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 4, 2000
MGC Communications, Inc.
(Exact name of Registrant as specified in its charter)
Nevada 0-24059 88-0360042
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification No.)
incorporation)
171 Sully's Trail, Suite 202, Pittsford, NY 14534
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 218-6550
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2
Item 5. Other Events.
On May 4, 2000 the Company announced its results for first
quarter 2000. A copy of the press release is filed as an Exhibit to this report
on Form 8-K and is hereby incorporated by reference in its entirety.
Item 7. Financial Statements and Exhibits.
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(a) Financial statements of businesses acquired.
None.
(b) Pro forma financial information.
None.
(c) Exhibits.
99.1. Press Release issued by Mpower on May 4, 2000.
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EXHIBIT INDEX
Exhibit
No. Description
- -------
99.1 Press Release issued by Mpower on May 4, 2000
<PAGE>
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 hereunto duly authorized.
MCG COMMUNICATIONS, INC
Date: May 4, 2000 /s/ Kent F. Heyman
----------------------------------------
Name: Kent F. Heyman
Title: Vice President and General Counsel
Exhibit 99.1
Mpower Communications Announces Solid First Quarter 2000 Results
Robust Revenue and Line Growth Provide Momentum for the Future; VoDSL Takes Off
o First quarter revenue increased 26% sequentially and 203% from a year
ago
o Lines in service grew by 18% over fourth quarter and 159% over first
quarter 1999
o In its first quarter of commercial availability, VoDSL accounted for
12% of lines sold and 4% of lines provisioned
o Collocation facilities reached 446 built; 305 revenue ready
ROCHESTER, NY - May 4, 2000 - Mpower Communications Corp. (NASDAQ: MPWR), a
leading provider of broadband data, Internet and telephony services to business
customers, today announced results of its operations for the quarter ended March
31, 2000 that reflect strong performance across the board and position Mpower as
a pioneer of VoDSL (Voice over Digital Subscriber Line) services.
Mpower reported record revenue for the first quarter of $25.5 million, a 203%
increase over first quarter 1999 revenue of $8.4 million, and a 26% increase
sequentially over the fourth quarter. Mpower posted an EBITDA (earnings before
interest, taxes, stock-based compensation, depreciation and amortization) loss
of $20.9 million for the quarter, compared to an EBITDA loss of $7.8 million in
the prior year's first quarter, exceeding First Call estimates.
Voice line equivalents sold in the first quarter were 49,219 and net lines
installed increased by 26,122 to total 168,786 lines in service as of quarter's
end, all of which are 100% on-switch and on-net. This growth represents an 18%
increase over the 142,664 lines in service at the end of 1999, and a 159%
increase over the 65,147 lines in the first quarter of 1999.
This quarter Mpower became one of the first companies in the industry to
actively market and sell Voice-over-DSL service in all of its service
territories. The company reported that 12% of its lines sold and 4% of its lines
provisioned in the first quarter were VoDSL equivalents.
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Mpower Earnings/Page 2
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"While the rest of the industry is making plans to conduct trials for VoDSL, we
are selling and installing integrated voice and data services over SDSL for
business customers across all of our markets," stated Mpower Communications
President and CEO Rolla P. Huff. "Just as we were one of the first
facilities-based CLECs to pioneer the provisioning of unbundled local loops,
today we are breaking new ground in the deployment and provisioning of VoDSL.
This is a critical milestone in our evolution to become an integrated
applications provider."
Mpower First Quarter Highlights
o Successfully completed a $250 million debt offering and $541 million
equity offering, providing the company with nearly $1 billion in
invested capital and fully funding its current business plans.
o Significantly expanded the size of its direct sales staff over the
fourth quarter of 1999, with 236 quota-carrying sales representatives
in place.
o Established 446 central office collocations, 305 of which were revenue
ready.
o Targeted focus on small to midsize business customers with business
lines, including payphones, representing 93% of the company's net lines
installed.
o Hired Roger J. Pachuta as Senior Vice President of Network Services
from AT&T Wireless to lead national network build.
o Signed an agreement with DSET to facilitate electronic bonding with
Ameritech, Bell Atlantic North Region, Bell Atlantic South Region, GTE,
Pacific Bell, SBC, and U S WEST.
"By all metrics, Mpower outperformed our targets for the first quarter. From
revenue and access lines to collocations and sales people, we are seeing strong
growth across the board and I am extremely proud of the lightning pace at which
our expanded management team has come together to produce results," added Huff.
"This is particularly significant given the fact that we are simultaneously
investing in the business to build a national footprint and to evolve the
company from a connectivity business to a data applications provider. I would
expect to see these investments yield even higher returns in terms of lines and
revenue later this year."
