-----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, IVElEuVyJhB/iGFeEEjkwE1hv7Lj27Px2k/uFJ0IdLkeTdX7F47KQGmI427DWsS6 SI4Q3CyUu4ZF85n66nGVbg== /in/edgar/work/0000950144-00-012668/0000950144-00-012668.txt : 20001030 0000950144-00-012668.hdr.sgml : 20001030 ACCESSION NUMBER: 0000950144-00-012668 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20001026 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20001027 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTERMEDIA COMMUNICATIONS INC CENTRAL INDEX KEY: 0000885067 STANDARD INDUSTRIAL CLASSIFICATION: [4813 ] IRS NUMBER: 592913586 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-20135 FILM NUMBER: 747295 BUSINESS ADDRESS: STREET 1: 3625 QUEEN PALM DR STREET 2: STE 720 CITY: TAMPA STATE: FL ZIP: 33619 BUSINESS PHONE: 8138290011 MAIL ADDRESS: STREET 1: ONE INTERMEDIA WAY CITY: TAMPA STATE: FL ZIP: 33647 FORMER COMPANY: FORMER CONFORMED NAME: INTERMEDIA COMMUNICATIONS OF FLORIDA INC DATE OF NAME CHANGE: 19930328 8-K 1 g64889e8-k.txt INTERMEDIA COMMUNICATIONS, INC. 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 (Date of earliest event reported): October 26, 2000 - -------------------------------------------------------------------------------- Intermedia Communications Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) - -------------------------------------------------------------------------------- Delaware 59-2913586 -------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 0-20135 ------------------------ (Commission File Number) One Intermedia Way Tampa, FL 33647 ---------------------------------------- (Address of principal executive offices) (813) 829-0011 ------------------ (Telephone Number) 2 ITEM 5. Other Events On October 26, 2000, a subsidiary of Intermedia Communications Inc. (the "Company"), Digex, Incorporated ("Digex"), filed the attached press release. ITEM 7. Financial Statements and Exhibits Exhibit 99 Press Release, dated October 26, 2000. 3 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. Dated: October 27, 2000 INTERMEDIA COMMUNICATIONS, INC. (Registrant) /s/ Robert M. Manning ------------------------------------------------- Robert M. Manning Senior Vice President and Chief Financial Officer 4 EXHIBIT INDEX Exhibit No. Description Page 99 Press release dated October 26, 2000 EX-99 2 g64889ex99.txt PRESS RELEASE, DATED OCTOBER 26, 2000 1 Exhibit 99 NEWS RELEASE MEDIA CONTACTS: INVESTOR RELATIONS: Alice Andors Nicole Morodan Tania Almond Digex, Inc. MS&L, for Digex Digex, Inc. 301.847.6471 212.213.7140 240.264.2237 alice.andors@digex.com nmorodan@mslpr.com tania.almond@digex.com DIGEX REPORTS RECORD THIRD QUARTER RESULTS BENEFITS OF SCALE DRIVE SHARP MARGIN IMPROVEMENT; QUARTERLY REVENUE INCREASES 189%; SIGNIFICANT NEW MANAGED SERVICES ADDED BELTSVILLE, MD, OCTOBER 26, 2000 - Digex, Incorporated (Nasdaq: DIGX), a leading high-end managed Web and application hosting service provider for businesses worldwide, today announced revenue of $46.5 million for the quarter-ended September 30, 2000, a 189% increase over the same period a year ago. Managed servers totaled 3,914 with average monthly revenue per server reaching another record high of $4,103. Gross margin improved to 45% while EBITDA* losses narrowed to $17.8 million in the third quarter and net loss per share of $0.61, excluding merger-related expenses. "Digex's strong improvement in margins this quarter demonstrates the leverage we can achieve through our deep expertise in developing pre-engineered, automated platforms. These well designed systems form the foundation for building complex and scalable solutions to meet the requirements of our diverse customers," said Mark Shull, president and CEO of Digex. "We continue to see healthy growth in our average monthly revenue per server, as customers increasingly recognize the flexibility of building their e-business initiatives on top of hardened, standardized platforms supported by our value-added managed products and services." As previously announced in early September, WorldCom announced an agreement to become Digex's new majority shareholder. "WorldCom brings powerful distribution channels, the largest global network, a domestic and international data center footprint, and access to capital to Digex. We will leverage these assets to accelerate our business model and become the global leader in outsourced hosting," continued Shull. In the third quarter, Digex continued its development of products and services in the areas of performance, high availability and managed storage to