OKLAHOMA CITY, May 9, 2001 (PRIMEZONE) -- Dobson Communications Corporation (Nasdaq:DCEL) today announced that demand for digital services continued to drive strong revenue and EBITDA growth in the first quarter of 2001.
Total revenue of $149.9 million was 42 percent higher than the first quarter last year, and EBITDA of $51.8 million was 35 percent higher than the same quarter of 2000. EBITDA represents earnings before interest, taxes, depreciation, amortization, equity in unconsolidated subsidiaries, and extraordinary items.
These revenue and EBITDA totals do not reflect Dobson's 50 percent joint venture ownership in American Cellular Corporation, which Dobson and AT&T Wireless (NYSE:AWE) acquired February 25, 2000, and for which Dobson accounts on an equity basis (Table 1, "Loss from investment in joint venture").
Dobson's first quarter net loss applicable to common shareholders was $63.6 million, or $0.68 per share, based on 94.1 million average shares outstanding. The net loss included paid-in-kind preferred stock dividends of $19.5 million and a loss related to American Cellular of $19.3 million.
In the first quarter last year, the net loss applicable to common shareholders was $117.9 million, or $1.54 per share, based on an average 76.5 million shares outstanding. This included non-cash preferred stock dividends of $75.4 million, a loss related to American Cellular of $5.8 million, and extraordinary expense of $20.4 million. Dobson Communications completed its initial public offering of stock in February 2000.
Proportionate Results
Proportionate results reflect Dobson's 50 percent ownership in American Cellular on an actual basis -- in last year's first quarter, from the date of purchase (February 25) to March 31, 2000, and for the first quarter of 2001, for the full three months (Tables 3-5). American Cellular's pro forma results for the first quarter of 2000 are available upon request.
These proportionate results illustrate the customer advantages and operating efficiencies of Dobson's 100 percent digital network and the benefits of shifting its subscriber base to digital calling plans. The demand for digital services continues to support strong average revenue per unit (ARPU) and continued increases in roaming caller traffic.
Proportionate total revenue for the first quarter was $198.6 million, compared with $119.8 million for the same period last year.
Local service ARPU for the first quarter was $40, compared with $39 ARPU for the first quarter of 2000 and in line with the fourth quarter of 2000. Digital ARPU for the first quarter was $48 and continues to trend well ahead of analog ARPU, which was $34 for the same period.
Roaming revenue for the quarter was $78.2 million, compared with $49.2 million the previous year (proportionate). Roaming minutes-of-use (MOUs) were 194.5 million for the first quarter, compared with 109.5 million roaming MOUs in the same period last year and 191.8 million MOUs for the fourth quarter of 2000.
First quarter EBITDA was $67.8 million, compared with $46.2 million for the first quarter last year (proportionate).
On a postpaid basis, first quarter gross subscriber additions were approximately 90,600, compared with gross subscriber additions of approximately 62,600 for the first quarter last year.
The Company's prepaid subscriber base has grown in the last two quarters, primarily reflecting the November 2000 acquisition of the Georgia 1 Rural Service Area, which serves a substantial number of prepaid customers.
In addition to strong gross subscriber additions, approximately 57,000 analog customers (proportionate) migrated to digital calling plans during the quarter, signing new service contracts with a minimum length of one year. This level of migrations increased equipment costs by approximately $5.1 million for the quarter.
First quarter postpaid customer churn was 1.9 percent on a proportionate basis, just below the Company's expected range for the year. Consequently, Dobson generated proportionate net subscriber additions in the first quarter of approximately 40,100, compared with approximately 36,800 the same period last year (postpaid and prepaid). As of March 31, 2001, 52 percent of Dobson's subscribers were digital, compared with 16 percent a year earlier and 43 percent at the end of the immediately previous quarter.
"I'm extremely pleased with our results for the first quarter -- they reflect significant progress in three areas very important to our business," said Everett R. Dobson, chairman and chief executive officer. "We are growing our subscriber base consistently, and we continue to see strong growth in roaming revenue. Finally, after stabilizing year-over-year ARPU in the third and fourth quarters last year, we improved it by $1 in the first quarter, compared to the first three months of 2000.
