EXHIBIT 99.1
For Release: November 8, 2000 Contacts:
**Teleconference** Michael B. Moneymaker
Thursday, November 9, 2000 Sr. Vice President & CFO
11:30 am (EST) Wesley B. Wampler
Dial in number: 800-288-8960 Director of Investor Relations
Digital replay: 800-475-6701 Phone: 540-946-3500
(until November 16, 2000)
Access code: 545162 Fax: 540-946-3595
CFW Reports Quarterly Revenues of $33.4 Million in Third Quarter 2000
Results Incorporate the Acquired Virginia PrimeCo Operations
and Consolidates the Virginia PCS Alliance
Positive Operating Cash Flow of $4.5 Million
WAYNESBORO, VA - November 8, 2000 - CFW Communications Company (NASDAQ: CFWC)
reported third quarter operating revenues of $33.4 million and net income of
$29.2 million. These results include the newly acquired Virginia PrimeCo
operations, the consolidation of the Virginia PCS Alliance and reflect the
disposition of CFW's analog cellular business, all as of July 26, 2000.
Operating cash flow, or EBITDA, was $4.5 million.
Non-recurring items included in earnings were a $62.6 million book gain on the
sales of the VA RSA 6 analog cellular business and a 22% limited partnership
interest in VA RSA 5, a $27.6 million book gain on the sale of the Directory
Assistance operations, bridge financing commitment charges of $6.3 million and a
write-down of switch equipment of $5.6 million.
The announced merger with R&B Communications is pending shareholder vote in
early December, and regulatory approval thereafter. Information packages with
proxies have been mailed and shareholder meetings are scheduled on December 4,
2000 for CFW and on December 6, 2000 for R & B Communications.
"It is our strategy to transform CFW into a leading Mid-Atlantic Wireless PCS
and Integrated Communications Provider and the PrimeCo acquisition is a
significant milestone in this process," said James S. Quarforth, chairman and
chief executive officer. "With the addition of the Richmond, Norfolk and Hampton
Roads markets, our operational area includes a population of 11 million. We now
have nearly 158,000 PCS subscribers compared to 63,600 last quarter and 30,500
last year at this time. We are pleased with the progress made to integrate the
new Virginia East markets into our operations and the implementation of our
transition plan continues as scheduled."
As part of its transition plan, the company announced the planned opening of a
second customer care center, to be located in Portsmouth, VA, and scheduled to
begin operations in December 2000. Construction of a new Network Operation
Center (NOC) in Waynesboro, VA was completed in October and is now operational.
The NOC will centrally monitor wireline and wireless service for both Virginia
and West Virginia. Two new retail stores were opened in October to meet the
needs of more customers and as a step to build the NTELOS brand in the new
Virginia East markets. One is located in Norfolk and the other in
Mechanicsville, northeast of Richmond.
"We are pleased to report that pro forma operating cash flows, before cost of
acquisition, for Virginia East, Virginia West, and West Virginia PCS operations
were positive and amounted to $3.8 million for the third quarter 2000," said
Quarforth.
Highlights of Third Quarter Business Activities
o PrimeCo Acquisition: On July 26, 2000, the Company acquired the operations
and assets of PrimeCo Virginia PCS (Virginia East) for cash of $408.6
million, a 22% limited partnership interest in VA RSA 5 (valued at $3.5
million), the analog assets and operations of VA RSA 6 (valued at $75.0
million), and the assumption of approximately $20.0 million of lease
obligations.
o Virginia PCS Alliance: On July 26, 2000, the Company commenced
consolidating the operating results of the Virginia PCS Alliance due to the
conversion and funding of certain preferred ownership interests which
increased the Company's common ownership interest in the Alliance to 65%
from 21%.
o Directory Assistance Sale: The Company sold its Directory Assistance
segment in July for $35.5 million, receiving $32.0 million in cash and $3.5
million in stock of Telegate AG, a public company traded on the German
stock exchange.
o New Preferred Equity: In July 2000, the Company closed on $250 million in
new preferred equity investments from Welsh, Carson, Anderson & Stowe and
Morgan Stanley Dean Witter.
o New Debt Facility: Also in July, the Company closed on $700 million in debt
facilities, of which $175 million remains available to support continued
growth. These new debt facilities replaced the Company's and the Alliances'
prior debt facilities of approximately $300 million.
Operating Revenues for the third quarter of 2000 were $33.4 million, compared to
$18.1 million for third quarter 1999, an increase of $15.3 million. For the
first nine months of 2000, operating revenues were $75.6 million compared to
$50.6 million for the first nine months of 1999, an increase of $25.0 million.
These amounts exclude the operating revenues of the directory assistance
segment, which has been reported as discontinued operations and includes the
July 26, 2000 acquisition of PrimeCo Virginia (Virginia East) and consolidation
of the Virginia PCS Alliance.
Wireless revenues for third quarter were $17.5 million, compared to $5.6 million
for third quarter of 1999, an increase of $11.9 million. Virginia East and the
Virginia PCS Alliance contributed $8.9 million and $4.1 million, respectively,
to reported wireless revenue for the period from July 26, 2000 through the end
of the third quarter. The RSA 6 analog cellular operation, which accounted for
approximately $5.6 million in revenue from January 1, 2000 to July 25, 2000 and
$11.3 million for calendar year 1999, was sold, also on July 26.
Wireline revenues for third quarter were $15.3 million, compared to $11.4
million for third quarter of 1999, an increase of $3.9 million or 34%.
