<PAGE> 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): May 2, 2000
IMPSAT FIBER NETWORKS, INC.
IMPSAT S.A.
(Exact name of registrant as specified in its charter)
Delaware
Argentina
(State or other jurisdiction of incorporation)
52-1910372
333-12977 Not Applicable
(Commission File Number) (IRS Employer Identification Number)
Alferez Pareja 256 (1107)
Buenos Aires, Argentina
(Address of Principal Executive Offices)
(5411) 4300-4007
(Telephone Number, Including Area Code)
(Not Applicable)
(Former name or former address, if changed since last report)
<PAGE> 2
ITEM 5. OTHER EVENTS.
IMPSAT Fiber Networks, Inc. made a public announcement on May 1,
2000 of its operating results for the first quarter 2000. The public
announcement was made by means of a news release, the text of which is set
forth in Exhibit 99.1 hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed as a part of this report:
EXHIBIT NO.
99.1 News release. Filed herewith.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by
the undersigned hereunto duly authorized.
IMPSAT FIBER NETWORKS, INC.
By /s/ Guillermo Jofre
---------------
Guillermo Jofre
Chief Financial Officer
IMPSAT S.A.
By /s/ Guillermo Jofre
---------------
Guillermo Jofre
Finance Manager
Date: May 2, 2000
<PAGE> 4
EXHIBIT INDEX
EXHIBIT NO.
99.1 News release. Filed herewith.
<PAGE> 1
FOR IMMEDIATE RELEASE
For More Information Contact:
Guillermo Jofre, Chief Financial Officer
Gonzalo Alende Serra, Investor Relations
IMPSAT Fiber Networks, Inc.
Tel: 54.11.4363.3700 or
54.11.4363.3546
www.impsat.com
or [IMPSAT LOGO]
Joe Mileti / Robin Weinberg
Citigate Dewe Rogerson Inc.
Tel: 212.688.6840
IMPSAT FIBER NETWORKS ANNOUNCES RESULTS
FOR THE FIRST QUARTER 2000
FIRST QUARTER 2000 HIGHLIGHTS
- - Net revenue for the first quarter of 2000 grew by 9.7% compared to the same
quarter of 1999
- - The most significant revenue growth was in Brazil, Venezuela and United
States
- - The number of customers grew by 9.6% during the quarter, with the
greatest increase in Argentina
- - IMPSAT's EBITDA Margin for the first quarter of 2000 was 11.0%
- - Construction on IMPSAT's fiber optic Broadband Network is progressing
according to schedule
(May 1, 2000 - Buenos Aires, Argentina) - IMPSAT Fiber Networks, Inc. ("IMPSAT"
or the "Company") (NASDAQ:IMPT), a leading provider of data transmission and
private telecommunications network services in Latin America with an increasing
emphasis on broadband transmission, today announced its results for the first
quarter 2000. All figures are in U.S. dollars.
FIRST QUARTER 2000 RESULTS
Overview
For the first quarter of 2000, IMPSAT reported net revenues of $58.8 million,
an increase of $5.2 million, or 9.7%, from the same period in 1999. Growth in
net revenues resulted primarily from non-satellite services and corporate
Internet services. Although the economic recession experienced in several of
the countries in which IMPSAT operates still has lingering effects, the Company
was able to achieve aggregate growth in customers and revenue as compared to
the first quarter of 1999. The Company continued to successfully expand its
business in Brazil and the United States.
<PAGE> 2
EBITDA for the first quarter of 2000 totaled $6.5 million, a decrease of $6.0
million compared to the same period in 1999, resulting in an EBITDA margin of
11.0%. The decline is attributable to increased leased telecommunication links
costs to address higher bandwidth demand and to increases in salaries and SG&A
expenses relating to the Company's growth plans. The decrease in EBITDA is in
line with the Company's expectations. The Company anticipates that EBITDA and
EBITDA margins will continue to be negatively impacted until the Broadband
Network is fully operational.
