| Focal Communications (FCOM) is a rapidly growing CLEC (competitive local exchange carrier) that provides data, voice and co-location services in large metropolitan markets.
A majority of the company’s revenue is currently derived from the provision of switched data services for its targeted customers. Due to customer demand, the company is deploying additional services such as high-speed data access using DSL technology and nationwide networking using ATM technology. As of Dec. 31, the company had sold 240,000 access lines, (+280 percent increase) of which 180,000 were installed and in service.
Recently the company issued a press release about earnings which reported record results for the quarter ended March 31. Focal installed almost 60,000 new access lines during the first quarter of 2000, compared to 44,000 during Q499. In addition, the company sold 55,000 additional access lines during the quarter bringing its total number of access lines sold to 290,000.
Revenue increased 74 percent during the first quarter of 2000 to $45.3 million. On a sequential basis, revenue increased 26 percent from $36 million in Q499. As a result of the strength in its existing business, Focal now expects to install at least 250,000 new access lines during 2000, an increase from the company’s prior estimate that it would install over 225,000.
For the fiscal year ended 12/31/99, revenues totaled $127 million, up from $43 million. Net loss totaled $22 million, up from $8 million. For the 3 months ended 03/31, revenues were $45 million with an after tax loss of $21 million. Capital expenditures for the first quarter of 2000 were approximately $52 million and are expected to total approximately $300 million for the entire year. Total cash remains over $400 million.
Robert Taylor, president, said, “We continue to experience significant growth in both our data services and telecom services businesses.”
Financing Growth. On January 7, 2000, Focal issued $275 million of notes. In recent news, Focal withdrew a proposed public offering of 7 million shares because of poor market conditions. They said it has sufficient capital to support operations through the Q201. They were going to sell 4 million shares in the offering. Stockholders, including company executives and board members, were to sell 3 million.
Focal has a $1.9 billion market cap.
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