OKLAHOMA CITY, Nov. 13, 2001 (PRIMEZONE) -- Dobson Communications Corporation (Nasdaq:DCEL) generated another quarter of solid revenue and EBITDA growth for the three months ended September 30, 2001. In addition, the Company's strong sales, continued shift toward a digital subscriber base and low churn generated positive trends throughout its markets.
Total revenue of $184.3 million was 28 percent higher than the third quarter last year, and EBITDA of $78.2 million was 27 percent higher than the same quarter of 2000. EBITDA represents earnings before interest, taxes, depreciation, amortization and loss from investment in joint venture.
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 in February 2000. Dobson accounts for its interest in American Cellular on an equity basis (Table 1, "Loss from investment in joint venture").
Dobson's third quarter net loss applicable to common shareholders was $45.4 million, or $0.48 per share, based on 94.2 million average shares outstanding. The net loss included non-cash preferred stock dividends of $22.4 million and a loss related to American Cellular of $15.6 million.
In the third quarter last year, the net loss applicable to common shareholders was $44.1 million, or $0.47 per share, based on an average 93.8 million shares outstanding. This included non-cash preferred stock dividends of $17.1 million and a loss related to American Cellular of $12.5 million.
Strong Proportionate Results
Along with strong growth in revenues and EBITDA, Dobson's third quarter results on a proportionate basis reflected continued low customer churn, strong growth in net subscriber additions and higher average revenue per unit (ARPU), compared with the same period last year. Proportionate results reflect Dobson's 50 percent ownership in American Cellular (Table 3).
Proportionate total revenue for the third quarter was $246.8 million, an increase of 24 percent over revenue of $199.0 million for the same period last year. Primarily driving this growth was a 28 percent increase in local service revenue and a 22 percent increase in roaming revenue, compared to the third quarter last year.
Third quarter service revenue benefited from Dobson's increasing base of digital subscribers and the resulting higher ARPU, which was $43 for the third quarter (proportionate, postpaid). This compares with proportionate ARPU of $41 in the same quarter last year. Digital ARPU for the third quarter of 2001 was $52, compared with analog ARPU of $28.
Dobson's strength in proportionate roaming revenue was based on 299 million roaming minutes-of-use (MOUs) during the quarter, an increase of 54 percent over roaming MOUs for the third quarter of 2000. Year-to-date, proportionate roaming MOUs have increased from 465 million in the first nine months of 2000 to 749 million minutes in the same period this year, an increase of 61 percent.
Third quarter EBITDA was $105.0 million, compared with $90.3 million for the same period last year (proportionate).
As previously announced, third quarter gross subscriber additions (proportionate, postpaid) were approximately 97,650, compared with gross subscriber additions of approximately 78,700 for the third quarter last year.
Approximately 34,350 analog customers upgraded to digital during the quarter. As a result of this and strong gross subscriber additions, as of September 30, 2001, 68 percent of Dobson's proportionate base was digital, compared with 61 percent at the end of the immediately previous quarter and 32 percent at the end of last year's third quarter. By the end of 2001, the Company expects its digital transition to be substantially completed and subsequent quarterly migration costs to be significantly reduced.
Customer churn was 1.9 percent (proportionate, postpaid) for the quarter, well below the average for the U.S. wireless industry and the rural sector. This was an improvement over churn of 2.0 percent in the third quarter last year.
Consequently, Dobson generated net subscriber additions in the third quarter of approximately 41,500, compared with approximately 30,300 for the same period last year. Third quarter proportionate net additions included 400 prepaid customers, compared with 800 prepaid net additions in the same quarter last year (proportionate).
"We continued to prove our strategy and delivered another very strong quarter," said Everett R. Dobson, chairman and chief executive officer. "Customer satisfaction remains high with our digital products and services -- reflected by the continued low churn -- and our technology leadership is proving to be a strong competitive advantage in attracting new customers and roaming traffic through our markets."
