0001056114-01-500028.txt : 20011101
0001056114-01-500028.hdr.sgml : 20011101
ACCESSION NUMBER: 0001056114-01-500028
CONFORMED SUBMISSION TYPE: 8-K
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20011030
ITEM INFORMATION: Other events
FILED AS OF DATE: 20011030
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CTC COMMUNICATIONS GROUP INC
CENTRAL INDEX KEY: 0001092319
STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385]
IRS NUMBER: 043469590
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 8-K
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-27505
FILM NUMBER: 1770309
BUSINESS ADDRESS:
STREET 1: 220 BEAR HILL RD
CITY: WALTHAM
STATE: MA
ZIP: 02451
BUSINESS PHONE: 7814668080
MAIL ADDRESS:
STREET 1: 220 BEAR HILL RD
CITY: WALTHAM
STATE: MA
ZIP: 02154
8-K
1
qtrpr2.txt
CTC FORM 8-K DATED 10-30-01
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report October 30, 2001
(Date of earliest event reported) (October 30, 2001)
CTC COMMUNICATIONS GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-27505 04-3469590
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
220 Bear Hill Rd., Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip Code)
(781) 466-8080
(Registrant's telephone number including area code)
(Former name or former address if changed since last report)
Item 5. Other Events
On October 30, 2001, the Registrant issued the following press release:
CTC Communications Group Reports Record Revenue and Operating Results
for the Quarter Ending September 30, 2001
Quarterly Highlights
-September 11th Events Adversely Effect Quarterly Results;
Strong Progress Made Nonetheless
-Quarterly Revenue of $78.2 million
-Annualized Revenue Run Rate of $312 million
-100 Basis Point Increase in Margin from the June Quarter
-29% Improvement in EBITDA Losses from the June Quarter
-30,400 Increase in Access Lines in Service
-565,800 Total Access Lines in Service
-24% Increase in Customer Locations On-Net from the June Quarter
-4,200 Total Customer Locations On-Net
-Fully Funded Business Plan
Waltham, MA, October 30, 2001-CTC Communications Group (NASDAQ NM:
CPTL)- today reported record results for the September quarter, despite
the adverse effects of a weak economy and the events of September 11th
and, reaffirmed the strength of its business model to expand margins and
fuel the Company's rapid movement to profitability.
For the quarter ended September 30, 2001, the Company reported revenues
of $78,166,000, a 37% increase over the $56,994,000 for the quarter
ended September 30, 2000 (adjusted for SAB 101) and a 5% increase over
the $74,512,000 reported for the quarter ended June 30, 2001.
For the quarter ended September 30, 2001, the Company reported margin as
a percent of revenue at 20.7 % which represents a 100 basis point
improvement from the June 30, 2001 quarter and EBITDA loss of $4,224,000
representing a 29% improvement from the June 30, 2001 quarter.
The Company added 30,400 access line equivalents (ALE's), net of churn,
in the quarter bringing total ALEs in service as of September 30, 2001
to 565,800 which represents a 6% sequential growth rate in total ALEs in
service over the quarter ended June 30, 2001.
The Company added 812 customer locations to its PowerPath(SM) network in
the September quarter bringing total on-net customer locations in
service as of September 30, 2001 to 4,200, which represents a 24%
sequential growth rate over the quarter ended June 30, 2001. The Company
ended the September quarter with approximately 12% of its access lines
on its network.
Other September quarter financial metrics included annualized revenue of
$439,000 per employee and an accounts receivable balance at 53 days
sales outstanding (DSOs), both industry-leading levels.
For the September quarter, the Company was in compliance with its bank
facility covenants. Given the current economy and events of September
11th, the Company amended its bank facility covenants into the future to
be more reflective of the current economic and operating environment.
The Company intends to be in compliance with the amended bank facility
covenants on a going forward basis.
