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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: May 15, 2000
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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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TRICOM, S.A.
QUARTERLY REPORT
FOR THE
FIRST QUARTER
ENDED
MARCH 31, 2000
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TABLE OF CONTENTS
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PAGE
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GENERAL INTRODUCTION.........................................................................................1
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS...............................................................................2
Consolidated Balance Sheet as of December 31, 1999 and March 31, 2000 (unaudited).......................2
Consolidated Statement of Operations Three Months ended March 31, 1999 and 2000 (unaudited).............4
Consolidated Statements of Cash Flows Three Months Ended March 31, 1999 and 2000
(unaudited).............................................................................................5
Notes to Financial Statements...........................................................................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION..............6
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK........................................16
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.................................................................................17
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.........................................................17
ITEM 3. DEFAULTS UPON SENIOR SECURITIES...................................................................17
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS................................................17
ITEM 5. OTHER INFORMATION.................................................................................17
ITEM 6. EXHIBITS AND REPORTS ON FORM 6-K..................................................................17
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GENERAL INTRODUCTION
UNLESS THE CONTEXT INDICATES OTHERWISE, ALL REFERENCES TO (I) THE "COMPANY"
OR "TRICOM" REFER TO TRICOM, S.A. AND ITS CONSOLIDATED SUBSIDIARIES AND THEIR
RESPECTIVE OPERATIONS, AND INCLUDE TRICOM'S PREDECESSORS, AND (II) "GFN" REFERS
TO GFN CORPORATION LTD. AND ITS DIRECT AND INDIRECT SUBSIDIARIES, OTHER THAN THE
COMPANY AND ITS SUBSIDIARIES, AND INCLUDE GFN'S PREDECESSORS.
PRESENTATION OF CERTAIN FINANCIAL INFORMATION
The Company prepares its consolidated financial statements in conformity
with generally accepted accounting principles in the United States. The Company
adopted the United States dollar as its functional currency effective January 1,
1997.
In this Quarterly Report references to "$," "US$" or "U.S. dollars" are to
United States dollars, and references to "Dominican pesos" or "RD$" are to
Dominican pesos. This Quarterly Report contains translations of certain
Dominican peso amounts into U.S. dollars at specified rates solely for the
convenience of the reader. These translations should not be construed as
representations that the Dominican peso amounts actually represent such U.S.
dollar amounts or could be converted into U.S. dollars at the rate indicated.
The average of prices of one U.S. dollar quoted by certain private commercial
banks (the "Private Market Rate") as reported by Banco Central de la Republica
Dominicana (the "Central Bank") on March 31, 2000 was RD$16.20 = US$1.00, the
date of the most recent financial information included in this Quarterly Report.
The Federal Reserve Bank of New York does not report a noon buying rate for
Dominican pesos. On May 10, 2000, the Private Market Rate was RD$16.27 =
US$1.00.
FORWARD-LOOKING STATEMENTS
The statements contained in this Quarterly Report, which are not historical
facts are forward-looking statements that involve risks and uncertainties.
Management cautions the reader that these forward-looking statements are only
predictions; actual events or results may differ materially as a result of risks
facing the Company. Such risks include, but are not limited to, the following
factors: competition; declining rates for international long distance traffic;
opposition to increased rates for basic local service; the Company's significant
capital expenditure requirements and its need to finance such expenditures; the
inability of the Company to expand its local access line network in a timely
manner and within the amount budgeted for such capital expenditure program; the
inability of the Company to manage effectively its rapid expansion; the
continued growth of the Dominican economy, demand for telephone services in the
Dominican Republic and moderation of inflation; and the continuation of a
favorable political and regulatory environment in the Dominican Republic.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(IN US$)
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DECEMBER 31, MARCH 31,
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1999 2000
ASSETS (AUDITED) (UNAUDITED)
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Current assets:
Cash and cash equivalents US$ 13,459,566 US$ 12,781,915
Accounts receivable:
Customers 22,821,951 21,304,289
Carriers 6,467,016 6,581,037
Related parties 40,412 1,769,528
Officers and employees 415,702 678,383
Current portion of long term accounts receivable 66,369 63,172
Other 624,846 988,652
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30,436,296 31,385,062
Allowance for doubtful accounts (4,307,563) (2,502,686)
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Accounts receivable, net 26,128,733 28,882,376
Inventories, net 9,701,255 10,615,612
Prepaid expenses 6,637,067 5,799,763
Deferred income taxes 949,190 949,190
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Total current assets 56,875,811 59,028,856
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Long-term accounts receivable 22,619 --
Other investments 2,710,572 2,826,967
Property and equipment cost 511,109,186 535,638,219
Accumulated depreciation (56,063,995) (63,616,729)
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Property and equipment, net 455,045,191 472,021,490
Other assets at cost, net of amortization 16,824,267 17,257,851
TOTAL ASSETS US$ 531,478,461 US$ 551,135,165
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TRICOM, S.A.
