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EXHIBIT 99
OpTel, Inc
[OPTEL LOGO]
OPTEL, INC REPORTS RESULTS FOR FOURTH QUARTER
AND TWELVE MONTHS FOR FISCAL YEAR 1999
DALLAS, November 12, 1999 - OpTel, Inc ("OpTel") today announced its unaudited
financial results for the fourth quarter and the twelve months of the fiscal
year ended August 31, 1999 ("fiscal 1999"). Results are subject to potential
audit adjustments, including those that may arise as a result of the recent
voluntary Chapter 11 filing by the company. Total revenues for the twelve
months ended August 31, 1999 rose to $86 million; a 32% growth over the
comparable twelve-month period of fiscal 1998. Total revenues for the fourth
quarter climbed to $22.8 million, a 14% growth over fourth quarter of fiscal
1998.
Telephony fourth quarter revenues increased by 132% over the fourth quarter of
fiscal 1998, and full year revenues of $8 million more than doubled those of
fiscal 1998. Cable television fourth quarter revenues increased 6% year over
year, and full fiscal year revenues increased 28% over fiscal 1998.
OPERATING HIGHLIGHTS
UNITS UNDER CONTRACT
o 622,152 total units under contract, up 20% year-over-year
o Telecommunication addressable market of well over 300,000 lines based on
collocation sites activated to date
o 37% increase in units under contract for telecommunications from 93,562 to
127,778
o 3% increase in units under contract for cable television from 426,444 to
439,679
o 54,695 units under contract for high speed Internet access launched in the
fall of 1998
CUSTOMER NUMBERS
o Telecommunications lines up 56% to 14,655 lines - In order to provide a
more accurate measure of the telephony initiative, lines have been restated
to exclude all company and non-revenue generating lines at customer sites
o Cable television customers down 1% to 210,285 with a penetration of 54%
o 405 high speed internet customers
On October 28, 1999 OpTel, and certain of its affiliates and subsidiaries,
filed for protection under Chapter 11 of the U.S. bankruptcy laws. The filing
allows the Company to operate its businesses in the normal fashion under court
protection while it continues discussions with representatives of certain major
creditors and others on a restructuring plan.
OpTel is a leading network based provider of integrated communications
services, including local and long distance telephone, cable television and
high speed Internet access services in the United States. The Company currently
provides cable television and telecommunications services in a number of
metropolitan areas including Los Angeles, San Diego, San Francisco, Phoenix,
Denver, Houston, Dallas-Fort Worth, Chicago, Indianapolis, Atlanta, Miami-Ft.
Lauderdale and Orlando-Tampa. OpTel is majority owned by Le Groupe Videotron
Ltee, owner of the second largest cable television operator in Canada.
# # #
For further information, please contact:
Waqar Nasim
Treasurer
214-634-4029
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OpTel, Inc
FINANCIAL RESULTS FOR THE FOURTH QUARTER OF FISCAL 1999
TOTAL REVENUES. Total revenues for the fourth quarter of fiscal 1999
increased by $2.8 million, or 14%, to $22.8 million compared to revenues of $20
million for the fourth quarter of fiscal 1998. Total revenues for the fiscal
year 1999 increased by $20.9 million, or 32%, to $86 million from $65 million
in 1998.
CABLE TELEVISION. Cable television revenues for the fourth quarter of
fiscal 1999 increased by $1.1 million, or 6%, to $20 million from $18.9 million
for the comparable period in fiscal 1998. This reflected a 1% decline in the
average quarterly number of basic customers and a 6% increase in the average
monthly revenue per basic customer. The average monthly revenue per basic
customer increased from $29.05 for the fourth quarter of fiscal 1998 to $30.83
for the fourth quarter of fiscal 1999. The increase in average monthly revenue
per basic customers mainly resulted from annual rate increases and rate
increases following property upgrades. Basic cable penetration decreased from
54.3% to 53.5% year-over-year in conjunction with a one percent increase in
cable units passed. Total cable revenues for fiscal 1999 rose to $78 million
from $61 million, reflecting a 28% increase over 1998.
