OKLAHOMA CITY, July 30, 2001 (PRIMEZONE) -- Dobson Communications Corporation (Nasdaq:DCEL) today announced strong revenue and EBITDA growth for the second quarter of 2001.
Total revenue of $171.3 million was 33 percent higher than the second quarter last year, and EBITDA of $67.7 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 second quarter net loss applicable to common shareholders was $53.4 million, or $0.56 per share, based on 94.2 million average shares outstanding. The net loss included non-cash preferred stock dividends of $21.5 million and a loss related to American Cellular of $16.4 million.
In the second quarter last year, the net loss applicable to common shareholders was $43.3 million, or $0.46 per share, based on an average 93.5 million shares outstanding. This included non-cash preferred stock dividends of $16.6 million and a loss related to American Cellular of $12.1 million.
Proportionate Results
During the second quarter, the Company's continued shift of its proportionate subscriber base to digital calling plans contributed significantly to lower customer churn and higher average revenue per unit (ARPU). Proportionate results reflect Dobson's 50 percent ownership in American Cellular.
Proportionate total revenue for the second quarter was $228.5 million, an increase of 28 percent over proportionate revenue of $178.0 million for the same period last year. Strong increases in both local service and roaming revenues contributed to the improvement.
Service revenue grew as a result of increases in Dobson's subscriber base and ARPU, which was $42 for the second quarter (proportionate, postpaid). This compares with ARPU of $40 in the immediately previous quarter and for the same quarter last year. The higher percentage of digital subscribers in the Company's proportionate base continued to drive higher ARPU overall. Digital ARPU for the second quarter was $54, compared with analog ARPU of $30 for the same period.
Roaming revenue for the quarter was $95.4 million, based on 255.9 million roaming minutes-of-use (MOUs). This represented an increase of 26 percent over roaming revenue of $75.5 million for the same quarter last year (proportionate), and a 58 percent increase in roaming MOUs over second quarter of 2000.
Second quarter EBITDA was $90.8 million, compared with $80.6 million for the same period last year (proportionate).
During the second quarter, new customer sales focused almost exclusively on digital calling plans, and, in addition, a large number of current analog customers upgraded to digital. As a result, as of June 30, 2001, 61 percent of Dobson's proportionate base was digital, compared with 52 percent at March 31, 2001, and 22 percent at the end of last year's second quarter.
Second quarter gross subscriber additions (proportionate, postpaid) were approximately 89,900, compared with gross subscriber additions of approximately 73,200 for the second quarter last year.
Customer churn was 1.8 percent (proportionate, postpaid) for the quarter.
Consequently, Dobson generated net subscriber additions in the second quarter of approximately 38,600, compared with approximately 35,700 the same period last year. Second quarter proportionate net additions included 1,800 prepaid customers, compared with 3,300 prepaid net additions in the immediately previous quarter and 2,100 prepaid net adds in the same quarter last year (proportionate).
Finally, approximately 40,500 analog customers (proportionate) migrated to digital calling plans during the quarter.
"We view this as an exceptional quarter for the company," said Everett R. Dobson, chairman and chief executive officer. "In particular, we have seen solid improvements in key operating metrics which include growth in gross and net subscriber additions, churn under 2.0% for the second consecutive quarter and ARPU increasing by approximately 5% from the second quarter last year."
"Based on these results and normal seasonal trends in the second half of the year, we remain confident in achieving our 2001 guidance," he said.
Digital Network Build-Out Continues
Dobson also continued to aggressively upgrade its wireless network in the second quarter, enhancing its technology leadership. The Company added 90 cell sites and approximately 5,560 new voice paths in the combined Dobson and American Cellular networks during the quarter. The two networks now comprise almost 1,600 cell sites with 41,300 voice paths, of which 60 percent are digital.
Digital voice traffic on the networks has kept pace with the upgrade. In the second quarter this year, approximately 80 percent of total voice traffic was digital, compared with approximately 50 percent in the same three months last year.
By year-end, the Company expects its networks to include 1,725 cell sites and 55,000 voice paths, with 75 percent of those being digital. Digital voice traffic is expected to rise to approximately 90 percent of total traffic by year-end.
To support this growth, Dobson has planned 2001 capital expenditures of approximately $120 million in the Dobson-only markets and $90 million in the American Cellular markets. Year-to-date, capital expenditures have totaled $115.9 million in the combined markets. Capital expenditures for 2002 are expected to be significantly less than the levels spent in 2000 and 2001, apart from acquisitions or other significant changes in the Company's markets.
