-----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, Kth5QZVjUeZkaAR1I1H8mzCcehb2WmTS2T2ULupHLJbPGkItqmGZ49owetIuUsQu IZIpyE/qaxy1JsA7/UH0Tg== 0000912057-02-017333.txt : 20020430 0000912057-02-017333.hdr.sgml : 20020430 ACCESSION NUMBER: 0000912057-02-017333 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20020429 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020430 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: 02626490 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 a2078342z8-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): April 24, 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 April 24, 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 April 24, 2002 (as filed with the United States Securities and Exchange Commission on April 29, 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: April 29, 2002 EXHIBIT INDEX EXHIBIT NO. DESCRIPTION OF EXHIBIT 99.1 Press release of Digex, Incorporated, dated April 24, 2002 (as filed with the United States Securities and Exchange Commission on April 29, 2002). EX-99.1 3 a2078342zex-99_1.txt EXHIBIT 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 First Quarter Results EBITDA Loss Improves 44% Year-Over-Year LAUREL, MD., APRIL 24, 2002 - Digex, Incorporated (Nasdaq: DIGX), the leading managed hosting provider for business on the Internet, today announced revenue of $51.8 million for the quarter-ended March 31, 2002, compared with $53.1 million a year ago. Managed servers totaled 3,420 with average monthly revenue per server of $4,638. EBITDA* losses totaled $7.8 million in the quarter with net loss available to common stockholders totaled $51.4 million, or $0.80 per share. "We continue to add high-quality enterprise customers through a tough business environment," said Mark Shull, president and CEO of Digex. "As previously announced, we were pleased to gain WorldCom's formal approval of Digex's 2002 business plan, as it relates to WorldCom's funding commitment to Digex." "Year-over-year we had another solid quarter for new customer additions, as Digex and WorldCom added 56 new customers in the quarter," said John Callari, senior vice president of sales. New customers include: Benjamin Moore & Co., Bureau of National Archives and Records Administration, Centridge Payment Systems, Charles Schwab & Co., Chemicon International, Docent, Henry Ford Museum, Lateral Payments, Mexican Tourism Board, NOPI, Nestle Ice Cream Company LLC, Owens Corning, Reptron, U.S. State Department and U.S. Venture Exchange. A number of customers also upgraded or renewed their services with Digex including: Blue Shield of California, Elogex, John Hancock Life Insurance Company, Kraft Foods, Miller Brewing Company, netCOMPONENTS, Inc., Novartis Pharma AG, PBHG Funds and Persimmon Research Partners. "One of Digex's first quarter achievements includes being listed in the Leaders quadrant in Gartner, Inc.'s latest North American Web Hosting Magic Quadrant#," said Rebecca Ward, president of marketing, product management and engineering at Digex. "To be placed in the Leaders quadrant, a Web hosting provider must demonstrate strength in both vision and execution. Digex has been placed in the Leaders quadrant for the second year in a row. More importantly, however, we believe that our strong vision and offerings translate to successful delivery of quality solutions to our customers year after year." ADDITIONAL QUARTERLY HIGHLIGHTS FOR DIGEX INCLUDE: o Achieved SYSTRUST CERTIFICATION after completing a rigorous assessment of its production environment for supporting customer Web operations. Developed and administered by the American Institute of Certified Public Accountants (AICPA), the SysTrust examination is designed to encompass four key principles (integrity, security, availability, and maintainability) and criteria for system reliability. Of 5 these principles, security, availability and maintainability are applicable to the services Digex provides. Ernst & Young LLP conducted Digex's SysTrust examination. o Launched CUSTOMER FURNISHED EQUIPMENT (CFE) program, which enables clients to gain the benefits of a managed solution and obtain high value with equipment they already own. The program allows clients to take advantage