-----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, LjAXAw/xSrkaNzMS0UuCP20reAQh3SUaO8YWboUXsZJSa6V15sOtMrqeasoqxbbo O0SLSvIUsHnk2M/FBFF8aw== 0000950123-98-005879.txt : 19980612 0000950123-98-005879.hdr.sgml : 19980612 ACCESSION NUMBER: 0000950123-98-005879 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980519 ITEM INFORMATION: FILED AS OF DATE: 19980611 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/A SEC ACT: SEC FILE NUMBER: 000-20135 FILM NUMBER: 98646387 BUSINESS ADDRESS: STREET 1: 3625 QUEEN PALM DR STREET 2: STE 720 CITY: TAMPA STATE: FL ZIP: 33619 BUSINESS PHONE: 8138290011 FORMER COMPANY: FORMER CONFORMED NAME: INTERMEDIA COMMUNICATIONS OF FLORIDA INC DATE OF NAME CHANGE: 19930328 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K 1 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): May 19, 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 2 Item 7. Financial Statements and Exhibits Exhibit 99.4 of the Current Report on Form 8-K, dated May 20, 1998, of Intermedia Communications Inc., a Delaware corporation, is hereby replaced in its entirety with Exhibit 99 attached hereto. Exhibit 99 Unaudited Pro Forma Condensed Consolidated Financial Statements 2 of 5 3 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: June, 1998 INTERMEDIA COMMUNICATIONS INC. (Registrant) By: /s/ Robert M. Manning Name: Robert M. Manning Title: Senior Vice President and Chief Financial Officer 3 of 5 4 EXHIBIT INDEX Exhibit Page No. Description No. Exhibit 99 Unaudited Pro Forma Condensed Consolidated Financial Statements. 5 4 of 5 EX-99 2 UNAUDITED PRO FORMA COND. CONSOLIDATED FINANCIALS 1 EXHIBIT 99 INDEX TO FINANCIAL STATEMENTS UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS Unaudited Pro Forma Condensed Consolidated Financial Statements -- Summary..................................... F-2 Unaudited Pro Forma Condensed Consolidated Balance Sheet -- March 31, 1998................................... F-3 Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet..................................................... F-4 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1997........... F-5 Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 1997...................................................... F-6 Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 1998...... F-8 Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations for the three months ended March 31, 1998.................................................. F-9
F-1 2 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS SUMMARY The accompanying unaudited pro forma condensed consolidated balance sheet of Intermedia Communications Inc. (Intermedia) at March 31, 1998, includes the historical and pro forma effects of the acquisition of National Telecommunications, Inc. Companies (collectively, National), which was consummated on April 30, 1998. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 1998 and the year ended December 31, 1997, have been prepared to reflect the aforementioned purchase transactions, as well as the historical and pro forma effects of the acquisitions of Shared Technologies Fairchild, Inc. (STFI), which was consummated on March 10, 1998, the Long Distance Savers Group of Companies (collectively, LDS), which was consummated on March 31, 1998, and DIGEX, Incorporated (DIGEX), which was consummated in July 1997 and the March, July, October and December 1997 Offerings, as if they were consummated on January 1, 1997. 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 financial statements are preliminary and subject to revision. The unaudited pro forma condensed consolidated financial statements are not intended to purport to be indicative of the actual results of operations or financial position that would have been achieved had the acquisitions or offerings in fact been consummated at the beginning of the periods presented or on March 31, 1998. Such pro forma financial information should be read in conjunction with the Consolidated Financial Statements and Notes of Intermedia. F-2 3 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET MARCH 31, 1998
HISTORICAL ----------------------- (A) (B) PRO FORMA PRO FORMA CONSOLIDATED NATIONAL ADJUSTMENTS TOTALS ------------ -------- ----------- ---------- (DOLLARS IN THOUSANDS) ASSETS Current assets: Cash and cash equivalents.................... $ 335,260 $ 3,425 $(63,083)(c) $ 275,602 Restricted investments....................... 7,534 7,534 Accounts receivable, net..................... 114,200 10,060 124,260 Prepaid expenses and other current assets.... 18,281 18,281 ---------- ------- -------- ---------- Total current assets................. 475,275 13,485 (63,083) 425,677 Telecommunications and other equipment......... 1,120,706 6,164 (2,551)(d) 1,124,319 Less accumulated depreciation.................. (107,918) (2,551) 2,551(d) (107,918) ---------- ------- -------- ---------- Telecommunications and other equipment, net.... 1,012,788 3,613 0 1,016,401 Intangible assets, net......................... 894,552 0 141,742(e) 1,041,394 5,100(f) Other assets................................... 43,140 602 43,742 ---------- ------- -------- ---------- Total assets......................... $2,425,755 $17,700 $ 83,759 $2,527,214 ========== ======= ======== ========== LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIENCY) Current liabilities: Accounts payable............................. $ 87,337 $ 6,573 $ 93,910 Other accrued expenses....................... 