-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pin6nSK/j5Kxhf+0u7rLnry2fFjoMyW7iyE6uNwfcHIAN9XGhwes5PEbz7CYVR91 LpxsQ8lUwaKj1NRmacED4g== 0000912057-01-007738.txt : 20010320 0000912057-01-007738.hdr.sgml : 20010320 ACCESSION NUMBER: 0000912057-01-007738 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010312 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010319 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FAIRPOINT COMMUNICATIONS INC CENTRAL INDEX KEY: 0001062613 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 133725229 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 333-56365 FILM NUMBER: 1571544 BUSINESS ADDRESS: STREET 1: 521 EAST MOREHEAD ST STREET 2: STE 250 CITY: CHARLOTTE STATE: NC ZIP: 28202 BUSINESS PHONE: 7043448150 FORMER COMPANY: FORMER CONFORMED NAME: MJD COMMUNICATIONS INC DATE OF NAME CHANGE: 19980527 8-K 1 a2042008z8-k.txt FORM 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------------------------- FORM 8-K Current Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): MARCH 12, 2001 ---------------- FAIRPOINT COMMUNICATIONS, INC. ------------------------------ (Exact Name of Registrant as specified in its charter) DELAWARE 333-56365 13-3725229 -------- ---------------- ---------- (State or other jurisdiction (Commission File (IRS Employer of incorporation) Number) Identification No.) 521 EAST MOREHEAD STREET, SUITE 250, CHARLOTTE, NORTH CAROLINA 28202 -------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (704) 344-8150 --------------- N/A ------------------------------------------------------------- (Former name or former address, if changed since last report): Item 5. Other Events On March 12, 2001, FairPoint Communications, Inc. (the "Company") issued a press release (the "Press Release") announcing year end and fourth quarter results for the year ended December 31, 2000. The Press Release is hereby incorporated by reference herein and is attached hereto as Exhibit 99.1. Item 7. Exhibits 99.1 Press Release, dated March 12, 2001. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. FAIRPOINT COMMUNICATIONS, INC. By: /s/ Walter E. Leach, Jr. ---------------------------------- Name: Walter E. Leach, Jr. Title: Senior Vice President and Chief Financial Officer Date: March 19, 2001 EX-99.1 2 a2042008zex-99_1.txt EXHIBIT 99.1 Exhibit 99.1 FOR IMMEDIATE RELEASE CONTACT: Timothy W. Henry Telephone: (704) 344.8150 E-mail: Thenry@fairpoint.com FAIRPOINT COMMUNICATIONS, INC. ANNOUNCES YEAR END AND FOURTH QUARTER RESULTS o ANNUAL REVENUES UP 66.2%; 4TH QUARTER CONSOLIDATED REVENUES UP 78.5% o ANNUAL ACCESS LINE GROWTH UP 87.3%; 4TH QUARTER ADDS 25,944 ACCESS LINES o ANNUAL TRADITIONAL TELEPHONE COMPANY EBITDA GROWTH OF 57%; 4TH QUARTER TRADITIONAL TELEPHONE COMPANY EBITDA GROWTH OF 62% CHARLOTTE, N.C. (March 12, 2001) - FairPoint Communications, Inc. ("FairPoint" or the "Company") today reported record revenue and strong operational results for its year ended December 31, 2000. FairPoint reported significant year over year growth in revenues driven by strong access line growth from traditional telephone company acquisitions during 2000 and from a substantial increase in customers in its competitive communications subsidiary, FairPoint Communications Solutions Corp. ("Solutions"). The Company reported consolidated revenues for the year ended December 31, 2000, of $246.3 million, a 66.2 percent increase compared to consolidated revenues of $148.2 million for the prior year. Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) were $14.4 million for 2000, a 72.0 percent decrease from $51.5 million for the same period in 1999. The decrease in EBITDA was primarily attributed to operating losses incurred from the rapid market expansion and customer growth achieved by Solutions during the year. "We are quite pleased with the growth during 2000 and the fourth quarter," commented CEO Jack Thomas. "The traditional telephone company acquisitions completed during the past year have been successfully integrated into our operations and have had a positive impact on our operating results. Additionally, we successfully managed substantial growth at Solutions through rapid customer growth and new market openings." Revenue growth was strong as a result of the revenues contributed by the traditional telephone companies acquired in 1999 and 2000 (four companies acquired in each year), solid traditional telephone companies same store growth year over year and the rapid customer growth at Solutions. -More- The traditional telephone companies reported revenues of $191.8 million in 2000, an increase of $57.9 million or 43.2 percent compared to the prior year. Revenues contributed by the companies acquired in 1999 and 2000 were approximately $52.7 million. The traditional telephone companies reported EBITDA of $111.4 million in 2000, an