Operating Cash Flows (operating income before depreciation and amortization) for
the third quarter of 2000 were $4.5 million, compared to $7.1 million for third
quarter 1999, a decrease of $2.6 million or 37%. For the first nine months of
2000, operating cash flows were $18.5 million compared to $21.5 for the first
nine months of 1999, a decrease of $3.0 million or 14%. These amounts exclude
the operating cash flows of the directory assistance segment, which has been
reported as discontinued operations.
Wireless cash flows for third quarter were ($2.0) million, compared to $1.3
million for third quarter of 1999, a decrease of $3.3 million. Wireless cash
flow includes ($1.2) million from the new Virginia East operations and ($1.0)
million from the consolidation of the Virginia PCS Alliance, both included from
July 26 forward. The analog cellular business was sold on July 26 and
historically generated cash flow of approximately $2.7 million from January 1,
2000 to July 25, 2000 and $5.8 million for calendar year 1999.
Wireline cash flows for third quarter were $6.3 million, compared to $5.6
million for third quarter of 1999, an increase of $0.7 million or 13%.
Third Quarter 2000 Business Segment Highlights
Wireless
o PCS: PCS revenues totaled $15.3 million for the quarter, reflecting the
addition of Virginia East. Also, the Virginia PCS Alliance was consolidated
into operations effective July 26, 2000 in connection with the Company's
increasing its common ownership interests to 65% from 21%. The West
Virginia PCS Alliance will be consolidated into this segment upon the
effective date of the planned R & B merger. Pro forma revenues for the
entire third quarter for each entity were $12.7 million for Virginia East,
an increase of 3% over third quarter 1999; $6.3 million for Virginia PCS
Alliance, an increase of 73% over third quarter 1999; and $4.0 million for
the West Virginia PCS Alliance, an increase of $3.1 million or 354% over
1999. Reported PCS operating cash flows were ($2.8) million for the
quarter. For the entire quarter, pro forma operating cash flows for each
entity were ($0.7) million for Virginia East, compared to ($0.6) million
for the third quarter 1999; ($2.0) million for the Virginia PCS Alliance,
compared to ($1.8) million for the third quarter 1999; and ($2.1) million
for the West Virginia PCS Alliance, compared to ($2.2) million for the
third quarter 1999.
Pro forma PCS revenues and operating cash flows (inclusive of Virginia
East, the Virginia PCS alliance, VA RSA 6 digital and the West Virginia PCS
alliance) were $23.9 million and ($5.4) million, respectively, for the
entire third quarter of 2000. These amounts are net of intercompany
eliminations and exclude revenues from VA RSA 6 analog cellular operations,
which were disposed of on July 26, 2000.
During the third quarter, the Company's marketing and promotion activities
were focused to transition all markets, particularly Virginia East, to the
new NTELOS brand, reserving specific product promotion for a fourth-quarter
introduction of new rate plans. The "N Town" plan was introduced across the
footprint in October offering an unlimited-calling local service wireless
alternative, with roaming capabilities. To strengthen the post-pay offering
in Virginia East, a Mid-Atlantic 13-state regional calling plan and new
local network plans are being introduced in November to leverage the
historical strength of the holiday season. The Company will also be
launching PCS services in Beckley, WV in November, which is expected to
generate new-market subscriber growth and enhance service in the nearby
Charleston, WV market by strengthening the PCS digital service footprint in
West Virginia.
Gross subscriber additions were about equal to second quarter 2000 at
29,468. After three quarters of record growth, the Virginia West and West
Virginia PCS operations experienced new competition coupled with the
introduction of aggressive rate plans and heavy promotion by existing
competitors. As a result, monthly subscriber churn increased to 4.2%,
combined, for these entities. Expected customer erosion in Virginia East,
related to the transition, brought total monthly subscriber churn combined
for all PCS entities to 5.0% (3.4% for post-pay and 7.6% for pre-pay). Net
subscriber additions were 6,175, including Virginia East and 5,830 for
Virginia West (Virginia PCS Alliance and VA RSA 6 digital) and the West
Virginia PCS Alliance. This brings year-to-date net additions for Virginia
West and the West Virginia PCS Alliance to 26,118. Average revenue per unit
(ARPU) was $43.68 for the third quarter, a decrease of $2.58 from the
second quarter of 2000, primarily due to the introduction of new pre-pay
and post-pay rate plans in Virginia East.
Wholesale and roaming revenues generated through the Sprint/Horizon
agreement continued to show impressive growth, totaling $2.1 million for
the quarter. This represents an increase of 204% over revenues of $0.7
million in the first quarter and 72% over revenues of $1.2 million in the
second quarter of this year.
The company announced early this month that it had entered into an
agreement with Lucent to purchase up to $100 million of equipment over a
three-year time period. In return for this commitment, CFW will receive
substantial discounts on both wireline and wireless equipment purchases,
but most significantly will receive at no cost two new Lucent mobile
switching centers, one to replace the existing wireless switch in
Waynesboro, VA, and the second to be placed in Charleston, WV.
With this conversion, the addition of two Lucent switches from the Virginia
East acquisition and a recently installed West Virginia switch, all
wireless switching will be on the Lucent platform as are now the CFW and R
& B Communications wireline operations. This conversion will enable
seamless deployment of future services over a uniform switching platform
and will result in efficiencies in staffing and maintenance. The company
has recognized in third quarter 2000 a write-down of $5.6 million relating
to the planned replacement of the existing wireless switch.