CONSOLIDATED BALANCE SHEET (CONTINUED)
(IN US$)
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DECEMBER 31, MARCH 31,
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1999 2000
(AUDITED) (UNAUDITED)
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LIABILITIES & SHAREHOLDERS EQUITY
Current liabilities:
Notes payable:
Borrowed funds-banks US$ 63,602,022 US$ 74,144,584
Borrowed funds-related parties 17,895,946 31,878,523
Current portion of long term debt 315,216 --
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81,813,184 106,023,107
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Current portion of capital leases 14,242,056 14,670,406
Accounts payable:
Carriers 2,987,379 3,701,740
Suppliers 12,043,787 9,280,933
Related parties 10,035,066 3,331,810
Other 329,309 520,137
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25,395,541 16,834,620
Other liabilities 3,789,707 4,297,452
Accrued expenses 15,293,910 12,769,142
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Total current liabilities 140,534,398 154,594,727
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Reserve for severance indemnities 31,414 23,767
Deferred income tax 631,159 631,159
Capital leases, excluding current portion 11,640,652 14,191,670
Long-term debt:
Bank Credit Facilities -- 28,730,176
Senior Notes 228,772,011 200,000,000
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Total liabilities 381,609,634 398,171,499
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Shareholders equity:
Class A Common Stock at par value RD$10: Authorized
55,000,000 shares; 5,700,000 shares issued at December
31, 1999 and March 31, 2000 3,750,000 3,750,000
Class B Stock at par value RD$10: Authorized
25,000,000 shares at December 31, 1998 and September 30,
1999; 19,144,544 issued at December 31, 1999 and March
31, 2000 12,595,095 12,595,095
Additional paid-in-capital, excess over par 94,288,852 94,015,852
Retained earnings 41,258,637 44,626,475
Equity adjustment for foreign currency translation (2,023,757) (2,023,757)
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Shareholders equity, net 149,868,827 152,963,665
TOTAL LIABILITIES &
SHAREHOLDERS EQUITY US$ 531,478,461 US$ 551,135,165
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TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(IN US$)
THREE MONTH PERIOD ENDED
MARCH 31,
-----------------------------
1999 2000
-----------------------------
(UNAUDITED) (UNAUDITED)
OPERATING REVENUES:
Toll US$ 4,705,266 US$ 6,551,984
International Settlement 12,970,980 17,992,204
Local service 5,840,175 12,194,025
Cellular 5,863,334 8,709,247
Paging 900,254 475,013
Sale and lease of equipment 966,004 1,119,534
Installations 3,419,179 3,903,194
Other 158,007 36,056
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TOTAL OPERATING REVENUES 34,823,199 50,981,257
OPERATING COSTS:
Satellite connections and carriers 8,420,901 14,139,422
Network depreciation 3,449,453 6,067,401
Expense in lieu of income taxes 2,969,610 2,881,694
General and administrative expenses 9,600,529 13,779,370
Depreciation expense 1,045,431 1,485,333
Other 1,009,404 1,048,650
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TOTAL OPERATING COSTS 26,495,328 39,401,870
OPERATING INCOME 8,327,871 11,579,387
OTHER INCOME (EXPENSES):
Interest expense (4,454,860) (7,979,096)
Interest income 971,202 203,888
Foreign exchange gain (loss) 165,392 (350,762)
Other (427,343) (46,156)
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TOTAL OTHER EXPENSES (3,745,609) (8,172,126)
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EARNINGS BEFORE INCOME TAX 4,582,262 3,407,261
INCOME TAX - PROVISION NET OF TAX CREDIT (LOSS) 56,203 (39,423)
NET EARNINGS US$ 4,638,465 US$ 3,367,838
============ ============
EBITDA US$ 15,792,365 US$ 22,013,815
EARNINGS PER SHARE:
Basic US$ 0.19 US$ 0.14
Diluted US$ 0.19 US$ 0.13
NUMBER OF SHARES USED IN CALCULATION:
Basic 24,844,544 24,844,544
Diluted 24,845,093 25,018,868
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TRICOM, S.A. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(IN US$)
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MARCH 31, MARCH 31,
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1999 2000
(UNAUDITED) (UNAUDITED)
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Cash flows from operating activities:
Net earnings US$ 4,638,465 US$ 3,367,838
Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:
Depreciation and amortization 4,494,884 7,552,734
Allowance for doubtful accounts 628,689 185,803
Expense for severance indemnities 74,025 48,707
Deferred income tax (benefit) provision (56,203) --
Net changes in assets and liabilities:
Accounts and notes receivable 5,207,154 (2,939,446)
Inventories (1,978,864) (914,357)
Prepaid expenses 964,244 837,304
Long-term accounts receivable 3,283 22,619
Other assets (2,128,962) (433,583)
Accounts payable 7,164,505 (8,560,921)
Other liabilities (3,156,710) 234,745
Accrued expenses (4,288,443) (2,524,768)
Reserve for severance indemnities (89,043) (56,354)
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Total adjustments 6,838,559 (6,547,517)
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Net cash provided by operating activities 11,477,024 (3,179,679)
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Cash flows from investing activities:
Acquisition of investments (30,337) (116,395)
Proceeds from maturity of US Treasury Bonds and
irrevocable restricted funds 10,564,732 --
Acquisition of property and equipment (25,757,966) (22,457,075)
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Net cash used in investing activities (15,223,571) (22,573,470)
Cash flows from financing activities:
Borrowed funds from banks 19,331,046 10,542,562
Borrowed funds to related parties (19,578,551) --
Capital lease payments -- 907,410
Proceeds from issuance of long-term debt -- (41,835)
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Net cash provided by financing activities (247,505) 25,075,498
Effect of exchange rate changes on cash:
Net increase in cash and cash equivalents (3,994,052) (677,651)
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Cash and cash equivalents at beginning of the period 15,377,410 13,459,566
Cash and cash equivalents at end of period US$ 11,383,358 US$ 12,781,915
Supplemental disclosure of cash flow information:
Interest paid, net of capitalization US$(11,517,465) US$(13,397,972)
Capital lease obligations incurred -- 2,979,096
Expense in lieu of income tax paid 2,969,610 2,881,694
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TRICOM, S.A. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The Company considers that all adjustments (all of which are normal
recurring accruals) necessary for a fair statement of financial position and
results of operations for these periods have been made; however, results for
such interim periods are subject to year-end audit adjustments. Results for such
interim periods are not necessarily indicative of results for a full year.
NOTE 2 - CALCULATION OF EBITDA
EBITDA consists of earnings (loss) before interest expense, income taxes,
depreciation and amortization. EBITDA is commonly used in the telecommunications
industry to analyze companies on the basis of operating performance, leverage
and liquidity. However, it does not purport to represent cash generated or used
by operating activities and should not be considered in isolation or as a
substitute for a measure of performance in accordance with generally accepted
accounting principles.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
COMPANY OVERVIEW
TRICOM is a leading integrated communications service provider in the
Dominican Republic. Through the only completely digital local access network in
the Dominican Republic, a wireless network covering 80% of the population and
our submarine fiber optic cable systems, we offer local, long distance, mobile,
Internet and broadband data transmission services. Through our subsidiary,
TRICOM USA, Inc., we own switching facilities in New York and are one of the few
Latin American long distance carriers licensed in the United States. In 1998, we
carried 46.4% of the southbound voice and data traffic from the United States to
the Dominican Republic.
SERVICE OFFERINGS
Our service offerings include:
o Local service;
o Mobile services;
o International long distance; and
o Broadband data transmission and Internet.
