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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
February 17, 1999
WESTERN WIRELESS CORPORATION
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(Exact Name of Registrant as Specified in Charter)
Washington
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(State or Other Jurisdiction of Incorporation)
000-28160 91-1638901
(Commission File Number) (IRS Employer Identification No.)
3650 131st Avenue SE, Suite 400
Bellevue, WA 98006
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(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: (425) 586-8700
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
On February 17, 1999, Western Wireless Corporation issued the following press
release:
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FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT:
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Investment Community: Media:
Ken Prussing John Snyder
Western Wireless Corporation Snyder Buscher Group
(425) 586-8072 (206) 652-9704
[email protected] [email protected]
www.wwireless.com
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WESTERN WIRELESS ANNOUNCES FOURTH QUARTER AND YEAR END 1998 FINANCIAL RESULTS
- CELLULAR FREE CASH FLOW OF $82.3 MILLION FOR THE YEAR -
VOICESTREAM(R) WIRELESS SUBSCRIBER GROWTH OF 151 PERCENT IN 1998 -
-
BELLEVUE, Wash. (February 17, 1999) -- Western Wireless Corporation (NASDAQ:
WWCA), a leading provider of cellular and personal communications services
("PCS"), announced today its financial and operating results for the fourth
quarter and year ended December 31, 1998.
"1998 has been a year of great accomplishments for Western Wireless," said
John Stanton, chairman and chief executive officer of Western Wireless. "Our
business continues to be one of the fastest growing wireless providers in the
country, adding over 330,000 new customers. In cellular, while growing the
subscriber base rapidly, we also grew EBITDA (operating income before
depreciation and amortization) by almost 50 percent and generated over $80
million in free cash flow (EBITDA less capital expenditures). We continue to be
excited by the prospect of expanding our wireless service offering in rural
America."
"During 1998 our VoiceStream Wireless business increased total subscribers
by 151 percent over the prior year" continued Stanton. "This growth in
subscribers demonstrates that consumers are excited by the new alternative to
wireless service that is being offered by VoiceStream. The launch of the Phoenix
market in the fourth quarter of 1998 and the impending launch of our Seattle
market are evidence that we continue to move the VoiceStream Wireless name
forward in the west. Our international team continues to look for opportunities
around the globe. We are pleased with their progress and excited by the future
prospects in the international arena."
TOTAL COMPANY RESULTS
At the end of the fourth quarter 1998 the company had 982,800 subscribers, a
52 percent increase over the fourth quarter of 1997. The company reported
revenues of $171.6 million for the quarter, up 51 percent over the same quarter
a year ago. Net loss was $57.2 million, a loss of $0.75 per share for the
quarter compared to a loss of $72.3 million, a loss of $0.99 per share, for the
fourth quarter of 1997. Consolidated EBITDA in the fourth quarter was $8.2
million compared to an EBITDA loss of $2.2 million for the same quarter in 1997.
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For the year ended December 31, 1998, total revenues for the company were
$584.6 million, a 54 percent increase from $380.6 million in 1997. The net loss
for the year ended December 31, 1998, was $224.1 million, a loss of $2.95 per
share compared to a loss of $265.5 million a loss of $3.76 per share, for the
year ended December 31, 1997. Consolidated EBITDA for the year ended December
31, 1998 was $34.8 million compared to an EBITDA loss of $26.2 million for 1997.
WESTERN WIRELESS CELLULAR RESULTS
Cellular subscribers increased by 140,400 during the year (including
acquisitions of 5,100). For the quarter ending December 31, 1998, cellular
subscribers were 660,400, a 27 percent year to year increase. Cellular service
revenues for the fourth quarter of 1998 increased 31 percent from the same
quarter a year ago to $111.6 million. Cellular EBITDA for the quarter was $42.8
million, a 40 percent increase over the same quarter in 1997. Cellular capital
expenditures were $23.9 million for the quarter. For the year ended December 31,
1998, cellular service revenues were $401.9 million, a 38 percent increase over
1997. Cellular EBITDA was $155.7 million for the year ended December 31, 1998, a
50 percent increase over 1997 EBITDA of $103.9 million. The cellular business
generated $82.3 million in free cash flow for the year ended December 31, 1998.
WESTERN WIRELESS INTERNATIONAL
1998 was an exciting year for Western Wireless International ("WWI"), marked
by the acquisition of three new licenses, the commercial launch of one new
market, and the continued growth of its first two operations. WWI operating
companies were awarded licenses in Ireland, Croatia, and Haiti in 1998. In May,
Tal hf, WWI's Icelandic operating company, launched commercial service,
achieving a 3.9% penetration rate in its first eight months of operation. WWI's
operating companies in Latvia, Georgia, and Iceland provide service to over
75,000 subscribers at the end of 1998.
VOICESTREAM WIRELESS RESULTS
VoiceStream Wireless subscribers increased by 193,800 during the year. For
the quarter ending December 31, 1998, VoiceStream subscribers were 322,400, a
151 percent year to year increase. VoiceStream service revenues for the fourth
quarter of 1998 increased 159 percent from the same quarter a year ago to $42.8
million. The VoiceStream EBITDA loss for the quarter was $34.6 million. EBITDA
before marketing expenses (including the net loss on equipment sales) for the
quarter ended December 31, 1998 was $7.6 million. VoiceStream capital
expenditures were $104.1 million for the quarter, which includes expenditures to
prepare for the Phoenix, and Seattle launches. For the year ended December 31,
1998, VoiceStream service revenues were $127.5 million, a 142 percent increase
over 1997. The VoiceStream EBITDA loss was $120.9 million for the year ended
December 31, 1998.