Other Developments
In addition to its third quarter achievements, Dobson announced on November 1, 2001, the signing of definitive agreements to sell four individual markets in California, Ohio, Tennessee and Georgia to Verizon Wireless (NYSE:VZ) for approximately $465 million. Dobson is negotiating the sale of a fifth market in Arizona to Verizon Wireless.
During the third quarter, in the combined Dobson and American Cellular networks, the Company added 70 cell sites and approximately 4,200 new voice paths, 93 percent of which were digital.
Digital voice traffic on the networks has kept pace with the upgrade. In the third quarter this year, approximately 84 percent of total voice traffic was digital, compared with approximately 57 percent in the same three months last year.
The Company has dramatically strengthened the network coverage and capabilities in the Dobson and American Cellular markets since December 1999. From that point to September 30, 2001, the networks' total cell sites have increased 252 percent to 1,689 sites; total voice paths have increased 356 percent to 45,714 voice paths; and within that total, digital voice paths have increased 783 percent to 28,710 digital voice paths.
"Over the last two years, we have built one of the most advanced digital networks in the country, providing our customers and roaming partners with unsurpassed wireless service," Dobson said. "As the industry evolves toward 2.5G and ultimately 3G, we plan to continue this leadership role."
Year-to-date, capital expenditures are $96.7 million in the Dobson markets and $66.3 million in American Cellular markets. In the third quarter, Dobson capital expenditures were $27.4 million and $19.7 million in American Cellular markets.
Conference Call to Be Web Cast
Dobson Communications will host its third quarter conference call on Wednesday, November 14, 2001, at 9 a.m. ET (8 a.m. CT). During the call, the Company plans to discuss its operating outlook for the remainder of the year.
To participate, please call (800) 500-0311 or (719) 457-2698; the confirmation code is 712130. The call will also be audio Web cast live through Dobson's Web site at www.dobson.net. A replay of the call will be available later that day by dialing (888) 203-1112 or (719) 457-0820, 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 wireless 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.
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 Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
---------- ----------- ---------- ----------
Operating Revenue
Service revenue $ 93,715 $ 72,839 $ 263,237 $ 196,012
Roaming revenue 84,351 64,474 222,788 163,798
Equipment &
other revenue 6,276 6,425 19,512 17,950
---------- ----------- ---------- ----------
Total 184,342 143,738 505,537 377,760
---------- ----------- ---------- ----------
Operating Expenses
(excluding
depreciation &
amortization)
Cost of service 49,805 35,928 137,413 88,157
Cost of equipment 14,495 11,284 43,565 33,839
Marketing &
selling 20,705 17,102 62,363 50,724
General &
administrative 21,099 17,916 64,474 51,828
---------- ----------- ---------- ----------
Total 106,104 82,230 307,815 224,548
---------- ----------- ---------- ----------
EBITDA 78,238 61,508 197,722 153,212
Depreciation &
amortization (52,853) (44,779) (155,082) (122,875)
---------- ----------- ---------- ----------
Operating income 25,385 16,729 42,640 30,337
Minority interest (2,064) (1,407) (5,527) (3,704)
Loss from
investment in
joint venture (a) (15,575) (12,477) (51,336) (30,436)
Other income 3,870 2,515 10,589 7,497
---------- ----------- ---------- ----------
Income (loss)
before interest &
income taxes 11,616 5,360 (3,634) 3,694
Interest expense (39,621) (41,238) (124,940) (107,378)
Income tax benefit 5,056 8,892 29,664 27,834
---------- ----------- ---------- ----------
Loss from continuing
operations (22,949) (26,986) (98,910) (75,850)
Extraordinary
expense, net of
income tax -- -- -- (20,387)
---------- ----------- ---------- ----------
Net Loss (22,949) (26,986) (98,910) (96,237)
Dividends on
preferred stock (22,427) (17,100) (63,433) (109,071)
---------- ----------- ---------- ----------
Net loss applicable
to common
shareholders $ (45,376) $ (44,086) $(162,343) $(205,308)
========== =========== ========== ==========
Basic net loss
applicable to
common shareholders
per common share:
Continuing
operations $ (0.24) $ (0.29) $ (1.05) $ (0.86)
Extraordinary
expense -- -- -- (0.23)
Dividends on
preferred stock (0.24) (0.18) (0.67) (1.24)
---------- ----------- ---------- ----------
Basic net loss
applicable to
common
shareholders
per common share $ (0.48) $ (0.47) $ (1.72) $ (2.33)
========== =========== ========== ==========
Basic weighted
average common
shares outstanding 94,208,662 93,788,684 94,166,437 87,941,001
========== =========== ========== ==========
(a) Represents the Company's 50% ownership in the
Net Loss from from American Cellular.