Wireline
o Telephone (ILEC): Access lines at the end of third quarter were 39,385, an
increase of 6.5% over the same period last year. Total access minutes for
third quarter this year grew 7.8% from second quarter 2000 to 54.5 million,
14.6% over third quarter 1999. ILEC operating revenues for the third
quarter of 2000 were $8.1 million, compared to $7.9 million for third
quarter 1999, an increase of $0.2 million or 2%. For the first nine months
of 2000, ILEC operating revenues were $24.0 million compared to $23.4
million for the first nine months of 1999, an increase of $0.6 million or
3%. Operating cash flows for the third quarter of 2000 were $5.6 million,
compared to $5.4 million for the third quarter of 1999, an increase of $0.2
million or 5%, and reflects a slight improvement in operating margin to
70%, compared to 68% for the prior-year quarter. For the first nine months
of 2000, ILEC operating cash flows were $16.6 million compared to $16.4
million for the first nine months of 1999, an increase of $0.2 million or
1%.
o Network and CLEC: Operating revenues for the third quarter of 2000 were
$2.7 million, compared to $1.5 million for third quarter 1999, an increase
of $1.1 million or 78%. For the first nine months of 2000, Network and CLEC
operating revenues were $7.1 million compared to $3.9 million for the first
nine months of 1999, an increase of $3.1 million or 80%. Operating cash
flows for the third quarter of 2000 were $0.04 million, compared to $0.3
million for third quarter 1999, a decrease of $0.2 million as a result of
the CLEC expansion into new markets. For the first nine months of 2000,
operating cash flows were ($0.2) million compared to $0.8 million for the
first nine months of 1999, a decrease of $1.1 million. End-of-period CLEC
access lines for the third quarter were 13,168, an increase of 9.6% over
second quarter, reflecting lower than anticipated growth related to
installation delays attributable to the Verizon strike.
o Internet/DSL: DSL lines were approximately 1,200 at the end of the third
quarter, an increase of 23.5% over second quarter 2000. Total Internet
revenues for third quarter were $4.1 million and operating cash flow was
$0.4 million compared to $1.6 million and ($0.3) million, respectively, for
the third quarter of 1999. Total Internet subscribers were 57,557 at the
end of third quarter.
EXHIBITS -- Financial Statements & Schedules (following pages) o Condensed
Consolidated Statements of Income - CFW Communications Company o Segment Summary
Operating Data from Continuing Operations o Condensed Consolidated Balance Sheet
- - CFW Communications Company o Income Statement - Virginia PCS Alliance o Income
Statement - Virginia East (formerly PrimeCo Virginia PCS operations) o Income
Statement & Balance Sheet - West Virginia PCS Alliance o Customer Summary Table
o PCS Customer detail o Pro Forma PCS Key Performance Indicators
WE URGE INVESTORS and security holders TO READ CFW'S Registration Statement on
Form S-4 and the JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT
DOCUMENTS relating to the Proposed CFW-R&B merger BECAUSE THEY CONTAIN IMPORTANT
INFORMATION. Investors and security holders may obtain a free copy at the
Securities and Exchange Commission's web site at www.sec.gov. The documents
filed with the Commission by CFW may also be obtained for free from CFW by
directing a request to CFW Communications Company, P. O. Box 1990, Waynesboro,
Virginia 22980, Attn: Investor Relations, telephone: (540) 946-3500. Certain of
these documents may also be available on CFW's website at www.cfw.com or
www.intelos.com. READ THE DEFINITIVE Registration Statement and JOINT PROXY
STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION CONCERNING THE MERGER.
The company wishes to caution readers that forward-looking statements made by
the Company are based on a number of assumptions, estimates and projections.
These statements are not guarantees of future performance and involve risks and
uncertainties and any significant deviations from these assumptions could cause
actual results to differ materially from those in forward-looking statements.
The Company undertakes no obligation to revise or update such statements to
reflect current events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.
CFW Communications (NASDAQ: CFWC), doing business as NTELOS, is an integrated
communications provider with headquarters in Waynesboro, Virginia. CFW provides
a broad range of products and services to customers in Virginia, West Virginia,
Kentucky, Tennessee and North Carolina, including digital PCS, dial-up Internet
access, high-speed DSL (high-speed Internet access), and local and long distance
telephone services. Detailed information about CFW Communications and NTELOS is
available online at www.cfw.com and www.ntelos.com.
NOTICE:
CFW will host a teleconference call on Thursday, November 9, 2000, at 11:30 am
EST to discuss operating results and Company business activities. To participate
in this call, please dial 800-288-8960. For a taped replay, available through
November 16, 2000, please dial 800-475-6701, and provide the operator with the
pass code of 545162. If you have any questions about the conference call, please
contact us at 540-946-3501.
