Universal Access Reports Strong First Quarter Results Meeting Expectations And Reiterates Full-Year Guidance

First Quarter 2001 Highlights

-- Total revenues increased 26.8% to $25.7 million compared to the fourth

quarter of 2000.

-- Gross margins grew 180 BP to 31.4% versus 29.6% in the fourth quarter

of 2000.

-- Four significant customer additions or expansions were announced

during the first quarter.

-- The company launched its CORE initiative to drive further penetration

of existing customers.



Apr 24, 2001, 01:00 ET from Universal Access Inc.

    CHICAGO, April 24 /PRNewswire Interactive News Release/ -- Universal
 Access, Inc. (Nasdaq: UAXS), a leading provider of network infrastructure
 services, today announced record results for the first quarter ended March 31,
 2001, meeting the company's previous projections.
     "We are pleased with our strong first quarter results and also to have the
 distinction of being one of the only companies in recent months to make its
 original projection when so many have struggled to meet even reduced
 expectations," said Patrick Shutt, Chairman and CEO of Universal Access.  "As
 the slowdown in capital expenditures across the industry persists, we continue
 to experience strong demand for our services and customers increasingly view
 us as partners in delivering the critically needed off-net circuits that
 enable them to recognize revenues sooner and complete existing and new service
 orders for their customers.  Our CORE initiative that was launched in the
 first quarter to further penetrate our existing customers also progressed and
 should continue to build throughout the year.  Based on our excellent
 visibility into our revenue stream, we remain confident in our
 $155-$160 million forecast for the year and achieving positive EBITDA in Q2 of
 2002."  CFO Bob Brown added, "First quarter gross margin progressed even
 beyond our projection and the 16 percentage point decline in SG&A as a percent
 of sales illustrate that the efficiency of our business continues to grow. Our
 revenue, margin and spending levels continue to track to our forecast and we
 are fully funded through our expected profitability date next year."
 
     First Quarter Results
     For the quarter ended March 31, 2001, total revenues increased to
 $25.7 million, a 26.8% sequential increase over 4Q00 and a 250.5% increase
 versus $7.3 million from the comparable period in 2000.  Gross profit for the
 first quarter of 2001 expanded to $8.08 million, up 34.6% from gross profit of
 $6.0 million in the previous quarter and an increase of 473.5% versus the
 $1.41 million in gross profit during the first quarter of 2000.  Gross margins
 increased by 180 BP during the quarter, rising to 31.4% from 29.6% in the
 fourth quarter of 2000 and 19.2% from the prior year.  The total net loss for
 the first quarter of 2001 was $15.0 million or ($0.16) per share.  Before non-
 cash stock option compensation charges, the net loss for the first quarter was
 $13.8 million or ($0.15) per share.
     At March 31, 2001, the company had $84.1 million in cash, restricted cash
 and short-term investments.  Capital expenditures in the quarter of
 $17.5 million were primarily related to continued investment in improving UIX
 systems, starting Class 2 UTX deployment, UTX site enhancements such as power
 upgrades for specific customer requirements, and the roll out of the company's
 grooming strategy.  Much of the capital expenditures for the year are front-
 end loaded.  Capital expenditures for the remainder of the year are expected
 to be approximately $14 to $16 million, bringing the total for the year to
 $32 to $34 million.
     SG&A, which reached $21.5 million for Q1, is expected to increase only
 nominally through the rest of the year.  Employee headcount at quarter-end was
 443, up only 3% from Q4.  Because of the company's increasing efficiency,
 headcount is also expected to remain relatively flat for the rest of the year.
 The company anticipates ending the year with cash of about $45 million.  Brown
 noted, "Due to our continued operating efficiencies and prudent cost control
 measures, we expect to reach operating cash flow break even in Q1 2002 and
 achieve positive operating cash flow in Q2 2002."
 
     First Quarter Achievements
     -- Significant customer announcements - The company announced several new
        or expanded customer relationships in the quarter, including
        360networks, Aleron, Electric Lightwave and Broadwing.
 
     -- CORE customer penetration strategy - The company launched a new program
        offering a consultative approach to help drive the benefits of its
        capabilities deeper into its customers' organizations.  For example,
        monthly recurring revenues from the company's top 20 accounts increased
        27% during the first quarter.
 
     -- Credit risk management - The company has established reserves that are
        expected to be sufficient to cover potential risks associated with its
        customers.
 
     -- Systems and infrastructure enhancements - During the first quarter, the
        base of installed circuits grew 25% to 2.0 million DS-0 equivalents and
        61 carriers were represented in the UTX sites.  Also, the number of
        data elements in the UIX grew to 15.2 million in the quarter.
 
