FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of: April 19, 1999
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TRICOM, S.A.
(Translation of registrant's name into English)
AVENIDA LOPE DE VEGA NO. 95, SANTO DOMINGO, DOMINICAN REPUBLIC
(Address of principal executives 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 the Securities Exchange Act of 1934.
Yes No X
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If "Yes" is marked, indicate below the file number assigned
to the registrant in connection with Rule 12g3-2(b): 82-
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FOR IMMEDIATE RELEASE
FOR FURTHER INFORMATION CONTACT:
Jaime Garcia Robin Weinberg / Jennifer Rogovin
TRICOM, S. A. CITIGATE DEWE ROGERSON
Ph (809) 476-4054 Ph (212) 688-6840
e-mail: [email protected] e-mail: [email protected]
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[email protected]
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TRICOM ANNOUNCES FIRST QUARTER RESULTS
STRONG SALES CONTINUE TO DRIVE GROWTH AND MARGIN EXPANSION
(Santo Domingo, Dominican Republic, April 19, 1999) TRICOM (NYSE:TDR), today
announced the results of operations for the first quarter ended March 31, 1999.
OPERATING HIGHLIGHTS:
() OPERATING REVENUES for the first quarter of 1999 increased 28.9%,
from US$ 27.0 million in the first quarter 1998 to US$ 34.8 million
in 1999.
() NET EARNINGS for the first quarter of 1999 grew 92.4% compared to net
earnings for the first quarter of 1998, increasing from US$ 2.4
million, or US$ 0.13 per share, to US$ 4.6 million, or US$ 0.19 per
share.
() OPERATING MARGIN expanded from 22.7% in the first quarter of 1998 to 23.9%
in 1999.
() OPERATING DATA: Strong sales continue to drive the Company's growth. Local
access lines grew by 78.5% from 51,581 at March 31, 1998, to 92,055 at
March 31, 1999. Cellular subscribers increased by 126.7% from 55,986
at March 31, 1998 to 126,923 at March 31, 1999. International long
distance minutes increased by 65.6% from 47.2 million minutes in the
first quarter of 1998 to 78.1 million minutes in the first quarter of
1999.
() EBITDA increased 42.7% from US$ 11.1 million for the first quarter of 1998
to US$ 15.8 million for the first quarter of 1999, with margins
expanding from 41.0% to 45.4%.
Commenting on the results, Arturo Pellerano, Chairman and CEO, stated, "We are
very pleased with our performance this quarter. Our major growth drivers
continue to deliver excellent results in terms of both volume and profitability.
Our network expansion strategy, strengthened by the first stage of our Wireless
Local Loop rollout, and the additional revenues forthcoming from the rate
rebalancing plan effected this year, put us well on track to meet projections
for 1999."
OPERATING REVENUES increased by 28.9% from US$ 27.0 million for the first
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quarter of 1998 to US$ 34.8 million for the first quarter of 1999. This growth
is attributable to increased local service revenues, increased cellular
revenues, and higher installation revenues associated with the Company's local
network expansion, as well as increased international revenues generated by
TRICOM USA, Inc., the Company's U.S. subsidiary which is a facilities based
international carrier.
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LOCAL SERVICE REVENUES increased 117.8% from US$ 2.7 million for the first
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quarter of 1998 to US$ 5.8 million for the first quarter of 1999, as a result of
the Company's local access subscriber base growth, combined with the positive
effects of local rate rebalancing. The Company added 11,439 net local access
lines during the first quarter of 1999 compared to 8,386 net local access lines
added during the same period of 1998. This represents the highest number of
lines added in any quarter since the Company began installing them in 1994.
Wireless Local Loop lines accounted for 26% of net additions for the quarter. As
of March 31, 1999, the Company had 92,055 local access lines in service compared
to 51,581 local access lines in service at March 31, 1998. The impact of the
first phase of local rate rebalancing is evidenced by an increase in average
monthly rent of 32%, from US$11.69 in the first quarter of 1998 to US$15.38 in
the first quarter of 1999. On average, the price per minute of measured local
service increased by 16% from US$0.007 per minute during the first quarter of
1998 to US$0.009 per minute during the first quarter of 1999.
