Next Level Communications Reports Record Revenue of $40.2 Million for Second Quarter 2000.Business Editors ROHNERT PARK Rohn·ert Park A city of west-central California, a residential suburb of Santa Rosa. Population: 42,300. , Calif.--(BUSINESS WIRE)--July 19, 2000 Sequential Revenue Up 32%; Gross Margin Increases to 20.1% Next Level Communications, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : NXTV), a leader in ATM/IP optical interactive DSL DSL in full Digital Subscriber Line Broadband digital communications connection that operates over standard copper telephone wires. It requires a DSL modem, which splits transmissions into two frequency bands: the lower frequencies for voice (ordinary broadband systems, today reported record revenue of $40.2 million for the second quarter ended June 30, 2000, a 327% increase over revenue of $9.4 million for the second quarter of 1999 and a 32% increase over revenue of $30.5 million for the first quarter of 2000. This revenue growth highlights the continued increased demand for Next Level's unique broadband DSL technology and state-of-the-art service creation software, which enable delivery of integrated voice, data and digital video to the home over standard telephone lines. Gross margin percentage grew to 20.1% in the second quarter, from 7.2% for the same period last year and 18.1% in the first quarter of 2000. Net loss for the second quarter was $14.6 million, or $.18 per share. This compares to a net loss of $19.9 million, or $.26 per pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma share, during the same period in 1999. Revenue for the six months ended June 30, 2000 rose 288% to $70.7 million compared to $18.2 million during the same period in 1999. Gross margin percentage for the six month period improved to 19.3% from 5.8% in the first six months of 1999. Net loss for the six month period was $33.1 million, or $.41 per share, compared to a net loss of $39.2 million, or $.51 per pro forma share, for the same period in 1999. "We are extremely pleased with our strong second quarter performance, which reflects our customers' need to meet growing consumer demand for broadband services See broadband and broadband service provider. ," said Pete Keeler Keel´er n. 1. One employed in managing a Newcastle keel; - called also keelman ltname>. 2. A small or shallow tub; esp., one used for holding materials for calking ships, or one used for washing dishes, etc. , chairman and chief executive officer of Next Level. "Next Level continues to attract new customers at a rapid pace as telecommunications companies See telecom company. increasingly turn to our technology to cost-effectively transform themselves into full-service voice, data and video providers." Second Quarter Highlights ------------------------- Total Customer Count Increases To 61 Next Level continues to attract new customers at a rapid pace, with total customer count reaching 61 as of June 30, 2000. The company added 19 new accounts during the quarter, including a $50 million dollar contract with ExOp of Missouri, Inc., a major Competitive Local Exchange Carrier (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) ), and a contract with Bell Canada Bell Canada Enterprises (TSX: BCE, NYSE: BCE), legally BCE Inc., is a major Canadian telecommunications company. Through its subsidiaries including Bell Canada, Bell Aliant, Northwestel, Télébec, and NorthernTel, it is the incumbent local exchange carrier for to commercially deploy VDSL See DSL. VDSL - Very high bit-rate Digital Subscriber Line broadband services in major metropolitan areas in Canada. In addition, US WEST's broadband VDSL deployment in Phoenix continues to accelerate, with more than 38,000 customers and over 400,000 homes passed as of June 30, 2000. NLevel3 Unified Access Platform Added To Rural Utilities Service Listing The Rural Utilities Service (RUS), the federal lending agency that provides financing for the construction of telecommunications infrastructure in rural America, added the NLevel3 Unified Access Platform to its list of acceptable materials for use on telecommunications systems of RUS borrowers. Inclusion on the RUS list of accepted materials is expected to make it simpler and faster for Next Level's rapidly growing independent telco customer base to get financing for purchases of Next Level technology. Technology To Deliver DBS (Direct Broadcast Satellite) A one-way TV broadcast service from a communications satellite to a small round or oval dish antenna no larger than 20" in diameter. Services Under Development Next Level announced that it is developing technology to deliver DBS (direct broadcast satellite) services along with the VDSL/ADSL services currently offered through the company's N3 Residential Gateway. Next Level To Incorporate Tdsoft Technology With Its DSL Broadband Access See broadband and wireless broadband. System Next Level is working with Tdsoft, a leading software developer, to enable Next Level's Broadband Digital Terminal to interface with international switches for the provision of telephone