-----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, ItSEJ/9v2GIb0GY8BBT+T5QEnf+TK0pLXO4S/PdtbmoOWNdPeDoAvWrZEmQrAzYB VRZFIdJCbvi99SFzpnjUuQ== 0000931763-99-002240.txt : 19990806 0000931763-99-002240.hdr.sgml : 19990806 ACCESSION NUMBER: 0000931763-99-002240 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990805 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990805 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: SEC FILE NUMBER: 000-20135 FILM NUMBER: 99678760 BUSINESS ADDRESS: STREET 1: 3625 QUEEN PALM DR STREET 2: STE 720 CITY: TAMPA STATE: FL ZIP: 33619 BUSINESS PHONE: 8138290011 MAIL ADDRESS: STREET 1: 3625 QUEEN PALM DRIVE CITY: TAMPA STATE: FL ZIP: 33619-1309 FORMER COMPANY: FORMER CONFORMED NAME: INTERMEDIA COMMUNICATIONS OF FLORIDA INC DATE OF NAME CHANGE: 19930328 8-K 1 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): August 5, 1999 ---------------- INTERMEDIA COMMUNICATIONS INC. - ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 59-2913586 --------------------------------- --------------------- (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification No.) 0-20135 ------------------------ (Commission File Number) 3625 Queen Palm Drive, Tampa, Florida 33619-1309 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (813) 829-0011 -------------------------- Item 5. Other Events On August 4, 1999, Intermedia Communications Inc. (the "Company") issued the attached press release. Item 7. Financial Statements and Exhibits Exhibit 99 Press Release, dated August 4, 1999. 2 SIGNATURE 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 thereunto duly authorized. Date: August 4, 1999 INTERMEDIA COMMUNICATIONS INC. ------------------------------ (Registrant) By: /s/ Robert M. Manning ------------------------------ Name: Robert M. Manning Title: Senior Vice President and Chief Financial Officer 3 EXHIBIT INDEX Exhibit Page No. Description No. - -------- ----------- ---- 99 Press Release, dated August 4, 1999 EX-99 2 PRESS RELEASE, DATED AUGUST 4, 1999 Exhibit 99 Contact: Curtis Lightburn Vice President, Investor Relations 813-829-2408 cglightburn@intermedia.com Media: Robert Pflieger Golin/Harris 202-626-1153 Rpflieger@golinharris.com Intermedia Communications Announces Second Quarter Results Increased Growth Pushes Quarterly Revenue to $218 Million Company Also Completes Digex IPO and Inks Pre-271 Data Agreement with Bell Atlantic TAMPA, FL - (August 4, 1999) - Intermedia Communications Inc. (NASDAQ: ICIX) today announced record revenue of $217.9 million for the quarter ended June 30, 1999. Last week, Intermedia's majority-owned Digex (NASDAQ: DIGX) subsidiary completed an initial public offering (IPO) of its common stock. Gross proceeds of $195.5 million were raised by issuing 18.7 percent of Digex to the public, with Intermedia retaining 81.3 percent ownership. Earlier this week, the company also announced an agreement to provide data services to Bell Atlantic's out-of-region customers on a pre-271 basis. Intermedia has the 4th largest nationwide frame relay and IP network and an industry leading 793 network to network data interconnections (NNIs) which makes Intermedia's data and IP network the densest and most flexible in the United States. Intermedia also announced its plan to expand its IP backbone to OC48 capacity. "As usual, it has been a busy quarter at Intermedia," said David Ruberg, Intermedia's president, chairman, and chief executive officer. "We have put ourselves in an ideal position to continue to improve operating results in the near term and also to capitalize on sustainable growth opportunities in Internet, data, and managed services and applications. Our strategy is Internet centric, and the value proposition to our customers is in integrated services and managed applications." SUMMARY OF SECOND QUARTER 1999 RESULTS Revenue for the second quarter of $217.9 million was up 6 percent sequentially over first quarter 1999 revenue of $204.7 million. Consolidated EBITDA (as defined below) for the second quarter was positive $10.1 million, inclusive of negative EBITDA of $12.2 million at Digex. "In the second quarter, we saw revenue growth accelerate to over 28 percent on an annualized basis versus 25 percent in the first quarter," said Robert M. Manning, Intermedia's chief financial officer. "The combination of accelerating revenue growth and increasing efficiency are driving expanding EBITDA margins in our core business. We expect accelerating financial improvements in the second half of 1999." REVENUE ANALYSIS Enhanced Data and Internet Services Enhanced Data and Internet services continued its growth. Revenue for the second quarter was $66.7 million, an increase of 56 percent over second quarter 1998 and an increase of 11 percent sequentially. Revenue grew sequentially in all categories, and was led by revenue growth at Digex, which grew 34 percent sequentially to $12.6 million in the second quarter versus $9.4 million in the first quarter of 1999, and was up 166 percent over the second quarter of 1998. Frame relay and ATM revenue also grew at double digit rates sequentially, as a function of increases in managed services as well as nodes in service. Frame relay nodes in service increased by 3,570 in the second quarter to 42,741. Frame relay nodes in service also increased 58 percent over the second quarter of 1998. Competitive Local Services Competitive Local services continued its growth. Revenue for the quarter was $55.5 million, an increase of 45 percent over second quarter 1998 and an increase of 5 percent sequentially. Intermedia installed 37,692 access lines in the quarter. 