CELLULAR REVENUES grew by 38.4% from US$ 4.2 million during the first quarter of
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1998 to US$ 5.9 million during the first quarter of 1999, primarily as a result
of a higher average cellular subscriber base as well as a 14% increase in the
average price per outgoing airtime minute from US$0.23 in the first quarter of
1998 to US$0.27 in the first quarter of 1999. An added benefit of the recently
implemented rate rebalancing was the increase in calling party pays charges,
from an average of US$0.04 in the first quarter of 1998 to US$0.07 in the first
quarter of 1999. The Company added 18,391 net cellular subscribers during the
first quarter of 1999 compared to 14,879 net cellular subscribers during the
first quarter of 1998. The number of cellular subscribers increased by 126.7%
from 55,986 at March 31, 1998 to 126,923 at March 31, 1999. Airtime minutes
increased by 28% from 21.6 million minutes in the first quarter of 1998 to 27.7
million minutes in the first quarter of 1999. The Company attributes the
substantial increase of its cellular subscriber base to the continued growth of
its AMIGO prepaid cellular program introduced in the third quarter of 1997.
INTERNATIONAL REVENUES increased by 19.6% from US$ 10.8 million for the first
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quarter of 1998 to US$ 13.0 million for the first quarter of 1999. This increase
is attributable to the growth of inbound traffic volume generated by TRICOM USA.
The number of inbound minutes generated by TRICOM USA increased by 76.8% in the
first quarter of 1999 over the same period in 1998. The revenue increase was
achieved despite a 18.9% decrease in settlement rates from an average rate of
US$ 0.221 per minute for the first quarter of 1998 to US$ 0.179 per minute for
the first quarter of 1999. Total inbound minutes increased by 73.8% over the
same period of time. Total international long distance minutes increased by
65.6% from 47.2 million in first quarter of 1998 to a record 78.1 million in the
first quarter of 1999.
INSTALLATION REVENUES grew by 42.6% from US$ 2.4 million for the first quarter
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of 1998 to US$ 3.4 million for the first quarter of 1999. The continued growth
of the Dominican Republic economy has contributed to the increased demand for
TRICOM's services as evidenced by the number of local access line and cellular
subscriber additions. The Company added 13,939 gross local access lines and
24,344 gross cellular subscribers during the first quarter of 1999, compared to
9,553 lines and 19,881 cellular subscribers during the first quarter of 1998.
OPERATING COSTS increased 26.9% from US$ 20.9 million for the first quarter of
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1998 to US$ 26.5 million for the first quarter of 1999. However, as a percentage
of total operating revenues, operating costs declined from 77.3% for the first
quarter of 1998 to 76.1% for the first quarter of 1999. The increase in
operating costs was primarily attributable to increases in general and
administrative expenses, depreciation, and taxes. General and administrative
expenses increased by 28.9% from US$ 7.4 million for the first quarter of 1998
to US$ 9.6 million for the same period in 1999, primarily as a result of higher
sales commissions paid to sales staff and increased personnel costs due to a
higher employee headcount.
OPERATING INCOME grew by 35.6% from US$ 6.1 million for the first quarter of
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1998 to US$ 8.3 million for the first quarter of 1999. Over the same period,
operating margins improved from 22.7% to 23.9%. The improvement in the Company's
operational results is attributed to higher margins from local service,
cellular, and international long distance services, as well as to cost control
measures implemented during the past two quarters.
NET EARNINGS increased by 92.4% from US$ 2.4 million for the first quarter of
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1998 to US$ 4.6 million for the first quarter of 1999. Net earnings accounted
for 8.9% of total operating revenues for the first quarter of 1998 compared to
13.3% of total operating revenues for the first quarter of 1999. On a per share
basis, earnings increased from US$0.13 to US$0.19 over the same period.
EBITDA grew by 42.7% from US$ 11.1 million for the first quarter of 1998 to US$
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15.8 million for the first quarter of 1999. Over the same period, EBITDA margins
expanded from 41.0% to 45.4%. The increase is attributed to the Company's
improved operating performance as a result of higher operating margins from its
cellular, local service and international businesses.
TRICOM is a full service telecommunications provider in the Dominican Republic,
and a facilities-based long distance carrier in the United States. Since it
began operations in 1992 as a low-cost international long distance service
provider, the Company has expanded its services to include basic local service,
national long distance, cellular, paging and Internet access.
For additional information, please visit TRICOM's Investor Relations website at
http://www.tricom.net/investor or contact our Investor Relations department at
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the above numbers.
The statements contained in this press release which are not historical facts
are forward-looking statements that involve risks and uncertainties. Management
cautions the reader that these forward-looking statements are only predictions;
actual events or results may differ materially as a result of risks facing the
Company. Such risks include, but are not limited to the following factors:
competition; declining rates for international long distance traffic; opposition
to increased rates for basic local service; the Company's significant capital
expenditure requirements and its need to finance such expenditures; the
inability of the Company to expand its local access line network in a timely
manner and within the amount budgeted for such capital expenditure program; the
inability of the Company to manage effectively its rapid expansion; the
continued growth of the Dominican economy, demand for telephone services in the
Dominican Republic and moderation of inflation; and the continuation of a
favorable political and regulatory environment in the Dominican Republic.
