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EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Becky Haight
Investor Relations
Pathnet
877 227-5600
investor@pathnet.net
Kye Presley-Dowd
Media Relations
Pathnet
202 295-3286
kpresleydowd@pathnet.net
PATHNET REPORTS THIRD QUARTER RESULTS
WASHINGTON, DC, NOVEMBER 9, 1999-- Pathnet, a privately-held carrier's carrier
of digital telecommunications capacity to under-served and second- and
third-tier markets, today announced revenue of $584,000 for the quarter ended
September 30, 1999, a 23% increase over 1998 third quarter revenue of $475,000.
Earnings before interest, taxes, depreciation and amortization (EBITDA) for the
quarter was a loss of $6.9 million.
"Pathnet has clearly evolved to a new level over the past six months," said
president and chief executive officer Richard A. Jalkut. "Our installed network
has grown from 3,900 to 6,100 route miles, and we recently announced landmark
agreements with Colonial Pipeline, BNSF and CSX. These agreements provide for
combined investments in Pathnet of rights-of way and cash valued at $250
million. Our underlying ability to pick and choose from our new partners'
extensive rights-of-way as dictated by demand, clearly facilitates our strategy
of reaching target markets through unique network corridors with a 'smart build'
approach."
Pathnet increased its gross plant and equipment by $24.3 million in the third
quarter, bringing total plant and equipment acquired to $110.6 million.
Depreciation and amortization expense for the quarter was $2.1 million, compared
to $0.2 million for the third quarter of 1998. The company activated 2,200
additional route miles of network during the quarter, bringing total activated
network to 6,100 route miles.
"Pathnet's backbone network is proceeding as planned, and our new agreements
will clearly enhance our capabilities in the future" said Bob Rouse, Pathnet
chief operating officer. "On a related front, we've also made tremendous
progress with collocations. To date we've completed over 20 collocations which
provide us with a way to differentiate ourselves, while adding significant value
for our carrier customers," he added.
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Third Quarter Highlights and Recent Developments
- - Announced potential investment valued at $250 million from Colonial Pipeline,
BNSF and CSX
- - Construction on 1,100 mile Chicago to Denver fiber route on schedule
- - Completed 2,200 miles of network in third quarter, bringing total route miles
of network activated to 6,100
- - Completed Y2K compliance work
- - Promoted Bob Rouse to chief operating officer
- - Shawn O'Donnell, senior vice president of engineering and construction,
Gerry Sharp, vice president and chief technology officer and Chuck Liggett,
senior vice president and chief marketing officer joined senior management
team
Pathnet is a carriers' carrier providing high capacity, digital bandwidth and
access services to under-served and second- and third-tier U.S. markets. It
provides service to inter-exchange carriers, local exchange carriers, Internet
service providers, Regional Bell Operating Companies, cellular operators and
resellers. Pathnet currently has 6,100 route miles of completed network and
1,400 route miles of network under construction. The company's headquarters are
located in Washington, D.C., at 1015 31st Street, NW, Washington, D.C., 20007.
For additional information about Pathnet, visit the company Web site at
www.pathnet.net.
The statements made by Pathnet in this press release may be forward looking in
nature. No assurance can be given that future results will be achieved; actual
results may differ materially from those projected in forward looking
statements. Pathnet believes that its primary risk factors include, but are not
limited to: signing additional agreements with private network operators and
others; offering services to telecom service providers; entering into partnering
arrangements; and building a digital network. Additional information concerning
these and other potential important factors can be found within Pathnet's public
filings with the U.S. Securities and Exchange Commission. Statements in this
release should be evaluated in light of these important factors.
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PATHNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------- -------------
1999 1998 1999 1998
---- ---- ---- ----
Revenue $ 584 $ 475 $ 2,275 $ 1,050
--------- --------- --------- ----------
Expenses:
Cost of revenue 4,259 1,621 9,579 5,386
Selling, general and administrative 3,197 2,694 9,500 6,722
Depreciation 2,143 204 3,714 315
--------- --------- --------- ----------
Total expenses 9,599 4,519 22,793 12,423
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Net operating loss (9,015) (4,044) (20,518) (11,373)
Interest expense (9,987) (11,151) (30,318) (21,862)
Interest income 3,319 4,729 10,511 9,574
Other (244) (1,354) (84) (1,354)
--------- --------- --------- ----------
Net loss $ (15,927) $ (11,820) $ (40,409) $ (25,015)
========= ========= ========= ==========
Basic and diluted loss per
Common share $ (5.44) $ (4.07) $ (13.88) $ (8.62)
========= ========= ========= ==========
Weighted average number of
Common shares outstanding 2,926 2,902 2,912 2,902
========= ========= ========= ==========
Other Data:
EBITDA (1) $ (6,872) $ (3,840) $ (16,804) $ (11,058)
========= ========= ========= ==========
(1) EBITDA comprises earnings before interest, taxes, depreciation and
amortization
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PATHNET, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT ROUTE MILES)
SEPTEMBER 30, DECEMBER 31,
1999 1998
---- ----
(UNAUDITED)
ASSETS
Cash and cash equivalents $ 98,896 $ 57,322
Marketable securities available for sale, at market 69,420 97,896
Other current assets 2,412 7,261
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Total current assets 170,728 162,479
Property and equipment, net 106,124 47,971
Marketable securities available for sale, at market 5,103 71,900
Pledged marketable securities held to maturity 42,380 61,825
Other assets 14,240 21,239
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Total assets $ 338,575 $ 365,414
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LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Total current liabilities 33,123 20,280
Bonds payable, net of unamortized bond discount of $3,481 346,519 346,212
Other non-current liabilities 264 --
Total mandatorily redeemable preferred stock 35,970 35,970
Total stockholders' equity (deficit) (77,301) (37,048)
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Total liabilities, mandatorily redeemable preferred stock and
stockholders' equity (deficit) $ 338,575 $ 365,414
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Selected statistical data:
Route miles under construction 1,400
Route miles complete 6,100
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