OKLAHOMA CITY, July 31, 2000 (PRIMEZONE) -- Dobson Communications Corporation (Nasdaq:DCEL) today announced record results for its second quarter ended June 30, 2000, including gains of 45 percent in total revenues and 46 percent in EBITDA compared with the second quarter last year. Revenues for the period reached $128.7 million, versus $89.0 million last year, and EBITDA was $53.4 million, compared with $36.6 million in the second quarter of 1999.
EBITDA represents earnings before interest, taxes, depreciation, amortization, equity in earnings of unconsolidated subsidiaries, loss from discontinued operations, and any extraordinary items. The revenue and EBITDA totals above do not reflect Dobson's 50 percent joint venture ownership in American Cellular Corporation, which Dobson accounts for on an equity basis (Table 1).
The Company reported a second quarter net loss applicable to common shareholders of $43.3 million, or $0.46 per share, based on average shares of 93.5 million. The net loss includes payment in kind of $16.6 million in preferred stock dividends and a $12.1 million loss from investment in the American Cellular joint venture. In the second quarter last year, Dobson recorded a net loss applicable to common shareholders of $47.2 million, or $0.86 per share (based on an average 54.8 million shares), after payment in kind of $17.8 million in preferred stock dividends. In last year's second quarter, no joint venture-related loss was recorded because the Dobson/AT&T Wireless (NYSE:AWE) joint venture completed its acquisition of American Cellular in the first quarter of 2000.
Roaming revenues of $55.5 million were particularly strong for the second quarter - 58 percent higher than the same quarter in 1999, despite the impact of scheduled reductions in the roaming rates paid to Dobson by its major roaming partners.
Proportionate, Pro Forma Results
Second quarter results were also very strong when Dobson's 50 percent ownership in the American Cellular joint venture and other acquisitions are fully reflected on a proportionate, pro forma basis(1) (Table 3). On this basis, Dobson reported total revenues of $179.3 million, an increase of 27 percent over the same quarter last year. EBITDA was $81.3 million, 29 percent higher than EBITDA in last year's second quarter.
Roaming revenues of $76.0 million represented a 36 percent increase over the second quarter last year. This increase reflects a 63 percent gain in roaming minutes-of-use (MOUs), which more than offset scheduled reductions in the roaming rates paid to Dobson by its major roaming partners.
"We are on target with our operating plan for the year," said Everett Dobson, chairman and chief executive officer. "We expect strong performance in the final six months of 2000, based on normal seasonal trends and promotions and new product introductions that we have had planned for the last half of the year."
Dobson added 35,000 net subscribers for the quarter on a proportionate, pro forma basis. Net subscriber growth slowed from the first quarter due to less aggressive marketing promotions in certain markets. Despite this, however, net subscriber adds for the second quarter increased 6.4 percent over net adds for the same period last year.
The second quarter net adds increased Dobson's subscriber base to 800,900, a 12-month gain of 24 percent (proportionate, pro forma). Second quarter churn remained at 1.7 percent, in line with both the first quarter of 2000 and the second quarter last year.
Growth in net adds continued to reflect increasing demand for digital products and services. As of the end of the second quarter of 2000, digital post-pay customers represented 22 percent of Dobson's subscriber base, compared with 16 percent as of March 31, 2000. The Company expects demand for digital products and services to continue driving the growth of its subscriber base.
As of June 30, 2000, Dobson owns FCC licenses for markets with approximately 9.0 million POPs (proportionate, pro forma). Including all markets under Dobson management (100 percent of American Cellular), the Company owns or manages properties covering approximately 11.5 million POPs.
Dobson's customer average revenue per unit (ARPU) was $40 in the second quarter (proportionate, pro forma) compared with $38 in the first quarter of the current year and to $42 in the second quarter of 1999. Digital ARPU increased during the quarter to $58, while analog ARPU was $36.
"Our second quarter results are consistent with our plan for 2000 and our long-term operating and strategic growth goals," CEO Dobson said. "During the second quarter, we continued to integrate the American Cellular properties and to acquire important new markets in Texas, Oklahoma and Kansas. We significantly increased the Company's capital resources, which will help us maintain our rapid growth. Finally, in the second quarter we continued to strengthen the service capabilities and coverage of our network, which will enable us to roll out new wireless data and voice products in the second half, enhancing our long-term growth prospects."
