-----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, B27zCyQu4a93pWnmZGxIosaWTPJ4GXaw6XV3SodBvT1uJjfzgB20VraM8I31sSOr PfOG6g6oGPGgvGTEkKdtFw== 0000950168-98-001761.txt : 19980525 0000950168-98-001761.hdr.sgml : 19980525 ACCESSION NUMBER: 0000950168-98-001761 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980522 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: US LEC CORP CENTRAL INDEX KEY: 0001054290 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 562065535 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24061 FILM NUMBER: 98630773 BUSINESS ADDRESS: STREET 1: 212 S TRYON ST STREET 2: STE 1540 CITY: CHARLOTTE STATE: NC ZIP: 28251 MAIL ADDRESS: STREET 1: 212 S TRYON ST STREET 2: SUITE 1540 CITY: CHARLOTTE STATE: NC ZIP: 28281 10-Q 1 US LEC CORP. 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended March 31, 1998 or -------------- [ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from _____ to ______ Commission file number 0-24061 ------- U S LEC Corp. - ----------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware - ----------------------------------------------------- (State or other jurisdiction of incorporation or organization) 56-2065535 - ----------------------------------------------------- (I.R.S. Employer Identification No.) 212 South Tryon Street, Suite 1540 Charlotte, North Carolina 28281 - ----------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (704) 319-1000 - ----------------------------------------------------------------------------- (Registrant's telephone number, including area code) N/A - ----------------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes . No X . ---- ----- As of May 22, 1998, there were 10,180,000 shares of Class A Common Stock and 17,075,270 shares of Class B Common Stock outstanding.
US LEC Corp. Table of Contents PART I. FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS (UNAUDITED): Condensed Consolidated Statements of Operations - Three month periods ended March 31, 1998 and 1997 Condensed Consolidated Balance Sheets - March 31, 1998 and December 31, 1997 Condensed Consolidated Statements of Cash Flows- Three month periods ended March 31, 1998 and 1997. Consolidated Statement of Stockholders' Equity - Three months ended March 31, 1998. Notes to Condensed Consolidated Financial Statements ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS PART II. OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS ITEM 3. DEFAULTS UPON SENIOR SECURITIES ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS ITEM 5. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K SIGNATURES US LEC Corp. Condensed Consolidated Statements of Operations (Dollars in thousands, except per share data) (Unaudited) Three Months Ended March 31, 1998 1997 ---- ---- Revenue $13,630 $ 1 Cost of Services 6,473 423 ------- ----- Gross Margin 7,157 (422) Selling, General and Administrative Expenses 4,426 1,049 Depreciation and Amortization 442 14 ------ ------ Operating Income (Loss) 2,289 (1,485) Interest Income (50) 0 Interest Expense 140 67 ------ ------ Income (Loss) Before Income Taxes 2,199 (1,552) Provision for Income Taxes 880 0 ------ ------ Net Income (Loss) $1,319 ($1,552) ====== ======= Earnings (Loss) Per Common and Equivalent Share $0.06 ($0.09) ====== ======= ===================================================== Weighted number of shares outstanding: (in thousands) ===================================================== Basic 20,695 17,310 Diluted 21,321 17,310 EBITDA $2,731 ($1,471)