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LOCAL SERVICE
We are a competitive local exchange carrier and had 124,550 local access
lines in service at March 31, 2000. Our local access network covers areas with
approximately 80% of the population of Santo Domingo, Santiago and six
additional cities.
All of our basic telephone service customers have access to a range of
value-added services, including call forwarding, three-way calling, call
waiting, and voice mail applications. In addition to local service, we provide
direct-dialed, collect and operator-assisted international and domestic long
distance services and Internet access to our residential and corporate
customers.
We offer our customers broad flexibility in assembling customized packages
of services, which provide our customers with cost savings and enhanced control
over their consumption of telephone services. Customers may choose from a menu
of services, including domestic and international long distance services, local
service and value-added services. They also may bundle their local access
service with cellular or PCS, paging and Internet services. Service packages
permit customers to preset their monthly bills based upon, for example, local
service minutes as well as long distance minutes and specified destinations.
Customers are responsible for paying for usage levels in excess of preset
package amounts, at regular per minute rates. We believe that providing
customers with such budgeting capability increases consumer confidence in using
telecommunications services, consequently allowing for increased service
penetration, higher levels of customer satisfaction and lower incidence of
delinquent payments.
We have accelerated our local access network expansion program by deploying
a wireless local loop. The wireless local loop consists of receivers that are
installed at a customer's house, digital switches and a base station
transmitter. The receiver is connected by cable to a standard telephone jack
that connects to a standard telephone. The receiver is powered by the customer's
home power supply and also contains a battery that allows operation to continue
for up to approximately 24 hours of standby and eight hours of talk time in the
event of a power outage. The wireless local loop offers voice quality as clear
as telephones connected by wirelines.
MOBILE SERVICES
Our mobile network covers approximately 80% of the Dominican Republic's
population. We currently offer both cellular and PCS service. At March 31, 2000,
we had 190,258 cellular subscribers, including 9,512 PCS subscribers,
representing approximately 44% of the Dominican mobile telephony market, based
on information available to us.
We attribute a substantial portion of this growth to our prepaid cellular
and PCS card, the Amigo card. At March 31, 2000, prepaid cellular and PCS
subscribers accounted for 40% of the entire cellular and PCS market of the
Dominican Republic and 85% of our cellular and PCS subscribers, based on
information available to us. Our Amigo card program has expanded our cellular
and PCS customer base because it offers cellular and PCS service to individuals
who would not satisfy our current credit policies and because it appeals to
customers who prefer to budget their cellular and PCS telephone spending.
We have offered PCS service since April 1999. This technology provides for
added security and privacy compared with traditional analog systems, and it also
offers greater capacity. PCS customers are able to receive all of the benefits
related to a digital service, including digital messaging, caller ID and
voicemail. Our PCS network covers areas with approximately 65% of the population
in the Dominican Republic and is less extensive than our analog network. We
offer a dual-band service, allowing customers to use seamlessly their mobile
phones nationwide over both digital and analog networks.
We have entered into arrangements with major consumer electronics retailers
and a network of independent cellular and PCS dealers to offer our cellular and
PCS services in conjunction with their sale of handsets. We do not subsidize or
provide credit on the sale of cellular and PCS handsets.
<PAGE>
We have provided paging services since April 1995. At March 31, 2000, we
provided paging services to 26,809 subscribers, representing approximately 11%
of the Dominican paging market according to market information available to us.
In 1999 we stopped soliciting new paging subscribers. We believe that the
success of our prepaid cellular and PCS program has contributed to the decline
of paging as a significant part of our business because customers have replaced
paging services with prepaid cellular services.
INTERNATIONAL LONG DISTANCE
In the Dominican Republic, we provide international long distance services
to our local access, cellular and PCS customers. In addition, we offer a prepaid
calling card for international distance, the Efectiva card that can be used from
any telephone in the Dominican Republic. We operate telephone centers that
provide access to telephone services to individual customers who either do not
have telephone services in their own homes or who are attracted by the
competitive pricing of the telephone centers. The centers offer a wide range of
telephone services, in addition to long distance.
In the United States, our subsidiary TRICOM USA provides international
carrier services principally to resellers, which account for an increasing share
of international long distance traffic between the United States and the
Dominican Republic. Through our switching facilities in the United States, we
have been able to provide resellers with an alternate channel for sending
international long distance traffic. In addition, by controlling the origination
and termination of international long distance traffic between the United States
and the Dominican Republic, we believe that we are able to send and receive such
traffic at a lower cost to us than by exchanging traffic with traditional
international carriers.
Each year since the initiation of TRICOM USA's operations, we have derived
a greater percentage of international revenues from resellers. During 1999,
resellers originated 42% of the international long distance minutes from the
United States to the Dominican Republic that we received. Minutes delivered by
resellers may fluctuate significantly. While we enter into agreements with
resellers, they are not required to provide to us any amount of traffic. The
price per minute charged by us to a reseller is negotiated as often as monthly.
During 1999, we received traffic from approximately 30 resellers.
TRICOM USA also markets a number of prepaid cards to ethnic communities in
New York, New Jersey, New England, Connecticut and Florida and in Puerto Rico.
Each prepaid card is assigned a unique identification number and a face value
ranging from $2 to $20. The prepaid card's dollar balance is reduced by the cost
of each call. TRICOM USA sells the cards to distributors that resell the cards
to retail outlets.
BROADBAND DATA TRANSMISSION AND INTERNET
We provide broadband data transmission services to over 100 of the largest
business customers in the Dominican Republic, through several means of delivery
including fiber optic cable and digital wireless point-to-point radio links. In
addition, we provide some of these large customers with Internet access, private
networks and frame relay services. Through our integrated services digital
network or ISDN, we offer unified transmission of voice and data over the same
strand of fiber optic cable. We recently increased transmission capacity to
provide larger bandwidths.
In the Dominican Republic we are the second largest ISP. We provide
Internet connectivity to the residential and corporate markets through
traditional dial-up connections, as well as through dedicated lines, with speeds
ranging from 56 Kbps to 1.5 Mbps. In the near future, we expect to deploy our
xDSL and wireless broadband delivery solutions, which are currently in the final
stages of testing. Our PCS and paging services are now fully integrated with our
Internet service, offering email and digital messaging through our website,
www.tricom.net.
