Broadwing Announces Record Revenue and EBITDA For Third Quarter
- Broadwing Communications, the company's broadband services business, produced $264 million of revenue, up 39 percent from a year ago, and delivered EBITDA of $27 million;
- Broadwing's network crossed the 1 million fiber-mile threshold and now touches 137 of the top 150 MSAs. The company was the first to offer a 10 gigabit optical wavelength service for broadband customers over this network;
- Broadwing Communications' 10 web hosting centers are already 38% sold after launching just last quarter;
- The Cincinnati-based businesses grew an unprecedented 20 percent;
- Cincinnati Bell Telephone generated revenues of $200 million, an increase of 7 percent, and recorded its ninth straight quarter of EBITDA margin improvement to $101 million;
- Cincinnati Bell nearly tripled its ADSL subscribers to over 35,000 versus a year ago;
- Cincinnati Bell Wireless added 40,000 subscribers and provided its third consecutive quarter of both increased subscriber growth and EBITDA profitability;
“For the quarter, EBITDA grew more than twice as fast as revenues – again confirming our ability to serve more customers with higher margin services while also maintaining a sharp focus on cost control,” said Kevin Mooney, Broadwing's executive vice president and chief financial officer. “We will continue to direct our resources toward creating greater efficiencies within our company, and pursuing profitable growth opportunities.”
Broadwing Communications delivered its fourth consecutive quarter of accelerating revenue growth. Revenues grew 39 percent to $264 million as Broadwing Communications continued to execute against its vision to be a leading data and internet services provider. Data revenues now represent 54 percent of the total, up from 45 percent a year ago. EBITDA for the third quarter was $27 million.
Broadwing now has ten fully operational web hosting and data centers serving an impressive mix of customers from dot.coms and ISPs to leading financial, educational and Fortune 100 institutions. The rapid success of these web hosting centers is driven by customers recognizing the full suite of services available with Broadwing's combination of web hosting centers and award-winning, pure IP network. Explosive customer demand for web-enablement of their businesses has driven Broadwing Communications' IT Consulting business to a five-fold increase in revenue over last year to $22 million.
Broadwing continued its leadership in the deployment of the industry's first intelligent, all-optical network with several achievements including: construction of the industry's first all-optical interoperability lab, successful testing of the first 10 gigabit wavelength service, taking delivery of the industry's first all-optical switch, and transmission of the first commercial traffic on a completely optical network segment.
Local Communications Services
Broadwing's local-exchange company, Cincinnati Bell Telephone (CBT), grew revenue 7 percent to $200 million with EBITDA of $101 million. The EBITDA margin of 51 percent was an increase of 7 points over last year, and represents the ninth consecutive quarter of EBITDA margin expansion. The primary contributors were strength in high-margin data and value added services and continued aggressive cost management. And, the company continues to keep access line loss at a best-of-class level of less than 1 percent.
High-speed data services accounted for 83 percent of CBT's overall revenue growth. Digital offerings grew 40 percent and optical services increased 57 percent. The number of ADSL subscribers nearly tripled versus a year ago, growing 22 percent sequentially, to over 35,000.
The company now has more than 178,000 customers who have taken a high-margin bundled offering that can include local, long distance, value-added services, wireless, internet, and ADSL – all on one bill.
Cincinnati Bell Wireless continued its unparalleled track record as the premier PCS business in the country, adding 40,000 customers – 68 percent more than the same quarter last year, to 279,000 total subscribers. Revenues were $49 million, an increase of 91 percent over 1999, and EBITDA was $7 million, the third consecutive quarter of EBITDA profitability. This record performance was highlighted by an average monthly postpaid revenue per subscriber of $69, and an industry low churn rate of 1.4 percent.
In one year, the company's unique, teen-focused prepaid offering, i-wireless, now stands at over 66,000 customers, acquired at less than half the cost of postpaid customers and generating primarily off-peak traffic.
Other Communications Services
Cincinnati Bell Any Distance, the company's best-in-class performing long distance offering, has captured, in just nine months, more than 56 percent of the residential market and 27 percent of the business market.
As a result, Other Communications Services revenue accounted for $37 million, an increase of 39 percent over the same period a year ago and EBITDA was $2 million.
Broadwing reported a per share loss of 12 cents for the quarter versus a 36 cent loss per share in the third quarter of 1999. The loss included a gain of $.07 cents per share as a result of selling shares in a minority investment.
On an as reported basis, the company earned 18 cents per share in the third quarter of 1999. “I am thrilled with Broadwing's strong financial performance across all of our businesses,” said Ellenberger. “This company is well positioned both strategically and operationally to continue to take advantage of the exploding demand for communications services.”
Broadwing will host a conference call regarding these results on Thursday, October 19 at 9:00 a.m. EST which can be accessed by dialing 800-446-1671 at least fifteen minutes prior to start time. A taped replay will be available for one week by calling 888-843-8996. The replay passcode is 2953840.
Broadwing Inc. (NYSE: BRW) combines unparalleled customer service with the industry's most advanced and flexible 18,000 mile next-generation fiber optic network and award winning IP backbone, to create data and Internet solutions that are innovative, reliable, and provide businesses a competitive advantage. Broadwing will be the first provider with a fully deployed optical network and sets the standard for customer accountability with the industry's only installation guarantee. Headquartered in Cincinnati, Ohio and Austin, Texas with 6,000 employees in 56 sales and service offices across the country, Broadwing can be found on the Web at www.broadwing.com.
Note: Information included in this news release contains forward-looking statements that involve potential risks and uncertainties. Broadwing's future results could differ materially from those discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, Broadwing's ability to maintain its market position in communications services, and it's ability to develop and launch new products and services. More information on potential risks and uncertainties is available in the company's recent filings with the Securities and Exchange Commission, including 1999's Form 10-K for Broadwing Inc. and Broadwing Communications Inc.