-----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, MaFnVQEOM11czJhtAosw9DIRUi1urulJM93ZIqoZuGaMH6Wf3L02VNbtMUdpXujq paYOm05twH3LDA3HcT3abA== 0000786343-00-000001.txt : 20000505 0000786343-00-000001.hdr.sgml : 20000505 ACCESSION NUMBER: 0000786343-00-000001 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000426 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20000504 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ICG HOLDINGS CANADA CO /CO/ CENTRAL INDEX KEY: 0000786343 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841128866 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-11052 FILM NUMBER: 619366 BUSINESS ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: P O BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80111 BUSINESS PHONE: 3034145431 MAIL ADDRESS: STREET 1: 161 INVERNESS DRIVE WEST STREET 2: PO BOX 6742 CITY: ENGLEWOOD STATE: CO ZIP: 80111 FORMER COMPANY: FORMER CONFORMED NAME: ICG HOLDINGS CANADA INC DATE OF NAME CHANGE: 19970225 FORMER COMPANY: FORMER CONFORMED NAME: INTERTEL COMMUNICATIONS INC DATE OF NAME CHANGE: 19930107 8-K 1 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) May 3, 2000 ---------------- (April 26, 2000) ---------------- ICG COMMUNICATIONS, INC. ---------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 1-11965 84-1342022 ---------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 --------------------------------------------------- (Address of principal executive offices) ICG HOLDINGS (CANADA) CO. ---------------------------------------------------------------- (Exact name of registrant as specified in charter) Canada 1-11052 Not Applicable ----------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 --------------------------------------------------- (Address of principal executive offices) ICG HOLDINGS, INC. ----------------------------------------------------------------- (Exact name of registrant as specified in charter) Colorado 33-96540 84-1158866 ----------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 --------------------------------------------------- (Address of principal executive offices) ICG FUNDING, LLC ----------------------------------------------------------------- (Exact name of registrant as specified in charter) Delaware 333-40495 84-1434980 ----------------------------------------------------------------- (State of Incorporation) (Commission (IRS Employer File Number) Identification No.) 161 Inverness Drive West, Englewood, Colorado 80112 --------------------------------------------------- (Address of principal executive offices) Registrants' telephone numbers, including area codes (888)424 --------- 1144 and (303) 414-5000 ------------------------ Item 5. Other Events. ------ ------------ In a press release dated April 26, 2000, ICG Communications, Inc., a Delaware corportation (the "Company"), announced its earnings information and results of operations for the Company's 2000 first quarter. A copy of the press release is attached. Item 7. Exhibit. ------ -------- (c) Exhibit ------- 99.1 Press Release, dated April 26, 2000. INDEX TO EXHIBIT Exhibit No. Description - ----------- ------------- 99.1 Press Release, dated April 26, 2000. EXHIBIT 99.1 Press Release, dated April 26, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned hereunto duly authorized. Dated: May 3, 2000 ICG COMMUNICATIONS, INC. By:/s/ Harry R. Herbst ---------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) ICG HOLDINGS (CANADA) CO. By: /s/ Harry R. Herbst --------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) ICG HOLDINGS, INC. By: /s/ Harry R. Herbst --------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) ICG FUNDING, LLC By: ICG Communications, Inc. Common Member and Manager By: /s/ Harry R. Herbst --------------------- Harry R. Herbst Executive Vice President and Chief Financial Officer (Principal Financial Officer) EX-99.1 2 PRESS RELEASE, DATED APRIL 26, 2000 [GRAPHIC OMITTED] FOR IMMEDIATE RELEASE For more information contact: Investor Relations (303) 414-5347 Investor_relations@icgcom.com ICG Reports First Quarter 2000 Results 174,000 Lines, $157 Million Revenue and $19 Million EBITDA ENGLEWOOD, COLORADO (April 26, 2000) - ICG Communications, Inc. (NASDAQ: ICGX) today announced first quarter results that reflect another record for access line installations, adding 174,000 lines for its ISP and business customers. The Company ended the first quarter with approximately 905,000 access lines in service, a 116 percent increase over first quarter 1999. First quarter revenue was $157.2 million, an increase of $52.9 million, or 51 percent over first quarter 1999, and EBITDA was $19.2 million, an increase of $11.4 million, or 144 percent, over the comparable period in 1999. "We set forth an aggressive growth plan for 2000, and we are right on track to meet our commitments," said ICG Chairman and Chief Executive Officer, J. Shelby Bryan. "I am confident that the combination of our experienced management team, substantial new funding and our demonstrated sales and provisioning capability will enable ICG to continue to successfully meet its targets." - -------------------------------------------------------------------------------- Invitation: Today, ICG executive management is hosting a conference call and simultaneous Webcast at 9:00 a.m. mountain time, 11:00 a.m. eastern time. Please log on to the ICG Web page at www.icgcom.com to view and listen to our year-end results discussion. The Webcast will remain available for replay on the ICG Web site. - -------------------------------------------------------------------------------- First