"These achievements -- strong subscriber growth, roaming revenue growth and ARPU growth -- continue to confirm our strategy of converting our network and subscriber base to digital," he said. "As a result of the successful first quarter and current trends in the business, we are reconfirming our pre-released 2001 guidance."
Capital expenditures in the first quarter were $22 million in the Dobson-only markets and $23 million in the American Cellular operations. These expenditures reflected record cell-site activations during the quarter -- 106 -- and the addition of 4,700 new digital voice paths to the combined networks. The combined networks now include more than 1,500 cell sites with 35,750 voice paths. In the first quarter, almost 75 percent of voice traffic on the networks was digital, compared with 43 percent a year ago.
The Company currently expects total 2001 capital expenditures of approximately $120 million in the Dobson-only markets and $90 million in the American Cellular markets.
Conference Call to Be Web-Cast
Dobson Communications will host its first quarter conference call on Thursday, May 10, at 9:00 a.m. ET (8:00 a.m. CT). During the call, the Company plans to discuss first quarter operations and its outlook for the remainder of 2001. Dobson's guidance for 2001 includes 16-to-18 percent growth in total revenues and EBITDA, based on stable ARPU (proportionate); customer churn in a range of 2.0-to-2.25 percent; and net subscriber additions of 162,000 to 172,000.
To participate, please call (800) 314-7867; the confirmation code is 586660. The first quarter conference call will also be audio webcast live through Dobson's website at www.dobson.net. A replay of the call will be available later that day by dialing (888) 203-1112, using the same confirmation code. The Company plans to archive the conference call on its web site shortly after the actual event.
Dobson Communications is a leading provider of cellular phone services to rural markets in the United States. Headquartered in Oklahoma City, the rapidly growing Company owns or manages wireless operations in 19 states. For additional information on the Company and its operations, please visit its web site at www.dobson.net.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding the Company's plans, intentions and expectations. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. These risks include, but are not limited to, increased levels of competition, shortages of key equipment, restrictions on the Company's ability to finance its growth and other factors. A more extensive discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements.
Table 1
Dobson Communications Corporation
Statements of Operations
(Includes American Cellular ownership on an equity basis and other
acquisitions on the basis of actual impact only, not pro forma)
Three Months Ended
March 31,
2001 2000
---- ----
Operating Revenue
Service revenue $ 80,880 $ 56,327
Roaming revenue 62,723 43,797
Equipment & other revenue 6,272 5,229
------ ------
Total 149,875 105,353
Operating Expenses
(excluding depreciation &
amortization)
Cost of service 41,104 23,023
Cost of equipment 15,097 11,323
Marketing & selling 20,589 16,634
General & administrative 21,299 16,027
------ ------
Total 98,089 67,007
EBITDA 51,786 38,346
Depreciation & amortization (50,551) (35,214)
------ ------
Operating income 1,235 3,132
Minority interest (1,818) (1,061)
Loss from investment in
joint venture (a) (19,346) (5,841)
Other income 3,827 2,867
------ ------
Income before interest & income taxes (16,102) (903)
Interest expense (43,089) (31,191)
Income tax benefit 15,122 9,976
------ ------
Loss from continuing operations (44,069) (22,118)
Extraordinary expense, net of income tax -- (20,387)
------ ------
Net Loss (44,069) (42,505)
Dividends on preferred stock (19,490) (75,408)
======= =======
Net loss applicable to common shareholders $ (63,559) $ (117,913)
======= =======
Basic net loss applicable to common
shareholders per common share:
Continuing operations $ (0.47) $ (0.29)
Extraordinary expense -- (0.26)
Dividends on preferred stock (0.21) (0.99)
Basic net loss applicable to common
shareholders per common share ======= =======
$ (0.68) $ (1.54)
======= =======
Basic weighted average common
shares outstanding 94,067,290 76,464,331
=========== ===========
(a) Represents the Company's 50% ownership
in the Net Loss from American Cellular.
