ICG Reports First Quarter 2000 Results; 174,000 Lines, $157 Million Revenue and $19 Million EBITDA.Business Editors ENGLEWOOD Englewood (ĕng`gəlw  d).1 City (1990 pop. 29,387), Arapahoe co., N central Colo., on the South Platte River, a residential and industrial suburb of Denver; inc. 1903. , Colo.--(BUSINESS WIRE)--April 26, 2000 ICG ICG indocyanine green. Communications, Inc. (Nasdaq:ICGX) today announced first quarter results that reflect another record for access line installations, adding 174,000 lines for its ISP (1) See in-system programmable. (2) (Internet Service Provider) An organization that provides access to the Internet. Connection to the user is provided via dial-up, ISDN, cable, DSL and T1/T3 lines. and business customers. The Company ended the first quarter with approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 905,000 access lines in service, a 116 percent increase over first quarter 1999. First quarter revenue was $157.2 million, an increase of $52.9 million, or 51 percent over first quarter 1999, and 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 was $19.2 million, an increase of $11.4 million, or 144 percent, over the comparable period in 1999. "We set forth an aggressive growth plan for 2000, and we are right on track to meet our commitments," said ICG Chairman and Chief Executive Officer, J. Shelby Bryan John Shelby Bryan (born March 12, 1946) is an American communications executive, also known for his affair with Anna Wintour, editor of Vogue magazine. A direct descendant of Stephen F. . "I am confident that the combination of our experienced management team, substantial new funding and our demonstrated sales and provisioning capability will enable ICG to continue to successfully meet its targets." Invitation: Today, ICG executive management is hosting a conference call and simultaneous Webcast at 9:00 a.m. mountain time, 11:00 a.m. eastern time. Please log on to the ICG Web page at www.icgcom.com to view and listen to our year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. results discussion. The Webcast will remain available for replay on the ICG Web site. First Quarter Review In addition to record line installations in the quarter, the Company received orders for approximately 200,000 new lines and exited the first quarter with a backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. of approximately one-half million lines to be installed during the remainder of the year. Both sales and provisioning capabilities are on track to deliver substantial growth in 2000. First quarter network expansion included 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 four new switches located in Ontario, California Ontario is a city located in San Bernardino County, California, United States. As of the 2000 Census, the city had a total population of 170,373. It is the home of LA/Ontario International Airport and the huge Ontario Mills shopping mall (the largest in Southern California and one , Irvine, California Irvine is an incorporated city in Orange County, California, United States. It is a planned city, mainly developed by the Irvine Company since the 1960s. Formally incorporated on December 28 1971, the 69.7 square mile (180.5 km²) city has a population of 202,079 (as of 2007). , Miami, Florida “Miami” redirects here. For the Native American tribe, see Miami tribe. Miami is a major city in southeastern Florida, in the United States. It is the county seat of Miami-Dade County. Miami is a gamma world city with an estimated population of 404,048. and Garfield Heights Garfield Heights, city (1990 pop. 31,739), Cuyahoga co., NE Ohio, a residential and industrial suburb adjacent to Cleveland; founded 1904, inc. 1932. It has oil refineries and a steel industry. , Ohio. The Company increased capacity in its new and existing markets, increasing total switch port capacity by over 200,000 during the quarter. In addition, by the end of the quarter the Company had leased the sites, ordered equipment and entered into 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. agreements related to its 22-market expansion plan. During the first quarter ICG continued to add significant network capacity. The Company increased its nationwide network 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. to OC12 from OC3, effectively increasing capacity by a factor of four, and is on schedule to increase capacity further to OC48 by mid-year. As part of its Internet gateway (1) See cable/DSL gateway. (2) A router or server that converts IP packets to IPX, AppleTalk or some other non-IP format and vice