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VOICESTREAM WIRELESS SPIN-OFF
On February 8, 1999, Western Wireless announced that it had received a
favorable ruling from the Internal Revenue Service regarding the tax free nature
of a potential spin-off of its 80.1 percent ownership of VoiceStream Wireless
Corporation. On February 5, 1999, the Board of Directors of Western Wireless
approved such a spin-off transaction and authorized the management of the
company to effectuate the transaction. Completion of the spin off transaction is
subject to conditions including receipt of certain third party consents and the
review of filings by the Securities and Exchange Commission. It is anticipated
that the spin off transaction will be completed during the second quarter of
1999.
Based in Bellevue, Wash., Western Wireless Corp. is a leading provider of
wireless communications services in the western United States. It currently
offers cellular service marketed under the Cellular One(R) name in 17 western
states. Marketed under the VoiceStream name, Western Wireless provides PCS
service using the globally dominant GSM technology in ten U.S. markets. In
conjunction with joint ventures, Western Wireless provides VoiceStream PCS
service in three additional markets. Western Wireless' combined cellular and PCS
licenses, along with its joint ventures, cover over half the land in the
continental United States.
[Remainder of page intentionally blank.]
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WESTERN WIRELESS CORPORATION
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
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Three months ended December 31, Twelve months ended December 31,
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1998 1997 1998 1997
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Revenues:
Subscriber revenues $ 129,940 $ 88,207 $ 454,016 $ 297,724
Roamer revenues 23,135 12,167 70,250 39,977
Equipment sales and other revenues 18,532 13,008 60,316 42,877
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Total revenues 171,607 113,382 584,582 380,578
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Operating expenses:
Cost of service 31,544 23,621 106,570 90,184
Cost of equipment sales 33,113 25,671 110,220 83,167
General and administrative 43,685 33,694 164,231 112,543
Sales and marketing 55,113 32,621 168,756 120,875
Depreciation and amortization 42,686 36,543 158,169 133,470
------------ ------------ ------------ ------------
Total operating expenses 206,141 152,150 707,946 540,239
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Operating loss (34,534) (38,768) (123,364) (159,661)
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Other income (expense):
Interest and financing expense, net (32,847) (31,167) (126,345) (98,964)
Equity in net loss of unconsolidated affiliates (7,154) (3,951) (28,866) (11,058)
Other, net 2,579 1,593 10,471 4,149
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Total other income (expense) (37,422) (33,525) (144,740) (105,873)
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Minority interest in net loss of consolidated subsidiaries 14,750 44,035
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Net loss $ (57,206) $ (72,293) $ (224,069) $ (265,534)
============ ============ ============ ============
Basic loss per common share $ (0.75) $ (0.99) $ (2.95) $ (3.76)
============ ============ ============ ============
Weighted average common shares used in computing
basic loss per common share 75,968,000 72,758,000 75,863,000 70,692,000
============ ============ ============ ============
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WESTERN WIRELESS CORPORATION
SUPPLEMENTARY FINANCIAL AND OPERATIONAL DATA
(Dollars in thousands)
(Unaudited)
(Note: The following table sets forth certain selected
financial and operating data of the company for the three
months and years ended December 31, 1998 and 1997)
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THREE MONTHS ENDED DECEMBER 31,
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1998 1997
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CELLULAR PCS CELLULAR PCS
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Revenues:
Subscriber revenues $ 88,248 $ 41,692 $ 71,904 $ 16,303
Roamer revenues 22,075 1,060 11,940 227
Equipment sales 4,602 12,633 3,948 7,736
Other revenues 1,297 1,324
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Total revenues 116,222 55,385 89,116 24,266
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Operating expenses:
Cost of service 15,579 15,965 12,424 11,197
Cost of equipment sales 8,925 24,188 9,654 16,017
General and administrative 24,527 19,158 18,416 15,278
Sales and marketing 24,410 30,703 18,049 14,572
Depreciation and amortization 20,161 22,525 17,267 19,276
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Total operating expenses 93,602 112,539 75,810 76,340
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Operating income (loss) $ 22,620 $ (57,154) $ 13,306 $ (52,074)
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EBITDA $ 42,781 $ (34,629) $ 30,573 $ (32,798)
Ending subscribers 660,400 322,400 520,000 128,600
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TWELVE MONTHS ENDED DECEMBER 31,
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1998 1997
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CELLULAR PCS CELLULAR PCS
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Revenues:
Subscriber revenues $ 330,050 $ 123,966 $ 245,364 $ 52,360
Roamer revenues 66,744 3,506 39,750 227
Equipment sales 14,699 40,490 12,353 25,143
Other revenues 5,127 5,381
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Total revenues 416,620 167,962 302,848 77,730
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Operating expenses:
Cost of service 55,592 50,978 47,001 43,183
Cost of equipment sales 33,149 77,071 29,698 53,469
General and administrative 88,888 75,343 60,865 51,678
Sales and marketing 83,309 85,447 61,409 59,466
Depreciation and amortization 74,402 83,767 66,595 66,875
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Total operating expenses 335,340 372,606 265,568 274,671
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Operating income (loss) $ 81,280 $(204,644) $ 37,280 $(196,941)
========= ========= ========= =========
EBITDA $ 155,682 $(120,877) $ 103,875 $(130,066)
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Ending subscribers 660,400 322,400 520,000 128,600
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SIGNATURES
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.
WESTERN WIRELESS CORPORATION
Dated: February 17, 1999
By /s/ Alan R. Bender
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Alan R. Bender
Senior Vice President and
General Counsel