increase of $40.4 million or 57 percent versus $71.0 million for the comparable period in 1999. Same store EBITDA increased 8.5 percent to $72.4 million, and the companies acquired in 1999 and 2000 contributed EBITDA of $39.1 million in 2000. Solutions reported annual revenues of $54.5 million, an increase of $40.2 million or 280 percent. Solutions recorded an EBITDA loss of approximately $97.0 million in 2000, which included approximately $16.5 million of reorganization charges associated with its consolidation activity completed in December 2000. Solutions' EBITDA losses were primarily associated with its early stage business development and rapid market expansion during 2000. The Company reported a net loss after taxes of $88.6 million for 2000. The net loss was attributed to the net loss after taxes incurred at Solutions of approximately $76.7 million and higher interest expenses related to debt incurred in connection with the acquisitions of traditional telephone companies in 1999 and 2000. In 2000, the Company acquired four traditional telephone companies that served approximately 81,000 access lines at December 31, 2000. The Company operates 28 traditional telephone companies, that served approximately 236,500 access lines at year end 2000, an increase of 85,900 access lines or 57.0 percent compared to the prior year. At December 31, 2000, Solutions served approximately 120,600 access lines, an increase of 200.8 percent over the prior year. Solutions consolidated its operations in two phases in December 2000 and January 2001. This consolidation was a proactive response by management to the deterioration in the capital markets and general economy that became evident in the fourth quarter 2000. Management initiated an exhaustive planning process late in fourth quarter and decided to refocus Solutions' strategic direction. "Solutions revised its strategic direction from rapid market expansion to a more measured growth strategy in our established facilities-based markets that edge-out from our traditional telephone companies," said Mr. Thomas. "This revised strategy will allow Solutions to achieve profitability in each market more quickly. The change also enhances our service offerings and reduces the amount of capital required to execute our revised business plan." -More- As a result of the Company's strategic redirection, it recorded a reorganization charge of approximately $16.5 million in fourth quarter 2000 and the Company estimates that an additional $35 to 40 million reorganization charge will be reported in the first quarter ending March 31, 2001. FairPoint Communications is an integrated communications provider offering voice, Internet, data, Web-enabled and other related communication services to its customers in its traditional telephone companies. It provides similar services to small and medium size businesses in targeted ex-urban markets through execution of a competitive local exchange communications business that utilizes the network and infrastructure of its traditional telephone companies to service these adjacent markets. FairPoint Communications, Inc. was founded in 1993 to take advantage of the consolidation opportunities in the highly fragmented rural independent telephone industry. Since its creation, the Company has completed 28 acquisitions and serves customers in 17 states across the United States. In 1998, the Company established its competitive communications subsidiary, FairPoint Communications Solutions Corp., to pursue new market opportunities created by the deregulation of the local exchange carrier markets. Solutions is pursuing a regional "edge-out" facilities-based strategy entering markets near its traditional telephone companies and competing with the incumbent local exchange carrier. As December 31, 2000, FairPoint and Solutions together served more than 357,000 access lines in 22 states across the United States. The statements in this news release that are not historical facts are forward-looking statements that are subject to material risks and uncertainties. Investors are cautioned that any such forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties, and that actual results or developments may differ materially from those in the forward-looking statements as a result of various factors which are discussed in previous FairPoint Communications, Inc., filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, uncertainties relating to economic conditions, acquisitions and divestitures, growth and expansion risks, the availability of equipment, materials, inventories and programming, product acceptance, and the ability to construct, expand and upgrade its services and facilities. FairPoint does not undertake to update any forward-looking statements in this news release or with respect to matters described herein. ### Attachments FairPoint Communications, Inc. and Subsidiaries Condensed Consolidated Balance Sheets
