-----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, ABCRB85vDWxqCWtezHQe37CG0Z4skQkK4v+N6FXsWEXyMkJ6GhPAnZDPn3ZJnlnx ePO8RCB+Hi5q3W6MF1anqw== 0000912057-02-004682.txt : 20020414 0000912057-02-004682.hdr.sgml : 20020414 ACCESSION NUMBER: 0000912057-02-004682 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020206 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020208 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERMEDIA COMMUNICATIONS INC CENTRAL INDEX KEY: 0000885067 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 592913586 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-20135 FILM NUMBER: 02531669 BUSINESS ADDRESS: STREET 1: ONE INTERMEDIA WAY CITY: TAMPA STATE: FL ZIP: 33647 BUSINESS PHONE: 8138290011 MAIL ADDRESS: STREET 1: ONE INTERMEDIA WAY CITY: TAMPA STATE: FL ZIP: 33647 FORMER COMPANY: FORMER CONFORMED NAME: INTERMEDIA COMMUNICATIONS OF FLORIDA INC DATE OF NAME CHANGE: 19930328 8-K 1 a2070101z8-k.txt 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): February 6, 2002 - -------------------------------------------------------------------------------- Intermedia Communications Inc. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in its Charter) Delaware 0-20135 59-2913586 (State or Other (Commission File (IRS Employer Jurisdiction of Number) Identification Number) Incorporation) One Intermedia Way Tampa, FL 33647 (Address of Principal Executive Offices) Registrant's telephone number, including area code: (813) 829-0011 - -------------------------------------------------------------------------------- Item 5. Other Events On February 6, 2002, Digex, Incorporated, a Delaware corporation and a majority owned subsidiary of Intermedia Communications Inc., issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference. Item 7. Financial Statements and Exhibits Exhibit 99.1 Press release of Digex, Incorporated dated February 6, 2002 (as filed with the United States Securities and Exchange Commission on February 7, 2002). 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. INTERMEDIA COMMUNICATIONS INC. By:/s/ Scott D. Sullivan --------------------------------- Scott D. Sullivan Chief Financial Officer Dated: February 7, 2002 EXHIBIT INDEX Exhibit No. Description of Exhibit - ----------- ---------------------- 99.1 Press release of Digex, Incorporated, dated February 6, 2002 (as filed with the United States Securities and Exchange Commission on February 7, 2002). EX-99.1 3 a2070101zex-99_1.txt EX-99.1 EXHIBIT 99.1 NEWS RELEASE
MEDIA CONTACTS: INVESTOR RELATIONS: Secret F. Wherrett Tania C. Almond Digex, Inc. Digex, Inc. 240.456.3556 240.456.3800 secret.wherrett@digex.com tania.almond@digex.com
Digex Reports Fourth Quarter and Full Year Results for 2001 Revenue Increases 28% over FY00 Results; Year of Defining Leadership LAUREL, MD., FEB. 6, 2002 - Digex, Incorporated (Nasdaq: DIGX), the leading managed hosting provider for business on the Internet, today announced revenue of $55.2 million for the quarter-ended December 31, 2001, compared with $57.9 million a year ago. Full-year 2001 revenue totaled $214.4 million, a 28% increase over the year-ago level of $168.1 million. Managed servers totaled 3,588 with average monthly revenue per server of $4,414. Gross margin in the quarter totaled 49%, with full-year gross margin at 44%. EBITDA* losses narrowed to $3.6 million in the quarter with full-year EBITDA* losses totaling $46.3 million. Net loss available to common stockholders for the quarter totaled $46.7 million, or $0.73 per share while full-year net loss was $192.5 million, or $3.00 per share. "Through 2001, Digex continued its strategic focus in the areas of innovation, growth and leadership as we enable our clients to move business computing and content to the Internet," said Mark Shull, president and CEO of Digex. "We have become the recognized leader in this market as demonstrated by our clients' decisions to place their key online business initiatives with Digex. Together with WorldCom, we believe to be better positioned than ever to meet the growing market demands going into 2002 and beyond." "We had another strong quarter for new customer additions, as Digex and WorldCom added 80 new customers in the quarter, up 54% over the adds in 4Q00," said John Callari, senior vice president of sales. "Continuing with our strength in the enterprise market, we ended the year with 78% of our revenue coming from that segment." New customers include: American Honda, Arby's, a subsidiary of Triarc Companies, Inc., Bank of America, Club Quarters, Comcast Cable, Dayport, eMachines, FNB Corporation, Gearworks, InfoVista, Pilkington plc, MTI, National Board for Professional Teaching Standards (NBPTS), Popular Mechanics, Republican National Committee, Rhodes Financial Services, The Rockefeller Foundation, Securities Industry Association, Standard Pacific Homes, Viterra Energy Services and Wisden. A number of customers also upgraded or renewed their services with Digex including; ABC School Supply, Alcatel, American Home Products, Bed Bath & Beyond, Delphi Automotive, Elogex Inc., Ford Motor Company, J. Crew, Kawasaki Motors Corp., Kimball International, USA, The Metropolitan Museum of Art, Nestle USA, Phillip Morris Management Corp. and Publishers Clearing House. 