Detailed as follows:
For the period
For the three month from inception
March 31, 2001 (February 25, 2000)
ended through
March 31, 2000
----------------- ------------------
EBITDA 32,015 15,797
Depreciation and Amortization (45,357) (17,050)
Interest Expense (41,223) (14,309)
Other Income, net 321 289
Income tax benefit 15,553 3,591
======== ========
Net Loss of American
Cellular (100%) (38,691) (11,682)
======== ========
Table 2
Dobson Communications Corporation
Selected Financial Data
March 31, 2001
--------------
($ in millions)
Cash Equivalents and Restricted Cash:
Unrestricted cash and
cash equivalents $ 244.6
Escrow for towers sold to
American Tower Company 2.0
Escrow for interest on
Dobson/Sygnet Senior Notes 24.5
=======
Total cash $ 271.1
=======
Total Debt: (a)
Dobson Operating Co., L.L.C.
credit facility $ 869.4
Dobson/Sygnet credit facility 327.8
DCC 10.875% Senior Notes, net 297.9
Dobson/Sygnet Senior Notes 200.0
Other 0.4
-------
Total debt $ 1,695.5
=======
Preferred Stock:
Series AA Preferred Stock, 5.96% $ 200.0
Senior Exchangeable
Preferred Stock, 12.25% 323.9
Senior Exchangeable
Preferred Stock, 13.00% 213.3
-------
Total preferred stock $ 737.2
=======
Quarter Ended
March 31, 2001
---------------
($ in millions)
Capital Expenditures $ 21.7
=======
(a) Does not include our proportionate interest in American
Cellular's total debt of $1.79 billion.
Table 3
Dobson Communications Corporation
Proportionately Consolidated Selected Financial Information
(Includes 50% of American Cellular's operations to represent
proportionate ownership)
For the Quarter
Ended 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01
($ in thousands except per
subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 64,709 $ 93,725 $102,316 $106,430 $111,825
Roaming revenue 49,233 75,535 87,887 77,682 78,175
Equipment & other
revenue 5,850 8,782 8,788 9,425 8,576
------- ------- ------- ------- -------
Total 119,792 178,042 198,991 193,537 198,576
Operating Expenses
(excluding
depreciation
& amortization)
Cost of service 25,520 37,557 46,823 49,328 $ 53,332
Cost of equipment 12,167 14,431 15,499 22,861 20,850
Marketing &
selling 17,895 21,550 22,899 30,777 27,954
General &
administrative 17,966 23,859 23,468 26,590 28,647
------- ------- ------- ------- -------
Total 73,548 97,397 108,689 129,556 130,783
------- ------- ------- ------- -------
EBITDA (a) $ 46,244 $ 80,645 $ 90,302 $ 63,981 $ 67,793
======== ======== ======== ======== ========
EBITDA Margin 38.60% 45.30% 45.38% 33.06% 34.14%
Pops 8,865,500 9,056,500 9,277,500 9,514,500 9,639,500
Post-paid
Gross Adds 62,550 73,150 78,700 109,550 90,600
Net Adds 34,200 33,550 29,500 56,600 36,800
Subscribers 743,350 791,600 844,000 913,000 949,800
Churn 1.71% 1.72% 2.01% 2.01% 1.93%
Average Service
Revenue per
Subscriber $ 39 $ 41 $ 41 $ 40 $ 40
Average Service
and Roaming
Revenue per
Subscriber $ 68 $ 73 $ 77 $ 70 $ 68
Pre-paid
Net Adds 2,550 2,100 800 4,050 3,300
Subscribers 7,250 9,350 10,150 18,200 21,500
Total
Net Adds 36,750 35,650 30,300 60,650 40,100
Subscribers 750,600 800,950 854,150 931,200 971,300
Penetration 8.47% 8.84% 9.21% 9.79% 10.08%
(a) Includes $1.7 million, $1.9 million, $2.1 million, $2.1 million
and $2.6 million of EBITDA for the quarters ended March 31,
2000, June 30, 2000, September 30, 2000, December 31, 2000 and
March 31, 2001 respectively, related to minority interests.
