Universal Access bucks trend with record results, high expectations

Bucking a financially depressed industry-wide trend, network interconnections supplier Universal Access Global Holdings announced record fourth-quarter results and suggested things will continue to get better in 2002.

Universal Access results include

-- Quarterly revenues that rose 16% to $35.7 million

-- Full-year revenue growth of $139% to $122.4 million

-- Positive EBITDA in December

-- A $60.7 million cash balance

The results were not achieved without some pain, the company conceded, including a cost-cutting program introduced in August that included corporate-wide layoffs. Nevertheless, Chief Financial Officer Bob Brown said he is optimistic the growth trend will continue throughout 2002.

“As the economy suffers, our value proposition remains strong,” Brown said. “We can provide off-net provisioning faster and better than anyone else, thus increasing efficiencies and lowering costs for our customers.”

Chairman-CEO Patrick Shutt said “various sources” were reporting differently whether the market is failing or growing.

“But we still see an inordinate amount of growth just in the people’s usage of telecom transport-type services,” said Shutt.

Shutt also noted the predicted growth of broadband services during the next three years as a harbinger of “an amazing transformation” in the industry.

“As more home users get on broadband and they want access to content, we’re going to see an absolute jump in the total amount of capacity required, and that’s where that backbone transport will come in line,” Shutt said.

This indicates there will be “strong growth in private line wholesale transport,” because--despite restructuring--CLECs, CAPs and IXCs are having a difficult time getting to their end customers, he said.

“They’re still not able to provide the levels of services that they’re going to need to provide in order to gain a competitive edge,” Shutt said.

Additionally, companies are looking for ways to outsource responsibilities for jobs that were previously held in-house. Universal Access uses “information as our weapon,” and this is a “key differentiator for Universal Access and why we have not taken on debt and been able to manage in a very tumultuous time,” Shutt said.