80,422 1,037 81,459 Current portion of long-term debt and capital lease obligations......................... 8,442 509 $ (509)(g) 8,442 ---------- ------- -------- ---------- Total current liabilities............ 176,201 8,119 (509) 183,811 Long-term debt and capital lease obligations... 1,733,110 2,269 (2,269)(g) 1,733,110 Series B redeemable exchangeable preferred stock........................................ 334,742 334,742 Series D redeemable exchangeable preferred stock........................................ 169,936 169,936 Series E junior convertible preferred stock.... 196,759 196,759 Stockholders' equity (deficiency): Common stock................................. 205 5 (5)(h) 220 15(i) Additional paid-in capital................... 390,565 1,811 (1,811)(h) 484,399 88,734(i) 5,100(f) Retained earnings (accumulated deficit)...... (567,863) 5,496 (5,496)(h) (567,863) Deferred compensation........................ (7,900) (7,900) ---------- ------- -------- ---------- Total stockholders' equity (deficiency)....................... (184,993) 7,312 86,537 (91,144) ---------- ------- -------- ---------- Total liabilities, redeemable preferred stock and stockholders' equity (deficiency)................ $2,425,755 $17,700 $ 83,759 $2,527,214 ========== ======= ======== ==========
See Accompanying Notes F-3 4 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (MARCH 31, 1998) (DOLLARS AND SHARES IN THOUSANDS) (a) This column represents the historical consolidated balance sheet of Intermedia at March 31, 1998. (b) This column represents the historical combined balance sheet of National at March 31, 1998. (c) This adjustment represents the cash portion of the $151,832 purchase price for National, consisting of 1,455 shares of the Company's common stock valued at $88,749 and $63,083 in cash. (d) This adjustment represents the elimination of the National accumulated depreciation as fixed assets will be recorded at fair values, which the Company believes approximate net book values on the date of acquisition. (e) This adjustment represents the excess of the total purchase price for National over the fair values of the net tangible and identifiable intangible assets acquired. The allocation reflected in this proforma financial statement is preliminary and subject to change based upon the completion of asset valuations. (f) These adjustments represent the elimination of imputed interest related to the STFI purchase resulting from the recognition of the purchase on the January 1, 1998 effective date which preceded the consummation date. (g) These adjustments represent payments made by Intermedia to retire the debt of National. Such Payments are included in the purchase price noted at (c) above. (h) These adjustments represent the elimination of stockholders' equity of National for pro forma combining purposes. (i) These adjustments represent the portion of the National purchase price paid in stock. F-4 5 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(A) YEAR ENDED DECEMBER 31, 1997
HISTORICAL HISTORICAL ----------------------- ------------------------------- (B) (C) PRO FORMA PRO FORMA (D) (E) (F) CONSOLIDATED DIGEX ADJUSTMENTS SUB TOTALS STFI LDS NATIONAL ------------ -------- ----------- ---------- --------- -------- -------- (DOLLARS IN THOUSANDS) Revenues....................... $ 247,899 $ 19,646 $ 267,545 $ 181,827 $122,267 $ 65,243 Costs and expenses: Network expenses, facilities administration and 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 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 --------- -------- --------- --------- --------- -------- -------- Income (loss) from operations................. (163,451) (21,838) 1,033 (184,256) (6,927) 7,683 5,851 Other income (expense): Interest expense........... (60,662) (784) (76,491)(j) (137,937) (29,775) (896) (145) Interest and other income (expense)................ 26,824 486 (5,120)(k) 22,190 (62,428) 4,908 212 --------- -------- --------- --------- --------- -------- -------- 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) benefit...................... -- -- -- (380) --------- -------- --------- --------- --------- -------- -------- Income (loss) before extraordinary item........... (197,289) (22,136) (80,578) (300,003) (99,510) 11,695 5,918 Extraordinary income (loss).... (43,834) (43,834) --------- -------- --------- --------- --------- -------- -------- Net income (loss).............. (241,123) (22,136) (80,578) (343,837) (99,510) 11,695 5,918 Preferred stock dividends and accretions................... (43,742) -- (28,108)(l) (71,850) (4,628) --------- -------- --------- --------- --------- -------- -------- Net loss attributable to common stockholders................. $(284,865) $(22,136) $(108,686) $(415,687) $(104,138) $ 11,695 $ 5,918 ========= ======== ========= ========= ========= ======== ======== Net loss per share............. $ (17.09) $ (24.94) ========= ========= Weighted average number of shares ...................... 16,670 16,670 ========= ========= EBITDA(t)...................... $ (49,838) $ (62,512) ========= ========= PRO FORMA PRO FORMA ADJUSTMENTS TOTALS(A) ----------- --------- Revenues....................... $ 636,882 Costs and expenses: Network expenses, facilities administration and maintenance costs.......... 