Aug 10, 2001 : Primus Reports Q2 Financial Results
📅 - Primus Telecommunications Group, Incorporated(primustel.com), a global facilities-based total service provider offering an integrated portfolio of voice, data, Internet, and Web hosting services, today announced results for the second quarter of 2001.
"Primus has made substantial progress on all three elements of its strategyto become financially self-sustaining by growing EBITDA, reducing debt andraising funds," said K. Paul Singh, chairman and CEO of Primus in astatement. "As projected, we returned to positive EBITDA before one-timecharges of $3 million, in the second quarter and again confirm our guidanceof attaining positive EBITDA in the range of $10 million to $15 million forthe full year 2001, before one-time charges. We also reduced our debt by$386 million, with annual interest savings of $44 million, by purchasing ourhigh-yield debt securities. Finally, $37 million in new funding was raisedthrough vendor financing and accounts receivable financing in Canada. Theseare major accomplishments in a difficult economic and financing environment.
"Over the next six months, we have to continue to progress on all threeelements of our strategy. In this business environment, our primarystrategic focus is to grow EBITDA. The streamlining of operations, thede-emphasis of sub-scale and low margin businesses, and our substantialreductions in selling, general and administrative (SG&A) expenses areproducing the desired results. From slightly positive EBITDA in the secondquarter, before one-time employee severance pay and termination expenses,our goal is to deliver $5 million positive EBITDA in the third quarter, andwe expect an increase from that level in the fourth quarter. Theseprojections are supported by key indicators of the soundness of ourbusinesses in the second quarter - minutes of use were at a record level aswas our number of customers (with over 80,000 new data/Internet customersthis quarter alone), while there are preliminary indications that pricingmay be stabilizing.
"Over the last eight months, we have reduced our debt from $1.3 billion toapproximately $800 million, including July 2001 purchases. We are activelypursuing initiatives to reduce our level of debt even further. With astronger balance sheet and enhanced EBITDA generation prospects, we continueto believe that senior secured financing, vendor financing, investments fromstrategic partners and private equity investments are potential sources ofadditional funding for Primus. Additional senior secured financing may beobtained primarily through offering unencumbered assets (over $500 millionof accounts receivable and net property, plant and equipment) as collateral.
Primus's net revenue in the second quarter of 2001 was $271 million,compared with $300 million for the second quarter of 2000, and $289 million(before one-time charges) in the prior quarter. "Overall revenues were loweras a result of the continuing impact of adverse foreign currency exchangerates, the planned de-emphasizing of certain non-core and low marginbusinesses, and reduced spending by customers as a result of the depressedeconomic environment," said Neil L. Hazard, executive vice president andCFO. "With approximately 70 percent of our revenue generated outside of theUnited States, the impact of adverse foreign currency exchange rates reducedtotal revenues by approximately $6 million this quarter in comparison to thefirst quarter's average exchange rates, and by approximately $18 million incomparison to the exchange rates in the second quarter one year ago."
Primus ended the second quarter of 2001 with cash of $156 million. Duringthe second quarter, the company spent approximately $52 million to purchasedebt securities in the open market, paid approximately $32 million ininterest payments, and paid approximately $3 million in debt principalpayments under capital leases and vendor financing. Capital expendituresduring the second quarter were approximately $26 million primarily forpreviously committed fiber optic cable capacity, switching and networkingequipment, data center equipment and back office systems. Primus had $714million of gross property, plant and equipment and $563 million on a netbasis at the end of June 2001. Commenting on Primus's financial position,Mr. Hazard concluded: "We believe our existing level of liquidity shouldfund our plan into the early first quarter of 2002."
For more detailed information, please see the company's website.
"Primus has made substantial progress on all three elements of its strategyto become financially self-sustaining by growing EBITDA, reducing debt andraising funds," said K. Paul Singh, chairman and CEO of Primus in astatement. "As projected, we returned to positive EBITDA before one-timecharges of $3 million, in the second quarter and again confirm our guidanceof attaining positive EBITDA in the range of $10 million to $15 million forthe full year 2001, before one-time charges. We also reduced our debt by$386 million, with annual interest savings of $44 million, by purchasing ourhigh-yield debt securities. Finally, $37 million in new funding was raisedthrough vendor financing and accounts receivable financing in Canada. Theseare major accomplishments in a difficult economic and financing environment.
"Over the next six months, we have to continue to progress on all threeelements of our strategy. In this business environment, our primarystrategic focus is to grow EBITDA. The streamlining of operations, thede-emphasis of sub-scale and low margin businesses, and our substantialreductions in selling, general and administrative (SG&A) expenses areproducing the desired results. From slightly positive EBITDA in the secondquarter, before one-time employee severance pay and termination expenses,our goal is to deliver $5 million positive EBITDA in the third quarter, andwe expect an increase from that level in the fourth quarter. Theseprojections are supported by key indicators of the soundness of ourbusinesses in the second quarter - minutes of use were at a record level aswas our number of customers (with over 80,000 new data/Internet customersthis quarter alone), while there are preliminary indications that pricingmay be stabilizing.
"Over the last eight months, we have reduced our debt from $1.3 billion toapproximately $800 million, including July 2001 purchases. We are activelypursuing initiatives to reduce our level of debt even further. With astronger balance sheet and enhanced EBITDA generation prospects, we continueto believe that senior secured financing, vendor financing, investments fromstrategic partners and private equity investments are potential sources ofadditional funding for Primus. Additional senior secured financing may beobtained primarily through offering unencumbered assets (over $500 millionof accounts receivable and net property, plant and equipment) as collateral.
Primus's net revenue in the second quarter of 2001 was $271 million,compared with $300 million for the second quarter of 2000, and $289 million(before one-time charges) in the prior quarter. "Overall revenues were loweras a result of the continuing impact of adverse foreign currency exchangerates, the planned de-emphasizing of certain non-core and low marginbusinesses, and reduced spending by customers as a result of the depressedeconomic environment," said Neil L. Hazard, executive vice president andCFO. "With approximately 70 percent of our revenue generated outside of theUnited States, the impact of adverse foreign currency exchange rates reducedtotal revenues by approximately $6 million this quarter in comparison to thefirst quarter's average exchange rates, and by approximately $18 million incomparison to the exchange rates in the second quarter one year ago."
Primus ended the second quarter of 2001 with cash of $156 million. Duringthe second quarter, the company spent approximately $52 million to purchasedebt securities in the open market, paid approximately $32 million ininterest payments, and paid approximately $3 million in debt principalpayments under capital leases and vendor financing. Capital expendituresduring the second quarter were approximately $26 million primarily forpreviously committed fiber optic cable capacity, switching and networkingequipment, data center equipment and back office systems. Primus had $714million of gross property, plant and equipment and $563 million on a netbasis at the end of June 2001. Commenting on Primus's financial position,Mr. Hazard concluded: "We believe our existing level of liquidity shouldfund our plan into the early first quarter of 2002."
For more detailed information, please see the company's website.
Reads: 1390 | Category: General | Source: TheWHIR : Web Host Industry Reviews
URL source: http://www.thewhir.com/marketwatch/primus810.cfm
Want to add a website news or press release ? Just do it, it's free! Use add web hosting news!