Viatel Reports Year-End 2000 Results

Apr 11, 2001, 01:00 ET from Viatel, Inc.

    NEW YORK, April 11 /PRNewswire/ -- Viatel, Inc. (Nasdaq:   VYTL) today
 announced financial results for the year-ended December 31, 2000(1).
     Revenue for 2000 increased to $749.5 million from $333.1 million for
 1999(2).  Revenue from advanced services for 2000, excluding capacity sales,
 increased to $88.1 million from $7.1 million for 1999.  Revenue from capacity
 sales was $103.0 million for the year compared to $84.5 million for the prior
 year.
     Revenue for the fourth quarter of 2000 was $165.2 million, an increase
 from the $122.7 million reported in the comparable quarter of 1999, but a
 decrease from the $200.5 million reported in the prior quarter primarily due
 to the lack of capacity sales.  However, revenue from advanced services in the
 fourth quarter, excluding capacity sales, was $27.9 million, a 601% increase
 from the $4.0 million reported in the fourth quarter of 1999, and a 13%
 increase from the $24.6 million reported in the third quarter of 2000.
     The Company also today announced that its Board of Directors has
 decided not to pay the April 15, 2001 interest payment on its 12.75% senior
 notes due 2008 and that Viatel Financing Trust I has decided not to pay the
 April 15 dividend payment on its 7.75% trust certificates.  Both the Company
 and the Trust have until May 15, 2001 to make such payments.  Additionally,
 the Company has been advised by its auditors that the audit opinion on the
 consolidated financial statements will include an explanatory paragraph which
 raises substantial doubt about the Company's ability to continue as a going
 concern.
     "Last year was both a year of significant progress and a year of major
 transformation for Viatel," said Michael J. Mahoney, Viatel Chairman and Chief
 Executive Officer.  "First and foremost, we continued to expand the scale and
 scope of our network.  Today, our network assets include a state-of-the-art,
 multi-conduit, 10,400-route kilometer Pan-European Network, a 160-gigabit per
 second trans-Atlantic cable, and metropolitan fiber networks under development
 in seven cities.  In sum, we have assembled a solid platform upon which to
 deliver today and tomorrow's bandwidth intensive data, Internet and voice
 services.
     "We have also continued to evolve our business, realigning our operations
 to focus principally on the high-growth, higher-margin corporate and broadband
 businesses.  With customer contracts including AOL and EcosseTel, we are just
 beginning to enjoy market share gains in advanced services.  And, with our
 significant infrastructure investments behind us, we can now focus solely on
 growing these businesses and generating positive cash flow."
     "However, the past year also posed significant challenges, most notably in
 the capital markets.  In realization of these market realities, we have
 retained Dresdner Kleinwort Wasserstein and Credit Suisse First Boston as
 financial advisors to assist us in exploring strategic relationships and
 restructuring alternatives for the Company.  Despite these challenges, we
 remain confident in the long-term market opportunity and enthusiastic about
 our business model."
     SG&A expenses for the year were $354.3 million, or 47% of revenue,
 compared to $100.6 million, or 30% of revenue, for the corresponding period in
 1999(2).  The higher year-over-year SG&A expense is primarily attributable to
 the Company's acquisitions.  As a direct consequence of the Company's
 realignment initiatives -- exiting certain countries in Europe, closing
 certain consumer-oriented businesses and scaling back its wholesale and
 prepaid businesses -- SG&A expenses in the fourth quarter included costs,
 primarily related to increased reserves for doubtful accounts and venture
 investments, of approximately $60 million.  The Company also anticipates that
 it will incur approximately $80 to $100 million during 2001 in accelerated
 depreciation on certain fixed assets related to its realignment initiatives.
     EBITDA(3) loss for 2000 was $156.9 million compared to a loss of
 $18.0 million for 1999.  Adjusted EBITDA(4) for the year was a loss of
 $85.0 million compared to $12.3 million for 1999.  Net loss attributable to
 common stockholders for 2000 was $1,573.7 million, or $(31.53) per share,
 versus $219.2 million, or $(7.43) per share for 1999.  The substantial
 increase in net loss per share reflects restructuring and impairment charges
 of approximately $900.0 million consisting primarily of impairment of goodwill
 and certain intangible assets, as well as the write-down of certain fixed
 assets.  These charges are attributable to the Company's reassessment of its
 ability to recover certain assets, reflecting changes in the Company's
 business and the dynamics of the overall telecommunications landscape.
 Excluding the effect of restructuring and impairment charges, net loss
 attributable to common stockholders would have been $673.7 million, or
 $(13.50) per share.
     At December 31, 2000, the Company had restricted and non-restricted cash
 and cash equivalents, marketable securities and cash securing letters of
 credit for network construction of $397.0 million, and approximately $175.0 to
 $200.0 million at March 31, 2001.  The Company had gross property plant and
 equipment of $1.6 billion, after taking into consideration the asset
 impairment recognized in the fourth quarter of 2000.
     For more information about Viatel and the products and services it offers,
 visit http://www.viatel.com.
 
