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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) July 19, 1999
MGC Communications, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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<S> <C> <C>
Nevada 0-24059 88-0360042
(STATE OR OTHER (COMMISSION (I.R.S. EMPLOYER
JURISDICTION FILE NUMBER) IDENTIFICATION NO.)
OF INCORPORATION)
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3301 N. Buffalo Drive, Las Vegas, Nevada 89129
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (702)310-1000
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT.)
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ITEM 5. OTHER EVENTS
On July 19, 1999, MGC Communications, Inc. (the "Company")
announced its results for second quarter 1999. A copy of the
press release is filed as an Exhibit to this report on Form
8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits. The following exhibit is furnished as a part of this
Report. Exhibit numbers refer to Item 601 of Regulation S-K.
99 - July 19, 1999 Press Release
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.
MGC COMMUNICATIONS, INC.
July 21, 1999 By: /s/ Linda M. Sunbury
----------------------------------------------
Linda M. Sunbury
Senior Vice President and Chief Financial
Officer
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EXHIBIT 99
FOR IMMEDIATE RELEASE
MGC REPORTS SECOND QUARTER 1999 RESULTS
ACCESS LINES SOLD INCREASED 38%
REVENUE INCREASED 37%
LINES PROVISIONED INCREASED 40%
LAS VEGAS (JULY 19, 1999) - MGC Communications, Inc. ("MGC" or the "Company"),
(NASDAQ: MGCX), a leading facilities-based integrated communications services
provider, today announced the results of its operations for the second quarter
1999. MGC reported revenues for the second quarter ended June 30,1999 of $11.5
million, a 37% increase over first quarter 1999 revenues of $8.4 million. Access
lines sold as of the end of the second quarter increased by 38% over March 31,
1999 to 109,480. Net installations for the second quarter were 24,388, an
increase of 40% over the first quarter of 1999, for a total installed base of
lines at June 30, 1999 of 89,535.
As a result of continued network expansion, earnings before interest, taxes,
depreciation and amortization (EBITDA) was a loss of $8.2 million for the three
months ended June 30, 1999. Collocation sites totaled 248 at June 30, 1999
providing access to approximately 13.7 million lines.
LINE GROWTH
Of the 24,388 net line additions for the second quarter, 15,269 or 63% were
business lines, compared to 8,596 business line additions for the first quarter
of 1999. The 78% increase was fueled primarily by sales growth in southern
California and Atlanta. The direct sales staff covering MGC's expanded network
footprint increased to 85 from 66 at the end of the first quarter, a 29%
increase.
NEW PRODUCTS
During the second quarter of 1999, the Company launched MGCi.com, an Internet
access portal, and an 800 service to enhance its existing product set of
switched local dialtone, direct dial long distance and custom calling features.
FINANCING
In May 1999, the Company issued 5,277,779 share of Series B Convertible
Preferred Stock to Providence Equity Partners III L.P., JK&B Capital III L.P.,
Wind Point Partners III, L.P. and their affiliates. Gross proceeds to the
Company from the issuance were $47.5 million.
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MGC REPORTS SECOND QUARTER 1999 RESULTS PAGE 2
July 19, 1999
REGULATORY UPDATE
The Federal Communications Commission released a decision on July 16, 1999
ordering AT&T to pay MGC $2.0 million plus interest for originating switched
access charges covering the time period from August 1998 through March 1999 per
MGC's tariffed rates. The decision is subject to appeal by AT&T.
Headquartered in Las Vegas, Nevada, MGC provides local phone service, custom
calling features, long distance and Internet services to small business and
residential customers in Las Vegas, Atlanta, Chicago, southern Florida and
selected areas of southern California including Los Angeles and San Diego.
Further information about the Company can be found at www.mgci.com.
Forward Looking Statements. Certain statements contained in this Press Release
that state the Company's or management's intentions, hopes, beliefs,
expectations or predictions of the future are forward-looking statements.
Management wishes to caution the reader these forward-looking statements that
are not historical facts, are only estimates or predictions. Actual results may
differ materially as a result of risks facing the Company or actual results
differing from assumptions underlying such statements. Such risks and
assumptions include, but are not limited to, the Company's ability to
successfully market its existing and proposed services to current and new
customers in existing and planned markets, successfully develop commercially
viable data and Internet offerings, access markets, install switches and obtain
suitable locations for its switches, negotiate suitable interconnect agreements
with the ILECs, obtain an acceptable level of cooperation from the ILECs, all in
a timely manner, at reasonable cost and on satisfactory terms and conditions, as
well as competitive, regulatory, legislative and judicial developments that
could materially affect the Company's future results. Additional information
concerning factors that could cause actual results to differ materially from
those expressed or implied in the forward-looking statements is contained from
time to time in the Company's SEC filings, including but not limited to the
Company's report on Form 10-K for the year ended December 31, 1998. Copies of
this filing may be obtained by contacting the Company or the SEC.
CONTACT:
Clark Wood
Director of Investor Relations
3301 N. Buffalo Drive
Las Vegas, NV 89129
(702) 310-1000
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(in thousands, except per share data) THREE MONTHS ENDED JUNE 30 SIX MONTHS ENDED JUNE 30
STATEMENTS OF OPERATIONS: 1999 1998 1999 1998
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Revenues $ 11,485 $ 4,018 $ 19,886 $ 6,864
Cost of operating revenues 10,506 3,415 18,989 5,786
------------ ----------- ------------ -----------
Gross profit 979 603 897 1,078
Selling, general & administrative 9,197 3,325 16,924 5,887
Depreciation & amortization 4,182 1,123 7,666 1,990
------------ ----------- ------------ -----------
Operating loss (12,400) (3,845) (23,693) (6,799)
Non-operating income/(expense) (3,137) (3,067) (6,056) (6,403)
------------ ----------- ------------ -----------
Net loss before preferred dividends (15,537) (6,912) (29,749) (13,202)
Preferred dividends (729) - (729) -
------------ ----------- ------------ -----------
Net loss applicable to common stockholders $ (16,266) $ (6,912) $ (30,478) $ (13,202)
============ =========== ============ ===========
Basic and diluted loss per share of common stock $ (0.93) $ (0.52) $ (1.76) $ (1.18)
============ =========== ============ ===========
Basic and diluted weighted average shares
outstanding 17,475 13,378 17,341 11,148
EBITDA (1) $ (8,218) $ (2,722) $ (16,027) $ (4,809)
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(in thousands) AS OF AS OF
SELECTED BALANCE SHEET DATA: JUNE 30, 1999 DECEMBER 31, 1998
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Cash, cash equiv. & investments $ 84,355 $ 84,949
Restricted cash 29,950 39,379
Property & equipment, net 132,683 116,380
Long-term debt 157,485 157,295
Series B Convertible Preferred Stock 46,500 --
Stockholders' equity 32,319 63,260
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<CAPTION>
AS OF AS OF
SELECTED OPERATIONAL STATISTICS: JUNE 30, 1999 DECEMBER 31, 1998
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Switches installed 7 7
Markets Served 13 7
Collocated facilities built 248 207
Addressable lines (000's) 13,696 11,362
Lines in service:
Business 44,307 20,442
Pay phone 11,841 7,290
Residential 33,387 20,012
------- -------
Total lines in service 89,535 47,744
======= =======
Total lines sold and installed 109,480 61,205
======= =======
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(1) Earnings before interest, taxes, depreciation and amortization (EBITDA)
is a measure commonly used in the communications industry to analyze
operating performance, leverage and liquidity.
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