EXHIBIT 99.1
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FOR IMMEDIATE RELEASE
Contact: Becky Haight
Investor Relations
Pathnet
(877) 227-5600
[email protected]
Patti Kelly
Media Relations
Pathnet
(703) 390-2868
[email protected]
PATHNET REPORTS THIRD QUARTER RESULTS
RESTON, VA (NOV. 14, 2000) -- Pathnet Telecommunications, Inc. (Pathnet), the
industry's first wholesale, convergent telecommunications service provider
combining competitive local access services and long-haul transport in
underserved markets, today announced its financial and operating results for the
quarter ended Sept. 30, 2000.
Third quarter revenue increased to $17.8 million as compared to revenue of $0.6
million in the third quarter of 1999. On a sequential basis, revenue increased
40 percent from $12.6 million in the prior quarter. As expected, construction
revenue for the quarter accounted for approximately 92 percent of total revenue,
with service revenue comprising the balance. Earnings before interest, taxes,
depreciation and amortization (EBITDA) for the quarter was a loss of $10.4
million versus a loss of $6.9 million in the year-ago quarter.
Customer demand for Pathnet's single integrated platform of VPOP Plus
Services--including Internet dial access, xDSL and Private Line connection
services--continues to increase. The company's sales backlog increased $35
million and now stands at $234 million, comprised of $195 million in telecom
services and $39 million in construction and infrastructure services.
"Pathnet is executing nicely on its plan of becoming the first convergent
communications services provider focused on underserved markets," said Richard
Jalkut, president and chief executive officer. "Customer demand for our unique
VPOP services family has been outstanding as evidenced by our growing sales
backlog. Customers are looking for
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Pathnet Earnings - 2
capital efficient, low-cost service that is available in multiple markets--which
Pathnet provides. We've also continued to bolster our financial position by
securing $260 million in credit facilities with various vendors."
During the third quarter, Pathnet successfully secured a total of $260 million
in credit facilities from two vendors and closed a $25 million second tranche of
equity from Colonial Pipeline Co. The company's $210 million credit facility
from Nortel Networks has a term of six years and will support the expansion of
Pathnet's continued fiber optic build-out through the financing of goods and
services purchased from Nortel. The second vendor's $50 million credit facility
will help Pathnet finance purchases including softswitches, gateways and optical
muxes, which will support Pathnet's offering of unique VPOP Plus Services.
Pathnet completed 300 additional route miles of network and 20 additional
collocations during the quarter, bringing its total network to 7,700 route miles
and 106 collocations in 73 cities. The company continues to target 150
collocations in 80 cities by the end of the year. Pathnet increased its gross
property and equipment by $51 million in the quarter, bringing total property
and equipment acquired to $272 million at quarter-end.
THIRD QUARTER HIGHLIGHTS AND RECENT DEVELOPMENTS
o Secured $210 million credit facility from Nortel Networks
o Secured a $50 million credit facility from a second vendor
o Closed $25 million second tranche of equity from first quarter's
strategic investment transaction
o Increased sales backlog to $234 million from $200 million
o Lit Omaha-to-Denver route to complete lighting on Chicago-to-Denver
route
o Completed 20 collocations, bringing cumulative total to 106
o Achieved CLEC approval in 10 new states, for a year-to-date total of
35 CLEC approvals
Pathnet will be discussing its third quarter results this morning at 11:00 a.m.
EST. Interested parties may listen to the call by dialing (719) 457-2633. A
telephone replay will be available approximately two hours after the conclusion
of the call for approximately one week. The replay call-in number is (719)
457-0820; both the call and the replay can be accessed using the passcode
652085.
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Pathnet Earnings - 3
Pathnet is a wholesale telecommunications service provider that delivers
broadband access and transport solutions to underserved markets nationwide over
a wholly convergent network. Pathnet provides service to classic
telecommunications carriers, as well as to emerging carriers such as Internet
service providers and competitive local exchange carriers, giving them the
ability to improve their profitability in today's environment via capital-free,
low-risk market expansion. Pathnet currently has 7,700 route miles of completed
network and 1,900 additional route miles of network under construction or swap
commitment. Additional information about Pathnet can be found on the company's
web site at: WWW.PATHNET.NET.
THE STATEMENTS MADE BY PATHNET IN THIS PRESS RELEASE MAY BE FORWARD-LOOKING IN
NATURE. NO ASSURANCE CAN BE GIVEN THAT FUTURE RESULTS WILL BE ACHIEVED; ACTUAL
RESULTS MAY DIFFER MATERIALLY FROM THOSE PROJECTED IN FORWARD-LOOKING
STATEMENTS. PATHNET BELIEVES THAT ITS PRIMARY RISK FACTORS INCLUDE, BUT ARE NOT
LIMITED TO: SIGNING ADDITIONAL AGREEMENTS WITH PRIVATE NETWORK OPERATORS AND
OTHERS; OFFERING SERVICES TO TELECOMMUNICATION SERVICE PROVIDERS; ENTERING INTO
PARTNERING ARRANGEMENTS; BUILDING A DIGITAL NETWORK; MEETING MARKET DEMAND AND
CUSTOMER SERVICE EXPECTATIONS; AND OBTAINING ADDITIONAL FINANCING. ADDITIONAL
INFORMATION CONCERNING THESE AND OTHER POTENTIALLY IMPORTANT FACTORS CAN BE
FOUND WITHIN PATHNET'S REGISTRATION STATEMENT AND PERIODIC REPORTS FILED WITH
THE U.S. SECURITIES AND EXCHANGE COMMISSION UNDER THE FEDERAL SECURITIES LAWS.
STATEMENTS IN THIS RELEASE SHOULD BE EVALUATED IN LIGHT OF THESE IMPORTANT
FACTORS.
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PATHNET TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
SEPT. 30,
2000 1999
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(UNAUDITED) (UNAUDITED)
<S> <C> <C>
Revenue $ 17,815 $ 584
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Expenses:
Cost of revenue 19,515 4,259
Selling, general and administrative 8,667 3,197
Depreciation 3,099 2,143
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Total expenses 31,281 9,599
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Net operating loss (13,466) (9,015)
Interest expense (10,434) (9,987)
Interest income 1,801 3,319
Other (15) (244)
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Net loss $ (22,114) $ (15,927)
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Other Data:
EBITDA $ (10,367) $ (6,871)
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PATHNET TELECOMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT STATISTICAL DATA)
<TABLE>
<CAPTION>
SEPT. 30, DEC. 31,
2000 1999
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(UNAUDITED)
ASSETS
<S> <C> <C>
Cash and cash equivalents $ 66,793 $ 90,662
Marketable securities available for sale, at market 5,128 42,652
Other current assets 14,410 2,486
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Total current assets 86,331 135,800
Property and equipment, net 256,950 131,928
Intangible assets 185,923 --
Restricted cash and marketable securities available for sale, at market 12,353 22,010
Pledged marketable securities held to maturity 20,966 20,797
Other assets 18,753 10,001
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Total assets $ 581,276 $ 320,536
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LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Total current liabilities 78,859 30,588
Bonds payable, net of unamortized bond discount of $3,071 and $3,378 346,929 346,622
Other non-current liabilities 24,545 3,093
Total mandatorily redeemable preferred stock 62,912 35,970
Total stockholders' equity (deficit) 68,030 (95,737)
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Total liabilities, mandatorily redeemable preferred stock and
stockholders' equity (deficit) $ 581,276 $ 320,536
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Selected statistical data:
Route miles complete 7,700 6,800
Route miles under construction and swap commitment 1,900 700
Collocations 106 40
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