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:
March 1, 2000
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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
March 1, 2000.
News Release
Contacts:
Investors and analysts: Media:
Fletcher Chamberlin Jack Hardy
(360) 816-3996 (360) 816-3602
[email protected] [email protected]
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ELECTRIC LIGHTWAVE REPORTS CONTINUED RAPID GROWTH
FOR THE FOURTH QUARTER OF 1999
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Vancouver, WA - March 1, 2000 - Electric Lightwave, Inc. (NASDAQ:ELIX), a
leading facilities-based integrated communications provider, today announced
results for the fourth quarter and full year 1999. Revenue growth continued to
be very strong, and the quarterly loss before interest, taxes, depreciation and
amortization (EBITDA loss) was less than half the loss in the prior year's
fourth quarter.
Revenues for the quarter ended December 31, 1999 were $54.1 million, or 60%
above revenues of $33.7 million in the fourth quarter of 1998 and 11% above
third quarter 1999 revenues of $48.6 million. The company's EBITDA loss,
excluding operating lease expense, was $7.6 million in the fourth quarter this
year, compared to $17.7 million in the fourth quarter a year ago. The net loss
in the 1999 fourth quarter was $35.0 million or $0.70 per share, compared with a
net loss of $22.1 million or $0.44 per share in the prior year's fourth quarter.
For the year ended December 31, 1999, revenues were $187.0 million, or 85% above
the 1998 total of $100.9 million. The EBITDA loss, excluding operating lease
expense, for 1999 was $51.5 million, compared to $50.6 million a year ago. The
net loss for 1999 was $133.5 million or $2.68 per share, compared with a net
loss of $70.0 million or $1.41 per share in 1998.
"Rapid revenue growth in our core businesses continued in the quarter, and we
continued to make progress toward our near-term goal of our first positive
EBITDA quarter in 2000," said Dave Sharkey, president of Electric Lightwave.
"Core revenue, including data services, network services and local telephone
service without reciprocal compensation, grew 19% compared with the third
quarter and 108% compared with the same quarter last year. Data Services
revenue, which includes Internet access revenue, was up 58% sequentially and
274% compared with last year. We continue to drive growth by aggressively
pursuing both the expanding data and Internet markets and the local telephone
business in the West, where we have extensive fiber optic networks."
Commenting on the company's operating performance, Sharkey added, "The gross
margin (defined as revenues minus network access expenses) was 70% in the fourth
quarter and 57% for the full year, compared with 42% and 49% in last year's
fourth quarter and full year, respectively. This major improvement sets the
stage for solid performance in the coming year. It is a result of our focus on
building on-net business for our extensive networks and our previously-announced
decision to exit lower-margin businesses. In addition, operations and selling,
general and administrative expenses grew by 10% from the third quarter, while
core revenues were up 19%, demonstrating continued productivity improvements."
"With rapid data and Internet growth, good gross margins, and our long-haul
network coming on line," concluded Sharkey, "we are optimistic about further
improvements in 2000."
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Electric Lightwave, Inc. is a broadband integrated communications company
providing Internet, data, voice and dedicated access services to
communications-intensive businesses and the growing e-commerce market. The
company owns and operates high-speed fiber optic networks that interconnect
major markets in the West and operates a leading national Internet and data
network. Headquartered in Vancouver, Washington, Electric Lightwave is on the
World Wide Web at www.eli.net. The company is 82% 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.
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Electric Lightwave, Inc.
