SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
May 3, 1999
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(Date of earliest event reported)
Electric Lightwave, Inc.
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(Exact name of Registrant as specified in charter)
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<CAPTION>
<S> <C> <C>
Delaware 0-23393 93-1035711
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4400 NE 77th Avenue, Vancouver, WA 98662
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(Address of principal executive offices) (Zip Code)
(360)816-3000
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(Registrant's telephone number, including area code)
No change since last report
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(Former name or address, if changed since last report)
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Item 5. Other Events.
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This report is being filed to make available the following press release dated
May 3, 1999.
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NEWS RELEASE
Contacts:
Investors and analysts: Media:
Fletcher Chamberlin Jack Hardy
(360) 816-3996 (360) 816-3602
[email protected] [email protected]
ELECTRIC LIGHTWAVE REPORTS RAPID FIRST QUARTER GROWTH
* Revenue increases 21% from 1998 fourth quarter, 91% from 1998 first quarter
* Data revenues up 57% from 1998 fourth quarter levels
* Local access lines increase 140% from prior year, 32% from prior quarter
Vancouver, WA - May 3, 1999 - Electric Lightwave, Inc. (NASDAQ:ELIX), a leading
facilities-based integrated communications provider, today announced continued
strong sequential revenue growth for the first quarter ended March 31, 1999.
Revenues for the latest quarter were $38.2 million, or 91% above revenues of
$20.1 million in the first quarter of 1998 and 21% above normalized fourth
quarter 1998 revenues of $31.5 million (excluding one-time revenue of $2.2
million in the fourth quarter of 1998). The company's loss before interest,
taxes, depreciation and amortization (EBITDA loss), excluding operating lease
expense, was $21.3 million in the first quarter this year, compared with $8.5
million in the first quarter a year ago and $17.7 million in the fourth quarter
of 1998. The net loss in the 1999 first quarter was $35.0 million or $0.70 per
share, compared with a net loss of $14.8 million or $0.30 per share in the prior
year's first quarter.
"Our sequential revenue growth continued to be very strong in the first
quarter," said Dave Sharkey, president of Electric Lightwave. "We are executing
on our strategy to become the leading competitive provider in the west to both
wholesale and retail customers, with a national reach in data and Internet
services. Our plan is to drive growth by aggressively pursuing both the
expanding data and Internet markets and the local telephone business where we
have extensive networks. Data Services revenue was up 57% from the fourth
quarter of 1998, and Local Telephone Service revenue, excluding reciprocal
compensation revenue, was up 27% from the fourth quarter."
Commenting on the company's operating progress, Sharkey noted, "In the quarter
we provisioned more than double the number of local access lines compared with
the most recent quarter, as we saw additional productivity gains from our
scaleable, integrated back-office system. We have rolled out our data services
to six new cities since the beginning of 1999, and we added 12 Internet routers,
7 ATM switches and 6 frame relay switches to our nationwide network during the
quarter. We also expanded our fiber network through a major fiber swap agreement
with IXC Corporation. Our sales force expansion continued, with an increase to
176 people by the end of March. The company's momentum in the marketplace
continues to build and we are optimistic about continued revenue growth
throughout 1999."
Access line equivalents at the end of the first quarter were 99,006, an increase
of 24,082 lines during the first quarter. The quarter-end total is 32% over the
end of the 1998 fourth quarter and 140% above the total for the end of the 1998
first quarter. The company continued its high asset utilization with 99% of its
access line equivalents on-switch and approximately 14,144 access line
equivalents per voice switch. At the end of the first quarter, it had 3.975
gigabits per second of Internet capacity in its network, an increase of 28% over
the total at the end of 1998. The company had also sold 3.12 gigabits per second
of frame relay and asynchronous transfer mode (ATM) capacity by the end of the
quarter, an increase of 25% from the end of 1998. Data and Internet-related
revenue continued to make up over 50% of the Company's revenue in the latest
quarter, including significant portions of its Local Telephone and Network
Services as well as its Data Services.
"We continue to record double-digit sequential revenue growth, and we plan to
continue that trend in the year ahead," concluded Sharkey. "We entered 1999 with
a plan to accelerate our revenue growth over last year's 65% rate, and we are
currently ahead of our revenue plan. Our provisioning capability continues to
improve and our sales force is increasingly productive. We are well-positioned
to take advantage of the opportunities in our markets."
