STOCKTON, Calif., Oct. 30 /PRNewswire/ -- Pac-West Telecomm, Inc.
(Nasdaq: PACW), a rapidly growing provider of integrated communications
services to Internet service providers (ISPs) and business customers in the
western U.S., today announced its results for the third quarter and nine
months ended September 30, 2000. Pac-West's total revenues for the third
quarter 2000 were $36.0 million, a decrease of three percent from total
revenues of $37.0 million in the third quarter of 1999. However, third
quarter 1999 total revenues included a settlement payment of $20.0 million
received in connection with previously withheld reciprocal compensation.
Excluding the settlement payment, third quarter 2000 revenues of $36.0 million
increased by 111 percent from revenues of $17.0 million in the third quarter
of 1999.
Also excluding the settlement payment for comparison purposes; EBITDA
(earnings before interest, net; income taxes; and depreciation and
amortization) for the third quarter of 2000 was $10.5 million, an increase of
82 percent from EBITDA of $5.8 million for the third quarter of 1999; and net
income for the third quarter was $0.8 million, compared to a loss of
$0.5 million in the third quarter of 1999. Fully diluted earnings per share
for the third quarter of 2000 were $0.02, compared to a loss of $0.02 per
share in the third quarter of 1999.
As of September 30, 2000, the Company had cash and short-term investments
totaling $104.9 million, in addition to a $40 million undrawn senior credit
line.
Lines in service at the end of the third quarter 2000 increased by 17,093
during the quarter to 169,050, a 92 percent increase from 88,009 lines at the
end of the third quarter of 1999, and an 11 percent increase sequentially from
151,957 lines at the end of the second quarter of 2000. Sequential line
growth from small and medium enterprise customers (SMEs) was 21 percent, while
wholesale market growth, which includes ISPs, was eight percent.
Wally Griffin, Pac-West's president and chief executive officer, said, "We
are extremely pleased with our strong performance in the third quarter. In
what was a challenging quarter for the industry, we were able to continue
growing our business; increasing our revenues, lines in service and geographic
footprint, while maintaining our strong gross margins. Our unique position of
positive net income and a strong cash position enables us to continue to grow
our business and expand our coverage area throughout the western U.S. "
The following chart highlights some of the unaudited results for the
second and third quarters of 2000 and 1999 and for the nine months ended
September 30, 2000 and 1999.
Q3 2000 Q2 2000 Q3 1999 9M 2000 9M 1999
Total
Revenues $36.0 mil $33.3 mil $37.0 mil $100.1 mil $67.3 mil
Revenue
excluding
settlement
payments* $36.0 mil $33.3 mil $17.0 mil $100.1 mil $47.3 mil
EBITDA $10.5 mil $10.3 mil $25.8 mil $31.4 mil $37.7 mil
Net Income $0.8 $1.3 $10.0 $4.4 $10.8
Earnings Per
Share
(diluted) $0.02 $0.04 $0.43 $0.12 $0.40
Lines in
Service 169,050 151,957 88,009 169,050 88,009
Minutes of
Use 6.1 bil 5.6 bil 4.0 bil 17.1 bil 10.7 bil
* Net a settlement payment of $20.0 million received in connection with
previously withheld reciprocal compensation
Third Quarter Highlights:
Operations:
-- Total lines in service for the third quarter were 169,050, an increase
of 92 percent from 88,009 lines in services at the end of the third
quarter of 1999, and a sequential increase of 11 percent from 151,957
lines in service at the end of the second quarter 2000. Line growth
from SMEs exceeded line growth from ISPs by a multiple of over 2 times
in the third quarter of 2000.
-- Pac-West entered into a 20-year agreement with Qwest Communications for
exclusive rights to an 811-mile OC-48 SONET ring spanning central and
southern California. This agreement locks in transport capacity at
favorable and predictable pricing.
-- Pac-West launched organizational initiatives, including a Quality
Improvement Team and Customer Operations group, to maximize growth
opportunities. The Customer Operations group, which was previously a
part of the Company's business market sales division, now includes all
customer care and field operations functions. The sales division will
focus exclusively on increasing the size and productivity of the sales
force and expanding the Company's base of SMEs.
-- Back-office legacy systems were transitioned to Oracle business
enterprise software and Daleen's BillPlex Plus billing and customer
care management solution.
-- Pac-West entered into a $20 million, capital lease equipment financing
agreement with Cisco to deploy the Cisco AS5800 Universal Access
Server. Pac-West has also been selected for membership in the Cisco
Powered Network (CPN) program, a select group of service providers
delivering their services with Cisco equipment, and benefiting from
joint marketing programs and technology sharing activities with Cisco.
Growth / Expansion:
-- Strategic expansion in the western U.S. continued with the completion
of Colorado Front Range coverage. Expansion continues into Utah,
Arizona and Oregon by the end of 2000, and into New Mexico and Idaho by
mid-2001.
-- Pac-West increased its emphasis on acquiring strategic assets,
customers and personnel, in order to accelerate its entry into
strategic markets. In Washington, Pac-West acquired Baron
Telecommunications, a provider of telecommunications equipment and
services to SMEs in Seattle and the surrounding areas. Pac-West has
also acquired Communication Specialists, Inc., a provider of
telecommunications equipment and services to SMEs in Salt Lake City,
Utah, and surrounding areas.