Table 4
Dobson Communications Corporation
For the Quarter
Ended 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01
($ in thousands except per
subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 56,327 $ 66,846 $ 72,839 $ 76,081 $ 80,880
Roaming revenue 43,797 55,527 64,474 60,993 62,723
Equipment & other
revenue 5,229 6,297 6,425 7,111 6,272
------- ------- ------- ------- -------
Total 105,353 128,670 143,738 144,185 149,875
Operating Expenses
(excluding
depreciation
& amortization)
Cost of service 23,023 29,206 35,928 38,841 41,104
Cost of equipment 11,323 11,232 11,284 16,996 15,097
Marketing &
selling 16,634 16,988 17,102 23,185 20,589
General &
administrative 16,027 17,885 17,916 19,859 21,299
------- ------- ------- ------- -------
Total 67,007 75,311 82,230 98,881 98,089
------- ------- ------- ------- -------
EBITDA (a) $ 38,346 $ 53,359 $ 61,508 $ 45,304 $ 51,786
======= ======= ======= ======= =======
EBITDA Margin 36.40% 41.47% 42.79% 31.42% 34.55%
Pops 6,421,000 6,612,000 6,833,000 7,070,000 7,070,000
Post-paid
Gross Adds 55,600 49,400 53,800 75,800 62,100
Net Adds 30,500 20,400 16,700 36,400 22,700
Subscribers 515,700 550,800 590,400 639,200 661,900
Churn 1.75% 1.81% 2.17% 2.14% 2.04%
Average Service
Revenue per
Subscriber $ 39 $ 42 $ 42 $ 41 $ 41
Average Service
and Roaming
Revenue per
Subscriber $ 70 $ 76 $ 80 $ 74 $ 73
Pre-paid
Net Adds 500 1,800 600 4,300 3,300
Subscribers 4,100 5,900 6,500 14,800 18,100
Total
Net Adds 31,000 22,200 17,300 40,700 26,000
Subscribers 519,800 556,700 596,900 654,000 680,000
Penetration 8.10% 8.42% 8.74% 9.25% 9.62%
(a) Includes $1.7 million, $1.9 million, $2.1 million, $2.1 million
and $2.6 million of EBITDA for the quarters ended March 31,
2000, June 30, 2000, September 30, 2000, December 31, 2000 and
March 31, 2001 respectively, related to minority interests.
Table 5
American Cellular Corporation
For the Quarter
Ended March 6/30/00 9/30/00 12/31/00 3/31/01
($ in thousands except per
subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 16,765 $ 53,759 $ 58,954 $ 60,699 $ 61,891
Roaming revenue 10,871 40,015 46,826 33,378 30,902
Equipment & other
revenue 1,242 4,972 4,727 4,628 4,609
------- ------- ------- ------- -------
Total 28,878 98,746 110,507 98,705 97,402
Operating Expenses
(excluding
depreciation &
amortization)
Cost of service 4,994 16,701 21,791 20,974 24,455
Cost of equipment 1,687 6,399 8,431 11,731 11,504
Marketing &
selling 2,522 9,124 11,593 15,185 14,732
General &
administrative 3,878 11,949 11,104 13,461 14,696
------- ------- ------- ------- -------
Total 13,081 44,173 52,919 61,351 65,387
------- ------- ------- ------- -------
EBITDA $ 15,797 $ 54,573 $ 57,588 $ 37,354 $ 32,015
======= ======= ======= ======= =======
EBITDA Margin 54.70% 55.27% 52.11% 37.84% 32.87%
Pops 4,889,000 4,889,000 4,889,000 4,889,000 5,139,000
Post-paid
Gross Adds 13,900 47,500 49,800 67,500 57,000
Net Adds 7,400 26,300 25,600 40,400 28,200
Subscribers 455,300 481,600 507,200 547,600 575,800
Churn 1.44% 1.55% 1.63% 1.71% 1.71%
Average Service
Revenue per
Subscriber $ 37 $ 38 $ 40 $ 38 $ 37
Average Service
and Roaming
Revenue per
Subscriber $ 61 $ 67 $ 71 $ 59 $ 55
Pre-paid
Net Adds 4,100 600 400 (500) --
Subscribers 6,300 6,900 7,300 6,800 6,800
Total
Net Adds 11,500 26,900 26,000 39,900 28,200
Subscribers 461,600 488,500 514,500 554,400 582,600
Penetration 9.44% 9.99% 10.52% 11.34% 11.34%
