-----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, MnB8edVluo+IGheCsLAhOERbixszFeMGy6uQ2hspyG4zNPVWgS8gLAq0oSJJXspz mCMoH54p0lW9U/VyUrfJZA== 0000892569-99-002061.txt : 19990805 0000892569-99-002061.hdr.sgml : 19990805 ACCESSION NUMBER: 0000892569-99-002061 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990803 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19990804 FILER: COMPANY DATA: COMPANY CONFORMED NAME: IXC COMMUNICATIONS INC CENTRAL INDEX KEY: 0001009532 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 752644120 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20803 FILM NUMBER: 99677494 BUSINESS ADDRESS: STREET 1: 1122 CAPITAL OF TEXAS HGWY S STREET 2: STE 200 CITY: AUSTIN STATE: TX ZIP: 78746 BUSINESS PHONE: 5123281112 MAIL ADDRESS: STREET 1: 5000 PLAZA ON THE LAKE STREET 2: SUITE 200 CITY: AUSTIN STATE: TX ZIP: 79746-1050 8-K 1 FORM 8-K DATED AUGUST 3, 1999 1 UNITED STATES 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) August 3, 1999 ------------------------------- IXC Communications, Inc. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 0-20803 74-2644120 - -------------------------------------------------------------------------------- (State or other (Commission (I.R.S. Employer jurisdiction File Number) Identification No.) of incorporation) 1122 Capital of Texas Highway South, Austin, Texas 78746 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (512) 328-1112 ---------------------------- Not applicable - -------------------------------------------------------------------------------- (Former name or former address, if changed since last report.) 2 ITEM 5. OTHER EVENTS. Attached as Exhibit 99.1 is a press release issued by IXC Communications, Inc. dated August 3, 1999 which is incorporated by reference herein. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) EXHIBITS 99.1 Press Release dated August 3, 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 hereunto duly authorized. Date: August 4, 1999 IXC Communications, Inc. By: /s/ Jeffrey C. Smith ------------------------------ Jeffrey C. Smith Senior Vice President, Chief Administrative Officer, General Counsel and Secretary 3. 4 EXHIBIT INDEX Exhibit Number Description - ------ ----------- 99.1 Press Release dated August 3, 1999 4. EX-99.1 2 PRESS RELEASE DATED AUGUST 3, 1999 1 EXHIBIT 99.1 IXC Communications, Inc. Announces Second Quarter Results AUSTIN, Texas--(BUSINESS WIRE)--Aug. 3, 1999--IXC Communications, Inc. (Nasdaq: IIXC) today announced revenue of $157.9 million for the second quarter of 1999, up from $155.9 million in the second quarter of 1998. Earnings before interest, taxes, depreciation and amortization (EBITDA) was a loss of $11.3 million, down from a positive $18.4 million in second quarter 1998. The net loss for the quarter was $114.2 million, or $(3.53) per share (basic and diluted), including a restructuring charge of $25.8 million, $(0.66) per share, and a $24.1 million write down of certain investments. Both the restructuring charge and the write down of the investments indicate a de-emphasis of the switched wholesale business. This compared with a net loss of $102.5 million, or $(3.30) per share, including an extraordinary charge of $69.8 million for the early extinguishment of debt, in the second quarter of 1998. Second quarter results for 1999 include the operations of Coastal Telephone Company from its acquisition date on May 10, 1999. Prior year results have been restated to include the operations of Eclipse (formerly Network Long Distance, Inc.), which was acquired in a transaction accounted for as a pooling of interests in June 1998. On a year-to-date basis revenue increased 1.8% to $319.3 million. EBITDA decreased to a negative $6.6 million from a positive $38.6 million for the prior year's six month period. The net loss for the six month period declined $36.0 million (29.9%) to $156.4 million including the restructuring and investment write downs. The prior year's results included the extraordinary charge of $69.8 million. CONSOLIDATED RESULTS -------------------- Total revenue for the quarter included $73.6 million from private line, $5.4 million from data/Internet, $74.9 million from switched services and $4.1 million from other sources. Compared to the second quarter of 1998, private line services increased 49.4% and data/Internet services more than quadrupled. Switched services declined 29.0%, largely because of the conversion of the Company's former largest switched services customer, Excel Communications, to a private line contract with IXC as Excel moved its switched minutes to its own network during 1998 and 1999. Revenue for the six-month period included private line revenue of $144.4 million, data/Internet revenue of $10.5 million, switched services revenue of $152.6 million and $11.6 million in other revenue. Private line revenue increased 56.0% over the prior year largely due to three large customers, including Excel Communications. Data/Internet revenue was over six times its prior year's mark. Switched service revenue declined 30.4% due largely to the loss of the Excel traffic. 