Director Resignation
Dobson also announced that Dana L. Schmaltz has resigned as a director of Dobson Communications and its former subsidiary, Logix Communications Enterprises, Inc. Mr. Schmaltz, who is a Managing Director of J. W. Childs Associates, Inc., had been a director of Dobson Communications and Logix since December 1998.
As previously announced, Dobson Communications recently filed a shelf registration statement with the Securities and Exchange Commission with respect to the possible sale by affiliates and co-investors of J. W. Childs Associates of up to 6.4 million shares of Dobson Communications Class A common stock, which represents all shares of Dobson Communications Class A common stock held by such affiliates and co-investors.
Conference Call to Be Webcast
Dobson Communications will host its second quarter conference call on Tuesday, July 31, 2001, at 9 a.m. ET (8 a.m. CT). During the call, the Company plans to discuss second 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; 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) 946-0783; the confirmation code is 741459. The call will also be audio Webcast 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, 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 Six Months Ended
June 30, June 30,
------------------------ ------------------------
2001 2000 2001 2000
----------- ----------- ----------- -----------
Operating Revenue
Service revenue $ 88,642 $ 66,846 $ 169,522 $ 123,172
Roaming revenue 75,714 55,527 138,437 99,325
Equipment &
other revenue 6,964 6,297 13,236 11,525
----------- ----------- ----------- -----------
Total 171,320 128,670 321,195 234,022
Operating Expenses
(excluding depre-
ciation & amorti-
zation)
Cost of service 46,504 29,206 87,608 52,229
Cost of equip-
ment 13,973 11,232 29,070 22,555
Marketing &
selling 21,068 16,988 41,658 33,621
General &
administrative 22,077 17,885 43,375 33,912
----------- ----------- ----------- -----------
Total 103,622 75,311 201,711 142,317
EBITDA 67,698 53,359 119,484 91,705
Depreciation &
amortization (51,678) (42,881) (102,229) (78,096)
----------- ----------- ----------- -----------
Operating income 16,020 10,478 17,255 13,609
Minority interest (1,646) (1,236) (3,463) (2,297)
Loss from
investment in
joint venture(1) (16,415) (12,118) (35,761) (17,959)
Other income 2,895 2,114 6,720 4,982
----------- ----------- ----------- -----------
Income (loss)
before
interest &
income taxes 854 (762) (15,249) (1,665)
Interest
expense (42,231) (34,949) (85,319) (66,140)
Income tax
benefit 9,486 8,965 24,608 18,942
----------- ----------- ----------- -----------
Loss from
continuing
operations (31,892) (26,746) (75,960) (48,863)
Extraordinary
expense, net
of income tax -- -- -- (20,387)
----------- ----------- ----------- -----------
Net Loss (31,892) (26,746) (75,960) (69,250)
Dividends on
preferred
stock (21,516) (16,564) (41,006) (91,971)
=========== =========== =========== ===========
Net loss
applicable to
common share-
holders $ (53,408) $ (43,310) $ (116,966) $ (161,221)
=========== =========== =========== ===========
Basic net loss
applicable to
common shareholders
per common share:
Continuing
operations $ (0.34) $ (0.29) $ (0.81) $ (0.57)
Extraordinary
expense 0.00 0.00 0.00 (0.24)
Dividends on
preferred
stock (0.23) (0.18) (0.44) (1.08)
----------- ----------- ----------- -----------
Basic net loss
applicable to
common shareholders
per common share $ (0.56) $ (0.46) $ (1.24) $ (1.90)
=========== =========== =========== ===========
Basic weighted
average common
shares
outstanding 94,234,678 93,532,473 94,151,058 84,985,029
=========== =========== =========== ===========
---------------------------------------------------------------------
(1) Represents the Company's 50% ownership in
the Net Loss from American Cellular.