TELECOMMUNICATIONS. Telecommunications revenues for the fourth quarter of
fiscal 1999 increased by 143% to $2.8 million. The increase reflects a 56%
increase in the number of lines and a 52% increase in average monthly revenue
per line compared to the restated fourth quarter of fiscal 1998.
Telecommunications revenues, including Internet revenues, doubled to $8 million
from $4 million in fiscal 1998. Since launching central office switches in
Houston and Dallas during fiscal 1998, the Company has increased its efforts to
market its telephone product in these markets.
PROGRAMMING, ACCESS FEES AND REVENUE SHARING. Programming, access fees and
revenue sharing increased from $8.6 million for the fourth quarter of fiscal
1998 to $10.1 million for the fourth quarter of fiscal 1999. For fiscal 1999,
these costs increased to $39 million from $29 million in fiscal 1998. The
increased cost is primarily attributed to the customer growth mentioned above
and to increases in rates charged by programming suppliers.
CUSTOMER SUPPORT, GENERAL AND ADMINISTRATIVE. Customer support, general and
administrative expenses were $17 million for the fourth quarter of fiscal 1999
compared to $11 million for the fourth quarter of fiscal 1998. The increase in
customer support, general and administrative expenses was largely due to the
accelerated roll-out of telephony central office switches, the deployment of
switch collocation access and Internet access services, direct marketing
efforts, and staff increases to further improve service quality. The fourth
quarter expenses also include approximately $0.9 million in severance costs.
EBITDA. The Company's EBITDA (earnings before interest, income taxes, and
depreciation and amortization) for the fourth quarter of fiscal 1999 was
negative $4.1 million compared to positive $0.6 million for the fourth quarter
of fiscal 1998. EBITDA for fiscal 1999 was a negative $12.6 million as opposed
to a positive $0.3 million in 1998. EBITDA is not intended to represent cash
flow from operations or an alternative to net loss, each as defined by
generally accepted accounting principles.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization of $10 million
for the fourth quarter of fiscal 1999 remained essentially flat with fiscal
1998.
INTEREST EXPENSE. Interest expense (net of amounts capitalized) was $12
million for the fourth quarter of fiscal 1999, a $2 million increase from
interest expense of $10 million for the fourth quarter of fiscal 1998. This
increase is attributable to higher debt levels and higher interest rates on the
11 1/2% Senior Notes than the bank facility they replaced.
CAPITAL EXPENDITURES. During fiscal 1999, the Company incurred $113 million
in capital expenditures compared to $129 million for fiscal 1998 (including
intangible assets and acquisition of businesses).
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OpTel, Inc
FINANCIAL & OPERATIONAL DATA
AUGUST 31, NOVEMBER 30, FEBRUARY 28, MAY 31, AUGUST 31,
1998 1998 1999 1999 1999
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CABLE TELEVISION
UNITS UNDER CONTRACT (NOTE 1) 426,444 429,625 429,227 436,487 439,679
AS A % OF MARKET (NOTE 2) 14.2% 14.3% 14.3% 14.5% 14.7%
UNITS PASSED (NOTE 1) 392,699 394,867 395,089 397,476 392,713
BASIC CUSTOMERS (NOTE 1) 213,046 214,390 214,820 217,750 210,285
PENETRATION 54.3% 54.3% 54.4% 54.8% 53.5%
PAY TO BASIC RATIO (NOTE 3) 84.5% 83.6% 80.9% 83.7% 87.7%
AVERAGE MONTHLY REVENUE PER CUSTOMER (NOTE 4) $29.05 $29.42 $28.98 $30.10 $30.83
TELECOMMUNICATIONS
UNITS UNDER CONTRACT (NOTE 1) 93,562 106,087 106,333 115,460 127,778
AS A % OF MARKET (NOTE 2) 3.1% 3.6% 3.6% 3.7% 4.3%
TOTAL ADDRESSABLE MARKET (NOTE 5) 34,895 41,523 46,686 78,507 367,429
LINES (NOTE 1) 9,417 9,131 11,890 13,209 14,655
PENETRATION 27.0% 22.0% 25.5% 16.8% 4.0%
AVERAGE MONTHLY REVENUE PER LINE (NOTE 4) $42.13 $48.18 $47.31 $59.09 $64.27
HIGH SPEED INTERNET
UNITS UNDER CONTRACT (NOTE 1) 1,225 17,879 35,272 54,695
AS A % OF MARKET (NOTE 2) - 0.6% 1.2% 1.8%
UNITS PASSED (NOTE 1) 126 6,600 13,016 14,592
CUSTOMERS (NOTE 1) 3 76 273 405
PENETRATION 2.4% 1.2% 2.1% 2.8%
AVERAGE MONTHLY REVENUE PER CUSTOMER (NOTE 4) $42.81 $41.65 $42.26 $45.12
1. Units under contract represents the number of units currently passed
and additional units with respect to which the Company has entered
into Rights of Entry for the provision of cable television and
telecommunication services, respectively, but which the Company has
not yet passed and which the Company expects to pass within the next
five years.