Detailed as follows:
For the
period
from
For the For the For the inception
three three nine (February
months months months 25, 2000)
ended ended ended through
September September September September
30, 2001 30, 2000 30, 2001 30, 2000)
EBITDA 53,464 57,573 131,634 127,940
Depreciation and
Amortization (48,833) (45,039) (141,873) (108,210)
Interest Expense (45,348) (43,829) (131,003) (96,849)
Other Income, net 673 103 2,478 519
Income tax benefit 9,769 6,238 36,967 15,727
Dividends on
preferred stock (875) -- (875) --
-------- -------- -------- --------
Net Loss of American
Cellular (100%) (31,150) (24,954) (102,672) (60,873)
======== ======== ======== ========
Dobson Communications Corporation
Selected Financial Data
September 30, 2001
----------------------
($ in millions)
Cash Equivalents and Restricted Cash:
Unrestricted cash and
cash equivalents $ 177.2
Escrow for interest on
Dobson/Sygnet Senior Notes 12.7
==========
Total cash $ 189.9
==========
Total Debt: (a)
Dobson Operating Co., L.L.C
credit facility $ 865.5
Dobson/Sygnet credit facility 299.7
DCC 10.875% Senior Notes, net 298.0
Dobson/Sygnet Senior Notes 200.0
Other 0.4
----------
Total debt $ 1,663.6
==========
Preferred Stock:
Series AA Preferred Stock, 5.96% $ 200.0
Senior Exchangeable Preferred
Stock, 12.25%, net 345.5
Senior Exchangeable Preferred
Stock, 13.00% 227.4
----------
Total preferred stock $ 772.9
==========
Nine Months Ended
September 30, 2001
------------------------
($ in millions)
Capital Expenditures: (b) $ 96.7
==========
(a) Does not include our proportionate interest in American
Cellular's total debt of $1.83 billion.
(b) Does not include our proportionate share of American Cellular's
capital expenditures for the nine months ended September 30, 2001
totaling $66.3 million.