For the three-month period ended March 31, 2000, the Company reported a net loss
of $29.1 million, an increase of $8.6 million (or 41.8%) compared to the same
period in 1999. In addition to the items described above, the Company's
increased loss was due to the change in its depreciation policy effected during
the third quarter of 1999, and the increase of net interest expense due to
higher average outstanding indebtedness, which were partially offset by a gain
on foreign exchange. IMPSAT's loss per share was $0.36 for the first quarter of
2000, compared to a net loss of $0.42 for the first quarter 1999.
Commenting on the results, Guillermo Jofre, the Company's Chief Financial
Officer said, "We are very pleased about the development of the Company's
activities during the first quarter of 2000. Our operations are proving strong
and poised to capitalize on the growing demand for broadband. Our performance
has met our expectations even when economies are taking longer to emerge from
recession. Our progress in the deployment of the Broadband Network is on
schedule and firmly positions us as the first mover in the context of the
fast-growing Latin American broadband market".
Revenues
The breakdown of IMPSAT's net revenues by service lines is summarized in the
following table:
<TABLE>
<CAPTION>
% TOTAL
1Q 1999 1Q 2000 %CHANGE REVENUES
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------
NET REVENUES
- --------------------------------------------------------------------------------------------------
NETWORK SERVICES
- --------------------------------------------------------------------------------------------------
Terrestrial $7,603 $9,465 24.5% 16.1%
Satellite 34,746 35,527 2.2% 60.5%
42,349 44,992 6.2% 76.6%
- --------------------------------------------------------------------------------------------------
INTERNET SERVICES
- --------------------------------------------------------------------------------------------------
Corporate 1,723 4,274 148.1% 7.3%
Wholesale 4,299 2,440 -43.2% 4.1%
6,022 6,714 11.5% 11.4%
- --------------------------------------------------------------------------------------------------
OTHER SERVICES 5,189 7,057 36.0% 12.0%
- --------------------------------------------------------------------------------------------------
TOTAL NET REVENUES $53,560 $58,763 9.7% 100.0%
- --------------------------------------------------------------------------------------------------
</TABLE>
(All figures in thousands of US dollars)
2
<PAGE> 3
The breakdown of IMPSAT's first quarter 2000 net revenues by service lines
in main locations is summarized in the following table:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
FIRST QUARTER 2000
- ------------------------------------------------------------------------------------------------------
All
Argentina Colombia Venezuela Brazil Other Eliminations Total
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
NET REVENUES
- ------------------------------------------------------------------------------------------------------
NETWORK
SERVICES
- ------------------------------------------------------------------------------------------------------
Terrestrial $5,555 $2,910 $438 $242 $374 $(54) $9,465
Satellite 15,239 8,009 5,244 2,892 5,836 (1,693) 35,527
20,794 10,919 5,682 3,134 6,210 (1,747) 44,992
- ------------------------------------------------------------------------------------------------------
INTERNET
SERVICES
- ------------------------------------------------------------------------------------------------------
Corporate 1,993 318 465 215 2,491 (1,208) 4,274
Wholesale 418 384 7 1,169 467 (5) 2,440
2,411 702 472 1,384 2,958 (1,213) 6,714
- ------------------------------------------------------------------------------------------------------
OTHER SERVICES 3,599 2,194 381 578 1,056 (751) 7,057
- ------------------------------------------------------------------------------------------------------
TOTAL NET
REVENUES $26,804 $13,815 $6,535 $5,096 $10,024 $(3,711) $58,763
- ------------------------------------------------------------------------------------------------------
</TABLE>
(All figures in thousands of US dollars)
The Company's customer base continued to grow during the first quarter of 2000
from 1,745 to 1,913, an increase of 9.6%. Customer growth was most pronounced in
Brazil, Argentina and the United States. Important new clients obtained during
the first quarter of 2000 included IFX, a U.S. Internet access provider that has
commenced operations in Latin America, Banque Nationale de Paris and the Buenos
Aires Stock Exchange Clearing House in Argentina.
The Company's operations in Brazil recorded the highest revenue growth rate.
