-----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, FEyhiAwkEX1xT0BSDscHs9HSMHJNuSOIxcmTc3CQLTYdkdAZcmkVKIXGUChrPhl3 6n8v9qibS2PeLmDMQxCGig== 0000950116-01-000279.txt : 20010224 0000950116-01-000279.hdr.sgml : 20010224 ACCESSION NUMBER: 0000950116-01-000279 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010215 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEGASUS COMMUNICATIONS CORP CENTRAL INDEX KEY: 0001015629 STANDARD INDUSTRIAL CLASSIFICATION: TELEVISION BROADCASTING STATIONS [4833] IRS NUMBER: 510374669 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-21389 FILM NUMBER: 1549436 BUSINESS ADDRESS: STREET 1: C/O PEGASUS COMMUNICATIONS MANAGEMENT STREET 2: 225 CITY LINE AVENUE SUITE 200 CITY: BALA CYNWYD STATE: PA ZIP: 19004 BUSINESS PHONE: 6103411801 MAIL ADDRESS: STREET 1: 1345 CHESTNUT ST CITY: PHILADELPHIA STATE: PA ZIP: 19107-3496 FORMER COMPANY: FORMER CONFORMED NAME: PEGASUS COMMUNICATIONS & MEDIA CORP DATE OF NAME CHANGE: 19960530 8-K 1 0001.txt FORM 8-K 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 15, 2001 ----------------- PEGASUS COMMUNICATIONS CORPORATION --------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Delaware 0-21389 51-0374669 - ---------------- ---------------- --------------------- (State or Other (Commission (IRS Employer Jurisdiction of File Number) Identification No.) Incorporation) c/o Pegasus Communications Management Company, 225 City Line Avenue, Suite 200, Bala Cynwyd, Pennsylvania 19004 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 888-438-7488 ------------ ----------------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events. ------------ The Registrant plans to hold its 2001 Annual Meeting of Stockholders on April 27, 2001. On February 15, 2001, the Registrant issued a press release containing, among other things, financial information for the quarter and the year ended December 31, 2000. A copy of the press release is filed as Exhibit 99.1 and is incorporated by reference into this report. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. ------------------------------------------------------ (c) Exhibits. 99.1 Registrant's press release, dated February 15, 2001. Item 9. Regulation FD Disclosure. ------------------------ The Registrant held a conference call on February 15, 2001 to report earnings results for the fourth quarter. On the call, the Registrant provided certain financial guidance for 2001. Set forth below is a table which provides financial guidance with respect to subscribers, revenues, contribution margin, pre-marketing cash flow, SAC and cash flow from operations for the first quarter of 2001 as compared to the first quarter of 2000 and for the year 2001 as compared to the year 2000. The information provided below with respect to 2001 is a forward-looking statement. See "Cautionary Statement" below.
(in thousands) Q1 '00 Q1 '01 Yr '00 Yr '01 Low High Low High Beginning subscribers 702 1,403 1,403 702 1,403 1,403 Net subscriber additions: DBS 21 40 55 178 180 260 Satellite Broadband 50 100 -------- --------- --------- --------- --------- --------- 21 40 55 178 230 360 Primestar conversions 29 77 Acquired subscribers 50 12 17 446 50 100 -------- --------- --------- --------- --------- --------- 100 52 72 701 280 460 -------- --------- --------- --------- --------- --------- Ending subscribers 802 1,455 1,475 1,403 1,683 1,863 -------- --------- --------- --------- --------- --------- Net revenues: DBS $ 95,857 $ 207,000 $ 215,000 $ 582,075 $ 890,000 $ 990,000 Satellite Broadband 16,000 36,000 Other 8,138 8,000 9,000 35,433 34,000 37,000 -------- --------- --------- --------- --------- --------- 103,995 215,000 224,000 617,508 940,000 1,063,000 -------- --------- --------- --------- --------- --------- Contribution margin: DBS 32,027 70,000 74,000 199,495 300,000 345,000 Satellite Broadband 5,000 13,000 Other 306 400 500 3,428 3,400 4,000 -------- --------- --------- --------- --------- --------- 32,333 70,400 74,500 202,923 308,400 362,000 -------- --------- --------- --------- --------- --------- Pre-marketing cash flow: DBS 27,999 61,000 64,000 174,898 265,000 310,000 Satellite Broadband 1,000 6,000 Other 306 400 500 3,428 3,400 4,000 -------- --------- --------- --------- --------- --------- 28,305 