Detailed as follows:
For the three months
ended June 30, For the six months
2001 2000 ended June 30, 2001
------------------ --------------------
EBITDA 46,154 54,573 78,170
Depreciation and
Amortization (47,684) (46,120) (93,040)
Interest Expense (44,431) (38,710) (85,655)
Other Income, net 1,485 123 1,805
Income tax benefit 11,646 5,898 27,198
------- ------- -------
Net Loss of American
Cellular (100%) (32,830) (24,236) (71,522)
======= ======= =======
For the period from
inception (Feb. 25, 2000)
through June 30, 2000
---------------------------
EBITDA 70,370
Depreciation and
Amortization (63,170)
Interest Expense (53,019)
Other Income, net 412
Income tax benefit 9,489
-------
Net Loss of American
Cellular (100%) (35,918)
=======
Table 2
Dobson Communications Corporation
Selected Financial Data
June 30, 2001
-----------------
($ in millions)
Cash Equivalents and
Restricted Cash:
Unrestricted cash and
cash equivalents $ 200.8
Escrow for towers sold to
American Tower Company 2.0
Escrow for interest on
Dobson/Sygnet Senior Notes 12.6
-----------------
Total cash $ 215.4
=================
Total Debt: (1)
Dobson Operating Co., L.L.C
credit facility $ 852.2
Dobson/Sygnet credit facility 326.8
DCC 10.875% Senior Notes, net 298.0
Dobson/Sygnet Senior Notes 200.0
Other 0.3
-----------------
Total debt $ 1,677.3
=================
Preferred Stock:
Series AA Preferred
Stock, 5.96% $ 200.0
Senior Exchangeable Preferred
Stock, 12.25% 334.5
Senior Exchangeable Preferred
Stock, 13.00% 220.1
-----------------
Total preferred stock $ 754.6
=================
Six Months Ended
June 30, 2001
-----------------
($ in millions)
Capital Expenditures $ 69.3
=================
(1) Does not include our proportionate interest in American
Cellular's total debt of $1.82 billion.
Table 3
Dobson Communications Corporation
Proportionately Consolidated Selected Financial Information
(Includes 50% of American Cellular's operations
to represent proportionate ownership)
For the
Quarter
Ended 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01
($ in thousands except per subscriber data)
(unaudited)
Operating
Revenue
Service
revenue $ 93,725 $ 102,316 $ 106,430 $ 111,825 $ 123,762
Roaming
revenue 75,535 87,887 77,682 78,175 95,355
Equipment &
other
revenue 8,782 8,788 9,425 8,576 9,341
---------- ---------- ---------- ---------- ----------
Total 178,042 198,991 193,537 198,576 228,458
Operating
Expenses
(excluding
depreciation &
amortization)
Cost of
service 37,557 46,823 49,328 53,332 60,230
Cost of
equipment 14,431 15,499 22,861 20,850 19,205
Marketing &
selling 21,550 22,899 30,777 27,954 28,248
General &
administra-
tive 23,859 23,468 26,590 28,647 29,999
---------- ---------- ---------- ---------- ----------
Total 97,397 108,689 129,556 130,783 137,682
---------- ---------- ---------- ---------- ----------
EBITDA (1) $ 80,645 $ 90,302 $ 63,981 $ 67,793 $ 90,776
========== ========== ========== ========== ==========
EBITDA Margin 45.3% 45.4% 33.1% 34.1% 39.7%
Pops 9,056,500 9,277,500 9,514,500 9,639,500 9,639,500
Post-paid
Gross Adds 73,150 78,700 109,550 90,600 89,900
Net Adds 33,550 29,500 56,600 36,800 36,800
Subscribers 791,600 844,000 913,000 949,800 986,600
Churn 1.7% 2.0% 2.0% 1.9% 1.8%
Average
Service
Revenue per
Subscriber $ 40 $ 41 $ 40 $ 40 $ 42
Average
Service
and Roaming
Revenue per
Subscriber $ 73 $ 77 $ 70 $ 68 $ 75
Pre-paid
Net Adds 2,100 800 4,050 3,300 1,800
Subscribers 9,350 10,150 18,200 21,500 23,300
Total
Net Adds 35,650 30,300 60,650 40,100 38,600
Subscribers 800,950 854,150 931,200 971,300 1,009,900
Penetration 8.8% 9.2% 9.8% 10.1% 10.5%
(1) Includes $1.9 million, $2.1 million, $2.1 million, $2.6 million
and $2.5 million of EBITDA for the quarters ended June 30, 2000,
September 30, 2000, December 31, 2000, March 31, 2001 and June
30, 2001, respectively, related to minority interests.
