Aliant growth strategy proves strong in second quarter


	Aliant growth strategy proves strong in second quarter SAINT JOHN, NB, July 24 /CNW/ - Aliant Inc. (TSE:AIT) today reported solid growth in its second quarter following its Board of Directors' meeting in Saint John. Net income from continuing operations (excluding one-time capital gains and accounting changes to reflect the harmonization of accounting practices in 1999 resulting from the merger) grew 20.8 per cent for the quarter to $ 58.0 million, or $ 0.44 per share compared to $ 48.0 million, or $ 0.38 per share for the same period last year. Reported earnings for the second quarter of 1999, including the capital gains and accounting changes, were $ 0.44 per share. "These strong results are a continuation of our positive first quarter performance," said Stephen Wetmore, President and CEO of the company. "We are achieving solid organic growth in our home territory, while pursuing synergy savings from our merger. At the same time, we are continuing to broaden the base for our future growth through ongoing acquisitions." Year-to-date net income from continuing operations (excluding one-time capital gains) increased 17.6 per cent to $ 102.1 million from $ 86.8 million in 1999. Earnings per common share from continuing operations during the first six months of the year were $ 0.79 compared to $ 0.69 for the same period last year. "Our results demonstrate our superior operating results from our lines of business, and our continued focus on an integrated growth and leveraging strategy," said Mr. Wetmore. "We bring together our world-class companies to provide fully integrated, end-to-end solutions to key vertical markets through the Aliant Premium(TM) model, thus increasing the value of our organization as a whole." Aliant Inc. reported total revenues for the second quarter of $ 563.4 million, compared with $ 513.6 million for the same period in 1999, an increase of 9.7 per cent. The increase is reflective of our strong performances in our wireless, local and Internet services. "We performed well, meeting and exceeding our growth compared to last year in our remote satellite communications and emerging business units. With these first six months behind us, we feel we are well on our way to accomplishing our targets for the year," explained Mr. Wetmore. Total operating expenses for the quarter, excluding cost of revenues, were $304.3 million compared with $293.0 million for the second quarter of 1999, an increase of 3.9%. Expense growth was due to $7.4 million in increased depreciation resulting from acquisition activity and $3.3 million from the adoption of new accounting practices for other post employment benefits. "We're pleased to report that our synergy targets are being met with a year-to-date savings of $ 17.9 million," said Mr. Wetmore. "Our recent announcement of the integration of our two IT companies - MITI and xwave solutions (together known as xwave effective August 1) - will contribute to our synergies as we move forward as one IT company with one brand, and one business strategy." Earnings before interest, taxes, depreciation and amortization (EBITDA) increased by 8.0 per cent to $228.8 million for the quarter, compared to $ 211.7 million for this time last year. << Financial Summary April / May / June (Quarter 2) ------------------------------ Change ($000's except per share amounts) 2000 1999 Change ($) (%) ---- ---- --------- ------ Total operating revenue $563,439 $513,637 49,802 9.7 Total expenses 425,069 384,918 40,151 10.4 EBITDA (excluding one-time gains) 228,778 211,747 17,031 8.0 Net Income from continuing operations 57,986 52,105 5,881 11.3 Net income from continuing operations before accounting policy harmonization 57,986 47,980 10,006 20.8 EPS from continuing operations 0.44 0.41 0.03 7.3 EPS from continuing operations before accounting policy harmonization 0.44 0.38 0.06 15.8 Net income applicable to common shares 57,986 56,105 1,881 3.4 Earnings per average common share 0.44 0.44 - - Cash flow per share 1.23 1.14 0.09 7.9 Average number of common shares outstanding 130,896 126,360 4,536 3.6 Rate of return on average common equity 19.9% 21.0% (1.1%) (5.2) >> During the quarter, Aliant issued 5.62 million common shares at $ 35.60 per share to raise gross proceeds of approximately $ 200 million. Aliant used a portion of the proceeds from this offering to repay debt related to investment in our telecommunications business and in our high-growth areas of remote satellite and information technology. Dividend Declared Aliant continues to return a significant portion of its earnings to its shareholders. The Board of Directors today declared a dividend of $0.225 per common