of the full range of Digex's managed hosting using their previous investments. o Continued its industry leading ROI PROGRAM in Q1, working with over 40 clients or prospects throughout the quarter, and adding new functionality to help customers model and understand the economics of hosting. New functionalities include an international model, the ability to include client-furnished equipment, and a more precise in-house headcount model. o Engineered the Digex Managed Linux solution using RED HAT LINUX 7.2. As Linux rapidly becomes a mainstream operating system in all sizes of organizations, Digex is now fully able to provide its core suite of SmartServices and value-added services on a Linux platform to meet the growing demand. FINANCIAL HIGHLIGHTS FOR DIGEX INCLUDE: o SG&A expense, including provision for doubtful accounts, as a percentage of total revenue was 58.3%, down 1,176 basis points from the year-ago level, and declined in absolute dollars by approximately $7.0 million or 18.8% o Capital investments for the quarter totaled $15.2 million, down 48% from the year-ago level o Quota-carrying salespeople totaled 161 for the quarter up from 128 in the year-ago quarter o Total employees ending March 31, 2002 was 1,293, compared with 1,455 in the year-ago period
1Q02 4Q01 3Q01 2Q01 1Q01 REVENUE MIX BY CUSTOMER TYPE: Enterprise 81% 78% 75% 73% 73% Startup 19% 22% 25% 27% 27% Note: Startup is combination of previously reported Internet-centric and ASP/other channels segments CUSTOMER DATA: Gross Adds 56 80 82 74 33 Customers (Net) 599 601 601 603 631 Avg. Annualized Rev/Cust $325,000 $324,000 $319,000 $333,000 $335,000 Churn (Revenue) 4.9% 4.6% 4.3% 7.5% 2.6%
Quarterly Conference Call Digex will host a conference call on Wednesday, April 24th, at 4:30 p.m. EDT to review its first 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: 3349857 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, April 24, 2002 at 7:00 p.m. EDT through Wednesday, May 1, 2002 at 5:00 p.m. EDT by dialing (800) 944-2125 or 6 (402) 220-6012 (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. 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 to Internet-based businesses, 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. ABOUT THE WORLDCOM-DIGEX AFFILIATION - -------------------------------------------------------------------------------- The WorldCom-Digex affiliation strategically combines the custom managed Web and application hosting expertise of Digex with the shared, dedicated and colocation hosting technologies of WorldCom to offer businesses of all sizes the full continuum of secure, dependable hosting services. Powered by the reach and reliability of the facilities-based WorldCom global network, the WorldCom-Digex affiliation rapidly delivers scalable, high-availability outsourced solutions that enable companies throughout North America, Europe and Asia to better focus on their core business. *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. # THE MAGIC QUADRANT IS COPYRIGHTED FEBRUARY 2002 BY GARTNER, INC. AND IS REUSED WITH PERMISSION. GARTNER'S PERMISSION TO QUOTE ITS MAGIC QUADRANT RESEARCH SHOULD NOT BE DEEMED TO BE AN ENDORSEMENT OF ANY COMPANY OR PRODUCT DEPICTED IN THE QUADRANT. THE MAGIC QUADRANT IS GARTNER'S OPINION AND IS AN ANALYTICAL REPRESENTATION OF A MARKETPLACE AT AND FOR A SPECIFIC TIME PERIOD. IT MEASURES VENDORS AGAINST GARTNER-DEFINED CRITERIA FOR A MARKETPLACE. THE POSITIONING OF VENDORS WITHIN A MAGIC QUADRANT IS BASED ON THE COMPLEX INTERPLAY OF MANY FACTORS. GARTNER DOES NOT ADVISE ENTERPRISES TO SELECT ONLY THOSE FIRMS IN THE LEADERS SEGMENT. IN SOME SITUATIONS, FIRMS IN THE VISIONARY, CHALLENGER, OR NICHE PLAYER SEGMENTS MAY BE THE RIGHT MATCH FOR AN ENTERPRISE'S REQUIREMENTS. WELL-INFORMED VENDOR SELECTION DECISIONS SHOULD RELY ON MORE THAN A MAGIC QUADRANT. GARTNER RESEARCH IS INTENDED TO BE ONE OF MANY INFORMATION SOURCES AND THE READER SHOULD NOT RELY SOLELY ON THE MAGIC QUADRANT FOR DECISION-MAKING. GARTNER EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED OF FITNESS OF THIS RESEARCH FOR A PARTICULAR PURPOSE. ALL TRADEMARKS, TRADENAMES AND SERVICE MARKS MENTIONED AND/OR USED HEREIN BELONG TO THEIR RESPECTIVE OWNERS. ### 7 