Quarter Review In addition to record line installations in the quarter, the Company received orders for approximately 200,000 new lines and exited the first quarter with a backlog of approximately one-half million lines to be installed during the remainder of the year. Both sales and provisioning capabilities are on track to deliver substantial growth in 2000. First quarter network expansion included deployment of four new switches located in Ontario, California, Irvine, California, Miami, Florida and Garfield Heights, Ohio. The Company increased capacity in its new and existing markets, increasing total switch port capacity by over 200,000 during the quarter. In addition, by the end of the quarter the Company had leased the sites, ordered equipment and entered into interconnection agreements related to its 22-market expansion plan. During the first quarter ICG continued to add significant network capacity. The Company increased its nationwide network backbone to OC12 from OC3, effectively increasing capacity by a factor of four, and is on schedule to increase capacity further to OC48 by mid-year. As part of its Internet gateway strategy, ICG acquired CPUs, or servers, that will be installed in over 150 locations by the end of the third quarter. As the Company phases in these servers, advanced network management capabilities such as application distribution and content management and delivery services will be offered to Internet service provider (ISP) customers and content providers. Financial Review Revenue First quarter revenue was $157.2 million, an 11 percent increase over the fourth quarter 1999 and a 51 percent increase over the first quarter 1999 as adjusted for discontinued operations. Local services revenue of $102.6 million contributed 65 percent of total revenue and includes revenue from regional business customers, ISP customers and associated reciprocal compensation revenue for call termination. Special access revenue of $39.8 million compares to $38.5 2 million in the fourth quarter 1999, with each period recognizing revenue from a long-term fiber optic lease agreement of $11.5 million and $13.0 million, respectively. Special access revenue was up 77 percent compared to the first quarter 1999. Long distance revenue was $4.3 million and switched termination revenue was $10.5 million. Operating Costs and Gross Operating Margin First quarter operating costs were $82.9 million resulting in a gross margin on sales of 47 percent. Operating costs were $59.5 million in the fourth quarter 1999, which benefited from identification of $9.5 million in capitalized costs related to capital activities during the second and third quarters of 1999. First quarter 1999 operating costs were $53.6 million Selling, General and Administrative (SG&A) Expenses First quarter SG&A expenses were $55.1 million. SG&A expenses were $12.3 million higher than the same period in 1999 as a result of the Company scaling its business. Earnings The first quarter loss from continuing operations was $121.3 million, or $2.52 per share. This compares to a loss from continuing operations of $86.2 million, or $1.85 per share, in the first quarter 1999, and compares to a loss of $100 million, or $2.10 per share, in the fourth quarter 1999. Reciprocal Compensation During the first quarter, ICG entered into an agreement with Bell South that defines terms for reciprocal compensation for the next three years. This agreement provides increased certainty related to the amount of reciprocal compensation that the Company expects to receive in future periods. Capital Expenditures and Liquidity Capital expenditures for the first quarter were $216.4 million, which included $57.5 million for long-haul network capacity acquired under long-term lease. The Company drew down $95.0 million in long-term debt under its senior banking 3 facility. The Company ended the quarter with $71.8 million in cash and short-term investments. Enhanced Management Team ICG continued to add strong leadership in key areas of the company. Jim Washington joined the Company as Executive Vice President of Network Services, Pam Jacobson as Executive Vice President of Sales and Marketing and Terry Wingfield, Jr. as Executive Vice President of Corporate Development. Subsequent to Quarter-end The Company completed the previously announced equity transaction for a private placement of $750 million in convertible preferred shares. In addition, the Company finalized agreements with vendors for approximately $200 million in financing for network equipment. These transactions together with operating cash flow are expected to fund the Company's 2000 expansion program as well as capital plans into 2001. Forward Looking Statement Disclosure Information and statements presented in this press release may contain forward looking disclosures, expressed or implied, that are based on the beliefs of management as well as assumptions made based on information currently available to management. These forward looking statements and information involve risks and uncertainties including, but not limited to, the ability of the Company to raise capital, future demand for the Company's services, general economic conditions, government regulations, competition and customer strategies, capital deployment, the impact of pricing and other risks and uncertainties. Should one or more of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in this press release as anticipated, believed, estimated or expected. These risks are detailed from time to time in various reports filed by ICG with the Securities and Exchange Commission, including Forms 10-K (filed for the year-ended December 31, 1999) and Forms 10-Q filed quarterly subsequent to March 31, June 30 and September 30, 1999. 4