meet the increasingly complex needs of sophisticated e-business clients. Digex, Compaq and Microsoft have recently unveiled an industry first interactive customer management portal, the first phase of the three-year joint development -- project "Tiger." The portal provides real-time resource monitoring and management, ticket management, and an XML framework for flexible, standards-based data exchange between Digex back-office systems and client applications. "This is another great milestone in Digex engineering. The research and development work we're doing with Compaq and Microsoft promises to further extend our leadership in high-value managed hosting services. We continue to raise the bar in managed hosting, enabling tighter integration between our sophisticated monitoring, billing and provisioning systems and the internal systems and processes of our clients," concluded Shull. Other key metrics driving the company's strong results in the quarter include: - - Annualized revenue per customer, grew to over $281,000, up 150% over 3Q99 and up from $227,000 in the previous quarter. 2 - - Average number of servers per customer rose to 6.0, up 79% over the year-ago level and up from 5.4 last quarter. "We are pleased with our financial results for the quarter, as we exceeded guidance across revenue, EBITDA, EPS and most notably gross margin. We remain comfortable with our previously increased guidance for 2000 and 2001," said Tim Adams, chief financial officer for Digex. "In the third quarter we placed a strong emphasis on adding significant enhancements to our managed products and services. Our Intelligent Director service, a Layer 7 Web Switching solution based on Cisco technology, further enhances performance of e-business sites, in time for the upcoming holiday shopping season," said Rebecca Ward, president, engineering, product management and marketing for Digex. "The launch of our advanced Managed Storage SAN and Tape Backup SAN solutions deepen our already strong capabilities in this mission critical area, and we will continue our focus on storage as a strategic feature of our managed computing environment." "Our enterprise customer base continued to expand, with the addition of such companies as First Republic Bank, Young America and La-Z-Boy," said Nancy Faigen, president of sales and service delivery for Digex. "We have a great track record with the financial services, manufacturing, retail and transportation industries, and continue to see defined needs within these industries as they implement their Internet strategies. We continue developing core product groups to meet their ever growing set of complex requirements." The Company's planned expansion of its direct sales force continued on track. Quota-carrying salespeople grew to 121, out of a total Digex employee base of 1,191, as of September 30, 2000. Additional quarterly highlights for Digex include; - - Won key enterprise customers, including First Republic Bank, La-Z-Boy, Vertecon (formerly Primary WebWorks), Tribal - DDB Dallas, Tourneau, NPD, Young America and web-centric customers including IntellExchange and Juritas. New application service providers (ASPs) in the quarter included mindlever.com, PowerCerv and Indus International. - - Implemented significant expansion among customers including American Century Investments, J. Crew and Medem, along with organic growth within its ASP customer base with expansions by Celarix and Commerce One Global Services. - - Opened a unified engineering lab, creating the ultimate development Internet ecosystem for product engineering, network development, training and research and development. - - Enhanced support of industry-leading e-business applications including BroadVision, Vignette, BEA WebLogic, IBM WebSphere and ATG Dynamo. - - Launched Intelligent Director, a traffic management and distribution system based on Layer-7 switching for both Web sites and firewalls. - - Introduced SQL Server 2000 for high-transaction volume e-business sites. Financial highlights: - - Revenue mix by segments for the third quarter was approximately: Enterprises 70% Internet-centric 20% Application Service Providers 10%
