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Teligent reports $32m in second quarter revenue; local lines increase by nearly
two-thirds
Vienna, Va., August 8, 2000 - Teligent, a global leader in broadband
communications, today reported second quarter revenue of $32.3 million, a 40
percent increase over the $23.1 million in revenue reported for the first
quarter and a gain of 700 percent year over year. Revenue from local service was
up 43 percent compared to the first quarter, while data and Internet revenue
rose 77 percent.
In addition to the strong revenue trends, installed local lines for the quarter
were up 64 percent, the company's customer base grew 48 percent, fixed wireless
building installations rose 33 percent, the total number of "on-net" buildings
grew 17 percent and building access rights for the first time broke the "one
billion square foot" mark.
During the quarter, Teligent launched a new domestic market - Columbus - and
added another - Dayton - in July, bringing the total number of U.S. markets
served to 42. The company also signed a comprehensive network services agreement
with Level 3 Communications Inc., giving Teligent access to Level 3's national
fiber backbone, regional fiber rings and metropolitan fiber networks.
"We're very pleased with our second quarter results across the board - data and
voice, domestic and international," said Alex J. Mandl, Teligent's Chairman and
Chief Executive Officer. "We're especially excited about the strong showing we
made in our local business. We posted record gains in local revenue, local line
installations and new customers ordering our local service. It's apparent that
customers continue to demand a clear choice for local service and that they
continue to want what Teligent offers."
On the international front, Teligent and Mannesmann Arcor launched their German
joint venture, ArcTel. In France, Teligent and partners LDCOM Networks, the
telecommunications arm of the $20-billion Louis Dreyfus Group, and Artemis, a
global investment holding company, completed work that led to last month's
spectrum grant by the French government.
The Teligent-LDCOM-Artemis joint venture was awarded eight regional licenses in
the 24.5 - 26.5GHz band to serve businesses in major French markets. In
Argentina, Teligent and its partner, Telcom Ventures, began deploying local
fixed wireless networks in Buenos Aires.
During the three months ending June 30, Teligent added 34,110 local lines,
bringing the total number of local lines to 87,516. Lines installed for data,
Internet and related services rose by 180 percent. Total net line additions were
49,075. Teligent ended the quarter with an adjusted total of 358,556 lines,
representing an increase of 25 percent over the first quarter and more than 850
percent from a year ago.
More than 12,400 of the new local lines were added for customers already
subscribing to Teligent long distance service, as the sales force continued its
efforts to bring more existing customers onto Teligent's local networks. (To
avoid double counting, those 12,400 local lines are not included in the total
number of new lines added during the quarter, but are counted only as new local
lines.)
Nearly two-thirds of new customers ordered local service, while the number of
installed local customers grew by 33 percent. Total installed customers
increased to 26,101, up from 17,647 at the end of the first quarter. Year over
year, Teligent's customer base rose nearly 640 percent.
"On-net" focus
"The significant growth in our local business - whether you measure revenue,
lines or customers - reflects our continuing focus on bringing more and more
buildings `on-net'," said Teligent President and Chief Operating Officer Buddy
Pickle. "We continue to shorten installation intervals and expand the universe
of buildings for which we have access rights. Together, these efforts are
driving our success in connecting more and more buildings to our local voice and
data facilities."
During the quarter, Teligent added 514 buildings to its SmartWave(TM) local
communications networks, all with fixed wireless connections, bringing the total
number of "on-net" buildings to 3,614. At the end of the second quarter, 57
percent of all "on-net" buildings were connected through fixed wireless
technology, while 43 percent had wireline connections.
Progress on fixed wireless
"We've made tremendous progress with our fixed wireless installations," Pickle
said. "One hundred percent of all the buildings we brought `on-net' during the
second quarter were equipped with fixed wireless technology. I expect we'll
continue to see even more improvements in our fixed wireless installation
procedures and results as we acquire rights to serve more and more buildings."
In the three months ending June 30, Teligent added 1,650 buildings to its
portfolio of real estate under lease or option, raising the number of buildings
to which Teligent has access rights by 19 percent, to 10,343.
Teligent announced during the quarter that it had secured access rights to
buildings with a combined total of more than one billion square feet of
commercial office space.
On the sales front, nearly 60 percent of new customers ordered a bundle of
services, while nearly two-thirds of new customers ordered local service. About
90 percent ordered long distance. Data and Internet orders by new customers
increased by 50 percent compared to the first quarter. Data sales per customer,
measured in dollars, rose 30 percent over the first quarter.
The Teligent sales force stood at 596 reps at the end of the second quarter, up
38 percent from the second quarter of 1999. Measured in full time equivalent
reps with a minimum of three months' experience, the sales force grew to 379
from 303 during the same year-over-year period. The total Teligent work force at
the end of the second quarter stood at 3,184, up 11 percent from the first
quarter.
Teligent reported a net loss of $164 million for the second quarter, compared to
$156 million for the first quarter. Capital expenditures for the second quarter
were $85 million, compared to $90 million in the first quarter. As of June 30,
the company reported available cash and short-term investments of $291 million
and total assets of $1.1 billion, compared to $286 million and $970 million,
respectively, as of March 31.
