Delaware | 333-169979 | 26-201259 | ||
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
400 Centennial Parkway, Suite 200, Louisville, CO |
80027 |
|
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 7.01 | Regulation FD Disclosure |
Combined Indebtedness as of September 30, 2011 | Zayo Group | 360networks | Combined | |||||||||
(unaudited) | ||||||||||||
(in thousands) | ||||||||||||
Senior secured notes |
$ | 350,000 | $ | | $ | 350,000 | ||||||
Capital lease obligations |
10,945 | 133 | 11,078 | |||||||||
Other debts |
4,450 | | 4,450 | |||||||||
Total indebtedness as of September 30, 2011 |
365,395 | 133 | 365,528 | |||||||||
Additional debt associated with acquisition |
345,000 | | 345,000 | |||||||||
Total combined indebtedness |
710,528 | |||||||||||
Estimated Annualized EBITDA |
$ | 196,964 | ||||||||||
Estimated leverage ratio |
3.6 |
| does not reflect capital expenditures, or future requirements for capital and major
maintenance expenditures or contractual commitments; |
| does not reflect changes in, or cash requirements for, our working capital needs; |
| does not reflect the significant interest expense, or the cash requirements necessary to
service the interest payments, on our debt; and |
| does not reflect cash required to pay income taxes. |
Zayo Group | 360networks (1) | Combined | ||||||||||
(unaudited) | ||||||||||||
(in thousands) | ||||||||||||
Earnings from continuing operations during
the three months ended September
30, 2011 |
$ | 3,148 | $ | 1,083 | $ | 4,231 | ||||||
EBITDA (add backs) |
||||||||||||
Interest expense |
9,168 | 10 | 9,178 | |||||||||
Provision for income taxes |
4,604 | | 4,604 | |||||||||
Depreciation and amortization |
17,062 | 2,839 | 19,901 | |||||||||
EBITDA |
33,982 | 3,932 | 37,914 | |||||||||
Adjusted EBITDA (add backs) |
||||||||||||
Stock-based compensation |
3,704 | | 3,704 | |||||||||
Transaction costs |
330 | | 330 | |||||||||
Other |
| 3,343 | 3,343 | |||||||||
Adjusted EBITDA |
$ | 38,016 | $ | 7,275 | $ | 45,291 | ||||||
Annualized Adjusted EBITDA (quarter ended
September 30, 2011 EBITDA x 4) |
$ | 152,064 | $ | 29,100 | $ | 181,164 | ||||||
Expected synergies from combined businesses |
15,800 | |||||||||||
Estimated combined EBITDA (annualized) |
$ | 196,964 | ||||||||||
Zayo Group | 360networks (1) | Combined | ||||||||||
(in thousands) | ||||||||||||
Earnings from continuing operations during
the twelve months ended September
30, 2011 |
$ | (1,294 | ) | $ | 11,632 | $ | 10,338 | |||||
EBITDA (add backs) |
||||||||||||
Interest expense |
36,325 | 40 | 36,365 | |||||||||
Provision for income taxes |
14,348 | 36 | 14,384 | |||||||||
Depreciation and amortization |
65,716 | 9,035 | 74,751 | |||||||||
EBITDA |
115,095 | 20,743 | 135,838 | |||||||||
Adjusted EBITDA (add backs) |
||||||||||||
Stock-based compensation |
22,883 | | 22,883 | |||||||||
Transaction costs |
1,036 | | 1,036 | |||||||||
Other |
| 3,309 | 3,309 | |||||||||
Adjusted EBITDA |
$ | 139,014 | $ | 24,052 | $ | 163,066 | ||||||
Expected synergies from combined businesses |
15,800 | |||||||||||
Estimated combined EBITDA (TTM) |
$ | 178,866 | ||||||||||
(1) | Zayo had previously spun-off its voice operations to its parent company Zayo Group
Holdings, Inc. in order to maintain focus on its Bandwidth Infrastructure business. Upon
closing the acquisition, Zayo intends to spin-off 360networks VoIP operations to Zayo Group
Holdings, Inc. As such, the earnings and Adjusted EBITDA add backs, above, for 360networks
excludes the operating results of its VoIP business. The operating results for
360networks, as reflected above, have been derived from the historical records of
360networks and do not include anticipated purchase price adjustments. These figures have
not been audited and are subject to change. |
Item 9.01. | Financial Statements and Exhibits. |
Exhibit No. | Description | |||
99.1 | Select financial information of 360networks Corporation
as of and for the three and nine months ended September
30, 2011. |
ZAYO GROUP, LLC |
||||
By: | /s/ Ken desGarennes | |||
Ken desGarennes | ||||
Chief Financial Officer |
Three months ended | Nine months ended | |||||||
September 30, 2011 | September 30, 2011 | |||||||
Revenue |
$ | 24,031,353 | $ | 68,079,065 | ||||
Operating Costs |
9,731,599 | 27,253,940 | ||||||
Selling,
general and administrative |
6,966,729 | 20,797,261 | ||||||
Stock based compensation |
500,835 | 1,670,067 | ||||||
Provision for bad debts |
(589,356 | ) | (460,867 | ) | ||||
Depreciation expense |
3,176,394 | 9,194,044 | ||||||
Accretion expense |
62,473 | 189,717 | ||||||
Restructuring expense |
25,006 | 66,445 | ||||||
Operating income |
4,157,672 | 9,368,458 | ||||||
Net gain/(loss) on settlements |
(3,255,445 | ) | (3,255,445 | ) | ||||
Net gain on sale of assets |
| 7,946 | ||||||
Interest expense |
(17,717 | ) | (46,922 | ) | ||||
Interest and dividend income |
562,591 | 1,622,371 | ||||||
Other income |
(131,572 | ) | (97,722 | ) | ||||
Income before income taxes |
1,315,530 | 7,598,686 | ||||||
Provision for income taxes |
92,768 | 150,814 | ||||||
Net income for the year |
$ | 1,222,763 | $ | 7,447,872 | ||||
As of | ||||
September 30, 2011 | ||||
ASSETS |
||||
Current Assets: |
||||
Cash and cash equivalents |
$ | 15,453,484 | ||
Accounts receivable, net |
8,411,865 | |||
Note receivable-current |
181,343 | |||
Other |
1,951,631 | |||
Total Current Assets |
25,998,323 | |||
Restricted Cash |
357,500 | |||
Investments |
115,610,415 | |||
Property and equipment, net |
77,826,810 | |||
Intangibles assets, net |
245,189 | |||
Note receivable |
860,346 | |||
Total Assets |
$ | 220,898,583 | ||
LIABILITIES |
||||
Current liabilities: |
||||
Accounts payable |
$ | 7,117,308 | ||
Wages payable |
5,662,850 | |||
Leases payable |
49,353 | |||
Income taxes payable |
366,008 | |||
Other accrued liabilities |
17,634,316 | |||
Deferred revenue |
3,308,027 | |||
Total Current Liabilities |
34,137,862 | |||
Deferred revenue, non-current |
39,611,743 | |||
Other long-term liabilities |
354,326 | |||
Total Liabilities |
$ | 74,103,931 | ||
STOCKHOLDERS EQUITY/(DEFICIT) |
||||
Capital stock |
$ | 75,725,498 | ||
Other capital accounts |
104,528,551 | |||
Accumulated deficit |
(33,459,397 | ) | ||
Total Stockholders Equity/(Deficit) |
146,794,652 | |||
Total Liabilities and Stockholders
Equity/(Deficit) |
$ | 220,898,583 | ||