US LEC Corp. Condensed Consolidated Balance Sheets (Dollars in thousands) (Unaudited) March 31, December 31, 1998 1997 ---- ---- ASSETS CURRENT ASSETS: Cash and cash equivalents $ 2,237 $ 3,189 Certficates of deposit 349 349 Accounts receivable 14,444 6,006 Prepaid expenses and other assets 473 111 ---------- ---------- Total current assets 17,503 9,655 PROPERTY AND EQUIPMENT, NET 25,160 12,890 OTHER ASSETS 470 136 ---------- ---------- TOTAL ASSETS $ 43,133 $ 22,681 ========== ========= LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) CURRENT LIABILITIES: Accounts payable $ 17,860 $ 8,201 Deferred revenue 182 1,142 Accrued expenses 8,681 2,299 Accrued interest payable-related party 422 282 ---------- --------- Total current liabilities 27,145 11,924 ---------- --------- NOTES PAYABLE-STOCKHOLDERS 3,289 5,000 ---------- --------- STOCKHOLDERS' EQUITY (DEFICIENCY): Common stock-Class A (72,924,728 authorized shares, 3,855,000 outstanding at March 31, 1998) 38 38 Common stock-Class B (17,075,272 authorized shares, 17,075,270 outstanding at March 31, 1998) 171 166 Additional paid-in capital 18,042 11,174 Accumulated deficit (5,552) (5,621) ---------- -------- Total stockholders' equity (deficiency) 12,699 5,757 ---------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY) $ 43,133 $ 22,681 ========== =========
US LEC Corp. Consolidated Statements of Cash Flows (Dollars in thousands) (Unaudited) Three Months Ended March 31, 1998 1997 ---- ---- OPERATING ACTIVITIES: Net income (loss) $ 1,319 $ (1,552) ---------- --------- Adjustments to reconcile net income (loss) to net cash used in operating activities: Depreciation and amortization 441 14 Stock compensation 75 0 Deferred compensation expense 23 0 Changes in assets and liabilities which provided (used) cash: Accounts receivable (8,438) (1) Prepaid expenses and other assets (225) 137 Other assets 55 (62) Accounts payable 826 154 Deferred revenue (960) 0 Accrued expenses 6,382 199 Accrued interest payable-related party 140 67 ----------- --------- Total adjustments (1,681) 508 ----------- --------- Net cash used in operating activities (362) (1,044) ----------- --------- INVESTING ACTIVITIES: Purchase of property and equipment (3,879) (1,798) Repayment from stockholder 0 200 ----------- --------- Net cash used in investing activities (3,879) (1,598) ----------- --------- FINANCING ACTIVITIES: Proceeds of notes payable-stockholders 3,289 3,000 Repayment of notes payable-stockholder 0 (600) ----------- --------- Net cash provided by financing activities 3,289 2,400 ----------- --------- NET DECREASE IN CASH AND CASH EQUIVALENTS (952) (242) ----------- --------- CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 3,189 726 ----------- --------- CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,237 $ 484 ========== =========
SUPPLEMENTAL NON-CASH INVESTING AND FINANCING ACTIVITIES-(1) At December 31, 1997 and March 31, 1998, $7,267,191 and $16,100,219, respectively, of property and equipment additions are included in outstanding accounts payable. (2) The Company's majority stockholder exchanged a note payable in the amount of $5,000,000 on February 14, 1998 for 480,770 shares of Class B Common Stock. The fair market value of the Class B Common Stock on the effective date of the exchange was $13 per share. The difference between the carying value of the debt and the fair value of the Class B Common Stock issued in the exchange ($1,250,010) was recorded as a non-cash dividend. (3) In connection with the grants of incentive stock options issued during the quarter ended March 31, 1998, the Company recorded the difference between the fair market value of the underlying shares and the exercise price ($548,400) as deferred compensation, which will be amortized over a period of 48 months. Amortization expense for the quarter ended March 31, 1998 was $22,850.
