UNITED STATES 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):
December 14,1999 (December 9, 1999)
Commission File Number 0-29782
WORLD ACCESS, INC.
(Exact name of Registrant as specified in its Charter)
Delaware 58-2398004 58-2398004
(State of Incorporation) (I.R.S. Employer Identification No.)
945 E. Paces Ferry Road, Suite 2200,
Atlanta, Georgia 30326
(Address of principal executive offices) (Zip Code)
(404) 231-2025
(Registrant's telephone number)
<PAGE>
Item 5. Other Events
On December 9, 1999, World Access, Inc., (the "Company"), announced
that its Board of Directors has adopted a plan to divest, spin-off or
otherwise monetize its Equipment Group, and further focus the Company on
its strategy to be a leading provider of bundled voice, data and Internet
services to key regions of the world. The Equipment Group currently
generates annual revenues in excess of $250 million and consists of the
following business units:
- Telco Systems Division, based in Norwood, Massachusetts, is a
leading provider of next generation transport and access solutions
for service providers throughout the world. Its products include
intelligent integrated access devices, multiplexers and digital
microwave radios;
- NACT Switching Division, based in Provo, Utah, is a rapidly
growing provider of advanced switching platforms with integrated
proprietary applications software as well as billing and
telemanagement systems;
- Wireless Local Loop Division, based in Alpharetta, Georgia, has
developed a next generation, CDMA-based, fixed wireless local loop
system known as Velocity-2000(TM); and the
- Cellular Infrastructure Supply Division, based in Chicago,
Illinois, is a value-added supplier of new and re-furbished
cellular base stations and related equipment.
The Company has engaged Donaldson, Lufkin & Jenrette and Brown
Brothers Harriman & Co. as its financial advisors in the sale or other
disposition of these businesses. The Company is prepared to sell,
spin-off or otherwise monetize these units individually or collectively.
As the result of the adoption of a definitive plan to divest its
non-core operations, the Company will report the results of its Equipment
Group as "Discontinued Operations" in its future SEC filings. Historical
financial results will be restated to represent only the International
Long Distance business as "Continuing Operations".
<PAGE>
Item 7 Financial Statements and Exhibits
(a) Financial Statements.
Not Applicable
(b) Pro Forma Financial Information.
Not Applicable
(c) Exhibits.
Exhibit
Number Description
99.1 Press Release dated December 9, 1999.
SIGNATURE
Pursuant to the reporting requirements of the Securities and Exchange
Act of 1934, the Registrant has duly caused this report to be signed on behalf
of the undersigned hereunto duly authorized.
WORLD ACCESS, INC.
Date: December 14, 1999 By: /s/ MARTIN D. KIDDER
---------------------------------
Its Vice President and Controller
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
99.1 Press Release dated December 9, 1999
WORLD ACCESS ADOPTS PLAN TO DIVEST ITS EQUIPMENT GROUP
Board of Directors Approves Strategic Plan to Focus on International
Long Distance Businesses
Divestiture of Highly Profitable, Technology Companies Expected to Generate
Significant Cash
Galaxy Engineering Division Sold to Group Led by Galaxy Management
Atlanta, Georgia - December 9, 1999 - World Access, Inc.
(Nasdaq: WAXS) announced today that its Board of Directors has adopted a
plan to divest, spin-off or otherwise monetize its Equipment Group, and
further focus the Company on its strategy to be a leading provider of
bundled voice, data and Internet services to key regions of the world.
The Equipment Group currently generates annual revenues in excess of $250
million and consists of several highly profitable businesses that have
worked diligently in the past few years to establish leadership positions
in several key technology markets.
The Company has engaged Donaldson, Lufkin & Jenrette and Brown
Brothers Harriman & Co. as its financial advisors in the sale or other
disposition of these businesses. The Company is prepared to sell,
spin-off or otherwise monetize these units individually or collectively.
John D. Phillips, Chairman and Chief Executive Officer of World
Access, said, "With the completion of our merger earlier this week with
FaciliCom International, we now have an international long distance
("ILD") business that has in excess of $1 billion in annual revenues,
generates significant EBITDA and is extremely well positioned to
aggressively pursue growth opportunities in the U.S., Europe and other
deregulating markets throughout the world. While we believe that there
are evident synergies between our ILD business and our Equipment Group,
it has become clear this year that the financial markets are not willing
to recognize the inherent value of these two businesses within one public
company."