Revenue grew 5% on a sequential basis and remained relatively strong
particularly in light of the difficult economic environment, which was
further worsened by the events of September 11th. In June 2001, the
Company entered Phase 3 of its business model, which is to start moving
its existing resale customer base onto its network and drive substantial
margin improvement. The Company currently has approximately 15,000
existing customers and when it moves one of them to its network, it
doubles the margin associated with that customer's revenue. In June, the
sales force was directed to focus on customer migration to the network
as a top priority and resale revenue growth as a lesser priority.
September quarter results demonstrate the benefits of this on-net focus
and priority. On a sequential basis, revenue grew $3.7 million while
margin grew $1.5 million and EBITDA loss was reduced by $1.7 million.
These results demonstrate strong margin performance with margin growing
faster than revenue and EBITDA improvement growing faster than margin.
From a network perspective, in the September quarter the Company
expanded its on-network local dial tone services to eastern
Massachusetts, New Hampshire and Maine, expanded customer access to its
PowerPath(SM) Network by adding 21 new fiber access locations and, began
marketing data center based new services enabled by its recently
completed Advanced Technology Center.
The Company also filed for a United States Patent on its PowerPath(SM)
Network infrastructure. The PowerPath(SM) Network is a unique and
integrated communications system (ICS) that combines all voice and data
communications on a single systems architecture and a single connection
to the customer. It enables communication between that customer and any
other person, business, database or information source in the world. The
Company considers its network infrastructure a new invention. The
overall network communications system integrates three primary sub-
systems that enable voice and data communications at substantially lower
cost, significantly higher functionality and meet or exceed all
technical and operating standards. The PowerPath(SM) Network, although
totally different from current network architectures, is a 100%
replacement for these current network architectures.
Bob Fabbricatore, Chairman and CEO stated, "In the September quarter, we
realized improvement in virtually every income statement metric. These
results further validate the strengths of the Company's business model
and its ability to expand margins. The Company is focussed on the right
things in this economic and financial market environment; profitable
growth, margin improvement, prudent business management and maintaining
its fully funded plan. We believe that the Company is uniquely able to
deal with the effects of a slow economy and, at the same time, continue
to improve financial performance by capturing the margin opportunities
inherent in our existing customer base and network technology. This is
what the Company is focussed on and what Phase 3 of the business model
is all about; putting the existing resale customers on the network,
expanding margins and moving rapidly to profitability. The economy may
have a dampening effect on our top line growth, and delays and
disruptions associated with the tragic events of September 11th affect
our results in the short run, but they do not impair the Company's
opportunity to grow margins and move to profitability."
Fabbricatore continued, "The events of September 11th coupled with
depressed access line growth associated with the economy results in the
Company revising its estimate of EBITDA positive from the December 2001
quarter to the March 2002 quarter. The events of September 11th affected
our on-net growth from two perspectives. Emergency restoration efforts
by Verizon and other carriers in New York necessitated the re-assignment
of personnel from growth activities to restoration activities. This
resulted in a three-week delay in processing orders for over 350 new
customer locations moving onto the network. Additionally, sales activity
following September 11th virtually came to a halt for two weeks and then
returned slowly as the business community, and all of us, were consumed
by these events, their devastation and America's response. In addition,
the Company experienced a deepening pare back of ALEs within its
existing resale base, as customers continued to adjust to the down
economy. These two factors offset well over $1 million in expected
September margin and, the carry over of that margin into the December
quarter. We basically took 3 to 4 weeks of downtime in on-net production
and on-net sales. This delay pushed our timing back just enough to place
December quarter EBITDA out of reach. The Company may attain EBITDA
positive for the month of December, but for the quarter, our guidance
must now be the March 2002 quarter. This is a disappointment but it is
only one of timing. The 350 on-net customers are installing now and the
sales cycle is back up to speed. There is no change in our plans to
attain free cash flow and positive net income during the first half of
2003."
Fabbricatore concluded by saying, "With all the distractions in the
current economy and market environment, it is easy to overlook, or
arbitrarily discount, the strengths and performance that characterize
the Company's current results and its foundations for future success.
The Company feels that it has the best business model in the industry.
