SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report:
November 13, 2001
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(Date of earliest event reported)
Electric Lightwave, Inc.
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(Exact name of Registrant as specified in charter)
Delaware 0-23393 93-1035711
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
3 High Ridge Park, Stamford, CT 06905
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(Address of principal executive offices) (Zip Code)
(203) 614-5600
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(Registrant's telephone number, including area code)
No change since last report
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(Former name or address, if changed since last report)
Item 7. Financial Statements, Exhibits
(c) Exhibits
99.1 Press Release of Electric Lightwave, Inc. released November
13, 2001 announcing earnings for the three and nine months ended
September 30, 2001.
FOR IMMEDIATE RELEASE
Contact:
Brigid M. Smith, Assistant Vice President
Corporate Communications
(203) 614-5042
bsmith@czn.com
Electric Lightwave, Inc. Reports Third-Quarter Results
Stamford, Conn., November 13, 2001 -- Electric Lightwave, Inc. (Nasdaq: ELIX)
today reported financial results for the quarter ended September 30, 2001.
Revenue for the period totaled $53.3 million, compared to $63.6 million for the
same period in 2000. Although revenue for the quarter was down 16 percent from
the corresponding period in 2000, the Network Services component of revenue grew
21 percent due to sales of additional circuits to new and existing customers as
ELI concentrated upon its targeted customer base. The revenue decrease was
primarily due to reduced rates for reciprocal compensation, the non-renewal of a
take-or-pay contract with a major customer, and reduced demand from ISPs and
other carriers for Internet-related traffic.
ELI revenue for the nine months ended September 30, 2001 was $176.3 million, a
$4.7 million decrease compared to revenue of $181.0 million for the same period
in 2000.
ELI's gross margin during the third quarter of 2001 was 68 percent. ELI's
third-quarter 2001 EBITDA loss of $2.1 million was impacted by workforce
reductions with an associated expense of $1.4 million, and
lower-than-anticipated revenue for the quarter. ELI EBITDA for the third quarter
of 2000 was $4.8 million. ELI EBITDA for the nine months ended September 30,
2001 was $5.2 million, compared to a $3.3 million EBITDA loss for the same
period in 2000, an improvement of $8.5 million.
Third quarter 2001 net loss was $47.3 million, or 92 cents per share, compared
to a net loss of $32.6 million, or 64 cents per share, for the third quarter of
2000. For the nine months ended September 30, 2001, net loss was $125.3 million,
or $2.46 per share, compared to a net loss of $102.7 million, or $2.04 per
share, for the same period of 2000.
For 2001, guidance for ELI is being lowered to $228 million in revenue, $10
million in EBITDA, and capital expenditures of $55 million.
ELI's Class A Common Stock is currently traded on the Nasdaq National Market
System, but the stock does not meet minimum bid price and market value of public
float requirements for continued listing that were applicable on September 27,
2001. On that date Nasdaq Stock Market, Inc. implemented a moratorium until
January 2, 2002, at which time compliance with the minimum requirements for
listing on the Nasdaq National and SmallCap Markets will start anew. If ELI's
Class A Common Stock does not meet the requirements of the National Market
System for 30 consecutive days, and is unable to regain compliance within 90
days, the stock could be subject to delisting at that time.
About Electric Lightwave, Inc.
Electric Lightwave, Inc. is a facilities-based competitive local exchange
carrier providing Internet, data, voice and dedicated access services to
communications-intensive businesses. The company owns and operates high-speed
fiber-optic networks that interconnect major markets in the West and operates a
leading national Internet and data network. The company is 85 percent owned by
Citizens Communications (NYSE:CZN, CZB). More information about Electric
Lightwave, Inc. may be found at www.eli.net.