Table 6
Dobson Operating Company LLC
For the Quarter
Ended 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01
($ in thousands except per
subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 31,119 $ 38,261 $ 41,829 $ 45,478 $ 49,920
Roaming revenue 35,208 45,776 52,649 50,649 52,927
Equipment & other
revenue 3,119 3,640 4,397 5,052 4,313
------- ------- ------- ------- -------
Total 69,446 87,677 98,875 101,179 107,160
Operating Expenses
(excluding
depreciation &
amortization)
Cost of service 16,738 20,798 26,025 30,243 31,532
Cost of equipment 5,944 6,332 7,208 8,458 9,152
Marketing &
selling 9,627 10,980 11,299 15,996 14,275
General &
administrative 10,306 11,823 11,378 13,463 14,210
------- ------- ------- ------- -------
Total 42,615 49,933 55,910 68,160 69,169
------- ------- ------- ------- -------
EBITDA (a) $ 26,831 $ 37,744 $ 42,965 $ 33,019 $ 37,991
======= ======= ======= ======= =======
EBITDA Margin 38.64% 43.05% 43.45% 32.63% 35.45%
Pops 4,059,000 4,250,000 4,471,000 4,708,000 4,708,000
Post-paid
Gross Adds 30,200 31,700 35,900 46,400 39,900
Net Adds 15,700 14,900 16,100 22,200 18,600
Subscribers 277,300 306,900 345,900 380,500 399,100
Churn 1.95% 1.92% 2.02% 2.22% 1.86%
Average Service
Revenue per
Subscriber $ 41 $ 43 $ 42 $ 41 $ 42
Average Service
and Roaming
Revenue per
Subscriber $ 89 $ 96 $ 96 $ 88 $ 87
Pre-paid
Net Adds 500 1,800 400 4,000 3,200
Subscribers 4,100 5,900 6,300 14,300 17,500
Total
Net Adds 16,200 16,700 16,500 26,200 21,800
Subscribers 281,400 312,800 352,200 394,800 416,600
Penetration 6.93% 7.36% 7.88% 8.39% 8.85%
(a) Includes $1.7 million, $1.9 million, $2.1 million, $2.1 million
and $2.6 million of EBITDA for the quarters ended March 31,
2000, June 30, 2000, September 30, 2000, December 31, 2000 and
March 31, 2001 respectively, related to minority interests.
Table 7
Dobson/Sygnet Communications Company
For the Quarter
Ended 3/31/00 6/30/00 9/30/00 12/31/00 3/31/01
($ in thousands except per
subscriber data)
(unaudited)
Operating Revenue
Service revenue $ 25,191 $ 28,568 $ 30,995 $ 30,590 $ 30,956
Roaming revenue 8,589 9,751 11,824 10,345 9,797
Equipment &
other revenue 2,110 2,657 2,028 2,058 1,958
------- ------- ------- ------- -------
Total 35,890 40,976 44,847 42,993 42,711
Operating
Expenses
(excluding
depreciation &
amortization)
Cost of service 6,285 8,408 9,903 8,597 9,572
Cost of
equipment 5,379 4,899 4,075 8,538 5,946
Marketing &
selling 7,007 6,008 5,804 7,189 6,314
General &
administrative 5,743 6,053 6,501 6,240 7,065
------- ------- ------- ------- -------
Total 24,414 25,368 26,283 30,564 28,897
------- ------- ------- ------- -------
EBITDA $ 11,476 $ 15,608 $ 18,564 $ 12,429 $ 13,814
======= ======= ======= ======= =======
EBITDA Margin 31.98% 38.09% 41.39% 28.91% 32.34%
Pops (a) 2,362,000 2,362,000 2,362,000 2,362,000 2,362,000
Post-paid
Gross Adds 25,400 17,700 17,900 29,400 22,200
Net Adds 14,800 5,500 600 14,200 4,100
Subscribers 238,400 243,900 244,500 258,700 262,800
Churn 1.53% 1.69% 2.36% 2.01% 2.31%
Average Service
Revenue per
Subscriber $ 36 $ 39 $ 42 $ 41 $ 40
Average Service
and Roaming
Revenue per
Subscriber $ 49 $ 53 $ 58 $ 54 $ 52
Pre-paid
Net Adds -- -- 200 300 100
Subscribers -- -- 200 500 600
Total
Net Adds 14,800 5,500 800 14,500 4,200
Subscribers 238,400 243,900 244,700 259,200 263,400
Penetration 10.09% 10.33% 10.36% 10.97% 11.15%