5 "The fourth quarter closes out a strong year for Digex with clear examples of continued success in our development efforts and solution offerings. One of our key accomplishments is the joint launch with WorldCom of Managed Express Hosting targeted at mid-size businesses," said Rebecca Ward, president of marketing, product management and engineering at Digex. "As highlighted by industry analysts, Express also meets the needs of individual departments within large corporations who may benefit from a managed hosting solution, but only require an entry-level package. This is a significant milestone for us as it marks the first real service initiative developed jointly by WorldCom and Digex. We worked together to determine customer requirements, service packages and price points, exemplifying the value our alliance." FOURTH QUARTER HIGHLIGHTS In addition to addressing the needs of the small-to-medium size businesses, Digex's quarterly highlights include the launch of its "Move to Managed" program designed to help enterprises migrate their Internet infrastructure to the Digex managed hosting environment. In demonstrating continued leadership, Digex was named the overall leader in Service Level Agreement (SLA) performance by Tier 1 Research in their December report titled "How Good is Good Enough?", and Digex confirmed its managed security services met the proposed security standards set by Health Insurance Portability and Accountability Act of 1996 (HIPAA) through a comprehensive third-party assessment. In furthering its focus on security, Digex formally launched a new high-speed firewall solution with a gigabit plus performance. Digex also expanded its performance and availability offerings by adding Akamai's EdgeSuiteSM and enhanced its industry-leading portal, ClientCentral(TM), with improvement in the performance, scalability, and reliability of Performance Statistics and Backup Servers functionality. 2001 HIGHLIGHTS Major accomplishments in 2001 include global expansion to France, Germany and Japan, staff reorganizations, improvements in tools for sales, networking design and architecture, and the finalization of the WorldCom funding agreement and controlling interest in Digex. Notable reorganizations include the regional expansion of sales into 18 U.S. teams and the realignment of the professional services organization with the addition of Digex Application Optimization Center (AOC) to help clients enhance their application performance. In a continued effort to improve client experience, Digex launched a new comprehensive interactive ROI tool to help clients realize the value and cost efficiencies of outsourcing managed hosting. Digex also experienced significant achievements in network design and architecture with the ability to remotely manage and troubleshoot servers anywhere and simplify the serviceability of the architecture to improve meantime to repair on all processes. Additionally, the Digex customer management portal was commercialized--ClientCentral. Digex also placed special emphasis in 2001 on certifications and third-party validations to demonstrate its proven capability. To date these include: o ISO 9001:2000 - Achieved registration for the Digex Application Optimization Center (AOC), demonstrating a commitment to quality production processes and procedures. o SUNTONE - First hosting provider to attain Sun's SunTone certification and recently conducted updated review to ensure continued certification. o SAS70 TYPE I & II AUDITS - First provider to gain SAS70 recognition, enforcing high standards on operational controls and its critical technology 6 as required by many financial institutions as a prerequisite for doing business with a service provider. o TRUSECURE - First hosting service provider to achieve TruSecure Corporation's TruSecure Management Service Provider (MSP) certification by rigorous adherence to a well-documented logical and physical security regimen. o CISCO POWERED NETWORK - Awarded the very first Cisco Powered Network certification and continues to be CPN certified. o E & Y CYBER PROCESS - Awarded the Cyber Process certification by Ernst & Young for overall control in quality and establishing a secured hosting environment. o DIGEX MANAGED SECURITY SERVICES MEET HIPAA STANDARDS, VALIDATED BY TRUSECURE ASSESSMENT - Successfully completed a rigorous assessment of managed security offerings to ensure security guidelines proposed under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) are met to assist healthcare clients with legislative