     Outlook
     "We are extremely pleased with our continued progress towards achieving
 EBITDA profitability in Q2 2002," commented Shutt. "Through our CORE
 initiatives, we will continue to deepen our customer relationships and
 generate additional revenue opportunities."  The company has evaluated its
 existing and new customer order flow to determine the potential effects of
 market conditions, and management anticipates second quarter revenues will
 grow sequentially 26% to 28%.  Gross margin is expected to grow approximately
 50 basis points per quarter this year, and the company's 2001 revenue
 projection remains at $155-$160 million.
     "As we noted last quarter, our penetration-focused model requires us to
 change the sales metrics we provide," said Bob Brown.  "Putting this into
 perspective, we are looking at a total U.S. market of approximately
 $16 billion in 2001 for private-line services.  Of that, our top 25 customers
 and prospects expect to have an aggregate market share of about $8 billion.
 Our client services team has estimated that the total business that Universal
 Access could potentially target this year with these customers is $75 million,
 and of that, we have forecast $16 to $19 million in new sales after factoring
 in individual confidence estimates as well as time.
     "These top customers will comprise approximately 90% of our increased
 monthly revenues, and these sales would represent a penetration rate of about
 22% and a market share of 0.1%.  Our forecasting also assumes 90 day average
 installation time between sale date and revenue recognition, cancellations at
 about 10% of sales, as well as monthly recurring revenues of $8.6 million at
 first quarter end.   We expect to continue to add significant accounts and
 this group of top customers will increase beyond 25 as new ones are added.
 Looking at 2002 and beyond, we are expecting sales to this top customer group
 to grow at a rate faster than the mid 20%-range that is estimated for the
 overall market.
 
     Webcast Conference Call at 10:00 Eastern Time on 4/24/01
     The company previously announced that it will hold its first quarter 2001
 results conference call on Tuesday, April 24 at 10:00 a.m. Eastern Time.  All
 investors are invited to join a live webcast of the call, which will be hosted
 by Chairman and CEO Patrick Shutt and CFO Bob Brown.  Investors may access the
 call by visiting the Investor Information section of Universal Access' website
 at www.universalaccess.net and clicking on the Live Webcast icon at the top of
 the page. If you are unable to participate during the live webcast, a replay
 of the call will be available on Universal Access' website for one week after
 the webcast.  The discussion may include forward-looking information, such as
 guidance regarding future results.
 
     About Universal Access, Inc.
     Universal Access is the only company capable of interconnecting thousands
 of telecom networks so telecommunications, Internet and application service
 providers can speed up the delivery of voice and data services worldwide,
 helping them generate revenues faster while minimizing operational and capital
 expenditures. Universal Access combines its unique and powerful database that
 provides a birds-eye view of virtually every major supplier's network and its
 strategically positioned interconnection facilities to supply complete turnkey
 solutions known as UniversalNET(SM) solutions. UniversalNET enables service
 providers to quickly and more efficiently control procurement, management,
 billing and operations of high capacity private line circuits from multiple
 vendors. Universal Access is headquartered in Chicago, Illinois and has
 regional offices in Herndon, Virginia, Santa Clara, California, London,
 England, and Amsterdam, the Netherlands. Visit http://www.universalaccess.net
 for more information.
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
 of 1995.
     This release contains forward-looking statements based on current
 expectations, forecasts and assumptions, including but not limited to
 statements that Universal Access might increase revenue and margin, obtain
 sales through the CORE initiative, decrease selling, general and
 administrative expenses as a percentage of sales, achieve profitability,
 enhance the UIX databases, build and leverage UTX facilities, complete
 strategic initiatives and expand global operations.  Actual results may differ
 materially from those anticipated in any forward-looking statements as a
 result of certain risks and uncertainties including, without limitation,
 difficulty forecasting our future results of operations due to our limited
 operating history, the challenge of attracting new clients or increasing sales
 to existing clients, difficulties in automating processes and increasing
 employee productivity, potential inability to achieve and maintain
 profitability, the new and unproven nature of the market for services using
 our UTX facilities and the risk that the market for these services will fail
 to develop as we expect, potential inability to negotiate definitive
 agreements with respect to UTX facilities or other business ventures,
 difficulties or delays in provisioning circuits, difficulties or delays in
 building or operating UTX facilities and deploying optical switches,
 difficulties integrating acquired businesses, potential inability to maintain
 and expand UIX databases, limited international operating experience and risks
 that we will encounter as we expand our operations internationally,
 competition in the Company's industry, and the need to raise additional
 capital.  For other risks and uncertainties applicable to the Company's
 business refer to the Company's Securities and Exchange Commission filings.
 The Company disclaims any intention or obligation to update or revise any
 forward-looking statements, whether as a result of new information, future
 events or otherwise.  All subsequent written and oral forward-looking
 statements attributable to the Company or persons acting on its behalf are
 expressly qualified in their entirety by this paragraph.
 
