-----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, Bg6tsmzJUJlAcv9TFYHyn7UFXXPpeko2nIZ/HjAcTBXExyfMGE13mMvr60NwNU/8 RyOMB6WcY0dmWe0nlk8vwA== 0000940180-97-000672.txt : 19970805 0000940180-97-000672.hdr.sgml : 19970805 ACCESSION NUMBER: 0000940180-97-000672 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19970709 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970804 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERMEDIA COMMUNICATIONS OF FLORIDA 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/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-20135 FILM NUMBER: 97650778 BUSINESS ADDRESS: STREET 1: 3625 QUEEN PALM DR STREET 2: STE 720 CITY: TAMPA STATE: FL ZIP: 33619 BUSINESS PHONE: 8138290011 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K/A SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------- FORM 8-K/A AMENDMENT NO. 1 CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 --------------- Date of Report (Date of earliest event reported): July 9, 1997 ------------ 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 of the Current Report on Form 8-K, dated July 9, 1997, of Intermedia Communications Inc., a Delaware corporation, is hereby amended and restated in its entirety as follows: Item 7. Financial Statements and Exhibits - ------------------------------------------ (a) Financial Statements of Businesses Acquired The Financial Statements of DIGEX filed as part of the Annual Report of DIGEX on Form 10-KSB for the period ended December 31, 1996 and the Financial Statements of DIGEX filed as part of the Quarterly Report of DIGEX on Form 10-QSB for the period ended March 31, 1997 are incorporated herein by reference. (b) Pro Forma Financial Information Unaudited Pro Forma Condensed Consolidated Financial Statements for the Company are filed as part of this report. (c) Exhibits Exhibit 2.1 Agreement and Plan of Merger among the Company, Daylight and DIGEX, dated June 4, 1997. Exhibit 99(c)(1) to the Company's Schedule 14D-1 filed with the Securities and Exchange Commission on June 11, 1997 is incorporated herein by reference. Exhibit 4.1 Indenture, by and between the Company and SunTrust Bank, Central Florida, National Association, as Trustee, dated as of July 9, 1997. Exhibit 4.2 Certificate of Designation of Voting Power, Designation Preferences and Relative, Participating, Optional and Other Special Rights and Qualifications, Limitations and Restrictions of 7% Series D Junior Convertible Preferred Stock of the Company, filed with the Secretary of State of the State of Delaware on July 8, 1997. Exhibit 4.3 Deposit Agreement by and between the Company and Continental Stock Transfer & Trust Company, dated as of July 9, 1997. Exhibit 99.1 Press Release, dated July 10, 1997. 2 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The accompanying unaudited pro forma condensed consolidated balance sheet of Intermedia Communications Inc. at March 31, 1997, and the related unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 1996 and the three months ended March 31, 1997 includes the historical and pro forma effects of the acquisitions of the Telecommunications Division of EMI Communications Corporation (EMI), acquired in June 1996, certain assets and related business lines of Universal Telcom Technologies, Inc. (UTT) and of Netsolve, Incorporated (Netsolve) which were both acquired in December 1996, and the acquisition of DIGEX, Incorporated (DIGEX) on July 9, 1997. The unaudited pro forma condensed consolidated statements of operations have been prepared to reflect the aforementioned purchase transactions as if they were consummated at the beginning of each period for which pro forma statements of operations are presented, and at March 31, 1997 for the condensed consolidated balance sheet. The pro forma effects are based on the historical financial statements of the acquired businesses giving effect to the transactions under the purchase method of accounting and the assumptions and adjustments described in the accompanying supplemental notes. The pro forma condensed consolidated statements of operations also reflect the effects of the issuance of preferred stock in March 1997 as if it occurred at the beginning of the respective periods. The pro forma information is not intended to purport to be indicative of the actual results or financial position that would have been achieved had the acquisitions in fact been consummated at the beginning of each period presented or at March 31, 1997. Such pro forma financial information should be read in conjunction with the Consolidated Financial Statements and Notes of Intermedia Communications Inc. 3 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1997 (IN THOUSANDS)