It is an industry leader in productivity and operating efficiency. It
has an advanced technology network infrastructure that replaces today's
traditional voice and data networks at far lower cost and, is so unique
that the Company has filed for a United States patent. All of these are
unique, enduring and industry leading attributes. The Company is also
focussed on the right things in this down economy, effectively managing
profitable growth, is fully funded and moving rapidly to profitability.
The economy and events of September 11th have not dampened the Company's
enthusia(SM) for what we have built, the numbers we are attaining or our
ongoing commitment to increasing shareholder value. We are effectively
executing today, looking toward a very bright future and will continue
to solidify and build on our industry leadership position".
Positive EBITDA and Free Cash flow
The Company expects to attain positive EBITDA in March 2002 quarter,
will expand EBITDA throughout 2002 and expects to attain free cash flow
and positive net income during the first half of 2003. This progression
will be dependent upon the Company's continued execution of four primary
initiatives; 1.) moving its existing resale customers onto the network,
which doubles the margin associated with those customers, 2.) reducing
its network cost of goods, primarily by replacing currently leased
network facilities with owned and operated fiber facilities, 3.) revenue
growth associated with new data center based services and applications,
which will begin in the December quarter of this year and, 4.) ongoing
attention to efficiently managing the Company's capital, cash and human
resources.
1.) In the September quarter the Company grew its on-net revenue by $2.6
million primarily by moving its existing resale customers onto its
network. This represents a 46% increase in on-net revenue from the June
quarter. As of September 30, 2001, the Company had 15,000 customers
generating $78.2 million in quarterly revenue. $70.0 million of this
revenue is on the Company's resale platform and $8.2 million is on the
Company's network. Margin on resale revenue is 22% and incremental
margin on network revenue is 50% plus. Each dollar of revenue the
Company moves from its resale platform to its network platform, doubles
the margin realized from that dollar of revenue. The Company anticipates
growing its on-net voice, data and Internet services to over $150
million in calendar year 2002.
2.) The Company currently has 4,200 customer locations on its network
and seeks to increase that number to over 5,500 by year-end 2001 and
over 16,000 by year-end 2002. The Company is positioning itself to
support this accelerated level of network growth with planned network
switching capacity, fiber bandwidth capacity, OSS and systems for
ordering, provisioning and installation and field resources associated
with installation and customer conversion. The Company expects to
progressively increase its on-net production process to 1,000 customer
locations a month in the spring of 2002. The sales and service force is
focused on moving the Company's existing resale customers onto the
network as a top priority and, operations is equipped to process and
execute the order volume.
In the September quarter the Company reduced its monthly network cost of
goods expense by $200,000 from its June baseline and expects to realize
$500,000 in further reductions by the end of the first quarter of 2002.
These cost reductions are primarily associated with replacing leased
broadband facilities with CTC owned and operated fiber facilities. The
Company's June baseline was $1.4 million a month for leased facilities
that connect its customers from the ILEC local switching office to its
network. Many of these leased facilities will be replaced with CTC owned
and operated fiber. This replacement began in May of 2001 and will
continue into 2002. As the Company's fiber is placed in service,
existing network customers in those locations are re-assigned from
leased facilities to the CTC fiber and the leased facilities are
disconnected. The Company currently has 22 fiber access locations in
service and customer re-assignment is ongoing. The Company plans to
progressively install and place in service a total of 60 fiber access
locations by the end of March of 2002. In addition to reducing its
current network costs, the Company will avoid future leased costs for
existing resale customers in these 60 locations that are moved onto the
network.
In the early stages of its network deployment, the Company leased the
long haul fiber facilities that interconnected its packet switches as
well as the broadband facilities that connected customers to its packet
switches. In 2000, the Company elected to purchase its own long haul
fiber and discontinue the leasing of long haul facilities. In late 2000
and early 2001 the Company elected to purchase its own metropolitan and
suburban fiber, began taking delivery in May of 2001 and is
progressively placing it in service in 60 locations. This fiber, when
installed, will enable the leased broadband facilities for on-net
customers in these 60 locations to be disconnected. The Company made the
decision to purchase its own fiber facilities to reduce network costs,
eliminate dependency on leased facility providers, improve its network
provisioning interval from 90 days to 30 days and to have the
independent capability to manage the growing bandwidth needs of its
customers and network infrastructure.
