-----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, T5aa3DIoctAs8PIpAKWxoY7o6nMUCSChJbxNpyjKEDjI2VXpOHy6t1KR6x5q7BtI I1vrSanE10xVPiuNRSJ0+g== 0000891020-98-001497.txt : 19981028 0000891020-98-001497.hdr.sgml : 19981028 ACCESSION NUMBER: 0000891020-98-001497 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981027 ITEM INFORMATION: FILED AS OF DATE: 19981027 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: WESTERN WIRELESS CORP CENTRAL INDEX KEY: 0000930738 STANDARD INDUSTRIAL CLASSIFICATION: RADIO TELEPHONE COMMUNICATIONS [4812] IRS NUMBER: 911638901 STATE OF INCORPORATION: WA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-28160 FILM NUMBER: 98731458 BUSINESS ADDRESS: STREET 1: 2001 NW SAMMAMISH RD CITY: ISSAQUAH STATE: WA ZIP: 98027 BUSINESS PHONE: 4253135200 MAIL ADDRESS: STREET 1: 2001 NW SAMMAMISH RD CITY: ISSAQUAH STATE: WA ZIP: 98027 8-K 1 CURRENT REPORT DATED OCTOBER 27, 1998 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 October 27, 1998 WESTERN WIRELESS CORPORATION - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Washington - -------------------------------------------------------------------------------- (State or Other Jurisdiction of Incorporation) 000-28160 91-1638901 - --------------------------------- ------------------------------------ (Commission File Number) (IRS Employer Identification No.) 3650 131st Avenue SE, Suite 400 Bellevue, WA 98006 - -------------------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: (425) 586-8700 2001 NW Sammamish Road Issaquah, WA 98027 - -------------------------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) 2 ITEM 5. OTHER EVENTS On October 27, 1998, Western Wireless Corporation issued the following press release: FOR IMMEDIATE RELEASE FOR FURTHER INFORMATION CONTACT: Investment Community: Media: Ken Prussing John Snyder Western Wireless Corporation The Snyder Buscher Group (425) 586-8072 (206) 652-9704 ken.prussing@wwireless.com jsnyder@sbgir.com WESTERN WIRELESS REPORTS THIRD QUARTER 1998 RESULTS - RECORD GROWTH IN SERVICE REVENUES WITH POSITIVE CONSOLIDATED EBITDA - - RULING REQUEST FILED WITH INTERNAL REVENUE SERVICE - BELLEVUE, Wash. (October 27, 1998) -- Western Wireless Corporation (NASDAQ: WWCA), a leading provider of cellular and personal communications services (PCS), announced today its financial and operating results for the third quarter ended September 30, 1998. "Western Wireless had an outstanding quarter for each of our businesses. We added over 85,000 new wireless subscribers during the quarter while continuing to show record growth in service revenues. For the third quarter in a row Western Wireless had positive EBITDA (operating income before depreciation and amortization) on a consolidated basis. The simultaneous growth and dramatically improved financial results are a testament to our commitment to serving our customers" said John Stanton, chairman and chief executive officer of Western Wireless. "Our VoiceStream(R) wireless business reached the important milestone of positive cash flow before marketing (EBITDA less sales and marketing, including net phone loss). Our Cellular One(R) business continued to generate free cash flow (EBITDA less capital expenditures) demonstrating, yet again, the value of our rural cellular business." CONSOLIDATED FINANCIAL RESULTS For the third quarter ended September 30, 1998, Western Wireless had 885,100 total wireless subscribers, a 67.9 percent increase over the third quarter of 1997. The company reported total revenues of $157.6 million for the quarter, up 50.1 percent over the same quarter a year ago. Consolidated EBITDA was $15.7 million for the third quarter of 1998. The company had a net loss of $49.7 million, a basic loss of $0.65 per share for the quarter, down from a net loss of $68.0 million, and a basic loss of $0.97 per share for the third quarter of 1997. The company reported total revenues of $413.0 million for the nine months ended September 30, 1998, a 54.6 percent increase over the same period in 1997. Consolidated EBITDA was $26.7 million for the nine months ended September 30, 1998. Net loss was $166.9 million, a basic loss of $2.20 per share, for the nine months ended September 30, 1998, down from a loss of $193.2 3 million, a basic loss of $2.76 per share, for the same period in 1997. CELLULAR AND PCS SUMMARIES For the quarter ended September 30, 1998, ending cellular subscribers were 620,300, a 45.5 percent increase over the same quarter in 1997. Cellular net additions were 37,000 for the quarter, including 4,800 from an acquisition. Cellular