HISTORICAL -------------------- (a) (b) PRO FORMA PRO FORMA CONSOLIDATED DIGEX ADJUSTMENTS TOTALS ------------ ------- ----------- --------- ASSETS Current assets: Cash and cash equivalents..... $435,859 $23,192 $(155,000)(c) $304,051 Short-term investments........ 5,842 -- 5,842 Restricted investments........ 27,102 -- 27,102 Accounts receivable, net...... 21,880 5,571 27,451 Prepaid expenses and other current assets............... 5,515 1,459 6,974 -------- ------- --------- -------- Total current assets........ 496,198 30,222 (155,000) 371,420 Restricted investments.......... 10,483 -- 10,483 Telecommunications and other equipment...................... 274,405 28,559 (5,156)(h) 297,808 Less accumulated depreciation... (44,827) (5,156) 5,156 (h) (44,827) -------- ------- --------- -------- Telecommunications and other equipment, net................. 229,578 23,403 -- 252,981 Intangible assets, net 47,058 -- 171,039 (d) 218,097 Other assets.................... 4,071 1,833 5,904 -------- ------- --------- -------- Total assets................ $787,388 $55,458 $ 16,039 $858,885 ======== ======= ========= ======== Liabilities, redeemable preferred stock and stockholders' equity Current liabilities: Accounts payable.............. $ 17,257 $12,460 $ 29,717 Other accrued expenses........ 29,535 4,716 $ 9,800 (e) 44,051 Current portion of long-term debt and capital lease obligation................... 516 5,106 5,622 -------- ------- --------- -------- Total current liabilities... 47,308 22,282 9,800 79,390 Other non-current liabilities... 10,900 (e) 10,900 Long-term debt and capital lease obligations.................... 363,964 8,515 -- 372,479 -------- ------- --------- -------- Total liabilities........... 411,272 30,797 20,700 462,769 Series A redeemable exchangeable preferred stock and accrued dividends...................... 292,250 -- 292,250 Stockholders' equity: Common stock.................. 163 113 (113)(f) 163 Additional paid-in capital.... 209,918 62,540 (62,540)(f) 229,918 20,000 (g) Accumulated deficit........... (121,921) (37,992) 37,992 (f) (121,921) Deferred compensation......... (4,294) -- (4,294) -------- ------- --------- -------- Total stockholders' equity.. 83,866 24,661 (4,661) 103,866 -------- ------- --------- -------- Total liabilities, redeemable preferred stock and stockholders' equity... $787,388 $55,458 $ 16,039 $858,885 ======== ======= ========= ========
4 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (a) This column represents Intermedia's historical consolidated balance sheet at March 31, 1997. (b) This column represents DIGEX's historical balance sheet at March 31, 1997. (c) This adjustment represents the cash purchase price for 11,674,261 shares of DIGEX common stock at $13 per share, plus estimated transaction expenses of $3,235. (d) This adjustment represents the excess of the total purchase price for DIGEX, including $9,300 related to duplicate facilities, $11,400 related to unfavorable leases and $20,000 related to stock options exchanged, over the book values (which approximate fair values) of the net tangible assets of DIGEX acquired. The balance, which is subject to allocation, will be allocated to customer lists and other identifiable intangible assets based upon appraised values, with the excess allocated to goodwill. (e) These adjustments represents the current and non-current portions of assumed liabilities for estimated duplicate network facility costs, following complete suspension of use of such facilities, and unfavorable leases. (f) These adjustments represent the elimination of DIGEX's stockholders' equity for pro forma combining purposes. (g) This adjustment represents the value ascribed to DIGEX's employee stock options and warrants that were exchanged for stock options of Intermedia at fair market value. These options and warrants were granted/issued by DIGEX prior to its acquisition by Intermedia and were "in-the-money" at the acquisition date. (h) This adjustment represents the elimination of DIGEX's accumulated depreciation as fixed assets will be recorded at fair values, which approximate net book value. 