 
                             UNIVERSAL ACCESS, INC
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                     (in thousands, except per share data)
 
                                                 Quarter Ended
                                    March 31,     December 31,     March 31,
                                       2001           2000           2000
 
 
     Revenues                        $25,711         $20,281        $7,335
 
     Operating expenses:
     Cost of circuit access           17,630          14,277         5,926
     Operations and administration
      (excluding stock option
       plan compensation)
                                      21,499          20,240         9,740
     Operations and administration
      (stock option plan
       compensation)                   1,203             526           840
     Depreciation & amortization       1,868           2,193           566
     Total operating expenses         42,200          37,236        17,072
     Operating loss                  (16,489)        (16,955)       (9,737)
     Other income (expense), net       1,490           2,375           663
     Net loss                        (14,999)        (14,580)       (9,074)
 
     Basic and diluted net loss
      per share
                                      ($0.16)         ($0.16)       ($0.22)
     Shares used in computing
      basic and diluted net loss
      per share                       91,325          90,668        41,097
 
 
                    UNIVERSAL ACCESS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
 
                                                     March 31,    December 31,
     ASSETS                                             2001          2000
 
     Current assets:
     Cash, cash equivalents and
      short-term investments                          $72,932       $107,356
     Accounts receivable, net                          17,133         15,404
     Prepaid expenses and other current assets          4,446          5,911
     Total current assets                              94,511        128,671
 
     Restricted cash                                   11,118         10,751
     Property and equipment, net                       94,615         78,675
     Intangible assets, net                             6,633          6,925
     Long-term investments                              2,000          2,000
     Total Assets                                    $208,877       $227,022
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
     Accounts payable and accrued expenses            $31,372        $38,994
     Unearned revenue                                   9,985          7,971
     Current portion of long-term debt                  1,221          1,233
     Total current liabilities                         42,578         48,198
 
     Notes payable and other long-term debt               854          1,153
     Other liabilities                                    323            309
     Total liabilities                                 43,755         49,660
 
     Total stockholders' equity                       165,122        177,362
 
     Total liabilities and stockholders' equity      $208,877       $227,022
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X61204500
 
 

SOURCE Universal Access Inc.
    CHICAGO, April 24 /PRNewswire Interactive News Release/ -- Universal
 Access, Inc. (Nasdaq: UAXS), a leading provider of network infrastructure
 services, today announced record results for the first quarter ended March 31,
 2001, meeting the company's previous projections.
     "We are pleased with our strong first quarter results and also to have the
 distinction of being one of the only companies in recent months to make its
 original projection when so many have struggled to meet even reduced
 expectations," said Patrick Shutt, Chairman and CEO of Universal Access.  "As
 the slowdown in capital expenditures across the industry persists, we continue
 to experience strong demand for our services and customers increasingly view
 us as partners in delivering the critically needed off-net circuits that
 enable them to recognize revenues sooner and complete existing and new service
 orders for their customers.  Our CORE initiative that was launched in the
 first quarter to further penetrate our existing customers also progressed and
 should continue to build throughout the year.  Based on our excellent
 visibility into our revenue stream, we remain confident in our
 $155-$160 million forecast for the year and achieving positive EBITDA in Q2 of
 2002."  CFO Bob Brown added, "First quarter gross margin progressed even
 beyond our projection and the 16 percentage point decline in SG&A as a percent
 of sales illustrate that the efficiency of our business continues to grow. Our
 revenue, margin and spending levels continue to track to our forecast and we
 are fully funded through our expected profitability date next year."
 