441,855 Selling, general and administrative............. 227,126 Depreciation and amortization............... 43,037(m) 128,587 Charge off of purchased in- process R&D................ 60,000 -------- --------- 43,037 857,568 -------- --------- Income (loss) from operations................. (43,037) (220,686) Other income (expense): Interest expense........... 15,974(n) (141,513) 11,121(o) 145(p) Interest and other income (expense)................ (20,677)(k) 6,505 62,300(q) -------- --------- Income (loss) before income taxes and extraordinary item......................... 25,826 (355,694) Income tax (provision) benefit...................... (380) -------- --------- Income (loss) before extraordinary item........... 25,826 (356,074) Extraordinary income (loss).... (43,834) -------- --------- Net income (loss).............. 25,826 (399,908) Preferred stock dividends and accretions................... 4,628(r) (71,850) -------- --------- Net loss attributable to common stockholders................. $ 30,454 $(471,758) ======== ========= Net loss per share............. $ (22.68) ========= Weighted average number of shares ...................... 20,805(s) ========= EBITDA(t)...................... $ (32,099) =========
See Accompanying Notes F-5 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. (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. F-6 7 (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 2,680 shares issued for LDS and 1,455 shares issued for National. (t) EBITDA consists of earnings (loss) before interest expense, interest and other income, income tax (provision) benefit, depreciation, amortization and one-time and certain non-recurring charges, such as the charge for in-process R & D. F-7 8 INTERMEDIA COMMUNICATIONS INC. UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS(A) THREE MONTHS ENDED MARCH 31, 1998
HISTORICAL --------------------------------- (B) (C) (D) PRO FORMA PRO FORMA CONSOLIDATED LDS NATIONAL ADJUSTMENTS TOTALS(A) ------------ ------- -------- ----------- --------- (DOLLARS IN THOUSANDS) Revenues................................................. $ 136,786 $30,012 $17,897 $ 184,695 Costs and expenses: Network expenses, facilities administration and maintenance costs.................................... 100,266 19,345 12,924 132,535 Selling, general and administrative.................... 46,347 5,816 3,385 55,548 Depreciation and amortization.......................... 39,864 655 276 $ 3,528(e) 44,323 Charge off of purchased in-process R&D................. 85,000 85,000 --------- ------- ------- ------- --------- 271,477 25,816 16,585 3,528 317,406 --------- ------- ------- ------- --------- Income (loss) from operations............................ (134,691) 4,196 1,312 (3,528) (132,711) Other income (expense): Interest expense......................................... (49,301) (54) 1,972(f) (42,229) 54(g) 5,100(h) Interest and other income (expense)...................... 10,729 65 22 (1,181)(i) 9,635 --------- ------- ------- ------- --------- Income (loss) before income taxes and extraordinary items.................................................. (173,263) 4,261 1,280 2,417 (165,305) Income tax (provision) benefit........................... 0 --------- ------- ------- ------- --------- Income (loss) before extraordinary item.................. (173,263) 4,261 1,280 2,417 (165,305) Extraordinary income (loss).............................. 0 --------- ------- ------- ------- --------- Net income (loss)........................................ (173,263) 4,261 1,280 2,417 (165,305) Preferred stock dividends and accretions................. (18,594) (18,594) --------- ------- ------- ------- --------- Net loss attributable to common stockholders............. $(191,857) $ 4,261 $ 1,280 $ 2,417 $(183,899) ========= ======= ======= ======= ========= Net loss per share....................................... $ (10.87) $ (8.44) ========= ========= Weighted average number of shares........................ 17,653 21,788(j) ========= ========= EBITDA(k)................................................ $ (9,827) $ (3,388) ========= =========
See Accompanying Notes F-8 9 NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1998 (DOLLARS AND SHARES IN THOUSANDS) (a) The unaudited pro forma condensed consolidated statement of operations for the three months ended March 31, 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 three months ended March 31, 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 12 1/4% Senior Subordinated Discount Notes purchased by the Company and 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 the STFI purchase resulting from the recognition of the purchase on the January 1, 1998 effective date which precedes the consummation date. (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) Includes the effect of 2,680 shares issued for LDS and 1,455 shares issued for National. (k) EBITDA consists of earnings (loss) before interest expense, interest and other income, income tax (provision) benefit, depreciation, amortization and one-time and certain non-recurring charges, such as the charge for in-process R & D. F-9 -----END PRIVACY-ENHANCED MESSAGE-----