61,400 64,500 178,326 269,400 320,000 -------- --------- --------- --------- --------- --------- Subscriber acquisition costs: DBS 25,409 50,000 55,000 169,998 225,000 255,000 Satellite Broadband 27,000 63,000 -------- --------- --------- --------- --------- --------- 25,409 50,000 55,000 169,998 252,000 318,000 -------- --------- --------- --------- --------- --------- Cash flow from operations: DBS 2,590 11,000 9,000 4,900 40,000 55,000 Satellite Broadband (26,000) (57,000) Other 306 400 500 3,428 3,400 4,000 -------- --------- --------- --------- --------- --------- 2,896 11,400 9,500 8,328 17,400 2,000 -------- --------- --------- --------- --------- ---------
Cautionary Statement This Report contains certain forward-looking statements (as such term is defined in the Private Securities Litigation Reform Act of 1995) and information relating to us that are based on the beliefs of our management, as well as assumptions made by and information currently available to our management. When used in this Report, the words "estimate," "project," "believe," "anticipate," "intend," "expect" and similar expressions are intended to identify forward-looking statements. Such factors include, among other things, the following: general economic and business conditions, both nationally, internationally and in the regions in which we operate; relationships with and events affecting third parties like DIRECTV, Inc.; litigation with DIRECTV; demographic changes; existing government regulations and changes in, or the failure to comply with government regulations; competition; the loss of any significant numbers of subscribers or viewers; changes in business strategy or development plans; technological developments and difficulties; the ability to attract and retain qualified personnel; our significant indebtedness; the availability and terms of capital to fund the expansion of our businesses; and other factors discussed under the section entitled "Risk Factors" of the Registrant's Proxy Statement dated February 29, 2000 and filed with the Securities and Exchange Commission on March 1, 2000 in connection with a special meeting of stockholders to be held on March 22, 2000 and other reports and registration statements filed by the Registrant, from time to time, with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as the date hereof. We do not undertake any obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. 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. PEGASUS COMMUNICATIONS CORPORATION February 16, 2001 By: /s/ Scott A. Blank ------------------------------ Scott A. Blank Vice President Exhibit Index ------------- Exhibit No. Description - ----------- ----------- 99.1 Registrant's press release, dated February 15, 2001. EX-99.1 2 0002.txt EXHIBIT 99.1 EXHIBIT 99.1 PEGASUS COMMUNICATIONS CORPORATION REPORTS RESULTS FOR FOURTH QUARTER AND YEAR ENDED DECEMBER 31, 2000 Net Revenues increase 105% and Pre-marketing Cash Flow grows 127% for the quarter Subscribers up 100% as compared to 1999 Gross subscriber additions up 117% for the quarter BALA CYNWYD, PA, February 15, 2001 - Pegasus Communications Corporation (NASDAQ: PGTV) today reported financial results for the three-month and twelve-month periods ended December 31, 2000. Results, which are attached, are in thousands except per share and per subscriber data. Summary of Operating Results - ----------------------------
- ------------------------------------------------------------------------------------------------------------------------------------ Three Months Ended Year Ended December 31, December 31, 2000 1999 Change 2000 1999 Change ---- ---- ------ ---- ---- ------ Net Revenues* $201,529 $98,075 105% $617,508 $322,768 91% Pre-marketing Cash Flow* $59,048 $26,060 127% $178,326 $92,494 93% Pre-marketing Cash Flow per common share* $1.07 $0.66 62% $3.58 $2.45 46% Net loss applicable to common shares** ($73,944) ($50,490) 46% ($201,817) ($201,519) 0% Net loss per common share** ($1.34) ($1.28) 5% ($4.05) ($5.34) (24%) Weighted average common shares outstanding (000's)** 55,030 39,505 39% 49,840 37,750 32% Subscriber Acquisition Costs (SAC) $58,352 $29,054 101% $169,998 $117,774 44% Cash flow from operations $696 ($2,994) n.m. $8,328 ($25,280) n.m. Subscriber Data (000's): Subscribers - beginning of period 1,312 631 108% 702 435 61% ------- ------- ------- ------- Gross subscriber additions 126 58 117% 343 264 30% Churn (53) (24) 121% (165) (111) 49% ------- ------- ------- ------- Net subscriber additions 73 34 115% 178 153 16% Primestar conversions - 31 (100%) 77 75 3% Acquired subscribers 18 6 200% 446 39 1,044% ------- ------- ------- ------- Subscribers - end of period 1,403 702 100% 1,403 702 100% Per Subscriber Data: SAC per gross subscriber addition $462 $330 40% $404 $349 16% Monthly revenue per subscriber $48.10 $45.37 6% $44.80 $43.94 2% Monthly pre-marketing cash flow per subscriber $14.50 $12.81 13% $13.46 $13.07 3% - ------------------------------------------------------------------------------------------------------------------------------------
*Net revenues and pre-marketing cash flow do not include the results of our discontinued cable operations, which were sold in September 2000. **Net loss applicable to common shares and net loss per common share includes an extraordinary loss from the early extinguishment of debt of approximately $9.3 million and $6.2 million in the first quarter of 2000 and the fourth quarter of 1999, respectively, and a net gain of approximately $59.4 million on the sale of the Company's cable operations in the third quarter of 2000. In May 2000, Pegasus completed a two-for-one stock split of its Class A and Class B common stock. Per share amounts and shares outstanding reflect the stock split and its retroactive effect. Results of Operations - --------------------- Three Months Ended December 31, 2000 Compared to Same Period Ended December 31, 1999 The Company's net revenues increased $103.5 million, or 105%, to $201.5 million for the quarter ended December 31, 2000 compared to the same period in 1999. Pre-marketing cash flow increased $33.0 million, or 127%, to $59.0 million for the quarter ended December 31, 2000 compared to the same period in 1999. The Company's net loss applicable to common shares increased $23.5 million to $73.9 million for the quarter ended December 31, 2000 compared to the same period in 1999. DBS net revenues increased $104.1 million, or 118%, to $192.2 million for the quarter ended December 31, 2000 compared to the same period in 1999. The average monthly revenue per subscriber increased $2.73 to $48.10 for the quarter ended December 31, 2000 compared to $45.37 for the same period in 1999. The average monthly pre-marketing cash flow per subscriber increased $1.69 to $14.50 for the quarter ended December 31, 2000 compared to $12.81 for the same period in 1999. Pre-marketing cash flow increased $33.1 million, or 133%, to $58.0 million for the quarter ended December 31, 2000 compared to the same period in 1999. Subscriber acquisition costs increased $29.3 million, or 101%, to $58.4 million compared to the same period in 1999. Subscriber acquisition costs per gross subscriber addition totaled $462 for the quarter ended December 31, 2000 compared to $330 for the same period in 1999. The increase in subscriber acquisition costs was principally due to commissions under the seamless marketing agreement entered into with DIRECTV in August 2000. The Company capitalized $1.9 million of DBS subscriber equipment in the third quarter of 2000 related to rental units. This equipment, which is owned by the Company, is depreciated over a three-year period and the equipment costs are not included as a component of SAC in the Company's results of operations. On a pro forma basis, the Company's DBS subscriber penetration increased from 17.9% at September 30, 2000 to 18.9% at December 31, 2000. Year Ended December 31, 2000 Compared to Same Period Ended December 31, 1999 The Company's net revenues increased $294.7 million, or 91%, to $617.5 million for the year ended December 31, 2000 compared to the same period in 1999. Pre-marketing cash flow increased $85.8 million, or 93%, to $178.3 million for the year ended December 31, 2000 compared to the same period in 1999. The Company's net loss applicable to common shares increased $298,000 to $201.8 million for the year ended December 31, 2000 compared to the same period in 1999. DBS net revenues increased $295.7 million, or 103%, to $582.1 million for the year ended December 