Key Operating Statistics - ----------------------------------------------------------------- ---------------- ---------------- As of Mar. 31, 2000 Dec. 31, 1999 - ----------------------------------------------------------------- ---------------- ---------------- Access lines/ports in service 904,629 730,975 - ----------------------------------------------------------------- ---------------- ---------------- Total port capacity (customer port equivalent) 1,137,439 932,143 - ----------------------------------------------------------------- ---------------- ---------------- Fiber route miles (operational) 4,807 4,596 Under construction 368 531 - ----------------------------------------------------------------- ---------------- ---------------- Buildings connected On network 1,046 963 Hybrid 7,746 7,115 Total buildings connected 8,792 8,078 - ----------------------------------------------------------------- ---------------- ---------------- Switches Circuit 35 31 Data- Frame relay 16 16 Data- ATM 24 24 Total switches 75 71 - ----------------------------------------------------------------- ---------------- ---------------- Long-haul capacity under long-term leases: Miles 18,000 18,000 Capacity OC12 OC 3 - ----------------------------------------------------------------- ---------------- ---------------- Collocations with ILECs 183 147 - ----------------------------------------------------------------- ---------------- ---------------- VoIP Gateways 181 140 - ----------------------------------------------------------------- ---------------- ----------------
5 ICG Press Release, 4/26/00, Page 6 CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) ($ in thousands, except per share data)
Comparative periods Three months Sequential Year-over-year ended, Three months ended, Three months ended, 3/31/00 12/31/99 % Change 3/31/99 % Change - ------------------------------------------------------------------------------------------------------------- Revenue: Local services $ 102,595 $ 86,318 19% $ 67,399 52% Long distance 4,284 3,968 8% 5,131 (17%) Special access 39,831 38,524 3% 22,562 77% Switched terminating access 10,514 13,265 (21%) 9,239 14% - ------------------------------------------------------------------------------------------------------------- Total revenue 157,224 142,075 11% 104,331 51% - ------------------------------------------------------------------------------------------------------------- Operating costs (82,902) (59,536) 39% (53,649) 55% Selling, general and administrative (55,089) (59,415) (7%) (42,808) 29% - ------------------------------------------------------------------------------------------------------------- EBITDA (before nonrecurring and noncash charges) 19,233 23,124 (17%) 7,874 144% - ------------------------------------------------------------------------------------------------------------- Depreciation and amortization (64,599) (48,102) 34% (36,375) 78% Provision for impairment of long-lived assets - (2,515) NA - NA Other, net (432) (296) 46% 933 (146%) - ------------------------------------------------------------------------------------------------------------- Operating loss (45,798) (27,789) 65% (27,568) 66% - ------------------------------------------------------------------------------------------------------------- Interest expense (62,634) (60,783) 3% (47,438) 32% Interest income 3,277 4,631 (29%) 4,104 (20%) Other, net 459 154 198% (500) (192%) - ------------------------------------------------------------------------------------------------------------- Loss from continuing operations before income taxes, preferred dividends and extraordinary gain (104,696) (83,787) 25% (71,402) 47% - ------------------------------------------------------------------------------------------------------------- Income tax expense - (25) NA - NA Accretion and preferred dividends on preferred securities of subsidiaries (16,637) (16,158) 3% (14,804) 12% - ------------------------------------------------------------------------------------------------------------- Loss from continuing operations before extraordinary gain (121,333) (99,970) 21% (86,206) 41% - ------------------------------------------------------------------------------------------------------------- Discontinued operations: (Loss) income from discontinued operations - (981) NA (111) NA (Loss) gain on disposal of discontinued operations - 45,784 NA - NA - ------------------------------------------------------------------------------------------------------------- - 44,803 NA (111) NA - ------------------------------------------------------------------------------------------------------------- Extraordinary gain on sales of operations of NETCOM, net of income taxes (301) 2,482 (112%) 193,029 (100%) - ------------------------------------------------------------------------------------------------------------- Net ( loss) income $ (121,634) $ (52,685) (131%) $ 106,712 (214%) ============================================================================================================= Net loss per share - basic and diluted: Loss from continuing operations $ (2.52) $ (2.10) (20%) $ (1.85) 36% Income (loss) from discontinued operations - 0.94 100% - NA Extraordinary gain - 0.05 NA 4.14 NA - ------------------------------------------------------------------------------------------------------------- Net loss per share - basic and diluted $ (2.52) $ (1.11) (127%) $ 2.29 (210%) ============================================================================================================= Weighted average number of shares outstanding - basic and diluted 48,189 47,618 46,538 =============================================================================================================