We provide a vertically integrated e-commerce platform targeted to the
largest Dominican and regional retail merchants. We believe that in the
Dominican Republic and other Central American countries, very few merchants have
the scale and resources to build and support their own websites. They will find
significant advantages in sharing the connection, hosting and marketing costs of
having an e-commerce platform together with other regional
<PAGE>
merchants. We are developing our own portal platform and will attempt to
minimize marketing and development costs by sharing them with some of our
merchant customers and potential partners. We also will seek to enter into
commercial relationships with some of the largest merchants able to offer
fulfillment services in the Dominican Republic and other targeted markets.
In March 2000, we established a strategic alliance with Intellicom, a
provider of two-way satellite-based Internet services and a subsidiary of U.S.
based Softnet Inc. Under the agreement, we are now a distributor of Intellicom's
products and services in the Dominican Republic, Puerto Rico, Nicaragua,
Honduras, Panama, El Salvador, Costa Rica, Guatemala, Colombia, Venezuela, U.S.
Virgin Islands and other countries in the Caribbean and Central American
regions. Intellicom's services, marketed under the TRICOM brand, combine caching
and satellite technologies and provide broadband Internet access, bypassing
landline telecom infrastructures. These services also include e-mail, network
news groups, user authentication and web hosting and are targeted at ISPs,
educational institutions, multiple dwelling units and large single site or
multi-site businesses including banks, insurance companies and hotels.
COMPETITION
We currently compete against three other telecommunications companies in
the Dominican market: Codetel, All America Cables and Radio, Inc. and Skytel.
Codetel, a wholly owned subsidiary of GTE Corp., is an integrated communications
service provider and has public telephone centers which compete with our retail
telephone centers. In January 2000, Centennial Cellular Corp. announced its
acquisition of 70% of All America Cables and Radio. We believe that Centennial
intends to expand All America's share of the market for cellular services.
Skytel, a U.S. paging service provider, has been granted a license by the
Dominican government and now provides paging services in the Dominican Republic.
In 1999, France Telecom acquired a company, which had been granted a concession.
While we believe that this concession has expired and anticipate challenging the
concession on this basis, we expect that pending disposition of our challenge,
France Telecom will use the concession to develop wireless roaming services
targeted to European tourists. The Dominican government also has granted
concessions to several other telecommunications companies, which either have not
commenced operations yet or have minimal operations. In addition, we believe
that international telecommunications companies, from time to time, have
considered investments in the Dominican market.
The growth of our market presence in the Dominican Republic depends upon
our ability to obtain customers in areas that currently are not served or are
underserved by Codetel and to convince these customers to either add or switch
to the telephony services provided by us. We initially attempted to compete with
Codetel by providing lower rates. From time to time, Codetel has implemented
significant price reductions for certain categories of calls in response to our
marketing initiatives and, as a result, forced us to modify rates for certain
services. We will continue our efforts to compete by reaching unmet demand and
providing innovative products and competitive pricing, reliable communications,
responsive customer service and accurate billing. We emphasize that customers
can realize savings through our packaged service offerings. In addition, we will
leverage our fully integrated and completely digital wireline network to
continue to provide accurate and reliable basic and Value-added telephone
services. However, Codetel, if it decided to do so, could spend significantly
greater amounts of capital than are available to us. Codetel also could upgrade
its network or sustain price reductions over a prolonged period. Any such
efforts by Codetel could have a material adverse effect on our ability to
increase or maintain our market share and on our results of operations.
The international telecommunications industry is intensely competitive and
subject to rapid change precipitated by changes in the regulatory environment
and advances in technology. Our success depends upon our ability to compete with
a variety of other telecommunications providers in the United States and in each
of our international markets. Our competitors include large facilities-based
multinational carriers such as AT&T, MCI/WorldCom and Sprint, smaller
facilities-based wholesale long distance service providers in the United States
and overseas that have emerged as a result of deregulation and switched-based
resellers of international long distance services. We compete on the basis of
price, reliability, quality of transmission, capacity at any time to terminate
traffic and customer service. We expect that competition will continue to
intensify as the number of new entrants increases as a result of the new
opportunities created by the 1996 Telecommunications Act, implementation by the
FCC of the United
<PAGE>
States' commitments under the World Trade Organization and basic
telecommunications agreements and changes in legislation and regulation in
various foreign target markets.
PRINCIPAL SHAREHOLDERS
TRICOM is controlled by GFN Corporation, Ltd. and Motorola, Inc.
("Motorola"). GFN, one of the Dominican Republic's largest holding companies
with interests in media, banking, credit cards and insurance, beneficially owns
60% of the issued and outstanding shares of Class B Stock and Motorola
beneficially owns 40% of the issued and outstanding shares of Class B Stock. In
May 1998, TRICOM made its initial public offering in the United States of 5.7
million American Depositary Shares representing an equal number of TRICOM's
Class A Common Stock. The ADSs are listed on the New York Stock Exchange under
the ticker symbol "TDR." Each share of Class B Stock entitles the holder thereof
to cast ten votes while each share of Class A Common Stock entitles the holder
thereof to cast one vote. As of March 31, 2000, the allocation of stock
ownership among GFN, Motorola and the public was 46.2% (58.3% voting power),
30.8% (38.8% voting power), and 23% (2.8% voting power), respectively.
REVENUE RECOGNITION
We derive our operating revenues primarily from toll revenues,
international settlement revenues, cellular and PCS services, local services,
the sale and lease of equipment and installations. The components of each of
these services are as follows:
Toll revenues are amounts we receive from our customers in the Dominican
Republic for international and domestic long distance calls, as well as
interconnection charges received from Codetel, the incumbent local service
provider, for calls that originate in or transit its network but terminate
in our network. Toll revenues are generated by residential and commercial
customers, calling card users, cellular and PCS subscribers and retail
telephone centers, and large corporate accounts. Toll revenues are
recognized as they are billed to customers, except for revenues from
prepaid calling cards which are recognized as the calling cards are used or
expire.