US LEC Corp. Consolidated Statement of Stockholders' Equity For the Three Months Ended March 31, 1998 (Unaudited) (In Thousands, Except Share and Loan Amounts) Class A Class B Additional Accumulated Common Stock Common Stock Paid-in-Capital Deficit Total ------------ ------------ --------------- ------- ----- Balance at January 1, 1998 $38 $166 $11,174 ($5,621) $5,757 Conversion of $5,000,000 stockholder loans for 480,770 shares of Class B Common Stock 0 5 4,995 0 5,000 Dividend 0 0 1,250 (1,250) 0 Issuance of employee stock options 0 0 548 0 548 Issuance of stock warrants 0 0 75 0 75 Net income 0 0 0 1,319 1,319 --------- ------- ------ ------ ------ Balance at March 31, 1998 $38 $171 $18,042 ($5,552) $12,699 ========= ======= ======= ======= =======
US LEC Corp. and Subsidiaries Notes to Condensed Consolidated Financial Statements (Unaudited) 1. Basis of Presentation and Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of US LEC Corp. and its subsidiaries ("US LEC" or the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation for the periods indicated have been included. Operating results for the three months ended March 31, 1998 are not necessarily indicative of the results that may be expected for the year ending December 31, 1998. The balance sheet at December 31, 1997 has been derived from the audited balance sheet at that date, but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. The accompanying financial statements should be read in conjunction with the audited financial statements (including the notes thereto) for the year ended December 31, 1997 included in the Company's prospectus dated April 23, 1998, which is on file with the U.S. Securities and Exchange Commission (the "Commission"). Certain amounts in the 1997 financial statements have been reclassified to conform to the 1998 presentation. 2. Earnings (Loss) Per Common and Common Equivalent Share Earnings (loss) per common and common equivalent share has been calculated in accordance with Statement of Financial Accounting Standards ("SFAS") No. 128, Earnings Per Share, and is based on net income (loss) divided by the weighted average common and common equivalent shares outstanding during the period. The weighted average shares outstanding used in the calculation for 1997 has been determined by giving retroactive effect to the merger of the predecessor limited liability company into the Company, which occurred on December 31, 1997 (based on the share conversion ratios utilized in the merger). Outstanding options and warrants are included in the calculation to the extent they are dilutive. Loss per share on a fully diluted basis is not presented as the effect is antidilutive. 3. Initial Public Offering On April 29,1998, US LEC completed the sale of 5,500,000 shares of Class A Common Stock through an initial public offering. The offering resulted in net proceeds of approximately $75,825,000, which US LEC intends to use to further expand and develop its telecommunications network. On May 12, 1998, US LEC issued an additional 825,000 shares of Class A Common Stock in connection with the underwriters' exercise of their option to cover over-allotments. This additional sale resulted in net proceeds to the Company of $11,508,750. 4. Income Taxes US LEC was organized as an S Corporation for the period from inception to December 31, 1996, and as a limited liability company for the period from January 1, 1997 to December 31, 1997, on which date it was effectively converted to C Corporation status. Effective January 1, 1998, US LEC began recognizing income tax expense associated with its taxable income. Accordingly, US LEC recognized income tax expense in the amount of $880,000 applicable to taxable income for the quarter ended March 31, 1998. At March 31, 1998, deferred tax assets and liabilities related to its operations were not significant. 5. Commitments and Contingencies A portion of the Company's revenue is derived from reciprocal compensation payments from incumbent local exchange carriers ("ILECs") such as BellSouth Communications, Inc. ("BellSouth"). Management believes that such payments are due pursuant to its interconnection agreements with ILECs. However, in August 1997, BellSouth notified US LEC and other CLECs that it would not pay or collect reciprocal compensation under interconnection agreements for traffic terminated to enhanced service providers ("ESPs"), including information service providers such as internet service providers ("ISPs"). On February 26, 1998, following a petition by US LEC, the North Carolina Utilities Commission ("NCUC") ordered BellSouth to bill and pay for all such traffic. Following a motion filed by BellSouth, the NCUC stayed enforcement of its order until June 1, 1998. On April 27, 1998, BellSouth filed a petition