EXHIBIT 99.2
[McLeodUSA logo] [MCLD: A Nasdaq-100
Company logo]
McLeodUSA Incorporated
McLeodUSA Technology Park
6400 C Street SW, PO Box 3177
Cedar Rapids, IA 52406-3177
Investor Contact: Bryce E. Nemitz
Press Contact: Bruce A. Tiemann
mcleodusa_ir@mcleodusa.com
Phone: (319)790-7800
FAX: (319)790-7767
FOR IMMEDIATE RELEASE
McLeodUSA POST STRONG FIRST QUARTER 2001 RESULTS
. Revenue increase 50% to $433 million
. EBITDA improves 24% TO $22.4 million
. Cash and available cash of $1.05 billion
. Competitive local customers increase 50% to 333,000
(CEDAR RAPIDS, Iowa) -- may 2, 2001 -- McLeodUSA Incorporated (Nasdaq: MCLD),
one of the nation's leading telecommunications providers, today reported results
for first quarter 2001. Revenues were $433.0 million for the quarter ended March
31, 2001, compared to $288.3 million for the same period one year ago, an
increase of 50 percent. EBITDA (earnings before interest, taxes, depreciation
and amortization) for the quarter was a positive $22.4 million, up from $18.0
million for first quarter 2000.
Commenting on the quarterly results, Chairman and Co-CEO Clark McLeod stated,
"In an economic climate where solid, dependable results have become increasingly
scarce, McLeodUSA has continued to meet or exceed our key operating metrics as
well as revenue and EBITDA performance. Our confidence in our ability to execute
on out core business opportunities remains strong."
President and Co-CEO Steve Gray added, "Once again, McLeodUSA has demonstrated
that a sound plan, backed by a great team with unwavering attention on
outstanding execution can flourish in a tough environment.'
Gray continued, "Just a few of our highlights include:
. Meeting or exceeding revenue expectations for the 20th consecutive quarter,
. Extending our unbroken string of EBITDA positive quarters to 14,
. Exceeding our sales headcount target by 180, yielding sales strength of
nearly 1,800,
. Increasing our route miles by 6,000 to nearly 30,000, and
. Increasing our competitive local service customers to 333,000.
In short, McLeodUSA has continued to add to its established track record of
performance."
Recent Announcements
- --------------------
. On January 16, 2001, McLeodUSA closed an offering of $750 million of
Senior Notes due January 1, 2009.
. On March 19, 2001, McLeodUSA signed an agreement to acquire Intelispan,
Inc. of Atlanta, strengtening its data services product portfolio through
Intelispan's superior Virtual Private Network (VPN) products and services.
The transaction is expected to close by the end of second quarter.
. Earlier today, McLeodUSA announced that it has sold two of its PCS
licenses and has entered into agreements to sell the remainder of its PCS
licenses for a combined total in excess of $100 million. The licenses
were purchased in a 1997 FCC auction for approximately $30 million. The
10-20 MHz, Block D and E licenses were sold to four buyers in a series of
transactions to be completed by year end. Specific terms of the
transactions were not disclosed.
Summary
- -------
Concluding, Mr. McLeod stated, "As Steve and I stated in our Letter to
Shareholders this year, we believe the market opportunity is enormous and our
position to capitalize on the opportunity is as good or better than ever. This
is the time for the strong to get stronger, and we continue to believe we have
the ability to do so."
Quarterly Conference Call
- -------------------------
An audio conference call will be held at 11 a.m. Eastern, Thursday, may 3 to
discuss quarterly results as well as other events and expectations. The U.S.
number for the call is 1-877-381-6511; international callers should phone
706-634-6027. The password for the live call is "McLeodUSA Quarterly Call."
Replay of the call will be available through Monday, May 7 at 1-800-642-1687
(domestic) and 706-645-9291 (international). The password for the replay is
521276.