CFW Communications Company
- ---------------------------------------------------------------------------------------------------------------------
Condensed Consolidated Statement of Income
(Dollars in thousands except per share amounts)
- ---------------------------------------------------------------------------------------------------------------------
Unaudited Three Months Ended
--------------------------------------
Sept. 30, 2000 Sept. 30, 1999
- ---------------------------------------------------------------------------------------------------------------------
Operating Revenues
Wireless Communications $ 17,461 $ 5,623
Wireline Communications 15,287 11,379
Other Communications Services 676 1,107
- ---------------------------------------------------------------------------------------------------------------------
33,424 18,109
Operating Expenses, before depreciation and amortization
Cost of Sales 5,831 2,023
Maintenance and Support 9,185 4,046
Customer Operations 10,846 2,870
Corporate Operations 3,110 2,096
- ---------------------------------------------------------------------------------------------------------------------
28,972 11,035
Operating Cash Flows (EBITDA) 4,452 7,074
Depreciation and Amortization 12,224 2,888
Asset Write-Down and Impairment Charges (1) 5,624 2,713
- ---------------------------------------------------------------------------------------------------------------------
Operating Income (13,396) 1,473
Other Income (Expenses)
Equity Loss from PCS Investees
Virginia PCS Alliance (2) (840) (1,298)
West Virginia PCS Alliance (3) (1,934) (1,403)
Gain on Sale of Assets (4) 62,633 8,366
Other Financing Acquisition Costs (5) (6,276)
Other, Principally interest, net (9,226) (291)
- ---------------------------------------------------------------------------------------------------------------------
30,961 6,847
Income Taxes 12,317 2,274
- ---------------------------------------------------------------------------------------------------------------------
18,644 4,573
Minority Interests - (123)
- ---------------------------------------------------------------------------------------------------------------------
Income (Loss) from Continuing Operations 18,644 4,450
Discontinued Operations 6
Income from Discontinued Operations, Net of Tax (291) (73)
Gain on Sale of Discontinued Operations, Net of Tax 16,497
- ---------------------------------------------------------------------------------------------------------------------
Net Income 34,850 4,377
Dividend Requirements on Preferred Stock 5,670
- ---------------------------------------------------------------------------------------------------------------------
Income Applicable to Common Shares $ 29,180 $ 4,377
=====================================================================================================================
Net Income from Continuing Operations per Common Share - Basic $1.42 $0.34
Net Income from Continuing Operations per Common Share - Diluted $1.38 $0.34
Net Income per Common Share - Basic $2.22 $0.33
Net Income per Common Share - Diluted $2.16 $0.33
Average Shares Outstanding - Basic 13,127,996 13,050,090
Average Shares Outstanding - Diluted 13,516,271 13,110,152
- --------------------------------------------------------------------------------------------------------------------
Unaudited Nine Months Ended
-------------------------------------
Sept. 30, 2000 Sept. 30, 1999
- ------------------------------------------------------------------------------- -------------------------------------
Operating Revenues
Wireless Communications $ 29,159 $ 16,095
Wireline Communications 43,860 31,376
Other Communications Services 2,533 3,168
- ------------------------------------------------------------------------------- -------------------------------------
75,552 50,639
Operating Expenses, before depreciation and amortization
Cost of Sales 10,688 5,513
Maintenance and Support 21,703 10,182
Customer Operations 17,941 8,312
Corporate Operations 6,734 5,162
- ------------------------------------------------------------------------------- -------------------------------------
57,066 29,169
Operating Cash Flows (EBITDA) 18,486 21,470
Depreciation and Amortization 18,975 8,086
Asset Write-Down and Impairment Charges (1) 5,624 2,713
- ------------------------------------------------------------------------------- -------------------------------------
Operating Income (6,113) 10,671
Other Income (Expenses)
Equity Loss from PCS Investees
Virginia PCS Alliance (2) (3,679) (4,136)
West Virginia PCS Alliance (3) (5,750) (3,834)
Gain on Sale of Assets (4) 62,633 8,366
Other Financing Acquisition Costs (5) (6,276)
Other, Principally interest, net (10,138) (749)
- ------------------------------------------------------------------------------- -------------------------------------
30,677 10,318
Income Taxes 12,229 3,470
- ------------------------------------------------------------------------------- -------------------------------------
18,448 6,848
Minority Interests (105) (341)
- ------------------------------------------------------------------------------- -------------------------------------
Income (Loss) from Continuing Operations 18,343 6,507
Discontinued Operations 6
Income from Discontinued Operations, Net of Tax 395 505
Gain on Sale of Discontinued Operations, Net of Tax 16,497
- ------------------------------------------------------------------------------- -------------------------------------
Net Income 35,235 7,012
Dividend Requirements on Preferred Stock 5,670
- ------------------------------------------------------------------------------- -------------------------------------
Income Applicable to Common Shares $ 29,565 $ 7,012
=============================================================================== =====================================
Net Income from Continuing Operations per Common Share - Basic $1.40 $0.45
Net Income from Continuing Operations per Common Share - Diluted $1.37 $0.45
Net Income per Common Share - Basic $2.26 $0.45
Net Income per Common Share - Diluted $2.21 $0.45
Average Shares Outstanding - Basic 13,098,652 13,037,438
Average Shares Outstanding - Diluted 13,359,373 13,093,342
- ------------------------------------------------------------------------------- -------------------------------------
(1) As a result of the Virginia East acquisition and planned R&B merger, both
of which utilize Lucent switch equipment, the Company decided to convert to
a uniform Lucent switch equipment platform. Accordingly, the Company has
recognized a $5.6 million write-down of its Motorola wireless switch
equipment. In third quarter 1999, the Company recognized an asset
impairment charge of $2.7 million on its wireless analog cable equipment.
(2) Partial quarter only. The Virginia PCS Alliance was consolidated into
operations effective July 26, 2000 in connection with the Company's
increasing its common ownership interests to 65% from 21%.