5 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1997 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL -------------------- (b) (c) PRO FORMA PRO FORMA CONSOLIDATED DIGEX ADJUSTMENTS TOTALS(a) ------------ ------- ----------- --------- Revenues......................... $ 43,938 $ 8,741 $ 52,679 Costs and expenses............... Facilities administration and maintenance and line costs.... 36,907 9,132 $ (1,800)(d) 44,239 Selling, general and administrative................ 19,526 7,510 27,036 Depreciation and amortization.. 8,294 1,623 5,350 (e) 15,267 -------- ------- -------- -------- 64,727 18,265 3,550 86,542 -------- ------- -------- -------- Loss from operations............. (20,789) (9,524) (3,550) (33,863) Other income (expense): Interest expense............... (11,089) (346) (11,435) Other income................... 4,474 232 (2,475)(f) 2,231 -------- ------- -------- -------- Net loss......................... (27,404) (9,638) (6,025) (43,067) Preferred stock dividends and accretions...................... (3,375) -- (6,960)(g) (10,335) -------- ------- -------- -------- Net loss attributable to common stockholders.................... $(30,779) $(9,638) $(12,985) $(53,402) ======== ======= ======== ======== Net loss per common share........ $ (1.89) $ (3.28) ======== ======= ======== ======== Weighted average number of shares outstanding..................... 16,297 -- 16,297 ======== ======= ======== ========
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (THREE MONTHS ENDED MARCH 31, 1997) (a) The unaudited pro forma operating information does not give effect to any potential cost savings and synergies that could result from the DIGEX acquisition. (b) This column represents Intermedia's historical results of operations for the three months ended March 31, 1997. (c) This column represents DIGEX's historical results of operations for the three months ended March 31, 1997. (d) This adjustment represents reduction of assumed liabilities in connection with the DIGEX acquisition related to duplicate facility costs of $400 and unfavorable lease rates of $1,400. (e) This adjustment represents the additional amortization expense expected to be incurred as a result of the DIGEX acquisition. For purposes of the pro forma presentation, it is estimated that the excess of the purchase price over the net tangible assets acquired will be allocated to customer lists (5 year lives) and goodwill (20 year life). The estimated composite amortization life used above is 8 years. The Company is investigating the amount and the appropriate amortization periods for the intangible assets. (f) This adjustment represents the estimated reduction in interest income that would have been experienced had the cash purchase price been paid at the beginning of the period. (g) This adjustment represents the preferred stock dividends and accretions that would have been recorded if Intermedia's preferred stock had been outstanding for the entire period. 6 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1996 (IN THOUSANDS, EXCEPT PER SHARE DATA)
HISTORICAL ------------------------------------------------- (b) (c) (d) (e) (f) PRO FORMA PRO FORMA CONSOLIDATED EMI UTT NETSOLVE DIGEX ADJUSTMENTS TOTALS (a) ------------ ------- ------- -------- -------- ----------- ---------- Revenues................ $ 103,397 $25,882 $ 4,812 $18,028 $ 15,573 $ (48)(g) $ 167,644 Costs and expenses: Facilities administration and maintenance and line costs................ 81,105 24,331 4,331 12,084 16,020 (48)(g) (9,800)(h) 128,023 Selling, general and administrative....... 36,610 1,646 1,335 1,072 18,934 59,597 Depreciation and amor- tization............. 