Telocity Revenues Increase 63% Sequentially in Fourth Quarter; Subscriber Base Reaches Approximately 48,000.Business Editors/High-Tech Writers CUPERTINO, Calif.--(BUSINESS WIRE)--Jan. 25, 2001 Telocity (Nasdaq NM: TLCT TLCT Tag Lock Clear and Try ), a leading provider of residential broadband services See broadband and broadband service provider. nationwide, today announced financial results for the fourth quarter and year-ended December 31, 2000. For the fourth quarter, subscribers doubled to 47,911 from 23,494 in the third quarter ended September 30, 2000. Revenues for the fourth quarter grew to $4.7 million from $2.9 million in the third quarter, which represents a 63% increase on a sequential basis. For the year ended December 31, 2000, revenues increased to $9.4 million from $0.2 million for the year ended December 31, 1999. The company did not begin generating revenues until the third quarter of 1999. "We are pleased that we were able to meet our subscriber growth and earnings targets during the quarter, despite significant challenges in the marketplace and uncertainties around our continued funding," said Patti Hart, Chief Executive Officer of Telocity. "Our hard work culminated last month with the signing of a definitive agreement with HUGHES Electronics, wherein where·in adv. In what way; how: Wherein have we sinned? conj. 1. In which location; where: the country wherein those people live. 2. they agreed to acquire all the outstanding shares of Telocity for $180 million in cash, or $2.15 per share. Through this agreement, we believe that we can continue to build on our strengths and realize our mission of becoming the leading provider of lifestyle-enhancing broadband services to and throughout the home." The loss before interest, taxes, depreciation, and amortization (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 $(33.3) million in the fourth quarter, compared with an EBITDA loss of $(28.6) million for the third quarter of 2000. As anticipated, the company's operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. increased during the quarter, with cash-based marketing and sales expenses returning to levels previously associated with the company's growth. Net loss for the fourth quarter ended December 31, 2000, excluding the amortization of stock-based compensation, was $(38.1) million, or $(0.50) per share, based on 77.0 million shares outstanding. On a sequential basis, this compares with a net loss, excluding amortization of stock-based compensation, of $(32.0) million, or $(0.42) per share, based on 75.5 million shares outstanding for the third quarter ended September 30, 2000. As of December 31, 2000, the company reported a net installable backlog of 13,645, almost double the third quarter backlog of 7,234 subscribers. At December 31, 2000, the company had cash and cash equivalents of $44.4 million. Telocity's Chief Financial Officer Ned Hayes Ned Hayes was an Irish sportsperson. He played hurling with his local club Two-Mile-Borris and with the Tipperary inter-county team in the 1900s. Ned Hayes was born in Two-Mile-Borris, County Tipperary and was regarded as one of the most skilful hurlers of his era. said, "During the quarter, we were able to reach our subscriber target through organic growth, and we 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. on certain, unique market conditions that enabled us to transition thousands of 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 customers from ailing ISPs relatively late in the quarter. These late-in-the-quarter subscriber additions provided upside Upside The potential dollar amount by which the market or a stock could rise. Notes: This is basically an educated guess on how high a stock could go in the near future. See also: Bull, Downside to our subscriber growth, but provided no significant revenue benefit in the quarter. We obviously look forward to these revenue streams in future quarters. "Further, given conditions in the capital markets today, we are also pleased with our ability to enter into a strategic acquisition agreement with HUGHES," added Mr. Hayes. "In light of the volatility and uncertainty in the markets today, we believe the agreement is in the best interests of all our shareholders." Following necessary regulatory approvals and satisfaction of customary conditions, HUGHES' offer to purchase all shares of Telocity common stock is expected to close at the beginning of the second calendar quarter. Following the closing of the tender offer, HUGHES will merge its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. with Telocity and remaining stockholders will receive the same consideration paid to stockholders who tendered their shares. Once the transaction is completed, Telocity is expected to help strengthen DIRECTV's ability to emerge as the first national provider of wire and wireless broadband High-speed wireless transmission of data. What is "high" speed is always a changing number. Wireless systems are typically slower than land-based, wireline networks. In the past, wireless broadband started at 250 Kbps, whereas land-based broadband was generally considered to start at T1 access nationwide. Telocity stockholders are advised to read the tender offer statement and the solicitation/recommendation statement regarding the acquisition referenced in this press release, which will be filed with the Securities and Exchange Commission upon the commencement of the tender offer. The tender offer statement (including an offer to purchase, letter of transmittal Letter of Transmittal A document used by security holder to accompany certificates surrendered in an exchange or other corporate action. and related