AirGate PCS reported a net loss of $9.8 million, or $0.82 per share, in the three months ended December 31, 1999 compared with a net loss of $1.6 million, or $0.47 per share, in the same period of 1998. EBITDA (earnings before interest, taxes, depreciation and amortization), was ($5.8) million for the first quarter of 2000, compared with ($1.0) million for the same period a year ago.
The Company’s operating expenses increased to $6.5 million in the three months ended December 31, 1999 from $1.2 million in the same period of 1998, primarily due to expenses related to the build-out of the PCS network.
From inception in June 1995 through the period ending December 31, 1999, the Company’s operating activities were focused on developing a PCS business in the southeastern United States. During this period AirGate PCS did not generate any significant revenues and, as a result, has incurred operating losses since inception. The operating results for the three months December 31, 1999 are not indicative of the anticipated results of operations which the Company expects to achieve, following commencement of commercial operations, as a Sprint PCS affiliate.
The first quarter of fiscal 2000 was highlighted by a number of key strategic events, said Thomas M. Dougherty, president and chief executive officer of AirGate PCS. As previously announced, the I-85 corridor in South Carolina between Atlanta, Georgia and Charlotte, North Carolina opened for roaming coverage prior to Thanksgiving, marking our first phase of roaming coverage. In addition, we made final preparations for the launch of the Company’s initial phase of commercial operations in Greenville-Spartanburg and Anderson, South Carolina on January 3, 2000; and in Asheville and Hickory, North Carolina on January 10, 2000. All of these operating milestones occurred ahead of schedule. AirGate now has the opportunity to offer exceptional Sprint PCS products and services to over 1.5 million residents in the combined regions, in addition to providing roaming coverage along the heavily traveled I-85 corridor.
Our financial results continue to reflect the considerable investment associated with the completion of our network build-out and the initial launch of commercial PCS service. We believe we have proven our ability to execute our business strategy as evidenced by the significant progress we have made in our PCS network build-out plan. As of January 20, 2000, we are well ahead of schedule with 86% of the cell sites in our territory leased and over half of the cell sites under construction or completed. In addition, our first switch is operational, a second switch has been declared network ready by Sprint PCS and the third switch is in the installation stage.
We are very pleased with our operating results to date and expect to have our PCS network complete and fully operational in the rest of our market region with over 6.8 million potential POPs by the end of 2000. With the continued execution of our strategy, we believe we can quickly gain significant market share in our territory and leverage the brand name of Sprint PCS, the fastest growing wireless operator in the nation, Dougherty concluded.
