FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A OR 15D - 16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of November 1999
Tevecap S.A.
(Exact Name as Specified in its Charter)
Tevecap Inc.
(Translation of Name into English)
SEC FILE NUMBER: 0-22267
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Rua do Rocio, 313
Sao Paulo, SP Brazil
04552-904
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under Securities Exchange Act of 1934.
Yes No X
-------- --------
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with rule 12g3- 2(b):82 N/A
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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, thereunto duly authorized.
TEVECAP S.A.
By: /s/ Jose Augusto P. Moreira
--------------------------------
Jose Augusto P. Moreira
Officer
By: /s/ Claudio Cesar D'Emilio
--------------------------------
Claudio Cesar D'Emilio
Officer
Date: November 11, 1999
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EXHIBIT LIST
------------
1. One copy of the press release, dated November 11, 1999 containing relevant
information regarding Tevecap S.A. as of and for the three month-periods
ended June 30, 1999, March 31, 1999 and June 30, 1998, the six-month period
ended June 30, 1999 and the seven-month period ended July 31, 1999, with
financial information prepared in accordance with U.S. GAAP.
<PAGE>
Tevecap S.A.
[OBJECT OMITTED]
FOR IMMEDIATE RELEASE
Contacts: Marcelo Bonini Marina Echavarria
Tevecap S.A. Ludgate Communications
(5511) 821-8554 (212) 688-5144
[email protected] [email protected]
TEVECAP S.A. ANNOUNCES SECOND-QUARTER RESULTS AND FINANCIAL
STATEMENTS AFTER DTH ASSETS SALE
SAO PAULO, BRAZIL, NOVEMBER 11, 1999 -- TEVECAP S.A., (TVA) ONE OF BRAZIL'S
PAY TELEVISION OPERATORS AND PROGRAMMING DISTRIBUTORS, TODAY ANNOUNCED RESULTS
FOR THE SECOND QUARTER OF 1999 AND IMPACT FROM THE SALE OF DTH AS OF JULY 31,
1999.
Net Revenue for the second quarter of 1999 was US$29.6 million, an increase
of almost 10% compared with US$27.0 million for the first quarter of 1999. When
comparing with the same period in 1998, Net Revenue decreased by 33% due to the
Brazilian currency devaluation.
EBITDA for the quarter was US$9.7 million, compared to US$4.9 million in
the same quarter of 1998 and includes a US$0.7 million gain caused by the impact
of the Real devaluation on TVA's Reais-denominated balance sheet accounts.
Excluding the impact above, EBITDA amounted to US$9.1 million an increase
of 92% compared with US$4.7 million for the first quarter EBITDA of 1998. The
EBITDA increase was due to a US$2.6 million increase in Net Revenues combined
with a US$1.7 million decrease in Direct Operating Expenses and S,G& A Expenses.
Comparing 2Q99 with 2Q98, net loss from continuing operations increased by
US$3.3 million mainly due to variations in the exchange rate in Brazilian Reais
denominated balance sheet accounts and increase in depreciation due to
investments made over the last twelve months.
Net loss for the quarter, after the sale of assets, was US$42.8 million
compared with a loss of US$33.1 million during the same period of 1998. This
result was due mainly to an increase in depreciation, net interest expenses and
loss from discontinued operations (Galaxy Brasil and TVA Banda C).
So as to generate the cash flow needed to support and expand its operations
and business, management has taken a series of actions, including the sale of
non-strategic assets, cost reduction, and offering of new services and products,
such as the recently
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TEVECAP S.A. PAGE 2 OF 4
launched AJATO, Internet access through the operator's cables. The following
operations were carried out:
On July 28, 1999, upon approval of ANATEL - National Agency of
Telecommunications, Tevecap S.A. and TVA Communications Ltd. (TVAICO), executed
the sales agreements dated May 18, 1999, and sold their total interest in
subsidiaries and affiliated companies, as shown below, to Galaxy Latin America,
DirecTV Latin America Inc. and Darlene Investments LLC, of Hughes Electronics
and the Cisneros Group respectively.