     Certain matters discussed in this release are forward-looking statements
 that involve risks and uncertainties, including construction risks and other
 risks detailed from time to time in the Company's registration statements and
 reports filed with the Securities and Exchange Commission, including those on
 Form 10-K for the year ended December 31, 2000.
 
                                   VIATEL, INC.
                      Summary of Consolidated Financial Data
                       (In thousands, except per share data)
 
                                                            Year Ended
                                                            December 31,
                                                     2000(1)           1999(2)
     Statements of Operations Data:
     Revenue:
        Communications services revenue             $646,470         $248,600
        Capacity sales                               102,983           84,501
           Total revenue                             749,453          333,101
     Operating expenses:
        Cost of services & sales                     552,110          250,574
        Selling, general & administrative            354,274          100,559
        Depreciation & amortization                  303,168           75,911
        Restructuring & impairment                   899,999           13,206
           Total operating expenses                2,109,551          440,250
     Operating loss                               (1,360,098)        (107,149)
     Interest expense and other, net                 180,649          110,687
     Net loss                                     (1,540,747)        (217,836)
     Dividends on convertible preferred stock         32,954            1,341
     Net loss attributable
      to common stockholders                     $(1,573,701)       $(219,177)
     Net loss per common share
      attributable to common stockholders            $(31.53)          $(7.43)
     Weighted average common shares outstanding       49,905           29,518
 
     Other Financial Data:
        EBITDA(3)                                  $(156,931)        $(18,032)
        Adjusted EBITDA(4)                          $(84,987)         $12,315
 
 
                                                         As of December 31,
     Balance Sheet Data:                                2000           1999
 
     Non-restricted cash, cash equivalents &
      marketable securities and cash securing
      letters of credit for network construction     $335,021       $423,209
 
     Restricted cash equivalents &
      restricted marketable securities                 61,936        197,760
 
     Property & equipment, net                      1,385,917        884,328
 
     Convertible/redeemable preferred stock           508,616             --
 
     Long-term liabilities, including
      current installments and long-term
      debt reclassified as current                  2,120,720(5)   1,802,882
 
 
     (1) Year-end 2000 results include ten months of results of Viatel Global
         Communications Limited (formerly AT&T New Comms (UK) Limited), which
         was acquired on February 29, 2000.
 
     (2) Year-end 1999 results include the December results of Viatel
         Communications, Inc. (formerly Destia Communications, Inc.), which was
         acquired on December 8, 1999.
 
     (3) As used herein, "EBITDA" consists of earnings before interest, income
         taxes, restructuring and impairment charges, extraordinary loss,
         dividends on convertible preferred stock and depreciation and
         amortization.  EBITDA is a measure commonly used in the
         telecommunications industry to analyze companies on the basis of
         operating performance.  EBITDA is not a measure of financial
         performance under generally accepted accounting principles, is not
         necessarily comparable to similarly titled measures of other companies
         and should not be considered as an alternative to net income as a
         measure of performance nor as an alternative to cash flow as a measure
         of liquidity.
 
     (4) "Adjusted EBITDA" is defined as EBITDA plus the non-cash cost of
         capacity sold, non-cash stock related compensation and the cash
         portion of the change in deferred revenue.
 
     (5) As a result of the Company's decision not to pay the April 15, 2001
         interest payment on its 12.75% senior notes due 2008, the Company has
         classified its long-term debt as current.
 