versa. It is used to connect non-IP networks to the Internet. strategy, ICG acquired CPUs, or servers, that will be installed in over 150 locations by the end of the third quarter. As the Company phases in these servers, advanced network management capabilities such as application distribution and content management and delivery services will be offered to Internet service provider Internet service provider (ISP) Company that provides Internet connections and services to individuals and organizations. For a monthly fee, ISPs provide computer users with a connection to their site (see data transmission), as well as a log-in name and password. (ISP) customers and content providers. Financial Review Revenue First quarter revenue was $157.2 million, an 11 percent increase over the fourth quarter 1999 and a 51 percent increase over the first quarter 1999 as adjusted for discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. . Local services revenue of $102.6 million contributed 65 percent of total revenue and includes revenue from regional business customers, ISP customers and associated reciprocal Bilateral; two-sided; mutual; interchanged. Reciprocal obligations are duties owed by one individual to another and vice versa. A reciprocal contract is one in which the parties enter into mutual agreements. compensation revenue for call termination Call Termination, also known as voice termination, refers to the handing off or routing of calls from one telephone company, also known as a carrier or provider, to another telephone company. The terminating point is end point. . Special access revenue of $39.8 million compares to $38.5 million in the fourth quarter 1999, with each period recognizing revenue from a long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. 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. lease agreement of $11.5 million and $13.0 million, respectively. Special access revenue was up 77 percent compared to the first quarter 1999. Long distance revenue was $4.3 million and switched termination The point where a line, channel or circuit ends. See SCSI termination and hybrid. revenue was $10.5 million. Operating Costs operating costs npl → gastos mpl operacionales and Gross Operating Margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: First quarter operating costs were $82.9 million resulting in a gross margin on sales of 47 percent. Operating costs were $59.5 million in the fourth quarter 1999, which benefited from identification of $9.5 million in capitalized Capitalized Recorded in asset accounts and then depreciated or amortized, as is appropriate for expenditures for items with useful lives longer than one year. costs related to capital activities during the second and third quarters of 1999. First quarter 1999 operating costs were $53.6 million Selling, General and Administrative (SG&A) Expenses First quarter SG&A expenses were $55.1 million. SG&A expenses were $12.3 million higher than the same period in 1999 as a result of the Company scaling its business. Earnings The first quarter loss from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the was $121.3 million, or $2.52 per share. This compares to a loss from continuing operations of $86.2 million, or $1.85 per share, in the first quarter 1999, and compares to a loss of $100 million, or $2.10 per share, in the fourth quarter 1999. Reciprocal Compensation During the first quarter, ICG entered into an agreement with Bell South that defines terms for reciprocal compensation for the next three years. This agreement provides increased certainty CERTAINTY, UNCERTAINTY, contracts. In matters of obligation, a thing is certain, when its essence, quality, and quantity, are described, distinctly set forth, Dig. 12, 1, 6. It is uncertain, when the description is not that of one individual object, but designates only the kind. Louis. related to the amount of reciprocal compensation that the Company expects to receive in future periods. Capital Expenditures and Liquidity Capital expenditures for the first quarter were $216.4 million, which included $57.5 million for long-haul long haul n. 1. A long distance: It is a long haul from New York to Los Angeles. 2. A long period of time: Over the long haul the candidates performed well. network capacity acquired under long-term lease. The Company drew down $95.0 million in 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. under its senior banking facility. The Company ended the quarter with $71.8 million in cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investments. Enhanced Management Team ICG continued to add strong leadership in key areas of the company. Jim Washington James H. "Jumpin Jimmy" Washington (born July 1, 1943 in Philadelphia, Pennsylvania) is a former professional basketball player. A 6'6" forward from Villanova University, he was selected by the St. Louis Hawks with the 8th pick of the 1965 NBA Draft. joined the Company as Executive Vice President of Network Services, Pam Jacobson Jacobson is a surname with several variants. Some people with this name include:
Subsequent to Quarter-end The Company completed the previously announced equity transaction for a private placement of $750 million in convertible preferred shares Preferred shares Preferred shares give investors a fixed dividend from the company's earnings and entitle them to be paid before common shareholders. See: Preferred stock. . In addition, the Company finalized See finalization. agreements with vendors for approximately $200 million in financing for network equipment. These transactions together with operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. are expected to fund the Company's 2000 expansion program as well as capital plans into 2001. Forward Looking Statement Disclosure Information and statements presented in this press release may contain forward looking disclosures, expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. , that are based on the beliefs of management as well as assumptions made based on information currently available to management. These forward looking statements and information involve risks and uncertainties including, but not limited to, the ability of the Company to raise capital, future demand for the Company's services, general economic conditions, government regulations, competition and customer strategies, capital deployment, the impact of pricing and other risks and uncertainties. Should one or more of these risks materialize ma·te·ri·al·ize v. ma·te·ri·al·ized, ma·te·ri·al·iz·ing, ma·te·ri·al·iz·es v.tr. 1. To cause to become real or actual: By building the house, we materialized a dream. , or should underlying assumptions prove incorrect Incorrect means to not be correct and may also refer to:
Key Operating Statistics
As of Mar. 31, 2000 Dec. 31, 1999
Access lines/ports in service 904,629 730,975
Total port capacity (customer port
equivalent) 1,137,439 932,143
Fiber route miles (operational) 4,807 4,596
Under construction 368 531
Buildings connected
On network 1,046 963
Hybrid 7,746 7,115
Total buildings connected 8,792 8,078
Switches
Circuit 35 31
Data-Frame relay 16 16
Data-ATM 24 24
Total switches 75 71
-------------------------
Long-haul capacity under long-term leases:
Miles 18,000 18,000
Capacity OC12 OC3
Collocations with ILECs 183 147
VoIP Gateways 181 140
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
($ in thousands, except per share data)
Comparative periods
Sequential Year-over-year
Three months Three months Three months
ended, ended, ended,
3/31/00 12/31/99 %Change 3/31/99 %Change
Revenue:
Local services $102,595 $86,318 19% $67,399 52%
Long distance 4,284 3,968 8% 5,131 (17%)
Special access 39,831 38,524 3% 22,562 77%
Switched terminating
access 10,514 13,265 (21%) 9,239 14%
-------- -------- ----- -------- ----
Total revenue 157,224 142,075 11% 104,331 51%
-------- -------- ----- -------- ----
Operating costs (82,902) (59,536) 39% (53,649) 55%
Selling, general
and administrative (55,089) (59,415) (7%) (42,808) 29%
-------- -------- ----- -------- ----
EBITDA (before
nonrecurring and
noncash charges) 19,233 23,124 (17%) 7,874 144%
-------- -------- ----- -------- ----
Depreciation and
amortization (64,599) (48,102) 34% (36,375) 78%
Provision for impairment
of long-lived assets - (2,515) NA - NA
Other, net (432) (296) 46% 933 (146%)
-------- -------- ----- -------- ----
Operating loss (45,798) (27,789) 65% (27,568) 66%
-------- -------- ----- -------- ----
Interest expense (62,634) (60,783) 3% (47,438) 32%
Interest income 3,277 4,631 (29%) 4,104 (20%)
Other, net 459 154 198% (500) (192%)
-------- -------- ----- -------- ----
Loss from continuing
operations before
income taxes,
preferred dividends
and extraordinary
gain (104,696) (83,787) 25% (71,402) 47%
-------- -------- ----- -------- ----
Income tax expense - (25) NA - NA
Accretion and preferred
dividends on preferred
securities of
subsidiaries (16,637) (16,158) 3% (14,804) 12%
-------- -------- ----- -------- ----
Loss from continuing
operations before
extraordinary gain (121,333) (99,970) 21% (86,206) 41%
-------- -------- ----- -------- ----
Discontinued operations:
(Loss) income from
discontinued
operations - (981) NA (111) NA
(Loss) gain on
disposal of
discontinued operations - 45,784 NA - NA
-------- -------- ----- -------- ----
- 44,803 NA (111) NA
-------- -------- ----- -------- ----
Extraordinary gain on
sales of operations
of NETCOM, net of
income taxes (301) 2,482 (112%) 193,029 (100%)
-------- -------- ----- -------- ----
Net (loss) income $(121,634) $(52,685) (131%) $106,712 (214%)
-------- -------- ----- -------- ----
-------- -------- ----- -------- ----
Net loss per share
Loss from
continuing operations $(2.52) $(2.10) (20%) $(1.85) 36%
Income (loss) from
discontinued operations - 0.94 100% - NA
Extraordinary gain - 0.05 NA 4.14 NA
-------- -------- ----- -------- ----
Net loss per share $(2.52) $(1.11) (127%) $2.29 (210%)
-------- -------- ----- -------- ----
-------- -------- ----- -------- ----
Weighted average number
of shares outstanding 48,189 47,618 46,538
-------- -------- ----- -------- ----
-------- -------- ----- -------- ----
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited)
($ in thousands)
March 31, December 31,
2000 1999
---- ----
Assets:
Cash and cash equivalents $ 40,699 $ 103,288
Short-term investments
available for sale 31,115 22,219
Receivables, net 156,511 168,731
Property and equipment, net 1,681,868 1,525,680
Other assets, net 165,144 200,703
----------- ----------
Total assets $ 2,075,337 2,020,621
----------- ----------
----------- ----------
Liabilities and Stockholders'
Deficit:
Accounts payable and
accrued liabilities $ 305,446 $ 333,322
Capital leases 81,724 71,438
Debt 2,053,557 1,906,697
Other liabilities 50,908 33,705
----------- ----------
Total liabilities 2,491,635 2,345,162
----------- ----------
Redeemable preferred
securities of subsidiaries 533,727 519,323
Stockholders' deficit:
Common stock 486 478
Additional paid-in capital 612,418 599,282
Accumulated deficit (1,565,258) (1,443,624)
Accumulated other
comprehensive gain 2,329 -
----------- ----------
Total stockholders' deficit (950,025) (843,864)
----------- ----------
Total liabilities and
stockholders' deficit $ 2,075,337 $ 2,020,621
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
($ in thousands)
Three Months
Ended March 31,
2000 1999
---- ----
Cash flows from operating activities:
Net (loss) income (121,634) 106,712
Loss from discontinued operations - 111
Extraordinary (gain) loss on
sales of operations 301 (193,029)
Adjustments to reconcile net (loss)
income to net cash used by
operating activities:
Accretion and preferred dividends
on preferred securities of subsidiaries 16,637 14,804
Noncash interest expense,
net of capitalized interest 52,439 45,603
Depreciation and amortization 64,599 36,375
Loss (gain) transactions, net (6,720) (5,177)
Deferred compensation and contribution
to 401(k) through issuance of common stock 1,673 2,077
Changes in operating assets and liabilities,
excluding the effects of dispositions and
noncash transactions (49,727) (55,381)
-------- --------
Net cash used by operating activities (42,432) (47,905)
-------- --------
Cash flows from investing activities:
Acquisition of property,
equipment and other assets (141,299) (99,151)
Payments for construction of
corporate headquarters (1,699) -
Proceeds from sales of assets, net of
investment purchases and
changes in restricted cash 21,530 232,251
-------- --------
Net cash (used) provided by
investing activities (121,468) 133,100
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock 11,902 4,157
Proceeds from issuance of long-term debt 95,000 -
Principal payments on long-term debt,
capital leases, and payments
of preferred dividends (5,497) (4,613)
-------- --------
Net cash (used) provided
by financing activities 101,405 (456)
-------- --------
Net increase (decrease) in
cash and cash equivalents (62,495) 84,739
Net cash used by discontinued operations (94) (3,356)
Cash and cash equivalents,
beginning of period 103,288 210,307
-------- --------
Cash and cash equivalents, end of period 40,699 291,690
-------- --------
-------- --------
Supplemental disclosure of cash
flows information of continuing
operations:
Cash paid for interest 7,132 1,835
-------- --------
-------- --------
Supplemental schedule of noncash
investing and financing
activities of continuing operations:
Acquisition of corporate headquarters
assets through issuance of long-term
debt and conversion of security deposit - 33,719
-------- --------
-------- --------
Assets acquired pursuant to IRU 57,494 -
Assets acquired under capital leases 14,415 3,760
-------- --------
Total 71,909 3,760
-------- --------
-------- --------
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