31, 2000 compared to the same period in 1999. The average monthly revenue per subscriber increased $0.86 to $44.80 for the year ended December 31, 2000 compared to $43.94 for the same period in 1999. The average monthly pre-marketing cash flow per subscriber increased $0.39 to $13.46 for the year ended December 31, 2000 compared to $13.07 for the same period in 1999. Pre-marketing cash flow increased $89.7 million, or 105%, to $174.9 million for the year ended December 31, 2000 compared to the same period in 1999. Subscriber acquisition costs increased $52.2 million, or 44%, to $170.0 million compared to the same period in 1999. Subscriber acquisition costs per gross subscriber addition totaled $404 for the year ended December 31, 2000 compared to $349 for the same period in 1999. The increase in subscriber acquisition costs was principally due to enhanced commissions under the seamless marketing agreement. The Company capitalized DBS subscriber rental equipment totaling $12.2 million in 2000. On a pro forma basis, the Company's DBS subscriber penetration increased from 15.3% at December 31, 1999 to 18.9% at December 31, 2000. -2- Restated Results of Operations - ------------------------------ The Company today also reported restated financial results for the second and third quarters of 2000. The revision is a result of an adjustment to the allocation of the purchase price and application of income taxes at the time of the acquisition of Golden Sky Holdings, Inc. While the reported second and third quarter losses will be reduced, the revision does not have an effect on the Company's cash flow or EBITDA. The Company will amend its reports filed with the Securities and Exchange Commission. Three Months and Six Months Ended June 30, 2000 The Company's restated net loss applicable to common shares decreased $10.5 million to $61.8 million, or $0.22 to $1.26 for the quarter ended June 30, 2000 compared to the $1.48 net loss per common share as previously reported. The Company's restated net loss applicable to common shares decreased $10.5 million to $114.3 million, or $0.23 to $2.56 for the six months ended June 30, 2000 compared to the $2.79 net loss per common share as previously reported. The revision resulted in a decrease in amortization expense of $5.8 million and an increase in the benefit for income taxes of $4.7 million for the three-month and six-month periods ended June 30, 2000. Three Months and Nine Months Ended September 30, 2000 The Company's restated net loss applicable to common shares decreased $33.0 million to $13.6 million, or $0.60 to $0.25 for the quarter ended September 30, 2000 compared to the $0.85 net loss per common share as previously reported. The Company's restated net loss applicable to common shares decreased $43.5 million to $127.9 million, or $0.90 to $2.66 for the nine months ended September 30, 2000 compared to the $3.56 net loss per common share as previously reported. The revision resulted in a decrease in amortization expense of $8.7 million and $14.5 million and an increase in the benefit for income taxes of $24.3 million and $29.0 million for the three-month and nine-month periods ended September 30, 2000, respectively. Furthermore, the Company is in the process of evaluating the allocation of the purchase price and application of income taxes related to the 1998 acquisition of Digital Television Services, Inc. If it is determined that a revision is warranted, it would be expected to reduce the net losses for periods following the acquisition and to have no effect on the Company's cash flow or EBITDA. Conference Call - --------------- A conference call to discuss this news release, outlook for the first quarter of 2001 and other matters of interest will be held at 4:30 p.m. Eastern Standard Time today. The earnings conference call can be accessed by dialing (212) 346-6380. A web cast of the conference call can also be accessed over the Internet through Pegasus Communications' web site at (www.pgtv.com). The web cast will include supplemental information that will be helpful to participants in following the conference call discussion. A replay of the conference call will be available approximately one hour after it concludes and can be accessed by calling (800) 633-8284 and