Revenues at IMPSAT Brazil during the first quarter of 2000 totaled $5.1 million,
an increase of 399.1% compared to the same period in 1999. Revenues in
Argentina, the Company's largest operation, totaled $26.8 million, a 1.2%
increase from the same period in 1999.
Our operations in the United States and Venezuela also showed positive results.
IMPSAT USA's revenues totaled $5.7 million in the first quarter of 2000, a 37.5%
increase as compared to the first quarter of 1999. This is primarily a result of
increased network services and Internet backbone access services to
multinational corporations with operations in Latin America. IMPSAT Venezuela's
revenues totaled $6.5 million for the first three months of 2000, 28.8% higher
than in the first quarter of 1999. IMPSAT Colombia's revenues reached $13.8
million during the first quarter of 2000, a 7.2% decrease from the same period
in 1999, due to the contraction in that country's economy.
3
<PAGE> 4
Operating Expenses
Operating Expenses excluding Depreciation and Amortization for the quarter
totaled $52.3 million, a 27.5% increase from the same period in 1999,
principally as a result of the increased costs of leased telecommunications
links capacity and higher Selling General and Administrative (SG&A) and salary
expenses attributable to the deployment of the Broadband Network, and the
continued growth of the Company's operations in Brazil.
Operating Expenses and EBITDA performance for the first quarter are summarized
in the following table:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
FIRST QUARTER 2000
- ------------------------------------------------------------------------------------------------------
All
Argentina Colombia Venezuela Brazil Other Eliminations Total
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------
OPERATING
EXPENSES
- ------------------------------------------------------------------------------------------------------
Salaries and
Wages $5,913 $1,897 $1,113 $2,107 $1,951 - $12,981
Selling
General and
Administrative 6,428 1,229 1,024 2,009 2,537 (196) 13,031
Leased Links 5,007 2,141 1,200 2,212 4,347 (1,870) 13,037
Other Direct
Costs 6,655 3,122 1,913 1,778 1,513 (1,740) 13,241
- ------------------------------------------------------------------------------------------------------
TOTAL
OPERATING
EXPENSES
(EXCLUDING D&A) $24,003 $8,389 $5,250 $8,106 $12,734 $(6,192) $52,290
- ------------------------------------------------------------------------------------------------------
EBITDA
$2,800 $5,427 $1,285 $(3,010) $59 $(88) $6,473
EBITDA MARGIN
10.4% 39.3% 19.7% -59.1% 0.5% 11.0%
- ------------------------------------------------------------------------------------------------------
</TABLE>
Salaries and wages in the first quarter of 2000 totaled $13.0 million, an
increase of $2.2 million (20.0%), compared to the same quarter of 1999. The
increase in salaries and wages is related to the Company's recruitment and
retention efforts implemented as part of the roll-out of operations into Brazil
and the development and implementation of its Broadband Network in Argentina and
Brazil, including the new strategic focus on broadband services. During the
first quarter of 2000, the number of employees grew to 1,153, and an increase of
46 from the headcount at year-end 1999.
Selling, general & administrative expenses totaled $13.0 million for the first
quarter of 2000, compared to $9.7 million for the same period in 1999. The
increase in SG&A expenses results from the expansion strategy the Company
undertook during 1999.
4
<PAGE> 5
IMPSAT's leased telecommunication links costs in the first three months of 2000
totaled $13.0 million, an increase of 34.1% compared to the first quarter of
1999. This increase reflects the continuation in the growing trend in demand for
higher bandwidth, which prompted the Company to lease additional satellite and
fiber optic capacity.
Other Direct Costs for the first quarter of 2000 were $13.2 million, an increase
of $2.5 million (or 23.1%) when compared to the same period of 1999. These other
direct costs consist primarily of contracted maintenance and installation
services, selling commissions, and the Company's provision for doubtful
accounts. The provision for doubtful accounts recorded during the first quarter
totaled $1.2 million. During the first quarter, Impsat recovered $2.0 million as
part of the Company's agreement with IBM de Argentina S.A. in respect of
litigation brought against that company for failure to pay certain amounts due
from 1997.
