PrimaCom Reports 2000 Results.Business Editors MAINZ, Germany--(BUSINESS WIRE)--March 29, 2001 PrimaCom AG (Neuer Markt Frankfurt, "PRC"/ID No. 625910; Nasdaq: PCAG PCAG Performance Confidence Assessment Group ) today reported its results for the year ended December 31, 2000. PrimaCom and Subsidiaries Twelve Months 2000 As Reported The Company's results reflect the inclusion of the Multikabel acquisition as of October 1, 2000. For the 2000 twelve-month period, revenues increased 17.3% to E124.3 million versus E106.0 million in the same period of 1999, primarily reflecting the contributions of the acquisition of Multikabel in the Netherlands and several acquisitions in Germany in both 1999 and 2000, rate increases for basic analog cable television services and the intorduction in Germany of high-speed Internet See broadband. access and digital television services. Adjusted earnings before extraordinary items, discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , minority interests, net interest expense, taxes, depreciation, amortization, non-cash compensation expense and non-operating expenses less non-operating income (adjusted 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 ) for the twelve months of 2000 amounted to E51.9 million compared with E53.1 million in the same period a year ago, primarily as a result of start-up costs related to the Company's Broadband Services See broadband and broadband service provider. Group as well as the inclusion of the accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. related to the possible charge of copyright royalties for programming (GEMA GEMA Gesellschaft für Musikalische Aufführungs- und Mechanische Vervielfältigungsrechte (German musical copyright monitoring body) GEMA Groupement des Entreprises Mutuelles d'Assurances (French) accrual). For the 2000 full-year period, the Company reported a net loss of E64.3 million, or E3.26 per basic and diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, compared with a net loss of E29.3 million, or E1.53 per basic and diluted share, a year ago. Included in the Company's 2000 annual results was an extraordinary charge of E8.2 million, or E0.41 per basic and diluted share, primarily related to the write-off of the unamortized portion of the fees and expenses of the Company's existing bank facility, which PrimaCom refinanced and cancelled on September 18, 2000, in conjunction with its acquisiton of Multikabel. Analog Cable Television For the year ended December 31, 2000, Analog CATV (Community Antenna TV) The original name for cable TV. It used a single antenna at the highest location in the community in order to deliver a quality signal to homes in areas with hilly terrain or other interference. subscribers reached approximately 1.3 million, or approximately 380,000 above the same period in 1999. Acquisitions in Germany and the acquisition of Multikabel accounted for most of the growth. Revenue from analog cable television increased by 13.4% from E103.1 million in the year ended December 31, 1999 to E116.9 million in the year ended December 31, 2000. Acquired cable systems and rate increases accounted for the growth. Certain cable systems acquired in Germany during 2000 and the Multikabel acquisition have yet to make full-year contributions. Subscribers and revenue contributions from these properties will continue to increase as integration continues. The Company announced the acquisition of an additional approximately 6,000 subscribers in Germany since the year ended December 31, 2000. Broadband Products and Services At December 31, 2000, PrimaCom had approximately 411,000 fully upgraded and ready for service homes. High speed Internet access See how to access the Internet. has been marketed to ready for service homes for the past twelve months. For the period ended December 31, 2000, Internet subscribers reached 20,489. Of this amount, PrimaCom acquired approximately 4,200 dial-up Internet subscribers who will be migrated to high-speed Internet access. The following table reflects high speed Internet access growth and penetration levels.