6,759 resale lines were either converted on-switch or pruned, bringing the total access lines in service at the end of the period to 407,675, a 46 percent increase versus second quarter 1998. At the end of the second quarter, 77 percent of the lines in service were on-switch. "Our on-switch percentage, gross margins, and revenue per access line continue to be the benchmarks in our industry," said Manning. "In the second quarter, we expanded our UV.net service, which provides integrated local, long distance and high-speed Internet access to small and medium-sized businesses, to 20 additional cities, bringing our total market coverage to 23 major metropolitan cities." Interexchange Services Interexchange revenue was $64.3 million in the second quarter, a 22 percent decrease versus second quarter 1998, and down 5 percent sequentially. "While the reduction in long distance revenue that has resulted from our intentional exit of certain lines of business, such as wholesale and low end stand-alone long distance, has helped to improve margins, we are nevertheless dissatisfied with the overall performance of this category," said Manning. "We have focussed on selling integrated services, and 100 percent of our UV.net sales are for multiple services. As UV.net sales and install activity ramps up in the second half of 1999, we expect improving results in this category." Integration Services Integration Services revenue for the quarter was $31.4 million, an increase of 18 percent versus second quarter of 1998 and an increase of 31 percent sequentially. OUTLOOK "Overall, the second quarter results were consistent with our expectations," said Manning. "Our growth rate has increased, and we believe we will be able to further accelerate revenue growth in the second half of the year." "Our core business is delivering improving financial performance, and we expect that trend to continue in the second half of the year," said Manning. "And, by creating a public entity at Digex, we have attracted the management talent and financing to aggressively pursue the opportunities in the managed web hosting and applications outsourcing marketplace, while retaining the vast majority of the financial benefits and all of the strategic benefits." EBITDA consists of earnings before interest and other income, income taxes, depreciation, amortization and charges for in-process R & D and business restructuring, integration and other charges. EBITDA does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA should not 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 is not a term defined by generally accepted accounting principles, and, as a result, the measure of EBITDA presented herein may not be comparable to similarly titled measures used by other companies. 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 Intermedia's services, the ability of Intermedia to complete its restructuring and integration program, and the ability of the Company to successfully implement its strategies, each of which may be impacted, among other things, by economic, competitive or regulatory conditions. These and other applicable risks are summarized under the caption "Risk Factors" in the Company's Form 10-K Annual Report for its fiscal year ended December 31, 1998, and are updated periodically through the filing of reports and registration statements with the Securities and Exchange Commission. About Intermedia Intermedia Communications provides integrated solutions to business and government customers. These solutions include voice and data, local and long distance, and advanced network access services in major U.S. markets. Intermedia's enhanced data portfolio, including frame relay networking, ATM, and a full range of business Internet solutions and web hosting services, offers seamless end-to-end service virtually anywhere in the world. Intermedia is one of the top 5 Internet services providers (ISPs) to businesses and is consistently rated at or near the top of all ISPs for network performance and customer services by such industry publications as Keynote and Boardwatch. Intermedia Communications Inc. is headquartered in Tampa, Florida, and can be found on the World