Shareholder value:
-- Pac-West Telecomm, Inc. was named to the S&P SmallCap 600 Index on
October 3, 2000. The S&P SmallCap 600 Index consists of 600 domestic
stocks chosen for market size, liquidity (bid-asked spread, ownership,
share turnover and number of no trade days) and industry
representation. It is a market-value weighted index, with each stock's
weight in the index proportionate to its market value.
Management is holding a conference call today to discuss the quarterly
results. To listen in, participants may access the live, free webcast
available through Pac-West's website at http://www.pacwest.com . A replay will be
available through November 6 by dialing 703-925-2435, passcode #4667424, or
for 90 days via the company's website.
About Pac-West Telecomm
Founded in 1980, Pac-West Telecomm, Inc. (Nasdaq: PACW) is a rapidly
growing provider of integrated communications services throughout the western
U.S. Pac-West supplies Internet infrastructure and broadband services to
Internet service providers (ISPs) and integrated voice, data and Internet
services to small and medium-sized businesses. The Company currently has
operations in California, Nevada, Washington, Colorado and Utah, and is
rapidly expanding its network into other western states. Pac-West is a
Safeguard Scientifics (NYSE: SFE) partner company. For more information,
please visit the company's web site at http://www.pacwest.com .
Forward-Looking Statements
The foregoing discussion contains forward-looking statements. The
Company's future performance is subject to numerous risks and uncertainties
that could cause actual results to deviate substantially from those discussed
in these forward-looking statements. Factors that could impact the
variability of future results include: successful execution of the Company's
expansion activities into new geographic markets on a timely and
cost-effective basis; the pace at which new competitors enter the Company's
existing and planned markets; competitive responses of the Incumbent Local
Exchange Carriers; execution of interconnection agreements with Incumbent
Local Exchange Carriers on terms satisfactory to the Company; maintenance of
the Company's supply agreements for transmission facilities; continued
acceptance of the Company's services by new and existing customers; the
outcome of legal and regulatory proceedings regarding reciprocal compensation
for Internet-related calls and certain of the Company's product offerings; the
ability to attract and retain talented employees; and the Company's ability to
successfully access markets, install switching electronics, and obtain the use
of leased fiber transport facilities and any required governmental
authorizations, franchises and permits, all in a timely manner, at reasonable
costs and on satisfactory terms and conditions, as well as regulatory,
legislative and judicial developments that could cause actual results to
differ materially from the future results indicated, expressed or implied, in
such forward-looking statements. These and other factors are discussed in the
Company's Prospectus dated November 3, 1999, and in its Annual Report as of
December 31, 1999, on Form 10-K as filed with the SEC.
Pac-West Telecomm, Inc.
CONDENSED STATEMENTS OF OPERATIONS:
Unaudited ($ in 000s except per share amounts)
Quarter Ended Nine Months Ended
Sept. 30 Sept 30
2000 1999 2000 1999
Revenues $35,981 $ 37,016 $ 100,127 $ 67,280
Costs and expenses
Operating 10,919 5,794 31,123 14,547
Selling, general &
administrative 14,587 5,463 37,607 15,026
Depreciation &
amortization 5,774 2,455 14,752 5,747
Total costs and
expenses 31,280 13,712 83,482 35,320
Income from operations 4,701 23,304 16,645 31,960
Other income --- --- (18) ---
Interest expense, net 3,028 4,092 8,295 11,409
Income before provision
for income taxes 1,673 19,212 8,368 20,551
Provision for income taxes 912 9,190 3,982 9,725
Net income 761 10,022 4,386 10,826
Accrued preferred
stock dividends --- (1,227) --- (3,552)
Net income applicable to
common stockholders $761 $8,795 $4,386 $7,274
Basic weighted average
number of shares
outstanding 35,878,204 17,587,458 35,804,098 17,587,458
Diluted weighted
average number of
shares outstanding 37,595,140 23,577,623 37,656,095 18,241,468
Basic net income
per share $ 0.02 $ 0.50 $ 0.12 $ 0.41
Diluted net income
per share $ 0.02 $ 0.43 $ 0.12 $ 0.40
CONDENSED BALANCE SHEETS:
Unaudited ($ in 000s)
As of As of
Sept 30, 2000 Dec. 31, 1999
Cash & short-term investments $ 104,915 $ 162,913
Other current assets 25,185 13,779
Total current assets 130,100 176,692
Equipment, vehicles and leasehold
improvements - net 165,017 105,189
Acquisition goodwill, net 17,898 210
Deferred financing costs, net 5,021 5,648
Other assets, net 2,452 2,361
Total assets $ 320,488 $290,100
Accounts payable and accrued liabilities $ 36,205 $16,146
Other current liabilities 3,944 9,054
Total current liabilities 40,149 25,200
Long-term debt 150,000 150,017
Deferred income taxes 10,896 8,633
Total liabilities 201,045 183,850
Stockholders' equity 119,443 106,250
Total liabilities and
stockholders' equity $ 320,488 $ 290,100
SOURCE Pac-West Telecomm, Inc.
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Related links:
http://www.pacwest.com
CONTACT:
Reid Cox, Director of Investor Relations of
Pac-West Telecomm, 209-926-3417, email, rcox@pacwest.com; or
General, Lisa Horn Chainey, or Media, Dawn Swidorski of The
Financial Relations Board, 415-986-1591
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