"We expect to receive significant value from our Equipment
Group, given the size and profitability of these businesses, their
underlying technology, proven management teams, new product pipelines and
projected growth rates. Our motivation in recommending this divestiture
plan to our Board was driven solely by our belief that the financial
markets would continue to undervalue the combined businesses in the
future, and new Wall Street sponsorship and related research coverage
would be difficult to obtain due to the complexity of our existing
structure. We currently have a strong balance sheet and available cash
resources to fund our ILD business plans for at least the next 18 to 24
months. As a result, we expect to work patiently with our financial
advisors to carefully evaluate all available alternatives for the
Equipment Group, including sales to strategic acquirers and sales of
majority shares through one or more initial public offerings."
"While we no longer will classify these businesses as continuing
operations," Mr. Phillips continued, "there will be no change in how we
run these businesses and we intend to continue to make substantial
investments in product research and market development. These operations
have all performed exceptionally well during 1999, and are poised for
continued growth and profitability. The management teams and employees of
these divisions are to be commended for their market vision, dedication
and performance."
<PAGE>
The World Access Equipment Group consists of the following
business units:
- Telco Systems Division, based in Norwood, Massachusetts,
is a leading provider of next generation transport and
access solutions for service providers throughout the
world. Its products include intelligent integrated access
devices, multiplexers and digital microwave radios.
- NACT Switching Division, based in Provo, Utah, is a
rapidly growing provider of advanced switching platforms
with integrated proprietary applications software as well
as billing and telemanagement systems.
- Wireless Local Loop Division, based in Alpharetta,
Georgia, has developed a next generation, CDMA-based, fixed
wireless local loop system known as Velocity-2000(TM).
- Cellular Infrastructure Supply Division, based in Chicago,
Illinois, is a value-added supplier of new and re-furbished
cellular base stations and related equipment.
In addition, earlier this week World Access completed the sale
of its Galaxy Engineering Services Division to an investment group led
by Joseph Forbes, founder and President of Galaxy. Terms of the cash
sale were not disclosed.
"We are happy to have completed the sale of Galaxy to Joe, his
team of accomplished engineers and their new partners," Mr. Phillips
commented. "Since being acquired by World Access in August 1997, this
group of RF engineers has continuously outperformed against their
business plan. They are well known in their industry for superior
customer performance and are well positioned for continued growth and
profitability. We thank them for their efforts during the past few years
and we wish them continued success. Galaxy has been a very attractive
investment for World Access, both in terms of its contribution to our
operating performance and the gain realized on the sale."
As the result of the adoption of a definitive plan to divest its
non-core operations, the Company will report the results of its Equipment
Group as "Discontinued Operations" in its SEC filings. Historical
financial results will be re-characterized to represent only the ILD
business as Continuing Operations.
World Access is focused on being a leading provider of bundled voice, data and
Internet services to key regions of the world. The company competitively
provides end-to-end communications services through its redundant digital
network which is capable of supporting voice and data services, including frame
relay, Internet Protocol (IP), asynchronous transfer mode (ATM) and multimedia
applications. Located strategically throughout the US and 13 European countries,
World Access's network backbone consists of gateway and tandem switches, linked
by an extensive fiber network encompassing tens of millions of circuit miles For
additional information regarding World Access, please refer to the Company's
website at www.waxs.com.
This press release may contain financial projections or other forward-looking
statements made pursuant to the safe harbor provisions of the Securities Reform
Act of 1995. Such statements involve risks and uncertainties which may cause
actual results to differ materially. These risks include: potential inability to
identify, complete and integrate acquisitions; difficulties in expanding into
new business activities; delays in new product developments or introductions;
the potential termination of certain service agreements or the inability to
enter into additional service agreements; and other risks described in the
Company's SEC filings, including the Company's Annual Report on Form 10-K for
the year ended December 31, 1998, the Company's Quarterly Report on Form 10-Q
for the three months ended March 31, 1999, June 30, 1999 and September 30, 1999
and the Company's Registration Statement on Form S-3 (No. 333-43497), as such
filings have been amended, all of which are incorporated by reference into this
press release.
World Access Contact: Nancy L. de Jonge Michael F. Mies
(404-231-2025) Director of Investor Relations Senior Vice
http://www.waxs.com & Corporate Communications& Treasurer President- Finance
