<PAGE>
________________________________________________________________________________
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): January 5, 1999
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 0-29092 54-1708481
(State or Other Jurisdiction of (Commission (IRS Employer
Incorporation) File Number) Identification No.)
1700 OLD MEADOW ROAD, SUITE 300, MCLEAN, VIRGINIA 22102
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (703) 902-2800
________________________________________________________________________________
<PAGE>
ITEMS 1-4. NOT APPLICABLE.
ITEM 5.
The press releases filed as exhibits provide information relating to Primus
Telecommunications Group, Incorporated's ("Primus" or the "Company") planned
$175 million private placement of senior notes and request for consents to amend
the Company's 11-3/4% senior notes due 2004.
ITEM 6. NOT APPLICABLE.
ITEM 7.
(b) PRO FORMA FINANCIAL STATEMENTS.
---------
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA FINANCIAL DATA
The following unaudited pro forma consolidated financial statements are based
on the historical presentation of the consolidated financial statements of the
Company, TresCom International, Inc. ("TresCom"), USFI, Inc. and Telepassport
L.L.C. The Unaudited Pro Forma Consolidated Statement of Operations for the nine
months ended September 30, 1998 gives effect to the merger between a wholly-
owned subsidiary of Primus and TresCom consummated on June 9, 1998 (the "TresCom
Merger"), the offering of its 9-7/8% Senior Notes due 2008 (the "1998 Senior
Notes") and the offering ("Offering") of Senior Notes due 2009 which are planned
to be offered for sale in January 1999 (the "Notes") as if they had occurred on
January 1, 1998. The Unaudited Pro Forma Consolidated Statement of Operations
for the year ended December 31, 1997 gives effect to the October 1997
acquisition by Primus of Telepassport L.L.C. and USFI, Inc. (the
"Telepassport/USFI Acquisition"), the TresCom Merger, the offering of 11-3/4%
Senior Notes due 2004 (the "1997 Senior Notes"), the offering of the 1998 Senior
Notes and the Offering as if they had occurred on January 1, 1997. The unaudited
pro forma consolidated financial statements do not give effect to the repayment
of the outstanding balance under TresCom's senior secured revolving credit
facility in January 1999 (The "TresCom Facility"). The unaudited pro forma
consolidated financial statements should be read in conjunction with the
historical financial statements, including notes thereto, of Primus, TresCom,
USFI, Inc. and Telepassport LLC, which have previously been filed with the
Securities and Exchange Commission.
The unaudited pro forma consolidated financial statements may not be
indicative of the results that actually would have occurred if the transactions
had been in effect on the dates indicated or which may be obtained in the
future.
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
TRESCOM OFFERING AS
PRIMUS(1) TRESCOM(2) ADJUSTMENTS ADJUSTMENTS ADJUSTED
--------- ---------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Net revenue............. $295,573 $ 71,342 $(1,817)(3) $ -- $359,141
(5,957)(4)
Cost of revenue......... 249,406 60,632 (5,957)(4) 304,081
-------- -------- ------- -------- --------
Gross margin............ 46,167 10,710 (1,817) -- 55,060
Operating expenses
Selling, general, and
administrative........ 57,389 16,050 (1,817)(3) 71,622
Depreciation and
amortization.......... 15,322 3,215 (1,046)(5) 19,949
2,458 (6)
-------- -------- ------- -------- --------
Total operating
expenses.............. 72,711 19,265 (405) -- 91,571
-------- -------- ------- -------- --------
Loss from operations.... (26,544) (8,555) (1,412) -- (36,511)
Interest expense........ (28,235) (754) (20,624)(8) (49,613)
Interest income......... 8,634 -- 8,634
Other income (expense).. -- 288 288
-------- -------- ------- -------- --------
Loss before income
taxes.................. (46,145) (9,021) (1,412) (20,624) (77,202)
Income taxes............ -- 0 -- (7) -- 0
-------- -------- ------- -------- --------
Net loss................ $(46,145) $ (9,021) $(1,412) $(20,624) $(77,202)
======== ======== ======= ======== ========
</TABLE>
- --------
(1) Represents the historical results of operations of the Company for the nine
months ended September 30, 1998.
