USOL Holdings Announces Record Revenue for Fiscal 2000

Year-end Revenue Up 72% While Operational Passings and Total Subscribers

Advance 59% and 42%, Respectively



Apr 02, 2001, 01:00 ET from USOL Holdings, Inc.

    AUSTIN, Texas, April 2 /PRNewswire/ -- USOL Holdings, Inc.
 (Nasdaq:   USOL, USOLW), an integrated provider of communications services to
 multi-family apartment and condominium complexes, today announced results for
 its fourth quarter and fiscal year ended December 31, 2000. These results
 included the following highlights:
 
     -- Revenue advanced 72% versus 1999 results.
     -- Increased total active passings by 59% versus 1999 results.
     -- Increased subscribers by 42% versus 1999 results.
     -- U.S. OnLine operating subsidiary awarded "Private Broadband Operator
        of the Year" for 2000.
 
     Fourth quarter revenue increased 77% to a record $2,810,340 compared
 with $1,589,914 in the fourth quarter last year. Fourth quarter EBITDA(1)
 losses were $3,330,774 compared to $3,538,713 in the fourth quarter of last
 year. The Company reported a net loss of $9,655,329 versus a net loss of
 $2,300,330 in the comparable quarter last year.  Net loss attributable to
 common shareholders, which is comprised of net loss plus preferred stock
 dividends, was $10,765,329, or $1.34 per basic and diluted share, versus a net
 loss of $3,410,330, or $.84 per basic and diluted share, in the previous
 fourth quarter.
     For the fiscal year, revenue increased 72% to a record $10,237,683 versus
 $5,971,242(2) in 1999. EBITDA(1) losses were $8,768,355 compared with
 $5,447,507(2) in 1999. Net loss was $22,573,783 in 2000 compared with a net
 loss of $8,189,783(2) last year.  Net loss attributable to common shareholders
 was $27,013,783, or $3.50 per basic and diluted share, compared with a net
 loss of $10,163,116(2), or $2.67(3) per basic and diluted share in 1999.
     The Company's revenue increases are a result of the significant growth in
 operational passings and subscriber counts, which advanced by 59% and 42%,
 respectively, over 1999 figures.  Average revenues per user for video services
 improved 11%, and subscriber penetration rates improved 3% for video and
 15% for phone.
     The increase in net loss between 2000 and 1999 can be contributed to
 several factors.  In 2000 the Company recorded approximately $5,657,000 in
 one-time charges associated with the write-off and disposal of certain
 long-term assets.  Included in the write-offs are: (1) approximately
 $1,871,000 of previously capitalized software development costs associated
 with the discontinuance of an in-house project to develop the Company's next
 generation billing and customer care system; and (2) the write-off of
 approximately $1,420,000 of property and equipment and $2,366,000 of goodwill
 by TRC associated with the termination of the GMAC Resident's Advantage
 business by TRC in 2000.  The remaining increases are attributable to the
 increased operating costs and increased depreciation expense associated with
 the above mentioned passing growth, increased costs directly related to the
 Company's public status in 2000 such as legal, accounting, investor relations
 and insurance, and increased goodwill amortization associated with
 transactions that were completed in the last half of 1999 that have a full
 year of amortization expense recorded in 2000.
     In September, the Company's subsidiary USOL Inc., which does business as
 U.S. OnLine, was presented with the "Private Broadband Operator of the Year"
 award at the annual Private & Wireless Broadband Conference.  The award
 recognizes excellence in providing digital video and broadband services while
 continuing overall exceptional standing with peers, vendors and owners.
 U.S. Online currently services 88 residential communities in 7 major markets,
 which includes many of the leading Real Estate Investment Trusts in the
 country.
     "We have been very successful at establishing long-term relationships with
 some of the real estate industry's largest and most influential companies,"
 said Rob Solomon, CEO of USOL Holdings.  "We also are achieving some of our
 industry's highest subscriber penetration rates, which we believe is a
 testament to the quality of our service and depth of our features.  These
 accomplishments are especially gratifying considering that 2000 was a year of
 extraordinary transition for the broader telecommunications industry, and it
 was a difficult year for many of our competitors -- several of which have
 declared bankruptcy or left the business altogether."
     The Company is filing a Form 12b-25, to request additional time to file
 its Form 10-KSB for the fiscal year ended December 31, 2000.  The delay is the
 result of negotiations between TRC and GMAC Mortgage Company to amend or
 modify its business agreement, which was entered into in August 2000.
 According to a January 2001 amendment to that agreement, TRC and GMAC have
 agreed to modify certain terms of their business arrangement, especially the
 terms and conditions associated with the provisioning delivery of Internet
 access services.  Management expects that the new provisions may substantially
 change the terms and conditions of the current agreement.  Under the terms of
 the amendment, TRC and GMAC must complete the required modifications in
 April 2001. If TRC and GMAC are not able to enter into a mutually agreeable
 modification to the current agreement, it may be terminated by either party.
 Such termination of the agreement would have a significant impact on the
 future operations of TRC. The Company plans to file its 10-KSB as soon as
 reasonably possible upon resolution of this matter, but by no later than
 April 17, 2001.
 