3.) In June of 2001, the Company completed construction of its Advanced
Technology Center (ATC) located in Waltham, Massachusetts. The ATC is a
50,000 square foot, multifunctional Class A building housing network
switching and fiber tran(SM)ission equipment, applications development
platforms and a data center for CTC retail business customers. These
three primary uses of the ATC enable CTC to reduce network costs,
provide exceptional speed to market for new products and applications
and, facilitate CTC customer outsourcing of mission critical equipment
and applications
In the September quarter, the Company completed development of its
managed storage product line and began marketing these products to its
customer base. The storage product line includes remote data storage,
retrieval and managed storage services that are expected to begin
generating revenue in the fourth quarter of 2001. In 2002, the Company
plans to develop and offer additional products, either internally or
through portal partners, including web-hosting, messaging and managed
network services. Advanced Technology Center revenues are targeted to be
at a $20 to $25 million annualized run rate by the fourth quarter of
2002.
4.) The Company will continue to strive to effectively manage the
business and maintain its fully funded business plan.
For the remainder of 2001, total employees are anticipated to remain in
the 710 to 725 range and SG&A expenses should grow conservatively. SG&A
as a percent of revenue is expected to moderate to the 24% to 26% range
by year-end from its September quarter level of 26%.
As of September 30, 2001, the Company had $101 million in cash. Cash
consumption should moderate for the remainder of 2001, supported by
continued EBITDA improvements on a going forward basis and continued
utilization of lease financing options. In the September quarter, the
Company drew-down the remaining $100 million of its bank facility which
will be primarily used for working capital and capital requirements. The
Company does not anticipate any need for additional capital to achieve
profitability within its current business plan.
Capital expenditures for the December 2001 quarter should continue at
the current pace of $83 million for the first nine months of 2001, thus
allowing the Company to remain within its estimates of $110-120 million
for calendar year 2001. Calendar year 2002 capital expenditures are
anticipated to be in the $75 million to $85 million range, with an
increasing percent of this capital spending being success based and
utilized to move customers onto the network. The Company expects to
continue to utilize capital leases from multiple sources to finance
these investments whenever possible.
The Company will continue to strive to maintain its Industry leading
results in revenue quality, productivity, the management of its
receivables and minimizing bad debt.
Attaining Net Income Profitability
The Company's progress to net income profitability will be enabled by
three primary attributes of its business model; 1.) its current customer
base, 2.) the advanced technology it selected and deployed and, 3.) the
capital structure that comprises its fully funded business plan
1.) The Company has built a major customer base of over 15,000 medium
and large business clients generating over $23 million in monthly
revenue on its resale platform. The majority of these customers average
over 40 lines, have multiple business locations and are data intense
users. They are ideal candidates in size, networking need, and
consumption levels to move to the Company's network.
The Company has already acquired these customers. Today, the Company is
providing these customers with their voice and data services on a resale
basis, billing them under the CTC brand and providing them the full
array of customer service and account management functions. In short, as
CTC customers, they already have a strong relationship with the Company
and are open and supportive to working with the Company to improve their
services and reduce their costs. Both of these improvements are inherent
in the Company's network.
The Company is not dependent on selling new applications to convince
customers to move to its network. The Company's network is a lower cost
replacement for today's legacy voice and data networks. When the Company
moves a resale customer to its network the customer saves 10% to 35% on
the existing voice and data services they are already using. The Company
realizes margins of 50% plus on that customer's network revenue.
2.) Within its fully funded business model, the Company has been
progressively building out its network and seeks to have sufficient
capacity to support in excess of 10,000 customer locations on the
network by year-end 2001. The network will be progressively scaled in
2002 to keep pace with the Company's expectation of over 16,000 customer
locations on-net by year end 2002.