2 As expected, EBITDA for the quarter and six-month period declined versus 1998. The lower results were driven by the margin pressures in the switched wholesale business and increased operating and administration costs related to expansion of the Company's nationwide fiber network and IT infrastructure as well as costs related to expansion of its retail distribution operation. The previously announced restructuring of the switched wholesale business resulted in a charge of $25.8 million during the second quarter. The charge includes severance costs associated with restructuring, certain expenses related to terminated customers who will be leaving the network and costs to dismantle surplus switches and close the Company's microwave network. The restructuring is expected to result in decreased revenue but improved gross margins from future savings in access costs, network facility and other costs. "The investment in our infrastructure coupled with low margins and significant billing issues with the switched wholesale business has affected our EBITDA performance. However, improvements in our back office and distribution capabilities should allow the Company to compete more effectively in the market. In addition, the positive effects of de-emphasizing the switched wholesale business are expected to be seen in EBITDA performance in the quarters to come, " said IXC president and CEO, John Zrno. MERGER WITH CINCINNATI BELL --------------------------- On July 21, 1999, the Company announced a merger agreement with Cincinnati Bell, Inc. (NYSE:CSN). The transaction was valued at $3.2 billion (including the assumption of debt) and is expected to close by the end of the year. Concurrently, IXC announced lowered EBITDA and revenue expectations for both the second quarter and the full year. ADDITIONAL INFORMATION ABOUT IXC -------------------------------- More complete information on IXC's second quarter results is available in the "Quarterly Analysis" in the financial highlights section of IXC's Web site at www.ixc-investor.com. IXC's network-based delivery solutions are designed to address the speed and capacity requirements of the global communications market. Its offerings include private line, fast packet (ATM and frame relay), Internet and long distance switched and dedicated services. IXC is at the forefront of the industry's new class of emerging domestic and international carriers. IXC is a publicly traded company listed on Nasdaq under the symbol "IIXC." For more information, visit IXC's Web site at 3 www.ixc-comm.com. Except for the historical information contained herein, this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. The Company's future actual results could differ materially from the forward-looking statements discussed herein. In particular, no assurance can be made that the restructuring of the Company's switched wholesale business will have the results expected by the Company or that certain parts of the network will be completed as scheduled. A list of the factors that could cause actual results to differ materially can be found in the documents the Company files with the SEC, including those contained in the Company's prospectus, and the Form 10-K for the year ended December 31, 1998. 4 IXC Communications, Inc. Summary of Operating Results ($000's except per share amounts)
Quarter Ended Year To Date June 30, June 30, -------------------- -------------------- 1999 1998 1999 1998 --------- --------- --------- --------- Revenues: Private line $ 73,569 $ 49,232 $ 144,433 $ 92,572 Long distance switched services 74,898 105,502 152,645 219,269 Broadband & Internet services 5,353 1,201 10,528 1,677 Other 4,072 -- 11,644 -- --------- --------- --------- --------- Total operating revenue 157,892 155,935 319,250 313,518 Gross profit 49,603 48,342 106,157 97,976 % 31.4% 31.0% 33.3% 31.3% EBITDA (11,345) 18,350 (6,600) 38,648 % -7.2% 11.8% -2.1% 12.3% Depreciation and amortization 39,565 22,636 75,843 42,788 Restructuring charge and infrequent items 25,916 -- 25,971 -- Pooling costs -- 7,681 -- 7,645 --------- --------- --------- --------- Operating loss (76,826) (11,967) (108,414) (11,785) Interest expense, net 7,253 5,206 12,446 9,920 Equity in net loss of unconsolidated subsidiaries 13,111 10,754 15,982 22,019 Other, net 13,061 219 13,234 249 --------- --------- --------- --------- Loss before income taxes and extraordinary item (110,251) (28,146) (150,076) (43,973) Income tax provision 3,900 4,551 6,311 6,619 --------- --------- --------- --------- Loss before extraordinary item (114,151) (32,697) (156,387) (50,592) Extraordinary item -- 69,810 -- 69,810 --------- --------- --------- --------- Net loss $(114,151) $(102,507) $(156,387) $(120,402) ========= ========= ========= ========= Dividends applicable to preferred stock (16,372) (15,471) (32,390) (27,207) --------- --------- --------- --------- Net loss applicable to common stockholders $(130,523) $(117,978) $(188,777) $(147,609) ========= ========= ========= ========= Basic and diluted loss per share $ (3.53) $ (3.30) $ (5.14) $ (4.14) ========= ========= ========= ========= Weighted average common shares outstanding 36,946 35,785 36,714 35,653
5 IXC Communications, Inc. Operating Summary By Segment ($000's)
Quarter Ended Quarter Ended Year to Date March 31, June 30, Ended June 30, ------------------- ------------------- 1999 1999 1998 1999 1998 ---------- -------- -------- --------- --------- Net Revenue Private line $ 70,864 $ 73,569 $ 49,232 $ 144,433 $ 92,572 Switched Long Distance 77,747 74,898 105,502 152,645 219,269 Broadband/Internet 5,175 5,353 1,201 10,528 1,677 --------- --------- --------- --------- --------- Subtotal - Recurring 153,786 153,820 155,935 307,606 313,518 Other 7,572 4,072 -- 11,644 -- --------- --------- --------- --------- --------- Total Revenue 161,358 157,892 155,935 319,250 313,518 Gross Profit Private line 44,762 47,441 26,784 92,203 50,935 % of Net Revenue 63.2% 64.5% 54.4% 63.8% 55.0% Switched Long Distance 3,418 (2,413) 23,154 1,005 50,004 % of Net Revenue 4.4% -3.2% 21.9% 0.7% 22.8% Broadband & Internet 802 503 (1,596) 1,305 (2,963) % of Net Revenue 15.5% 9.4% (132.9%) 12.4% (176.7%) --------- --------- --------- --------- --------- Subtotal - Recurring Gross Profit 48,982 45,531 48,342 94,513 97,976 % of Net Revenue 31.9% 29.6% 31.0% 30.7% 31.3% Other 7,572 4,072 -- 11,644 -- --------- --------- --------- --------- --------- Total Gross Profit $ 56,554 $ 49,603 $ 48,342 $ 106,157 $ 97,976 ========= ========= ========= ========= =========
6 CONTACT: IXC Communications Inc., Austin Media: Melissa Jackson, 512/231-5247 mjackson@ixc-comm.com or Investor: Greta Wiechman, 888/267-9478 gwiechman@ixc-comm.com -----END PRIVACY-ENHANCED MESSAGE-----