service in international markets. This will allow Next Level's international customers to fully leverage the platform's capabilities to provide integrated voice, data and video services. Recent Highlights ----------------- Bell Canada Begins VDSL Rollout On July 17, 2000 Next Level announced it signed a multi-year contract with Bell Canada. Next Level will supply Bell Canada with the access equipment necessary to provide video, high-speed data and telephony services over copper twisted pair A thin-diameter wire (22 to 26 gauge) commonly used for telephone and network cabling. The wires are twisted around each other to minimize interference from other twisted pairs in the cable (Alexander Graham Bell invented this and was awarded a patent for it in 1881). to Toronto apartment and condominium condominium In modern property law, individual ownership of one dwelling unit within a multidwelling building. Unit owners have undivided ownership interest in the land and those portions of the building shared in common. residences, with the potential to expand rapidly to other major cities. Bell Canada has been offering VDSL services to Palace Pier, a large condominium apartment complex in Toronto, on a trial basis since last year. Next Level Forms Strategic Partnership With OutReach Communications Next Level announced today that it has formed a strategic partnership with OutReach Communications, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control , to provide integrated broadband services to local telephone companies throughout rural 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. telecommunications markets. This partnership will allow consumers in these markets to access the very latest in digital video services and high-speed Internet See broadband. access, as well as traditional phone service, with the initial rollouts in Missouri planned Missouri Plan Method of selecting judges that originated in the state of Missouri and was later adopted elsewhere. Designed to overcome the weaknesses of the elective system, the plan permits the governor to select a judge from a list of nominees recommended by a special for later this year. Next Level will provide its VDSL platform to facilitate the deployment of OutReach services under contracts with Local Exchange Companies (LECs). About Next Level Next Level is a technology leader in ATM/IP Optical Transport, Networking and Interactive DSL Broadband Systems for the delivery of voice, data and video services for communications companies Communications Company is a communications unit of the United States Marine Corps. They are part of Combat Logistics Regiment 37 , 3rd Marine Logistics Group (3MLG) and III Marine Expeditionary Force (III MEF). The unit is based out of the Marine Corps Base Camp Smedley D. . Next Level is based in Rohnert Part, Calif., and may be contacted at www.nlc.com. This release contains "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. 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. are generally preceded by words including, without limitation, "will," "plans," "expects," "believes," "anticipates" or "intends." Investors are cautioned that all forward-looking statements in this release involve risks and uncertainties that could cause actual results to differ materially from current expectations. Factors that realistically could cause results to differ materially from those projected in the forward-looking statements are set forth in "Risk Factors" in our Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended December 31, 1999.
Statements of Operations
(Unaudited - In thousands, except per share information)
Three months ended Six months ended
June 30 June 30
2000 1999 2000 1999
---- ---- ---- ----
Revenues $ 40,176 $ 9,413 $ 70,655 $ 18,190
Cost of Revenue 32,101 8,735 57,049 17,140
Gross Profit 8,075 678 13,606 1,050
Operating Expense 24,617 19,391 48,026 37,435
Non-Cash Compensation Charge - - 2,384 -
Total Operating Expense 24,617 19,391 50,410 37,435
Operating Loss (16,542) (18,713) (36,804) (36,385)
Interest Income/Expense 1,910 (1,227) 3,742 (2,812)
Net Loss $(14,632) $(19,940) $(33,062) $(39,197)
Basic and Diluted
Net Loss per share
(Pro Forma for 1999) $ (.18) $ (.26) $ (.41) $ (.51)
Basic and Diluted Net Loss
per share Excluding
Compensation Charge
(Pro Forma for 1999) $ (.18) $ (.26) $ (.38) $ (.51)
Weighted Average Shares
Outstanding 80,322 69,967 80,044 69,967
Balance Sheets
(Unaudited - In thousands, except per share information)
June 30, 2000 December 31, 1999
Cash and Equivalents $ 90,298 $128,752
Marketable Securities 14,941 14,971
Trade Receivables 21,792 13,879
Inventories 37,874 22,553
Other Current Assets 3,614 4,177
Total Current Assets 168,519 184,332
Long Term Investments 28,000 30,151
Property & Equipment 49,396 48,263
Other Assets 4,465 5,065
Total Assets $250,380 $267,811
Total Current Liabilities $ 47,118 $ 36,384
Long Term Liabilities 25,173 25,199
Total Stockholders Equity 178,089 206,228
Total Liabilities and
Stockholders Equity $250,380 $267,811
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