The live conference call will also be Webcast at:
www.mcleodusa.com/html/ir/streamingmedia.php3 and the audio replay will be
- ---------------------------------------------
available at the same location beginning at 2 p.m. Eastern on May 3.
About McLeodUSA
- ---------------
McLeodUSA provides integrated communications services, including local services,
in 25 Midwest, Southwest, Northwest and Rocky Mountain states. The Company also
provides data and voices services in all 50 states. McLeodUSA is a
facilities-based telecommunications provider with, as of March 31, 2001, 396 ATM
switches, 50 voice switches, nearly 30,000 route miles of fiber optic network
and 11,300 employees. The Company's fiber optic network is capable of
transmitting integrated next-generation data, Internet, video and voice
services, reaching 800 cities and approximately 90% of the U.S. population. In
the next 12 months, McLeodUSA plans to distribute 34 million telephone
directories in 26 states, serving a population of 56 million. McLeodUSA is a
Nasdaq-100 company traded under the symbol MCLD. Visit the Company's web site at
www.mcleodusa.com.
- -----------------
Some of the statements contained in this press release discuss future
expectations, contain projections of results of operations or financial
condition or state other forward-looking information. Those statements are
subject to known and unknown risks, uncertainties and other factors that could
cause the actual results to differ materially from those contemplated by the
statements. The "forward-looking" information is based on various factors and
was derived using numerous assumptions. In some cases, you can identify these
so-called "forward-looking statements" by our use of word such as "may," "will,"
"should," "expect," "plan," "anticipate." "believe." "estimate," "predict,"
"project," "intend," "continue," or "potential" or the negative of those words
and other comparable words. You should be aware that those statements only
reflect our predictions. Actual events or results may differ substantially.
Important factors that could cause actual events or results of McLeodUSA to be
materially different from the forward-looking statements include availability of
financing and regulatory approvals; the number of potential customers in a
target market; the existence of strategic alliances or relationships;
technological, regulatory or other developments in the industry; changes in the
competitive climate in which McLeodUSA operates; and the emergence of future
opportunities. These and other applicable risks are summarized under the caption
"Risk Factors" in the McLeodUSA Annual Report on Form 10-K for the fiscal year
ended December 31, 2000, which is filed with the Securities and Exchange
Commission.
###
McLEODUSA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands except for per share data)
(UNAUDITED)
Three Months Ended
------------------
March 31
--------
2001 2000
---- ----
Revenues:
Telecommunications $ 335,456 $ 197,311
Local exchange services 21,358 21,609
Directory 71,752 64,802
Other 4,450 4,577
------------ ------------
Total revenues 433,016 288,299
Operating expenses:
Cost of service 246,048 148,059
Selling, general and administrative 164,616 122,218
Depreciation and amortization 141,958 60,632
------------ ------------
Total operating expenses 552,622 330,909
------------ ------------
Operating loss (119,606) (42,610)
Non-operating income (expense):
Interest income 6,739 15,321
Interest (expense) (56,681) (30,970)
Other (3,626) (199)
------------ ------------
Total non-operating income (expense) (53,568) (15,848)
------------ ------------
Loss before income taxes (173,174) (58,458)
Income taxes --- ---
------------ ------------
Net loss (173,174) (58,458)
------------ ------------
Preferred stock dividend (13,602) (13,602)
------------ ------------
Net loss applicable to common shares $ (186,776) $ (72,060)
============ ============
Net loss per common share $ (0.31) $ (0.15)
============ ============
Weighted average common shares outstanding 610,425 479,217