Wide Web at http://www.intermedia.com. ------------------------- About Digex Digex is a leading provider of Web and application hosting services for some of the world's leading companies that rely on the Internet as a critical business tool. Digex also offers value-added enterprise and professional services, including performance and security testing, monitoring, reporting and networking services. Digex customers, from mainstream corporations to Internet-based businesses, leverage Digex's services to deploy secure, scalable, high performance business solutions, including electronic retailing, online banking, online procurement and customer self-service applications. Digex, Incorporated is headquartered in Beltsville, Maryland and is a subsidiary of Intermedia Communications. Additional information on Digex is available at http://www.digex.com. - -------------------- INTERNET USERS: Intermedia news releases, investor contacts and other useful information are available on Intermedia's website at http://www.intermedia.com. To receive news releases by e-mail or to request that information be mailed to you, please visit the Investor Relations section of our website, and go to the "Request Information" link. INTERMEDIA COMMUNICATIONS INC. Financial Highlights (in thousands, except share data)
Three Months Ended Six Months Ended June 30, June 30, ------------------------- --------------------------- 1999 1998 1999 1998 --------- --------- --------- --------- Revenues: Local network services $ 55,475 $ 38,193 $ 108,457 $ 71,869 Enhanced data services 66,675 42,668 126,768 79,205 Interexchange services 64,329 82,747 131,942 127,498 Integration services 31,410 26,622 55,444 48,443 ---------- ---------- ---------- ---------- Total revenues 217,889 190,230 422,611 327,015 Expenses: Network operations 93,996 88,015 187,904 159,557 Facilities administration and maintenance 23,171 18,536 45,807 33,568 Cost of goods sold 19,501 17,218 35,305 30,909 Selling, general and administrative 71,102 56,402 128,416 102,747 Depreciation and amortization 68,772 50,215 140,383 90,991 Charge-off of purchased in process R & D - - - 63,000 Business restructuring, integration and other charges 3,439 50,081 8,838 50,081 ---------- ---------- ---------- ---------- Total operating expenses 279,981 280,467 546,653 530,853 ---------- ---------- ---------- ---------- Loss from operations (62,092) (90,237) (124,042) (203,838) Other income (expense) Interest (69,224) (47,858) (131,402) (97,159) Other 13,749 6,040 20,307 16,770 ---------- ---------- ---------- ---------- Net loss (117,567) (132,055) (235,137) (284,227) Preferred stock dividends and accretions (22,965) (18,876) (45,448) (37,471) ---------- ---------- ---------- ---------- Net loss attributable to common stockholders $ (140,532) $ (150,931) $ (280,585) $ (321,698) ========== ========== ========== ========== Loss per common share: Net loss before charge for in-process R&D and restructuring $ (2.74) $ (2.33) $ (5.47) $ (5.30) Charge for in-process R&D - - - $ (1.60) Charge for business restructuring, integration and other charges $ (0.07) $ (1.16) $ (0.18) $ (1.27) ---------- ---------- ---------- ---------- Basic and diluted net loss per common share $ (2.81) $ (3.49) $ (5.65) $ (8.17) ========== ========== ========== ========== Weighted average shares outstanding basic and diluted 50,009,473 43,300,889 49,682,966 39,373,704 EBITDA (1) $ 10,119 $ 10,059 $ 25,179 $ 234 Other Data: June 30, 1999 March 31, 1999 ------------- -------------- Local and Long Distance Services (2) Buildings (3) 4,374 4,359 Voice switches in operation 25 23 Access line equivalents 407,675 376,742 Access line equivalents per local switch (4) 14,315 13,862 Enhanced Data Services (2) Data switches in operation 173 167 Nodes in service (5) 42,741 39,171 NNI connections 793 728 Employees 4,262 4,128
(1) EBITDA consists of earnings before interest and other income, income taxes, depreciation, amortization and charges for in-process R&D and business restructuring and Integration expenses. EBITDA does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA should not 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 is not a term defined by generally accepted accounting principles, and, as a result, the measure of EBITDA presented herein may not be comparable to similarly titled measures used by other companies. (2) Amounts reflected in the table are based upon information contained in the Company's operating records. (3) Includes both on-net direct connections with intermedia-owned fiber optic cable and on-net extended connections with leased circuits. (4) Calculated by dividing the number of on-switch access line equivalents by the number of switches providing local service. (5) Amount represents an individual point of origination and termination of data served by the Company's enhancement network. -----END PRIVACY-ENHANCED MESSAGE-----