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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) February 12, 1998
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IXC Communications, Inc.
(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 File Number) Identification No.)
of 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.
Attached as Exhibit 99.1 is a press releases issued by IXC
Communications, Inc. dated February 12, 1998 which is hereby incorporated by
reference herein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(C) EXHIBITS
99.1 Press Release dated February 12, 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: February 12, 1998
IXC Communications, Inc.
By: /s/ Jeffrey C. Smith
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Jeffrey C. Smith
Senior Vice President, General
Counsel and Secretary
3.
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EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------
99.1 Press Release dated February 12, 1998
4.
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EXHIBIT 99.1
IXC NEWS RELEASE
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IXC Communications, Inc. Announces 1997 Results
- Fourth Quarter Revenue up 84.6%; EBITDA up 106.6%
AUSTIN, Texas, Feb. 12 /PRNewswire/ -- IXC Communications, Inc. (Nasdaq:
IIXC) announced today that revenues for the fourth quarter of 1997 increased
84.6% to $135.7 million, from $73.5 million for the fourth quarter of 1996.
Earnings before interest, taxes, depreciation and amortization (EBITDA)
increased 106.6% to $15.0 million for the fourth quarter of 1997, from $7.3
million in the fourth quarter of 1996. The net loss for the fourth quarter was
$19.1 million, or ($.99) per common share (basic and diluted), compared with a
net loss of $8.1 million, or ($0.27) per common share (basic and diluted) for
the fourth quarter of 1996.
The $62.2 million increase in revenues in the fourth quarter of 1997 over
the fourth quarter of 1996 resulted from an increase in switched long
distance revenues of $38.5 million, or 83.6%, and in private line revenues of
$23.7 million, or 86.5%. The increase in EBITDA resulted from the growth in
revenues, partially offset by increased access costs related to 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 expanding operations. The net loss for
the fourth quarter also reflected higher depreciation expense related to the
Company's fiber expansion program, as the Cleveland-to-Phoenix segment of the
new fiber network became operational during 1997, and larger equity losses
related to the Company's investment in Marca-Tel, a long distance venture
in Mexico. Losses per common share for the fourth quarter included the impact of
dividends relating to preferred stock, including the two classes of preferred
stock issued during 1997.
On a sequential basis, fourth quarter revenues for 1997 increased 20.9%
over third quarter 1997 revenues, with switched long distance revenues
increasing 20.4% to $84.6 and private line revenues increasing 21.8% to $51.1
million. EBITDA in the fourth quarter increased 145.3% over the third quarter
1997, with the revenue increase partially offset by increases in access and
leased circuit costs, but with operating expenses remaining approximately level
quarter to quarter.
(more)
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"It is very gratifying to be able to report the continued rapid growth in
revenues along with the dramatic improvement in the Company's EBITDA
performance," said Ben Scott, IXC Chief Executive Officer. "We are now
beginning to realize greater efficiency in our cost structure, as voice traffic
and revenues grow. This improvement has been achieved, even before we fully
realize the cost benefits we expect as we complete our network expansion to the
West Coast and to New York this quarter and additional segments of our new
nationwide fiber network over the next several quarters."
For the full year 1997, revenues increased 106.5% to $420.7 million, from
$203.8 million in 1996. EBITDA for 1997 increased 17.3% to $15.5 million, from
$13.2 million in 1996. The net loss for 1997 was $94.6 million, or ($3.75) per
common share (basic and diluted), compared to a net loss of $37.5 million, or
($1.39) per common share (basic and diluted) for 1996. Revenues increased
$216.9 million in 1997 versus 1996, led by a 148.5% increase in switched long
distance revenues, with private line revenues increasing 62.7% for the year.
The revenue increase was accompanied by increases in cost of services,
primarily access costs related to the growth of long distance revenues, as well
as increased operating expenses, primarily sales and back office costs
supporting the growth in switched long distance services and operational costs
supporting the growth of the fiber network. Losses per common share reflected
the impact of dividends related to the two classes of preferred stock issued
in 1997. The larger net loss for the year reflected increased depreciation
related to the fiber expansion program, and equity losses related to the
Company's investment in Marca-Tel. The increased equity losses reflect both
increased operating losses in Marca-Tel, and greater recognition of those
losses by IXC. During 1997, IXC's recognition of Marca-Tel's losses increased
to 75.9%, representing its increased indirect investment in the venture. In
light of the continuing adverse regulatory environment in Mexico, IXC and
Marca-Tel have decided to limit further investment by Marca-Tel and to reduce
its scope of operations in Mexico.
"This has been a tremendous year for IXC," Mr. Scott said. "With the
completion of our network into Los Angeles and New York in the first quarter
of 1998 and the launch of our new OCX high-speed and high-capacity family of
products, we are well positioned as the first-to-market provider of the
nationwide network services required for advanced, high-bandwidth-intensive
products and services.