share payable on September 30, 2000 to shareholders of record on September 15, 2000. The Aliant group of advanced technology companies and its staff of 10,000 professionals delivers full service, integrated solutions through its core lines of business: wireline and wireless telecommunications, information technology, remote satellite communications, and emerging business solutions. From its base in Atlantic Canada, Aliant serves consumer and business customers worldwide. More information about Aliant may be found on our Web site: www.aliant.ca. << Summary Highlights April / May / June (Quarter 2) ------------------------------ ($000's except per Change share amounts) 2000 1999 Change ($) (%) ---- ---- ---------- ------ Total operating revenue $563,439 $513,637 49,802 9.7 Total expenses 425,069 384,918 40,151 10.4 Net income from continuing operations before accounting policy harmonization 57,986 47,980 10,006 20.8 Earnings per average common share from continuing operations before accounting policy harmonization 0.44 0.38 0.06 15.8 Aliant Inc. Consolidated Statement of Income Quarter Ended June 30, 2000 (Unaudited) ------------------------------------------------- ---------------------- (dollars in thousands, Three Months Six Months except per-share amounts) 2000 1999 2000 1999 ------------------------------------------------- ---------------------- Revenue Telecommunications Local $ 218,745 $ 206,115 $ 434,003 $ 411,528 Long Distance 104,179 114,518 212,215 223,040 Wireless 51,522 45,039 97,181 84,711 Other 72,742 52,137 110,816 78,845 Information Technology 79,770 63,058 165,525 132,983 Mobile Satellite 44,288 36,717 80,102 69,626 Other 35,304 15,035 70,464 28,973 Intercompany Eliminations (43,111) (18,982) (75,227) (39,545) ----------------------- ---------------------- Total 563,439 513,637 1,095,079 990,161 ----------------------- ---------------------- Expenses Operations 213,893 210,003 428,954 405,080 Cost of Operating Revenue 120,768 91,887 237,131 195,209 Dep & Amortization 90,408 83,028 178,594 166,146 ----------------------- ---------------------- 425,069 384,918 844,679 766,435 ----------------------- ---------------------- - Operating Income 138,370 128,719 250,400 223,726 Other Income 1,087 7,390 4,186 9,411 Financing Costs 31,664 30,660 61,565 60,299 ----------------------- ---------------------- Income Before Taxes 107,793 105,449 193,021 172,838 Income Taxes 49,641 49,403 87,946 81,876 ----------------------- ---------------------- Income Before Non- Controlling Interest 58,152 56,046 105,075 90,962 Non-Controlling Interest 166 (59) 856 122 ----------------------- ---------------------- Net Income applicable to Common Shares $ 57,986 $ 56,105 $ 104,219 $ 90,840 ----------------------- ---------------------- ----------------------- ---------------------- ----------------------- ---------------------- Net Income from Continuing Operations $ 57,986 $ 52,105 $ 102,090 $ 86,840 ----------------------- ---------------------- ----------------------- ---------------------- Average common shares 130,896 126,360 129,473 126,226 ----------------------- ---------------------- ----------------------- ---------------------- EPS Total $ 0.44 $ 0.44 $ 0.80 $ 0.72 ----------------------- ---------------------- ----------------------- ---------------------- Earnings Per Share from Continuing Operations $ 0.44 $ 0.41 $ 0.79 $ 0.69 ----------------------- ---------------------- ----------------------- ---------------------- Aliant Inc. Condensed Balance Sheet June 30, 2000 2000 1999 (thousands of dollars) Amount Amount ------ ------ Assets ------ Current assets $ 760,754 $ 531,779 Capital assets 4,667,663 4,372,724 Accumulated depreciation (2,577,237) (2,386,698) Long term investments 57,812 52,629 Goodwill 172,680 121,379 Deferred Charges 187,475 110,753 ------------ ------------- $3,269,147 $ 2,802,566 ------------ ------------- ------------ ------------- Liabilities and shareholders equity ----------------------------------- Current liabilities $ 627,093 $ 675,313 Long term debt 1,058,332 957,435 Deferred credits 206,709 48,716 Non controlling interest 92,207 35,543 Shareholders equity 1,284,806 1,085,559 ------------ ------------- $3,269,147 $ 2,802,566 ------------ ------------- ------------ ------------- Aliant Inc. Condensed Statement of Changes in Financial Position For the Six Months Ended June 30, 2000 (Unaudited) (thousands of dollars) 2000 1999 ---- ---- Cash from (used in) operations Net income $ 104,219 $ 90,840 Add (deduct) non cash items Depreciation and amortization 178,801 166,146 Other non-cash items (3,765) 491 Share in earnings of equity accounted investments 1,070 195 Non-controlling interest 856 122 -------------------------- $ 