requirements. FINANCIAL HIGHLIGHTS FOR DIGEX INCLUDE: o Revenue mix for the fourth quarter was approximately: Enterprise 78% Internet-centric 18% ASP and other channels 4% o SG&A expense, including provision for doubtful accounts, as a percentage of total revenue was 55.7%, down 2,480 basis points from the year-ago level, and declined in absolute dollars by $15.9 million or a 34.0% decrease o Annualized revenue per customer was approximately $324,000, ending 2001 with 601 customers o Capital investments for the quarter totaled $15.1 million, down 50% sequentially. Capital investments for the full year 2001 totaled $109.3 million o Quota-carrying salespeople totaled 166 out of a total Digex employee base of 1,393, as of December 31, 2001 QUARTERLY CONFERENCE CALL Digex will host a conference call on Wednesday, February 6, at 4:30 p.m. ET to review its fourth quarter results. To participate on this call, please dial (800) 779-5318 or (712) 257-2476 (International), passcode "DIGEX" (the operator will ask for this passcode). In addition, you may listen to a live audio webcast of this call by going to http://www.e-meetings.wcom.com. Click on "Join Event - Audio Streaming". Type in the conference ID: 6746004 and passcode: "DIGEX". Enter your participant information, check the box to accept the terms and conditions, and then select "Proceed" to be joined to the call. A replay of the call will be available from Wednesday, February 6, 2002 at 7:00 p.m. ET through Wednesday, February 13, 2002 at 5:00 p.m. ET by dialing (888) 437-4649 or (402) 998-1321 (International). A replay of the audio webcast will be available for 30 days by going to http://www.e-meetings.wcom.com and following the directions listed above. You can also listen to an archive of the call by visiting our website at http://www.digex.com/investors.htm and clicking on the Audio Archive link. 7 FORWARD LOOKING STATEMENTS Statements contained in this news release regarding expected financial results and other planned events are forward looking statements, subject to uncertainties and risks, including, but not limited to, the demand for Digex's services and the ability of Digex to successfully implement its strategies, each of which may be impacted, among other things, by economic, competitive or technological conditions. These and other applicable risks are summarized under the caption "Risk Factors" in the Company's annual 10K filing, and are updated periodically through the filing of reports and registration statements with the Securities and Exchange Commission. ABOUT DIGEX Digex is the leading managed hosting provider for business on the Internet. Digex customers, from mainstream enterprise corporations, Internet-based businesses and Application Service Providers (ASPs), leverage Digex's services to deploy secure, scaleable, high performance business solutions, including electronic retailing, online financial services, online procurement and customer self-service applications. Digex also offers value-added enterprise and professional services, including performance and security testing, monitoring, reporting and networking services. Additional information on Digex is available at www.digex.com. ------------- *EBITDA before certain charges consists of earnings (net loss) before interest expense, interest income and other, merger related expenses, foreign exchange gain or loss, income taxes, deferred compensation, depreciation, and amortization. EBITDA before certain charges does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA before certain charges should also not be construed as a substitute for operating income or a better measure of liquidity than cash flow from operating activities, which are determined in accordance with generally accepted accounting principles. This caption excludes components that are significant in understanding and assessing the results of operations and cash flows. In addition, EBITDA before certain charges is not a term defined by generally accepted accounting principles and as a result EBITDA before certain charges may not be comparable to similarly titled measures used by other companies. However, the Company believes that EBITDA before certain charges is relevant and useful information that is often reported and widely used by analysts, investors and other interested parties in the Web site and application hosting industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of the Company's operating performance, as an additional meaningful measure of performance and liquidity, and to provide additional information with respect to the Company's ability to meet future debt service, capital expenditures and working capital requirements. All trademarks, tradenames and service marks mentioned and/or used herein belong to their respective owners. ### 8