December 31, 2000 1999 --------- ------- ASSETS (DOLLARS IN THOUSANDS) Current assets: Cash and cash equivalents $ 1,023 9,923 Accounts receivable and other 56,020 40,257 --------- ------- Total current assets 57,043 50,180 --------- ------- Property, plant, and equipment, net 348,916 178,296 --------- ------- Other assets: Investments 50,353 36,246 Goodwill, net of accumulated amortization 451,486 229,389 Deferred charges and other assets 33,625 23,924 --------- ------- Total other assets 535,464 289,559 --------- ------- Total assets $ 941,423 518,035 ========= ======= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current liabilities: Accounts payable $ 37,909 12,778 Current portion of long-term debt and other long-term liabilities 18,428 5,102 Demand notes payable 535 752 Accrued interest payable 11,547 4,396 Other accrued liabilities 43,957 11,492 --------- ------- Total current liabilities 112,376 34,520 --------- ------- Long-term liabilities: Long-term debt, net of current portion 739,682 458,529 Deferred credits and other long-term liabilities 19,414 33,124 --------- ------- Total long-term liabilities 759,096 491,653 --------- ------- Minority interest 15 443 --------- ------- Common stock subject to put option 5,011 3,000 --------- ------- Stockholders' equity (deficit): Common stock 498 345 Additional paid-in capital 227,245 48,868 Unearned compensation (9,707) -- Accumulated other comprehensive income 440 4,187 Accumulated deficit (153,551) (64,981) --------- ------- Total stockholders' equity (deficit) 64,925 (11,581) --------- ------- Total liabilities and stockholders' equity $ 941,423 518,035 ========= =======
FairPoint Communications, Inc. and Subsidiaries Condensed Consolidated Statements of Operations
Three months ended Twelve months ended December 31, December 31, 2000 1999 2000 1999 ---- ---- ---- ---- (DOLLARS IN THOUSANDS) Revenues $ 71,489 40,059 246,264 148,162 --------- ------- ------- ------- Operating expenses: Network operating costs 45,339 15,366 134,170 49,306 Selling, general and administrative 33,923 16,999 94,400 52,138 Restructure costs 16,485 -- 16,485 -- Depreciation and amortization 15,815 9,136 52,544 31,632 Stock-based compensation expense 1,376 3,156 16,451 3,386 --------- ------- ------- ------- Total operating expenses 112,938 44,657 314,050 136,462 --------- ------- ------- ------- Income from operations (41,449) (4,598) (67,786) 11,700 --------- ------- ------- ------- Other income (expense): Net gain (loss) on sale of investments 418 150 6,648 512 Interest income 40 111 1,076 446 Dividend income 600 511 1,403 1,452 Interest expense (19,662) (22,124) (66,038) (51,185) Other, net 1,327 1,182 4,095 2,520 --------- ------- ------- ------- Total other expense (17,277) (20,170) (52,816) (46,255) --------- ------- ------- ------- Loss before income taxes (58,726) (24,768) (120,602) (34,555) Income tax benefit 16,419 4,042 32,035 5,615 Minority interest in income of subsidiaries (1) (42) (3) (100) --------- ------- ------- ------- Net loss $ (42,308) (20,768) (88,570) (29,040) ========= ======= ======= =======
FairPoint Communications, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows
Twelve months ended December 31, 2000 1999 ---- ---- (DOLLARS IN THOUSANDS) Cash flows from operating activities: Net loss $ (88,570) (29,040) Adjustments to reconcile net loss to net cash provided by operating activities: Amortization of debt issue costs 3,534 1,710 Depreciation and amortization 52,544 31,632 Other non cash items (22,566) 8,193 Changes in assets and liabilities arising from operations, net of acquisitions: Accounts receivable (18,296) (876) Accounts payable and accrued expenses 52,035 1,040 Income taxes recoverable 6,487 (4,955) --------- ----- Total adjustments 73,738 36,744 --------- ----- Net cash provided by (used in) operating activities (14,832) 7,704 --------- ----- Cash flows from investing activities: Net capital additions (107,705) (43,393) Acquisitions of telephone properties, net of cash acquired (256,068) (53,949) Other, net 20,408 20,732 --------- ----- Net cash used in investing activities (343,365) (76,610) --------- ----- Cash flows from financing activities: Loan origination costs (14,780) (3,703) Proceeds from issuance of long-term debt 668,786 138,943 Repayment of long-term debt (459,948) (52,056) Net proceeds from the issuance of common stock 157,896 -- Other, net (2,657) (17,596) --------- ----- Net cash provided by financing activities 349,297 65,588 --------- ----- Net decrease in cash and cash equivalents (8,900) (3,318) Cash and cash equivalents, beginning of period 9,923 13,241 --------- ----- Cash and cash equivalents, end of period $ 1,023 9,923 ========= =====
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