(3) Reported under equity method for entire quarter. The West Virginia PCS
Alliance will be consolidated into operations upon the closing of the R&B
merger. (4) On July 26, 2000 the Company sold its VA RSA 6 analog cellular
operations and assets and its 22% limited partnership interest in VA RSA 5,
recognizing a $62.6 million gain, before tax. In third quarter 1999, the
Company recognized a gain of $7.6 million due to the purchase of American
Telecasting, Inc. by Sprint Corp and a gain of $0.7 million on the sale of
the Company's Richmond tower.
(5) Represents bridge financing costs associated with the Virginia East
acquisition and related financing commitments.
(6) In May 2000 the Company announced that it had entered into a definitive
agreement to sell its Directory Assistance operations. The Company sold its
Directory Assistance operations in July 2000, recognizing a $27.6 million
gain, before taxes, on the sale. All periods have been restated to reflect
the accounting for the directory assistance segment as discontinued
operations.
CFW Communications Company
- ------------------------------------------------------------------------------------------------------------------------------------
Summary Operating Data from Continuing Operations
(Dollars in Thousands)
- ------------------------------------------------------------------------------------------------------------------------------------
Unaudited Three Months Ended Nine Months Ended
-------------------------------------- --------------------------------------
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
- ----------------------------------------------------------------------------------- --------------------------------------
Operating Revenues
Wireless Operations
PCS $ 15,316 $ 1,397 $ 19,431 $ 3,491
Analog Cellular 710 2,967 5,557 8,667
Paging and Other 837 607 2,335 1,844
Cable 598 652 1,836 2,093
- ----------------------------------------------------------------------------------- --------------------------------------
17,461 5,623 29,159 16,095
Wireline Operations
Telephone (ILEC) 8,058 7,918 24,050 23,428
Network/CLEC 2,681 1,507 7,057 3,928
Internet 4,147 1,552 11,559 2,818
Cable 401 402 1,194 1,202
- ----------------------------------------------------------------------------------- --------------------------------------
15,287 11,379 43,860 31,376
Other Operating Revenues 676 1,107 2,533 3,168
- ----------------------------------------------------------------------------------- --------------------------------------
Total Operating Revenues $ 33,424 $ 18,109 $ 75,552 $ 50,639
=================================================================================== ======================================
Operating Cash Flows (EBITDA)
Wireless Operations
PCS $ (2,770) $ (724) $ (4,006) $ (2,137)
Analog Cellular 210 1,680 2,652 4,799
Paging and Other 371 281 979 917
Cable 153 30 410 315
- ----------------------------------------------------------------------------------- --------------------------------------
(2,036) 1,267 35 3,894
Wireline Operations
Telephone (ILEC) 5,632 5,371 16,611 16,395
Network/CLEC 38 335 (239) 837
Internet 432 (263) 823 (871)
Cable 191 133 529 485
- ----------------------------------------------------------------------------------- --------------------------------------
6,293 5,576 17,724 16,846
Other Operating Cash Flows 195 231 727 730
- ----------------------------------------------------------------------------------- --------------------------------------
Total Operating Cash Flows $ 4,452 $ 7,074 $ 18,486 $ 21,470
=================================================================================== ======================================
CFW Communications Company
- --------------------------------------------------------------------------------------------------
Condensed Consolidated Balance Sheet
(Dollars in thousands)
- --------------------------------------------------------------------------------------------------
Unaudited
---------------------------------------
Sept. 30, 2000 Dec. 31, 1999
- --------------------------------------------------------------------------------------------------
ASSETS
Current Assets $ 73,171 $ 21,375
Restricted Cash 70,259
Investments and Advances to Affiliates 82,460 39,110
Property & Equipment, net 677,907 125,881
Other Assets 165,796 31,636
- --------------------------------------------------------------------------------------------------
Total Assets $ 1,069,593 $ 218,002
==================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 75,492 $ 19,096
Long-Term Debt 526,463 37,685
Deferred Taxes and Other Long-Term Liabilities 70,363 43,256
Minority Interests 1,258 1,781
Redeemable Preferred Stock 239,104
Shareholders' Equity 156,913 116,184
- --------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 1,069,593 $ 218,002
==================================================================================================
Virginia PCS Alliance L.C. (1)
- ----------------------------------------------------------------------------------------------------------------------------------
Condensed Consolidated Statement of Income
(Dollars in thousands except per share amounts)
- ----------------------------------------------------------------------------------------------------------------------------------
Unaudited Three Months Ended Nine Months Ended
-------------------------------------- --------------------------------------
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
- ---------------------------------------------------------------------------------------- --------------------------------------
Operating Revenues
Subscriber Revenues $ 3,145 $ 2,075 $ 8,819 $ 5,417
Wholesale/Roaming Revenues 2,421 839 5,357 2,131
Equipment Revenues 265 240 1,071 812
Other Revenues 469 488 1,481 1,464
- ---------------------------------------------------------------------------------------- --------------------------------------
6,300 3,642 16,728 9,824
Operating Expenses, before depreciation
and amortization
Cost of Sales 2,673 1,565 7,138 4,417
Maintenance and Support 2,224 1,607 6,274 4,963
Customer Operations 2,668 1,843 7,442 5,697
Corporate Operations 698 398 2,105 1,583
- ---------------------------------------------------------------------------------------- --------------------------------------
8,263 5,413 22,959 16,660
Operating Cash Flows (EBITDA) (1,963) (1,771) (6,231) (6,836)
Depreciation and Amortization 2,125 2,642 6,197 7,495
Asset Write-Down and Impairment Charges (2) 5,625 5,625
- ---------------------------------------------------------------------------------------- --------------------------------------
Operating Income (9,713) (4,413) (18,052) (14,331)
Other Expenses, principally interest, net (3) 5,132 1,511 10,440 4,583
- ---------------------------------------------------------------------------------------- --------------------------------------
Net Income (Loss) $ (14,845) $ (5,924) $ (28,492) $ (18,914)
======================================================================================== ======================================
(1) This statement represents full periods of operation. The operations of the
Virginia PCS Alliance L.C. were consolidated into CFW Communications
Company effective July 26, 2000.