Dobson Communications Corporation
Proportionately Consolidated Selected Financial Information
(Includes 50% of American Cellular's operations to represent
proportionate ownership)
For the Quarter Ended
9/30/00 12/31/00 3/31/01 6/30/01 9/30/01
Operating
Revenue
Service
revenue $ 102,316 $ 106,430 $ 111,825 $ 123,762 $ 131,236
Roaming
revenue 87,887 77,682 78,175 95,355 106,897
Equipment
& other
revenue 8,788 9,425 8,576 9,341 8,685
---------- ---------- ---------- ---------- ----------
Total 198,991 193,537 198,576 228,458 246,818
---------- ---------- ---------- ---------- ----------
Operating
Expenses
(excluding
deprecia-
tion &
amorti-
zation)
Cost of
service 46,823 49,328 53,332 60,230 64,695
Cost of
equip-
ment 15,499 22,861 20,850 19,206 19,140
Marketing
& selling 22,899 30,777 27,954 28,247 28,394
General &
admin-
strative 23,468 26,590 28,647 29,999 29,619
---------- ---------- ---------- ---------- ----------
Total 108,689 129,556 130,783 137,682 141,848
---------- ---------- ---------- ---------- ----------
EBITDA(a) $ 90,302 $ 63,981 $ 67,793 $ 90,776 $ 104,970
========== ========== ========== ========== ==========
EBITDA
Margin 45.4% 33.1% 34.1% 39.7% 42.5%
Pops 9,469,400 9,726,400 9,856,100 9,856,100 9,856,100
Post-
paid
Gross
Adds 78,700 109,550 90,600 89,900 97,650
Net Adds 29,500 56,600 36,800 36,800 41,100
Sub-
scribers 844,000 913,000 949,800 986,600 1,027,700
Churn 2.0% 2.0% 1.9% 1.8% 1.9%
Average
Service
Revenue
Per Sub-
scriber $ 41 $ 40 $ 40 $ 42 $ 43
Average
Service
and
Roaming
Revenue
Per Sub-
scriber $ 77 $ 70 $ 68 $ 75 $ 79
Pre-paid
Net Adds 800 4,050 3,300 1,800 400
Sub-
scribers 10,150 18,200 21,500 23,300 23,700
Total
Net Adds 30,300 60,650 40,100 38,600 41,500
Sub-
scribers 854,150 931,200 971,300 1,009,900 1,051,400
Pene-
tration 9.0% 9.6% 9.9% 10.2% 10.7%
(a) Includes $2.1 million, $2.1 million, $2.6 million, $2.5 million
and $2.9 million of EBITDA for the quarters ended September 30,
2000, December 31, 2000, March 31, 2001, June 30, 2001 and
September 30, 2001 respectively, related to minority interests.
Dobson Communications Corporation
For the Quarter Ended
9/30/00 12/31/00 3/31/01 6/30/01 9/30/01
($ in thousands except per share data)
(unaudited)
Operating
Revenue
Service
revenue $ 72,839 $ 76,081 $ 80,880 $ 88,642 $ 93,715
Roaming
revenue 64,474 60,993 62,723 75,714 84,351
Equipment
& other
revenue 6,425 7,111 6,272 6,964 6,276
---------- ---------- ---------- ---------- ----------
Total 143,738 144,185 149,875 171,320 184,342
---------- ---------- ---------- ---------- ----------
Operating
Expenses
(excluding
deprecia-
tion &
amorti-
zation)
Cost of
service 35,928 38,841 41,104 46,504 49,805
Cost of
equip-
ment 11,284 16,996 15,097 13,973 14,495
Marketing
& selling 17,102 23,185 20,589 21,068 20,705
General
& admini-
strative 17,916 19,859 21,299 22,077 21,099
---------- ---------- ---------- ---------- ----------
Total 82,230 98,881 98,089 103,622 106,104
---------- ---------- ---------- ---------- ----------
EBITDA(a) $ 61,508 $ 45,304 $ 51,786 $ 67,698 $ 78,238
========== ========== ========== ========== ==========
EBITDA
Margin 42.8% 31.4% 34.6% 39.5% 42.4%
Pops 6,955,200 7,212,200 7,212,200 7,212,200 7,212,200
Post-paid
Gross
Adds 53,800 75,800 62,100 63,100 67,900
Net Adds 16,700 36,400 22,700 23,100 27,700
Sub-
scribers 590,400 639,200 661,900 685,000 712,700
Churn 2.2% 2.1% 2.0% 1.9% 1.9%
Average
Service
Revenue
per
Sub-
scriber $ 42 $ 41 $ 41 $ 43 $ 44
Average
Service
and
Roaming
Revenue
per
Sub-
scriber $ 80 $ 74 $ 73 $ 81 $ 85
Pre-paid
Net Adds 600 4,300 3,300 2,400 600
Sub-
scribers 6,500 14,800 18,100 20,500 21,100
Total
Net Adds 17,300 40,700 26,000 25,500 28,300
Sub-
scribers 596,900 654,000 680,000 705,500 733,800
Pene-
tration 8.6% 9.1% 9.4% 9.8% 10.2%
(a) Includes $2.1 million, $2.1 million, $2.6 million, $2.5 million
and $2.9 million of EBITDA for the quarters ended September 30,
2000, December 31, 2000, March 31, 2001, June 30, 2001 and
September 30, 2001 respectively, related to minority interests.