Electric Lightwave, Inc. is a leading integrated communications provider of
enhanced data services, frame relay, ATM and Internet access solutions to
bandwidth intensive businesses and the growing e-commerce market. The company
offers long distance, data and prepaid services nationwide. As a full-service
provider, the company offers local, long distance, videoconferencing and
high-speed broadband transport via an expanding fiber optic network that
interconnects major markets in the West. Headquartered in Vancouver, Washington,
Electric Lightwave is on the World Wide Web at www.eli.net and
http://data.eli.net. The company is 83% owned by Citizens Utilities (NYSE:CZN,
CZNPr).
This press release contains forward-looking statements that are subject to risks
and uncertainties which could cause actual results to differ materially from
those expressed or implied in the statements. All forward-looking statements are
only predictions or statements of current plans, which are constantly under
review by Electric Lightwave (the Company). All forward-looking statements may
differ from actual future results due to, but not limited to, changes in the
local and overall economy, the nature and pace of technological changes, the
number and effectiveness of competitors in the Company's markets, success in
overall strategy, changes in legal and regulatory policy, relations with
Incumbent Local Exchange Carriers (ILECs) and their ability to provide delivery
of services including interoffice trunking, implementation of back office
service delivery systems, the Company's ability to identify future markets and
successfully expand existing ones and the mix of products and services offered
in the Company's target markets. Readers should consider these important factors
in evaluating any statement contained herein and/or made by the Company or on
its behalf. The Company has no obligation to update or revise forward-looking
statements to reflect the occurrence of future events or circumstances.
(tables follow)
Electric Lightwave, Inc.
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Statements of Operations
<CAPTION>
(In thousands, except per share data)
Three Months Ended
3/31/99 12/31/98 3/31/98
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<S> <C> <C> <C>
Revenues:
Network Services .......................................................... $ 10,424 $ 10,102 $ 9,107
Local Telephone Services .................................................. 14,308 14,389 6,024
Long Distance Services .................................................... 8,530 6,076 1,822
Data Services ............................................................. 4,954 3,149 3,104
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Total Revenues .................................................. 38,216 33,716 20,057
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Operating Expenses:
Network Access ............................................................ 25,224 19,568 9,212
Operating Expenses ........................................................ 9,034 9,067 5,246
Selling, General and Administrative ....................................... 26,767 24,349 15,375
Depreciation and Amortization ............................................. 6,994 5,248 3,884
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Total Operating Expenses ........................................ 68,019 58,232 33,717
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Loss from Operations ........................................................... (29,803) (24,516) (13,660)
Interest Expense, Net .......................................................... 4,779 2,301 744
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Net Loss Before Income Taxes and Cumulative
Effect of Change in Accounting Principle (34,582) (26,817) (14,404)
Income Tax Expense (Benefit) ................................................... 370 (4,735) (2,449)
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Net Loss Before Cumulative Effect of a Change in Accounting Principle (34,952) (22,082) (11,955)
Cumulative Effect of Change in Accounting Principle ............................ -- -- 2,817
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Net Loss .................................................................. $(34,952) $(22,082) $(14,772)
========= ========= =========
EBITDA * .................................................................. $(21,332) $(17,685) $ (8,455)
======== ======== ========
Weighted average shares outstanding ............................................ 49,801 49,744 49,685
Net Loss Per Common Share:
Basic $ (0.70) $ (0.44) $ (0.30)
Diluted $ (0.70) $ (0.44) $ (0.30)
*Excludes operating lease expenses of $1,477, $1,583 and $1,321 for the three
months ended March 31, 1999, December 31, 1998 and March 31, 1998, respectively.
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Electric Lightwave, Inc.
Selected Financial & Operating Data
<CAPTION>
(In thousands except selected operating data)
3/31/99 12/31/98 3/31/98
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Selected Financial Data
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Property, Plant & Equipment - Owned ........................................... $585,533 $528,582 $352,062
Property, Plant & Equipment - Leased .......................................... $108,541 $108,541 $105,226
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Total ............................................................... $694,074 $637,123 $457,288
Selected Operating Data
Markets ....................................................................... 23 15 5
Route Miles ................................................................... 3,098 3,091 2,525
Fiber Miles ................................................................... 181,816 181,368 145,350
Buildings Connected ........................................................... 783 766 631
Switches:
Internet Routers .................................................... 36 24 18
ATM ................................................................. 21 14 9
Frame Relay ......................................................... 29 23 22
Voice ............................................................... 7 7 5
Access Line Equivalents ....................................................... 99,006 74,924 41,270
Access Line Equivalents/Switch ................................................. 14,144 10,703 8,254
% on Switch ................................................................... 99% 99% 97%
Employees ..................................................................... 1,200 1,090 670
Customers ..................................................................... 1,843 1,644 1,226
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Electric Lightwave, Inc.
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Registrant
By: /s/ Kerry D. Rea
_____________________________
Vice President and Controller
Date: May 4, 1999
