-----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, A0yAj03CYfqcEKond0jNiVFKNFaB+PjefDv/4V6QO67AkH8Tc0OIWu1V6s/0SqwM m9gobLZ7x7rYs/fzOSBStQ== 0000950144-99-001176.txt : 19990210 0000950144-99-001176.hdr.sgml : 19990210 ACCESSION NUMBER: 0000950144-99-001176 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990209 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990209 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: 99525275 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 INTERMEDIA COMMUNICATIONS INC 1 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): FEBRUARY 1, 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 -------------- 2 ITEM 5. OTHER EVENTS. - ---------------------- On February 9, 1999, the Registrant issued the press releases attached hereto as Exhibits 99.1 and 99.2. On February 1, 1999, the Company's board of directors approved, subject to consummation of the Offering (as described in the attached press release), a 1999 capital expenditure budget of approximately $480 million (which does not include the non-cash Williams network capacity purchase and includes approximately $60 million of capital expenditures associated with the Web hosting business). If the Offering is consummated, the Company believes its business plan will be funded into the second half of 2000. If the Offering is not consummated, management of the Company intends to arrange alternate financing, such as the bank credit facility referred to below, or to submit to the board of directors for its approval a scaled down capital expenditure budget which can be funded through the end of 1999 from the Company's existing resources. Depending on market conditions, the Company may determine to raise additional capital at any time. There can be no assurance, however, that the Company will be successful in raising sufficient debt or equity on terms that it will consider acceptable. Moreover, the terms of the Company's outstanding indebtedness and preferred stock impose certain restrictions upon the Company's ability to incur additional indebtedness or issue additional preferred stock. The Company has entered discussions with several banks for a bank credit facility, although there can be no assurance that a bank facility on terms satisfactory to the Company will be established. ITEM 7. EXHIBITS - ----------------- 99.1 Press Release dated February 9, 1999. 99.2 Press Release dated February 9, 1999. 2 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: February 9, 1999 INTERMEDIA COMMUNICATIONS INC. ------------------------------ (Registrant) By: /s/ Robert M. Manning --------------------------------------- Name: Robert M. Manning Title: Senior Vice President and Chief Financial Officer 3 4 EXHIBIT INDEX ------------- Exhibit No. Description - ------- ----------- 99.1 Press Release dated February 9, 1999. 99.2 Press Release dated February 9, 1999. EX-99.1 2 PRESS RELEASE DATED FEBRUARY 9,1999 1 EXHIBIT 99.1 CONTACT: Curtis Lightburn Vice President Investor Relations 813/829-2408 cglightburn@intermedia.com INTERMEDIA ANNOUNCES COMMENCEMENT OF PRIVATE OFFERING AND INTENT TO PUBLICLY OFFER WEB HOSTING SUBSIDIARY TAMPA, FL (February 9, 1999) - Intermedia Communications Inc. (Nasdaq: ICIX), today announced the commencement of private offerings of $500 million of ten-year notes. The net proceeds from the offerings of the notes will be used to fund the cost of acquisition or construction by the Company of telecommunications-related assets and for general corporate purposes. A portion of the Company's expansion may occur through acquisitions (utilizing cash or securities of the Company) as an alternative to direct investments in the assets required to implement the expansion. The notes to be sold in the offerings have not been and will not be registered under the Securities Act or any state securities or blue sky laws, and may not be offered or sold in the United States or in any state thereof absent registration or an applicable exemption from the registration requirements of such laws. The Company also announced its intent to cause its wholly-owned Web hosting subsidiary, DIGEX, Incorporated, to offer to sell a portion of its capital stock to the public. While Intermedia expects to own at least 51% of the capital stock of DIGEX after the public offering, the Company may take other actions in the future which would further decrease its ownership interest. DIGEX anticipates using the proceeds of the public offering to finance a portion of the expenses and capital requirements associated with the continued rapid expansion of the Web hosting business, including constructing additional data centers. Intermedia may elect not to proceed with the DIGEX offering based on valuation issues or marketing considerations. There can be no assurance that DIGEX will successfully complete the planned public offering or, if completed, of the timing or the proceeds thereof. Intermedia provides integrated telecommunications 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 connectivity and web hosting services, offers seamless end-to-end service virtually anywhere in the world. Intermedia is headquartered in Tampa, Florida and can be found on the World Wide Web at http://www.intermedia.com. -END- EX-99.2 3 PRESS RELEASE DATED FEBRUARY 9, 1999 1 Exhibit 99.2 Contact: Curtis Lightburn Vice President, Investor Relations 813-829-2408 cglightburn@intermedia.com INTERMEDIA ANNOUNCES SUMMARY FOURTH QUARTER AND YEAR END 1998 RESULTS REPORTS RECORD REVENUE AND POSITIVE EBITDA TAMPA, Florida (February 9, 1999) - Intermedia Communications Inc. (NASDAQ: ICIX) today announced record revenue and positive EBITDA for the quarter ended December 31, 1998. Revenue for the fourth quarter of $193.4 million was up 134 percent over fourth quarter 1997 revenue of $82.6 million. Competitive Local and Enhanced Data and Internet services continued their sequential growth with Enhanced Data and Internet services revenue up 15 percent and Competitive Local services revenue up 9 percent over third quarter 1998. EBITDA before certain charges for the fourth quarter was positive $13.5 million, versus an EBITDA loss of $9.9 million for the fourth quarter of 1997. Revenue for the full year of 1998 was $712.8 million, up 188 percent over the $247.9 million reported for the full year of 1997. EBITDA before certain charges of $28.9 million for the full year of 1998 versus an EBITDA loss of $49.8 million for the full year of 1997 represented an improvement of $78.7 million. "In the fourth quarter, we continued to focus on the execution of our core Integrated Communications Provider strategy," said David C. Ruberg, Intermedia's Chairman, President, and Chief Executive Officer. "We also recently made three key additions to the senior management team in Nancy Faigen, President of DIGEX Web Hosting; Richard Buyens, Intermedia's Senior Vice President of Sales; and Richard Marchant, Vice President of Engineering. As a result, we are confident we have put ourselves in a position to significantly grow revenues and expand margins in 1999." 