service revenues for the third quarter of 1998 increased 35.4 percent from the same quarter a year ago to $107.2 million. Cellular EBITDA for the quarter was $43.4 million, a 41.6 percent increase over the same quarter in 1997. Cellular free cash flow was $13.5 million for the third quarter, the seventh consecutive quarter of positive free cash flow for the cellular business. For the nine months ended September 30, 1998, cellular net additions were 100,300, including subscribers obtained through acquisitions. Cellular service revenues for the same period were $290.3 million, a 41.4 percent increase over the nine months ended September 30, 1997. For the nine months ended September 30, 1998, cellular EBITDA was $112.9 million, a 54.0 percent increase over the same period a year ago. Cellular free cash flow for the nine months ended September 30, 1998, was $63.4 million, a 98.3 percent increase over the same period in 1997. At the end of the third quarter 1998, Western Wireless had 264,800 VoiceStream PCS subscribers, an increase of 162.2 percent over the same quarter of 1997. VoiceStream PCS net additions were 52,200 for the quarter, a 96.2 percent increase over the third quarter of 1997. PCS service revenues were $34.4 million for the quarter compared to $16.2 million for the third quarter of 1997, an increase of 111.8 percent. The negative EBITDA declined from $31.6 million in the third quarter of 1997 to $27.8 million for the same quarter in 1998. Cash flow before marketing was positive for the first time in the history of VoiceStream. For the nine months ended September 30, 1998, the company added 136,200 VoiceStream PCS subscribers. VoiceStream PCS service revenues for the same period were $84.7 million, a 135.0 percent increase over the nine months ended September 30, 1997. The negative EBITDA declined from $97.3 million in the nine months ended September 30, 1997, to $86.2 million for the same period in 1998. WESTERN WIRELESS INTERNATIONAL Western Wireless International (WWI) continues to make progress in developing the countries where it has operations. During the quarter a WWI partnership was awarded a license in Croatia. Total international subscribers from systems operating in Latvia, Georgia, and Iceland were over 50,000 at September 30, 1998. 4 RULING REQUEST FILED WITH THE INTERNAL REVENUE SERVICE Western Wireless is considering alternatives to its current capital structure, one of which is a potential spin-off of its 80.1 percent ownership interest in VoiceStream Wireless Corporation to its shareholders on a tax-free basis. In connection with such consideration, Western Wireless has filed a request for ruling with the Internal Revenue Service ("IRS") as to the tax-free nature of such spin-off. Such a transaction would be subject to numerous conditions including, among others, the receipt of a favorable IRS ruling, final approval by the Board of Directors of the terms and conditions of any such transaction, certain government and third party approvals and review by the Securities and Exchange Commission ("SEC") of necessary SEC filings. There can be no assurance that such potential tax-free spin-off will be consummated. Based in Bellevue, Wash., Western Wireless Corp. is a leading provider of wireless communications services in the western United States. It currently offers cellular service marketed under the Cellular One name in 17 western states. Marketed under the VoiceStream Wireless name, Western Wireless provides PCS service using the globally dominant GSM technology in nine U.S. metropolitan markets. In addition, Western Wireless owns PCS licenses for 104 markets. In conjunction with joint ventures Western Wireless provides VoiceStream PCS service in two additional markets, and owns licenses for another 21 markets. As a result, Western Wireless' combined cellular and PCS licenses, along with its joint ventures, cover 59 percent of the land in the continental United States. ### 5 WESTERN WIRELESS CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) (Unaudited)