     First Quarter Results
     For the quarter ended March 31, 2001, total revenues increased to
 $25.7 million, a 26.8% sequential increase over 4Q00 and a 250.5% increase
 versus $7.3 million from the comparable period in 2000.  Gross profit for the
 first quarter of 2001 expanded to $8.08 million, up 34.6% from gross profit of
 $6.0 million in the previous quarter and an increase of 473.5% versus the
 $1.41 million in gross profit during the first quarter of 2000.  Gross margins
 increased by 180 BP during the quarter, rising to 31.4% from 29.6% in the
 fourth quarter of 2000 and 19.2% from the prior year.  The total net loss for
 the first quarter of 2001 was $15.0 million or ($0.16) per share.  Before non-
 cash stock option compensation charges, the net loss for the first quarter was
 $13.8 million or ($0.15) per share.
     At March 31, 2001, the company had $84.1 million in cash, restricted cash
 and short-term investments.  Capital expenditures in the quarter of
 $17.5 million were primarily related to continued investment in improving UIX
 systems, starting Class 2 UTX deployment, UTX site enhancements such as power
 upgrades for specific customer requirements, and the roll out of the company's
 grooming strategy.  Much of the capital expenditures for the year are front-
 end loaded.  Capital expenditures for the remainder of the year are expected
 to be approximately $14 to $16 million, bringing the total for the year to
 $32 to $34 million.
     SG&A, which reached $21.5 million for Q1, is expected to increase only
 nominally through the rest of the year.  Employee headcount at quarter-end was
 443, up only 3% from Q4.  Because of the company's increasing efficiency,
 headcount is also expected to remain relatively flat for the rest of the year.
 The company anticipates ending the year with cash of about $45 million.  Brown
 noted, "Due to our continued operating efficiencies and prudent cost control
 measures, we expect to reach operating cash flow break even in Q1 2002 and
 achieve positive operating cash flow in Q2 2002."
 
     First Quarter Achievements
     -- Significant customer announcements - The company announced several new
        or expanded customer relationships in the quarter, including
        360networks, Aleron, Electric Lightwave and Broadwing.
 
     -- CORE customer penetration strategy - The company launched a new program
        offering a consultative approach to help drive the benefits of its
        capabilities deeper into its customers' organizations.  For example,
        monthly recurring revenues from the company's top 20 accounts increased
        27% during the first quarter.
 
     -- Credit risk management - The company has established reserves that are
        expected to be sufficient to cover potential risks associated with its
        customers.
 
     -- Systems and infrastructure enhancements - During the first quarter, the
        base of installed circuits grew 25% to 2.0 million DS-0 equivalents and
        61 carriers were represented in the UTX sites.  Also, the number of
        data elements in the UIX grew to 15.2 million in the quarter.
 
     Outlook
     "We are extremely pleased with our continued progress towards achieving
 EBITDA profitability in Q2 2002," commented Shutt. "Through our CORE
 initiatives, we will continue to deepen our customer relationships and
 generate additional revenue opportunities."  The company has evaluated its
 existing and new customer order flow to determine the potential effects of
 market conditions, and management anticipates second quarter revenues will
 grow sequentially 26% to 28%.  Gross margin is expected to grow approximately
 50 basis points per quarter this year, and the company's 2001 revenue
 projection remains at $155-$160 million.
     "As we noted last quarter, our penetration-focused model requires us to
 change the sales metrics we provide," said Bob Brown.  "Putting this into
 perspective, we are looking at a total U.S. market of approximately
 $16 billion in 2001 for private-line services.  Of that, our top 25 customers
 and prospects expect to have an aggregate market share of about $8 billion.
 Our client services team has estimated that the total business that Universal
 Access could potentially target this year with these customers is $75 million,
 and of that, we have forecast $16 to $19 million in new sales after factoring
 in individual confidence estimates as well as time.
     "These top customers will comprise approximately 90% of our increased
 monthly revenues, and these sales would represent a penetration rate of about
 22% and a market share of 0.1%.  Our forecasting also assumes 90 day average
 installation time between sale date and revenue recognition, cancellations at
 about 10% of sales, as well as monthly recurring revenues of $8.6 million at
 first quarter end.   We expect to continue to add significant accounts and
 this group of top customers will increase beyond 25 as new ones are added.
 Looking at 2002 and beyond, we are expecting sales to this top customer group
 to grow at a rate faster than the mid 20%-range that is estimated for the
 overall market.
 
     Webcast Conference Call at 10:00 Eastern Time on 4/24/01
     The company previously announced that it will hold its first quarter 2001
 results conference call on Tuesday, April 24 at 10:00 a.m. Eastern Time.  All
 investors are invited to join a live webcast of the call, which will be hosted
 by Chairman and CEO Patrick Shutt and CFO Bob Brown.  Investors may access the
 call by visiting the Investor Information section of Universal Access' website
 at www.universalaccess.net and clicking on the Live Webcast icon at the top of
 the page. If you are unable to participate during the live webcast, a replay
 of the call will be available on Universal Access' website for one week after
 the webcast.  The discussion may include forward-looking information, such as
 guidance regarding future results.
 