 

SOURCE Viatel, Inc.
    NEW YORK, April 11 /PRNewswire/ -- Viatel, Inc. (Nasdaq:   VYTL) today
 announced financial results for the year-ended December 31, 2000(1).
     Revenue for 2000 increased to $749.5 million from $333.1 million for
 1999(2).  Revenue from advanced services for 2000, excluding capacity sales,
 increased to $88.1 million from $7.1 million for 1999.  Revenue from capacity
 sales was $103.0 million for the year compared to $84.5 million for the prior
 year.
     Revenue for the fourth quarter of 2000 was $165.2 million, an increase
 from the $122.7 million reported in the comparable quarter of 1999, but a
 decrease from the $200.5 million reported in the prior quarter primarily due
 to the lack of capacity sales.  However, revenue from advanced services in the
 fourth quarter, excluding capacity sales, was $27.9 million, a 601% increase
 from the $4.0 million reported in the fourth quarter of 1999, and a 13%
 increase from the $24.6 million reported in the third quarter of 2000.
     The Company also today announced that its Board of Directors has
 decided not to pay the April 15, 2001 interest payment on its 12.75% senior
 notes due 2008 and that Viatel Financing Trust I has decided not to pay the
 April 15 dividend payment on its 7.75% trust certificates.  Both the Company
 and the Trust have until May 15, 2001 to make such payments.  Additionally,
 the Company has been advised by its auditors that the audit opinion on the
 consolidated financial statements will include an explanatory paragraph which
 raises substantial doubt about the Company's ability to continue as a going
 concern.
     "Last year was both a year of significant progress and a year of major
 transformation for Viatel," said Michael J. Mahoney, Viatel Chairman and Chief
 Executive Officer.  "First and foremost, we continued to expand the scale and
 scope of our network.  Today, our network assets include a state-of-the-art,
 multi-conduit, 10,400-route kilometer Pan-European Network, a 160-gigabit per
 second trans-Atlantic cable, and metropolitan fiber networks under development
 in seven cities.  In sum, we have assembled a solid platform upon which to
 deliver today and tomorrow's bandwidth intensive data, Internet and voice
 services.
     "We have also continued to evolve our business, realigning our operations
 to focus principally on the high-growth, higher-margin corporate and broadband
 businesses.  With customer contracts including AOL and EcosseTel, we are just
 beginning to enjoy market share gains in advanced services.  And, with our
 significant infrastructure investments behind us, we can now focus solely on
 growing these businesses and generating positive cash flow."
     "However, the past year also posed significant challenges, most notably in
 the capital markets.  In realization of these market realities, we have
 retained Dresdner Kleinwort Wasserstein and Credit Suisse First Boston as
 financial advisors to assist us in exploring strategic relationships and
 restructuring alternatives for the Company.  Despite these challenges, we
 remain confident in the long-term market opportunity and enthusiastic about
 our business model."
     SG&A expenses for the year were $354.3 million, or 47% of revenue,
 compared to $100.6 million, or 30% of revenue, for the corresponding period in
 1999(2).  The higher year-over-year SG&A expense is primarily attributable to
 the Company's acquisitions.  As a direct consequence of the Company's
 realignment initiatives -- exiting certain countries in Europe, closing
 certain consumer-oriented businesses and scaling back its wholesale and
 prepaid businesses -- SG&A expenses in the fourth quarter included costs,
 primarily related to increased reserves for doubtful accounts and venture
 investments, of approximately $60 million.  The Company also anticipates that
 it will incur approximately $80 to $100 million during 2001 in accelerated
 depreciation on certain fixed assets related to its realignment initiatives.
     EBITDA(3) loss for 2000 was $156.9 million compared to a loss of
 $18.0 million for 1999.  Adjusted EBITDA(4) for the year was a loss of
 $85.0 million compared to $12.3 million for 1999.  Net loss attributable to
 common stockholders for 2000 was $1,573.7 million, or $(31.53) per share,
 versus $219.2 million, or $(7.43) per share for 1999.  The substantial
 increase in net loss per share reflects restructuring and impairment charges
 of approximately $900.0 million consisting primarily of impairment of goodwill
 and certain intangible assets, as well as the write-down of certain fixed
 assets.  These charges are attributable to the Company's reassessment of its
 ability to recover certain assets, reflecting changes in the Company's
 business and the dynamics of the overall telecommunications landscape.
 Excluding the effect of restructuring and impairment charges, net loss
 attributable to common stockholders would have been $673.7 million, or
 $(13.50) per share.
     At December 31, 2000, the Company had restricted and non-restricted cash
 and cash equivalents, marketable securities and cash securing letters of
 credit for network construction of $397.0 million, and approximately $175.0 to
 $200.0 million at March 31, 2001.  The Company had gross property plant and
 equipment of $1.6 billion, after taking into consideration the asset
 impairment recognized in the fourth quarter of 2000.
     For more information about Viatel and the products and services it offers,
 visit http://www.viatel.com.
 