(2) As a result of the Virginia East acquisition and planned R&B merger, both
of which utilize Lucent switch equipment, the Company decided to convert to
a uniform Lucent switch equipment platform. Accordingly, the Company has
recognized a $5.6 million write-down of its Motorola wireless switch
equipment.
(3) In July 2000, the Virginia PCS Alliance redeemed its $12.9 million series A
redeemable preferred stock and entered into a new financing agreement with
the Company, using the proceeds from such financing to repay $118.3 million
of borrowings from the Rural Telephone Finance Cooperative. In connection
with these transactions, the Virginia PCS Alliance recognized $1.5 million
of make-whole finance charges.
Virginia East PCS Operations (formerly PrimeCo) (1)
- ------------------------------------------------------------------------------------------------------------------------------
Condensed Consolidated Statement of Income
(Dollars in thousands except per share amounts)
- ------------------------------------------------------------------------------------------------------------------------------
Unaudited Three Months Ended Nine Months Ended
-------------------------------------- --------------------------------------
Sept. 30, 2000 Sept. 30, 1999 Sept. 30, 2000 Sept. 30, 1999
- ----------------------------------------------------------------------------------- --------------------------------------
Operating Revenues
Service Revenues $ 10,564 $ 10,381 $ 34,017 $ 30,583
Equipment Revenues 1,148 1,512 3,613 5,173
Other Revenues 1,006 438 2,078 1,204
- ----------------------------------------------------------------------------------- --------------------------------------
12,718 12,331 39,708 36,960
Operating Expenses, before depreciation
and amortization
Cost of Sales 3,490 2,791 10,917 10,493
Maintenance and Support 1,562 2,610 6,705 7,808
Customer Operations 7,154 5,419 19,713 18,624
Corporate Operations 1,194 2,106 4,484 6,516
- ----------------------------------------------------------------------------------- --------------------------------------
13,400 12,926 41,819 43,441
Operating Cash Flows (EBITDA) $ (682) $ (595) $ (2,111) $ (6,481)
(1) This statement represents full periods of operation. The operations of
Virginia East, formerly PrimeCo, were acquired and consolidated into CFW
Communications Company effective July 26, 2000.
West Virginia PCS Alliance L.C.
- ---------------------------------------------------------------------------------------------------------------------
Condensed Consolidated Statement of Income
(Dollars in thousands except per share amounts)
- ---------------------------------------------------------------------------------------------------------------------
Unaudited Three Months Ended
--------------------------------------
Sept. 30, 2000 Sept. 30, 1999
- ---------------------------------------------------------------------------------------------------------------------
Operating Revenues
Subscriber Revenues $ 3,008 $ 578
Wholesale/Roaming Revenues 763 137
Equipment Revenues 186 160
Other Revenues - -
- ---------------------------------------------------------------------------------------------------------------------
3,957 875
Operating Expenses, before depreciation and amortization
Cost of Sales 2,197 702
Maintenance and Support 1,804 1,110
Customer Operations 1,598 993
Corporate Operations 499 296
- ---------------------------------------------------------------------------------------------------------------------
6,098 3,101
Operating Cash Flows (EBITDA) (2,141) (2,226)
Depreciation and Amortization 550 613
- ---------------------------------------------------------------------------------------------------------------------
Operating Income (2,691) (2,839)
Other Expenses, principally interest, net (2) 1,197 307
- ---------------------------------------------------------------------------------------------------------------------
Net Income (Loss) $ (3,888) $ (3,146)
=====================================================================================================================
Company's Share of Net Loss (1) $ (1,934) $ (1,403)
=====================================================================================================================
- ---------------------------------------------------------------------------------------------------------------------
Unaudited Nine Months Ended
--------------------------------------
Sept. 30, 2000 Sept. 30, 1999
- ---------------------------------------------------------------------------------------------------------------------
Operating Revenues
Subscriber Revenues $ 7,381 $ 985
Wholesale/Roaming Revenues 1,535 137
Equipment Revenues 955 351
Other Revenues -
- ---------------------------------------------------------------------------------------------------------------------
9,871 1,473
Operating Expenses, before depreciation and amortization
Cost of Sales 6,470 1,402
Maintenance and Support 4,794 2,970
Customer Operations 5,128 2,568
Corporate Operations 1,525 1,302
- ---------------------------------------------------------------------------------------------------------------------
17,917 8,242
Operating Cash Flows (EBITDA) (8,046) (6,769)
Depreciation and Amortization 1,713 1,305
- ---------------------------------------------------------------------------------------------------------------------
Operating Income (9,759) (8,074)
Other Expenses, principally interest, net (2) 2,683 520
- ---------------------------------------------------------------------------------------------------------------------
Net Income (Loss) $ (12,442) $ (8,594)
=====================================================================================================================
Company's Share of Net Loss (1) $ (5,750) $ (3,834)
=====================================================================================================================
West Virginia PCS Alliance L.C.