"Mr. Scott noted IXC's significant achievements since the beginning of
1997:
-- Launch of 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.
-- The formation of Unidial Direct, a joint venture with Unidial
Communications, one of the nation's fastest growing, full service providers of
telecommunications services, to sell Unidial products exclusively over IXC's
state-of-the-art nationwide digital network, through a full-time, national
direct sales force. This venture is an important step in IXC's newly initiated
retail market strategy.
-- Agreement to acquire Network Long Distance, Inc., a provider of long
distance and other telecommunications services through business retail and
association program distribution channels, with current annualized revenues in
excess of $100 million. This acquisition is intended to jump start IXC's retail
growth strategy in its targeted markets.
(more)
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-- Additional fiber exchanges expanding the reach of IXC's developing
fiber network while dramatically reducing the capital cost of the expansion.
Routes acquired include:
* 450-mile route between LA and San Francisco
* 1,400-mile route between Las Vegas and Portland, through Salt Lake
City and Boise
* 1,600-mile route between Washington, DC and Houston, through Atlanta
-- Completion and activation of an additional 3,500 mile network with
state-of-the-art fiber and optronics, laying the groundwork for the completion
of the nation's first technologically advanced coast-to-coast fiber optic
system in the first quarter of 1998.
-- Two agreements to sell dark fiber to LCI, bringing IXC's total dark
fiber sales to more than $270 million.
-- Two major financings including the successful issuance of $100 million
in 7 1/4% Convertible Preferred Stock and $300 million in 12 1/2% Junior
Exchangeable Preferred Stock.
-- Agreement to form a long-term alliance with PSINet in which IXC
will provide OC-48 transmission capacity for 20 years in exchange for 20% of
PSINet's common stock, with a guaranteed minimum value of $240 million. This
agreement provides IXC with a strategic partnership with a leading, nationwide
Internet Service Provider.
-- Joint venture with Telenor, the national telephone company of Norway,
to provide long distance services to 11 European countries. This is another
step in expanding IXC's reach to global markets.
-- Initiation of IXC's retail strategy with the acquisition of Telecom
One, an agent-based long distance reseller with annualized revenues of over
$8.0 million, operating in 32 states.
-- Launch of nationwide, high-speed Broadband data services over
ATM/Frame Relay network platform in early 1997, and subsequent agreement with
Infonet Services Corporation to extend its frame relay services into
international markets, establishing IXC as a worldwide provider of broadband
services.
Austin, Texas-based IXC Communications, Inc. is one of the largest and
fastest-growing suppliers of network-based information delivery solutions for
the global communications market. The company owns and operates a new
nationwide digital network and makes network capacity available to local
telephone companies, national and regional long-distance carriers, cable and
utility companies, and Internet Service Providers. IXC offerings include
private line, broadband, and switched and dedicated inbound and outbound
calling products, and calling card and debit card 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.
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 unavoidable
construction delays, increases in expenses, and 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.
(more)
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IXC Communications, Inc.
Summary of Operating Results
($000's) except per share amounts
<TABLE>
<CAPTION>
Three Months Ended
December 31, Full Year
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues:
Private line $ 51,087 $ 27,396 $ 162,398 $ 99,793
Switched long distance 84,608 46,092 258,312 103,968
Net operating revenue 135,695 73,488 420,710 203,761
Gross Profit 37,589 21,036 95,583 60,292
% 27.7% 28.6% 22.7% 29.6%
EBITDA 14,990 7,255 15,513 13,225
% 11.0% 9.9% 3.7% 6.5%
Depreciation &
Amortization 17,981 7,307 60,748 27,241
Operating Loss (2,991) (52) (45,235) (14,016)
Interest Expense, Net 4,490 6,090 23,571 26,834
Loss in Unconsolidated
Subsidiaries 10,132 1,937 23,663 1,961
Other, Net 36 261 697 618
Income Tax Provision
(Benefit) 1,430 (282) 1,389 (5,981)
Net Loss (19,079) (8,058) (94,555) (37,448)
Preferred Dividend
Requirements (12,037) (437) (21,636) (1,739)
Net Loss Applicable
to Common Shareholders $(31,116) ($8,495) ($116,191) ($39,187)
Basic and Diluted
Net loss per share
applicable to common
shareholders ($0.99) ($0.27) ($3.75) ($1.39)
Weighted average
common shares
outstanding 31,350 31,502 30,961 28,209
</TABLE>
SOURCE: IXC Communications, Inc.
-0- 02/12/98
/CONTACT: Investors, James F. Guthrie, Executive Vice President,
Chief Financial Officer, 512-427-3713, or [email protected], or
for Media, Melissa Jackson, Manager of Public Relations, 512-231-5247,
or [email protected]/
/Company News On-Call: http://www.prnewswire.com or fax, 800-758-5804,
ext. 115151/
/Web site: http://www.ixc-comm.com/
(IIXC)