============ ============
EBITDA $ 22,352 $ 18,022
============ ============
MCLEODUSA INCORPORATED AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands except for per share data)
(Unaudited)
Three Months Ended
------------------
6/30/00 9/30/00 12/31/00 3/31/01
------- ------- -------- -------
Revenues:
Telecommunications $ 246,157 $ 278,168 $ 314,077 $ 335,456
Local exchange services 20,507 21,646 25,118 21,358
Directory 59,762 60,766 64,618 71,752
Other 5,357 6,065 6,164 4,450
-------------- -------------- -------------- -------------
Total revenues 331,783 366,645 409,977 433,016
Operating expenses:
Cost of service 196,367 204,186 224,139 246,048
Selling, general and administrative 134,345 147,342 159,284 164,616
Depreciation and amortization 102,561 113,641 132,789 141,958
-------------- -------------- -------------- -------------
Total operating expenses 433,273 465,169 516,212 552,622
-------------- -------------- -------------- -------------
Operating loss (101,490) (98,524) (106,235) (119,606)
Non-operating income (expense):
Interest income 15,542 12,197 4,711 6,739
Interest (expense) (41,970) (40,657) (37,754) (56,681)
Other 2,170 (744) (1,652) (3,626)
-------------- -------------- -------------- -------------
Total non-operating income (expense) (24,258) (29,204) (34,695) (53,568)
-------------- -------------- -------------- -------------
Loss before income taxes and extraordinary (125,748) (127,728) (140,930) (173,174)
charge
Income taxes ---- ----
-------------- -------------- -------------- -------------
Net loss before extraordinary charge (125,748) (127,728) (140,930) (173,174)
Extraordinary charge for early retirement of debt
----- (24,446) ---- ----
-------------- -------------- -------------- -------------
Net loss (125,748) (152,174) (140,930) (173,174)
Preferred stock dividend (13,602) (13,602) (13,600) (13,602)
-------------- -------------- -------------- -------------
Net loss applicable to common shares $ (139,350) $ (165,776) $ (154,530) $ (186,776)
============== ============== ============== =============
Net loss per common share:
Loss before extraordinary charge $ (0.24) $ (0.24) $ (0.26) $ (0.31)
Extraordinary charge ---- $ (0.04) ---- ----
-------------- -------------- -------------- -------------
Net loss per common share $ (0.24) $ (0.28) $ (0.26) $ (0.31)
============== ============== ============== =============
Weighted average common shares outstanding 578,572 583,326 590,647 610,425
============== ============== ============== =============
EBITDA $1,071 $ 15,117 $ 26,554 $ 22,352
============== ============== ============== =============
McLeodUSA Selected Statistical Data:
3/31/00 12/31/00 3/31/01
------- -------- -------
Sales cities 112 130 150
Central offices leased 467 1,368 1,501
Collocations 186 305 342
Switches owned
CO / LD 31 50 50
ATM / Frame Relay 354 396 396
DSLAMs installed 0 334 376
Route miles 10,606 21,622 29,825 (a)
Intracity route miles 2,846 5,290 5,299
Intercity route miles 7,760 16,332 24,526
Buildings connected 1,139 1,264 1,336
Sales headcount 1,095 1,396 1,784
Customers
Total 300,400 385,300 410,900
Competitive 222,600 307,800 333,000
ILEC 77,800 77,500 77,900
(a) Includes 12,549 Level 3 route miles accepted to date.
Frequently Asked Questions:
FINANCIAL (Note: Numbers are preliminary and unaudited; in millions)
- ---------
What are the first quarter numbers for:
|X| Cash and Available Cash $1,049
Includes Secured Bank Facility of $725 million
|X| PP&E
|X| Gross $3,619
|X| Net $3,154
|X| Long Term Debt $3,498
|X| Outstanding shares 612
|X| Fully diluted shares 862
|X| CAPEX $347
What is the quarterly EBITDA breakout by category?
Competitive $9.7
Publishing $11.6
ILEC $8.4
Corporate $(7.3)
MARKETSHARE
What is the McLeodUSA marketshare penetration of local business lines in markets
served?
|X| Above 40% penetration IA, WY
|X| 30 - 39% penetration IL, ND, SD
|X| 20 - 29% penetration MN, WI
|X| 10 - 19% penetration CO, MI, MO, NE
|X| 0 - 9% penetration AR, AZ, ID, IN, KS, LA, MT,
NM, OH, OK, OR, TX, UT, WA