-----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, WzdHK7WkZ57U5IPvuvrGUmndW6alSvJMeqfJ7AiSwfzMvBG3M5yr+e9Lm6eX+ydU cwBkR81op8t5xnLkikze8w== 0000940180-98-000947.txt : 19980904 0000940180-98-000947.hdr.sgml : 19980904 ACCESSION NUMBER: 0000940180-98-000947 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980902 ITEM INFORMATION: FILED AS OF DATE: 19980903 SROS: NASD 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: 98703650 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 CURRENT REPORT 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): September 3, 1998 ----------------- INTERMEDIA COMMUNICATIONS INC. -------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 59-2913586 - -------------------------- ------------------- (State or other jurisdic- (I.R.S. Employer tion of incorporation or Identification No.) organization) 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 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS - ---------------------------------------------------------------------------- (b) Although there is no requirement that Intermedia COmmunications Inc. (the "Company") file financial statements with the Securities and Exchange Commission under Item 7, the Company hereby files unaudited pro forma condensed consolidated financial statements, as Exhibit 99.1, which give applicable effect to the acquisitions of the affiliated entities known as National Tel, which was consummated on April 30, 1998, the affiliated entities known as Long Distance Savers, which was consummated on March 31, 1998, Shared Technologies Fairchild, Inc., which was consummated on March 10, 1998, DIGEX Incorporated, which was consummated in July 1997 and the Company's debt and equity offerings in 1997. Exhibit 99.1 Unaudited Pro Forma Condensed Consolidated Financial Statements 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: September 3, 1998 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 No. Description - ------- ----------- Exhibit 99.1 Unaudited Pro Forma Condensed Consolidated Financial Statements EX-99.1 2 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FIN EXHIBIT 99.1 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SUMMARY The accompanying unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 1998 includes the historical and pro forma effects of the acquisitions of National Telecommunications of Florida, Inc. and NTC, Inc. (collectively, National), which was effected on April 1, 1998 and the Long Distance Savers group of companies (collectively, LDS), which was effected on March 31, 1998. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 1997 includes the historical and pro forma effects of the acquisitions described above and the acquisitions of Shared Technologies Fairchild, Inc. (STFI), which was effected on January 1, 1998 and DIGEX, Incorporated (DIGEX), which was effected July 1, 1997. The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 1997 also includes the pro forma effects of the March, July, October and December 1997 offerings, as the proceeds therefrom were principally used for the aforementioned acquisitions. The pro forma effects are based on the historical financial statements of the acquired businesses giving effect to these transactions under the purchase method of accounting. As such, the total cost of all acquisitions have or will be allocated to the net tangible and intangible assets acquired and liabilities assumed based upon their respective fair values at the effective date of each acquisition. Such allocations and the related amortization periods for purchase transactions recently consummated will be based on valuations or other data which have not yet been completed or obtained. Accordingly, the allocations reflected in the pro forma statements of operations are preliminary and subject to revision. The unaudited pro forma condensed consolidated statements of operations are not intended to purport to be indicative of the actual results of operations that would have been achieved had the acquisitions or offerings in fact been consummated at the beginning of the periods presented. Such pro forma financial information should be read in conjunction with the Consolidated Financial Statements and Notes of Intermedia. 5 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(A) YEAR ENDED DECEMBER 31, 1997
PRO FORMA PRO FORMA PRO FORMA --------- --------- --------- HISTORICAL ADJUSTMENTS SUB TOTALS HISTORICAL ADJUSTMENTS ---------------------- ------------- ---------- ----------------------------- ----------- (B) (C) (D) (E) (F) --- --- --- --- --- CONSOLIDATED DIGEX STFI LDS NATIONAL ------------ -------- ---- --- -------- (DOLLARS IN THOUSANDS) Revenues........................ $ 247,899 $ 19,646 $ 267,545 $ 181,827 $122,267 $65,243 Costs and expenses: Facilities administration line maintenance costs........ 199,139 19,588 (5,400)(g) 213,327 100,356 80,203 47,969 Selling, general and administrative................ 98,598 18,506 (374)(h) 116,730 68,482 31,486 10,428 Depreciation and amortization.................. 53,613 3,390 4,741 (i) 61,744 19,916 2,895 995 43,037 (m) Charge off of purchased in-process R&D................ 60,000 60,000 --------- ------- -------- -------- ------- ------- ------ ---------- 411,350 41,484 (1,033) 451,801 188,754 114,584 59,392 43,037 --------- ------- -------- -------- ------- ------- ------ ---------- Income (loss) from operations.................... (163,451) (21,838) 1,033 (184,256) (6,927) 7,683 5,851 (43,037) Other income (expense): Interest expense............. (60,662) (784) (76,491)(j) (137,937) (29,775) (896) (145) 15,974 (n) 11,121 (o) 145 (p) Interest and other income (expense)............ 26,824 486 (5,120)(k) 22,190 (62,428) 4,908 212 (20,677)(k) 62,300 (q) --------- ------- -------- -------- ------- ------- ------ ---------- Income (loss) before income taxes and extraordinary item... (197,289) (22,136) (80,578) (300,003) (99,130) 11,695 5,918 Income tax provision............ (380) --------- ------- -------- -------- ------- ------- ------ ---------- Income (loss) before extraordinary item............. (197,289) (22,136) (80,578) (300,003) (99,510) 11,695 5,918 25,826 Extraordinary income (loss)..... (43,834) (43,834) --------- ------- -------- -------- ------- ------- ------ ---------- Net income (loss)............... (241,123) (22,136) (80,578) (343,837) (99,510) 11,695 5,918 25,826 Preferred stock dividends and accretions................. (43,742) (28,108)(l) (71,850) (4,628) 4,628 (r) --------- ------- -------- -------- ------- ------- ------ ---------- Net loss attributable to common stockholders............ $ (284,865) $(22,136) $(108,686) $(415,687) $(104,138) $ 11,695 $ 5,918 $ 30,454 ========= ======= ======== ======== ======== ======= ====== ========== Net loss per share.............. $ (8.54) $ (12.47) ========= ======== Weighted average number of shares O/S..................... 33,340 33,340 ========= ======== EBITDA(t)....................... $ (49,838) $ (62,512) ========= ======== PRO FORMA --------- TOTALS(A) --------- Revenues.......................... $ 636,882 Costs and expenses: Facilities administration line maintenance costs.......... 441,855 Selling, general and administrative.................. 227,126 Depreciation and amortization.................... 128,587 Charge off of purchased in-process R&D.................. 60,000 --------- 857,568 --------- Income (loss) from operations...................... (220,686) Other income (expense): Interest expense............... (141,513) Interest and other income (expense).............. 6,505 --------- Income (loss) before income taxes and extraordinary item..... (355,694) Income tax provision.............. (380) --------- Income (loss) before extraordinary item............... (356,074) Extraordinary income (loss)....... (43,834) --------- Net income (loss)................. (399,908) Preferred stock dividends and accretions................... (71,850) --------- Net loss attributable to common stockholders.............. $ (471,758) ========= Net loss per share................ $ (11.34) ========= Weighted average number of shares O/S....................... 41,610(s) ========= EBITDA(t)......................... $ (32,099) =========
See Accompanying Notes 6 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS YEAR ENDED DECEMBER 31, 1997 (DOLLARS AND SHARES IN THOUSANDS) (a) The unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 1997 does not give effect to any potential cost savings and synergies that could result from the DIGEX, STFI, LDS or National acquisitions. The effect of the write-off of intangible assets associated with the STFI acquisition, consisting of in-process research and development of $85.0 million, has not been reflected in the statement as it is a non-recurring charge. The allocations of purchase price to the fair values of assets and liabilities of STFI, LDS and National is preliminary for purposes of these pro forma financial statements. (b) This column represents the historical consolidated results of operations for Intermedia for the year ended December 31, 1997. (c) This column represents the operating results for DIGEX for the six months ended June 30, 1997. (d) This column represents the historical results of operations of STFI for the year ended December 31, 1997. (e) This column represents the historical results of operations of LDS for the year ended December 31, 1997. (f) This column represents the historical results of operations of National for the year ended December 31, 1997. (g) This adjustment represents the reduction of network lease expense due to unfavorable lease terms accrued for in purchase accounting. (h) This adjustment represents the reversal of DIGEX's amortization of deferred compensation associated with stock compensation preceding the purchase. (i) This adjustment represents the amortization expense of intangible assets related to DIGEX. (j) This adjustment represents interest expense, including amortization of debt discount and finance costs, of $24,400 on the 11-1/4% Senior Discount Notes Due 2007 that were issued in July 1997 (net of $10,800 reduction of interest due to the retirement of the 13-1/2% Senior Notes), $19,800 on 8-7/8% Senior Notes due 2007 that were issued in October 1997 and $43,100 on 8-1/2% Senior Notes due 2008 that were issued in December 1997 as if the Notes had been issued January 1, 1997. (k) Where acquisitions were paid all or partially in cash, interest income was reduced to reflect the absence of the cash or investments for the full year. (l) This adjustment increases the preferred stock dividends and accretions to amounts that would have been recorded if Intermedia's Series B, D and E preferred stock had been outstanding for the entire period. (m) This adjustment represents the additional amortization expense that would have been incurred in connection with the STFI, LDS and National acquisitions. For purposes of the pro forma presentation, it is assumed that the excess of the purchase price over the net tangible assets acquired will ultimately be allocated to either identifiable intangibles such as developed technology and customer lists or goodwill with the weighted average amortization period of 20 years. 7 (n) This adjustment represents the elimination of interest expense in STFI's historical financial statements related to the 12-1/4% Senior subordinated Discount Notes purchased by the Company. (o) This adjustment represents the elimination of interest expense in STFI's historical financial statements related to the Credit Facility Term Loans and Revolving Credit Facility paid by the Company upon closing of the acquisition. (p) This adjustment represents the elimination of interest expense in National's historical financial statements related to the outstanding debt paid by the Company at closing. (q) This adjustment represents the elimination of the following non- recurring charges related to the STFI's terminated merger agreement with Tel- Save, Inc. Termination of merger agreement--$15,000; Termination of long distance service contract--$36,000; and Retirement of outstanding options held by Tel-Save, Inc.