(Five tables to follow)
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The following tables set illustrate operating information for the three month
period ended March 31, 1998 and 1999.
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SUMMARY OF OPERATING INFORMATION
1Q'98 1Q'99
===============================================================================
Total lines in service (at period end) 51,581 92,055
Local access line additions, net 8,386 11,439
Cellular subscribers (at period end) 55,986 126,923
Cellular subscriber additions, net 14,879 18,391
Airtime minutes 21,644,844 27,712,507
International long distance minutes 47,160,115 78,118,054
Domestic long distance minutes 4,522,424 6,781,682
Paging subscribers (at period end) 28,332 28,892
Number of employees (at period end) 1,042 1,452
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SUMMARY OF OPERATING INFORMATION
VARIATION %
===============================================================================
Total lines in service (at period end) 40,474 78.5%
Local access line additions, net 3,053 36.4%
Cellular subscribers (at period end) 70,937 126.7%
Cellular subscriber additions, net 3,512 23.6%
Airtime minutes 6,067,663 28.0%
International long distance minutes 30,957,939 65.6%
Domestic long distance minutes 2,259,258 50.0%
Paging subscribers (at period end) 560 2.0%
Number of employees (at period end)
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The following table illustrates the percentage contribution of each category of
revenues to total operating revenues and certain items in the statement of
operations expressed as a percentage of total operating revenues for the three
month period ended March 31, 1998 and 1999.
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OPERATING REVENUES 1Q'98 1Q'99
=============================================================================
Toll 16.8% 13.5%
International revenues 40.1% 37.2%
Local service 9.9% 16.8%
Cellular 15.7% 16.8%
Paging 4.7% 2.6%
Sale and lease of equipment 3.7% 2.8%
Installations 8.9% 9.8%
Other 0.2% 0.5%
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Operating costs 77.3% 76.1%
Operating income 22.7% 23.9%
Interest expense, net -11.8% -10.0%
Net earnings 8.9% 13.3%
EBITDA 41.0% 45.4%
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All share and per share data shown below reflect the reclassification of the
Company's shares of Common Stock that were outstanding prior to TRICOM's initial
public offering of American Depository Shares into shares of Class B Stock and
give effect to an approximate 3.3132-for-one stock split at that time. The
financial data set forth below for the period-ended March 31, 1998 are unaudited
and are subject to normal recurring year-end adjustments.
TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN US$)
DECEMBER 31, MARCH 31,
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1998 1999
ASSETS (AUDITED) (UNAUDITED)
Current assets:
Cash and cash equivalents US $15,377,410 US$ 5,048,152
Accounts receivable:
Customers 9,168,740 9,878,925
Carriers 4,153,003 5,140,117
Related parties 163,110 476,167
Officers and employees 275,069 379,026
Current portion of long term
accounts receivable 75,071 53,358
Other 2,113,228 605,861
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15,948,221 16,533,454
Allowance for doubtful accounts (740,687) (826,557)
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Accounts receivable, net 15,207,534 15,706,897
Current portion of pledged securities 54,470,478 43,905,746
Inventories, net 8,687,356 10,666,220
Prepaid expenses 2,921,680 2,140,698
Deferred income taxes 556,949 613,152
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Total current assets 97,221,407 78,080,866
Long-term accounts receivable 91,556 88,273
Other investments 2,164,387 2,194,724
Property and equipment cost 365,682,963 391,440,929
Accumulated depreciation (35,226,515) (39,721,399)
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Property and equipment, net 330,456,448 351,719,530
Other assets at cost, net of
amortization 14,880,805 16,826,504
TOTAL ASSETS US$444,814,603 US$448,909,987
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TRICOM, S.A.