This press release contains forward-looking statements that are subject to risks
and uncertainties that could cause actual results to differ materially from
those expressed or implied in the statements. All forward-looking statements are
only predictions or statements of current plans, which are constantly under
review by Electric Lightwave (the company). All forward-looking statements may
differ from actual future results due to, but not limited to, changes in the
local and overall economy, the nature and pace of technological changes, the
number and effectiveness of competitors in the company's markets, success in
overall strategy, changes in legal and regulatory policy, relations with
Incumbent Local Exchange Carriers (ILECs) and their ability to provide delivery
of services including interoffice trunking, implementation of back office
service delivery systems, the company's ability to identify future markets and
successfully expand existing ones and the mix of products and services offered
in the company's target markets. Readers should consider these important factors
in evaluating any statement contained herein and/or made by the company or on
its behalf. The company has no obligation to update or revise forward-looking
statements to reflect the occurrence of future events or circumstances.
Electric Lightwave, Inc.
Statements of Operations
Three Months Ended
September 30,
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(Dollars in thousands, except per share amounts) 2001 2000
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Revenue
Network services $ 26,077 $ 21,627
Local telephone services 14,450 25,187
Long distance services 3,131 3,728
Data services 9,672 13,068
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Total revenue 53,330 63,610
Operating expenses
Network access expense 17,232 17,821
Operations expense 14,442 13,473
Selling, general and administrative 22,361 27,430
Severance expense 1,418 110
Depreciation and amortization 19,919 16,306
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Total operating expenses 75,372 75,140
Loss from operations (22,042) (11,530)
Interest expense and other 25,231 20,603
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Net loss before income taxes (47,273) (32,133)
Income tax expense 22 459
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Net loss $ (47,295) $ (32,592)
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EBITDA (1) $ (2,123) $ 4,776
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Net loss per common share:
Basic $ (0.92) $ (0.64)
Diluted $ (0.92) $ (0.64)
Weighted average shares outstanding 51,168 50,606
(1) EBITDA is Operating income plus depreciation and amortization.
Electric Lightwave, Inc.
Statements of Operations
Nine Months Ended
September 30,
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(Dollars in thousands, except per share amounts) 2001 2000
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Revenue
Network services $ 77,966 $ 54,804
Local telephone services 58,114 75,412
Long distance services 9,314 12,590
Data services 30,927 38,202
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Total revenue 176,321 181,008
Operating expenses
Network access expense 51,014 56,811
Operations expense 40,820 38,494
Selling, general and administrative 76,112 88,875
Severance expense 3,141 152
Depreciation and amortization 58,647 43,782
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Total operating expenses 229,734 228,114
Loss from operations (53,413) (47,106)
Interest expense and other 71,401 54,643
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Net loss before income taxes (124,814) (101,749)
Income tax expense 449 940
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Net loss $ (125,263) $ (102,689)
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EBITDA (1) $ 5,234 $ (3,324)
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Net loss per common share:
Basic $ (2.46) $ (2.04)
Diluted $ (2.46) $ (2.04)
Weighted average shares outstanding 50,995 50,404
(1) EBITDA is Operating income plus depreciation and amortization.
Electric Lightwave, Inc.
Selected Financial and Operating Data
(Dollars in thousands) September 30, 2001 June 30, 2001 September 30, 2000
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Selected Financial Data
Gross Property Plant & Equipment:
Owned or under capital lease $ 1,029,724 $ 1,023,783 $ 962,454
Under operating lease (1) $ 108,541 $ 108,541 $ 108,541
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Total $ 1,138,265 $ 1,132,324 $ 1,070,995
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Selected Operating Data
Markets 25 25 25
Route miles (2) 6,737 6,734 5,921
Fiber miles (2) 353,785 349,455 297,208
Buildings connected on-net 860 856 850
Switches and routers:
Internet routers 79 79 65
ATM switches 23 23 23
Frame relay switches 33 33 32
Voice switches 10 8 8
Access Line Equivalents 172,372 187,981 203,911
Access Line Equivalents/Voice switch 17,237 23,498 25,489
% on switch 99% 97% 92%
Employees 928 949 1,156
Customers 2,245 2,267 2,915
(1) Facilities under an operating lease agreement under which we have the
option to purchase the facilities at the end of the term.
(2) Route and fiber miles also include those to which we have exclusive use
pursuant to license and lease arrangements.
Signature
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ELECTRIC LIGHTWAVE, INC.
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(Registrant)
By: /s/ Robert J. Larson
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Robert J. Larson
Vice President and Chief Accouting Officer
Date: November 13, 2001