entering the pass code: 17847684. -3- About Pegasus - ------------- Pegasus Communications Corporation (www.pgtv.com) is one of the fastest growing media companies in the United States and serves approximately 1.4 million DBS subscribers in 41 states. Pegasus is the tenth largest multichannel video provider in the United States and the only publicly traded cable, satellite TV or Internet services company exclusively focused on providing services to rural and underserved areas. Through agreements with Liberate Technologies, Genuity, Hughes Network Systems and other companies, Pegasus is expanding the array of advanced digital products and services it offers through the more than 3,500 independent retailers in the Pegasus Retail Network to include interactive television, narrowband TV centric Internet access and broadband Internet access to TV's, PC's and other Internet access appliances. Safe Harbor - ----------- Certain matters contained in this news release concerning the business outlook which are not historical facts, are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995, and will be considered forward-looking statements. Such forward-looking statements may be identified with words such as "we expect", "we predict", "we believe", "we project", "we anticipate" and similar expressions. Pegasus' actual results may differ materially from those expressed or indicated by forward-looking statements. There can be no assurance that these future events will occur as anticipated or that the Company's results will be as estimated. Factors which can affect the Company's performance are described in the Company's filings with the Securities and Exchange Commission. This press release also contains information about pending transactions and there can be no assurances that these transactions will be completed. ### For further information, contact: - --------------------------------- Yolanda Robins Jeff Majtyka/Brad Edwards Pegasus Communications Corporation Brainerd Communicators, Inc. (610) 934-7000 (212) 986-6667 yrobins@pgtv.com majtyka@braincomm.com brad@braincomm.com ### (Please see attached financial table) -4- Pegasus Communications Corporation SELECTED CONSOLIDATED STATEMENT OF OPERATIONS DATA
(Dollars in thousands) Three Months Ended Dec. 31, Year Ended Dec. 31, (unaudited) (unaudited) ------------------------------ ----------------------------- 2000 1999 2000 1999 ---- ---- ---- ---- Net revenues: DBS $192,224 $88,172 $582,075 $286,353 Other 9,305 9,903 35,433 36,415 -------- -------- -------- -------- 201,529 98,075 617,508 322,768 -------- -------- -------- -------- Pre-marketing operating expenses: DBS 134,252 63,267 407,177 201,158 Other 8,229 8,748 32,005 29,116 -------- -------- -------- -------- 142,481 72,015 439,182 230,274 -------- -------- -------- -------- Pre-marketing cash flow: DBS 57,972 24,905 174,898 85,195 Other 1,076 1,155 3,428 7,299 -------- -------- -------- -------- 59,048 26,060 178,326 92,494 -------- -------- -------- -------- Subscriber acquisition costs 58,352 29,054 169,998 117,774 -------- -------- -------- -------- Cash flow from operations: DBS (380) (4,149) 4,900 (32,579) Other 1,076 1,155 3,428 7,299 -------- -------- -------- -------- 696 (2,994) 8,328 (25,280) -------- -------- -------- -------- Incentive compensation 3,740 307 5,779 1,649 Corporate expenses 3,387 1,481 9,428 5,589 Depreciation and amortization 62,663 22,676 194,810 91,007 Other expense, net 4,288 1,096 9,792 2,582 Interest expense 35,917 17,407 122,102 64,904 Interest income (4,103) (341) (15,245) (1,356) Provision (benefit) for income taxes (41,329) (4,861) (100,320) (8,892) Income from discontinued cable operations (429) (753) (1,663) (2,128) Gain on sale of cable operations, net 5 - (59,361) - Extraordinary loss on extinguishment of debt - 6,178 9,280 6,178 Preferred stock dividends 10,501 4,306 35,543 16,706 -------- -------- -------- -------- Net loss applicable to common shares ($73,944) ($50,490) ($201,817) ($201,519) ======== ======== ======== ======== Balance Sheet Data: As of Dec. 31, 2000 ------------------- Cash $223,432 Working capital 120,022 Total assets 2,836,452 Total debt 1,182,858 Total liabilities 1,844,532 Total equity 991,920
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