- ---------------------------------------------------------------------------------------------------------------------
Condensed Consolidated Balance Sheet
(Dollars in thousands)
- ---------------------------------------------------------------------------------------------------------------------
Unaudited
--------------------------------------
Sept. 30, 2000 Dec. 31, 1999
- ---------------------------------------------------------------------------------------------------------------------
ASSETS
Current Assets $ 4,489 $ 2,367
Investments - 2,506
Property & Equipment, net 53,950 45,422
Other Assets 3,117 3,202
- ---------------------------------------------------------------------------------------------------------------------
Total Assets $ 61,556 $ 53,497
=====================================================================================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities $ 3,434 $ 3,076
Long-Term Debt 57,458 51,125
Other Long-Term Liabilities 12,836 -
Shareholders' Equity (12,172) (704)
- ---------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $ 61,556 $ 53,497
=====================================================================================================================
(1) The operations of the West Virginia PCS Alliance L.C. are reported by
equity method for CFW Communications for third quarter 2000. Effective upon
the planned merger with R&B communications, the operations of the West
Virginia PCS Alliance L.C. will be consolidated.
(2) In July 2000, the West Virginia PCS Alliance entered into a new financing
agreement with the Company, using the proceeds from such financing to repay
$51.1 million of borrowings from the Rural Telephone Finance Cooperative.
In connection with this transaction, the West Virginia PCS Alliance
recognized $0.3 million of make-whole finance charges.
- -------------------------------------------------------------------------------------------------------------------------------
CFW Communications Company
- -------------------------------------------------------------------------------------------------------------------------------
Customer Summary Table as Reported
- -------------------------------------------------------------------------------------------------------------------------------
Quarter Ended: 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00
- -------------------------------------------------------------------------------------------------------------------------------
PCS Digital Subscribers 19,100 24,166 30,525 43,299 55,249 63,587 157,717(1)
LEC Access Lines 37,100 37,300 37,500 37,900 38,300 39,100 39,385
CLEC Access Lines 900 2,300 4,000 5,800 8,900 12,400 13,168
Internet Subscribers 9,100 16,700 31,500 45,233 53,600 55,990 56,369
Digital Subscriber Lines 23 81 185 538 808 962 1,188
Paging Subscribers 14,500 14,300 14,200 15,100 15,600 14,700 14,887
Long Distance Subscribers 6,500 6,900 6,900 7,300 8,100 8,200 8,354
Cable Subscribers 19,400 18,700 18,300 18,000 17,800 16,600 16,192
(1) PCS digital subscribers for quarter ended 9/30/00 include ending
subscribers of 88,300 from Virginia East, formerly PrimeCo, acquired July
26,2000.
- -------------------------------------------------------------------------------------------------------------------------------
Virginia East (formerly PrimeCo) Customer Summary
- -------------------------------------------------------------------------------------------------------------------------------
Quarter Ended: 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00
- -------------------------------------------------------------------------------------------------------------------------------
PCS Digital Subscribers 68,584 73,651 74,856 78,869 86,383 87,955 88,300
- -------------------------------------------------------------------------------------------------------------------------------
R & B Communications Customer Summary (Information provided by R&B Communications)
- -------------------------------------------------------------------------------------------------------------------------------
Quarter Ended: 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00
- -------------------------------------------------------------------------------------------------------------------------------
LEC Access Lines 10,770 10,898 11,309 12,233 12,282 12,323 12,509
CLEC Access Lines 1,624 2,557 3,118 3,975 4,417 4,952 5,690
Internet Subscribers 1,353 1,445 1,761 2,078 2,212 2,332 2,552
Paging Subscribers 4,980 5,330 5,225 5,025 5,163 5,165 4,970
Long Distance Subscribers 4,422 4,396 4,382 4,412 4,402 4,332 4,237
Cable Subscribers 2,076 2,059 2,061 2,078 2,019 2,059 1,937
- -------------------------------------------------------------------------------------------------------------------------------
Customer Summary Table - Pro Forma Including Virginia East & R&B Communications
- -------------------------------------------------------------------------------------------------------------------------------
Quarter Ended: 3/31/99 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 9/30/00
- -------------------------------------------------------------------------------------------------------------------------------
PCS Digital Subscribers 87,684 97,817 105,381 122,168 141,632 151,542 157,717
LEC Access Lines 47,870 48,198 48,809 50,133 50,582 51,423 51,894
CLEC Access Lines 2,524 4,857 7,118 9,775 13,317 17,352 18,858
Internet Subscribers 10,453 18,145 33,261 47,311 55,812 58,322 58,921
Digital Subscriber Lines 538 808 962 1,188
Paging Subscribers 19,480 19,630 19,425 20,125 20,763 19,865 19,857
