Weblink Wireless Posts Record Consolidated EBITDA

Dallas-based WebLink Wireless Inc. reported its fourth-quarter results as it received first delivery of two-way wireless data subscriber devices this week. The company reported record consolidated EBITDA despite the considerable carrying cost of the company's nationwide two-way wireless data network. The $7.8 million negative EBITDA of the Wireless Data Division (formerly known as the PCS Division) for the three months ended Dec. 31, 1999, was offset by the Traditional Paging Division's $21.0 million EBITDA. A year ago, the divisions had $4.6 million negative EBITDA and $15.9 million EBITDA, respectively.

Wireless Data Division
Prior to wireless data device availability, the company has used the advanced network to sell assured paging; however, management believes the market is increasingly demanding two-way services instead of enhanced one-way paging. In the fourth quarter, the company added 12,574 assured paging customers after adding 3,484; 20,157; and 24,585, respectively, in the first three quarters of 1999.

The Wireless Data Division's EBITDA improved slightly from the prior quarter to a negative $7.8 million as the company added $1.0 million in recurring revenue from assured paging. The EBITDA carrying cost of the network while waiting for devices is about $7 to $8 million per quarter.

Traditional Paging Division
WebLink Wireless Traditional Paging Division reported record EBITDA of $21.0 million for the fourth quarter on $60.9 million of net revenues vs. $15.9 million of EBITDA on $62.9 million of net revenues over the same period a year ago.

The company reported a 2.4% decline of 63,177 units in its traditional paging base. It believes its traditional base will continue to decline, reflecting the market for traditional paging in general. The first quarter will include an anticipated 55,000-unit decline by a major reseller. In addition, the company no longer will report any Canadian units in service (42,067 units at Dec. 31, 1999) due to the sale of its Canadian paging operations.

Consolidated balance sheet and cash flow items
Total capital expenditures for the fourth quarter were $10.3 million. The company's cash balance increased from $6.2 million at the beginning of the quarter to $10.4 million at the end of the quarter as EBITDA for the fourth quarter exceeded capital expenditures by $2.8 million. The company's bank debt remained at $25 million on its $100 million line of credit.

Edited by Ellen Jensen