- - Gross margin in the quarter was 45.2%, up 3.4% sequentially from the normalized 2Q00 level of 41.8%, which excludes the equipment sale - - Capital investments for the quarter totaled $72.4 million - - Cash and cash equivalents were $142.7 million as of September 30, 2000 3 Digex expects fourth quarter 2000 results as follows: - - Expected revenue in the range of $52-$54 million, with full year 2000 revenue expected in the range of $168-$170 million - - Expected gross margin of approximately 45% - - Expected EBITDA* losses in the range of $17-$18 million - - Depreciation and amortization in the range of $27-$29 million, based largely on demand driven capital spending - - Net loss per share of approximately $0.68-$0.72 Digex expects full year 2001 results as follows: - - Revenue in the range of $300-$310 million - - Gross margin in the range of 49%-51% - - EBITDA* losses in the range of $10-$20 million - - Net loss per share in the range of $2.60- $2.65 - - Capital expenditures of approximately $200 million FORWARD LOOKING STATEMENTS Statements contained in this news release regarding expected financial results and other planned events are forward looking statements, subject to uncertainties and risks, including, but not limited to, the demand for Digex's services and the ability of Digex to successfully implement its strategies, each of which may be impacted, among other things, by economic, competitive or technological conditions. These and other applicable risks are summarized under the caption "Risk Factors" in the Company's annual 10K filing, and are updated periodically through the filing of reports and registration statements with the Securities and Exchange Commission. ABOUT DIGEX Digex (Nasdaq: DIGX) is a leading provider of managed Web and application hosting services for some of the world's leading companies that rely on the Internet as a critical business tool. Digex customers, from mainstream enterprise corporations, Internet-based businesses and Application Service Providers (ASPs), leverage Digex services to deploy secure, scaleable, high performance business solutions, including electronic retailing, online financial services, online procurement and customer self-service applications. Digex also offers value-added enterprise and professional services, including performance and security testing, monitoring, reporting and networking services. Additional information on Digex is available at www.digex.com. - -------------------------------------------------------------------------------- INTERNET USERS: Digex news releases and other useful information are available on the Digex Web site at www.digex.com. To receive news releases by e-mail or to request that information be mailed to you, please visit the Investor Relations section of the site and click on the "Investor Information Request Form" link. - - EBITDA consists of earnings (net loss) before interest expense, interest and other income, merger-related expenses, foreign exchange gain or loss, income taxes, deferred compensation, depreciation, and amortization. EBITDA does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA should also not be construed as a substitute for operating income or a better measure of liquidity than cash flow from operating activities, which are determined in accordance with generally accepted accounting principles. This caption excludes components that are significant in understanding and assessing the results of operations and cash flows. In addition, EBITDA is not a term defined by generally accepted accounting principles and as a result EBITDA may not be comparable to similarly titled measures used by other companies. However, the Company believes that EBITDA is relevant and useful information that is often reported and widely used by analysts, investors and other interested parties in the Web site and application hosting industry. Accordingly, the Company is disclosing this information to permit a more comprehensive analysis of the Company's operating performance, as an additional meaningful measure of performance and liquidity, and to provide additional information with respect to the Company's ability to meet future debt service, capital expenditures and working capital requirements. 4 DIGEX, INCORPORATED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS UNAUDITED (IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, SEPTEMBER 30, ------------------------------------- ----------------------------------- 2000 1999 2000 1999 ---------------- ------------------ ---------------- ----------------- Revenues $ 46,531 $ 16,111 $ 116,727 $ 38,132 Costs and expenses: Cost of operations 4,237 2,698 17,275 7,044 Cost of services 21,256 6,331 49,480 13,761 Selling, general and administrative 38,880 20,119 101,872 46,846 Deferred compensation 1,087 509 3,077 509 Depreciation and amortization 21,883 8,146 52,435 18,112 --------------- ------------------ ---------------- ----------------- Total costs and expenses 87,343 37,803 224,139 86,272 --------------- ------------------ ---------------- ----------------- Loss from operations (40,812) (21,692) (107,412) (48,140) Other income (expense) Interest expense (523) (373) (1,395) (612) Interest and other income 2,838 1,293 10,239 1,293 Merger-related expenses (2,708) - (2,708) - --------------- ------------------- ---------------- ----------------- Total interest and other income 130 1,293 7,531 1,293 Net loss before income tax benefit (41,205) (20,772) (101,276) (47,459) Income tax benefit - - - 4,839 --------------- ------------------ ---------------- ----------------- Net loss $ (41,205) $ (20,772) $ (101,276) $ (42,620) =============== ================== ================ ================= Net loss per common share - basic and diluted (1) $ (0.65) $ (0.36) $ (1.60) $ (0.81) =============== ================== ================ ================= Net loss per common share - basic and diluted (3) $ (0.61) $ (0.36) $ (1.56) $ (0.81) =============== ================== ================ ================= Shares used in computing basic and diluted net loss per share 63,616,765 57,250,000 63,248,403 52,443,223 =============== ================== ================ ================= EBITDA (2) (17,842) (13,037) (51,900) (29,519)
(1) Basic and diluted loss per share have been calculated assuming that the common shares issued in connection with the Company's recapitalization in April 1999 were outstanding for all periods presented. (2) EBITDA consists of earnings (net loss) before interest expense, interest and other income, merger-related expenses, foreign exchange gain or loss, income taxes, deferred compensation, depreciation and amortization. EBITDA does not represent funds available for management's discretionary use and is not intended to represent cash flow from operations. EBITDA should not to be considered as an alternative to net loss as an indicator of the Company's operating performance or to cash flows as a measure of liquidity. In addition, EBITDA is not a term defined by generally accepted accounting principles, and, as a result, the measure of EBITDA presented herein may not be comparable to similarly titled measures used by other companies. (3) Basic and diluted loss per share have been calculated excluding merger-related expenses in Interest and Other Income. 5 DIGEX, INCORPORATED CONDENSED CONSOLIDATED BALANCE SHEETS (AMOUNTS IN THOUSANDS, EXCEPT SHARE INFORMATION)
SEPTEMBER 30, DECEMBER 31, 2000 1999 ------------------ ---------------------- (UNAUDITED) ASSETS Current assets: Cash and cash equivalents $ 142,732 $ 88,778 Restricted investments 2,000 - Accounts receivable, net of allowance of $3,586 and $4,362 in 2000 and 1999, respectively 32,569 17,271 Due from Intermedia - 3,110 Prepaid expenses and other current assets 9,072 1,496 ------------------ ---------------------- Total current assets 186,373 110,655 Property and equipment, net 326,783 205,903 Intangible assets, net 24,220 27,213 Other assets 1,184 538 ------------------ ---------------------- Total assets $ 538,560 $ 344,309 ================== ====================== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued expenses $ 49,837 $ 33,619 Deferred revenue - 222 Due to Intermedia 326 - Current portion of note payable 2,730 1,235 Current portion of capital lease obligations 1,694 801 ------------------ ---------------------- Total current liabilities 54,587 35,877 Note payable 1,405 2,477 Capital lease obligations 27,204 15,766 ------------------ ---------------------- Total liabilities 83,196 54,120 ================== ====================== Stockholders' equity: Preferred stock, $.01 par value; 5,000,000 shares authorized; 100,000 designated as Series A Convertible; 100,000 shares issued and outstanding in 2000 1 - Class A common stock, $.01 par value; 100,000,000 shares authorized; 24,492,510 and 11,500,000 shares issued and outstanding in 2000 and 1999, respectively 245 115 Class B common stock, $.01 par value; 50,000,000 shares authorized; 39,350,000 and 50,000,000 shares issued and outstanding in 2000 and 1999, respectively 393 500 Additional paid-in capital 620,593 354,553 Accumulated deficit (154,044) (52,768) Deferred compensation (11,824) (12,211) ------------------ ---------------------- Total stockholders' equity 455,364 290,189 ------------------ ---------------------- Total liabilities and stockholders' equity $ 538,560 $ 344,309 ================== ======================
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