International revenues represent amounts recognized by us for termination
of traffic from foreign telecommunications carriers to the Dominican
Republic either on our own network or on Codetel's network, including
revenues derived from our U.S. based international long distance pre-paid
calling cards.
Local service revenues consist of monthly fees, local measured service and
local measured charges for value-added services, including call forwarding,
three-way calling, call waiting and voice mail, as well as calls made to
cellular users under the calling-party-pays system and revenues from other
miscellaneous local access services.
Cellular and PCS revenues represent fees received for mobile cellular and
PCS services, including interconnection charges for calls incoming to our
cellular and PCS subscribers from other companies' subscribers. Cellular
and PCS revenues do not include fees received for international long
distance calls generated by our cellular and PCS subscribers. Cellular and
PCS fees consist of fixed monthly fees, per minute usage charges and
additional charges for value-added services, including call waiting, call
forwarding, three-way calling and voice mail, and for other miscellaneous
cellular and PCS services.
Paging revenues consist of fixed monthly charges for nationwide service and
use of paging equipment and activation fees. Beginning in 1999, we
determined that paging will not play a major role in our future marketing
programs.
Revenues from the sale and lease of equipment consist of sales and rental
fees for customer premise equipment, including private branch exchanges and
key telephone systems, residential telephones, cellular and PCS handsets
and paging units. Since late 1996, we have only sold, and
<PAGE>
not leased, equipment.
Installation revenues consist of fees we charge for installing local access
lines, private branch exchanges and key telephone systems as well as fees
for activating cellular handsets.
Other revenues consist of revenues that are not generated from our core
businesses, including commissions received for providing package handling
services for a courier and commissions received for collection services for
utility companies.
The following table sets forth the percentage contribution of each category
of revenues to total operating revenues for the period indicated:
THREE MONTHS
ENDED
MARCH 31,
--------------------
1999 2000
------ ------
Toll 13.5% 12.9%
International 37.2 35.3
Local service 16.8 23.9
Cellular and PCS 16.8 17.1
Paging 2.6 0.9
Sale and lease of equipment 2.8 2.2
Installations 9.8 7.7
Other 0.5 0.1
----------------
Note: Percentages may not add up to 100% due to rounding.
The following table sets forth certain items in the statements of
operations expressed as a percentage of total operating revenues for the period
indicated:
THREE MONTHS
ENDED
MARCH 31,
----------------------
1999 2000
------ ------
Operating costs 76.1% 77.3%
Operating income 23.9 22.7
Interest expense, net (10.0) (15.3)
Other income (expenses) (10.8) (16.0)
Net earnings 13.3 6.6
EBITDA 45.4 43.2
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 2000 COMPARED TO THE SAME PERIOD IN 1999
OPERATING REVENUES. Our total operating revenues increased 46.4% to $51.0
million for the three-month period ended March 31, 2000 (the "First Quarter of
2000") from $34.8 million for the three-month period ended March 31, 1999 (the
"First Quarter of 1999"). This growth stemmed primarily from increases in
revenues generated by the expansion of our local exchange network, international
business and of our cellular services.
TOLL. Toll revenues increased 39.2% to $6.6 million in the First Quarter of
2000 from $4.7 million in the First Quarter of 1999. This resulted from both
higher domestic long distance and outbound international traffic. Domestic
<PAGE>
long distance minutes increased by 53.8% to 10.4 million minutes in the First
Quarter of 2000 from 6.8 million minutes in the First Quarter of 1999 due to a
higher number of local access lines in service. Outbound international minutes
increased by 18.1% to 7.9 million in the First Quarter of 2000 from 6.7 million
minutes in the First Quarter of 1999, reflecting increased traffic volume from
our local and Efectiva prepaid calling card customers. Local access lines and
cellular and PCS customers accounted for 32.4% and 28.1% of our total outbound
minutes in the First Quarter of 2000 compared to 27.9% and 15.6% for 1998.
Interconnection revenues increased by approximately 31.8% to $1.6 million in the
First Quarter of 2000 from $1.2 million in the First Quarter of 1999.
INTERNATIONAL. International revenues increased 38.7% to $18.0 million in
the First Quarter of 2000 from $13.0 million in the First Quarter of 1999,
primarily as a result of the growth of inbound traffic volume received from our
U.S. based international carrier, TRICOM USA. Inbound minutes increased by 53.9%
to 109.3 million minutes in the First Quarter of 2000 from 71.0 million in the
First Quarter of 1999. TRICOM USA accounted for 64.7% of our total inbound
minutes in the First Quarter of 2000 compared to 57.6% in the First Quarter of
1999.
The increase in international revenues was achieved despite the continued
trend of decreasing settlement rates for traffic between the United States and
the Dominican Republic. Our average settlement rate was $0.10 per minute during
the First Quarter of 1999 and $0.17 per minute during the First Quarter of 2000.
We have been able to increase revenues from the provision of international long
distance services by increasing the volume of international traffic carried
through our network. Future decreases in settlement rates, without corresponding
increases in our long distance traffic from the United States, would reduce our
international settlement revenues, adversely affect the profit margins that we
realize on such traffic and could have a material adverse effect on our
business, financial condition and results of operations.
LOCAL SERVICE. Local service revenues increased 108.8% to $12.2 million in
the First Quarter of 2000 from $5.8 million in the First Quarter of 1999. The
continued growth in the number of local lines in service resulted in increased
local service revenues in the First Quarter of 2000.
In the First Quarter of 2000, we added 5,624 net local access lines
compared to 11,439 net local access lines added in the First Quarter of 1999. At
March 31, 2000, we had 124,550 local access lines in service, including 26,446
wireless local loop lines, compared to 92,055 local access lines in service at
March 31, 1999.
On January 14, 1999, we announced price increases, effective as of
January 1, 1999, for residential monthly fees and for measured local service
rates as part of the industry's process of price rebalancing initiated under the
new Telecommunications Law No. 153-98. As a result, local service rent revenues
increased by 106.8% to $8.0 million in the First Quarter of 2000 from $3.9
million in the First Quarter of 1999. As a result of a higher number of lines in
service and higher rates for service, interconnection revenues for local calls
received from Codetel increased 176.7% to $1.3 million in the First Quarter of
2000 from $459,000 million in the First Quarter of 1999.