tender offer documents) and the solicitation/recommendation statement will contain important information which should be read carefully before any decision is made with respect to the offer. Telocity stockholders may obtain a free copy of the tender offer statement and the solicitation/recommendation statement when it is available and other documents filed by HUGHES and Telocity with the SEC at the SEC's Web site at www.sec.gov. The tender offer statement and the solicitation/recommendation statement and these other documents may also be obtained by Telocity stockholders without cost to them from Telocity. Note to Editors: Telocity and the Telocity logo are trademarks of Telocity, Inc. All other marks belong to their owners. Quarterly Teleconference Information Management will host a teleconference on Thursday, January 25, 2001 at 2:00 pm PST PST Paroxysmal supraventricular tachycardia, see there to discuss the company's fourth quarter and year 2000 financial results. A live webcast will also be available at www.telocity.net under the Investor Relations Investor relations The process by which the corporation communicates with its investors. section. For access to two-week telephone replay that begins at 7:00 pm PST, please dial 1-719-457-0820, passcode #419452. For additional information, please contact Lynne Farris, Director of Investor Relations, at 408.863.6643. About Telocity Telocity is a leading nationwide provider of integrated residential broadband services. Telocity improves today's dial-up, or narrowband In communications, transmission rates up to T1 speeds (1.544 Mbps). The upper limit is moving target. At one time, narrowband meant 150 bps (that is 150 bits per second!). Then, the upper limit became 2,400 bps. Later, it moved to 64 Kbps. Contrast with wideband and broadband. , experience through faster and reliable services that enhance Internet surfing surfing, sport of gliding toward the shore on a breaking wave. Surfers originally used long, cumbersome wooden boards but now ride lightweight synthetic boards that allow a greater degree of maneuverability. , shopping, and communications. Telocity intends to expand its broadband services to include value-added services A value-added service (VAS) is a telecommunications industry term for non-core services or, in short, all services beyond standard voice calls and fax transmissions. such as firewall, multiple computer support, unified messaging Having access to e-mail, voice mail and faxes via a common computer application or by telephone. For example, unified messaging may send faxes and digitized voice mail to a mail server that turns them into e-mail attachments. and other voice services, on-line photo albums and home video. Telocity currently provides high-speed broadband services through digital subscriber line See DSL. (communications, protocol) Digital Subscriber Line - (DSL, or Digital Subscriber Loop, xDSL - see below) A family of digital telecommunications protocols designed to allow high speed data communication over the existing copper telephone lines between end-users and (DSL) technology. As Telocity expands its services, Telocity intends to choose the most reliable, flexible and cost- effective broadband access See broadband and wireless broadband. technologies (including DSL, cable, and wireless) available in each local market. Telocity's current broadband footprint covers over 140 major U.S. metropolitan statistical areas (MSAs) across the 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. . For more information, contact Telocity at phone 408-863-6600; fax 408-777-1451; www.telocity.net, or mail at 10355 N. DeAnza Blvd.; Cupertino, CA 95014. Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. Statement Investors are cautioned that statements that are not strictly historical constitute 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. , including, without limitation, statements regarding the expected acquisition of Telocity by HUGHES, statements regarding value-added services and the expectations therefor there·for adv. For that: ordering goods and enclosing payment therefor. Adv. 1. therefor , current or future financial performance, management's plans and objectives for future operations, product plans and performance, management's assessment of market factors, and statements regarding the strategy and plans of Telocity and its strategic partners. In accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with 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, important factors that could cause Telocity's actual results to differ materially from those expressed or implied by such forward-looking statements include but are not limited to the pending acquisition of Telocity by HUGHES, the highly competitive and evolving nature of the broadband market, the availability of financing, the ability to satisfy the conditions to the tender offer and merger, the successful deployment of Telocity's rollout plans and strategies, customer demand for Telocity's services in target markets, the pricing environment for Telocity's basic and value-added services, and the success of the company's strategic relationships. Readers are encouraged to review Telocity's recent filings with the Securities and Exchange Commission, including Telocity's current quarterly report on Form 10-Q Form 10-Q See 10-Q. , Registration Statement on Form S-8, prospectus filed under Rule 428(b)(4), final amended Registration Statement on Form S-1, and its other filings with the Securities and Exchange Commission, copies of which may be accessed through the SEC's web site at http://www.sec.gov. Descriptions of risk factors are not intended to be complete.
