MCLD - McLeod USA, Inc. (MCLD)

[jmhollen]

McLeodUSA says funded into 2003

CEDAR RAPIDS, Iowa, July 10 — Emerging telephone and data services company McLeodUSA Inc. (NASDAQ:MCLD) on Tuesday said it has enough money to fund its operations until it produces free cash-flow in 2003 and reiterated confidence in its long-term outlook.

McLeodUSA said it accessed an additional $175 million of its $1.3 billion credit facility, leaving an undrawn balance of $550 million. It said it expects proceeds from the previously announced sale of wireless telephone licenses to exceed $120 million.

"We intend to maximize our cash flow, continue solid growth in a challenging market, and manage through tough industry conditions," McLeodUSA Co-Chief Executive Officer Steve Gray said in a statement.

McLeodUSA, which competes against the dominant Baby Bells, is one of several emerging communications companies to be hurt by the slowing economy. In May it cut its revenue and cash flow forecasts for 2001 due to the slowdown, pricing pressures and delayed customer purchases. It also said it would reduce its work force by about 5 percent, or about 575 jobs.

McLeodUSA's fiber optic network transmits data, Internet, video and voice services and reaches 800 cities and about 90 percent of the U.S. population.

McLeodUSA's stock, which has plunged about 88 percent over the past year, gained 34 cents, or 12.45 percent, $34.07 in early morning trading on Nasdaq.

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