"Our operational and financial metrics demonstrate our continued strength," said
Acting Chief Financial Officer Cindy Tallent. "With nearly one billion dollars
in available liquidity, we have the financial flexibility and resources we need
to drive our success in the marketplace."
About Teligent's broadband networks
Teligent's local communications networks represent the integration of the latest
advances in high-frequency microwave technology with traditional broadband
wireline equipment. Together these technologies enable Teligent to increase its
local network efficiency and significantly lower network costs.
Teligent delivers fixed wireless services by installing small antennas on the
roofs of customer buildings. When a customer makes a telephone call or accesses
the Internet, the voice, data or video signals travel over the building's
internal wiring to the rooftop antenna. These signals are then digitized and
transmitted to a "base station" antenna on another building, usually less than
three miles away.
Each base station antenna gathers signals from a cluster of surrounding customer
buildings, aggregates the signals and then routes them to a broadband switching
center. At the switching center, ATM (Asynchronous Transfer Mode) switches and
data routers distribute the traffic to other networks, such as public
circuit-switched voice networks, packet-switched Internet and private data
networks.
About Teligent
Based in Vienna, Virginia, Teligent, Inc. (NASDAQ: TGNT) is a global leader in
broadband communications offering business customers local, long distance,
high-speed data and dedicated Internet services over its digital SmartWave(TM)
local networks in 42 major markets throughout the United States. The company is
working with international partners to extend its reach into Europe, Asia and
Latin America. Teligent's offerings of regulated services are subject to all
applicable regulatory and tariff approvals.
For more information, visit the Teligent website at: www.teligent.com
Teligent and SmartWave are the exclusive trademarks of Teligent, Inc.
Except for any historical information, the matters discussed in this press
release contain forward-looking statements that reflect the company's current
views regarding future events. These forward-looking statements involve risks
and uncertainties that could affect the company's growth, operations, markets,
products and services. The company cannot be sure that any of its expectations
will be realized. Factors that may cause actual results, performance or
achievement to differ materially from those contemplated by its forward looking
statements include, without limitation: 1) The company's pace of entry into new
markets; 2) The time and expense required to build the company's planned network
and ISP infrastructure; 3) The impact of changes in telecommunications laws and
regulations; 4) Ability to secure building access; 5) General economic and
competitive conditions; 6) Technological developments; 7) Other factors
discussed in the company's filings with the Securities and Exchange Commission.
Financial Tables Follow
TELIGENT, INC.
Consolidated Statements of Operations
(amounts in thousands, except per share, share amounts, and number of employees)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------------ -----------------------------
June 30, 2000 June 30, 1999(1) June 30, 2000 June 30,1999(1)
------------- ---------------- ------------- ---------------
<S> <C> <C> <C> <C>
Revenues:
Communications services $ 32,264 $ 3,961 $ 55,328 $ 5,484
Costs and expenses:
Cost of services 86,394 43,638 163,442 77,942
Sales, general and
administrative expenses 59,755 50,051 116,636 95,542
Stock-based and other
noncash compensation 8,250 7,937 16,071 15,801
Depreciation and
amortization expense 24,020 10,087 43,149 17,483
------- ------- ------- -------
Total costs and
expenses 178,419 111,713 339,298 206,768
------- ------- ------- --------
Loss from operations (146,155) (107,752) (283,970) (201,284)
Interest income and other 7,236 4,193 14,313 9,373
Interest expense (25,202) (19,913) (50,217) (39,675)
------- ------- ------- --------
Net loss (164,121) (123,472) (319,874) (231,586)
------- ------- ------- -------
Accrued preferred stock
dividendsand accretion
of issuance costs (10,335) - (20,619) -
------- ------- ------- --------
Net loss applicable to
common shareholders $(174,456) $ (123,472) $ (340,493) $ (231,586)
======= ======= ======= =======
Basic and diluted net
loss per common share $ (2.94) $ (2.34) $ (5.95) $ (4.39)
======= ======= ======= =======
Weighted average common
shares outstanding 59,361,643 52,828,466 57,198,744 52,751,915
========== ========== ========== ==========
Selected Financial and Other Data:
<CAPTION>
Three Months Ended Six Months Ended
--------------------------- -------------------------------
June 30, 2000 June 30, 1999 June 30, 2000 June 30, 1999 (1)
------------- ------------- ------------- -----------------
<C> <C> <C> <C>
EBITDA (2) $(113,885)$ (89,728)$ (224,750)$ (168,000)
Cash used in operations (134,028) (98,369) (254,782) (183,412)
Total capital expenditures 85,067 34,772 175,200 91,475
<CAPTION>
June 30, 2000 June 30, 1999 (1)
------------- -----------------
<C> <C>
Cash and short-term investments $ 290,541 $ 386,088
Total assets 1,060,208 799,712
Total stockholders' (deficit) equity (548,690) (183,426)
Number of employees 3,184 2,237
</TABLE>
(1) Certain amounts in prior quarters and prior year financial statements have
been reclassified to conform to the current period's presentation.
EBITDA (earnings before interest, taxes, depreciation and amortization) excludes
charges for stock-based and other noncash compensation