     Austin-based USOL Holdings provides integrated telecommunications and
 entertainment services to the residential real estate industry. Its
 subsidiary, USOL Inc., which does business as U.S. OnLine, provides local and
 long distance telephone, cable television and high-speed Internet access,
 in a single package at competitive prices, all with the convenience of a
 single monthly invoice to residents of MDUs. U.S. OnLine provides its services
 in seven major markets -- Austin, Dallas/Ft. Worth, Denver, Houston,
 Portland, Ore., San Antonio and Washington, D.C. -- and currently serves over
 52,000 operational passings. USOL Holdings also owns TheResidentClub,
 Inc., which develops Internet platforms that provide a range of customized
 private-labeled online solutions for residential real estate operating and
 finance companies.
 
     This news release contains "forward looking statements" within the meaning
 of Section 27A of the Securities and Exchange Act of 1934, as amended.
 Although USOL Holdings believes that such statements are based on reasonable
 assumptions, it can give no assurance that its expectations will in fact
 occur.  Important factors that could cause actual results to differ materially
 from those forward looking statements include, among other things, changes in
 national or regional economic conditions affecting the telecommunications
 industry, federal and state regulatory developments, USOL Holdings' financial
 leverage and availability of skilled personnel, as well as other risk factors.
 
 
     FINANCIAL RECAP      Three Months Ended          Fiscal Year Ended
                             December 31,               December 31,
                          2000         1999         2000           1999(2)
 
     Revenues        $2,810,340     $1,589,914    $10,237,683     $5,971,242
     Operating
      Expenses       11,513,951      4,005,646     31,589,775     12,538,832
     Loss from
      Operations    $(8,703,611)   $(2,415,732)  $(21,352,092)   $(6,567,590)
     Other Income
      (Expense)        (939,764)        93,667     (1,165,244)    (1,635,033)
     Net Loss       $(9,655,329)   $(2,300,330)  $(22,573,783)   $(8,189,783)
     Preferred Stock
      Dividends      (1,110,000)    (1,110,000)    (4,440,000)    (1,973,333)
     Loss
      Attributable
      to Common
      Shareholders $(10,765,329)   $(3,410,330)  $(27,013,783)  $(10,163,116)
     Basic and
      Diluted Loss
      Per Common
      Share               (1.34)         (.84)          (3.50)       (2.67)(3)
     Basic and
      Diluted
      Weighted
      Average Common
      Shares          8,033,828      3,998,026      7,715,490     2,492,421(3)
     EBITDA         $(3,300,774)   $(3,538,713)   $(8,768,355)   $(5,447,507)
     Total Passings      48,846         30,748         48,846         30,748
 
 
     (1) EBITDA consists of Earnings Before Interest, Taxes, Depreciation and
     Amortization and also excludes stock compensation expense, losses on
     long-term asset write-offs and minority interest.
 
     (2) The fiscal year end results for 1999 are the combined results of the
     Company's predecessor U.S. OnLine Communications, Inc. from January 1,
     1999 through June 30, 1999 and the Company from inception (May 12, 1999)
     through December 31, 1999.
 
     (3) Basic and diluted loss per share for the year ended December 31, 1999,
     is calculated based on the results of operations of the Company from
     inception (May 12, 1999) through December 31, 1999.  It does not consider
     the results of the Company's predecessor U.S. OnLine Communications, Inc.
     from January 1, 1999 through June 30, 1999.  Basic and diluted weighted
     average common shares gives consideration only to the Company's
     outstanding shares from inception through December 31, 1999.
 