     Certain matters discussed in this release are forward-looking statements
 that involve risks and uncertainties, including construction risks and other
 risks detailed from time to time in the Company's registration statements and
 reports filed with the Securities and Exchange Commission, including those on
 Form 10-K for the year ended December 31, 2000.
 
                                   VIATEL, INC.
                      Summary of Consolidated Financial Data
                       (In thousands, except per share data)
 
                                                            Year Ended
                                                            December 31,
                                                     2000(1)           1999(2)
     Statements of Operations Data:
     Revenue:
        Communications services revenue             $646,470         $248,600
        Capacity sales                               102,983           84,501
           Total revenue                             749,453          333,101
     Operating expenses:
        Cost of services & sales                     552,110          250,574
        Selling, general & administrative            354,274          100,559
        Depreciation & amortization                  303,168           75,911
        Restructuring & impairment                   899,999           13,206
           Total operating expenses                2,109,551          440,250
     Operating loss                               (1,360,098)        (107,149)
     Interest expense and other, net                 180,649          110,687
     Net loss                                     (1,540,747)        (217,836)
     Dividends on convertible preferred stock         32,954            1,341
     Net loss attributable
      to common stockholders                     $(1,573,701)       $(219,177)
     Net loss per common share
      attributable to common stockholders            $(31.53)          $(7.43)
     Weighted average common shares outstanding       49,905           29,518
 
     Other Financial Data:
        EBITDA(3)                                  $(156,931)        $(18,032)
        Adjusted EBITDA(4)                          $(84,987)         $12,315
 
 
                                                         As of December 31,
     Balance Sheet Data:                                2000           1999
 
     Non-restricted cash, cash equivalents &
      marketable securities and cash securing
      letters of credit for network construction     $335,021       $423,209
 
     Restricted cash equivalents &
      restricted marketable securities                 61,936        197,760
 
     Property & equipment, net                      1,385,917        884,328
 
     Convertible/redeemable preferred stock           508,616             --
 
     Long-term liabilities, including
      current installments and long-term
      debt reclassified as current                  2,120,720(5)   1,802,882
 
 
     (1) Year-end 2000 results include ten months of results of Viatel Global
         Communications Limited (formerly AT&T New Comms (UK) Limited), which
         was acquired on February 29, 2000.
 
     (2) Year-end 1999 results include the December results of Viatel
         Communications, Inc. (formerly Destia Communications, Inc.), which was
         acquired on December 8, 1999.
 
     (3) As used herein, "EBITDA" consists of earnings before interest, income
         taxes, restructuring and impairment charges, extraordinary loss,
         dividends on convertible preferred stock and depreciation and
         amortization.  EBITDA is a measure commonly used in the
         telecommunications industry to analyze companies on the basis of
         operating performance.  EBITDA is not a measure of financial
         performance under generally accepted accounting principles, is not
         necessarily comparable to similarly titled measures of other companies
         and should not be considered as an alternative to net income as a
         measure of performance nor as an alternative to cash flow as a measure
         of liquidity.
 
     (4) "Adjusted EBITDA" is defined as EBITDA plus the non-cash cost of
         capacity sold, non-cash stock related compensation and the cash
         portion of the change in deferred revenue.
 
     (5) As a result of the Company's decision not to pay the April 15, 2001
         interest payment on its 12.75% senior notes due 2008, the Company has
         classified its long-term debt as current.
 
 SOURCE  Viatel, Inc.