(2) Represents the historical results of operations of TresCom from January 1,
1998 through June 9, 1998 (acquisition date).
TresCom Adjustments:
(3) To reflect the reclassification of TresCom's bad debt expenses from
selling, general and administrative expenses to a reduction of net revenue
to conform to Primus's accounting policies.
(4) To eliminate the effects of intercompany transactions between Primus and
TresCom.
(5) To reverse amortization expense associated with TresCom's previously
acquired customer list and the excess of purchase price over the fair value
of net assets acquired.
(6) To record amortization expense associated with TresCom's previously
acquired customer list and the excess of purchase price over the fair value
of net assets acquired.
(7) The pro forma adjustment to the income tax provision is zero because a
valuation reserve was applied in full to the tax benefit associated with
the pro forma loss before income taxes.
Offering Adjustments:
(8) To reflect (i) pro forma interest expense and amortization of deferred
financing costs related to the 1998 Senior Notes and (ii) pro forma
interest expense on the Notes, assuming an interest rate of 11.0% per
annum, and the amortization of $6.25 million of estimated deferred
financing costs.
<PAGE>
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA AS ADJUSTED USFI/
TELEPASSPORT AND TRESCOM
--------------------------------------
USFI/ PRO FORMA
USFI, TELEPASSPORT TELEPASSPORT TRESCOM OFFERING AS
PRIMUS (1) INC. (2) LLC (2) TRESCOM (3) ADJUSTMENTS ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTED
---------- -------- ------------ ----------- ------------ ----------- -------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net revenue...... $280,197 $27,040 $3,108 $157,641 $(9,673)(4) $(4,159)(7) $448,929 $ -- $ 448,929
$(5,225)(8)
Cost of revenue.. 252,731 20,907 2,704 124,365 (8,029)(4) (5,225)(8) 387,453 387,453
-------- ------- ------ -------- ------- ------- -------- -------- ----------
Gross margin..... 27,466 6,133 404 33,276 (1,644) (4,159) 61,476 -- 61,476
Operating expenses:
Selling,
general, and
administrative.. 50,622 11,182 1,389 36,386 (4,159)(7) 95,420 95,420
Depreciation and
amortization... 6,733 674 74 6,599 409 (5) (2,167)(9) 22,155 22,155
9,833 (10)
-------- ------- ------ -------- ------- ------- -------- -------- ----------
Total operating
expenses....... 57,355 11,856 1,463 42,985 409 3,507 117,575 -- 117,575
-------- ------- ------ -------- ------- ------- -------- -------- ----------
Loss from
operations...... (29,889) (5,723) (1,059) (9,709) (2,053) (7,666) (56,099) -- (56,099)
Interest
expense......... (12,914) (18) (1,146) (14,078) (51,663)(12) (65,741)
Interest income.. 6,238 6,238 6,238
Other income
(expense)....... 407 25 162 594 594
-------- ------- ------ -------- ------- ------- -------- -------- ----------
Loss before
income taxes.... (36,158) (5,698) (915) (10,855) (2,053) (7,666) (63,345) (51,663) (115,008)
Income taxes..... (81) -- -- -- -- (6) -- (11) (81) (81)
-------- ------- ------ -------- ------- ------- -------- -------- ----------
Net loss......... $(36,239) $(5,698) $ (915) $(10,855) $(2,053) $(7,666) $(63,426) $(51,663) $(115,089)
======== ======= ====== ======== ======= ======= ======== ======== ==========
</TABLE>
- --------
(1) Represents the historical results of operations of the Company for the
year ended December 31, 1997.
(2) Represents the historical results of operations of USFI, Inc. and
Telepassport LLC for the period from January 1, 1997 through October 20,
1997 (acquisition date).
(3) Represents the historical results of operations of TresCom for the year
ended December 31, 1997.
USFI/Telepassport adjustments:
(4) To eliminate selected net revenue and cost of revenue for a portion of
the customer base which was not purchased.
(5) To record amortization expense associated with the acquired customer list
and the excess of purchase price over the fair value of net assets
acquired.
