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 SECOND QUARTER RESULTS
WASHINGTON, DC, AUGUST 6, 1999--Pathnet, Inc., a privately-held carrier's
carrier of digital telecommunications capacity to under-served and second- and
third-tier markets, today announced revenues of $865,000 for the quarter ended
June 30, 1999, an 82% increase over 1998 second quarter revenues of $475,000.
The majority of the company's revenues for the quarter were derived from
telecommunication services, with the remainder coming from construction
management services for strategic partners. Earnings before interest, taxes,
depreciation and amortization (EBITDA) for the quarter were a loss of $5.3
million, essentially flat with a loss of $5.0 million in the year-ago quarter.
"We're very pleased with our recent progress in executing our business plan of
bringing needed bandwidth to under-served markets," said president and chief
executive officer Richard A. Jalkut. "In terms of developing supply, our
recently announced Grand Junction to Albuquerque route provides an excellent
example of our strategy of capitalizing on opportunities in smaller markets that
have been overlooked. We're also moving forward rapidly on our fiber build from
Denver to Chicago and, on the demand side of the equation, we're clearly
encouraged by a recently signed memorandum of understanding for $5 million in
dark fiber on that route," he added.
The increase in gross plant and equipment for the second quarter of $15.9
million, bringing total plant and equipment acquired to $86.3 million.
Depreciation and amortization expenses for the quarter were $1.0 million,
compared to $0.1 million for the second quarter 1998.
"We've made excellent progress in recent months," said Robert A. Rouse, Pathnet
president of network services. "We now have network available in 18 states with
1,900 additional route miles completed in this quarter alone. We're on schedule
with all of our
network construction and with over 30 interconnection projects into
under-served areas."
SECOND QUARTER HIGHLIGHTS AND RECENT DEVELOPMENTS
- Announced 400-mile fiber route from Grand Junction to Albuquerque
- Construction initiated on 1,100 mile Denver to Chicago fiber route
- $5 million memorandum of understanding signed for delivery of dark fiber to
a major inter-exchange carrier
- Increased total route miles of network completed to 3,900
- On target for over 30 city interconnections by end of year 1999
- Robert A. Rouse, president of network services, and James M. Craig, chief
financial officer, joined senior management team
Pathnet is a carriers' carrier providing high capacity, fiber and wireless
bandwidth 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.
As of June 30, 1999, Pathnet had 3,900 route miles of completed network, 3,800
route miles of network under construction and 7,700 route miles of network under
commitment. 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.
PATHNET, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE DATA)
FOR THE PERIOD
AUGUST 25, 1995
FOR THE THREE MONTHS ENDED (DATE OF INCEPTION)
JUNE 30, TO JUNE 30,
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1999 1998 1999
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Revenue $ 865 $ 475 $ 3,438
Expenses:
Cost of revenue 2,669 3,020 12,868
Selling, general and administrative 3,508 2,473 21,928
Depreciation 1,033 112 2,360
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Total expenses 7,210 5,605 37,156
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Net operating loss (6,345) (5,130) (33,718)
Interest expense (10,061) (9,868) (53,318)
Interest income 3,378 4,488 21,308
Initial public offering costs -- -- (1,355)
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Other income, net 72 -- 157
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Net loss $(12,956) $(10,510) $(66,926)
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Basic and diluted loss per
Common share $ (4.46) $ (3.62) $ (23.07)
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Weighted average number of
Common shares outstanding 2,905 2,902 2,901
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Other Data:
EBITDA (1) $ (5,312) $ (5,018) $(31,358)
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(1) EBITDA comprises earnings before interest, taxes, depreciation and
amortization
PATHNET, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT ROUTE MILES)
JUNE 30, DECEMBER 31,
1999 1998
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(UNAUDITED)
ASSETS
Cash and cash equivalents $ 133,873 $ 57,322
Interest receivable 1,527 3,849
Marketable securities available for sale, at market 37,139 97,896
Other current assets 1,037 3,412
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Total current assets 173,576 162,479
Property and equipment, net 83,953 47,971
Deferred financing costs, net 9,981 10,508
Restricted cash 7,890 10,731
Marketable securities available for sale, at market 33,608 71,900
Pledged marketable securities held to maturity 41,775 61,825
Other Assets 190 --
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Total assets $ 350,973 $ 365,414
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LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DE FICIT)
Accounts payable $ 19,714 $ 10,708
Accrued interest 8,932 8,932
Other current liabilities 1,342 640
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Total current liabilities 29,988 20,280
Bonds payable, net of unamortized bond discount of $3,685 346,417 346,212
Other non-current liabilities 184
Total mandatorily redeemable preferred stock 35,970 35,970
Total stockholders' equity (deficit) (61,586) (37,048)
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Total liabilities, mandatorily redeemable preferred stoc k and
stockholders' equity (deficit) $ 350,973 $ 365,414
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Selected statistical data:
Route miles under construction 3,800
Route miles complete 3,900