for judicial review of the NCUC's order and an action for declaratory judgement and other relief with the United States District Court for the Western District of North Carolina. This action was filed against US LEC and the NCUC. An answer has not yet been filed, but US LEC intends to vigorously oppose this action. A significant portion of US LEC's estimated total revenue for 1998 and 1999 is expected to be derived from reciprocal compensation from BellSouth for traffic terminated on US LEC's network to ESPs and ISPs in North Carolina. Management believes that the Company will ultimately be successful in this proceeding. However, if a decision adverse to US LEC is issued by the U.S. District Court, or on any appeal or review of a favorable decision by the U.S. District Court, US LEC's ability to serve existing and future ESP and ISP customers profitably would be limited, which would have a material adverse effect on US LEC's operating results, financial condition and current business strategy. Based upon the favorable decision of the NCUC, US LEC elected to recognize $1,141,386 of previously deferred reciprocal compensation as revenue during the quarter ended March 31, 1998. 6. Stock Options US LEC adopted the US LEC Corp. Omnibus Stock Plan (the "Plan") in January 1998. During the quarter ended March 31, 1998, the Company granted options to purchase an aggregate of 212,500 shares of Class A Common Stock under the Plan. Management's Discussion and Analysis of Financial Condition and Results of Operations Except for the historical information provided below, the matters discussed in this item are forward-looking statements that involve a number of risks and uncertainties. US LEC's actual liquidity needs, capital resources and results may differ materially from the discussion set forth or implied in the forward-looking statements. Important factors that may cause the actual results, performance or achievements of the Company to be materially different from those expressed or implied by the forward-looking statements are summarized in the "Risk Factors" section and elsewhere in the Company's prospectus dated April 23, 1998, which is on file with the Commission. OVERVIEW US LEC is a rapidly growing competitive local exchange carrier ("CLEC") that provides switched local, long distance and enhanced telecommunications services primarily to medium and large-sized organizations located in selected markets in the southeastern United States. US LEC was founded in June 1996 after passage of the Telecommunications Act of 1996, which enhanced the competitive environment for local exchange services. US LEC initiated service in Charlotte, North Carolina in March 1997, becoming one of the first CLECs in North Carolina to provide switched local exchange services, and subsequently initiated service in Raleigh and Greensboro, North Carolina, Atlanta, Georgia and Memphis, Tennessee. US LEC currently plans to enter additional markets in the southeastern United States by the end of 1999. RESULTS OF OPERATIONS Three Months Ended March 31, 1998 Compared With The Three Months Ended March 31, 1997 US LEC did not commence operations until March 1997, consequently it generated only a nominal amount of revenue during the quarter ended March 31, 1997. Total revenue for the quarter ended March 31, 1998 was $13.6 million. As expected, a majority of this revenue was comprised of reciprocal compensation derived from traffic terminated by US LEC that was originated by customers of ILECs in the Company's North Carolina markets. (See Note 5 to the condensed consolidated financial statements appearing elsewhere in this report for a discussion of certain contingencies associated with this revenue). The balance of US LEC's revenue was comprised of recurring and non-recurring charges paid by the Company's new and existing customers. Billable minutes of use (MOUs) increased from approximately 40,000 in the first quarter 1997 to 1.36 billion in the first quarter of 1998. Billable trunks increased from 47 to 12,399 and equivalent access lines increased from 288 to 75,536 at March 31, 1997 and 1998, respectively. Cost of services is currently comprised primarily of leased transport charges and to a lesser extent, reciprocal compensation related to calls that originate with a US LEC customer and terminate on the network of the ILEC or another CLEC. These costs increased from $423,000 in the first quarter of 1997 to $6.5 million in the first quarter of 1998 primarily as a result of increases in the size of US LEC's network and increased usage by its customers. Selling, general and administrative expenses for the first quarter of 1998 increased to $4.4 million, or 32% of revenue as compared with $1.0 million, or 919% of revenue, for the first quarter of 1997 primarily as