Unique to the Company's advanced technology is the fact that the
individual customer voice and data services on its network do not vary
significantly in the margins they generate. Since all voice and data
services are provided over a single broadband connection to the customer
and processed by a single network, margins are a function of overall
fixed costs with little to no variable cost difference between
individual voice and data services. Although the array of voice and data
services for any particular customer are part of the provisioning and
operations aspects of the network, from a margin perspective, the
Company is relatively indifferent to the individual services mix. All
services generate margins at or above 50%.
The Company's advanced network technology mosaic includes a packet-
based, IP+ATM switching network interconnected with high-speed fiber
tran(SM)ission facilities and centralized development and services
delivery platforms at its Advanced Technology Center. This mosaic is
integrated and managed by the Company's Management Information Platform
and its underlying array of Operating Support Systems and Business
Support Systems. Customers are connected to the network over a single
broadband access facility to their location and all of their voice, data
and Internet services are provided over a single access facility and
processed by a single network. From both a capital and operating
perspective, this arrangement is far less costly and much more efficient
than traditional voice and data network technologies. This integrated
communications system, its sub-systems and its capital and operating
efficiency formed the basis of the Company's application for a United
States patent.
The Company has progressively selected technology and developed
applications that have equipped its network to be a lower cost,
replacement for today's legacy voice, data, and hybrid networks. In late
1999, the Company began by providing data and Internet services on the
network. In early 2000, dedicated long distance voice was added to the
network. In 2000, the Company equipped its packet network with a
softswitch and in early 2001 switched long distance and local dial tone
voice services were added to the network.
The Company's September quarter resale revenue was $70.0 million. Today,
over $35 million of this resale revenue is eligible for movement to the
Company's network and virtually 100 % will be eligible for movement to
the network in the second quarter of 2002.
Currently the Company's network provides dedicated long distance voice,
data and Internet services throughout its Northeast and Mid-Atlantic
States operating area. The switched long distance and local dial tone
services that were added earlier this year are in the process of
implementation and are currently available only in Massachusetts, New
Hampshire and Maine. These voice services are being progressively
implemented on a state-by-state basis and it is estimated that they will
be available across the Company's entire operating area by the end of
the second quarter of 2002.
3.) The Company has raised $500 million in capital to support execution
of its business plan. This consists of $225 million in Bank Lines, $200
million in Preferred Equity and $80 million in common equity. In
addition, the Company has also entered into capital leases currently at
the $95 million level.
The Company's capital structure does not include any high yield debt or
extraordinary financing arrangements. The Company's capital structure
results in an average cost of debt of less than 12%.
The Company does not anticipate any need for additional capital to
achieve profitability within its current business plan.
-- September 30, 2001 Quarterly Analysis --
Summary
From an operating perspective, the Company generated record revenues and
access lines in service, improved margins, continued to prudently manage
its cash, maintain its fully funded business plan and, continued to
effectively manage profitable growth in this soft economy.
Revenue and Margin Analysis
During the quarter ended September 30, 2001, CTC increased its local
service revenues from $43.1 million in 2Q01 to $44.3 million in 3Q01, or
3% sequentially, due primarily to continued success at acquiring and
retaining medium and larger sized business customers in a difficult
economic environment.
Toll revenues for the quarter increased from $18.0 million in 2Q01 to
$18.1 million for 3Q01 or 1% sequentially. The Company continued to grow
toll revenues due to increased customer penetration and higher minutes
of use. Growth was somewhat mitigated by seasonality and the events of
September 11, 2001.
Data revenues for the quarter increased from $13.4 million in 2Q01 to
$15.8 million in 3Q01, or 18% sequentially, due primarily to continued
strong demand for the Company's broadband PowerPath(SM) network.
Margin for the quarter increased from 19.7% in 2Q01 to 20.7% in 3Q01.
This increase is due primarily to the migration of customers onto our
PowerPath(SM) network.
