Pegasus Communications Corporation Reports Results For Fourth Quarter And Year Ended December 31, 1999 - Company Financial Information

Cambridge Telcom Report, Feb 21, 2000

Pegasus Communications Corporation (Nasdaq: PGTV) Wednesday reported financial results for the three-month and twelve-month periods ended December 31, 1999. Results, which are attached, are in thousands of dollars, except per share and subscriber data. The following is a summary of the results:

              Three Months Ended             Year Ended
                 December 31,               December 31,
            1999      1998  Change     1999      1998     Change
Net revenues*:
 DBS         $88,172    $51,480   71%   $286,353   $147,142     95%
 Broadcast     9,902     10,762  (8%)     36,415     34,311      6%
 Cable         6,288      1,948  223%     21,158     13,768     54%
Total Net
 Revenues    104,362     64,190   63%    343,926    195,221     76%

Pre-marketing
Cash Flow*:
 DBS          24,905     15,385   62%     85,195     44,723     90%
 Broadcast     1,154      3,175 (64%)      7,298     10,262   (29%)
 Cable         3,019        367  723%      9,789      5,870     67%
Total Pre-marketing
 Cash Flow    29,078     18,927   54%    102,282     60,855     68%

Subscriber Acquisition
 Costs* (SAC) 29,054     20,688   40%    117,774     45,706    158%

Net loss applicable
 to common
 shares**  ($50,490)  ($44,389)   14% ($201,519)  ($93,881)    115%
Net loss per
commonshare**($2.56)    ($2.79)  (8%)   ($10.68)    ($6.64)     61%
Weighted average
 common shares
 outstanding
 (000's)      19,753     15,898   24%     18,875     14,130     34%

DBS Subscriber Data:
 Subscribers - end
  of period  702,081    435,307   61%    702,081    435,307     61%
 Gross subscriber
  additions*  88,111     52,781   67%    337,342    132,739    154%
 SAC per gross
  subscriber
  addition      $330       $392 (16%)       $349       $344      1%
 Net subscriber
  additions*  65,004     38,066   71%    227,772     86,187    164%
 Monthly revenue
per subscriber$45.37     $41.40   10%     $43.94     $41.63      6%
 Monthly contribution
  margin per
  subscriber  $15.28     $14.38    6%     $15.15     $14.68      3%

* Net revenues and pre-marketing cash flow include the results of the Company's remaining cable operations, which are to be sold in 2000. The results of cable operations may be presented as discontinued operations in the Company's audited financial statements prepared in accordance with generally accepted accounting principles.Cable net revenues and pre-marketing cash flow are presented in the above table for informational purposes only. For definitions of pre-marketing cash flow, subscriber acquisition costs, gross subscriber additions and net subscriber additions see "Glossary of Key Terms."

** Includes a gain of approximately $24.7 million on the sale of the Company's New England cable systems in the third quarter of 1998 and an extraordinary loss from the early extinguishment of debt of approximately $6.2 million in the fourth quarter of 1999.

"The fourth quarter represented a strong conclusion to a stellar 1999, a year in which we grew our revenues and pre-marketing cash flow in our core DBS business by 95% and 90%, respectively," said Marshall W. Pagon, President, Chairman and CEO of Pegasus Communications Corp. "In the fourth quarter, DBS continued to perform well, as monthly revenue per subscriber grew 10% and monthly contribution margin per subscriber grew by 6%. Overall penetration in our markets, pro forma for pending acquisitions (including the acquisition of Golden Sky), increased to 15.3% from 14.0% at the end of the third quarter. These per subscriber and penetration figures are a testament to the strength of our retail distribution network and our increasing critical mass, which will enable us to serve our growing customer base more efficiently.

"Entering 2000, we have already embarked on an aggressive growth clip, highlighted by our announcement in January to acquire Golden Sky, the second largest independent provider of DIRECTV," Mr. Pagon further commented. "When completed, the acquisition of Golden Sky will put Pegasus at over 1.1 million subscribers, ranking us among the nation's top ten multichannel video providers. We anticipate continuing to consolidate the remaining independent providers of DIRECTV. In January, we also closed on a $700 million credit facility and completed a $300 million offering of convertible preferred shares. Finally, in January we also announced a preliminary agreement to sell our cable system in Puerto Rico for $170 million. We intend on using our cash and available credit to aggressively grow our DBS business and to introduce new digital services through our retail network later this year, including broadband Internet access and other satellite-delivered advanced digital services."

RESULTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO SAME PERIOD ENDED DECEMBER 31, 1998 The Company's net revenues increased $40.2 million, or 63%, to $104.4 million for the quarter ended December 31, 1999 compared to the same period in 1998. Pre-marketing cash flow increased $10.2 million, or 54%, compared to the same period in 1998. The Company's net loss applicable to common shares increased $6.1 million to $50.5 million for the quarter ended December 31, 1999 compared to the same period in 1998.