Table 4
Dobson Communications Corporation
For the
Quarter
Ended 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01
($ in thousands except per subscriber data)
(unaudited)
Operating
Revenue
Service
revenue $ 66,846 $ 72,839 $ 76,081 $ 80,880 $ 88,642
Roaming
revenue 55,527 64,474 60,993 62,723 75,714
Equipment
& other
revenue 6,297 6,425 7,111 6,272 6,964
---------- ---------- ---------- ---------- ----------
Total 128,670 143,738 144,185 149,875 $ 171,320
Operating
Expenses
(excluding
depreciation
& amortization)
Cost of
service 29,206 35,928 38,841 41,104 46,504
Cost of
equipment 11,232 11,284 16,996 15,097 13,973
Marketing
& selling 16,988 17,102 23,185 20,589 21,068
General &
administra-
tive 17,885 17,916 19,859 21,299 22,077
---------- ---------- ---------- ---------- ----------
Total 75,311 82,230 98,881 98,089 103,622
---------- ---------- ---------- ---------- ----------
EBITDA (1) $ 53,359 $ 61,508 $ 45,304 $ 51,786 $ 67,698
========== ========== ========== ========== ==========
EBITDA Margin 41.5% 42.8% 31.4% 34.6% 39.5%
Pops 6,612,000 6,833,000 7,070,000 7,070,000 7,070,000
Post-paid
Gross Adds 49,400 53,800 75,800 62,100 63,100
Net Adds 20,400 16,700 36,400 22,700 23,100
Subscribers 550,800 590,400 639,200 661,900 685,000
Churn 1.8% 2.2% 2.1% 2.0% 1.9%
Average
Service
Revenue per
Subscriber $ 42 $ 42 $ 41 $ 41 $ 43
Average
Service and
Roaming
Revenue per
Subscriber $ 76 $ 80 $ 74 $ 73 $ 81
Pre-paid
Net Adds 1,800 600 4,300 3,300 2,400
Subscribers 5,900 6,500 14,800 18,100 20,500
Total
Net Adds 22,200 17,300 40,700 26,000 25,500
Subscribers 556,700 596,900 654,000 680,000 705,500
Penetration 8.4% 8.7% 9.3% 9.6% 10.0%
(1) Includes $1.9 million, $2.1 million, $2.1 million, $2.6 million
and $2.5 million of EBITDA for the quarters ended June 30, 2000,
September 30, 2000, December 31, 2000, March 31, 2001 and June
30, 2001, respectively, related to minority interests.
Table 5
American Cellular Corporation
For the
Quarter
Ended 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01
($ in thousands except per subscriber data)
(unaudited)
Operating
Revenue
Service
revenue $ 53,759 $ 58,954 $ 60,699 $ 61,891 $ 70,239
Roaming
revenue 40,015 46,826 33,378 30,902 39,283
Equipment &
other
revenue 4,972 4,727 4,628 4,609 4,754
---------- ---------- ---------- ---------- ----------
Total 98,746 110,507 98,705 97,402 114,276
Operating
Expenses
(excluding
depreciation &
amortization)
Cost of
service 16,701 21,791 20,974 24,455 27,453
Cost of
equipment 6,399 8,431 11,731 11,504 10,467
Marketing
& selling 9,124 11,593 15,185 14,732 14,358
General &
administra-
tive 11,949 11,104 13,461 14,696 15,844
---------- ---------- ---------- ---------- ----------
Total 44,173 52,919 61,351 65,387 68,122
---------- ---------- ---------- ---------- ----------
EBITDA $ 54,573 $ 57,588 $ 37,354 $ 32,015 $ 46,154
========== ========== ========== ========== ==========
EBITDA Margin 55.3% 52.1% 37.8% 32.9% 40.4%
Pops 4,889,000 4,889,000 4,889,000 5,139,000 5,139,000
Post-paid
Gross Adds 47,500 49,800 67,500 57,000 53,600
Net Adds 26,300 25,600 40,400 28,200 27,400
Subscribers 481,600 507,200 547,600 575,800 603,200
Churn 1.6% 1.6% 1.7% 1.7% 1.6%
Average
Service
Revenue per
Subscriber $ 38 $ 40 $ 38 $ 37 $ 40
Average
Service and
Roaming
Revenue per
Subscriber $ 67 $ 71 $ 59 $ 55 $ 62
Pre-paid
Net Adds 600 400 (500) -- (1,200)
Subscribers 6,900 7,300 6,800 6,800 5,600
Total
Net Adds 26,900 26,000 39,900 28,200 26,200
Subscribers 488,500 514,500 554,400 582,600 608,800