CELLULAR AND PCS. Cellular and PCS revenues increased 48.5% to $8.7 million
in the First Quarter of 2000 from $5.9 million in the First Quarter of 1999,
primarily as a result of the increase in the number of cellular and PCS
subscribers. In the First Quarter of 2000, we added 14,178 net cellular and PCS
subscribers, compared to 18,391 net cellular subscribers added in the First
Quarter of 1999. At March 31, 2000, we had 180,746 cellular and 9,512 PCS
subscribers compared to 126,923 cellular subscribers at March 31, 1999. We
attribute the substantial growth of our subscriber base to the continued success
of the Amigo prepaid program introduced in the third quarter of 1997.
As a result of a higher average subscriber base, airtime minutes increased
43.8% from 27.7 million in the First Quarter of 1999 to 39.9 million in the
First Quarter of 2000. Airtime revenues increased by 61.9% to $6.0 million in
the First Quarter of 2000 from $3.7 million in the First Quarter of 1999 due to
the higher volume of minutes generated by a larger subscriber base of prepaid
cellular and PCS subscribers.
Prepaid cellular and PCS services generated approximately 55% of our total
airtime minutes and 54% of total cellular and PCS revenues in the First Quarter
of 2000. Prepaid revenues increased by 51.9% to $4.8 million in the First
Quarter of 2000 from $3.2 million in the First Quarter of 1999. Our average
monthly churn rate for cellular
<PAGE>
and PCS services was 1.7% for both the First Quarter of 1999 and 2000.
PAGING. Paging revenues decreased 47.2% to $475,000 in the First Quarter of
2000 from $900,000 in the First Quarter of 1999. This reflects increased
competition which lowered prices and margins for paging services. Paging
revenues represented 0.9% of total operating revenues in the First Quarter of
2000 compared to 2.6% of total operating revenues in the First Quarter of 1999.
At March 31, 2000, we had 26,809 paging subscribers compared to 28,892 paging
subscribers at March 31, 1999. Our average monthly churn rate for paging
services increased to 3.5% in the First Quarter of 2000 from 3.0% in the First
Quarter of 1999.
SALE AND LEASE OF EQUIPMENT. Revenues from the sale of equipment increased
15.9% to $1.1 million in the First Quarter of 2000 from $966,000 in the First
Quarter of 1999. The increase was primarily attributable to the sale of
broadband corporate data transmission lines, as well as customer premise
equipment, including private branch exchanges and key telephone systems,
residential telephones and cellular and PCS handsets in the First Quarter of
2000. We have entered into arrangements for the distribution of cellular and PCS
services through major electronics retailers. We believe that these arrangements
will decrease equipment sales revenues but will add subscribers and increase
cellular and PCS service revenues.
INSTALLATIONS. Installation revenues increased 14.2% to $3.9 million in the
First Quarter of 2000 from $3.4 million in the First Quarter of 1999, as a
result of our adding 14,013 gross local access lines and 23,536 gross cellular
and PCS customers compared to 13,939 gross local access lines and 24,344 gross
cellular additions in the First Quarter of 1999.
OPERATING COSTS. Major components of operating costs are:
o carrier costs, which include amounts owed to foreign carriers for the
use of their networks for termination of outbound traffic;
o interconnection costs, which are access charges paid primarily to
Codetel;
o depreciation of network equipment and leased terminal equipment;
o payments for international satellite circuit leases;
o expenses in lieu of income tax; and
o general and administrative expenses, which include salaries and other
compensation to personnel, non-network depreciation, maintenance
expenses, marketing expenses and other related costs.
Our operating costs increased 48.7% to $39.4 million in the First Quarter
of 2000 from $26.5 million in the First Quarter of 1999. The increase in
operating costs was primarily the result of higher satellite connection and
carrier costs, increased general and administrative expenses reflecting our
continued expansion, and depreciation associated with our continued capital
investment program. Operating costs represented 77.3% of total operating
revenues in the First Quarter of 2000 compared to 76.1% in the First Quarter of
1999.
SATELLITE CONNECTIONS AND CARRIER COSTS. Satellite connections and carrier
costs increased by 67.9% to $14.1 million in the First Quarter of 2000 from $8.4
million in the First Quarter of 1999 primarily as a result higher outbound
carrier and higher interconnection costs. Outbound carrier costs increased by
$4.1 million from $2.6 million in the First Quarter of 1999 to $6.7 million in
the First Quarter of 2000. Interconnection costs increased by 28.9% to $5.9
million in the First Quarter of 2000 from $4.6 million in the First Quarter of
1999, the result of a higher volume of inbound traffic terminating in Codetel's
network.
NETWORK DEPRECIATION AND DEPRECIATION EXPENSE. Network depreciation
increased 75.9% from $3.4 million in the First Quarter of 1999 to $6.1 million
in the First Quarter of 2000, as a result of our continued investments in
<PAGE>
plant and equipment. Depreciation expense increased 42.1% to $1.5 million in the
First Quarter of 2000 from $1.0 million in the First Quarter of 1999.
EXPENSE IN LIEU OF INCOME TAXES. We make payments to the Dominican
government in lieu of income tax equal to 10% of gross domestic revenues, after
deducting charges for access to the local network, plus 10% of net international
revenues. Expense in lieu of income taxes also includes a tax of 2% on
international settlement revenues collected. Expense in lieu of income taxes
decreased by 3.0% to $2.9 million in the First Quarter of 2000 from $3.0 million
in the First Quarter of 1999.
GENERAL AND ADMINISTRATIVE. General and administrative expenses increased
43.5% to $13.8 million in the First Quarter of 2000 from $9.6 million in the
First Quarter of 1999 primarily as a result of increased personnel costs due to
a higher employee headcount and higher commissions paid to sales staff and
intermediaries. At March 31, 2000, we had 1,528 employees compared to 1,452
employees at March 31, 1999. As a result, personnel costs, net of capitalized
labor expenses, increased by 23.0% to $6.0 million in the First Quarter of 2000
from $4.9 million in the First Quarter of 1999. Commissions increased by 68.4%
to $5.5 million in the First Quarter of 2000 from $3.3 million in the First
Quarter of 1999.
As a percentage of total operating revenues, general and administrative
expenses decreased to 27.0% in the First Quarter of 2000 compared to 27.6% in
the First Quarter of 1999.