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1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
2000 2000 2000 2000
Ready for
service
homes 344,000 350,855 375,302 411,000
Internet
subscribers 5,297 8,499 14,624 20,489
Penetration 2.4% 2.4% 3.9% 4.9%
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In the year ended December 31, 2000, high speed Internet access subscription fees contributed E745,000 to revenue, compared to E25,000 in 1999. As of December 2000, Digital Television has been actively marketed in the Netherlands and soft launched in a test environment in Germany. The following table reflects the Digital Television subscriber growth and penetration:
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1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
2000 2000 2000 2000
Ready for
service
homes 344,000 350,855 375,302 411,000
Digital
Television - 1,067 2,453 5,395
Penetration - 0.3% 0.7% 1.3%
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In the year ended December 31, 2000, Digital Television subscription fees contributed approximately E103,000 to revenue. Data communications data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. , advertising, e-commerce and other operating revenue operating revenue Revenue from any regular source. Revenue from sales is adjusted for discounts and returns when calculating operating revenue. Compare other revenue. associated with the broadband services group contributed over E1,000,000 to revenue in the year ended December 31, 2000. Adjusted EBITDA losses for broadband services were approximately E10.0 million for the period ended December 31, 2000. Twelve Months 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 Presentation Including Multikabel On September 18, 2000 PrimaCom AG acquired N.V. Kabeltelevisie Kop Noord-Holland ("Multikabel"). The following comments assume that the acquisition occurred on January 1, 1999. For the twelve months ended December 31, 2000, pro forma revenues were E148.9 million. Pro forma adjusted EBITDA for the 2000 twelve-month period was E64.7 million. Financial Position As of December 31, 2000, PrimaCom had outstanding indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. of E754.5 million. On a pro forma basis, adjusted EBITDA covers pro forma interest approximately 1.4 times. As a result of the completion of the syndication See syndication format. of the Company's previously announced E1.0 billion Reducing Revolving Credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility and its E375.0 million capital markets bridge facility. Based on current projections, the Company continues to have a fully-funded business plan. Recent Events On February 1, 2001, the Company announced that it had concluded a preliminary agreement with the channels RTL (Register Transfer Level) A high-level hardware description language (HDL) for defining digital circuits. The circuits are described as a collection of registers, Boolean equations, control logic such as "if-then-else" statements as well as complex event sequences; , RTL II RTL II is a privately owned, commercial, general-interest German television channel. It was founded as a second-generation commercial broadcaster in 1993. It quickly became infamous for its perceived "trash programming", comprising lots of soft porn as well as shows such as , Super RTL Super RTL is a Cologne-based German television network operated by RTL Disney Fernsehen GmbH & Co. KG. It was the second German television channel aimed mostly at children (the first was Nickelodeon). , VOX and RTL NEWMEDIA covering a wide range of initiatives including digital TV and other new media. On February 14, 2001 the Company announced that it had acquired three additional cable operators Tele-Kommunikationsgesellschaft mbH Eisenhuttenstadt, Grossgemeinschafts-Antennenanlagen Lizenz- und Betriebs GmbH, and Telekommunikations GmbH Kirchheimbolanden, and incraesed its position in PKG PKG Package PKG Packing PKG Penalty Kick Goals Scored (soccer) PKG Private Key Generator Heidenau to 100 percent. On March 7, 2001, the Company announced that it won the case brought before the Federal Supreme Court (Bundesgerichtshof) in Karlsruhe. The ruling indicates that Grundstucks- und Gebaudeversicherungs-gesellschaft mbH, the housing association that brought the original suit in February, 1998, may not exert any influence on PrimaCom's price structure. Paul Thomason, Speaker of the Executive Board and Chief Financial Officer, commented, "2000 was a year of significant achievement for PrimaCom as we continued to execute on the growth strategy outlined at our IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. in February, 1999. During the year, we continued to expand through acquisition. Excluding Multikabel, we completed 12 additional acquisitions, adding nearly 88,000 cable television subscribers in key markets to our subscriber base. With the recently-closed acquisition of Multikabel, we achieved our subscriber target for the year. We also continued our upgrade program, providing two-way capability to over 100,000 homes in Germany by the end of the year. 2000 saw PrimaCom begin the initial test phase of a digital television roll-out to the German market in Leipzig. To date, this test has progressed well, and we look forward to additional roll-outs of digital television services as we progress through 2001." Mr. Thomason continued, "Financially, PrimaCom further strengthened its position in 2000 through the successful syndication of new credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities exceeding Euro 1.3 billion. We are very pleased to have completed this transaction in spite of tighter market conditions, and believe this demonstrates the support of the financial community of PrimaCom's operating strategy." Mr. Thomason concluded, "Looking forward, we remain optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about our prospects. Conditions for the roll-out of new broadband services by cable operators in the German marketplace appear to be improving, and we intend to exploit these improving conditions to expand and improve our digital television offerings while continuing the roll-out of high-speed Internet access services. In Germany, we expect to introduce video-on-demand