American Cellular Corporation
For the Quarter Ended
9/30/00 12/31/00 3/31/01 6/30/01 9/30/01
($ in thousands except per share data)
(unaudited)
Operating
Revenue
Service
revenue $ 58,954 $ 60,699 $ 61,891 $ 70,239 $ 75,042
Roaming
revenue 46,826 33,378 30,902 39,283 45,092
Equipment
& other
revenue 4,727 4,628 4,609 4,754 4,819
---------- ---------- ---------- ---------- ----------
Total 110,507 98,705 97,402 114,276 124,953
---------- ---------- ---------- ---------- ----------
Operating
Expenses
(excluding
deprecia-
tion &
amorti-
zation)
Cost of
service 21,791 20,974 24,455 27,453 29,779
Cost of
equip-
ment 8,431 11,731 11,504 10,467 9,291
Market-
ing &
selling 11,593 15,185 14,732 14,358 15,379
General &
admini-
strative 11,104 13,461 14,696 15,844 17,040
---------- ---------- ---------- ---------- ----------
Total 52,919 61,351 65,387 68,122 71,489
---------- ---------- ---------- ---------- ----------
EBITDA $ 57,588 $ 37,354 $ 32,015 $ 46,154 $ 53,464
========== ========== ========== ========== ==========
EBITDA
Margin 52.1% 37.8% 32.9% 40.4% 42.8%
Pops 5,028,400 5,028,400 5,287,800 5,287,800 5,287,800
Post-paid
Gross
Adds 49,800 67,500 57,000 53,600 59,500
Net
Adds 25,600 40,400 28,200 27,400 26,800
Subscrib-
ers 507,200 547,600 575,800 603,200 630,000
Churn 1.6% 1.7% 1.7% 1.6% 1.8%
Average
Service
Revenue
per
Sub-
scriber $ 40 $ 38 $ 37 $ 40 $ 41
Average
Service
and
Roaming
Revenue
per
Sub-
scriber $ 71 $ 59 $ 55 $ 62 $ 65
Pre-paid
Net Adds 400 (500) -- (1,200) (400)
Sub-
scribers 7,300 6,800 6,800 5,600 5,200
Total
Net Adds 26,000 39,900 28,200 26,200 26,400
Sub-
scribers 514,500 554,400 582,600 608,800 635,200
Pene-
tration 10.2% 11.0% 11.0% 11.5% 12.0%
Dobson Operating Company LLC
For the Quarter Ended
9/30/00 12/31/00 3/31/01 6/30/01 9/30/01
($ in thousands except per share data)
(unaudited)
Operating
Revenue
Service
revenue $ 41,829 $ 45,478 $ 49,920 $ 55,239 $ 58,228
Roaming
revenue 52,649 50,649 52,927 64,717 71,236
Equip-
ment
& other
revenue 4,397 5,052 4,313 5,297 4,637
---------- ---------- ---------- ---------- ----------
Total 98,875 101,179 107,160 125,253 134,101
---------- ---------- ---------- ---------- ----------
Operating
Expenses
(excluding
deprecia-
tion &
amorti-
zation)
Cost of
service 26,025 30,243 31,532 35,370 38,055
Cost of
equip-
ment 7,208 8,458 9,152 9,170 9,239
Marketing
& selling 11,299 15,996 14,275 14,877 14,437
General &
admini-
strative 11,378 13,463 14,210 15,090 14,120
---------- ---------- ---------- ---------- ----------
Total 55,910 68,160 69,169 74,507 75,851
---------- ---------- ---------- ---------- ----------
EBITDA(a) $ 42,965 $ 33,019 $ 37,991 $ 50,746 $ 58,250
