Prospectus Supplement filed under Rule 424(b)(3)
Registration Number 333-91749
Prospectus Supplement No. 7, dated August 3, 2000
(To Prospectus, dated January 3, 2000)
[AIRGATE PCS LOGO]
644,400 SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF WARRANTS
This prospectus supplement to the prospectus dated January 3, 2000 relates
to our offering of 644,400 shares of common stock issuable by us from time to
time upon exercise of warrants sold by us in our units offering, which was
completed on September 30, 1999.
This prospectus supplement should be read in conjunction with the
prospectus dated January 3, 2000, as supplemented, which is to be delivered with
this prospectus supplement.
THIS INVESTMENT INVOLVES RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 17 OF
PROSPECTUS SUPPLEMENT NO. 5 DATED MAY 16, 2000.
-------------------------------------------------------------------------------
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
-------------------------------------------------------------------------------
<PAGE>
On August 3, 2000, AirGate PCS, Inc. ("AirGate PCS") issued the following
press release announcing third quarter fiscal 2000 results for the three and
nine months ended June 30, 2000.
Contact: Alan B. Catherall
Chief Financial Officer
404-525-7272
AIRGATE PCS, INC. ANNOUNCES STRONG
THIRD QUARTER FISCAL 2000 RESULTS
SUBSCRIBER BASE MORE THAN TRIPLED SEQUENTIALLY COMBINED
WITH OUTSTANDING GROWTH IN ROAMING REVENUE
ATLANTA (August 3, 2000) AirGate PCS, Inc., (Nasdaq/NM: PCSA), a Sprint PCS
(NYSE: PCS) Network Partner, today announced financial and operating results for
the third fiscal quarter and nine months ended June 30, 2000.
Net revenues for the third quarter ended June 30, 2000 totaled $6.5
million. EBITDA (earnings before interest, taxes, depreciation and
amortization), was ($16.1) million for the third quarter of fiscal 2000,
compared with ($1.2) million for the same period a year ago. The Company
reported a net loss of ($25.2) million, or ($2.03) per share, in the three
months ended June 30, 2000 compared with a net loss of ($6.2) million, or
($1.83) per share, in the same period of 1999.
For the nine months ended June 30, 2000, the Company reported net revenues of
$8.3 million. EBITDA was ($33.8) million for the first nine months of fiscal
2000, compared with ($2.8) million for the same period a year ago. AirGate PCS
reported a net loss of ($52.1) million, or ($4.27) per share, in the nine months
ended June 30, 2000 compared with a net loss of ($9.4) million, or ($2.77) per
share, in the same period of 1999.
"We are very pleased to report an outstanding quarter for AirGate PCS,"
said Thomas M. Dougherty, president and chief executive officer of AirGate PCS.
"Our strong top line performance reflects our aggressive network build-out and
our ability to launch PCS service in most of our markets a full six months ahead
of schedule. As a result of our rapid network construction, we are now offering
coverage to over 75% of the population in our territory. Even more exciting is
the tremendous response we have witnessed in these initial markets as evidenced
by the significant growth of new subscribers. As these markets mature, we
expect this trend to continue and, as a result, we believe that AirGate is well
positioned for continued strong customer growth in our territory.
"In addition, the quarter was highlighted by strong growth in roaming coverage
generated in these markets," Dougherty continued. "We believe we will continue
to see an increase in roaming traffic with our newly launched markets and the
additional opportunity to benefit from attractive patterns for roaming
activity."
Operating highlights for the third quarter of fiscal 2000 include the following:
- AirGate added 17,104 net new customers in its second quarter of commercial
PCS operations compared to the 6,378 net new customers added in the prior
quarter. As a result, the Company had a total of 23,482 subscribers as of June
30, 2000.
- Average revenue per subscriber (ARPU), excluding roaming and activation
fees, was $54 for the quarter, compared with $53 for the previous quarter.
- Total roaming revenue was $3.8 million for the third fiscal quarter,
compared with $816,000 for the second fiscal quarter.
- Commercial Sprint PCS service was launched in the following markets:
Charleston, South Carolina on April 28, 2000; Savannah, Georgia on May 22, 2000;
Jacksonville and Roanoke Rapids, North Carolina on May 29, 2000; Augusta,
Georgia and Columbia, Florence and Orangeburg, South Carolina on June 7, 2000;
and Greenville and New Bern, North Carolina on June 30, 2000. Additionally, the
Company launched service in Sumter, South Carolina and The Outer Banks region of
North Carolina on July 19, 2000.
- The Company opened a total of seven Sprint PCS stores in the fiscal third
quarter. In addition, a further three stores have been opened in July.
- Churn, net of 14 day returns, was 3% in the third fiscal quarter.
- The customer average minutes of use (MOU) was 363 in the third quarter,
compared with 326 in the previous quarter.
AirGate PCS will hold a conference call to discuss this press release today
at 10:00 a.m. EDT. A live broadcast of the conference call will be available
online at www.airgatepcsa.com, www.streetevents.com, or www.vcall.com and a
replay will be available to institutional subscribers on www.streetfusion.com.
To listen to the live call, please go to the web site at least fifteen minutes
early to register, download, and install any necessary audio software. For
those who cannot listen to the live broadcast, a replay will be available
shortly after the call through the close of business on August 8, 2000.
AirGate PCS, Inc. is the exclusive manager and operator of Sprint PCS
products and services throughout most of the state of South Carolina, including
Charleston, Columbia and Greenville-Spartanburg, parts of North Carolina,
including Asheville, Wilmington and Hickory, and the eastern Georgia cities of
Augusta and Savannah. With a territory that includes more than 7.1 million POPs
covering 62,000 contiguous square miles, AirGate PCS is one of the largest
Sprint PCS affiliates based on the size of the population in its territory. As
a Sprint PCS affiliate, AirGate PCS is building its own PCS network to
exclusively provide 100% digital, 100% PCS products and services under the
Sprint and Sprint PCS brand names in its territory.