DIGEX, INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ---------------------------- ---------------------------- 2001 2000 2001 2000 ------------ ------------ ------------ ------------ Revenue: Revenue $ 40,156 $ 51,942 $ 185,025 $ 162,085 Revenue from WorldCom 15,030 6,000 29,328 6,000 ------------ ------------ ------------ ------------ Total revenue 55,186 57,942 214,353 168,085 Costs and expenses: Cost of operations 3,897 3,969 16,138 21,244 Cost of services 24,170 22,922 103,962 69,658 Selling, general and administrative 27,805 40,721 125,140 134,227 Provision for doubtful accounts 2,959 5,910 15,374 10,649 Deferred compensation 703 1,024 3,192 4,101 Depreciation and amortization 40,367 26,384 136,396 78,819 ------------ ------------ ------------ ------------ Total costs and expenses 99,901 100,930 400,202 318,698 ------------ ------------ ------------ ------------ Loss from operations (44,715) (42,988) (185,849) (150,613) Other income (expense): Interest expense (1,653) (613) (4,768) (2,008) Interest income and other 628 2,155 2,158 9,686 ------------ ------------ ------------ ------------ Loss before cumulative effect of change in accounting principle (45,740) (41,446) (188,459) (142,935) Cumulative effect of change in accounting principle (1) -- -- -- (166) ------------ ------------ ------------ ------------ Net loss (45,740) (41,446) (188,459) (143,101) Accretion of preferred stock discount (1,006) -- (4,025) -- ------------ ------------ ------------ ------------ Net loss available to common stockholders $ (46,746) $ (41,446) $ (192,484) $ (143,101) ============ ============ ============ ============ Net loss per common share - basic and diluted $ (0.73) $ (0.65) $ (3.00) $ (2.26) ============ ============ ============ ============ Shares used in computing basic and diluted net loss per share 64,138,466 63,870,748 64,076,647 63,404,839 ============ ============ ============ ============ EBITDA (2) $ (3,645) $ (15,580) $ (46,261) $ (67,693)
(1) Represents the cumulative net income effect of implementing SAB 101 as of January 1, 2000. (2) EBITDA before certain charges consists of earnings (loss) before interest expense, interest income and other, merger-related expenses, foreign exchange gains (losses), income taxes, deferred compensation, depreciation and amortization. EBITDA before certain charges does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA before certain charges should not to be considered as an alternative to net loss as an indicator of the Company's operating performance or to cash flows as a measure of liquidity. In addition, EBITDA before certain charges is not a term defined by generally accepted accounting principles, and, as a result, the measure of EBITDA before certain charges presented herein may not be comparable to similarly titled measures used by other companies. 9 DIGEX, INCORPORATED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)
DECEMBER 31, DECEMBER 31, 2001 2000 ----------- ----------- (unaudited) ASSETS Current assets: Cash and cash equivalents $ 12,096 $ 83,434 Restricted investments 3,197 2,000 Accounts receivable, net of allowance of $4,806 and $4,741 in 2001 and 2000, respectively 21,496 36,241 Due from WorldCom 18,842 6,000 Deferred costs 7,302 8,627 Prepaid expenses and other current assets 7,579 7,452 ----------- ----------- Total current assets 70,512 143,754 Property and equipment, net 327,701 348,975 Intangible assets, net 19,231 23,222 Notes receivable from employees 6,825 -- Other assets 3,089 5,100 ----------- ----------- Total assets $ 427,358 $ 521,051 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 48,380 $ 59,455 Current portion of deferred liabilities 7,572 7,734 Current portion of note payable 56 2,772 Current portion of capital lease obligations 5,675 1,871 ----------- ----------- Total current liabilities 61,683 71,832 Deferred liabilities 4,257 4,025 Notes payable 3,208 1,435 Notes payable to Intermedia 90,000 -- Capital lease obligations 29,477 27,131 ----------- ----------- Total liabilities 188,625 104,423 ----------- ----------- Redeemable Preferred stock, $.01 par value; 5,000,000 shares authorized; 100,000 designated as Series A Convertible; 100,000 shares issued and outstanding in 2001 and 2000 (aggregate liquidation preference of $100,000) 81,503 71,572 Stockholders' equity: Class A common stock, $.01 par value; 100,000,000 shares authorized; 24,788,446 and 24,545,543 shares issued and outstanding in 2001 and 2000, respectively 248 245 Class B common stock, $.01 par value; 50,000,000 shares authorized; 39,350,000 shares issued and outstanding 2001 and 2000 394 394 Additional capital 544,606 550,465 Accumulated deficit (384,328) (195,869) Deferred compensation (3,448) (10,141) Accumulated other comprehensive loss (242) (38) ----------- ----------- Total stockholders' equity 157,230 345,056 ----------- ----------- Total liabilities and stockholders' equity $ 427,358 $ 521,051 =========== ===========
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