========== ========== ========== ========== ==========
EBITDA
Margin 43.5% 32.6% 35.5% 40.5% 43.4%
Pops 4,597,500 4,854,500 4,854,500 4,854,500 4,854,500
Post-paid
Gross
Adds 35,900 46,400 39,900 43,100 45,300
Net Adds 16,100 22,200 18,600 18,600 19,100
Sub-
scribers 345,900 380,500 399,100 417,700 436,800
Churn 2.0% 2.2% 1.9% 1.8% 2.0%
Average
Service
Revenue
per Sub-
scriber $ 42 $ 41 $ 42 $ 44 $ 45
Average
Service
and
Roaming
Revenue
per Sub-
scriber $ 96 $ 88 $ 87 $ 97 $ 100
Pre-paid
Net Adds 400 4,000 3,200 2,200 300
Sub-
scribers 6,300 14,300 17,500 19,700 20,000
Total
Net Adds 16,500 26,200 21,800 20,800 19,400
Sub-
scribers 352,200 394,800 416,600 437,400 456,800
Pene-
tration 7.7% 8.1% 8.6% 9.0% 9.4%
(a) Includes $2.1 million, $2.1 million, $2.6 million, $2.5 million
and $2.9 million of EBITDA for the quarters ended September 30,
2000, December 31, 2000, March 31, 2001, June 30, 2001 and
September 30, 2001 respectively, related to minority interests.
Dobson/Sygnet Communications Company
For the Quarter Ended
9/30/00 12/31/00 3/31/01 6/30/01 9/30/01
($ in thousands except per share data)
(unaudited)
Operating
Revenue
Service
revenue $ 30,995 $ 30,590 $ 30,956 $ 33,404 $ 35,484
Roaming
revenue 11,824 10,345 9,797 10,996 13,115
Equip-
ment &
other
revenue 2,028 2,058 1,958 1,667 1,639
---------- ---------- ---------- ---------- ----------
Total 44,847 42,993 42,711 46,067 50,238
---------- ---------- ---------- ---------- ----------
Operating
Expenses
(excluding
deprecia-
tion &
amorti-
zation)
Cost of
service 9,903 8,597 9,572 11,134 11,750
Cost of
equip-
ment 4,075 8,538 5,946 4,802 5,255
Marketing
& selling 5,804 7,189 6,314 6,192 6,268
General &
admini-
strative 6,501 6,240 7,065 6,995 6,986
---------- ---------- ---------- ---------- ----------
Total 26,283 30,564 28,897 29,123 30,259
---------- ---------- ---------- ---------- ----------
EBITDA $ 18,564 $ 12,429 $ 13,814 $ 16,944 $ 19,979
========== ========== ========== ========== ==========
EBITDA
Margin 41.4% 28.9% 32.3% 36.8% 39.8%
Pops 2,357,700 2,357,700 2,357,700 2,357,700 2,357,700
Post-paid
Gross
Adds 17,900 29,400 22,200 20,000 22,600
Net Adds 600 14,200 4,100 4,500 8,600
Sub-
scribers 244,500 258,700 262,800 267,300 275,900
Churn 2.4% 2.0% 2.3% 1.9% 1.7%
Average
Service
Revenue
per Sub-
scriber $ 42 $ 41 $ 40 $ 42 $ 44
Average
Service
and
Roaming
Revenue
per Sub-
scriber $ 58 $ 54 $ 52 $ 56 $ 60
Pre-paid
Net Adds 200 300 100 200 300
Sub-
scribers 200 500 600 800 1,100
Total
Net Adds 800 14,500 4,200 4,700 8,900
Sub-
scribers 244,700 259,200 263,400 268,100 277,000
Pene-
tration 10.4% 11.0% 11.2% 11.4% 11.7%