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UNITED STATES
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): December 7, 1998
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IXC Communications, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-20803 74-2644120
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(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
1122 Capital of Texas Highway South, Austin, Texas 78746
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (512) 328-1112
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Not applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On December 7, 1998, IXC Communications, Inc. ("IXC") announced a
transaction with DCI Telecommunications, Inc. ("DCI") involving DCI's taking
management control of a significant customer of IXC which has defaulted in
payments to IXC, and a 5-year commitment by DCI to utilize significant domestic
and international telecommunications services from IXC. In the transaction, IXC
will acquire approximately $16 million based on the closing price on December 4,
1998 in DCI stock in exchange for approximately $18 million in amounts owed by
the defaulting customer. In connection with the default, IXC estimates a
one-time negative impact on the fourth quarter of approximately $14 million. The
defaulting customer is the debit-card provider that prompted IXC to take certain
reserves, as described in IXC's recent 10-Q and in a recent news release.
Attached as Exhibit 99.1 is a press release issued by IXC dated
December 7, 1998, which describes the transaction in more detail and is hereby
incorporated by reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS
99.1 Press Release dated December 7, 1998
2.
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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 hereunto duly authorized.
Date: December 7, 1998
IXC Communications, Inc.
By: /s/ Jeffrey C. Smith
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Jeffrey C. Smith
Senior Vice President,
Secretary and General Counsel
3.
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EXHIBIT INDEX
Exhibit
Number Description
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99.1 Press Release dated December 7, 1998
4.
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EXHIBIT 99.1
IXC COMMUNICATIONS, INC. NEWS RELEASE
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IXC ANNOUNCES GLOBAL SERVICES AGREEMENT
WITH DCI TELECOMMUNICATIONS
AUSTIN, TX - December 7, 1998 - IXC Communications, Inc. (Nasdaq: IIXC) today
announced a transaction with DCI Telecommunications, Inc. (OTC Bulletin Board:
DCTC) involving DCI's taking management control of a significant customer of IXC
which has defaulted in payments to IXC, and a 5-year commitment by DCI to
utilize significant domestic and international telecommunications services from
IXC. In the transaction, IXC will acquire approximately $16 million in DCI stock
in exchange for approximately $18 million in amounts owed by the defaulting
customer. In connection with the default, IXC estimates a one-time negative
impact on the fourth quarter of approximately $14 million. The defaulting
customer is the debit-card provider that prompted IXC to take certain reserves,
as described in IXC's recent 10-Q and in a recent news release.
DCI is an international provider of telephone services, including long distance,
prepaid telephone cards and Internet services. IXC will provide services for DCI
throughout Spain, England, Canada, Mexico and the Far East through their
international operating affiliates - MarcaTel in Mexico and Storm in Europe.
"The arrangement with DCI is significant for both companies. For DCI, IXC's
contribution provides the network and collocation capabilities to significantly
expand its international operations. For IXC, it represents an expanding
international presence and the first time all its operating affiliates have come
together under one customer contract," said John Fleming, president of IXC's
international business.
DCI has agreed to issue approximately 13% of its stock to IXC (4.25 million
shares) with a market value of approximately $16 million based on the closing
price at December 4, 1998. In exchange for the DCI stock, IXC has canceled
amounts owed by the debit card provider of approximately $18 million. IXC
estimates that the total negative pre-tax impact of this event on the fourth
quarter (net of reserves) will be $14 million. The number of shares of DCI stock
held by IXC is subject to adjustment if the DCI stock price changes.
"This arrangement represents a significant new business opportunity for IXC
going forward, while also providing a favorable resolution of an unfortunate
situation," commented Ben Scott, IXC's chairman and chief executive officer.
"Although the customer default will have a significant impact on the fourth
quarter, the event is one-time in nature and should not indicate any recurring
reduction in the operating results of IXC. We look forward to a long-term and
mutually beneficial relationship with DCI, both as a significant new customer
and as a strategic investment."
Under the agreements, DCI has a call option to repurchase the 4.25 million
shares of its stock from IXC through April 1, 1999 at a price of approximately
$18 million. In the event the call option is not exercised, there will be an
adjustment to the number of shares owned by IXC on June 1, 1999 if the 15-day
volume-weighted average price for the shares is outside of the range of $4.20 to
$5.88. After the adjustment, if
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any, IXC will own shares of DCI with a minimum value of approximately $18
million (if the price is below the range) and a maximum value of $22 million (if
the price is above the range).
Larry Shatsoff, vice president and COO of DCI, stated that this agreement with
IXC is a significant step forward for DCI in its quest to be an international
facilities-based service provider. "We are extremely pleased to be working so
closely with a company of IXC's global stature and appreciate IXC's confidence
in DCI to provide the services and support necessary to establish such links and
services in Europe," Shatsoff said.
IXC's network-based delivery solutions are designed to address the speed and
capacity requirements of the global communications market. Having completed the
first new coast-to-coast fiber optic network in the United States in more than a
decade, IXC Communications, Inc. is at the forefront of the industry's new class
of emerging domestic and international carriers. IXC offerings include private
line, broadband, Internet and long distance switched and dedicated services. IXC
is a publicly traded company listed on Nasdaq under the symbol IIXC. IXC's Web
site is at www.ixc-comm.com.
Certain of the above statements set forth management's expectations or
predictions of the future based on current facts and analyses. Actual results
may differ materially from those indicated in such statements due to actions of
DCI or third parties, or other factors. Additional information on factors that
may affect the business and financial results of IXC can be found in IXC's
filings with the Securities and Exchange Commission.
# # #
Media Contact: Investor Contact:
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Melissa Jackson Greta Wiechman
Manager of Public Relations Senior Manager, Investor Relations
(512) 231-5247 (888) 267-9478
[email protected] [email protected]