281,181 $ 257,794 Change in non cash working capital (159,879) (61,581) -------------------------- $ 121,302 $ 196,213 -------------------------- Cash from (used in) financing Proceeds from (repayment of) long term debt (75,192) (26,782) Proceeds from notes payable 88,558 71,992 Dividends declared (58,867) (49,506) Increase in Non-controlling interest 52,781 950 Proceeds from common shares 213,922 10,675 -------------------------- 221,202 7,329 -------------------------- Cash from (used in) investing Capital expenditures - Net (180,836) (180,123) Merger acquisition costs (8,066) (Increase) in investments (99,748) (32,628) (Increase) Decrease in other deferred charges 514 (16,383) -------------------------- (280,070) (237,200) -------------------------- Increase in cash & cash equivalents 62,434 (33,658) Cash & cash equivalents, beginning of period (13,636) 12,376 -------------------------- Cash & cash equivalents, end of period $ 48,798 $ (21,282) -------------------------- -------------------------- Cash & cash equivalents consist of: Cash $ 66,399 $ - Bank indebtedness (17,601) (21,282) -------------------------- $ 48,798 $ (21,282) -------------------------- -------------------------- Aliant Inc. Consolidated Statistics Quarter Ended June 30, 2000 (Unaudited) Second Second Quarter Quarter 2000 1999 ------- ------- Operating cashflow per share $ 1.23 $ 1.14 Free Cashflow $ (83,574) $ (42,160) Return on average common equity 19.9% 21.0% Capital Expenditures $ 125,157 $ 109,382 Long distance conversations minutes 804,888 675,422 Employees, at June 30 9,981 9,237 Capital Structure Short-term debt $ 243,226 $ 277,786 Long-term debt (includes current portion) 1,112,381 1,080,763 Non-controlling interest 92,207 35,543 Common shareholders equity 1,284,806 1,083,121 ---------------------------- Total capital structure $ 2,732,620 $ 2,477,213 ---------------------------- ---------------------------- Reconciliation of Consolidated EBITDA Telecommunications $ 203,996 $ 202,372 Information Technology 13,159 8,047 Mobile Satellite 7,166 4,281 All Other 4,457 (2,953) ---------------------------- Consolidated EBITDA $ 228,778 $ 211,747 ---------------------------- ---------------------------- >> Aliant Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) June 30, 2000 1. Acquisitions Prior Data Sciences Ltd. On January 31, 2000, xwave Solutions Inc. acquired all of the outstanding common shares of Prior Data Sciences Ltd., a provider of information technology services, for an aggregate purchase price of $30.3 million resulting in goodwill of $26.4 million. Shell Offshore Services Company On April 7, 2000, Stratos Global Corporation acquired the assets of Shell Offshore Services Company, a remote communications provider for an aggregate purchase price of $80.2 million resulting in goodwill of $8.2 million. 2. Accounting policies Effective January 1, 2000, the Company adopted new accounting recommendations in accordance with Canadian Generally Accepted Accounting Practices (GAAP). Accounting standards now require recognition of post-employment benefits as they are earned as opposed to as incurred. The prior years' impact of this change resulted in a $121.2 million liability of which $67.1 million was charged to retained earnings. Canadian accounting standards also required the adoption of a new policy for the accounting of future income taxes. This new policy will present the income tax asset or liability in a manner that will better reflect the underlying transaction or event. With the implementation of this policy, the Company realized an increase of $13 million in the future income tax liability. 3. Share Capital On May 26, 2000, the Company issued 5,620,000 common shares at $35.60 per share for gross proceeds of $200,072,000. BCE and Bell Canada purchased in the aggregate of 2,997,700 shares of the Company in order to maintain their aggregate proportionate interest. On April 7, 2000, Stratos Global Corporation issued 15 million special warrants for net proceeds of $150.1 million by way of a private placement. Each warrant entitles the holder to receive one common share of the Corporation without additional payment following receipt for the final prospectus from the securities regulatory authorities. Receipts were issued by July 5, 2000, with automatic conversion of the warrants on July 13, 2000. 4. Comparative Figures The comparative financial information has been restated to conform with the 2000 presentation. %SEDAR: 00012285EB -30- For further information: Investor Inquiries should be directed to: Doug McDade, Investor Relations, Aliant Inc., (902) 486-2788; Media Inquiries: Jennifer Dicks, Aliant Inc., (709) 739-2605

	Go to Press Releases Index