Depreciation and Amortization
Depreciation and Amortization expense for the first quarter totaled $19.9
million, an increase of $9.0 million (or 82.6%) compared to the same period in
1999. The significant increase in depreciation and amortization expense reflects
the Company's decision at the end of the third quarter of 1999 to change the
depreciable life of some of the Company's customers' premises telecommunication
equipment from ten years to five years in light of technological advances as
well as the continued growth in the Company's infrastructure (including the
Broadband Network).
Interest Expense and Other
For the three months ended March 31, 2000, net interest expense totaled $17.6
million, consisting of interest expense of $22.4 million and interest income of
$4.8 million. Net interest expense for the corresponding quarterly period of
1999 was $ 14.4 million. The Company recorded a gain on foreign exchange for the
first three months of 2000 of $2.6 million due to the appreciation of the
Brazilian real against the U.S. dollar, as compared to a loss on foreign
exchange for the first three months of 1999 of $6.2 million due to the
devaluation of the real during that period.
Capital Expenditure
Capital Expenditures (CapEx) for the first quarter of 2000 totaled $85.1
million, an increase of $68.0 million (or 297.7%) from the same period of 1999.
The increase in capital expenditures relates principally to the deployment of
IMPSAT's Broadband Network.
OPERATING HIGHLIGHTS
Network Extension
As recently announced, at March 31, 2000 the total extension of the deployed
network was 1,907 route kilometers of ducts and 2,202 route kilometers of fiber.
IMPSAT had a total of 1,192 route kilometers of ducts and 1,280 route kilometers
of fiber installed during the first quarter of 2000. Among the highlights of the
deployment of the Broadband Network during the first three months of 2000 was
the completion of 228 kilometers of ducts on the high mountain stretch across
the Andes in Argentina and Chile. In addition, IMPSAT completed the construction
of its long-haul network between the cities of Buenos Aires and Rosario in
Argentina. The Company expects to put this section of the Broadband Network into
operation by mid-year, prior to the originally planned date.
5
<PAGE> 6
During the first quarter of 2000, IMPSAT signed agreements with Global Crossing
and Movicom/BellSouth, for the provision of backhauls and capacity swaps,
respectively. These agreements will allow the Company to extend the projected
reach of its Broadband Network from 4,282 route kilometers of ducts and 6,312
route kilometers of fiber, to 4,562 route kilometers of ducts and 7,922 route
kilometers of fiber, respectively, and to cover additional areas in the Sao
Paulo/Santos and Buenos Aires areas not included in the initially planned
footprint of the Broadband Network.
IMPSAT Fiber Networks, Inc. is a leading provider of Internet and private
network integrated data and voice telecommunications services in Latin America.
IMPSAT is building an extensive pan-Latin American high capacity Broadband
network using advanced technologies, including IP/ATM switching, DWDM, and
non-zero dispersion fiber optics. IMPSAT provides services to more than 1,900
national and multinational companies, government entities and wholesale services
to carriers, ISPs and other service providers throughout the region. The Company
currently has operations in Argentina, Colombia, Venezuela, Ecuador, Mexico,
Brazil, the United States, Chile and Peru.
- --------------------------------------------------------------------------------
Statements made in this press release that state IMPSAT's intentions, beliefs,
expectations, or predictions for the future are forward-looking statements. It
is important to note that the company's actual results could differ materially
from those projected in such forward-looking statements. Information concerning
factors that could cause actual results to differ materially from those in the
forward-looking statements is contained in the company's filings with the U.S.
Securities and Exchange Commission (SEC). Copies of these filings may be
obtained by contacting IMPSAT or the SEC.
