<PAGE> 1
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) April 29, 1998
-------------------------------
IXC Communications, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-20803 74-2644120
- --------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
1122 Capital of Texas Highway South, Austin, Texas 78746
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (512) 328-1112
-----------------------------
Not applicable
- --------------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
<PAGE> 2
ITEM 5. OTHER EVENTS.
Attached as Exhibit 99.1 is a press releases issued by IXC
Communications, Inc. dated April 29, 1998 which is hereby incorporated by
reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
99.1 Press Release dated April 29, 1998
2.
<PAGE> 3
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: April 29, 1998
IXC Communications, Inc.
By: /s/ Stuart K. Coppens
--------------------------------------
Stuart K. Coppens
Vice President of Finance and
Chief Accounting Officer
3.
<PAGE> 4
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
99.1 Press Release dated April 29, 1998
4.
<PAGE> 1
EXHIBIT 99.1
(BW)(IXC-COMMUNICATIONS)(IIXC) IXC Communications, Inc. Announces
First Quarter Results; EBITDA Grows 22% Over Fourth Quarter 1997
Business Editors
AUSTIN, Texas--(BUSINESS WIRE)--April 29, 1998--IXC Communications
(NASDAQ:IIXC) announced today that revenue for the first quarter of 1998
increased 54.0% to $129.2 million, from $83.9 million in the first quarter of
1997. Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the quarter reached $18.3 million compared with an EBITDA loss of $1.6
million for the prior year's first quarter. The net loss for the first quarter
was $19.4 million, or ($0.98) loss per common share (basic and diluted),
compared with a net loss of $19.9 million, or ($0.66) per common share (basic
and diluted) for the first quarter of 1997.
The $45.3 million increase in revenues in the first quarter of 1998 over
the first quarter of 1997 resulted from an increase in switched long distance
revenues of $32.3 million, or 60.9%, and an increase in private line revenues
of $12.9 million, or 41.9%. The $19.9 million increase in EBITDA resulted from
the growth in revenues, partially offset by increased access costs related to
the growth in switched long distance traffic, additional costs of leasing
off-net circuits to support revenue growth in advance of the Company's fiber
expansion, and operating costs related to the Company's expanded operations.
The net loss for the first quarter reflected these increased costs and higher
depreciation expense related to the Company's fiber expansion program, and
larger equity losses, primarily related to the Company's investment in
MarcaTel, a long distance venture in Mexico. Losses per common share for the
first quarter included the impact of dividends related to preferred stock,
including the two classes of preferred stock issued during 1997.
On a sequential quarter basis, first quarter 1998 EBITDA increased 22.0%
to $18.3 million, compared with $15.0 million in the fourth quarter, 1997. The
increase reflected an $11.5 million reduction in long distance access costs,
partially offset by a decline in total revenue and increased operating costs
related to the growth of network operations. The current quarter's EBITDA
improvement was achieved despite a slight reduction in revenues (4.8%) related
primarily to the termination or expiration of private line leases on
approximately 130 DS-3 circuits leased on a short term basis under a single
customer contract. Switched long distance revenue in the current quarter
increased 0.9% over the fourth quarter of 1997. The slowed growth of switched
long distance revenues reflected the Company's elimination of international
switched traffic under a certain customer service agreement which had proved to
be unprofitable, and a rate reduction, effective January 1998, granted as part
of a recently announced renegotiation and renewal of an existing switched
services contract.
The access cost reduction resulted primarily from ongoing FCC mandated
rate reductions, the reduction of higher cost international termination
traffic, a non recurring reduction related to a favorable dispute resolution,
and the Company's continued efforts to control costs related to traffic mix and
overflow traffic. As a result, access cost declined to 67.2% of switched long
distance revenue in the current quarter, compared with 81.3% of revenues in the
fourth quarter, 1997.
"We are very pleased with the continued progress in achieving our
financial and operating objectives in the first quarter," said Ben Scott, IXC
Chief Executive Officer. "We are enjoying increased
<PAGE> 2
operating efficiencies as we activate additional segments of our fiber network
and begin to achieve the necessary scale and scope in our operations. This has
been a great start to a year we believe will be our 'breakout year,' with our
strong financial performance, the lighting of our coast-to-coast fiber network
from Los Angeles to New York, and the signing of the $265 million service
agreement with a major Internet service provider -- our first high capacity OCX
service offering."
