<PAGE>
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) APRIL 25, 2000
NORTHEAST OPTIC NETWORK, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 000-24653 04-3056279
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
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2200 WEST PARK DRIVE
WESTBOROUGH, MASSACHUSETTS 01581
(Address of principal executive offices) (Zip code)
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Registrant's telephone number, including area code: (508) 616-7800
Exhibit Index at Page 3
Page 1 of 7
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ITEM 5. OTHER EVENTS
On April 25, 2000 the Company announced the results of operations for the first
quarter of the 2000 fiscal year, as set forth in the press release attached
hereto as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) EXHIBITS. Press Release Dated April 25, 2000
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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.
NORTHEAST OPTIC NETWORK, INC.
Date: April 27, 2000 By: /s/ Vincent C. Bisceglia
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Vincent C. Bisceglia
Chairman & Chief Executive Officer
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EXHIBIT INDEX
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Exhibit No. Description At Page
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99 Press Release Dated April 25, 2000 4
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EXHIBIT 99
[LOGO]
NORTHEAST OPTIC NETWORK, INC.
2200 West Park Drive www.neoninc.com 800.891.5080 TEL
Suite 200 508.616.7800 TEL
Westborough, MA 01581 508.616.7895 FAX
News Release Contact:
Immediate Fred Kocher
April 25, 2000 (508) 616-7819
NORTHEAST OPTIC NETWORK ANNOUNCES
FIRST QUARTER 2000 RESULTS
Westborough, MA B NorthEast Optic Network, Inc. ("NEON"-Registered Trademark-)
[NOPT-NASDAQ] announced today its financial and operating results for the three
months ended March 31, 2000.
Revenues for the quarter ending March 31, 2000 increased 409% to approximately
$2.7 million compared with revenues of $0.5 million for the same period in 1999.
The increasing revenue reflects the Company's accelerated provisioning of lit
circuits, representing 40% of the first quarter's $2.7 million revenue. The
Company had approximately $0.7 million of non-recurring revenues associated with
construction, engineering and design during the quarter ending March 31, 2000.
The Company's net loss for the three months ended March 31, 2000 amounted to
approximately $8.3 million or $0.50 per share loss, compared to a net loss of
about $5.3 million or $0.33 per share loss for the same period in 1999.
Vin Bisceglia, NEON's-Registered Trademark- Chairman and CEO, said: "Our results
for the first quarter of 2000 met our expectations and we increased our backlog
by $21.0 million. Our accomplishments during the quarter and the first few days
of the second quarter are significant for the Company's growth. In particular,
we received regulatory approval from the City of New York Franchise and
Concession Review Committee for a franchise in the City. This will allow us to
install and own our own facilities and to roll out expanded, high-bandwidth
services by the end of this year. After doing so, we will also be able to
connect our hubs in New York City to the rest of our network. Meanwhile, we
currently carry customer traffic in and out of New York City on fibers we have
leased from Qwest."
Bisceglia continued: "We also signed a number of carrier contracts in the First
Quarter, including an initial agreement with Global Crossing Telecommunications
to connect several New England Universities to the region's most advanced fiber
optic system, a significant first contract with Conversent Communications, and
Master Service Agreements with two of our current customers, Lightship Telecom
and RNK Telecom, for fiber optic network services throughout the Northeast. We
have also signed a number of contracts with new customers, including UUNET,
Omnipoint, Northpoint, Broadwing, Universal Access, Choice One, Teligent,
Genuity, VarTec, and Cable and Wireless -- relationships which we expect to grow
during the year."
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"In February we announced the addition of a new Vice President of Sales, Joe
Ford," said Bisceglia. "Joe came to us from Conectiv Communications where he
developed a SONET fiber optic network and a competitive local exchange
carrier business. And this week we are delighted to announce that our new
Vice President of Marketing, Brad Bradshaw, joins us from the Yankee Group.
Brad has been a key figure at Yankee Group where he provided strategic
direction and planning for emerging fiber carriers. Yankee Group is one of
the country's premier telecommunications research and consulting firms. In
addition, we are creating regional sales offices in New York City and
Washington, DC to expand our sales effort geographically into these key areas
of growth. We are very excited about our new Regional Sales Vice President in
the Washington, DC area -- Randy Domolky -- who joins NEON from Winstar,
where he was a senior sales executive."
"Finally, we are currently in the process of deploying the latest Lambda
wavelength technology on our network, which will significantly increase network
capacity. You will be hearing more about this new development in the months
ahead. The first quarter has been a great start to an important year of growth
for our Company," said Bisceglia.
Total cost of sales in the three months ended March 31, 2000 was $2.1
million -- an increase of 127% over the $0.9 million recorded in the same
quarter ended March 31, 1999. This increase of approximately $1.2 million
related primarily to increased lease payments for fiber optic facilities,
collocation lease expense and increased operations and maintenance costs.
Selling, general and administrative expenses in the three months ended March 31,
2000 increased 90% to $2.5 million from $1.3 million reported in the same period
in 1999. This increase resulted from continuing investment in sales and
marketing infrastructure, including personnel, sales commissions on increased
bookings in the Quarter and an increase in management and information
technology.
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Summary of Financial Results
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Year to Date
March 31,
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2000 1999
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(Dollars in Thousands, Except Eps)
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REVENUE $2,652.7 $521.0
COST OF SALES 2,110.5 929.0
SG & A 2,508.6 1,321.4
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TOTAL OPERATING EXPENSES 4,619.1 2,250.4
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OPERATING LOSS (1,966.4) (1,729.4)
DEPRECIATION & AMORTIZATION 2,458.9 795.0
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LOSS BEFORE INTEREST AND TAXES (4,425.3) (2,524.4)
INTEREST EXPENSE (5,384.3) (4,979.7)
INTEREST INCOME 1,535.4 2,240.8
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NET INTEREST (3,848.9) (2,738.9)
NET LOSS BEFORE INCOME TAXES (8,274.2) (5,263.3)
PROVISION FOR (BENEFIT FROM) TAXES 0.0 0.0
NET LOSS ($8,274.2) ($5,263.3)
========= =========
EPS
NET LOSS PER SHARE ($0.50) ($0.33)
DILUTED AND AVERAGE WEIGHTED SHARES 16,479.8 16,070.0
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SUPPLEMENTAL DATA
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CAPITAL EXPENDITURES $ 13,555.9 $ 14,837.8
CASH POSITION (EXCL. RESTRICTED CASH) $ 58,697.5 $ 98,406.6
REVENUES
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DARK FIBER LEASES $ 663.3 $ 386.7
LIT SERVICES 999.9 34.8
COLLOCATION 273.8 0.0
ANCILLARY SERVICES 715.7 99.5
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TOTAL $ 2,652.7 $ 521.0
========== =========
BACKLOG 3/31/00 12/31/99
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DARK FIBER LEASES $ 87,050.5 $ 78,102.4
LIT SERVICES 28,686.5 19,188.5
COLLOCATION 9,372.9 6,905.9
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TOTAL $125,109.8 $104,196.9
========== ==========
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#
NEON-Registered Trademark- is a registered trademark of NorthEast Optic Network,
Inc.
(Note: This news release contains "forward looking statements" with the
meaning of the Private Securities Litigation Reform Act of 1995, including
but not limited to, statements concerning future plans for expansion and
completion of the NEON-Registered Trademark- system. Such statements are
subject to risks and uncertainties which could cause actual results to differ
materially from those anticipated, including those risks detailed in the
Company's filings with the Securities and Exchange Commission, and should be
read in light of these risks. The Company assumes no obligation to update the
information contained in this news release.)
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