 

SOURCE USOL Holdings, Inc.
    AUSTIN, Texas, April 2 /PRNewswire/ -- USOL Holdings, Inc.
 (Nasdaq:   USOL, USOLW), an integrated provider of communications services to
 multi-family apartment and condominium complexes, today announced results for
 its fourth quarter and fiscal year ended December 31, 2000. These results
 included the following highlights:
 
     -- Revenue advanced 72% versus 1999 results.
     -- Increased total active passings by 59% versus 1999 results.
     -- Increased subscribers by 42% versus 1999 results.
     -- U.S. OnLine operating subsidiary awarded "Private Broadband Operator
        of the Year" for 2000.
 
     Fourth quarter revenue increased 77% to a record $2,810,340 compared
 with $1,589,914 in the fourth quarter last year. Fourth quarter EBITDA(1)
 losses were $3,330,774 compared to $3,538,713 in the fourth quarter of last
 year. The Company reported a net loss of $9,655,329 versus a net loss of
 $2,300,330 in the comparable quarter last year.  Net loss attributable to
 common shareholders, which is comprised of net loss plus preferred stock
 dividends, was $10,765,329, or $1.34 per basic and diluted share, versus a net
 loss of $3,410,330, or $.84 per basic and diluted share, in the previous
 fourth quarter.
     For the fiscal year, revenue increased 72% to a record $10,237,683 versus
 $5,971,242(2) in 1999. EBITDA(1) losses were $8,768,355 compared with
 $5,447,507(2) in 1999. Net loss was $22,573,783 in 2000 compared with a net
 loss of $8,189,783(2) last year.  Net loss attributable to common shareholders
 was $27,013,783, or $3.50 per basic and diluted share, compared with a net
 loss of $10,163,116(2), or $2.67(3) per basic and diluted share in 1999.
     The Company's revenue increases are a result of the significant growth in
 operational passings and subscriber counts, which advanced by 59% and 42%,
 respectively, over 1999 figures.  Average revenues per user for video services
 improved 11%, and subscriber penetration rates improved 3% for video and
 15% for phone.
     The increase in net loss between 2000 and 1999 can be contributed to
 several factors.  In 2000 the Company recorded approximately $5,657,000 in
 one-time charges associated with the write-off and disposal of certain
 long-term assets.  Included in the write-offs are: (1) approximately
 $1,871,000 of previously capitalized software development costs associated
 with the discontinuance of an in-house project to develop the Company's next
 generation billing and customer care system; and (2) the write-off of
 approximately $1,420,000 of property and equipment and $2,366,000 of goodwill
 by TRC associated with the termination of the GMAC Resident's Advantage
 business by TRC in 2000.  The remaining increases are attributable to the
 increased operating costs and increased depreciation expense associated with
 the above mentioned passing growth, increased costs directly related to the
 Company's public status in 2000 such as legal, accounting, investor relations
 and insurance, and increased goodwill amortization associated with
 transactions that were completed in the last half of 1999 that have a full
 year of amortization expense recorded in 2000.
     In September, the Company's subsidiary USOL Inc., which does business as
 U.S. OnLine, was presented with the "Private Broadband Operator of the Year"
 award at the annual Private & Wireless Broadband Conference.  The award
 recognizes excellence in providing digital video and broadband services while
 continuing overall exceptional standing with peers, vendors and owners.
 U.S. Online currently services 88 residential communities in 7 major markets,
 which includes many of the leading Real Estate Investment Trusts in the
 country.
     "We have been very successful at establishing long-term relationships with
 some of the real estate industry's largest and most influential companies,"
 said Rob Solomon, CEO of USOL Holdings.  "We also are achieving some of our
 industry's highest subscriber penetration rates, which we believe is a
 testament to the quality of our service and depth of our features.  These
 accomplishments are especially gratifying considering that 2000 was a year of
 extraordinary transition for the broader telecommunications industry, and it
 was a difficult year for many of our competitors -- several of which have
 declared bankruptcy or left the business altogether."
     The Company is filing a Form 12b-25, to request additional time to file
 its Form 10-KSB for the fiscal year ended December 31, 2000.  The delay is the
 result of negotiations between TRC and GMAC Mortgage Company to amend or
 modify its business agreement, which was entered into in August 2000.
 According to a January 2001 amendment to that agreement, TRC and GMAC have
 agreed to modify certain terms of their business arrangement, especially the
 terms and conditions associated with the provisioning delivery of Internet
 access services.  Management expects that the new provisions may substantially
 change the terms and conditions of the current agreement.  Under the terms of
 the amendment, TRC and GMAC must complete the required modifications in
 April 2001. If TRC and GMAC are not able to enter into a mutually agreeable
 modification to the current agreement, it may be terminated by either party.
 Such termination of the agreement would have a significant impact on the
 future operations of TRC. The Company plans to file its 10-KSB as soon as
 reasonably possible upon resolution of this matter, but by no later than
 April 17, 2001.
 
