EXHIBIT 99.1
FOR IMMEDIATE RELEASE
Contact: Becky Haight
Investor Relations
Pathnet
877 227-5600
investor@pathnet.net
Patti Kelly
Media Relations
Pathnet
703 390-2868
pkelly@pathnet.net
PATHNET ANNOUNCES FIRST QUARTER RESULTS
RESTON, VA, MAY 9, 2000-- Pathnet Telecommunications, Inc., a `next generation'
carrier's carrier of long-haul transport and competitive local access services
to under-served markets, today announced its financial and operating results for
the quarter ending March 31, 2000.
First quarter revenue doubled to $1.9 million as compared to revenue of $0.8
million in the first quarter of 1999, and was up almost 90% sequentially from
$1.0 million in the prior quarter. As expected, given the expenses relating to
the company's recent reorganization, earnings before interest, taxes,
depreciation and amortization (EBITDA) for the quarter resulted in a loss of
$10.0 million, up from a loss of $4.6 million for the year-ago quarter.
After performing a thorough review and evaluation of the company's proposed
transaction with Colonial Pipeline, BNSF and CSX, Pathnet bondholders provided
the necessary consent to enable the transaction to go forward. This affirmative
action paved the way for the subsequent closing of Pathnet's strategic
investment agreements with these companies valued at $250 million. As part of
these agreements, Pathnet received the right to develop over 12,000 miles of the
investors' right-of-way holdings.
"It was clearly a landmark quarter for us," said president and chief executive
officer Richard Jalkut. "We almost tripled our services backlog to $15 million
during the quarter, bringing our total backlog to $61 million when combined with
our infrastructure and construction sales backlog of $46 million. In addition,
we strengthened ourselves financially with a major equity infusion into the
company and strategically with the addition of three prominent partners."
Pathnet increased its gross plant and equipment by $29 million in the quarter,
bringing total plant and equipment acquired to $168 million at quarter-end. The
company also completed 100 route miles of network and 25 collocations, bringing
its total network to 6,900 route miles and a total of 65 collocations in over 40
cities. The company continues to target 150 collocations in 80 cities by the end
of the year.
"Our network rollout is on track - we have 6,900 miles of network with 1,200
miles under construction. In addition, we recently signed a swap deal that will
extend our network another 1,300 miles," said Bob Rouse, Pathnet chief operating
officer. "With 65 collocations in over 40 cities available for TDM services, we
continue to rollout new collocations every week and expect to have our
collocations xDSL and PRI service-ready within the next several months. Both
these products are part of our unique VPOP Plus Service, which bundles Pathnet's
low cost access and transport into an unprecedented value for its customers."
FIRST QUARTER HIGHLIGHTS AND RECENT DEVELOPMENTS
o Closed transaction for strategic investments valued at over $250 million
o The above transaction added $43 million in cash and $187 million in
intangible ROW to Pathnet's balance sheet and is expected to add an
additional $25 million in the second quarter
o Completed 25 collocations, bringing cumulative total to 65 o Increased
sales backlog to $61 million o Achieved CLEC approval in a total of 16
states o Signed swap agreement with another carrier for 1,300 route miles
of network
o Announced purchase agreement with Nortel Networks and Hekimian for their
OPTera and TestDSLTM products, respectively
Pathnet is a `next generation' carrier's carrier providing competitive local
access services and high capacity, digital transport to under-served and second-
and third-tier U.S. cities. Pathnet provides service to inter-exchange carriers,
local exchange carriers, Internet service providers, Regional Bell Operating
Companies, cellular operators and resellers. Pathnet currently has 6,900 route
miles of completed network and 1,200 route miles of network under construction.
Additional information about Pathnet can be found on the company's web site at:
WWW.PATHNET.NET.
THE STATEMENTS MADE BY PATHNET AND PATHNET TELECOMMUNICATIONS 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 AND PATHNET TELECOM BELIEVE
THAT THEIR PRIMARY RISK FACTORS INCLUDE, BUT ARE NOT LIMITED TO: SIGNING
ADDITIONAL AGREEMENTS WITH PRIVATE NETWORK OPERATORS AND OTHERS; OFFERING
SERVICES TO TELECOMMUNICATION SERVICE PROVIDERS; ENTERING INTO PARTNERING
ARRANGEMENTS; BUILDING A DIGITAL NETWORK; MEETING MARKET DEMAND AND CUSTOMER
SERVICE EXPECTATIONS; AND OBTAINING ADDITIONAL FINANCING. ADDITIONAL INFORMATION
CONCERNING THESE AND OTHER POTENTIALLY IMPORTANT FACTORS CAN BE FOUND WITHIN
PATHNET TELECOM'S REGISTRATION STATEMENT AND PATHNET'S PERIODIC REPORTS FILED
WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION UNDER THE FEDERAL SECURITIES
LAWS. STATEMENTS IN THIS RELEASE SHOULD BE EVALUATED IN LIGHT OF THESE IMPORTANT
FACTORS.
PATHNET TELECOMMUNICATIONS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS EXCEPT PER SHARE DATA)
.
FOR THE THREE MONTHS ENDED
MARCH 31,
2000 1999
---- ----
(UNAUDITED) (UNAUDITED)
Revenue $ 1,927 $ 826
-------------- ------------
Expenses:
Cost of revenue 4,269 2,651
Selling, general and administrative 6,244 2,795
Contribution & Reorganization expenses 1,408 --
Depreciation 2,558 538
-------------- ------------
Total expenses 14,479 5,984
-------------- ------------
Net operating loss (12,552) (5,158)
Interest expense (9,742) (10,271)
Interest income 2,235 3,815
Other (172) 88
-------------- ------------
Net loss $ (20,231) $ (11,526)
============== ============
Basic and diluted loss per
Common share $ (6.59) $ (3.97)
============== ============
Weighted average number of
Common shares outstanding 3,068 2,903
============== ============
Other Data:
EBITDA (1) $ (9,994) $ (4,620)
============= ============
PATHNET TELECOMMUNICATIONS, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT STATISTICAL DATA)
MARCH 31, DECEMBER 31,
2000 1999
---- ----
(UNAUDITED)
ASSETS
Cash and cash equivalents $ 118,599 $ 90,662
Marketable securities available for sale, at market 11,675 42,652
Other current assets 3,020 2,486
-------------- -------------
Total current assets 133,294 135,800
Property and equipment, net 158,365 131,928
Intangible assets 187,275 --
Restricted cash and marketable securities available for sale, at market 25,817 21,541
Pledged marketable securities held to maturity 21,550 21,265
Other assets 16,373 10,002
-------------- -------------
Total assets $ 542,674 $ 320,536
============== =============
LIABILITIES, MANDATORILY REDEEMABLE
PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT)
Total current liabilities 40,533 30,588
Bonds payable, net of unamortized bond discount of $3,276 and $3,378 346,724 346,622
Other non-current liabilities 7,991 3,093
Total mandatorily redeemable preferred stock 37,872 35,970
Total stockholders' equity (deficit) 109,554 (95,737)
-------------- -------------
Total liabilities, mandatorily redeemable preferred stock and
stockholders' equity (deficit) $ 542,674 $ 320,536
============== =============
Selected statistical data:
Route miles complete 6,900 6,800
Route miles under construction 1,200 700
Collocations 65 40
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