Other Highlights
-- In May the Company completed the acquisition of the Texas 9 Rural Service Area (RSA), and in June it entered into a definitive agreement to acquire the FCC cellular license and related assets of the Oklahoma 6 RSA for approximately $72.0 million. The Oklahoma 6 RSA covers a total population of approximately 221,000 in seven counties in central and eastern Oklahoma. The Oklahoma 6 acquisition should be completed early in the fourth quarter 2000. During the second quarter and early in the third quarter, Dobson also participated in two smaller acquisitions covering a total of 273,000 POPs. Through the American Cellular joint venture, it acquired PCS spectrum that will essentially cover the Oklahoma 4 RSA in northeastern Oklahoma and several adjacent counties in southeastern Kansas. Dobson also acquired the western portion of Missouri 2 RSA. -- On June 22 Dobson completed a private placement of $300 million principal amount of 10 7/8% Senior Notes due 2010. The transaction resulted in net proceeds to the Company of approximately $290.2 million, which it used to pay down bank debt and for working capital and other general corporate purposes. -- During the second quarter, Dobson continued to enhance the capacity and coverage of its network. The Company installed 60 new cell sites, bringing its total of owned and managed cell sites to approximately 1,150. By the end of the quarter, all but two of Dobson's owned or managed markets had digital voice services available, bringing the total digital coverage to more than 98 percent of Dobson's owned or managed POPs. Dobson also completed the installation of CDPD (cellular digital packet data) radios in the majority of its owned or managed cell sites during the quarter. These will be instrumental to the planned third-quarter roll-out of Dobson's wireless data products.
Dobson Communications will host its second quarter conference call on Tuesday, August 1, at 8:30 a.m. (EDT). To participate, please call (800) 946-0705; the confirmation code is 625645. A replay of the call will be available at approximately noon on August 1 through the 15th, by dialing (888) 203-1112 and using the same confirmation code.
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 18 states. For the year ended December 31, 1999, Dobson reported total revenues of $359.3 million; EBITDA of $137.9 million; and a net loss of $127.6 million, which included a loss from discontinued operations and extraordinary expense.
For additional information on the Company and its operations, please visit its web site at www.dobson.net.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding the Company's plans, intentions and expectations. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. A discussion of the risk factors that could impact these areas and the Company's overall business and financial performance can be found in the Company's reports filed with the Securities and Exchange Commission. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements.
(1) Second quarter 2000 proportionate, pro forma data include Dobson's 50 percent ownership in American Cellular Corporation and the results of its acquisition of Texas 9 RSA as if the property has been acquired at the beginning of the period. Supporting data available upon request.
Table 1 Dobson Communications Corporation Statements of Operations ($ in thousands, except per share data) (unaudited) (Includes American Cellular ownership on an equity basis and second quarter acquisitions on the basis of actual impact only, not pro forma) Three Months Ended Six Months Ended June 30, June 30, ----------------- ----------------- 2000 1999 2000 1999 ---- ---- ---- ---- Operating Revenue Service revenue $ 66,846 $ 51,097 $ 123,172 $ 96,966 Roaming revenue 55,527 35,208 99,325 63,305 Equipment & other revenue 6,297 2,738 11,525 6,018 ----------- --------- ---------- --------- Total 128,670 89,043 234,022 166,289 Operating Expenses (excluding depreciation & amortization) Cost of service 29,206 21,670 52,229 42,027 Cost of equipment 11,232 6,042 22,555 11,859 Marketing & selling 16,988 11,500 33,622 21,710 General & administrative 17,885 13,254 33,912 26,067 ----------- --------- ---------- --------- Total 75,311 52,466 142,318 101,663 EBITDA 53,359 36,577 91,704 64,626 Depreciation & amortization (42,881) (34,173) (78,096) (69,900) ----------- --------- ---------- --------- Operating income (loss) 10,478 2,404 13,608 (5,274) Minority interest (1,236) (925) (2,297) (1,480) Loss from investment in joint venture(1) (12,118) -- (17,959) -- Other income 2,114 295 4,982 1,904 ----------- --------- ---------- --------- Loss before interest & income taxes (762) 1,774 (1,666) (4,850) Interest expense (34,949) (27,168) (66,140) (55,528) Income tax benefit 8,965 9,646 18,942 22,940 ----------- --------- ---------- --------- Loss from continuing operations (26,746) (15,748) (48,864) (37,438) Loss from discontinued operations, net of income tax -- (13,725) -- (25,779) Extraordinary expense, net of income tax -- -- (20,387) -- ----------- --------- ---------- --------- Net Loss (26,746) (29,473) (69,251) (63,217) Dividends on preferred stock (16,564) (17,756) (91,971) (31,872) ----------- --------- ---------- --------- Net loss applicable to common shareholders $ (43,310) $ (47,229) $ (161,222) $ (95,089) =========== ========= ========== ========= Basic net loss applicable to common shareholders per common share: Continuing operations $ (0.28) $ (0.29) $ (0.58) $ (0.68) Discontinued operations -- (0.25) -- (0.47) Extraordinary expense -- -- (0.24) -- Dividends on Preferred stock (0.18) (0.32) (1.08) (0.58) ----------- --------- --------- ----------- Basic net loss applicable to common share- holders per common share: $ (0.46) $ (0.86) $ (1.90) $ (1.73) =========== ========= ========= =========== Basic weighted average common shares outstanding 93,532,473 54,823,354 84,985,029 54,823,354 ========== ========== ========== ========== (1) Represents the Company's 50% ownership in the Net Loss from American Cellular. Detailed as follows: For the three months ended June 30, 2000 -------------------- EBITDA 54,573 Depreciation and Amortization (46,120) Interest Expense (38,710) Other Income, net 123 Provision for income taxes 5,898 ------- Net Loss of American Cellular (100%) (24,236) ======= Table 2 Dobson Communications Corporation Selected Financial Data June 30, 2000 ----------------- ($ in millions) Cash Equivalents and Restricted Cash Unrestricted cash and cash equivalents $ 170.3 Escrow for towers sold to American Tower Company 2.7 Escrow for Interest on Dobson/Sygnet Senior Notes 35.4 -------- Total Cash $ 208.4 ======== Long-term debt: (1) Dobson Operating Co., L.L.C. credit facility $ 628.9 Dobson/Sygnet credit facility 364.2 DCC 10.875% Senior Notes 297.7 Dobson/Sygnet Senior Notes 200.0 Other 4.0 -------- Total debt $ 1,494.8 ======== Senior Exchangeable Preferred Stock 12.25% $ 293.4 13.00% 193.3 -------- Total Senior Exchangeable Preferred Stock $ 486.7 ======== Six Months Ended June 30, 2000 ----------------- ($ in millions) Capital Expenditures $ 61.9 ======== (1) Does not include our proportionate interest in American Cellular's long-term debt of $1.66 billion. Table 3 Dobson Communications Corporation Proportionately Consolidated Pro Forma Selected Financial Information ($ in thousands except per subscriber data) (unaudited) (Includes 50% of American Cellular's operations to represent proportionate ownership and pro forma effect of all acquisitions as if they had occurred at the beginning of the periods) For the Quarter Ended 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 Operating Revenue Service revenue $ 79,643 $ 83,606 $ 83,777 $ 85,236 $ 94,457 Roaming revenue 55,954 73,246 60,937 62,266 76,019 Equipment & other revenue 5,395 6,695 7,402 7,325 8,801 --------- --------- ------- --------- --------- Total 140,992 163,547 152,116 154,827 179,277 Operating Expenses (excluding depreciation & amortization) Cost of service 32,719 38,390 30,915 32,680 37,785 Cost of equipment 8,832 10,041 14,176 14,340 14,488 Marketing & selling 16,049 17,962 20,969 21,151 21,614 General & administrative 20,557 22,347 21,811 23,757 24,117 --------- --------- -------- --------- --------- Total 78,157 88,740 87,871 91,928 98,004 --------- --------- -------- --------- --------- EBITDA (1) $ 62,835 $ 74,807 $ 64,245 $ 62,899 $ 81,273 ========= ========= ======== ========= ========= EBITDA Margin 44.57% 45.74% 42.23% 40.63% 45.33% Pops 8,595,000 8,913,000 9,044,000 9,044,000 9,044,000 Post-paid Gross Adds 64,300 70,300 86,200 80,300 73,800 Net Adds 33,200 33,700 45,500 43,700 33,800 Subscribers 641,800 676,500 715,500 759,200 793,000 Churn 1.66% 1.85% 1.96% 1.65% 1.71% Average Service Revenue per Subscriber $ 42 $ 42 $ 40 $ 38 $ 40 Average Service and Roaming Revenue per Subscriber $ 72 $ 79 $ 69 $ 67 $ 73 Pre-paid Net Adds (300) -- 500 1,600 1,200 Subscribers 4,600 4,600 5,100 6,700 7,900 Total Net Adds 32,900 33,700 46,000 45,300 35,000 Subscribers 646,400 681,100 720,600 765,900 800,900 Penetration 7.52% 7.64% 7.97% 8.47% 8.86% (1) Includes $1.6 million, $1.3 million $1.5 million, $1.7 million and $2.0 of EBITDA for the quarters ended June 30, 1999, September 30, 1999, December 31, 1999, March 31, 2000 and June 30, 2000, respectively, related to minority interests. Table 4 Dobson Communications Corporation Consolidated Pro Forma Financial Information for cellular operations applicable to Dobson Communications 13% Senior Exhangeable Preferred Stock and 10.875% Senior Notes ($ in thousands except per subscriber data) (unaudited) (100% of Dobson Communications - includes both DOC LLC and Dobson/Sygnet on a pro forma basis as if all acquisitions had occurred at the beginning of the periods; no American Cellular operations) For the Quarter Ended 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 Operating Revenue Service revenue $ 58,516 $ 60,959 $ 59,770 $ 61,259 $ 67,578 Roaming revenue 40,802 51,843 42,713 46,328 56,011 Equipment & other revenue 3,933 4,884 5,386 5,469 6,315 --------- --------- --------- --------- --------- Total 103,251 117,686 107,869 113,056 129,904 Operating Expenses (excluding depreciation & amortization) Cost of service 26,206 30,628 25,739 25,097 29,434 Cost of equipment 6,652 7,485 11,062 11,741 11,288 Marketing & selling 12,351 14,146 16,416 17,240 17,052 General & administrative 15,198 16,654 16,719 17,664 18,143 --------- --------- --------- -------- --------- Total 60,407 68,913 69,936 71,742 75,917 --------- --------- --------- -------- --------- EBITDA (1) $ 42,844 $ 48,773 $ 37,933 $ 41,314 $ 53,987 ========= ========= ========= ========= ========= EBITDA Margin 41.49% 41.44% 35.17% 36.54% 41.56% Pops 6,140,000 6,458,000 6,589,000 6,589,000 6,589,000 Post-paid Gross Adds 44,100 49,400 59,200 57,900 49,700 Net Adds 22,000 22,100 28,800 31,600 20,700 Subscribers 454,400 477,500 499,900 531,500 552,200 Churn 1.67% 1.95% 2.09% 1.70% 1.79% Average Service Revenue per Subscriber $ 44 $ 43 $ 41 $ 39 $ 41 Average Service and Roaming Revenue per Subscriber $ 74 $ 80 $ 70 $ 69 $ 76 Pre-paid Net Adds (400) (600) -- 300 900 Subscribers 3,900 3,300 3,300 3,600 4,500 Total Net Adds 21,600 21,500 28,800 31,900 21,600 Subscribers 458,300 480,800 503,200 535,100 556,700 Penetration 7.46% 7.45% 7.64% 8.12% 8.45% (1) Includes $1.6 million, $1.3 million $1.5 million, $1.7 million and $2.0 of EBITDA for the quarters ended June 30, 1999, September 30, 1999, December 31, 1999, March 31, 2000 and June 30, 2000, respectively, related to minority interests. Table 5 American Cellular Corporation Consolidated Financial Information ($ in thousands except per subscriber data) (unaudited) (100% American Cellular, exclusive of Dobson operations) For the Quarter Ended 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 Operating Revenue Service revenue $42,254 $45,295 $48,014 $47,953 $53,759 Roaming revenue 30,304 42,807 36,447 31,877 40,015 Equipment & other revenue 2,925 3,623 4,033 3,712 4,972 ------- ------- ------- ------- ------- Total 75,483 91,725 88,494 83,542 98,746 Operating Expenses (excluding depreciation & amortization) Cost of service 13,025 15,524 14,799 15,166 16,701 Cost of equipment 4,360 5,111 6,227 5,196 6,400 Marketing & selling 7,396 7,632 9,106 7,822 9,124 General & administrative 10,717 11,387 10,785 12,186 11,948 ------- ------- ------- ------- ------ Total 35,498 39,654 40,917 40,370 44,173 ------- ------- ------- ------- ------ EBITDA $39,985 $52,071 $47,577 $43,172 $54,573 ======= ======= ======= ======= ======= EBITDA Margin 52.97% 56.77% 