(Tables to Follow)
6
<PAGE> 7
IMPSAT FIBER NETWORKS
UNAUDITED CONSOLIDATED BALANCE SHEET DATA (IN THOUSANDS OF US DOLLARS)
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
----------------------------------
December 31, March 31,
1999 2000
----------------------------------
<S> <C> <C>
Cash and cash equivalents $97,507 $557,545
Accounts Receivable-net 52,176 52,878
Other receivables 27,640 30,516
Prepaid expenses 1,703 2,891
----------------------------------
Total Current assets 179,026 643,830
----------------------------------
Broadband Network, Net 71,868 126,501
Property, Plant and Equipment, Net 310,330 321,963
Non Current assets:
Intangible assets 442 87,350
Investments 235,925 141,914
Deferred financing costs, net 8,985 14,452
Other non-current assets 21,756 21,396
Total non-current assets 267,108 265,112
TOTAL ASSETS 828,332 1,357,406
CURRENT LIABILITIES
Accounts payable-trade 53,678 60,313
Short-term debt 15,670 17,920
Current portion of long-term debt 23,007 24,061
Accrued and other liabilities 29,506 35,109
Deferred income taxes, net 51,870 15,682
Customer advances on Broadband network project 23,200 42,125
TOTAL CURRENT LIABILITIES 196,931 195,210
Broadband vendor financing 59,961 94,652
Long term debt, net 385,673 683,553
Other long term- liabilities 16,406 16,059
Minority interest 4,985 -
Redeemable Preferred Stock 149,035 -
Common Stock 716 914
Amount paid in excess of carrying value of
assets acquired from related party (4,827) (4,685)
Additional paid in capital 221,013 541,710
Accumulated deficit (202,934) (232,001)
Treasury stock (125,000) -
Deferred stock-based compensation - (5,438)
Other comprehensive (loss) income 126,373 67,432
TOTAL STOCKHOLDERS' EQUITY 15,341 367,932
TOTAL 828,332 1,357,406
- ----------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 8
IMPSAT FIBER NETWORKS
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (IN THOUSANDS OF US DOLLARS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
1Q 1999 1Q 2000 % Change % Net
Revenues
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NET REVENUES $53,560 $58,763 9.7% 100.0%
----------------------------------------------------
OPERATING EXPENSES
Salaries & Wages 10,815 12,981 20.0% -22.1%
Selling, General & Administrative 9,729 13,031 33.9% -22.2%
Leased Links 9,717 13,037 34.2% -22.2%
Depreciation & Amortization 10,915 19,936 82.6% -33.9%
Other Direct Costs 10,759 13,241 23.1% -22.5%
- ------------------------------------------------------------------------------------------------
TOTAL OPERATING EXPENSES 51,935 72,226 39.1% -122.9%
----------------------------------------------------
EBITDA 12,540 6,473 -48.4% 11.0%
----------------------------------------------------
Operating Profit (loss) 1,625 (13,463) N/D -22.9%
Interest income 1,021 4,767 366.9% 8.1%
Interest expense (15,381) (22,381) 45.5% -38.1%
Interest expense-net (14,360) (17,614) 22.7% -30.0%
Net Foreign Exchange (loss) Income (6,212) 2,565 N/D 4.4%
Other (loss) income (481) 178 N/D 0.3%
- ------------------------------------------------------------------------------------------------
LOSS BEFORE TAXES (19,428) (28,334) 45.8% -48.2%
Taxes 2,143 660 -69.2% 1.1%
(INCOME) LOSS ATTRIBUTABLE TO MINORITY
INTEREST 164 - -100% 0.0%
- ------------------------------------------------------------------------------------------------
DIVIDENDS ON REDEEMABLE PREFERRED STOCK (3,375) (1,393) -58.7% -2.4%
- ------------------------------------------------------------------------------------------------
NET LOSS ATTRIBUTABLE TO COMMON
SHAREHOLDERS $(20,496) $(29,067) 41.8% -49.5%
- --------------------------------------------====================================================
LOSS PER SHARE (IN US$) * (0.42) (0.36)
</TABLE>
*Calculated on the basis of a weighted average number of shares outstanding of
48,725,000 for 1Q99 and 80,591,000 for 1Q00.
8