a) Participation sold to Galaxy Latin America:
a.1. 100% of the participation in Galaxy do Brasil Ltda. (GLB),
wholly-owned subsidiary and DirecTV's exclusive local operator in
Brazil;
a.2. 100% of the participation in TVA Banda C Ltda. (TVA Banda C),
TVA's operator for Band C services;
b) Participation sold to DirecTV Latin America Inc. and Darlene
Investments LLC:
b.1. 10% of the participation in Galaxy Latin America, in which
Tevecap has an indirect investment through its subsidiary TVA
Communications Ltd. (TVAICO);
b.2. 25% of the participation in Surfin Ltd. (Surfin), a limited
liability company engaged in financing of DirecTV's services
throughout Latin America;
b.3. The rights to promissory notes (CBC Notes) receivable from
related company California Broadcast Center (CBC), a limited
liability company of Delaware, US, the principal of which totals
R$7,580 thousand; and
b.4. CBC Unit Acquisition Class B Bonuses (CBC Bonuses), dated April
11, 1997, convertible into CBC shares, recorded under the cost
method at zero.
The above operations total R$674,070, equivalent, on the closing date, to
US$371,000.
In addition, as part of these agreements, on July 28, 1999, TVA
Communications Ltd. used the funds obtained from these operations and invested
in foreign markets the amount of US$131,201, equivalent to R$238,379, in Senior
Notes issued by Tevecap S.A. This investment was made with a negative goodwill
of 35% of the face value of these Notes, equivalent to US$70,647. As a result of
this investment, of the total amount of US$250,000 of Senior Notes issued,
US$201,848 are kept in portfolio for future placement in the secondary market.
In view of the above, as from this quarter, the financial statements of
Galaxy do Brasil Ltda. and TVA Banda C Ltda. are no longer included in the
consolidated financial statements.
- Tables Follow -
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TEVECAP S.A. PAGE 3 OF 4
<TABLE>
<CAPTION>
TEVECAP S.A
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
For the periods ended July 31, 1999, June 30, 1999, March 31, 1999 and June 30, 1998
(in thousands of U.S. dollars)
- ------------------------------------------------------------------------------------------------------------------------------------
ASSETS JUN-98 MAR-99 JUN-99 JUL-99
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<S> <C> <C> <C> <C>
Cash and cash equivalents 926 1,100 972 7,584
Accounts receivable, net 31,640 9,610 12,590 12,761
Inventories, net 18,780 12,632 11,967 11,605
Film exhibition rights 1,551 1,446 1,301 1,276
Prepaid and other assets 13,681 4,476 7,737 4,836
Accounts receivable from related parties 218 695 765 869
Other accounts receivable 5,273 2,781 2,299 2,499
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Total current assets 72,069 32,740 37,631 41,430
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Property plant and equipment, net 287,374 291,571 281,039 278,816
Investments
Equity basis 2,992 3,737 3,480 3,963
Cost basis investees 44,905 49,096 49,104 6,684
Concessions, net 12,922 11,705 11,218 11,076
Loans to related companies 42,889 28,938 27,446 5,953
Debt issuance costs, net 6,985 5,945 5,100 964
Other 1,639 1,525 2,035 27,576
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TOTAL ASSETS 471,775 425,257 417,053 376,462
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LIABILITIES AND SHAREHOLDERS' EQUITY
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Loans 51,514 33,190 17,789 18,755
Film suppliers 11,998 12,211 11,303 11,160
Other suppliers 18,805 17,626 13,459 13,255
Deficit in discontinued operations (Galaxy Brasil and TVA Banda c) 6,325 28,292 44,462 -
Taxes payable other than income taxes 9,862 11,433 17,010 17,483
Accrued payroll and related liabilities 5,433 2,944 2,573 2,866
Advance payments received from subscribers 2,330 1,197 1,199 1,284
Other accounts payable 6,155 2,485 6,691 7,313
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Total current liabilities 112,422 109,378 114,486 72,116
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Loans 267,514 262,067 261,888 57,309
Loans from shareholders 43,721 88,558 118,296 121,731
Provision from claims 6,561 5,318 5,403 18,926
Liability to fund equity investee 51 - - -
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TOTAL LONG-TERM LIABILITIES 317,847 355,943 385,587 197,966
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Minority Interest 3,988 3,583 3,440 3,442
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SHAREHOLDERS' EQUITY 37,518 (43,646) (86,460) 102,938
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Paid-in capital 387,803 387,803 387,803 387,803
Accumulated Deficit (285,991) (434,058) (434,058) (434,058)
Net Income (Loss) (64,294) 2,609 (40,205) 149,193
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TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 471,775 425,257 417,053 376,462
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FASB
</TABLE>
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TEVECAP S.A. PAGE 4 OF 4
<TABLE>
<CAPTION>
TEVECAP S.A.
