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MGC Reports First Quarter 1998 Results
- First quarter revenues increase 25% over fourth quarter
- Access lines increase 39% to 26,279 from fourth quarter totals
LAS VEGAS (April 21, 1998) - MGC Communications, Inc. (MGC), a leading switch-based Integrated Communications Services Provider focused on small business and residential customers, today reported its financial and operating results for the first quarter of 1998. These results include substantial growth in revenue and access line sales and installations for its first quarter ended March 31, 1998.
Revenues for its first quarter 1998 were $2,846,000, representing a 52% increase over fourth quarter 1997 revenues of $1,867,000. Gross profit for the first quarter 1998 was $475,000 compared to $451,000 for the fourth quarter 1997. EBITDA results for the first quarter 1998 were a loss of $2,087,000 versus a fourth quarter 1997 loss of $2,035,000.
Gross access lines sold and installed increased to 26,279, a 39% increase over the 18,864 lines sold and installed at the end of the fourth quarter 1997. During the first quarter 1998, MGC installed 5,334 net new lines for a total of 20,924 lines in service at March 31, compared to 15,590 access lines in service at the end of the fourth quarter 1997. Of these 20,924 lines in service at March 31, 7,854 (38%) were business lines, 7,349 (35%) were residential lines and 5,721 (27%) were pay phone lines. The average monthly revenue per line for the first quarter 1998 was $53.13.
"The 52 percent growth in revenue and 39 percent increase in lines sold and in service during the first quarter of 1998 is further confirmation of our business and network strategy." commented Maurice Gallagher, MGC's Chairman of the Board. Mr. Gallagher continued, "Our results to date only strengthen our belief that small business and residential users demand simply priced, packaged and billed communications products. Additionally, we are very pleased that our Las Vegas market produced positive EBITDA during February, a mere 15 months after our commencement of operations in this market with only 17,744 lines in service."
Nield J. Montgomery, MGC's CEO and President stated "During the first quarter, we installed 5,334 net new lines, which we believe reflects a core competence in the selling and provisioning of unbundled local loops in our existing markets. Network buildouts for our planned 1998 markets are well underway and we expect to have in excess of 200 collocated facilities by the end of the year."
Mr. Montgomery continued, "Our enhanced credit policies and internal monitoring capabilities have reduced churn rates to an acceptable level without hampering sales efforts. As a result of these enhanced procedures, monthly churn was 2.8 percent and disconnects for non-payment were less than 1 percent of the installed base."
Mr. Gallagher concluded, "Our performance over the past few quarters demonstrates our ability to provision, service, and bill our customers in a timely manner."
MGC offers innovative packaging and pricing of local and long distance services to small businesses and residential customers in Las Vegas, NV, as well as selected suburban areas of Atlanta, GA and Los Angeles, CA.
MGC management will host a conference call on Wednesday, April 22, 1998 at 5:00pm Eastern Daylight Time to discuss its first quarter 1998 results. Access to the call can be reached by dialing (888) 283-3870, Password "MGC First Quarter." A playback of the conference call will be available 24 hours after the conference call by dialing (800) 756-0522.
Ownership shares of MGC Communications, Inc. are privately held and are not currently traded publicly.
Quarterly Financial Highlights
CONSOLIDATED
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(Dollars in thousands) |
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Statements of Operations Data: |
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March 31 |
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December 31 |
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September 30 |
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June 30 |
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March 31 |
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Revenues |
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$2,846 |
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$1,867 |
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$1,060 |
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$652 |
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$212 |
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Cost of operating revenues |
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2,371 |
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1,416 |
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1,152 |
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821 |
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539 |
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Gross profit/(loss) |
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475 |
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451 |
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(92) |
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(169) |
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(327) |
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Selling, general & administrative |
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2,562 |
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2,486 |
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1,799 |
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1,272 |
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883 |
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Depreciation & amortization |
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867 |
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455 |
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402 |
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257 |
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160 |
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Operating loss |
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(2,954) |
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(2,490) |
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(2,293) |
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(1,698) |
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(1,370) |
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Interest, net |
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(3,336) |
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(3,207) |
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(49) |
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143 |
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128 |
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Net loss |
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($6,290) |
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($5,697) |
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($2,342) |
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($1,555) |
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($1,242) |
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EBITDA (1) |
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($2,087) |
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($2,035) |
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($1,891) |
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($1,441) |
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($1,210) |
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Balance Sheet Data: |
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Cash, cash equivalents & investments |
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$97,397 |
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$102,763 |
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$95,390 |
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$7,860 |
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$11,629 |
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Restricted investments |
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58,366 |
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57,574 |
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56,767 |
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0.00 |
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0.00 |
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Property & equipment, net |
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34,421 |
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24,617 |
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18,339 |
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9,802 |
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3,938 |
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Long-term debt |
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156,689 |
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156,637 |
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154,100 |
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0 |
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0 |
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Preferred Stock |
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21,645 |
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16,665 |
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0 |
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0 |
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0 |
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Stockholders' equity |
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$3,027 |
# |
$8,976 |
# |
$18,186 |
# |
$12,357 |
# |
$13,881 |
# |
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Operating Statistics: |
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Switches installed |
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3 |
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3 |
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2 |
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1 |
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1 |
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Markets served |
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3 |
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3 |
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1 |
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1 |
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1 |
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Collocated facilities |
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27 |
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25 |
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16 |
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15 |
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12 |
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Lines in service at end of period: |
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Business |
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7,854 |
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5,998 |
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5,013 |
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3,589 |
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1,037 |
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Pay phone |
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5,721 |
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4,832 |
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2,779 |
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1,623 |
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162 |
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Residential |
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7,349 |
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4,760 |
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4,918 |
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3,790 |
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2,602 |
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Total line in service |
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20,924 |
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15,590 |
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12,710 |
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9,002 |
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3,801 |
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Backlog |
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5,355 |
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3,274 |
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2,167 |
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N/A |
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N/A |
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Total gross access lines |
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26,279 |
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18,864 |
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14,877 |
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N/A |
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N/A |
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Forward Looking Statements. Certain statements contained in this Press
Release that state the Company's or management's intentions, hopes, beliefs, expectations or predictions of the future are forward-looking
statements. Management wishes to caution the reader these forward-looking statements such as the Company's plans to expand its
existing network through collocation, statements regarding development of the Company's products or business, statements regarding the
Company's ability to achieve or exceed its goals in the future or similar statements contained in this Press Release regarding matters that are
not historical facts, are only estimates or predictions. Actual results may differ materially as a result of risks facing the Company or actual results
differing from assumptions underlying such statements. Such risks and assumptions include, but are not limited to, the Company's ability to
successfully market its services to current and new customers in existing and planned markets, access markets, install switches and obtain
suitable locations for its switches, negotiate suitable interconnect agreements with the ILECs, obtain an acceptable level of cooperation
from the ILECs, all in a timely manner, at reasonable cost and on satisfactory terms and conditions, as well as regulatory, legislative and
judicial developments that could materially affect the Company's future results. Additional information concerning factors that could cause actual
results to differ materially from those expressed or implied in the forward-looking statements is contained from time to time in the
Company's SEC filings, including but not limited to the Company's report on Form 10-K for the year ended December 31, 1997. Copies of this filing
may be obtained by contacting the Company or the SEC.
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