Extending the momentum in to the second quarter, Mpower unveiled its new
Internet portal with e-commerce alliances with BizBuyer.com, Biztro and inc.com
to evolve its Web site into a critical business destination for small business
customers. Mpower also announced the acquisition of St-Louis-based Primary
Network, significantly expediting its entry into key Southwest markets.
"The acquisition of Primary is a perfect example of how our strong balance sheet
allows us to be opportunistic in the recent turbulent stock market conditions,"
said Huff. "We are continuing to pursue additional strategic alliances that will
provide speed-to-market, further extend our service footprint and add to our
growing portfolio of Web-enabled applications."
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Mpower Earnings/Page 3
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About Mpower Communications Corp.
Mpower Communications (a/k/a MGC Communications, Inc.) is a facilities-based
broadband communications provider offering a full range of data, telephony,
Internet access and Web hosting services for small and medium-size business
customers. The company currently operates in markets within Northern and
Southern California, Chicago, Atlanta, Southern Florida and Las Vegas. Mpower
ranked 12th in the Bloomberg Tech 100 listing of the fastest growing technology
companies in the United States based on sales growth for the 1999 fiscal year.
Further information about the company can be found at www.mpowercom.com.
Forward-Looking Statements
Certain statements contained in this press release that state Mpower
Communications and/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 are not historical facts and
are only estimates or predictions. Actual results may differ materially as a
result of risks and uncertainties including, but not limited to, projections of
future sales, returns on invested assets, regulatory approval processes, market
conditions and other risks detailed from time to time in Mpower's Securities and
Exchange Commission filings.
Investor Relations Inquiries: Media Inquiries:
David S. Clark Michele D. Sadwick
Senior Vice President Vice President
716.218.6559 716.218.6542
[email protected] [email protected]
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Mpower Communications First Quarter Earnings Conference Call
Date: May 4, 2000
Time: 11:00 a.m. (Eastern Daylight Time)
Participants: Rolla P. Huff, President and Chief Executive Officer
Michael R. Daley, Executive Vice President and Chief
Financial Officer
Conference Call Number: 888-937-3934 (domestic)
001-712-271-0003 (international)
Please ask for the "Mpower First Quarter" call.
A replay of the conference call will be available from Thursday, May 4, 2000 at
1:00 p.m. through Thursday, May 11, 2000 at 1:00 p.m. by dialing 800-633-8284.
The reservation number for the replay is #14743217.
# # #
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<TABLE>
<CAPTION>
(in thousands, except per share data) Three Months Ended March 31
-------------------------------------
Statements of Operations: 2000 1999
----------------- ------------------
<S> <C> <C> <C>
Revenues $ 25,458 $ 8,401
Cost of operating revenues 23,231 8,483
Selling, general & administrative 23,140 7,727
Stock-based compensation 1,576 -
Depreciation & amortization 6,761 3,484
----------------- ------------------
Loss from operations (29,250) (11,293)
Net interest income/(expense) and other 3,906 (2,919)
Preferred stock dividend (3,007) -
Preferred stock accretion to redemption value (3,489) -
----------------- ------------------
Net loss applicable to common stockholders $ (31,840) $ (14,212)
================= ==================
Basic and diluted loss per share of common stock $ (1.18) $ (0.83)
================= ==================
Basic and diluted weighted average shares outstanding 26,939 17,205
EBITDA (1) $ (20,913) $ (7,809)
(in thousands) As of As of
Selected Balance Sheet Data: March 31, 2000 December 31, 1999
----------------- ------------------
Cash, cash equiv. & investments $ 895,845 $ 169,070
Restricted investments 20,534 20,256
Property & equipment, net 230,163 191,612
Current liabilities 83,668 52,363
Long-term debt, net of current portion 404,504 161,312
Redeemable preferred stock 239,216 84,973
Stockholders' equity 448,878 103,781
As of As of As of
Selected Operational Statistics: March 31, 2000 December 31, 1999 March 31, 1999
----------------- ------------------ ----------------
Switches in service 7 7 7
Markets Served 13 13 13
Collocated facilities built 446 322 233
Collocated facilities revenue ready 305 245 198
Collocated facilities DSL revenue ready 248 85 -
Number of employees 1,314 849 469
Number of sales employees 356 187 74
Lines in service:
Business 97,672 74,832 29,038
Pay phone 22,362 20,679 9,077
Residential 48,752 47,153 27,032
----------------- ------------------ ----------------
Total lines in service 168,786 142,664 65,147
================= ================== ================
</TABLE>
(1) Earnings before interest, taxes, stock-based compensation, depreciation
and amortization (EBITDA) is a measure commonly used in the
communications industry to analyze operating performance, leverage and
liquidity.