Selling, general and administrative expenses (SG&A), excluding
depreciation and amortization, decreased from $20.6 million in 2Q01 to
$20.4 million in 3Q01, reflecting the effects of the Company's ongoing
cost management efforts.
EBITDA losses decreased from $5.9 million in 2Q01 to $4.2 million in
3Q01 due to the increase in margin and the reduction in SG&A expenses.
Net losses, including preferred stock dividends and accretion costs,
increased from $32.5 million ($1.21 per share) in 2Q01 to $35.2 million
($1.30 per share) in 3Q01, due primarily to the increased depreciation
and amortization.
Investor Conference Call
The Company will host its September Quarter investor conference call on
Tuesday October 30, 2001 at 1:15 PM Eastern Time.
There will be an initial presentation by management and then the lines
will be opened for questions and answers. Topics will include operating
results for the quarter as well as other appropriate subjects.
In addition to the standard call in procedure, this Investor Conference
Call will be audio broadcast live over the Internet for those who would
like to participate via this medium. It should be noted that the
Internet audio broadcast is listen only and there is no capability to
ask questions.
To participate via the traditional dial in conference call, please call
877-797-1768 and ask for the CTC Communications Group Conference call.
The call will start promptly at 1:15 PM Eastern Time.
To participate via the audio broadcast on the Internet, please access
www.ctcnet.com, follow the link on the home page and register using the
password: ctc103001. The call will start promptly at 1:15 PM Eastern
Time.
For those unable to participate, the conference call will be replayed
through November 7, 2001. Please call 877-519-4471 and use PIN# 2911410
for the replay. Replay will also be available through November 7, 2001
under the Investor Relations section of CTC's website at www.ctcnet.com.
Please register using the password: ctc103001.
About CTC Communications
CTC is a rapidly growing "next generation" Integrated Communications
Carrier utilizing advanced technology and providing its customers with
converged voice, data, Internet and video services on a broadband,
packet-based network. The Company serves medium and larger business
customers from Virginia to Maine, which includes the most robust
telecommunications region in the world-the Washington D.C. to Boston
corridor. CTC was managing more than 565,000 access lines as of
September 30, 2001.
CTC's Cisco Powered IP+ATM packet network and its 450 member sales and
service teams, provide contiguous marketing and technology coverage
throughout the Northeast and Mid-Atlantic States. The Company, through
its dedicated commitment to exceptional customer service, has achieved
an industry-leading market share in the Northeast. CTC can be found on
the worldwide web at www.ctcnet.com.
The statements in this press release that relate to future plans, events
or performance are forward-looking statements that involve risk and
uncertainties that could cause actual results to differ materially from
those reflected in the forward-looking statements including the
attainment of EBITDA positive, free cash flow and net income positive
results, improved margins, network and fiber deployment plans and
schedules, revenue growth, resale customer movement to the network,
network applications and services development and deployment, financial
results, operating metrics expectations, reduced operating costs, the
effects of the current economic conditions, the events of September 11,
2001 and attainment of a U.S. patent on the PowerPath(SM) Network .
Readers are, accordingly, cautioned not to place undue reliance on these
forward-looking statements. Additional information about these risks and
uncertainties is set forth in the Company's most recent report on Forms
10-K and 10Q. CTC undertakes no obligation to release publicly the
results of any revisions to these forward-looking statements that may be
made to reflect results, events or circumstances after the date hereof.
###
Finance Contact:John Pittenger Media Contact: Alan Russell
CTC COMMUNICATION CTC COMMUNICATIONS
781-466-1302 (t) 781-522-8731 (t)
pitt@ctcnet.com arussell@ctcnet.com
www.ctcnet.com www.ctcnet.com
CTC Communications Group, Inc.