OTHER COSTS. Other costs increased by 3.9% to $1.1 million in the First
Quarter of 2000 from $1.0 million in the First Quarter of 1999, primarily as a
result of increases in the costs of sale of private branch exchange systems and
cellular handsets in the First Quarter of 2000.
OPERATING INCOME. Operating income increased 39.0% to $11.6 million in the
First Quarter of 2000 from $8.3 million in the First Quarter of 1999. Our
operating income as a percentage of total operating revenues decreased to 22.7%
in the First Quarter of 2000 from 23.9% of total operating revenues in the First
Quarter of 1999, reflecting increased costs associated with the expansion of our
operations.
OTHER INCOME (EXPENSES). Other expenses increased by $4.4 million to $8.2
million in the First Quarter of 2000 from $3.7 million in the First Quarter of
1999, reflecting increased short-term bank borrowings and reduced interest
income as a result of the application of pledged securities to pay interest on
the senior notes due 2004 and the principal amount of loans from the Caribbean
Basin Project Financing Authority, and additional short-term financing during
the First Quarter of 2000.
NET EARNINGS. Net earnings decreased by $1.3 million to $3.4 million in the
First Quarter of 2000 from $4.6 million in the First Quarter of 1999. The
decrease is primarily the result of higher financial expenses resulting from
higher short-term indebtedness coupled with lower interest income. On a per
share basis, earnings decreased to $0.14 per share in the First Quarter of 2000
from $0.19 per share in the First Quarter of 1999. The number of shares
outstanding used in the calculation at March 31, 1999 and 2000 was 24,844,544.
Net earnings represented 6.6% of total operating revenues in the First Quarter
of 2000 compared to 13.3% in the First Quarter of 1999.
EBITDA. Earnings before interest and other income and expenses, taxes and
depreciation and amortization increased by 39.4% to $22.0 million in the First
Quarter of 2000 from $15.8 million in the First Quarter of 1999. We calculate
earnings before interest and other income and expenses, taxes and depreciation
and amortization prior to the deduction of payments to the government in lieu of
income taxes.
EFFECTS OF INFLATION
The annual inflation rate in the Dominican Republic was 8.4% for 1997, 7.8%
for 1998 and 5.1% for 1999. The effects of inflation on our operations have not
been significant.
CHANGE IN FUNCTIONAL AND REPORTING CURRENCY
<PAGE>
Through December 31, 1996, we used the Dominican peso as our functional and
reporting currency. While a significant portion of our revenues, assets and
liabilities historically were denominated in U.S. dollars, a clear determination
of the functional currency was difficult, and we used the Dominican peso as our
functional currency. However, in our opinion, since the issuance of the 11 3/8%
senior notes due 2004, in August 1997, our cash flows and financial results of
operations are more appropriately presented in the U.S. dollar as the functional
currency. Effective January 1, 1997, we changed our functional currency from the
Dominican peso to the U.S. dollar. Our financial statements for periods prior to
January 1, 1997 have not been restated for this change in the functional
currency. However, we did retroactively change our reporting currency to the
U.S. dollar.
LIQUIDITY AND CAPITAL RESOURCES
Substantial capital is required to expand and operate our
telecommunications networks. For 1999, we made capital investments of $145
million for the installation of additional local access lines, enhancement of
our cellular and PCS network, expansion of international facilities and other
network improvements. Expansion of international facilities included the
installation of a switch in New York and investments in submarine fiber optic
cables. We currently anticipate making capital expenditures of approximately
$140 million in 2000, a substantial majority of which will be in the Dominican
Republic, for increasing capacity and coverage in our local access and mobile
networks, expanding our international facilities to support increased traffic
volume, expanding our local network and other international expansion. However,
the amounts to be invested for these purposes will depend upon a number of
factors, including primarily the demand for our services.
In addition, as we expand our operations into new areas we will be required
to support increased working capital and capital expenditure needs. We have
satisfied our working capital requirements and funded capital expenditures from
cash generated from operations, short-term and long-term borrowings, trade
finance, vendor financing and equity and debt issuances. We believe our cash
generated by operations, the proceeds of this secondary offering and the
availability of borrowings from of our credit facilities will be sufficient to
fund our expected capital expenditures through the middle of 2001. We frequently
evaluate potential acquisitions and joint venture investments. Acquisitions or
investments, for example, the investment in Panama subject to a non-binding
memorandum of understanding that we have executed, may require us to obtain
additional financing. There can be no assurance that additional funding sources
will be available to us on terms which we find acceptable or at all.
Net cash provided by operating activities was $5.7 million for the First
Quarter of 1999 and net cash used by operating activities was $2.9 million for
the First Quarter of 2000. We had net accounts receivable of $26.1 million and
$28.9 million at December 31, 1999 and March 31, 2000.
Our indebtedness was approximately $363.9 million at March 31, 2000, of
which $200.0 million was our senior notes due 2004, $42.9 million was in
long-term borrowings and capital leases, with maturities ranging from one to
seven years, and $120.9 million was short-term bank loans, telecommunications
equipment financings, trade financings and current portion of capital leases. At
March 31, 2000, our U.S. dollar borrowings (other than the 11 3/8% senior notes
due 2004) had interest rates ranging from 9.5% per annum to 13% per annum, and
our peso borrowings had interest rates ranging from 20% per annum to 24% per
annum. At March 31, 2000, our U.S. dollar borrowings (other than the 11 3/8
senior notes due 2004) totaled $152.6 million and our peso borrowings totaled
$11.3 million.
We have U.S. dollar- and peso-denominated credit facilities which, in the
aggregate, permit us to borrow up to $189.9 million. At March 31, 2000, there
was $163.9 million outstanding under these facilities. We had approximately
$26.0 million available for borrowing under these facilities, of which $25.0
million was under facilities with maturities of less than one year.