     Austin-based USOL Holdings provides integrated telecommunications and
 entertainment services to the residential real estate industry. Its
 subsidiary, USOL Inc., which does business as U.S. OnLine, provides local and
 long distance telephone, cable television and high-speed Internet access,
 in a single package at competitive prices, all with the convenience of a
 single monthly invoice to residents of MDUs. U.S. OnLine provides its services
 in seven major markets -- Austin, Dallas/Ft. Worth, Denver, Houston,
 Portland, Ore., San Antonio and Washington, D.C. -- and currently serves over
 52,000 operational passings. USOL Holdings also owns TheResidentClub,
 Inc., which develops Internet platforms that provide a range of customized
 private-labeled online solutions for residential real estate operating and
 finance companies.
 
     This news release contains "forward looking statements" within the meaning
 of Section 27A of the Securities and Exchange Act of 1934, as amended.
 Although USOL Holdings believes that such statements are based on reasonable
 assumptions, it can give no assurance that its expectations will in fact
 occur.  Important factors that could cause actual results to differ materially
 from those forward looking statements include, among other things, changes in
 national or regional economic conditions affecting the telecommunications
 industry, federal and state regulatory developments, USOL Holdings' financial
 leverage and availability of skilled personnel, as well as other risk factors.
 
 
     FINANCIAL RECAP      Three Months Ended          Fiscal Year Ended
                             December 31,               December 31,
                          2000         1999         2000           1999(2)
 
     Revenues        $2,810,340     $1,589,914    $10,237,683     $5,971,242
     Operating
      Expenses       11,513,951      4,005,646     31,589,775     12,538,832
     Loss from
      Operations    $(8,703,611)   $(2,415,732)  $(21,352,092)   $(6,567,590)
     Other Income
      (Expense)        (939,764)        93,667     (1,165,244)    (1,635,033)
     Net Loss       $(9,655,329)   $(2,300,330)  $(22,573,783)   $(8,189,783)
     Preferred Stock
      Dividends      (1,110,000)    (1,110,000)    (4,440,000)    (1,973,333)
     Loss
      Attributable
      to Common
      Shareholders $(10,765,329)   $(3,410,330)  $(27,013,783)  $(10,163,116)
     Basic and
      Diluted Loss
      Per Common
      Share               (1.34)         (.84)          (3.50)       (2.67)(3)
     Basic and
      Diluted
      Weighted
      Average Common
      Shares          8,033,828      3,998,026      7,715,490     2,492,421(3)
     EBITDA         $(3,300,774)   $(3,538,713)   $(8,768,355)   $(5,447,507)
     Total Passings      48,846         30,748         48,846         30,748
 
 
     (1) EBITDA consists of Earnings Before Interest, Taxes, Depreciation and
     Amortization and also excludes stock compensation expense, losses on
     long-term asset write-offs and minority interest.
 
     (2) The fiscal year end results for 1999 are the combined results of the
     Company's predecessor U.S. OnLine Communications, Inc. from January 1,
     1999 through June 30, 1999 and the Company from inception (May 12, 1999)
     through December 31, 1999.
 
     (3) Basic and diluted loss per share for the year ended December 31, 1999,
     is calculated based on the results of operations of the Company from
     inception (May 12, 1999) through December 31, 1999.  It does not consider
     the results of the Company's predecessor U.S. OnLine Communications, Inc.
     from January 1, 1999 through June 30, 1999.  Basic and diluted weighted
     average common shares gives consideration only to the Company's
     outstanding shares from inception through December 31, 1999.
 
 SOURCE USOL Holdings, Inc.