--$11,300 (r) This adjustment represents the elimination of preferred stock dividends and accretions of STFI. (s) Includes the effect of 5,360 shares issued for LDS and 2,910 shares issued for National. (t) EBITDA consists of earnings (loss) before interest expense, interest and other income, income tax (provision) benefit, depreciation, amortization and charges for in-process R&D and the business integration and restructuring costs associated with the Program. EBITDA is presented since it is a measure commonly used in the telecommunications industry to measure operating performance, asset value and financial leverage. It is presented to enhance the reader's understanding of the Company's operating results and is not intended to present cash flow for the periods presented. 8 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(A) SIX MONTHS ENDED JUNE 30, 1998
HISTORICAL ----------------------------------- (B) (C) (D) PRO FORMA PRO FORMA --- --- --- --------- --------- CONSOLIDATED LDS NATIONAL ADJUSTMENTS TOTALS( A) ------------ -------- ---------- ---------------- ---------- (DOLLARS IN THOUSANDS) Revenues .............................................. $ 327,015 $30,012 $17,897 -- $ 374,924 Costs and expenses: Facilities administration and line maintenance costs................................... 224,034 19,345 12,924 _7 256,303 Selling, general and administrative ................. 102,747 5,816 3,385 -- 111,948 Depreciation and amortization ....................... 89,166 655 276 3,528 (e) 93,625 Charge off of purchased in-process R&D .............. 85,000 -- -- -- 85,000 Business restructuring, integration and other charges .......................................... 52,551 -- -- -- 52,551 --------- ------- --------- ------------ --------- 553,498 25,816 16,585 3,528 599,427 --------- ------- ------- ------- --------- Income (loss) from operations ......................... (226,483) 4,196 1,312 (3,528) (224,503) Other income (expense): Interest expense ...................................... (97,159) -- (54) 1,972 (f) (89,053) 54 (g) 6,134 (h) Interest and other income (expense) ................... 16,770 65 22 (1,181)(i) 15,676 --------- ------- ------- ------- --------- Income (loss) before income taxes and extraordinary items .................................. (306,872) 4,261 1,280 3,451 (297,880) Income tax (provision) benefit ........................ -- -- -- -- -- --------- ------- ------- ------- --------- Income (loss) before extraordinary item ............... (306,872) 4,261 1,280 3,451 (297,880) Extraordinary income (loss) ........................... -- -- -- -- -- --------- ------- ------- ------- --------- Net income (loss) ..................................... (306,872) 4,261 1,280 3,451 (297,880) Preferred stock dividends and accretions .............. (37,471) -- -- -- (37,471) --------- ------- ------- ------- --------- Net loss attributable to common stockholders .......... $(344,343) $ 4,261 $ 1,280 $ 3,451 $(335,351) ========= ======= ======= ======= ========= Net loss per share .................................... $(8.75) $(8.52) ========= ========= Weighted average number of shares ..................... 39,374 39,374 ========= ========= EBITDA(j) ............................................. $ 234 $ 6,673 ========= =========
See Accompanying Notes 9 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS SIX MONTHS ENDED JUNE 30, 1998 (AMOUNTS AND SHARES IN THOUSANDS) (a) The unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 1998 does not give effect to any potential cost savings and synergies that could result from the LDS or National acquisitions. The allocations of purchase price to fair values of assets and liabilities of STFI, LDS and National are preliminary for purposes of proforma financial statements. (b) This column represents the historical consolidated results of operations for Intermedia for the six months ended June 30, 1998. (c) This column represents the historical results of operations of LDS for the three months ended March 31, 1998. (d) This column represents the historical results of operations of National for the three months ended March 31, 1998. (e) This adjustment represents the additional amortization expense that would have been incurred in connection with the LDS and National acquisitions. For purposes of the pro forma presentation, it is assumed that the excess of the purchase price over the net tangible assets acquired will ultimately be allocated to either identifiable intangibles such as developed technology and customer lists or goodwill with the weighted average amortization period of approximately 20 years. (f) This adjustment represents the elimination of interest expense in STFI's historical financial statements related to the Credit Facility Term Loans and Revolving Credit Facility paid by the Company upon closing of the acquisition. (g) This adjustment represents the elimination of interest expense in National's historical financial statements related to the outstanding debt paid by the Company at closing. (h) This adjustment represents the elimination of imputed interest related to a business acquisition. (i) Where acquisitions were paid all or partially in cash, interest income was reduced to reflect the absence of the cash or investments for the full year. (j) EBITDA consists of earnings (loss) before interest expense, interest and other income, income tax (provision) benefit, depreciation, amortization and charges for in-process R&D and the business integration and restructuring costs associated with the Program. EBITDA is presented since it is a measure commonly used in the telecommunications industry to measure operating performance, asset value and financial leverage. It is presented to enhance the reader's understanding of the Company's operating results and is not intended to present cash flow for the periods presented. 10 -----END PRIVACY-ENHANCED MESSAGE-----