ACSI lost $34.9 million in 2nd half Budding phone service continued heavy spending

February 21, 1997|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

American Communications Services Inc. said it boosted revenue dramatically in the last months of 1996 but continued to lose millions of dollars as it builds a series of local telephone networks to compete with the Baby Bells.

The Annapolis Junction-based company said it lost $34.9 million during the last six months of 1996, well above its $8.9 million loss for the same period of 1995. The main reason in both years was heavy capital spending: The company poured $64.5 million into capital projects during the second half of 1996.

The second-half loss worked out to $5.48 a share, the company said. The company had previously reported a $3.30-a-share loss for the third quarter of 1996, placing the fourth-quarter loss at $2.18 a share. Analysts who follow ACSI had predicted it would lose $1.48 to $2.39 a share, according to Nelson Publications Inc.

But ACSI did begin to attract more customers last year, as it began to turn its attention toward operating its business.

Revenue rose to $7 million in the last half of the year and $9.4 million for all of 1996, up from $989,000 and $1.4 million for the same periods in 1995.

The push to get more revenue sooner may have caused the recent management upheaval at ACSI. Chief Executive Richard A. Kozak quit in January after being demoted.

The company and Kozak have declined to make detailed public comments, but analysts who follow ACSI have said they think Kozak's strategy of spending aggressively on capital projects in hopes of achieving big long-term gains lost favor as other executives pushed to moderate the pace of network expansion and to boost short-term efforts to sell the services ACSI was already able to provide.

Those include local phone service and high-end data transmission services, both mostly aimed at business customers.

ACSI also serves long-distance carriers by carrying calls from customers' homes or offices out to long-distance networks, whose owners don't have the same house-by-house wiring connections traditional local Bell monopolies do.

Last month, ACSI's revenue prospects for 1997 got a boost when MCI Communications Corp. announced that it would use ACSI's services to carry long-distance calls to its network in 21 cities and that it would resell ACSI's local phone services under the MCI brand in 10 cities where MCI does not plan to build local phone networks.

The value of the five-year deal was not disclosed.

Pub Date: 2/21/97

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