193% Increase in Total Revenue
Construction Completed on Third Phase of Pan-European Network
NEW YORK, May 3 /PRNewswire/ --
Viatel, Inc. (Nasdaq: VYTL) -- a rapidly growing provider of "all distance" communications services to individuals, corporations, ISPs, ASPs and other carriers -- today announced its first quarter 2000 results.
Revenue for the quarter was $180.7 million, nearly a three-fold increase over the $61.6 million recorded during the same period in 1999. EBITDA(a) loss, as a percentage of revenue, narrowed to 6.0% in the first quarter of 2000 from 13.3% for the corresponding prior year period.
"Viatel had yet another excellent quarter, with revenue growing 193% year-over-year," said Michael J. Mahoney, Viatel's Chairman and Chief Executive Officer. "In addition to delivering strong financial results in the first quarter, we took very significant steps towards realizing our goal of becoming Europe's premier provider of pan-European and trans-Atlantic data and voice services.
* "We appointed William Murphy, former Managing Director of British
Telecom's Enterprise Division, as Viatel's President. Not only is he is
leading our effort to deploy advanced services, he is helping us manage
the rapid growth in our European business as well as our European
network expansion.
* We acquired an AT&T subsidiary, AT&T Communications (UK) Ltd., expanding
our pan-European network throughout the U.K. by 1,700 route kilometers
and adding Enterprise-level corporate customers to our growing customer
base. We also gained a dedicated team of sales, marketing and technical
professionals with significant experience developing, marketing and
supporting a broad suite of products and services for Enterprise and SME
customers.
* We augmented our advanced services product offerings and accelerated our
deployment schedule for data products including frame relay, ATM and IP
services.
* We announced an e-business agreement with Intira Corporation that
enables Viatel customers to leverage complex web-hosting solutions or
"Netsourcing" for SMEs throughout the UK and Europe. Intira will
utilize Viatel's existing network infrastructure to provide
"mission-critical" Netsourcing services to Global 2000 customers.
* We announced our plans to deploy 22,000 fiber kilometers of CLEC
metropolitan fiber in London, Amsterdam, Paris, Berlin, Frankfurt and
Dusseldorf as well as throughout the New York metropolitan area,
enabling the Company to offer high speed integrated data, video and
voice communications over a single integrated network.
* And, we received equity sponsorship from Hicks, Muse, Tate & Furst,
Chase Capital Partners and The Blackstone Group."
Mahoney continued, "Already this quarter, we have accomplished a great deal. Just this week, we completed construction on the third phase of our pan-European network.
"With over 7,000 route kilometers of our pan-European network complete, and the balance of the network scheduled for completion by year's end, we are in an extremely advantageous position relative to our competitors. By the end of 2000, we will own and operate a 10,400 route kilometer network linking over 59 cities, giving us one of the largest, state-of-the-art, continuously upgradeable broadband network in service in Western Europe.
"Equally significant, we now own 25% of the Yellow Submarine trans-Atlantic cable, of which Level 3 and Global Crossing own 25% and 50%, respectively. When combined with our long-haul and metropolitan networks, this trans-Atlantic fiber-optic cable will enable us to deliver intercontinental end-to-end integrated services 'on net.' This provides scalable distribution from the largest market in the world to Viatel's European network. We will shortly be able to provide, in many cases, door-to-door services, for example, New York to Berlin, to our customers.
"In all, our operating results and our strategic initiatives demonstrate that we can implement and execute. Through a focused and cohesive strategy, we have built a solid business and continue to expand our network and grow our customer base. We have done more than merely articulate a vision, we have delivered upon our promises," said Mahoney.
Revenue from communications services, which includes basic services (consisting of long distance voice services, 800 services, calling cards, conference calling, fax services, and carrier services) and advanced services (consisting of domestic and international private line services, Internet access, frame relay, and ATM and IP services) increased 232% to $160.6 million from $48.4 million in the same quarter in 1999.
Revenue from basic services was $149.0 million in the first quarter of 2000. Revenue from advanced services was $11.6 million in the quarter. Revenue from capacity sales was $20.0 million compared to $13.2 million in the first quarter of 1999.