2 REVENUE ANALYSIS Enhanced Data and Internet Services Enhanced Data and Internet continued its growth. Revenue for the fourth quarter was $54.8 million, an increase of 72 percent over fourth quarter 1997 and an increase of 15 percent over third quarter 1998. For the year, revenue was $181.6 million, up 110 percent over 1997 revenues. Growth was seen in all data product offerings. Internet connectivity was up by 12 percent sequentially. Enterprise data services, principally frame relay and ATM, showed accelerating growth, with revenue up 19 percent over third quarter 1998. Frame relay nodes in service increased by 5,002 from 30,266 at the end of the third quarter to 35,268, up 17 percent compared to third quarter 1998 and up 75 percent over fourth quarter 1997. RBOC related sales contributed to the increased nodes in service. "In the quarter, we were particularly pleased by the improving revenue growth at DIGEX, where Web Hosting revenue was up 21 percent sequentially. DIGEX continues to be a leading value added player in the Web Hosting arena," said Ruberg. "Our overall strength in Enhanced Data and Internet services is expected to be a core component of our growth." Competitive Local Services Competitive Local services continued its growth. Revenue for the quarter was $47.8 million, an increase of 189 percent over fourth quarter 1997 and an increase of 9 percent over third quarter 1998. For the year, revenue was $163.4 million, a 289 percent increase over 1997. Access lines in service grew by 35,686. Total access lines in service at the end of the fourth quarter was 347,584 a 327 percent increase versus fourth quarter 1997 and an 11 percent increase versus third quarter 1998. At the end of the fourth quarter, 69 percent of the lines in service were on-switch. "Our focus on selling access lines that are on-switch has improved gross margins, operating efficiency and customer service," said James F. Geiger, Intermedia's Chief Marketing Officer. Interexchange Services Interexchange revenue was $67.3 million in the fourth quarter, a 109 percent increase versus fourth quarter 1997, but a 6 percent decrease versus third quarter 1998. The sequential 3 decrease was primarily a result of the previously announced exit of the wholesale interexchange business, selective revenue pruning, and seasonal factors. For the year, interexchange revenue was $266.4 million, a 135 percent increase over 1997. "Intermedia deliberately pruned revenue in certain segments that were either non-strategic or economically unattractive," said Robert M. Manning, Intermedia's Chief Financial Officer. "The decisions we made lowered revenue growth, but increased margins and the long term health of the business. We expect revenue growth in the long distance segment to resume in 1999." Integration Services Integration Services revenue for the quarter was $23.5 million, a decrease of 20 percent versus third quarter of 1998. The decrease in sales was due largely to seasonality. OUTLOOK "As we continue to scale our business, we improve our ability to add revenue efficiently over the assets we have deployed," said Manning. "As a result, we expect to drive increases in revenue and EBITDA in 1999." "We have made additional progress in integrating our acquisitions, and have completed the consolidation of five independent accounting back office functions onto one common general ledger platform." Full results will be made public in conjunction with Intermedia's normally scheduled Earnings Release, previously announced and scheduled for February 24th. 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 implement 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, 1997, and are updated periodically through the filing of reports and registration statements with the Securities and Exchange Commission. 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. 4 Intermedia Communications Inc. is headquartered in Tampa, Florida. Intermedia can be found on the World Wide Web at www.intermedia.com. INTERMEDIA COMMUNICATIONS INC. FINANCIAL HIGHLIGHTS (In thousands except share data)
THREE MONTHS ENDED YEAR ENDED DECEMBER 31, DECEMBER 31, ----------------------------------------------------- 1998 1997 1998 1997 -------- --------- --------- ---------- Revenue: Competitive Local Services $ 47,776 $ 16,510 $ 163,423 $ 41,967 Enhanced Data & Internet Services 54,845 31,805 181,636 86,636 Interexchange Services 67,321 32,275 266,370 113,152 Integration Services 23,472 1,993 101,354 6,144 --------- --------- --------- --------- Total Revenue 193,414 82,583 712,783 247,899 --------- --------- --------- --------- EBITDA before certain charges (1) $ 13,520 $ (9,931) $ 28,894 $ (49,838) --------- --------- --------- ---------
(1) EBITDA before certain charges consists of earnings before interest, income taxes, depreciation, amortization and charges for in-process R & D. 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 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 acceptable 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. Other Data:
DECEMBER 31, SEPTEMBER 30, 1998 1998 ------------ ------------- Local and Long Distance Services:(1) Buildings connected(2) 4,342 4,331 Voice switches in operation 23 21 Access line equivalents 347,584 311,898 Access line equivalents per local switch(3) 11,692 7,303 Enhanced Data Services:(1) Data switches installed 177 164 Nodes in service(4) 35,268 30,266 NNI connections 680 608 Employees 3,931 3,678
5 (1) Amounts reflected in the table are based upon information contained in the Company's operating records. (2) Includes both on-net direct connections with Intermedia-owned fiber optic cable and on-net extended connections with leased circuits. (3) Calculated by dividing the number of on-switch access line equivalents by the number of switches providing local service. Excludes access lines contributed by Shared. (4) Amount represents an individual point of origination and termination of data served by the Company's enhanced network. -END- -----END PRIVACY-ENHANCED MESSAGE-----