ICG Press Release, 4/26/00, Page 7 CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) ($ in thousands)
March 31, December 31, -------------- -------------- 2000 1999 - -------------------------------------------------------------------------------------- Assets: Cash and cash equivalents $ 40,699 $ 103,288 Short-term investments available for sale 31,115 22,219 Receivables, net 156,511 168,731 Property and equipment, net 1,681,868 1,525,680 Other assets, net 165,144 200,703 - -------------------------------------------------------------------------------------- Total assets $ 2,075,337 2,020,621 ====================================================================================== Liabilities and Stockholders' Deficit: Accounts payable and accrued liabilities $ 305,446 $ 333,322 Capital leases 81,724 71,438 Debt 2,053,557 1,906,697 Other liabilities 50,908 33,705 - -------------------------------------------------------------------------------------- Total liabilities 2,491,635 2,345,162 - -------------------------------------------------------------------------------------- Redeemable preferred securities of subsidiaries 533,727 519,323 Stockholders' deficit: Common stock 486 478 Additional paid-in capital 612,418 599,282 Accumulated deficit (1,565,258) (1,443,624) Accumulated other comprehensive gain 2,329 - - -------------------------------------------------------------------------------------- Total stockholders' deficit (950,025) (843,864) - -------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------- Total liabilities and stockholders' deficit $ 2,075,337 $ 2,020,621 ====================================================================================== Diluted shares (in thousands) 58,464 50,217
ICG Press Release, 4/26/00, Page 8 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) ($ in thousands)
Three Months Ended March 31, 2000 1999 - ------------------------------------------------------------------------------------------------------------- Cash flows from operating activities: Net (loss) income (121,634) 106,712 Loss from discontinued operations - 111 Extraordinary (gain) loss on sales of operations 301 (193,029) Adjustments to reconcile net (loss) income to net cash used by operating activities: Accretion and preferred dividends on preferred securities of subsidiaries 16,637 14,804 Noncash interest expense, net of capitalized interest 52,439 45,603 Depreciation and amortization 64,599 36,375 Loss (gain) transactions, net (6,720) (5,177) Deferred compensation and contribution to 401(k) through issuance of common stock 1,673 2,077 Changes in operating assets and liabilities, excluding the effects of dispositions and noncash transactions (49,727) (55,381) - ------------------------------------------------------------------------------------------------------------- Net cash used by operating activities (42,432) (47,905) - ------------------------------------------------------------------------------------------------------------- Cash flows from investing activities: Acquisition of property, equipment and other assets (141,299) (99,151) Payments for construction of corporate headquarters (1,699) - Proceeds from sales of assets, net of investment purchases and changes in restricted cash 21,530 232,251 - ------------------------------------------------------------------------------------------------------------- Net cash (used) provided by investing activities (121,468) 133,100 - ------------------------------------------------------------------------------------------------------------- Cash flows from financing activities: Proceeds from issuance of common stock 11,902 4,157 Proceeds from issuance of long-term debt 95,000 - Principal payments on long-term debt, capital leases, and payments of preferred dividends (5,497) (4,613) - ------------------------------------------------------------------------------------------------------------- Net cash (used) provided by financing activities 101,405 (456) - ------------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents (62,495) 84,739 Net cash used by discontinued operations (94) (3,356) Cash and cash equivalents, beginning of period 103,288 210,307 - ------------------------------------------------------------------------------------------------------------- Cash and cash equivalents, end of period 40,699 291,690 ============================================================================================================= Supplemental disclosure of cash flows information of continuing operations: Cash paid for interest 7,132 1,835 ============================================================================================================= Supplemental schedule of noncash investing and financing activities of continuing operations: Acquisition of corporate headquarters assets through issuance of long-term debt and conversion of security deposit - 33,719 ============================================================================================================= Assets acquired pursuant to IRU 57,494 - Assets acquired under capital leases 14,415 3,760 - ------------------------------------------------------------------------------------------------------------- Total 71,909 3,760 =============================================================================================================
-----END PRIVACY-ENHANCED MESSAGE-----