AND SUBSIDIARIES
Consolidated Statements of Operations
For the three months ended June 30, 1999, March 31, 1999 and June 30, 1998,
and six and seven months ended June 30 and July 31, 1999
(in thousands of U.S. dollars)
- --------------------------------------------------------------------------------------------------------------------------
ACCUMULATED
---------------------
2Q98 1Q99 2Q99 JUN-99 JUL-99
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<S> <C> <C> <C> <C> <C>
GROSS REVENUES
Monthly subscription 33,046 24,130 25,111 49,241 57,048
Installation 1,458 389 780 1,169 1,394
Advertising 1,265 306 415 720 810
Indirect programming 4,527 1,854 (94) 1,760 2,424
Other 1,929 2,572 6,624 9,196 9,773
Taxes on revenues (2,935) (2,237) (3,215) (5,452) (6,371)
------- ------ ------- ------- -------
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NET REVENUE 39,290 27,014 29,620 56,634 65,078
------ ------ ------ ------ ------
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DIRECT OPERATING EXPENSES
Payroll and benefits (4,828) (2,312) (1,820) (4,132) (4,674)
Programming (14,456) (8,601) (6,594) (15,195) (17,302)
Transponder lease cost (638) (212) (642) (854) (1,189)
Technical assistance 218 (256) (449) (705) (748)
Vehicle rentals (9) (15) (44) (59) (68)
TVA magazine (1,594) (718) (724) (1,442) (1,463)
Pole rental (860) (798) (1,658) (1,814)
Other costs (1,363) (1,509) 104 (1,406) (1,724)
------- ----- ------- ----- -----
(22,670) (14,483) (10,967) (25,450) (28,982)
------ ------ ------ ------ ------
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
Payroll and benefits (6,369) (2,830) (4,379) (7,209) (8,200)
Advertising and promotion (2,408) (556) (682) (1,238) (1,590)
Rent (851) (702) (323) (1,025) (1,184)
Other Administrative expenses 1,000 (2,423) (3,050) (5,473) (6,345)
Other general expenses (3,113) (1,294) (1,166) (2,460) (2,901)
----- ----- ----- ----- -----
(11,741) (7,805) (9,600) (17,405) (20,220)
------ ----- ----- ------ ------
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EBITDA 4,879 4,726 9,053 13,779 15,876
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Real devaluation impact of balance sheet 6,723 660 7,383 7,630
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EBITDA WITH REAL DEVALUATION EFFECTS 4,879 11,449 9,713 21,162 23,506
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Provision for equipment and Inventorie obsolescence (49) - 544 544 520
Depreciation (11,248) (13,357) (13,888) (27,245) (32,016)
Amortization (426) (426) (426) (852) (994)
- --------------------------------------------------------------------------------------------------------------------------
Operating loss from continuing operations (6,844) (2,334) (4,057) (6,391) (8,984)
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Interest income 22,044 (4,107) 17,937 16,746
Interest expenses (12,340) (11,088) (12,886) (23,974) (27,245)
Translation gain (loss) (1,022) (833) 282 (551) (437)
Equity in losses of affiliates (3,322) (504) (3,107) (3,611) (3,740)
Other nonoperating (expenses) income, net (389) 1,876 (2,914) (1,038) 172,838
- -------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
INCOME TAXES AND MINORITY INTEREST (23,917) 9,161 (26,789) (17,628) 149,178
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Income taxes
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INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE
MINORITY INTEREST (23,917) 9,161 (26,789) (17,628) 149,178
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Minority Interest 598 (118) 143 25 15
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NET INCOME (LOSS) FROM CONTINUING OPERATIONS (23,319) 9,043 (26,646) (17,603) 149,193
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LOSS FROM DISCONTINUED OPERATIONS (GLB AND TVA
BANDA C) (9,740) (6,434) (16,168) (22,602)
- -------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) (33,059) 2,609 (42,814) (40,205) 149,193
- -------------------------------------------------------------------------------------------------------------------------
FASB
</TABLE>