Three months ended September 30, Nine months ended September 30, --------------------------------- --------------------------------- 1998 1997 1998 1997 ------------ ------------ ------------ ------------ Revenues: Subscriber revenues $ 118,233 $ 81,829 $ 324,076 $ 209,517 Roamer revenues 22,082 12,243 47,115 27,810 Equipment sales and other revenues 17,235 10,922 41,784 29,869 ------------ ------------ ------------ ------------ Total revenues 157,550 104,994 412,975 267,196 ------------ ------------ ------------ ------------ Operating expenses: Cost of service 26,705 24,040 75,026 66,563 Cost of equipment sales 30,597 21,989 77,107 57,496 General and administrative 40,238 28,660 120,546 78,849 Sales and marketing 44,347 31,233 113,643 88,254 Depreciation and amortization 40,282 37,305 115,483 96,927 ------------ ------------ ------------ ------------ Total operating expenses 182,169 143,227 501,805 388,089 ------------ ------------ ------------ ------------ Operating loss (24,619) (38,233) (88,830) (120,893) ------------ ------------ ------------ ------------ Other income (expense): Interest and financing expense, net (31,699) (27,289) (93,498) (67,797) Equity in net loss of unconsolidated affiliates (7,647) (3,799) (21,712) (7,107) Other, net 2,061 1,278 7,892 2,556 ------------ ------------ ------------ ------------ Total other income (expense) (37,285) (29,810) (107,318) (72,348) ------------ ------------ ------------ ------------ Minority interest in net loss of consolidated subsidiary 12,231 29,285 ------------ ------------ Net loss $ (49,673) $ (68,043) $ (166,863) $ (193,241) ============ ============ ============ ============ Basic loss per common share $ (0.65) $ (0.97) $ (2.20) $ (2.76) ============ ============ ============ ============ Weighted average common shares used in computing basic loss per common share 75,877,000 70,056,000 75,828,000 70,004,000 ============ ============ ============ ============
6 WESTERN WIRELESS CORPORATION SUPPLEMENTARY FINANCIAL AND OPERATIONAL DATA (Dollars in thousands) (Unaudited) (Note: The following Table sets forth certain selected financial and operating data of the company for the three and nine months ended September 30, 1998 and 1997)
THREE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------- 1998 1997 -------------------------- -------------------------- CELLULAR PCS CELLULAR PCS --------- --------- --------- --------- Revenues: Subscriber revenues $ 84,942 $ 33,291 $ 65,588 $ 16,241 Roamer revenues 20,972 1,110 12,243 Equipment sales 4,133 11,785 2,488 7,051 Other revenues 1,317 1,383 -------------------------- -------------------------- Total revenues 111,364 46,186 81,702 23,292 -------------------------- -------------------------- Operating expenses: Cost of service 14,415 12,290 12,105 11,935 Cost of equipment sales 9,247 21,350 7,092 14,897 General and administrative 22,313 17,925 15,873 12,787 Sales and marketing 21,964 22,383 15,963 15,270 Depreciation and amortization 19,199 21,083 16,730 20,575 -------------------------- -------------------------- Total operating expenses 87,138 95,031 67,763 75,464 -------------------------- -------------------------- Operating income (loss) $ 24,226 $ (48,845) $ 13,939 $ (52,172) ========================== ========================== EBITDA $ 43,425 $ (27,762) $ 30,669 $ (31,597) ========================== ========================== Ending subscribers 620,300 264,800 426,300 101,000 ========================== ==========================
NINE MONTHS ENDED SEPTEMBER 30, ------------------------------------------------------------- 1998 1997 -------------------------- -------------------------- CELLULAR PCS CELLULAR PCS --------- --------- --------- --------- Revenues: Subscriber revenues $ 241,802 $ 82,274 $ 173,460 $ 36,057 Roamer revenues 44,669 2,446 27,810 Equipment sales 10,097 27,857 8,405 17,407 Other revenues 3,830 4,057 -------------------------- -------------------------- Total revenues 300,398 112,577 213,732 53,464 -------------------------- -------------------------- Operating expenses: Cost of service 40,013 35,013 34,577 31,986 Cost of equipment sales 24,224 52,883 20,044 37,452 General and administrative 64,361 56,185 42,449 36,400 Sales and marketing 58,899 54,744 43,360 44,894 Depreciation and amortization 54,241 61,242 49,328 47,599 -------------------------- -------------------------- Total operating expenses 241,738 260,067 189,758 198,331 -------------------------- -------------------------- Operating income (loss) $ 58,660 $(147,490) $ 23,974 $(144,867) ========================== ========================== EBITDA $ 112,901 $ (86,248) $ 73,302 $ (97,268) ========================== ========================== Ending subscribers 620,300 264,800 426,300 101,000 ========================== ==========================
7 SIGNATURES 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 hereunto duly authorized. WESTERN WIRELESS CORPORATION Dated: October 27, 1998 By /s/ Alan R. Bender ------------------------------------ Alan R. Bender Senior Vice President and General Counsel -----END PRIVACY-ENHANCED MESSAGE-----