53.76% 51.68% 55.27% Pops 4,911,000 4,911,000 4,911,000 4,911,000 4,911,000 Post-paid Gross Adds 40,300 41,800 54,000 44,700 48,100 Net Adds 22,400 23,200 33,300 24,100 26,300 Subscribers 374,800 397,900 431,200 455,300 481,600 Churn 1.66% 1.63% 1.70% 1.60% 1.55% Average Service Revenue per Subscriber $ 39 $ 39 $ 39 $ 36 $ 38 Average Service and Roaming Revenue per Subscriber $ 67 $ 76 $ 68 $ 60 $ 67 Pre-paid Net Adds 200 1,000 1,000 2,800 600 Subscribers 1,500 2,500 3,500 6,300 6,900 Total Net Adds 22,600 24,200 34,300 26,900 26,900 Subscribers 376,300 400,400 434,700 461,600 488,500 Penetration 7.66% 8.15% 8.85% 9.40% 9.95% Table 6 Dobson Operating Company LLC (DOC LLC) Pro Forma Financial Information for cellular operations applicable to Dobson Communications 12.25% Senior Exchangeable Preferred Stock ($ in thousands except per subscriber data) (unaudited) (Includes DOC LLC on a pro forma basis as if all acquisitions had occurred at the beginning of the periods; excludes Dobson/Sygnet and American Cellular) For the Quarter Ended 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 Operating Revenue Service revenue $34,170 $35,509 $35,063 $36,068 $39,010 Roaming revenue 31,859 40,188 34,229 37,739 46,260 Equipment & other revenue 2,539 3,524 3,449 3,359 3,658 ------- ------- ------- ------- ------ Total Revenue 68,568 79,221 72,741 77,166 88,928 Costs & Expenses Cost of service 18,624 22,513 18,764 18,812 21,025 Cost of equipment 4,249 4,244 5,891 6,363 6,389 Marketing & selling 6,945 8,409 9,848 10,233 11,044 General & administrative 10,172 11,668 12,235 11,921 12,090 ------- ------- ------- ------- ------- Total Costs & Expenses 39,990 46,834 46,738 47,329 50,548 ------- ------- ------- ------- ------- EBITDA (1) $ 28,578 $ 32,387 $ 26,003 $ 29,837 $38,380 ======= ======= ======= ======= ======= EBITDA Margin 41.68% 40.88% 35.75% 38.67% 43.16% Pops 3,766,000 4,084,000 4,227,000 4,227,000 4,227,000 Post-paid Gross Adds 25,300 28,700 33,000 32,500 32,100 Net Adds 9,800 10,300 15,100 16,800 15,200 Subscribers 255,000 266,200 276,100 293,100 308,300 Churn 2.07% 2.36% 2.21% 1.84% 1.87% Average Service Revenue per Subscriber $ 45 $ 45 $ 43 $ 42 $ 43 Average Service and Roaming Revenue per Subscriber $ 87 $ 96 $ 86 $ 86 $ 94 Pre-paid Net Adds (400) (600) -- 300 900 Subscribers 3,900 3,300 3,300 3,600 4,500 Total Net Adds 9,400 9,700 15,100 17,100 16,100 Subscribers 258,900 269,500 279,400 296,700 312,800 Penetration 6.87% 6.60% 6.61% 7.02% 7.40% (1) Includes $1.6 million, $1.3 million $1.5 million, $1.7 million and $2.0 of EBITDA for the quarters ended June 30, 1999, September 30, 1999, December 31, 1999, March 31, 2000 and June 30, 2000, respectively, related to minority interests. Table 7 Dobson/Sygnet Financial Information for cellular operations applicable to Dobson/Sgynet 12.25% Senior Notes ($ in thousands except per subscriber data) (unaudited) (Excludes DOC LLC and American Cellular) For the Quarter Ended 6/30/99 9/30/99 12/31/99 3/31/00 6/30/00 Operating Revenue Service revenue $ 24,346 $ 25,450 $ 24,706 $ 25,191 $28,568 Roaming revenue 8,943 11,655 8,484 8,589 9,751 Equipment other revenue 1,394 1,360 1,937 2,110 2,657 -------- -------- -------- -------- -------- Total Revenue 34,683 38,465 35,127 35,890 40,976 Costs & Expenses Cost of service 7,582 8,115 6,975 6,285 8,408 Cost of equipment 2,404 3,242 5,171 5,379 4,899 Marketing & selling 5,406 5,737 6,568 7,007 6,008 General & administrative 5,026 4,986 4,484 5,743 6,053 -------- -------- -------- -------- -------- Total Costs & Expenses 20,418 22,080 23,198 24,414 25,368 -------- -------- -------- -------- -------- EBITDA $ 14,265 $ 16,385 $ 11,929 $ 11,476 $15,608 ======== ======== ======== ======== ======== EBITDA Margin 41.13% 42.60% 33.96% 31.98% 38.09% Pops (1) 2,374,000 2,374,000 2,362,000 2,362,000 2,362,000 Post-paid Gross Adds 18,900 20,700 26,300 25,400 17,700 Net Adds 12,200 11,800 13,700 14,800 5,500 Subscribers 199,500 211,300 223,800 238,400 243,900 Churn 1.15% 1.43% 1.93% 1.52% 1.68% Average Service Revenue per Subscriber $ 42 $ 41 $ 38 $ 36 $ 39 Average Service and Roaming Revenue per Subscriber $ 57 $ 60 $ 51 $ 49 $ 53 Penetration 8.40% 8.90% 9.48% 10.09% 10.33%