TELOCITY (DELAWARE), INC.
Financial Highlights
(Dollars in thousands, except share and per share data)
Three Months Ended Twelve Months Ended
12/31/00 9/30/00 12/31/00 9/30/00
Revenues $4,659 $2,851 $9,352 $4,822
Operating Expenses:
Network and products costs 10,064 8,228 29,090 22,705
Sales, general and
administrative 23,615 18,357 89,739 80,819
Research and Development 4,246 4,873 18,336 16,516
Amortization of stock
based compensation 14,572 6,607 26,665 14,172
Depreciation and amortization 5,477 4,811 15,592 11,115
Total operating expenses 57,974 42,876 179,422 145,327
Loss from operations (53,315) (40,025) (170,070) (140,505)
Net interest income (expense) 636 1,379 2,794 1,470
Net loss $(52,679)$(38,646) $(167,276)$(139,035)
Basic and diluted net loss
per common share (1) $(0.68) $(0.51) $(2.79) $(3.62)
Weighted average shares
used in computing net
loss per share 76,983,273 75,529,306 60,079,659 43,127,459
Pro Forma Information:
Pro forma net loss (2) $(38,107)$(32,039) $(140,611)$(124,863)
Diluted pro forma net
loss per share (3) $(0.50) $(0.42) $(1.94) $(1.98)
Shares used in computing
diluted pro forma net
loss per share (3) 76,983,273 75,529,306 72,405,384 63,160,175
Other Data:
EBITDA (4) $(33,266)$(28,607) $(127,813)$(115,218)
(1) Basic and diluted net loss per share is after taking effect of
deemed dividend and accretion on mandatorily redeemable
convertible preferred stock of $341,000 and $16,750,000 for the
quarters ended March 31, 2000, and December 31, 1999,
respectively.
(2) Pro forma net loss excludes the effect of the amortization of
deferred stock compensation, deemed dividend and accretion on
mandatorily redeemable convertible preferred stock. (3) Diluted
pro forma net loss per share, assumes the conversion of Telocity's
preferred stock, which converted to common stock upon the closing
of its initial public offering, as if the conversion occurred as
of the beginning of the period or the date of issuance, if later.
(4) EBITDA is defined as earnings (losses) before interest, taxes,
depreciation, amortization, non-cash stock based compensation and
other non-operating income or expenses.
December 31 December 31
2000 1999
Selected Balance Sheet Data:
Cash and cash equivalents (A) $44,398 $66,978
Working capital (2,159) 53,729
Net property and equipment 46,028 22,272
Total assets 133,060 140,071
Current liabilities 52,923 20,275
Long-term obligations 7,124 12,058
Total stockholders' equity $73,013 $107,738
(A) Cash and cash equivalents at December 31, 2000 includes restricted
cash of $5,976,000.
|
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion