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MFS COMMUNICATIONS REPORTS 29 PERCENT GAIN IN SECOND QUARTER REVENUES DRIVEN BY 48 PERCENT GROWTH IN TELECOMMUNICATIONS SEGMENT

 OMAHA, Neb., Aug. 2 /PRNewswire/ -- MFS Communications Company, Inc. (NASDAQ-NMS: MFST) today reported that revenues for the second quarter ended June 30, 1993, increased by 29 percent to $31,458,000, compared to $24,468,000 for the same period last year.
 Telecommunications Services segment revenues increased by 48 percent to $16,277,000 from $11,026,000 in the second quarter of 1992. Monthly recurring revenue increased more than 50 percent to $5.4 million at June 30, 1993, as compared to $3.5 million at June 30, 1992. Network Systems Integration and Facilities Management Services segment revenues increased 13 percent to $15,181,000 from $13,442,000 in the second quarter of 1992.
 "Our operating results for the second quarter as well as the first half of 1993 are fully in line with expectations and the implementation of the company's strategic business plan," said James Q. Crowe, MFS chairman and chief executive officer. "Our focus remains on rapid growth of recurring revenue with high value-added services. We continue to aggressively reinvest operating cash generated by our competitive access business in developing our national high speed data service and our integrated telecommunications service for medium and small businesses. For the first six months of 1993, investment in MFS Datanet and MFS Intelenet totaled approximately $14 million."
 The MFS networks, the platform upon which the company delivers its services, continued to experience dramatic growth. In the first half of the year, network route miles grew 20 percent, fiber miles grew 30 percent, the number of buildings served grew 23 percent and circuits in service grew 26 percent.
 Growing Cash Flow From MFS Telecom
 For the six months ending June 30, 1993, MFS Telecom, Inc., MFS' competitive access business, generated approximately $10 million of EBITDA (Earnings Before Interest, Income Taxes, Depreciation and Amortization), a standard industry measure of operating cash flow. This is more than four times last year's amount. "This increase in EBITDA demonstrates the underlying strength of the company's current telecom business," said Crowe. "The strong growth in EBITDA from MFS Telecom during the past six months enables us to redeploy these funds to grow the company's networks and range of services."
 For the quarter, the company's consolidated EBITDA was $430,000, compared to $3,225,000 for the same period last year. The decrease resulted primarily from increased expenses in excess of $4 million directly related to the new businesses -- MFS Datanet and MFS Intelenet. In addition, EBITDA was impacted in the Network System Integration and Facilities Management Services segment due to flooding, which slowed progress on the Iowa Communications Network, and a United Kingdom project in which operating expenses exceeded revenue during the quarter. At June 30, backlog for this segment stood at approximately $53 million.
 MFS Datanet and MFS Intelenet Initial Phase Near Completion
 MFS Datanet is now serving its first national customers, enabling them to send computer-generated data between buildings, across town or across the nation. MFS Intelenet began offering comprehensive telecommunications services in July to small- and medium-sized business customers. "The initial phase of MFS Datanet and MFS Intelenet is nearly complete. We expect to make further announcements concerning these exciting new businesses in the near future," Crowe said.
 On May 19, 1993, the company completed its initial public offering. "With over $300 million in cash and no long term debt, MFS is well positioned to continue aggressively pursuing its strategic plan," said Crowe.