19,836 1,931 40 -- 2,855 (584)(i) 1,799 (j) 21,400 (k) 47,277 --------- ------- ------- ------- -------- -------- --------- 137,551 27,908 5,706 13,156 37,809 12,767 234,897 --------- ------- ------- ------- -------- -------- --------- Income (loss) from oper- ations................. (34,154) (2,026) (894) 4,872 (22,236) (12,815) (67,253) Other income (expense): Interest expense...... (35,213) -- (230) (30) (1,566) 260 (l) (36,779) Interest and other in- come................. 12,168 118 -- -- 497 (10,759)(m) 2,024 --------- ------- ------- ------- -------- -------- --------- Income (loss) before in- come tax benefit....... (57,199) (1,908) (1,124) 4,842 (23,305) (23,314) (102,008) Income tax benefit...... -- 677 -- -- -- (677)(n) -- --------- ------- ------- ------- -------- -------- --------- Net income (loss)....... (57,199) (1,231) (1,124) 4,842 (23,305) (23,991) (102,008) Preferred stock divi- dends and accretions... (41,340)(p) (41,340) --------- ------- ------- ------- -------- -------- --------- Net loss attributable to common stockholders........... $ (57,199) $(1,231) $(1,124) $ 4,842 $(23,305) $(65,331) $(143,348) ========= ======= ======= ======= ======== ======== ========= Net loss per share...... $ (4.08) $ (9.87) ========= ========= Weighted average num- ber of shares outstanding.......... 14,018 14,518(o) ========= =========
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (YEAR ENDED DECEMBER 31, 1996) (a) The unaudited pro forma operating information does not give effect to any potential cost savings and synergies that could result from the business acquisitions discussed in the introduction to the pro forma information. (b) This column represents Intermedia's historical results of operations for the year ended December 31, 1996, which includes the operating results of EMI beginning July 1, 1996, and UTT and NetSolve beginning December 1, 1996. (c) This column represents EMI's historical results of operations for the six months ended June 30, 1996. (d) This column represents UTT's historical results of operations for the eleven months ended November 30, 1996. 7 (e) This column represents Netsolve's historical results of operations for the eleven months ended November 30, 1996. (f) This column represents DIGEX's historical results of operations for the year ended December 31, 1996. (g) This adjustment represents the elimination of intercompany sales between Intermedia and EMI, prior to its acquisition. (h) This adjustment represents reduction of assumed liabilities in connection with the DIGEX acquisition related to duplicate network facility costs of $4,100 and unfavorable lease rates of $5,700. (i) This adjustment represents a reduction in EMI's historical depreciation expense as a result of the allocation of purchase price to fair values of fixed assets acquired. In addition, this fixed assets are being depreciated for pro forma purposes on a straight line basis using an estimated weighted average remaining life of seven years versus original estimated lives and accelerated depreciation historically followed. (j) This adjustment represents the additional amortization expense that would have been incurred had UTT and Netsolve been acquired at the beginning of the year. (k) This adjustment represents the additional amortization expense that is expected to be incurred in connection with the DIGEX acquisition. For purposes of the pro forma presentation, it is assumed that the excess of the purchase price over the net tangible assets acquired will be allocated to customer lists (5 year lives) and goodwill (20 year life). The composite amortization life used above is eight years. The Company is investigating the amount and the appropriate amortization periods for the intangible assets. (l) This adjustment represents the elimination of interest expense on UTT's and Netsolve's historical statement of operations. (m) Where acquisitions were paid all or partially in cash, interest income was adjusted to reflect the absence of the cash or investments for the full year. (n) Represents the elimination of the historical income tax benefit of EMI that would not have been realized had the operations of EMI been consolidated with Intermedia for the year. (o) Includes the weighted effect of 937,500 shares issued in June 1996 for EMI and 31, 380 shares issued in December 1996 for UTT. (p) This adjustment represents the preferred stock dividends and accretions that would have been recorded if Intermedia's preferred stock had been outstanding for the entire period. 8 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, 1997 INTERMEDIA COMMUNICATIONS INC. ------------------------------ (Registrant) By: /s/ Robert M. Manning ------------------------------------- Name: Robert M. Manning Title: Senior Vice President and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----