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Covad Communications Group Announces Second Quarter 2004 Results Tuesday July 27, 4:00 pm ET Reaches Cash-Flow Positive, Revenue Increases 16%, VoIP Services Network Ready in 56 Cities SAN JOSE, Calif.--(BUSINESS WIRE)--July 27, 2004--Covad Communications Group, Inc. (OTCBB:COVD - News), a leading national provider of integrated voice and data communications, today reported revenue for the second quarter of 2004 of $107.3 million, a 16 percent increase over the $92.4 million reported in the second quarter of 2003, and a decrease of $1.2 million from the first quarter of 2004. The company reported net loss for the second quarter of 2004 of $7.4 million, or $0.03 per share, as compared to a net loss of $27.3 million, or $0.12 per share in the second quarter of 2003, and a net loss of $13.5 million, or $0.06 per share for the first quarter of 2004. Loss from operations for the second quarter of 2004 was $6.7 million, compared to $26.2 million in the second quarter of 2003 and $12.9 million for the first quarter of 2004. Cash, cash equivalent and short-term investment balances, including restricted cash and investments, increased by $2.7 million to $172.3 million in the second quarter of 2004 compared to $169.6 million in the first quarter of 2004. Second quarter cash flow included approximately $10.4 million of capital expenditures. "We are pleased to achieve cash-flow positive this quarter as it demonstrates our disciplined approach to grow the company profitably," said Charles Hoffman, president and chief executive officer of Covad. "Critical to our continued growth is our ability to leverage our nationwide facilities-based broadband network. We are incorporating our Voice-over-Internet Protocol (VoIP) services into our network and have now launched in 56 cities. "We plan to aggressively roll-out Voice over IP to 100 markets nationwide by the end of the year," Hoffman added. "This will give Covad the opportunity to strategically grow its revenue." Earnings before interest, taxes, depreciation and amortization (EBITDA) for the second quarter of 2004 were $12.5 million as compared to a loss of $8.4 million in the second quarter of 2003 and a profit of $6.3 million in the first quarter of 2004. Refer to the Selected Financial Data, including note 2, for a reconciliation of this non-GAAP financial performance measure to the GAAP measure and other information. The company`s wholesale subscribers contributed $78.5 million of revenue, or 73 percent, while direct subscribers contributed $28.8 million of revenue, or 27 percent. On June 30, 2004, Covad had approximately 440,800 wholesale and 73,600 direct lines in service, as compared to 394,900 wholesale and 58,600 direct lines in service reported in the second quarter of 2003 and 444,600 wholesale and 71,200 direct lines in service on March 31, 2004. For the second quarter of 2004, broadband and VoIP subscription billings increased 15 percent to $87.5 million from $76.1 million reported in the second quarter of 2003, and decreased slightly from $89.6 million reported in the first quarter of 2004. Management uses broadband and VoIP subscription billings to evaluate the performance of its business and believes broadband subscription billings are a useful measure for investors as they represent a key indicator of the performance of the company`s core business. Refer to the Selected Financial Data, including Note 3, for additional information, including a reconciliation of this non-GAAP financial performance measure to the GAAP measure. For the second quarter of 2004, gross margin was $44.6 million or 42 percent of revenue, as compared to 26 percent of revenue in the year-ago quarter, and 37 percent of revenue for the first quarter of 2004. Sales, marketing, general and administrative (SG&A) expenses were $31.9 million for the second quarter of 2004, as compared to $31.6 million in the year-ago quarter and $33.3 million for the first quarter of 2004. Mark Richman, chief financial officer of Covad, said: "We are pleased with the financial results we have achieved to date, especially reaching cash-flow positive. Our balance sheet provides us with the flexibility to invest in growth opportunities going forward in the voice and data market." Operating Statistics * Digital subscriber lines increased 13 percent year-over-year, from 453,500 in the second quarter of 2003 to 514,400 in the second quarter of 2004, and decreased by 1,400 from the first quarter of 2004. Line count continues to be impacted by pricing pressures in the consumer broadband market. * At the end of the second quarter, Covad had approximately 292,200 consumer and 222,200 business lines in service, representing approximately 56 percent and 44 percent of total lines respectively. * Weighted Average Revenue per User (ARPU) was approximately $57 during the second quarter of 2004, a decrease from $58 in the first quarter of 2004. The decrease in ARPU is due to the pricing pressures in the consumer broadband market. * Net customer disconnections, or churn, averaged approximately 3.6 percent in the second quarter of 2004, a decrease from 4.1 percent in the first quarter of 2004. Much of the churn decrease is due to the lower number of consumer installs over the past two quarters. Business Outlook Covad currently expects revenue for the third quarter of 2004 to be in the range of $104-108 million with flat subscriber line count growth. Broadband and VoIP subscription billings for the third quarter of 2004 are expected to be in the range of $86.5-90.5 million. With the aggressive nation-wide rollout of VoIP services primarily requiring investments in sales and marketing activities, for the third quarter of 2004, Covad expects its net loss to be in the range of $21-25 million, and generate an EBITDA loss in the range of $2-5 million. Net change in cash, cash equivalents and short-term investments, including restricted cash and investments, in the third quarter of 2004 is expected to be in the range of negative $10-15 million. Recent Business Highlights * Completed the close of the acquisition of GoBeam, Inc., a privately owned provider of Voice over Internet Protocol (VoIP) solutions to small- and medium-sized businesses. * Covad is partnering with Netopia, Inc., a market leader in broadband equipment and software, to provide a turn-key, all-in-one wireless fidelity (Wi-Fi) and DSL network solution that enables customers to access Covad broadband wirelessly from nearly any location within a home or small business. * Entered into a one-year agreement that will enable MetTel, an integrated communications provider, to bundle Covad`s Digital Subscriber Line (DSL) broadband services with its local and long distance service packages. MetTel currently serves customers in 11 states and plans to expand its coverage area to 30 states by the end of the first quarter 2005. * Announced that Speakeasy will be its first broadband partner to offer Covad`s new dedicated-loop asymmetric digital subscriber line (ADSL) services to consumers and very small businesses on a nationwide basis. * Announced a strategic relationship with WilTel Communications to provide its enterprise customers with more broadband access choices in the country`s top Metropolitan Statistical Areas (MSAs). * Announced that it is supporting the launch of the new EarthLink High Speed 3.0 service, which is up to 70 times faster than a standard dial-up connection based on the average speed between a 28.8k and 56k. ------------------------- So weit ich das sehe, keine Veränderung der Zahl der DSL-Anschlüsse, weiter reduzierte Verluste, evtl. neutrales Ergebnis. Geschäft erweitert auf Internettelefonie. Fast 170 Millionen Dollar Reserven bei Quartalsverlust von 7 Mill. Dollar. |
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| aus der Diskussion: | Covad - Himmel oder Hölle |
| Autor (Datum des Eintrages): | Bannerman (28.07.04 17:08:27) |
| Beitrag: | 89 von 149 (ID:13850062) |
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