Sprint PCS operates the largest all-digital, all-PCS nationwide wireless network
in the United States, already serving the majority of the nation's metropolitan
areas including more than 4,000 cities and communities across the country.
Sprint PCS has licensed PCS coverage of nearly 270 million people in all 50
states, Puerto Rico and the U.S. Virgin Islands. For more information, visit
the Sprint PCS web site at http://www.sprintpcs.com. Sprint PCS is a
wholly-owned tracking group of Sprint Corporation trading on the NYSE under the
symbol "PCS."
Sprint is a global communications company at the forefront in integrating
long distance, local and wireless communications services and one of the world's
largest carriers of Internet traffic. Sprint built and operates the United
States' only nationwide all-digital, fiber optic network and is a leader in
advanced data communications services. Sprint has $20 billion in annual
revenues and serves more than 20 million business and residential customers.
Statements contained in this news release regarding expected financial
results and other expected events should be considered forward-looking
statements that are subject to various risks and uncertainties. Such forward
looking statements are made pursuant to the "safe-harbor" provisions of the
private Securities Litigation Reform Act of 1995 and are made based on
management's current expectations or beliefs as well as assumptions made by, and
information currently available to, management. A variety of factors could
cause actual results to differ materially from those anticipated in AirGate PCS'
forward- looking statements, including the following factors: potential
fluctuations in quarterly results; our dependence on our affiliation with Sprint
PCS; an adequate supply of subscriber equipment; new product development; risks
related to our ability to compete with larger, more established businesses;
rapid technological and market change; risks related to future growth and
expansion and; our significant level of indebtedness and volatility of stock
prices. For a detailed discussion of these and other cautionary statements and
factors that could cause actual results to differ from AirGate PCS' forward-
looking statements, please refer to AirGate PCS' filings with the Securities and
Exchange Commission, especially in the "risk factors" section of AirGate PCS'
Form 10-K for the fiscal year ended September 30, 1999, and Form 10-Q for the
quarter ended March 31, 2000, and in subsequent filings with Securities and
Exchange Commission.
AIRGATE PCS, INC. AND SUBSIDIARY AND PREDECESSORS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- --------------------
2000 1999 2000 1999
---- ---- ---- ----
<S> <C> <C> <C > <C>
Revenues:
Service revenue $2,034 $ -- $ 2,494 $ --
Roaming revenue 3,771 -- 4,717 --
Equipment revenue 737 -- 1,041 --
---------- ------------ ---------- -----------
$ 6,542 -- $8,252 --
Operating expenses:
Cost of services
and roaming (7,509) -- (15,913) --
Cost of equipment (1,363) -- (1,974) --
Selling and marketing (8,734) -- (13,772) --
General and
administrative expenses (4,647) (1,201) (9,349) (2,844)
Noncash stock
compensation expense (354) -- (1,067) --
Depreciation and
amortization (4,235) (171) (6,795) (585)
------------- ----------- ------------ ------------
OPERATING LOSS (20,300) (1,372) (40,618) (3,429)
Interest income 2,005 -- 8,083 --
Interest expense (6,901) (4,813) (19,593) (5,934)
------------ ----------- ------------ -----------
NET LOSS $(25,196) $ (6,185) $ (52,128) $(9,363)
============ ========== =========== ============
Basic and diluted
net loss per share of
common stock $(2.03) $ (1.83) $ (4.27) $ (2.77)
============ =========== ============ ============
Weighted average
outstanding common shares 12,435,644 3,382,518 12,212,480 3,382,518
============ =========== ============ ============
Weighted average
outstanding shares including
potentially dilutive common
stock equivalents 13,754,095 3,382,518 13,504,402 3,382,518
============ =========== =========== ============
</TABLE>
<PAGE>
AIRGATE PCS, INC. AND SUBSIDIARY AND PREDECESSORS
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(dollars in thousands)
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
2000 1999
---- ----
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $92,221 $258,900
Trade receivables, net 3,659 --
Due from AirGate Wireless, LLC -- 751
Other current assets 6,593 2,819
-------- --------
TOTAL CURRENT ASSETS 102,473 262,470
------- -------
Property and equipment, net 160,830 44,206
Financing costs 9,502 10,399
Other assets 290 245
-------- --------
TOTAL ASSETS $273,095 $317,320
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 8,230 $ 2,216
Accrued expenses 12,311 20,178
Accrued interest 392 1,413
Current maturities of
long-term debt -- 7,700
------- --------
TOTAL CURRENT LIABILITIES 20,933 31,507
Long-term debt 174,861 157,967
------- -------
TOTAL LIABILITIES 195,794 189,474
------- -------
Stockholders' equity:
Preferred stock, par value, $0.01 per share;
5,000,000 shares authorized; no shares
issued and outstanding -- --
Common stock, par value, $0.01 per share;
150,000,000 shares authorized;
12,473,802 and 11,957,201 shares issued
and outstanding at June 30, 2000 and
September 30, 1999, respectively 125 120
Additional paid-in capital 160,622 157,880
Accumulated deficit (79,382) (27,254)
Unearned stock option compensation (4,064) (2,900)
------- --------
TOTAL STOCKHOLDERS' EQUITY 77,301 127,846
Commitments and contingencies -- --
------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $273,095 $317,320
======== =========
</TABLE>
<PAGE>