At March 31, 2000, we had $85.2 million of short-term and long-term, U.S.
dollar and peso- denominated credit facilities with Dominican banks and
institutions and $104.7 million of U.S. dollar-denominated credit facilities
with international banks. In the past, we met a significant portion of our
funding requirements with short-term borrowings in Dominican markets. Recently,
the cost of peso-denominated short-term indebtedness in the Dominican financial
market has ranged from 24% per annum to 28% per annum. Moreover, from time to
time, the
<PAGE>
Dominican government has imposed limitations on loans by Dominican banks in
Dominican pesos in order to restrict the country's money supply and curb
inflation. This monetary policy has limited the sources of bank financing and
the amounts available to be borrowed from Dominican banks and has increased the
costs of such borrowing.
As of March 31, 2000, our current liabilities exceed our current assets by
$95.6 million. This reflects our short-term borrowings in the Dominican Republic
with related companies, local banks and international banks. Dominican banks
lend on a short-term basis in order to negotiate interest rates should market
conditions change, without necessarily demanding the repayment of credit
facilities. It is our belief that the existence of negative working capital does
not affect adversely the continuity of our business.
We will seek additional credit facilities with international banks to
refinance our short-term credit facilities. In January 2000, we obtained a
commitment from Export-Import Bank of the United States to provide credit
guarantees of up to $46.6 million. The credits will be disbursed by The
International Bank of Miami, N.A. to be used for purchases of communications
equipment and material from Motorola and other suppliers. The commitment
provides that the credits will be available for disbursement over a 12-month
period and will be repayable over five years. We are in the process of executing
the Credit Agreement and obtaining the necessary documentation to close this
transaction.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The following discussion about market risks to certain financial
instruments includes "forward-looking" statements that involve risks and
uncertainties. Actual results could differ materially from those projected in
the forward-looking statements.
We are exposed to market risks from adverse changes in interest rates and
foreign exchange rates. We do not hold or issue financial instruments for
trading purposes.
INTEREST RATE RISK
Our interest expense is sensitive to changes in the general level of
interest rates in the United States and in the Dominican Republic. At March 31,
2000, we had outstanding $200 million aggregate principal amount of senior
notes. The senior notes bear interest at 11 3/8% per annum and mature in the
year 2004. The fair value of such senior notes was approximately $187 million
and $190.5 million at December 31, 1999 and March 31, 2000, respectively.
Our primary exposure to market risk for changes in interest rates
relates to our short-term borrowings from Dominican banks. At March 31, 2000,
we had $120.9 million and $42.9 million of short-term and long-term
borrowings, respectively, including trade finance and capital leases
outstanding from Dominican and international banks, mostly denominated in
U.S. dollars. During the First Quarter of 2000, our short-term and long-term
U.S. dollar denominated borrowings bore interest at rates ranging from 9.5%
per annum to 13% per annum. During the First Quarter of 2000, our short-term
and long-term Dominican peso denominated borrowings bore interest at rates
ranging from 20% to 24% per annum. A 10% increase in the average rate for our
variable rate debt would have decreased our net income in the First Quarter
of 2000 by approximately $370,000.
FOREIGN EXCHANGE RISKS
We are subject to currency exchange risks. During the First Quarter of
2000, we generated revenues of $18.0 million in U.S. dollars and $33.0 million
in Dominican pesos. In addition, at March 31, 2000, we had $152.6 million of
U.S. dollar-denominated debt outstanding, (excluding the $200.0 million
principal amount of the 11 3/8% senior notes due 2004). At March 31, 2000, we
had debt indexed to the dollar of RD$36.1 million at a contracted exchange
<PAGE>
rate of RD$16.00 per $1.00, resulting in a obligation of $2.3 million.
Dominican foreign exchange regulations require us and other
telecommunications companies to convert all U.S. dollar revenues into Dominican
pesos at the official exchange rate, and to purchase US dollars at the private
market exchange rate. Although the official exchange rate now fluctuates and is
tied to the private market rate, the official exchange rate tends to be lower
than the private market rate. During the First Quarter of 2000, the average
official exchange rate was RD$16.03 per $1.00 while the average private market
rate was RD$16.20 per $1.00.
Our functional currency is the U.S. dollar and, as a result, we must
translate the value of Dominican peso-denominated assets into U.S. dollars when
compiling our financial statements. This translation can create foreign exchange
gains or losses depending upon fluctuations in the relative value of the
Dominican peso against the U.S. dollar. During the First Quarter of 2000, we
recognized an approximate $351,000 foreign exchange loss. If the Dominican peso
had devalued by an additional 10% against the U.S. dollar on average in the
First Quarter of 2000, then we would have realized an additional foreign
exchange loss of approximately $35,100.
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In August 1999, a Dominican company, DCS International S.A., and two
individual plaintiffs whom we believe are officers or employees of DCS, sued us
in Dominican courts for alleged losses and damages of up to approximately RD$200
million ($12 million) resulting from the imprisonment of two of the individuals
for 15 days. The plaintiffs alleged that their imprisonment was the result of an
investigation by the local district attorney and the police that we instigated
following an irregular increase in telephonic traffic at certain telephone
numbers. We requested that the court dismiss the action because of lack of
jurisdiction. The court granted our motion to dismiss and assessed the costs of
the proceedings against the plaintiffs. The plaintiffs resubmitted the action
before the proper court within one month from the date of the notification of
the ruling. At the request of the plaintiffs, the court of competent
jurisdiction set the date of the hearing to try the merits of the case for May
10, 2000. We believe, after consulting with legal counsel in this action, that
the matter will not have a material adverse effect on our results of operations
and financial position.
There are no other legal proceedings to which we are a party, other than
ordinary routine litigation incidental to our business, which is not otherwise
material to our business or financial condition.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
<PAGE>
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 6-K
(a) Exhibits.
None.
(b) Reports on Form 6-K. The Company filed with the Securities and
Exchange Commission a Report on Form 6-K on March 21, 2000
reporting the filing of the Company's Registration
Statement for the issuance of its Common Stock, a private
offering of senior notes and the tender offer for
outstanding 11 3/8% Notes due 2004, a Report on Form 6-K on
April 11, 2000 reporting the successful completion of the
Company's consent solicitation, and a Report on Form 6-K on
April 21, 2000 reporting the pricing of the Company's equity
offering.
<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, thereunto duly authorized.
TRICOM, S.A
Dated: May 15, 2000 By: /s/ Carl H. Carlson
-------------------------------------
Carl H. Carlson
Executive Vice President
and Member of the
Office of the President