Balance Sheet
September 30, December 31,
2001 2000
Assets
Cash and cash equivalents $100,649,591 $80,029,442
Accounts receivable, net 45,360,645 43,137,423
Other current assets 6,737,851 10,137,037
Total current assets 152,748,087 133,303,902
Property and equipment (net) 228,766,659 195,741,815
Other assets 12,238,124 15,082,876
Total Assets $393,752,870 $344,128,593
Liabilities and Stockholders' Deficit
Capital Leases/ Notespayable $36,162,802 $29,039,834
Accounts payable and accrued expenses 52,545,821 52,743,629
Total current liabilities 88,708,623 81,783,463
Capital Leases Long Term 58,514,840 52,763,576
Notes payable Long Term 227,705,828 103,018,589
Total long term debt 286,220,668 155,782,165
Series B Preferred Stock 217,783,560 203,249,272
Stockholders' deficit (198,959,981) (96,686,307)
Total Liabilities and Stockholders' Deficit $393,752,870 $344,128,593
CTC Communications Group, Inc.
Statements of Operations
Three months ended September 30,
2001 2000
Restated *
--------------- -----------------
Total revenues: $78,166,156 $56,993,993
Costs and expenses
Cost of telecommunication revenue 61,989,987 44,386,041
(excluding depreciation)
Selling, general and administrative 20,400,071 20,433,701
Depreciation and amortization 20,301,786 11,975,575
Total costs and expenses 102,691,844 76,795,317
Loss from operations (24,525,688) (19,801,324)
Interest income/(expense) (5,700,915) (2,100,116)
Net Loss (30,226,603) (21,901,440)
Preferred stock dividends and accretion 4,935,531 4,539,531
Net loss applicable to
common stockholders ($35,162,134) ($26,440,971)
EBITDA (4,223,902) (7,825,749)
Loss per common share:
Basic and diluted ($1.30) ($1.01)
Shares in computing Loss per common share
Basic and diluted 27,035,449 26,267,495
* Restated for SAB101 adoption April 1, 2000.
CTC Communications Group, Inc.
Statements of Operations
Nine months ended September 30,
2001 2000 2000
Pro forma *
-------------------------------------------------
Total revenues: $ 220,299,607 $ 154,622,734 $ 152,972,597
Costs and expenses:
Cost of telecommunication revenue 177,186,737 119,253,701 118,471,654
(excluding depreciation)
Selling, general and administrative 62,187,790 53,468,473 53,441,486
Depreciation and amortization 54,030,546 28,010,674 28,010,674
Total costs and expenses 293,405,073 200,732,848 199,923,814
Loss from operations (73,105,466) (46,110,114) (46,951,217)
Interest income/(expense) (13,683,542) (9,412,259) (9,412,259)
Loss before extraordinary item and cumulative
effect of change in accounting principle (86,789,008) (55,522,373) (56,363,476)
Extraordinary item- early extinguishment of debt - (2,430,456) (2,430,456)
Loss before cumulative effect of change in
Accounting principle (86,789,008) (57,952,829) (58,793,932)
Cumulative effect of accounting change
in principle - (2,878,949) (2,878,949)
Net Loss (86,789,008) (60,831,778) (61,672,881)
Preferred stock dividends and accretion 14,534,288 7,376,398 7,376,398
Net loss applicable to common stockholders ($101,323,296) ($68,208,176) ($69,049,279)
EBITDA (19,074,920) (18,099,440) (18,940,543)
Loss per common share:
Basic and diluted ($3.78) ($2.71) ($2.75)
Loss per common share before cumulative
effect:
Basic and diluted ($3.78) ($2.60) ($2.63)
Loss per common share before extraordinary
item and Cumulative effect:
Basic and diluted ($3.78) ($2.50) ($2.54)
Shares in computing Loss per common share
Basic and diluted ** 26,837,277 25,142,455 25,142,455
* Proforma reflects the nine months ended September 30, 2000
under applicable provisions of SAB101
** recalculated the weighted average shares for the proforma
nine months ended September 30,2000.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized on October 30, 2001.
CTC COMMUNICATIONS GROUP, INC.
By: /s/ John D. Pittenger
John D. Pittenger,
Executive Vice President, Finance and Administration