services during the upcoming year, as well as telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. services in the more advanced Dutch cable market. This expansion of broadband products and services allows us to increase our average revenue per user as we go forward. We will also continue our growth through acquisition fueled by the consolidating German cable market, and will focus on increasing the subscriber density of our cable clusters in order to increase the cost effectiveness of the upgrade process. Our combination with the German and certain Dutch cable assets of United Pan Europe Communications, also announced today, is a prime example of this strategy. As more cable companies enter the German market, PrimaCom will continue to play an active role in consolidation and modernization modernization Transformation of a society from a rural and agrarian condition to a secular, urban, and industrial one. It is closely linked with industrialization. As societies modernize, the individual becomes increasingly important, gradually replacing the family, of the German cable sector." In conjunction with this release, PrimaCom will host a conference call, which will be simultaneously broadcast live over the Internet. Management will host the call, which is scheduled for today, March 29, at: 5:00 PM (Germany) 4:00 PM (London) 10:00 AM EST EST electroshock therapy. EST abbr. electroshock therapy 9:00 AM CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. 7:00 AM PST PST Paroxysmal supraventricular tachycardia, see there From PrimaCom, Paul Thomason, Speaker of the Executive Board and Chief Financial Officer, Hans Wolfert, Chief Corporate Development Officer, and Alexander Hoffmann, Director of Investor Relations Investor relations The process by which the corporation communicates with its investors. , will host the call. Listeners can access the conference call live over the Internet at http://www.streetfusion.com, or through a link in the international visitors section of the Company's web site at http://www.primacom.de. Please allow 15 minutes prior to the call to visit the sites to download and install any necessary audio software. After the call has taken place, its archived version may be accessed at these web sites. About PRIMACOM (Neuer Markt, Frankfurt, PRC ID No. 625910 and Nasdaq PCAG) PrimaCom currently passes more than 1.8 million households and has approximately 1.3 million customers in Europe. In Germany, PrimaCom has approximately 1 million customers, making it the fourth largest private network provider. Of the 1 million subscribers approximately 11 per cent have been upgraded and are two way capable. A further 320,000 households are connected in the Netherlands; serving around 300,000 customers via an already fully upgraded cable network. PrimaCom provides customers with multi-media services via its own broadband cable network. In all, approximately one third of the PrimaCom networks have been fully upgraded to the latest broadband technology broadband technology Telecommunications devices, lines, or technologies that allow communication over a wide band of frequencies, and especially over a range of frequencies divided into multiple independent channels for the simultaneous transmission of different signals. . In Leipzig, Chemnitz , Magdeburg, Aschersleben, and Naumburg PrimaCom already offers 109,500 households attractive high speed Internet access at a flat rate via its own PrimaCom portal (www.cixity.de). Leipzig and the Netherlands are being served with approximately 80 digital TV programmes and other interactive services such as Pay-per-view TV, and this is soon to be extended to other German cities. With the introduction of digital television PrimaCom has introduced a range of interactive services that use a set-top box The cable TV box that sits on "top" of the TV "set," although it is often located several feet away in an equipment rack. The set-top box descrambles the premium channels and provides a tuner for the higher cable numbers that very old TVs did not support. as a platform. PrimaCom continues to develop as a multi-media communications company 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. . This press release includes 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. within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Because these statements apply to future events, they are subject to risks and uncertainties that could cause actual results to differ materially, including PrimaCom's absence of an operating history subsequent to the Multikabel Acquisition and ist transformation to a broadband communications company, its possible future need for additional financing, competitive factors and restrictions imposed by existing and possible future debt instruments. (Financial Table to Follow) EDITOR'S NOTE Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : E = EURO DOLLAR
PRIMACOM AG
Pro Forma
12 months 12 months 12 months
December 31, December 31, December 31,
1999 2000 2000
Euro 000 Euro 000 Euro 000
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Revenues 105,949 124,343 148,864
Operating costs and
expenses
Operations 24,543 30,191 36,441
Selling, general and
administrative 18,590 28,584 33,298
Corporate overhead 12,413 17,219 18,176
Depreciation and
amortization 61,277 75,530 104,254
------- ------- -------
Total 116,823 151,524 192,169
------- ------- -------
Operating loss -10,874 -27,181 -43,305
Interest expense 15,874 26,173 46,173
Other income (expense) -767 1,690 1,689
Loss from continuing
operations
Before minority interest
and income taxes -27,515 -51,664 -87,789
Minority interest in net
income of subsidiaries 70 94 94
Income tax 1,667 4,258 -1,258
------ ------ ------
Net loss before extraordinary
items -29,252 -56,016 -89,141
Extraordinary items -- -8,308 -8,308
NET LOSS -29,252 -64,324 -97,449
======= ======= =======
Loss per share - basic
and diluted -1.53 -3.26 -4.94
===== ===== =====
Weighted average shares 19,156 19,739 19,739
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EBITDA 50,403 48,349 60,949
EBITDA margin 47.6% 38.9% 40.9%
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Adjusted EBITDA 53,160 51,907 64,684
Adjusted EBITDA margin 50.2% 41.7% 43.5%
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