2. Based on an estimated 3.0 million units (as of March 25, 1998) in
MDU's with greater than 150 units located in the Company's markets as
estimated by industry sources and updated using Company estimates as
necessary.
3. In common with most other cable television providers the Company has
revised the method of reporting premium penetration to include all
premium units in the calculation.
4. Represents average monthly revenue per the average number of basic
customers/lines for the fiscal periods ended as of the date shown.
5. Addressable market is defined as the total number of phone lines (MDU,
single family, and business) serviced by each ILEC wire center in
which OpTel collocates (source: PNR, Inc.) plus telephone passings for
MDU properties serviced by OpTel that are not serviced by any of the
collocated sites.
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OpTel, Inc
CONDENSED STATEMENTS OF OPERATIONS
($'S IN THOUSANDS)
(UNAUDITED)
Quarter Ended Year Ended
August 31, August 31,
1999 1998 1999 1998
-------- --------- -------- ---------
REVENUES
Cable television 19,984 $ 18,886 $77,902 $61,081
Telecommunications 2,822 1,161 7,928 3,882
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Total revenues 22,806 20,047 85,830 64,963
OPERATING EXPENSES:
Programming, access fees and revenue sharing (10,099) (8,612) (39,323) (28,825)
Customer support, general and administrative (16,804) (10,803) (59,057) (35,847)
Depreciation and amortization (10,048) (10,049) (36,780) (28,481)
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Total operating expenses (36,951) (29,464) (135,160) (93,153)
LOSS FROM OPERATIONS (14,145) (9,417) (49,330) (28,190)
OTHER
Interest expense, net (11,821) (10,104) (46,033) (39,564)
Extraordinary loss on extinguishing debt -- (6,644) -- (6,644)
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NET LOSS $(25,966) $(26,165) $(95,363) $(74,398)
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NET LOSS ATTRIBUTABLE TO COMMON EQUITY $(30,731) $(30,845) $(114,560) $(83,146)
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CONDENSED CONSOLIDATED BALANCE SHEETS
($'S IN THOUSANDS)
(UNAUDITED)
August 31,
1999 1998
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ASSETS
Cash and short term investments $ 10,419 $123,774
Restricted investments 14,680 63,207
Property, plant & equipment 339,730 268,044
Intangibles &
Other assets 175,595 172,145
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Total $540,424 $627,170
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LIABILITIES & STOCKHOLDERS' EQUITY
Accounts payable & other liabilities $ 40,987 $ 37,116
Notes payable & deferred acquisition liabilities 439,676 429,278
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Total liabilities 480,663 466,394
Stockholders' equity 59,761 160,776
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Total $540,424 $627,170
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THE FOREGOING INCLUDES CERTAIN FORWARD LOOKING STATEMENTS THAT ARE IDENTIFIED
BY WORDS SUCH AS "EXPECT" AND SIMILAR EXPRESSIONS. ACHIEVEMENT OF SUCH
EXPECTATIONS IS SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING, AMONG
OTHERS, THE AVAILABILITY OF ADDITIONAL FINANCING ON A TIMELY BASIS AND ON
REASONABLE TERMS, OBTAINING VARIOUS REGULATORY APPROVALS AND SUCCESSFUL
MANAGEMENT OF THE COMPANY'S EXPANSION PLANS.