Penetration 10.0% 10.5% 11.3% 11.3% 11.8%
Table 6
Dobson Operating Company LLC
For the
Quarter
Ended 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01
($ in thousands except per subscriber data)
(unaudited)
Operating
Revenue
Service
revenue $ 38,261 $ 41,829 $ 45,478 $ 49,920 $ 55,239
Roaming
revenue 45,776 52,649 50,649 52,927 64,717
Equipment &
other
revenue 3,640 4,397 5,052 4,313 5,297
---------- ---------- ---------- ---------- ----------
Total 87,677 98,875 101,179 107,160 125,253
Operating
Expenses
(excluding
depreciation
& amortization)
Cost of
service 20,798 26,025 30,243 31,532 35,370
Cost of
equipment 6,332 7,208 8,458 9,152 9,170
Marketing
& selling 10,980 11,299 15,996 14,275 14,877
General &
administra-
tive 11,823 11,378 13,463 14,210 15,090
---------- ---------- ---------- ---------- ----------
Total 49,933 55,910 68,160 69,169 74,507
---------- ---------- ---------- ---------- ----------
EBITDA (1) $ 37,744 $ 42,965 $ 33,019 $ 37,991 $ 50,746
========== ========== ========== ========== ==========
EBITDA Margin 43.0% 43.5% 32.6% 35.5% 40.5%
Pops 4,250,000 4,471,000 4,708,000 4,708,000 4,708,000
Post-paid
Gross Adds 31,700 35,900 46,400 39,900 43,100
Net Adds 14,900 16,100 22,200 18,600 18,600
Subscribers 306,900 345,900 380,500 399,100 417,700
Churn 1.9% 2.0% 2.2% 1.9% 1.8%
Average
Service
Revenue per
Subscriber $ 43 $ 42 $ 41 $ 42 $ 44
Average
Service and
Roaming
Revenue per
Subscriber $ 96 $ 96 $ 88 $ 87 $ 97
Pre-paid
Net Adds 1,800 400 4,000 3,200 2,200
Subscribers 5,900 6,300 14,300 17,500 19,700
Total
Net Adds 16,700 16,500 26,200 21,800 20,800
Subscribers 312,800 352,200 394,800 416,600 437,400
Penetration 7.4% 7.9% 8.4% 8.8% 9.3%
(1) Includes $1.9 million, $2.1 million, $2.1 million, $2.6 million
and $2.5 million of EBITDA for the quarters ended June 30, 2000,
September 30, 2000, December 31, 2000, March 31, 2001 and June
30, 2001, respectively, related to minority interests.
Table 7
Dobson/Sygnet Communications Company
For the
Quarter
Ended 6/30/00 9/30/00 12/31/00 3/31/01 6/30/01
($ in thousands except per subscriber data)
(unaudited)
Operating
Revenue
Service
revenue $ 28,568 $ 30,995 $ 30,590 $ 30,956 $ 33,404
Roaming
revenue 9,751 11,824 10,345 9,797 10,996
Equipment &
other
revenue 2,657 2,028 2,058 1,958 1,667
---------- ---------- ---------- ---------- ----------
Total 40,976 44,847 42,993 42,711 46,067
Operating
Expenses
(excluding
depreciation
& amortiza-
tion)
Cost of
service 8,408 9,903 8,597 9,572 11,134
Cost of
equipment 4,899 4,075 8,538 5,946 4,802
Marketing
& selling 6,008 5,804 7,189 6,314 6,192
General &
adminis-
trative 6,053 6,501 6,240 7,065 6,995
---------- ---------- ---------- ---------- ----------
Total 25,368 26,283 30,564 28,897 29,123
---------- ---------- ---------- ---------- ----------
EBITDA $ 15,608 $ 18,564 $ 12,429 $ 13,814 $ 16,944
========== ========== ========== ========== ==========
EBITDA
Margin 38.1% 41.4% 28.9% 32.3% 36.8%
Pops (1) 2,362,000 2,362,000 2,362,000 2,362,000 2,362,000
Post-paid
Gross Adds 17,700 17,900 29,400 22,200 20,000
Net Adds 5,500 600 14,200 4,100 4,500
Subscribers 243,900 244,500 258,700 262,800 267,300
Churn 1.7% 2.4% 2.0% 2.3% 1.9%
Average
Service
Revenue per
Subscriber $ 39 $ 42 $ 41 $ 40 $ 42
Average
Service and
Roaming
Revenue per
Subscriber $ 53 $ 58 $ 54 $ 52 $ 56
Pre-paid
Net Adds -- 200 300 100 200
Subscribers -- 200 500 600 800
Total
Net Adds 5,500 800 14,500 4,200 4,700
Subscribers 243,900 244,700 259,200 263,400 268,100
Penetration 10.3% 10.4% 11.0% 11.2% 11.4%