Mr. Scott noted IXC's significant achievements since the beginning of 1998:
-- Completion and activation of the key coast-to-coast fiber backbone
between Los Angeles and New York - approximately 5,000 route miles of
state-of-the-art high speed, high capacity digital fiber network.
-- Launch of IXC's OCX High Capacity Transmission Service, the first
coast-to-coast offering of very large capacity OC-3/OC-12 products, responding
to the escalating demand for bandwidth from IP backbone providers, Internet
service providers, and other high-volume data carriers.
-- Signing of a 5-year, $265 million agreement to provide OC-12 capacity to
a major Internet service provider - IXC's first major OCX service agreement on
its coast-to-coast fiber network.
-- Signing of an amendment to its existing contract with Excel
Communications for a 4-year, $156 million agreement to provide both private
line and switched network services.
-- Completion of the agreement forming a long-term alliance with PSINet in
which IXC will provide 10,000 miles of OC-48 transmission capacity for 20
years in exchange for 20% of PSINet's common stock, with a guaranteed future
minimum value of $240 million.
-- Formation of InterconX, a strategic alliance with e.spire (formerly
ACSI) and fONOROLA to provide data services throughout the U.S. and Canada.
-- Acquisition of Network Evolutions, Inc. (NEI) providing IXC with
strategic technical support for its nationwide IP and Internet business
strategy.
-- Successful completion of the initial major steps in IXC's plan of
refinancing, including
-- sale of $155 million of 6 3/4% Convertible Preferred Stock
-- tender for substantially all of the Company's outstanding 12 1/2%
Senior Notes Due 2005
-- sale of $450 million of 9% Senior Subordinated Notes due 2008
These financings strengthen IXC's financial structure and provide the
Company with additional new flexibility for funding its capital
requirements over the next several years.
-- Additional fiber exchanges that will result in expanding the reach of
IXC's developing network by almost 1,000 fiber route miles, while reducing the
capital cost of the expansion. Routes to be acquired include:
<PAGE> 3
- 280-mile route between New York and Boston
- 260-mile route between New York and Washington, D.C.
- 450-mile route between LA and San Francisco
-- Fiber exchange in Mexico involving MarcaTel, the Company's Mexican
joint venture, adding almost 1,000 fiber route kilometers and bringing
MarcaTel's total fiber network in Mexico to approximately 2,000 kilometers -
linking Mexico's three largest cities (Monterrey, Guadalajara, and Mexico City)
with IXC's U.S. fiber network.
About IXC Communications
IXC Communications, Inc., based in Austin, Texas, is one of the largest
and fastest growing suppliers of network-based delivery solutions designed to
address the speed and capacity requirements of the global telecommunications
market. Having recently completed the U.S.'s first new coast-to-coast fiber
optic network in a decade, IXC is at the forefront of the industry's new class
of emerging carriers. IXC's 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 located at
www.ixc-comm.com.
<PAGE> 4
IXC Communications, Inc.
Summary of Operating Results
($000's) except per share amounts
Three Months Ended
March 31
1998 1997
Revenues:
Private line $ 43,815 $ 30,869
Long distance switched services 85,369 53,041
Net operating revenue 129,184 83,910
Gross profit 41,886 14,928
% 32.4% 17.8%
EBITDA 18,302 (1,639)
% 14.2% (2.0)%
Depreciation and amortization 19,070 10,002
Operating loss (768) (11,641)
Interest expense, net 4,686 6,467
Equity in net loss of
unconsolidated subsidiaries 11,265 1,819
Other, net 33 203
Income tax provision 2,645 (252)
Net loss $(19,397) $(19,878)
Dividends applicable to
preferred stock (11,736) (470)
Net loss applicable to
common stockholders $(31,133) $(20,348)
Basic and diluted loss
per share $ (0.98) $ (0.66)
Weighted average common
shares outstanding 31,626 30,799
<PAGE> 5
CONTACT: Investor Contact:
James F. Guthrie
Executive Vice President, Chief Financial Officer
(512) 427-3731
[email protected]
or
Media Contact:
Melissa Jackson
Manager of Public Relations
(512) 231-5247
[email protected]