a result of costs associated with developing the infrastructure of the Company, such as personnel, sales and marketing, occupancy, administration and billing. Depreciation and amortization for the first quarter of 1998 increased to $442,000 from $14,000 in the comparable 1997 quarter due to the increase in depreciable assets in service related to US LEC's network expansion. Depreciation and amortization will continue to increase in conjunction with spending on capital asset deployment related to US LEC's network expansion. The Company had interest earnings of $50,000 in the first quarter of 1998 related to funds invested in short-term investments. Interest expense for the first quarter of 1998 was $140,000, a 209% increase from the comparable quarter in 1997. The increase resulted from an increase in the Company's outstanding indebtedness during the period. Net earnings before interest, taxes, depreciation and amortization ("EBITDA") and net income were $2.7 million and $1.3 million, respectively, for the quarter ended March 31, 1998, the first quarter in which US LEC generated positive EBITDA and net income on a consolidated basis. While EBITDA does not represent cash flow or results of operations in accordance with generally accepted accounting principles, it is a measure of financial performance commonly used in the telecommunications industry. Management attributes the Company's ability to generate positive EBITDA and net income after a relatively short period of operations to its capital efficient network strategy, which does not require a lengthy "build-out" period to construct a fiber optic transmission network, and to efficient network utilization associated with the high traffic volume of its customer base. As a result of these factors, management expects continued improvement in the Company's EBITDA and net income during the execution of its current expansion plan. LIQUIDITY AND CAPITAL RESOURCES US LEC's business is capital intensive and its operations will require substantial capital expenditures for the purchase and installation of network switches and related electronic equipment. The Company's capital expenditures were $12.7 million and $1.8 million for the quarter ended March 31, 1998 and 1997, respectively. US LEC will have substantial capital requirements in connection with its planned expansion into additional locations throughout the southeastern United States by the end of 1999. US LEC anticipates additional capital expenditures of approximately $26 million during the remainder of 1998 and $29 million in 1999. US LEC intends to fund these expenditures with the proceeds of its initial public offering of Class A Common Stock. To date, US LEC has funded a substantial portion of its capital expenditures through the private sale of equity securities and to a lesser extent, borrowings from its two principal stockholders. At December 31, 1997, US LEC was indebted to Richard T. Aab, the Company's principal stockholder, Chairman and Chief Executive Officer, in the amount of $5.0 million. On February 14, 1998, Mr. Aab exchanged this loan for 480,770 shares of Class B Common Stock. During the first quarter of 1998, Tansukh V. Ganatra, US LEC's President and Chief Operating Officer and Melrich Associates, L.P. ( an entity of which Mr. Aab is a general partner) loaned the Company a total of $3.3 million. Cash used in operating activities was $.4 million and $ 1.0 million during the first quarter of 1998 and 1997, respectively. The decrease was primarily related to the growth in the demand for US LEC's products and services. Cash used in investing activities increased from $1.6 million to $3.9 million during the first quarter of 1997 and 1998, respectively. The increase was related to purchases of switching and related telecommunications equipment during the period. Cash provided by financing activities increased to $ 3.3 million for the first three months of 1998 versus $2.4 million for the comparable period in 1997 as a result of increased borrowings from the Company's principal stockholders. PART II OTHER INFORMATION Item 1. Legal Proceedings US LEC is not currently a party to any legal proceedings, other than the NCUC and U.S. District Court proceedings related to reciprocal compensation from BellSouth for ISP and ESP traffic. Note 5 to the Company's condensed consolidated statements included elsewhere in this report is incorporated by reference into the Company's response to this Item. Item 2. Changes in Securities and Use of Proceeds Recent Sales of Unregistered Securities Information regarding sales of unregistered securities by US LEC during the quarter ended March 31, 1998 has been previously reported in the Company's Registration Statement on Form S-1 (File No. 333-46341) (the "Registration Statement"). Use