(6) The pro forma adjustment to the income tax provision is zero as a
valuation reserve was applied in full to the tax benefit associated with
the pro forma net loss before income taxes.
TresCom adjustments:
(7) To reflect the reclassification of Trescom's bad debt expenses from
selling, general and administrative expenses to a reduction of net
revenue to conform to Primus's accounting policies.
(8) To eliminate the effects of intercompany transactions between Primus and
TresCom.
(9) To reverse amortization expense associated with TresCom's previously
acquired customer list and the excess of purchase price over the fair
value of net assets acquired.
(10) To record amortization expense associated with TresCom's previously
acquired customer list and the excess of purchase price over the fair
value of net assets acquired.
(11) The pro forma adjustment to the income tax provision is zero as a
valuation reserve was applied in full to the tax benefit associated with
the pro forma net loss before income taxes.
Offering adjustments:
(12) To reflect (i) pro forma interest expense and amortization of deferred
financing costs related to the 1997 Senior Notes and the 1998 Senior
Notes and (ii) pro forma interest expense on the Notes, assuming an
interest rate of 11.0% per annum, and the amortization on $6.25 million
of estimated deferred financing costs.
CAPITALIZATION
The following table sets forth as of September 30, 1998: (i) the actual
capitalization of the Company; and (ii) the actual capitalization of the
Company adjusted to give effect to (A) the planned offering of the Notes,
less discounts, commissions, and estimated expenses of the Offering payable by
the Company, and the application of the estimated net proceeds therefrom, and
(B) the repayment of the outstanding balance under the TresCom Facility in
January 1999. This table should be read in conjunction with the Company's
Unaudited Pro Forma Financial Data and the notes thereto.
<TABLE>
<CAPTION>
As of September 30, 1998
----------------------------
Actual As Adjusted
------------ --------------
(Dollars in thousands,
except share data)
<S> <C> <C>
Cash and cash equivalents... $ 179,070 $ 324,266
Restricted investments
(including current and
long-term)................. 49,905 49,905
------------ ------------
Total cash, cash
equivalents and
restricted investments... $ 228,975 $ 374,171
============ ============
Debt and capital lease
obligations:
TresCom Facility.......... $ 23,554 $ --
11-3/4% Senior Notes due
2004..................... 222,888 222,888
9-7/8% Senior Notes due
2008..................... 150,000 150,000
__% Senior Notes due 2009. -- 175,000
Notes payable............. 558 558
Capital lease
obligations.............. 14,003 14,003
------------ ------------
Total debt and capital
lease obligations...... 411,003 562,449
Stockholders' equity:
Common Stock, $.01 par
value--80,000,000 shares
authorized; 28,041,692
shares actual and as
adjusted, issued and
outstanding.............. 280 280
Additional paid-in
capital.................. 234,405 234,405
Accumulated deficit....... (94,150) (94,150)
Cumulative translation
adjustment............... (4,226) (4,226)
------------ ------------
Total stockholders'
equity................. 136,309 136,309
------------ ------------
Total capitalization.... $ 547,312 $ 698,758
============ ============
</TABLE>
<PAGE>
(c) EXHIBITS.
--------
99.1 Press Release, dated January 5, 1999, issued by the Company.
99.2 Press Release, dated January 5, 1999, issued by the Company.
ITEM 8. NOT APPLICABLE.
<PAGE>
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 hereunto duly authorized.
PRIMUS TELECOMMUNICATIONS
GROUP, INCORPORATED
By: /s/ NEIL L. HAZARD
--------------------------------
Neil L. Hazard
Executive Vice President
and Chief Financial Officer
Date: January 11, 1999
<PAGE>
Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACT:
- -------
John DePodesta THE FINANCIAL RELATIONS BOARD
Neil Hazard -----------------------------
PRIMUS Telecommunications Group (212) 661-8030
(703) 902-2800 Investors: Jordan Darrow
Media: Alan Goldsand
General: Jeff Bogart
PRIMUS PLANS $175 MILLION PRIVATE PLACEMENT OF SENIOR NOTES
MCLEAN, Virginia, January 5, 1999; PRIMUS Telecommunications Group,
Incorporated (Nasdaq NMS: PRTL) announced today that it anticipates offering
$175,000,000 in aggregate principal amount of senior notes due 2009 in a private
placement pursuant to Rule 144A under the Securities Act of 1933. The net
proceeds from the offering, after payment of selling commissions and discounts,
and other expenses of the offering, are expected to be used to fund capital
expenditures to expand and develop its global network and for other permitted
corporate purposes.
