<PAGE> 1
EXHIBIT 99.1
FOR IMMEDIATE RELEASE
e.spire(TM) REPORTS RECORD REVENUES OF $92.7 MILLION FOR SECOND QUARTER
HERNDON, VA, JULY 20, 2000 -- e.spire Communications, Inc. (NASDAQ: ESPI), the
communications company for the networked economy, today announced consolidated
revenues of $92.7 million for the quarter ended June 30, 2000, a 41% increase
over the prior quarter and a 46% improvement over the year ago quarter. Earnings
before interest, taxes, depreciation, amortization and non-cash compensation
("adjusted EBITDA") for the quarter ended June 30, 2000, was a loss of $(8.8)
million, a 63% improvement over the prior quarter and a 34% improvement over the
year ago quarter.
Revenues from e.spire's core telecom business were $62.6 million, up from $61.5
million in the previous quarter and up 40% from $44.8 million in the year ago
quarter. e.spire's Internet subsidiaries, Web hosting service provider
ValueWeb(TM) and dial-up Internet service provider CyberGate, Inc., delivered
revenues of $7 million, or 8% of total revenues. These revenues are included in
the Company's core telecom business.
ACSI Network Technologies, Inc., e.spire's network development subsidiary,
reported $30.1 million in revenues, a 610% increase from $4.2 million in the
prior quarter and a 62% increase from $18.6 million in the year ago quarter.
ACSI NT contributed 33% of e.spire's consolidated revenues in the second
quarter, up from 6% in the previous quarter.
"e.spire's performance exceeded our expectations for the quarter," said George
F. Schmitt, e.spire Chairman and Acting Chief Executive Officer. "We achieved
record-breaking revenues and an improved EBITDA loss."
"For the third quarter, we expect to see improvement in our telecom business, as
well as another significant contribution from our NT subsidiary and growth in
our Web hosting business," added Schmitt. "We are increasing capacity in several
of our key switch markets and continuing to improve our back office processes,
and we also expect to add customers in the high-margin Web hosting business."
e.spire's net loss applicable to common stockholders and net loss per common
share for the second quarter 2000 was $(81.6) million, or $(1.56) per common
share, compared to $(118.1) million, or $(2.29) per common share, for the first
quarter, which included a beneficial conversion charge of approximately $24.6
million, or $(0.48) per common share, related to the convertible preferred stock
issued in the first quarter.
<PAGE> 2
During the second quarter of 2000, e.spire negotiated with its syndicated bank
group to amend its Senior Secured Credit Facility and reached agreement on new
terms, signed on July 14, 2000. e.spire expects final documentation to be signed
by mid-August.
-MORE-
e.spire REPORTS RECORD REVENUES OF $92.7 MILLION FOR SECOND
QUARTER/PAGE 2
"We met and expect to continue to meet the financial commitments of the new
terms," said Bradley E. Sparks, e.spire Chief Financial Officer. "Resolution of
these negotiations was a major accomplishment for us because the new covenants
will allow us to achieve our goals."
e.spire Communications, Inc. is a leading integrated communications provider,
offering traditional local and long distance, dedicated Internet access and
advanced data solutions, such as ATM and frame relay. e.spire also provides
dial-up Internet through its wholly-owned Internet service provider (ISP),
CyberGate, Inc., and Web hosting services through CyberGate's subsidiary,
ValueWeb. In addition, ACSI Network Technologies, Inc., another e.spire
subsidiary, provides third parties, including other communications concerns,
municipalities and corporations, with turnkey fiber-optic design, construction
and project management expertise. More information about e.spire is available on
e.spire's Web site, www.espire.net.
Certain statements regarding the development of the Company's businesses, the
markets for the Company's services and products, the Company's anticipated
capital expenditures, anticipated EBITDA and other statements are
forward-looking statements (as such term is defined in the Private Securities
Litigation Reform Act of 1995) which can be identified as any statement that
does not relate strictly to historical or current facts. Forward-looking
statements use such words as plans, expects, will, will likely result, are
expected to, will continue, is anticipated, estimate, project, believes,
anticipates, intends and expects, may, should, continue, seek, could and other
similar expressions. Although the Company believes that its expectations are
based on reasonable assumptions, it can give no assurance that its expectations
will be achieved. The important factors that could cause actual results to
differ materially from those in the forward-looking statements herein (the
"Cautionary Statements") include, without limitation, the Company's degree of
financial leverage, risks associated with debt service requirements and interest
rate fluctuations, risks associated with acquisitions and the integration
thereof, the impact of restriction under the Company's financial instruments,
dependence on availability of transmission facilities, regulation risks
including the impact of the Telecommunications Act of 1996, contingent
liabilities, the impact of competitive services and pricing, the ability of the
Company to successfully implement its strategies, as well as the other risks
referenced from time to time in the Company's filings with the SEC, including
the Company's Form 10-K for the year ended December 31, 1999. All subsequent
written and oral forward-looking statements attributable to the Company or
persons acting on its behalf are expressly qualified in their entirety by the
<PAGE> 3
Cautionary Statements. The Company does not undertake any obligation to release
publicly any revisions to such forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Contact:
Media Relations
---------------
Peggy Disney
703.639.6738
[email protected]
# # #