 MFS is the largest provider of local competitive access telecommunications services in the United States and now has all-fiber optic networks serving 14 major metropolitan markets. The company operates in two business segments. Telecommunications Services and Network Systems Integration and Facilities Management Services. Through its operating units, MFS provides a wide range of high quality voice, data and other enhanced services and systems specifically designed to meet the requirements of communications-intensive business and government customers. MFS' common stock is traded on the NASDAQ National Market System under the symbol MFST.
 MFS COMMUNICATIONS COMPANY, INC.
 RESULTS OF OPERATIONS
 (Unaudited)
 (dollars in thousands)
 Periods ended Three Months Six Months
 June 30 1993 1992 1993 1992
 Revenue:
 Telecommunications services $16,277 $11,026 $31,460 $21,949
 Network systems integration
 and facilities management
 services 15,181 13,442 28,873 26,147
 Total $31,458 $24,468 $60,333 $48,096
 Operating Income (loss):
 Telecommunications services $(7,801) $(4,925) $(13,381) $(9,070)
 Network systems integration
 and facilities management
 services 408 2,945 873 2,902
 Total $(7,393) $(1,980) $(12,508) $(6,168)
 EBITDA(A):
 Telecommunications services $ (109) $ 264 $ 1,093 $ 621
 Network systems integration
 and facilities management
 services 539 2,961 1,118 2,966
 Total $ 430 $ 3,225 $ 2,211 $ 3,587
 (A) EBITDA, or earnings before interest, income taxes, depreciation and amortization, is a standard industry measure of operating cash flow.
 BENCHMARK OPERATING STATISTICS
 Fiscal Year Ended As of June 30,
 1989 1990 1991 1992 1993
 Metropolitan Areas Served 8 9 12 14 14
 Networks 8 9 14 21 22
 Circuits in service 60,483 173,958 465,420 589,130 743,114
 Buildings connected 128 226 695 1,101 1,353
 Route miles 49 127 373 858 1,030
 Fiber miles 5,780 10,359 22,982 38,595 50,049
 MFS COMMUNICATIONS COMPANY, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Unaudited)
 (dollars in thousands, except per share data)
 Periods ended Three Months Six Months
 June 30 1993 1992 1993 1992
 Revenue $31,458 $24,468 $60,333 $48,096
 Costs and expenses:
 Operating expenses 23,418 16,132 43,698 34,139
 Depreciation & amort. 7,733 5,102 14,739 9,641
 G&A 7,610 5,111 14,424 10,370
 38,761 26,345 72,861 54,150
 Loss from operations (7,303) (1,877) (12,528) (6,054)
 Other income (expense):
 Interest income 1,026 38 1,682 97
 Interest expense (27) (217) (59) (538)
 Other 117 (100) 281 (83)
 Total other inc. (exp.) 1,116 (279) 1,904 (524)
 Loss before income taxes (6,187) (2,156) (10,624) (6,578)
 Inc. tax benefit
 (provision) 2,063 (200) 3,463 (220)
 Net loss $(4,124) $(2,356) $(7,161) $(6,798)
 Net loss per common &
 common equiv. share
 (pro forma) $(.09) $(.05) $(.15) $(.15)
 Wtd. avg. common & common
 equiv. shares outstg. 48,490,659 44,085,000 46,306,588 44,085,000
 MFS COMMUNICATIONS COMPANY, INC.
 CONSOLIDATED BALANCE SHEET
 (Unaudited)
 June 30, 1993
 (dollars in thousands, except per share amounts)
 ASSETS
 Current Assets:
 Cash and cash equivalents $163,784
 Marketable securities, at lower of cost or market 152,648
 Accounts receivable 9,624
 Costs and earnings in excess of billings on
 uncompleted contracts 2,696
 Other current assets 9,169
 Total current assets 337,921
 Networks and equipment, net 245,106
 Other assets, net 74,853
 Total assets $657,880
 LIABILITIES AND STOCKHOLDERS' EQUITY
 Current liabilities:
 Accounts payable $ 13,817
 Accrued cost and billings in excess of
 revenue on uncompleted contracts 10,697
 Other current liabilities 15,492
 Total current liabilities 40,006
 Long term debt, less current portion 157
 Other liabilities 5,428
 Deferred income taxes 10,269
 Minority interest 7,701
 Stockholders' Equity:
 Common stock of $.01 par value. Authorized
 125,000,000 shares; issued and outstanding
 56,350,000 564
 Additional paid-in capital 706,469
 Foreign currency adjustment 27
 Accumulated deficit (112,741)
 Total stockholders' equity 594,319
 Total liabilities and stockholders' equity $657,880
 -0- 8/2/93
 /CONTACT: Steve Ingish of MFS Communications Company, 708-218-7316/
 (MFST)


CO: MFS Communications Company, Inc. ST: Nebraska IN: TLS SU: ERN

SH -- NY014 -- 8188 08/02/93 08:59 EDT
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