     About Universal Access, Inc.
     Universal Access is the only company capable of interconnecting thousands
 of telecom networks so telecommunications, Internet and application service
 providers can speed up the delivery of voice and data services worldwide,
 helping them generate revenues faster while minimizing operational and capital
 expenditures. Universal Access combines its unique and powerful database that
 provides a birds-eye view of virtually every major supplier's network and its
 strategically positioned interconnection facilities to supply complete turnkey
 solutions known as UniversalNET(SM) solutions. UniversalNET enables service
 providers to quickly and more efficiently control procurement, management,
 billing and operations of high capacity private line circuits from multiple
 vendors. Universal Access is headquartered in Chicago, Illinois and has
 regional offices in Herndon, Virginia, Santa Clara, California, London,
 England, and Amsterdam, the Netherlands. Visit http://www.universalaccess.net
 for more information.
 
     Safe Harbor Statement under the Private Securities Litigation Reform Act
 of 1995.
     This release contains forward-looking statements based on current
 expectations, forecasts and assumptions, including but not limited to
 statements that Universal Access might increase revenue and margin, obtain
 sales through the CORE initiative, decrease selling, general and
 administrative expenses as a percentage of sales, achieve profitability,
 enhance the UIX databases, build and leverage UTX facilities, complete
 strategic initiatives and expand global operations.  Actual results may differ
 materially from those anticipated in any forward-looking statements as a
 result of certain risks and uncertainties including, without limitation,
 difficulty forecasting our future results of operations due to our limited
 operating history, the challenge of attracting new clients or increasing sales
 to existing clients, difficulties in automating processes and increasing
 employee productivity, potential inability to achieve and maintain
 profitability, the new and unproven nature of the market for services using
 our UTX facilities and the risk that the market for these services will fail
 to develop as we expect, potential inability to negotiate definitive
 agreements with respect to UTX facilities or other business ventures,
 difficulties or delays in provisioning circuits, difficulties or delays in
 building or operating UTX facilities and deploying optical switches,
 difficulties integrating acquired businesses, potential inability to maintain
 and expand UIX databases, limited international operating experience and risks
 that we will encounter as we expand our operations internationally,
 competition in the Company's industry, and the need to raise additional
 capital.  For other risks and uncertainties applicable to the Company's
 business refer to the Company's Securities and Exchange Commission filings.
 The Company disclaims any intention or obligation to update or revise any
 forward-looking statements, whether as a result of new information, future
 events or otherwise.  All subsequent written and oral forward-looking
 statements attributable to the Company or persons acting on its behalf are
 expressly qualified in their entirety by this paragraph.
 
 
                             UNIVERSAL ACCESS, INC
                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                     (in thousands, except per share data)
 
                                                 Quarter Ended
                                    March 31,     December 31,     March 31,
                                       2001           2000           2000
 
 
     Revenues                        $25,711         $20,281        $7,335
 
     Operating expenses:
     Cost of circuit access           17,630          14,277         5,926
     Operations and administration
      (excluding stock option
       plan compensation)
                                      21,499          20,240         9,740
     Operations and administration
      (stock option plan
       compensation)                   1,203             526           840
     Depreciation & amortization       1,868           2,193           566
     Total operating expenses         42,200          37,236        17,072
     Operating loss                  (16,489)        (16,955)       (9,737)
     Other income (expense), net       1,490           2,375           663
     Net loss                        (14,999)        (14,580)       (9,074)
 
     Basic and diluted net loss
      per share
                                      ($0.16)         ($0.16)       ($0.22)
     Shares used in computing
      basic and diluted net loss
      per share                       91,325          90,668        41,097
 
 
                    UNIVERSAL ACCESS, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
 
 
                                                     March 31,    December 31,
     ASSETS                                             2001          2000
 
     Current assets:
     Cash, cash equivalents and
      short-term investments                          $72,932       $107,356
     Accounts receivable, net                          17,133         15,404
     Prepaid expenses and other current assets          4,446          5,911
     Total current assets                              94,511        128,671
 
     Restricted cash                                   11,118         10,751
     Property and equipment, net                       94,615         78,675
     Intangible assets, net                             6,633          6,925
     Long-term investments                              2,000          2,000
     Total Assets                                    $208,877       $227,022
 
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
     Current liabilities:
     Accounts payable and accrued expenses            $31,372        $38,994
     Unearned revenue                                   9,985          7,971
     Current portion of long-term debt                  1,221          1,233
     Total current liabilities                         42,578         48,198
 
     Notes payable and other long-term debt               854          1,153
     Other liabilities                                    323            309
     Total liabilities                                 43,755         49,660
 
     Total stockholders' equity                       165,122        177,362
 
     Total liabilities and stockholders' equity      $208,877       $227,022
 
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X61204500
 
 SOURCE  Universal Access Inc.