DIGEX, INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (AMOUNTS THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED MARCH 31, ----------------------------- 2002 2001 ------------- ------------- Revenues: Revenue $ 40,868 $ 51,937 Revenue from WorldCom 10,889 1,115 ------------- ------------- Total Revenue 51,757 53,052 Costs and expenses: Cost of operations 4,288 5,156 Cost of services 25,070 24,545 Selling, general and administrative 28,011 34,282 Provision for doubtful accounts 2,173 2,898 Deferred compensation 597 1,072 Depreciation and amortization (2) 40,223 29,489 ------------- ------------- Total costs and expenses 100,362 97,442 ------------- ------------- Loss from operations (48,605) (44,390) Other income (expense): Interest expense (1,992) (698) Interest income and other 161 869 ------------- ------------- Net loss (50,436) (44,219) Accretion of preferred stock discount (1,006) (1,007) ------------- ------------- Net loss available to common stockholders $ (51,442) $ (45,226) ============= ============= Net loss per common share - basic and diluted $ (0.80) $ (0.71) ============= ============= Shares used in computing basic and diluted net loss per share 64,138,466 63,951,087 ============= ============= EBITDA (1) $ (7,785) $ (13,829)
(1) EBITDA before certain charges consists of earnings (loss) before interest expense, interest and other income, 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. (2) Net loss per common share - basic and diluted Digex adopted the provisions of Statement of Financial Accounting Standards No. 142, GOODWILL AND OTHER INTANGIBLE ASSETS , effective January 1, 2002, and ceased amortization of amounts assigned to goodwill and acquired workforce. Depreciation and amortization expense excluding the amortization of goodwill and acquired workforce in the first quarter of 2001 was $28,949. Adjusted net loss available to common stockholders was $44,686 (or $0.70 loss per common share) for the first quarter of 2001. 8 DIGEX, INCORPORATED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)
MARCH 31, DECEMBER 31, 2002 2001 ----------- ----------- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 10,884 $ 12,096 Restricted investments 3,217 3,197 Accounts receivable, net of allowance of $4,717 and $4,806 in 2002 and 2001, respectively 20,017 25,159 Due from WorldCom 15,285 15,179 Deferred costs 6,444 7,302 Prepaid expenses and other current assets 5,577 7,579 ---------- ----------- Total current assets 61,424 70,512 Property and equipment, net 302,881 327,701 Goodwill and intangible assets, net 18,773 19,231 Notes receivable from employees 7,248 6,825 Other assets 2,543 3,089 ---------- ----------- Total assets $ 392,869 $ 427,358 ========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 43,554 $ 43,491 Due to WorldCom 7,072 4,475 Current portion of deferred liabilities 6,635 7,572 Current portion of note payable 57 56 Current portion of notes payable to Intermedia 4,887 -- Current portion of capital lease obligations 5,676 5,675 ---------- ----------- Total current liabilities 67,881 61,269 Deferred liabilities 3,851 4,257 Notes payable 3,344 3,208 Notes payable to Intermedia 98,313 90,000 Capital lease obligations 28,662 29,477 ---------- ----------- Total liabilities 202,051 188,211 ---------- ----------- Commitments and contigencies Redeemable preferred stock, $.01 par value; 5,000,000 shares authorized; 100,000 shares designated as Series A Convertible; 100,000 Series A Convertible shares issued and outstanding in 2002 and 2001 (aggregate liquidation preference of $100,000) 83,995 81,503 Stockholders' equity: Class A common stock, $.01 par value; 100,000,000 shares authorized; 24,788,466 shares issued and outstanding in 2002 and 2001 248 248 Class B common stock, $.01 par value; 50,000,000 shares authorized; 39,350,000 shares issued and outstanding in 2002 and 2001 394 394 Additional capital 544,016 545,020 Accumulated deficit (434,764) (384,328) Deferred compensation (2,851) (3,448) Accumulated other comprehensive loss (220) (242) ---------- ----------- Total stockholders' equity 106,823 157,644 ---------- ----------- Total liabilities and stockholders' equity $ 392,869 $ 427,358 ========== ===========
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