CONSOLIDATED BALANCE SHEET (CONTINUED)
(IN US$) DECEMBER 31, MARCH 31,
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1998 1999
(AUDITED) (UNAUDITED)
LIABILITIES & SHAREHOLDERS EQUITY
Current liabilities:
Notes payable:
Borrowed funds-banks US$21,665,516 US$40,996,562
Borrowed funds-related parties 25,591,915 6,013,364
Current portion of long term debt -
Carifa Loan 32,000,000 32,000,000
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79,257,431 79,009,926
Accounts payable:
Carriers 3,106,898 2,506,352
Suppliers 11,772,957 20,675,026
Related parties - 8,242
Other 1,566,076 420,816
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16,445,931 23,610,436
Other liabilities 7,413,821 4,257,111
Accrued expenses 13,887,974 9,599,531
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Total current liabilities 117,005,157 116,477,004
Reserve for severance indemnities 42,886 27,868
Deferred income tax 205,258 205,258
Long-term debt:
Senior Notes 200,000,000 200,000,000
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Total liabilities 317,253,301 316,710,310
Shareholders equity:
Class A Common Stock at par value RD$10:
Authorized 55,000,000 shares; 5,700,000
shares issued at December 31, 1998 and
March 31, 1999 3,750,000 3,750,000
Class B Stock at par value RD$10:
Authorized
25,000,000 shares at December 31, 1998
and March 31, 1999; 19,144,544 issued at
December 31, 1998 and March 31, 1999 12,595,095 12,595,095
Additional paid-in-capital, excess over
par 94,015,852 94,015,852
Retained earnings 19,224,112 23,862,577
Equity adjustment for foreign currency
translation (2,023,757) (2,023,757)
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Shareholders equity, net 127,561,302 132,199,767
TOTAL LIABILITIES &
SHAREHOLDERS EQUITY US$ 444,814,603 US$448,909,897
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TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(IN US$) THREE MONTH PERIOD ENDED
MARCH 31,
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1998 1999
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(UNAUDITED) (UNAUDITED)
OPERATING REVENUES:
Toll US$ 4,533,777 US$ 4,705,266
International revenues 10,843,462 12,970,980
Local service 2,681,624 5,840,175
Cellular 4,235,646 5,863,334
Paging 1,264,116 900,254
Sale and lease of equipment 997,386 966,004
Installations 2,397,536 3,419,179
Other 62,137 158,007
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TOTAL OPERATING REVENUES 27,015,684 34,823,199
OPERATING COSTS:
Satellite connections and carriers 7,478,406 8,420,901
Network depreciation 2,363,897 3,449,453
Expense in lieu of income taxes 1,926,880 2,969,610
General and administrative expense 7,445,802 9,600,529
Depreciation expense 637,266 1,045,431
Other 1,022,133 1,009,404
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TOTAL OPERATING COSTS 20,874,384 26,495,328
OPERATING INCOME 6,141,300 8,327,871
OTHER INCOME (EXPENSES):
Interest expense (4,365,511) (4,454,860)
Interest income 1,177,995 971,202
Foreign exchange gain (loss) (106,223) 165,392
Other (436,869) (427,343)
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TOTAL OTHER EXPENSES (3,730,608) (3,745,609)
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EARNINGS BEFORE INCOME TAX 2,410,692 4,582,262
INCOME TAX - DEFERRED CREDIT - 56,203
NET EARNINGS US$ 2,410,692 US$ 4,638,465
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EBITDA US$ 11,069,343 US$ 15,792,365
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EARNINGS PER SHARE US$ 0.13 US$ 0.19
WEIGHTED AVG. NUMBER OF SHARES 19,144,544 24,844,544
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TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN US$)
MARCH 31, MARCH 31,
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1998 1999
(UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net earnings (loss) US$ 2,410,692 US$ 4,638,465
Adjustments to reconcile net earnings
(loss) and net cash provided by
operating activities:
Depreciation 3,001,163 4,494,884
Allowance for doubtful accounts 157,069 628,689
Accounts receivable charged off (314,138) (542,819)
Unrealized loss (gain) in foreign
exchange 101,274 -
Reserve for severance indemnities,
net of payments (37,513) 89,043
Net changes in assets and liabilities:
Accounts receivable 915,194 (595,420)
Inventories (5,583,587) (1,978,864)
Prepaid expenses 2,333,859 780,982
Long-term accounts receivable 367,504 21,714
Other assets (1,806,711) (1,388,752)
Accounts payable 11,937,070 7,156,261
Other liabilities 502,891 (3,212,914)
Accrued expenses (6,152,264) (4,392,504)
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Total adjustments 5,409,285 1,052,057
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Net cash provided by operating activities 7,819,977 5,698,765
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Cash flows from investing activities:
Current portion of investments - 10,564,732
Cancellation of investments 13,213,028 (587,285)
Acquisition of property and equipment (29,516,058) (25,757,965)
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Net cash used in investing activities (16,303,030) (15,780,518)
Cash flows from financing activities:
Borrowed funds from banks 1,900,330 19,331,046
Borrowed funds from related parties 4,500,813 (19,578,551)
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Net cash provided by financing activities 6,401,143 (247,505)
Effect of exchange rate changes on cash (100,766) -
Net increase in cash and cash equivalents (2,182,676) (10,329,258)
Cash and cash equivalents at beginning
of the period 5,732,505 15,377,410
Cash and cash equivalents at end of period US$ 3,549,829 US$ 5,048,152
================ ==========
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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.
TRICOM, S.A
Dated: April 22, 1999 By: /s/ Carl H. Carlson
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Carl H. Carlson
Executive Vice President
and Member of the
Office of the President
