ended Six Months Ended
Jun 30, Jun 30,
1998 1997 1998 1997
Revenue 32,030 11,601 58,575 21,668
Costs and expenses:
Operating 28,070 12,037 52,620 21,941
Selling, general
and administrative 36,077 15,829 68,034 29,103
Deferred
compensation 760 223 1,384 1,115
Depreciation and
amortization 12,180 4,525 22,363 8,931
Loss from operations (45,057) (21,013) (85,826) (39,422)
Interest income 22,822 5,567 34,557 10,692
Interest expense (38,338) (10,902) (61,616) (22,041)
Net loss (60,573) (26,348) (112,885) (50,771)
Preferred stock dividends and
accretion of preferred stock
redemption obligation, including
issue costs (15,328) (10,550) (26,879) (17,353)
Net loss applicable
to common shares (75,901) (36,898) (139,764) (68,124)
Net loss per share (1.42) (0.94) (2.61) (1.73)
Weighted average shares
outstanding 53,609,120 39,312,482 53,545,671 39,312,482
EBITDA (1) (32,117) (16,265) (62,079) (29,376)
(1) EBITDA consists of net loss before net interest expense,
depreciation, amortization and deferred compensation expense. EBITDA
is commonly used to analyze companies on the basis of operating
performance, leverage and liquidity.
NEXTLINK COMMUNICATIONS, INC. 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 Financial Results (Dollars in thousands) As of June 30, December 31, 1998 1997 Cash, cash equivalents, and marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has $ 1,298,646 $ 742,357 Other current assets Other Current Assets A balance sheet item that includes the value of non-cash assets due within one year. Notes: Examples are things like prepaid expenses and accounts receivable. 35,830 27,485 Pledged securities 42,350 41,425 Total current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. 1,376,826 811,267 Pledged securities - 21,185 Property and equipment, net 372,687 253,653 Other long-term assets Long-Term Assets 1. Reported on the balance sheet, it's the value of a company's property, equipment and other capital assets, less depreciation. 2. A stock, bond or other asset that you plan on holding in your portfolio for a lengthy period of time. , net 306,419 131,048 Total assets $ 2,055,932 $ 1,217,153 Current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. $ 76,515 $ 69,582 Long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. and capital lease obligations, less current portion 1,502,374 757,640 Other long-term liabilities Other Long-Term Liabilities A balance sheet item that includes obligations that do not currently require interest payments. Notes: This would include items such as remaining leases, future employee benefits and deferred taxes. 2,808 3,202 Redeemable preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , net of issuance costs 530,772 313,319 Class B common stock subject to redemption - 4,950 Total shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. (deficit) (56,537) 68,460 Total liabilities and shareholders' equity (deficit) $ 2,055,932 $1,217,153
NEXTLINK COMMUNICATIONS, INC.
Operating Data (1)
As of As of As of As of
June 30, March 31, Dec. 31, Sept. 30,
1998 1998 1997 1997
Route miles (2) 2,099 2,036 1,897 1,757
Fiber miles (3) 152,225 141,788 133,224 124,399
On-net buildings
connected (4) 658 571 513 479
Off-net buildings
connected (5) 8,448 5,947 3,504 1,404
Switches installed
(6) 17 14 13 13
Access lines in
service (7) 102,887 72,834 50,131 30,944
Employees 1,765 1,499 1,327 1,027
(1) The operating data for all periods presented include the
statistics of the Las Vegas network, which the Company manages
and in which the Company has a 40% membership interest.
(2) Route miles refers to the number of miles of the
telecommunications path in which the Company-owned or leased
fiber optic cables are installed.
(3) Fiber miles refers to the number of route miles installed along a
telecommunications path, multiplied by the Company's estimate of
the number of fibers along that path.
(4) Represents buildings physically connected to the Company's
networks, excluding those connected by unbundled incumbent local
exchange carrier (ILEC) facilities.
(5) Represents buildings connected to the Company's networks through
leased or unbundled ILEC facilities.
(6) Switches installed include two long distance switches acquired in
a business acquisition and the switch installed in the Company's
testing facility.
(7) Represents the number of access lines in service, including those
lines which are provided through resale of Centrex services, for
which the Company is billing services.
CONTACT: NEXTLINK
Todd Wolfenbarger, media and industry analyst
425/519-3946 or 206/399-6770 portable
or
Lon Huntsman, financial analyst
425/519-8940
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