of Proceeds from Registered Securities On February 13, 1998, US LEC filed the Registration Statement to register up to 6,325,000 shares of its Class A Common Stock (the "Common Stock") for sale by the Company. The Registration Statement was declared effective on April 23, 1998 and the offering commenced on April 24, 1998. The offering closed on April 29, 1998 at which time all of the registered securities (except 825,000 shares covered by the over-allotment option granted to the underwriters in connection with the offering) were sold for an aggregate offering price of $82,500,000, or $15.00 per share. The managing underwriter for the offering was Smith Barney Inc. Underwriting discounts and commissions deducted from the gross proceeds of the offering totaled $5,775,000, and the Company currently estimates that other expenses incurred in connection with the offering will total $900,000. On May 12, 1998, the underwriters exercised their over-allotment option. The issuance of 825,000 additional shares of Class A Common Stock in connection therewith resulted in net proceeds to the Company of $11,508,750. Because the effective date of the Registration Statement occurred subsequent to March 31, 1998, no proceeds of the offering were available for use during the period covered by this report. Item 3. Defaults upon Senior Securities None Item 4. Submission of Matters to a Vote of Securities Holders In connection with the Company's preparations for the initial public offering described elsewhere in this report, a number of actions were taken by the Company's shareholders through written consent to action without meeting. These actions are described below. A proposal to amend the Certificate of Incorporation to increase the authorized number of Class B shares from 16,458,000 to 16,594,502 and to reduce the authorized number of Class A shares from 73,542,000 to 73,405,498 was approved on January 14, 1998 as follows: Class A shares voted for: 2,355,000 Class B shares voted for: 16,594,500 Class A shares not voted: 1,500,000 Class B shares not voted: 0 A proposal to designate Richard T. Aab and Tansukh V. Ganatra as Class B directors was approved on January 16, 1998 as follows: Class B shares voted for: 16,594,500 Class B shares not voted: 0 A proposal to change the terms of loans from Richard T. Aab, Tansukh V. Ganatra, and Melrich Associates, L.P. was approved on January 16, 1998 as follows: Class A shares voted for: 2,355,000 Class B shares voted for: 16,594,500 Class A shares not voted: 1,500,000 Class B shares not voted: 0 A proposal to approve cancellation of $5,000,000 in debt to Richard T. Aab in exchange for 480,770 shares of Class B Common Stock and to amend the Certificate of Incorporation to increase the authorized number of shares of Class B Common Stock from 16,594,502 to 17,075,272 and to reduce the authorized number of Class A shares from 73,405,498 to 72,924,728 was approved on February 14, 1998 as follows: Class A shares voted for: 2,355,000 Class B shares voted for: 16,594,500 Class A shares not voted: 1,500,000 Class B shares not voted: 0 A proposal to amend and restate the Certificate of Incorporation was approved on March 24, 1998 as follows: Class A shares voted for: 2,355,000 Class B shares voted for: 17,075,270 Class A shares not voted: 1,500,000 Class B shares not voted: 0 Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: Exhibit No. Description ----------- --------------------------- 3.1 Restated Certificate of Incorporation* 3.2 By-laws* 3.3 Amendment No. 1 to By-laws* 11.1 Statement Regarding Computation of Earnings per Share 27 Financial Data Schedule ---- * Incorporated by reference to the corresponding exhibit to the Company's Registration Statement on Form S-1 (File No. 333-46341). (b) US LEC filed no Current Reports on Form 8-K during the period covered by this report. 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 thereunto duly authorized. US LEC Corp. By:_______________________ David N. Vail Executive Vice President-Finance and Chief Financial Officer EX-11 2 EXHIBIT 11.1
US LEC Corp. Computation of Earnings (Loss) Per Share Three Months Ended March 31, 1998 1997 ---- ---- Net earnings (loss) $ 1,318,997 ($1,551,684) =========== =========== Weighted average number of shares outstanding: Basic 20,695,227 17,310,000 ========== ========== Diluted 21,320,697 17,310,000 ========== ========== Earnings (loss) per share: Basic $0.06 ($0.09) ========== ========== Diluted $0.06 ($0.09) ========== ==========
EX-27 3 FDS -- US LEC CORPORATION
5 0001054290 US LEC CORPORATION 3-MOS DEC-31-1998 JAN-01-1998 MAR-31-1998 2,586 0 14,444 0 0 17,503 26,049 889 43,133 27,145 0 0 0 209 12,490 43,133 0 13,630 0 6,473 0 0 140 2,199 880 0 0 0 0 1,319 .06 .06
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