The senior notes anticipated to be offered and sold will not be registered
under the Securities Act of 1933, as amended, and may not be offered or sold in
the United States absent such registration or an applicable exemption from such
registration requirements.
This press release shall not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of the Senior Notes
in any jurisdiction in which such offer, solicitation or sale would be unlawful
prior to registration or qualification under applicable securities laws, or
absent the availability of an exemption from such registration or qualification
requirements.
PRIMUS Telecommunications Group, Incorporated is a global facilities-
based telecommunications company providing domestic and international long-
distance voice, data, private network and value-added services. The Company
provides services through an extensive global network of owned and leased
transmission facilities, international gateway switches, and a variety of
operating agreements that allow the Company to deliver traffic worldwide.
Founded in 1994 and based in McLean, Va., the Company now serves over 375,000
corporate, small- and medium-sized business, residential and wholesale customers
located in the North America, Caribbean, Europe and the Asia-Pacific regions of
the world. News and information are available at the Company's Website at
http://www.PRIMUStel.com.
- ------------------------
To receive additional information on PRIMUS Telecommunications Group,
Incorporated via fax at no charge, dial 1-800-PRO-INFO and enter code PRTL.
###
<PAGE>
Exhibit 99.2
FOR IMMEDIATE RELEASE
CONTACT:
- -------
Bob Stankey THE FINANCIAL RELATIONS BOARD
General Counsel -----------------------------
PRIMUS Telecommunications Group (212) 661-8030
(703) 902-2800 Investors: Jordan Darrow
Media: Alan Goldsand
General: Jeff Bogart
PRIMUS TO SEEK CONSENTS TO AMEND
11 3/4% SENIOR NOTES DUE 2004
MCLEAN, Virginia, January 5, 1999--PRIMUS Telecommunications Group,
Incorporated (Nasdaq NMS: PRTL) announced today that it is pursuing a consent
from the holders of its $225,000,000 aggregate principal amount of 113/4% senior
notes due 2004 to amend the indenture in respect of such notes. The proposed
amendments would substantially conform certain covenants applicable to such
notes to the corresponding provisions of the Company's 97/8% senior notes due
2008 and to the corresponding provisions expected to be included in an indenture
governing its anticipated offering of senior notes which was previously
announced (the "New Notes"). The consent is not required for PRIMUS to issue
the New Notes.
The consent solicitation commences on January 6, 1999, has a record date of
January 4, 1999, and will expire at 5:00 p.m., New York City time, on January
14, 1999, unless otherwise extended (the "Expiration Date"). PRIMUS will pay a
consent fee of $7.50 for each $1,000 in aggregate principal amount of the notes
as to which a valid and unrevoked consent has been received prior to the
Expiration Date. PRIMUS has retained Lehman Brothers Inc. as Consent
Solicitation Agent and D. F. King & Co., Inc. as Information Agent.
PRIMUS Telecommunications Group, Incorporated is a global facilities-
based telecommunications company providing domestic and international long-
distance voice, data, private network and value-added services. The Company
provides services through an extensive global network of owned and leased
transmission facilities, international gateway switches, and a variety of
operating agreements that allow the Company to deliver traffic worldwide.
Founded in 1994 and based in McLean, Va., the Company now serves over 375,000
corporate, small- and medium-sized business, residential and wholesale customers
located in the North America, Caribbean, Europe and the Asia-Pacific regions of
the world. News and information are available at the Company's Website at
http://www.PRIMUStel.com.
- ------------------------
To receive additional information on PRIMUS Telecommunications Group,
Incorporated via fax at no charge, dial 1-800-PRO-INFO and enter code PRTL.
###