Long Distance Subscribers 10,922 6,900 6,900 7,300 8,100 8,200 8,354
Cable Subscribers 21,476 20,759 20,361 20,078 19,819 18,659 18,129
CFW Communications Company
- ----------------------------------------------------------------------------------------
PCS Customer Detail (Pro Forma to Include Virginia East)
- ----------------------------------------------------------------------------------------
Quarter Ended: 3/31/00 6/30/00 9/30/00
- ----------------------------------------------------------------------------------------
Virginia East (Former PrimeCo)
- ----------------------------------------------------------------------------------------
Beginning Subscribers 78,854 86,383 87,955
Pre-Pay 34,356 42,251 43,573
Post-Pay 44,498 44,132 44,382
Gross Additions 19,519 13,946 15,403
Pre-Pay 15,526 9,375 11,320
Post-Pay 3,993 4,571 4,083
Disconnections 11,990 12,374 15,058
Pre-Pay 7,631 8,053 9,919
Post-Pay 4,359 4,321 5,139
Ending Subscribers 86,383 87,955 88,300
Pre-Pay 42,251 43,573 44,974
Post-Pay 44,132 44,382 43,326
- ----------------------------------------------------------------------------------------
Virginia West (Former Virginia PCS Alliance)
- ----------------------------------------------------------------------------------------
Beginning Subscribers 32,035 37,233 41,978
Pre-Pay 7,238 9,881 12,151
Post-Pay 24,797 27,352 29,827
Gross Additions 7,153 9,738 8,484
Pre-Pay 4,372 4,696 3,212
Post-Pay 2,781 5,042 5,272
Disconnections 1,955 4,993 5,214
Pre-Pay 1,729 2,426 2,951
Post-Pay 226 2,567 2,263
Ending Subscribers 37,233 41,978 45,248
Pre-Pay 9,881 12,151 12,412
Post-Pay 27,352 29,827 32,836
- ----------------------------------------------------------------------------------------
West Virginia
- ----------------------------------------------------------------------------------------
Beginning Subscribers 11,264 18,016 21,609
Pre-Pay 1,899 2,755 3,427
Post-Pay 9,365 15,261 18,182
Gross Additions 7,520 5,677 5,581
Pre-Pay 1,399 1,402 1,128
Post-Pay 6,121 4,275 4,453
Disconnections 768 2,084 3,021
Pre-Pay 543 730 955
Post-Pay 225 1,354 2,066
Ending Subscribers 18,016 21,609 24,169
Pre-Pay 2,755 3,427 3,600
Post-Pay 15,261 18,182 20,569
- ----------------------------------------------------------------------------------------
Total PCS Subscribers
- ----------------------------------------------------------------------------------------
Beginning Subscribers 122,153 141,632 151,542
Pre-Pay 43,493 54,887 59,151
Post-Pay 78,660 86,745 92,391
Gross Additions 34,192 29,361 29,468
Pre-Pay 21,297 15,473 15,660
Post-Pay 12,895 13,888 13,808
Disconnections 14,713 19,451 23,293
Pre-Pay 9,903 11,209 13,825
Post-Pay 4,810 8,242 9,468
Ending Subscribers 141,632 151,542 157,717
Pre-Pay 54,887 59,151 60,986
Post-Pay 86,745 92,391 96,731
CFW Communications Company
- --------------------------------------------------------------------------------------------------
PCS Key Performance Indicators - Pro Forma
- --------------------------------------------------------------------------------------------------
Quarter Ended: 3/31/00 6/30/00 9/30/00
- --------------------------------------------------------------------------------------------------
Average Subscribers (weighted monthly)
Virginia East 82,705 86,970 88,772
Virginia West 33,274 39,491 43,281
West Virginia 14,213 19,823 22,859
--------------------------------------------------------------------------------------------
Total 130,192 146,284 154,912
Gross Subscriber Revenues ($000) (1)
Virginia East $ 11,451 $ 11,999 $ 11,126
Virginia West 4,473 5,423 5,773
West Virginia 1,838 2,880 3,400
--------------------------------------------------------------------------------------------
Total $ 17,763 $ 20,303 $ 20,299
Average Monthly Revenue per Subscriber (ARPU) (1)
Virginia East $ 46.15 $ 45.99 $ 41.78
Virginia West 44.81 45.78 44.46
West Virginia 43.11 48.43 49.59
--------------------------------------------------------------------------------------------
Total $ 45.48 $ 46.26 $ 43.68
Cost of Acquisition per Gross Add (2)
Virginia East $ 279.15 $ 308.30 $ 325.05
Virginia West 431.18 320.24 424.22
West Virginia 317.24 413.65 399.85
--------------------------------------------------------------------------------------------
Total $ 326.68 $ 337.62 $ 368.54
Monthly Subscriber Churn
Virginia East 4.8% 4.7% 5.7%
Virginia West 2.0% 4.2% 4.0%
West Virginia 1.8% 3.5% 4.4%
--------------------------------------------------------------------------------------------
Total 3.8% 4.4% 5.0%
Cell Sites (Period Ending)
Virginia East 210 215 220
Virginia West 222 232 260
West Virginia 115 126 136
--------------------------------------------------------------------------------------------
Total 547 573 616
Operating Cash Flows (EBITDA) Before Cost of Acquisition ($000)
Virginia East $ (270) $ 2,760 $ 1,982
Virginia West 631 1,303 1,636
West Virginia (808) (242) 154
--------------------------------------------------------------------------------------------
Total $ (447) $ 3,821 $ 3,773
Capital Expenditures ($000)
Virginia East $ 2,838 $ 1,965 $ 4,212
Virginia West 3,403 4,738 11,285
West Virginia 7,868 6,498 8,530
--------------------------------------------------------------------------------------------
Total $ 14,110 $ 13,201 $ 24,026
(1) Gross subscriber revenues include access, airtime, toll, incollect roaming
and miscellaneous other. ARPU is calculated by dividing subscriber revenues
by the number of average subscribers
(2) Cost of acquisition includes handset subsidy, marketing costs, advertising
costs, sales commissions and sales management costs.