Statements of Operations
(in thousands, except per share data)
Three Months Ended
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12/31/99 9/30/99 12/31/98
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Revenues:
<S> <C> <C> <C>
Network Services .................. $ 15,818 $ 14,024 $ 10,101
Local Telephone Services .......... 22,370 22,313 14,388
Long Distance Services ............ 4,111 4,812 6,076
Data Services ..................... 11,796 7,453 3,151
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Total Revenues .............. 54,095 48,602 33,716
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Operating Expenses:
Network Access .................... 16,303 14,719 19,568
Operations ........................ 11,823 10,732 9,067
Selling, General and Administrative 35,168 32,017 24,349
Depreciation and Amortization ..... 11,554 9,807 5,248
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Total Operating Expenses .... 74,848 67,275 58,232
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Loss from Operations .............. (20,753) (18,673) (24,516)
Interest Expense and Other ............. 14,312 11,424 2,301
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Net Loss Before Income Taxes ...... (35,065) (30,097) (26,817)
Income Tax (Expense) Benefit ........... 49 (277) 4,735
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Net Loss .......................... $(35,016) $(30,374) $(22,082)
======== ======== ========
EBITDA* ........................... $ (7,583) $ (7,361) $(17,685)
======== ======== ========
Weighted Average Shares Outstanding .... 50,029 49,915 49,744
Net Loss Per Common Share:
Basic ............................. $ (0.70) $ (0.61) $ (0.44)
Diluted ........................... $ (0.70) $ (0.61) $ (0.44)
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* Excludes operating lease expenses of $1,616, $1,505, and $1,583 for the three
months ended December 31, 1999, September 30, 1999 and December 31, 1998,
respectively.
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Electric Lightwave, Inc.
Statements of Operations
(in thousands, except per share data)
Year Ended
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Revenues: 12/31/99 12/31/98
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Network Services ...................... $ 53,249 $ 36,589
Local Telephone Services .............. 77,591 38,169
Long Distance Services ................ 26,698 12,309
Data Services ......................... 29,470 13,813
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Total Revenues .................. 187,008 100,880
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Operating Expenses:
Network Access ........................ 79,948 50,957
Operations ............................ 41,222 28,149
Selling, General and Administrative ... 123,399 78,555
Depreciation and Amortization ......... 36,505 17,002
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Total Operating Expenses ........ 281,074 174,663
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Loss from Operations .................. (94,066) (73,783)
Interest Expense and Other ................. 38,583 7,254
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Net Loss Before Income Taxes and
Cumulative Effect of Change in
Accounting Principle ................ (132,649) (81,037)
Income Tax (Expense) Benefit ............... (898) 13,837
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Net Loss Before Cumulative Effect of
Change in Accounting Principle ...... (133,547) (67,200)
Cumulative Effect of Change in Accounting
Principle (Net of $577 income tax benefit) -- 2,817
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Net Loss .............................. $(133,547) $ (70,017)
========= =========
EBITDA* ............................... $ (51,502) $ (50,567)
========= =========
Weighted Average Shares Outstanding ........ 49,893 49,709
Net Loss Per Share Before Cumulative Effect
Of Change in Accounting Principle:
Basic ................................. $ (2.68) $ (1.35)
Diluted ............................... $ (2.68) $ (1.35)
Net Loss Per Common Share:
Basic ................................. $ (2.68) $ (1.41)
Diluted ............................... $ (2.68) $ (1.41)
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* Excludes operating lease expenses of $6,059 and $6,214 for the years ended
December 31, 1999 and December 31, 1998, respectively.
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Electric Lightwave, Inc.
Selected Financial and Operating Data
(In thousands, except selected operating data)
12/31/99 9/30/99 12/31/98
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Selected Financial Data
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Gross Property Plant & Equipment:
Owned or under capital lease ................. $771,947 $723,141 $528,582
Under operating lease ........................ 108,541 108,541 108,541
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Total ........................................... $880,488 $831,682 $637,123
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Selected Operating Data
Markets ......................................... 25 25 15
Route Miles ..................................... 4,052 4,047 3,091
Fiber Miles ..................................... 214,864 214,656 181,368
Buildings Connected On-Net ...................... 824 808 766
Switches and Routers:
Internet Routers ........................... 42 42 24
ATM Switches ............................... 23 22 14
Frame Relay Switches ....................... 32 31 23
Voice ...................................... 8 7 7
Access Line Equivalents ......................... 161,555 142,433 74,924
Access Line Equivalents/Voice Switch ............ 20,194 20,348 10,703
% on switch ..................................... 97% 97% 99%
Employees ....................................... 1,167 1,172 1,090
Customers ....................................... 2,371 2,102 1,644
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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
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Vice President and Controller
Date: March 1, 2000
