PrimaCom AG i.I.
Ad hoc-Service: PrimaCom AG english Part 1
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PrimaCom Reports 1999 Results
Revenue increases 12.6% over pro forma 1998 results. Company passes
approximately 60,354 homes with fiber optic lines and has 30,456 fully
upgraded 862 MHz two-way capable homes (“Ready-for-Service”)
Mainz, Germany, March 28, 2000 – PrimaCom (NASDAQ: PCAG) (Neuer Markt
Frankfurt: PRC, WKN: 625910) reported financial results for the year ended
December 31, 1999.
Year end Results 1999
Revenues for the year were approximately TDM 207,218, an increase of
12.6% over pro forma 1998 revenues of approximately TDM 184,043.
Earnings before extraordinary items, interest, taxes, depreciation,
amortization and non-cash compensation related to stock options
(Adjusted EBITDA) were approximately TDM 103,974 for the period,
compared to the pro forma Adjusted EBITDA of TDM 101,421 for 1998. The
Company’s 1999 Adjusted EBITDA margin was 50.1%.
Revenue and Adjusted EBITDA for the cable television business were TDM
207,198 and TDM 106,893, respectively. The introduction of the new
products and services group recorded an Adjusted EBITDA loss of
approximately TDM 2,919.
Commenting on these results, Mr. Jacques Hackenberg, Chief Executive
Officer, stated PrimaCom continued to acquire cable television
subscribers in 1999 and this business sector generated healthy results.
Adjusted EBITDA in the cable television sector increased by 5.4% growth
despite increases in Deutsche Telekom fees of almost TDM 3,100. We have
now absorbed almost all escalation clauses in our B-1 models. We also
began the transition from a pure cable TV operator to a full service
broadband telecommunications company. Over the last 6 months of 1999 we
assembled a formidable team of 22 professionals dedicated to developing
new internet and video products and services that we began offering in
Leipzig in late September. We had approximately 150 high speed internet
access customers on-line with another 300 customers waiting to be
connected at year end. The cost of introducing the new products and
services is initially high, but it positions PrimaCom in the fastest
growing segments of the broadband business.
Hans Wolfert, Chief Development Officer stated: “Given the soft launch
of the high speed internet product and the limited ability of ready-for-
service homes during 1999 our initial market share is very encouraging.
Based on the average ready-for-service homes marketed in 1999, we
believe we are achieving a 12% share of the on-line market.
For the year, the company incurred an operating loss of TDM 21,267,
compared to the 1998 pro forma operating loss of TDM 21,193. The Company
maintained equivalent operating results despite the fact that it
absorbed high Deutsche Telekom fees, costs and expenses related to the
introduction of new products and services and a non-cash charge of TDM
5,393 related to the grant of stock options in 1999.
Interest expense for the period was TDM 31,046 a significant decline
over the TDM 55,901 for the comparable 1998 pro forma period. This
brought the Company’s net loss to TDM 57,210 or DM 2.99 per diluted
share, compared to the net loss of TDM 86,280 reported for the pro forma
year ended 1998 or DM 5.47 per diluted share.
Jacques Hackenberg stated: “1999’s operating performance reflected a
14.3% year over year increase in PrimaCom’s average subscriber base to
907,574 and, as anticipated, a decrease in the average monthly revenue
per customer resulting from the lower average revenue rates of
subscribers added through acquisitions. At the same time, we incurred
significant expenses and investments related to the accelerated upgrade
of our cable television network and the start up of PrimaCom’s high
speed internet access and interactive digital video products.”
The Balance Sheet reflects the impact of the Company’s IPO and
subsequent recapitalization.
Paul Thomason, Chief Financial Officer stated: ” PrimaCom continues to
generate significant free cash flow which will fund a substantial amount
of our consolidation and upgrade activity. We also possess one of the
strongest balance sheets in this sector and have the ability to access
substantial capital in either the private or public markets, if needed
to fund accelerated growth.”
Outlook
“Looking ahead”, Jacques Hackenberg said “PrimaCom continues to be well
positioned as a consolidator in the German cable television business. In
1999, we have purchased networks that added approximately 42,000
subscribers to our customer base since year-end we added another 13,741
subscribers. Our acquisition strategy has taken on a more regional
focus. We have several bids outstanding for significant cable
operations, but it is difficult to predict any closing dates.
Importantly, PrimaCom remains in the auction for certain of Deutsche
Telekom’s regional cable TV operations”.
The customer demand for our internet and digital video service has been
quite strong and we intend to continue to expand this area at an
accelerated pace,” Mr. Hackenberg said. “We had approximately 30,000
“ready-for-service” homes at 1999 year end. We view this as an extremely
fast growing market and we expect to have approximately 200,000 homes
“ready for service” by the end of the year 2000,” Mr. Hackenberg noted.
PrimaCom is the third largest private cable-TV-Operator in Germany with
a nation wide market share of approximately 5%. The market share in the
new German states is approximately 18%. The company came into existence
in December 1998 through the merger of Süweda Elektronische Medien- und
Kommunikations AG, Mainz and KabelMedia Holding AG, Frankfurt, to German
cable-tv-operators of equal size. Since its IPO in February 1999
PrimaCom is listed at the Frankfurt Neuer Markt and at the Nasdaq
National Market. The Company has approximately 500 employees.
PrimaCom will file its 20-F Annual Report with the SEC and the Frankfurt
stock Exchange this afternoon.
Contact:
Jacques Hackenberg, Vors. des Vorstandes Tel.: ++49-6131-9310.101
Paul Thomason, Vorstand (Finanzen) Tel.: ++49-6131-9310.101
Alexander Hoffmann, Direktor Inv. Relations: Tel.: ++49-6131-9310.150
e-mail: alexander.hoffmann@primacom.de
Homepage: www.primacom.de
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