Gross margin improved to 28.0% from 17.2% for the comparable quarter of 1999. Sales, general and administrative expense increased in the first quarter of 2000 to $61.4 million, or 34% of revenue, from $18.8 million, or 30.4% of revenue for the corresponding period in 1999. This increase was primarily the result of the expanded geographical reach of our network, additional product offering capabilities and employee-related reorganization expenses.
Net loss attributable to common stockholders was $121.0 million, or ($2.51) per share, for the first quarter of 2000, compared to a net loss attributable to common stockholders of $38.3 million, or ($1.65) per share, for the first quarter of 1999. Substantially all of the increase in the Company's net loss for the quarter was due to increased interest expense, depreciation and amortization expense associated with our network infrastructure initiatives and our acquisition of Destia Communications.
At March 31, 2000, the Company had gross property, plant and equipment of $1.2 billion and $676.2 million of cash, cash equivalents, marketable securities and cash securing letters of credit for network construction. Pro forma for the recent financings, the Company had $1.1 billion in cash, cash equivalents, marketable securities and cash securing letters of credit for network construction. The Company expects gross property, plant and equipment to exceed $1.6 billion by year-end 2000.
Viatel, Inc. is a rapidly growing provider of all distance communications services -- local and long-distance, voice and data, Web-centric and multimedia -- to end-users, ISPs, ASPs and other carriers in Europe and North America. It currently operates one of the largest international networks, with international gateways in New York and London; state-of-the-art network operations centers in Egham, England and Somerset, New Jersey; and network points of interconnection in over 250 cities. For more information about Viatel and the products and services that it offers, visit www.viatel.com .
Certain matters discussed in this release are forward-looking statements that involve risks and uncertainties, including construction risks and other risks detailed from time to time in the Company's registration statements and reports filed with the Securities and Exchange Commission, including those on Form 10-K for the year ended December 31, 1999.
VIATEL, INC.
Unaudited Summary Consolidated Financial and Other Data
(In thousands, except per share data)
Three Months Ended
March 31,
2000 1999
Statement of Operations Data:
Revenue:
Communications services revenue $ 160,640 $ 48,395
Capacity sales 20,038 13,246
Total revenue 180,678 61,641
Operating expenses:
Cost of services and sales 130,162 51,048
Selling, general and administrative 61,428 18,763
Depreciation and amortization 66,666 9,603
Restructuring and impairments 571 --
Total operating expenses 258,827 79,414
Operating loss (78,149) (17,773)
Interest income 7,346 6,828
Interest expense (48,385) (26,166)
Net loss (119,188) (37,111)
Dividends on convertible preferred stock (1,780) (1,177)
Net loss attributable to common stockholders $ (120,968) $ (38,288)
Net loss per common share attributable
to common stockholders $ (2.51) $ (1.65)
Weighted average common shares outstanding 48,202 23,186
Other Financial Data:
EBITDA(a) $ (10,912) $ (8,170)
Billable minutes (000s) 1,433,250 270,808
Balance Sheet Data (000s)(b)
As of March 31,
2000 2000 1999
Pro Forma(c) Actual Actual
Non-restricted cash, cash equivalents,
marketable securities and cash
securing letters of credit
for network construction $ 969,855 $ 516,777 $ 619,994
Restricted cash equivalents and
restricted marketable securities 159,452 159,452 229,796
Property and equipment, net 1,083,322 1,083,322 412,089
Convertible/redeemable
preferred securities 487,469 307,469 48,298
Long-term debt, excluding
current installments 2,044,778 1,756,787 1,292,482
(a) As used herein, "EBITDA" consists of earnings before interest,
income taxes, restructuring and impairment charges, extraordinary
loss, dividends on convertible preferred stock and depreciation and
amortization. EBITDA is a measure commonly used in the
telecommunications industry to analyze companies on the basis of
operating performance. EBITDA is not a measure of financial
performance under generally accepted accounting principles, is not
necessarily comparable to similarly titled measures of other companies
and should not be considered as an alternative to net income as a
measure of performance nor as an alternative to cash flow as a measure
of liquidity.
(b) Certain reclassifications have been made to the March 31, 1999 balance
sheet data to conform to the current year's presentation.
(c) Pro forma for the 7.75% Trust Convertible Preferred Securities and the
12.75% Senior Euro Notes offerings completed in April 2000.
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