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:
July 11, 1997
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(Date of earliest event reported)
CITIZENS UTILITIES COMPANY
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(Exact name of Registrant as specified in charter)
Delaware 001-11001 06-0619596
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
High Ridge Park, P.O. Box 3801, Stamford, Connecticut 06905
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(Address of principal executive offices) (Zip Code)
(203) 329-8800
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(Registrant's telephone number, including area code)
No change since last report
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(Former name or address, if changed since last report)
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Item 5. Other Events
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Citizens Utilities Company announced today that the company
has taken several actions intended to both improve earnings by year-end 1997
and slow the pace of its telecommunications expansion. These actions include
a restructuring expected to reduce operating expenses by at least $70 million
annually, a second quarter 1997 pre-tax charge of approximately $185 million
and a reduction of at least $175 million to the company's 1997 capital
expenditure program. Additional actions to further reduce operating expenses
will be taken before the end of 1997.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
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(c) Exhibits
99 Press release of Citizens Utilities Company released
July 11, 1997.
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CITIZENS UTILITIES COMPANY
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Registrant
By:/s/ Livingston E. Ross
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Vice President and Controller
Date: July 11, 1997
EXHIBIT 99
FOR IMMEDIATE RELEASE
Contact: Arthur Dague Investor/Shareholder Relations
(203) 329-5094 (800) 248-8845
[email protected] [email protected]
CITIZENS UTILITIES TAKES STEPS TO IMPROVE EARNINGS
AND WILL TAKE A CHARGE TO SECOND-QUARTER EARNINGS
Stamford, CT, July 11, 1997 -- Citizens Utilities announced today that
the company has taken several actions intended to both improve earnings by
year-end 1997 and slow the pace of its telecommunications expansion. Robert J.
DeSantis, vice president and treasurer, stated that these actions include a
restructuring expected to reduce operating expenses by at least $70 million
annually, a second quarter 1997 pre-tax charge of approximately $185 million and
a reduction of at least $175 million to the company's 1997 capital expenditure
program. Additional actions to further reduce operating expenses will be taken
before the end of 1997.
"Because of lower than anticipated long distance and adjacent market
revenues and the charge to earnings, Citizens' earnings and earnings per share
(with and without the charge) for the 1997 second quarter as compared to the
prior year quarter will decline more than they did in the first quarter of this
year. In order to return to a pattern of increasing earnings in succeeding
quarters, it is necessary to substantially reduce operating expenses and capital
expenditures," said Mr. DeSantis.
Mr. DeSantis explained that the operating expense savings relate to
reductions in workforce and benefits, consolidation of call center operations,
closure of sales offices, reduction of sales and marketing activities and
reconfiguration of the company's network cost structure through new carrier
contracts and network redesign.
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Page 2 of 2
Mr. DeSantis further stated that the second quarter charge to earnings,
like those made by many of Citizens' peer companies, generally relates to the
restructuring and the changing regulatory environment. More specifically, he
explained that the charge pertains to the cost of employee severance and
benefits, lease termination costs, the cost of curtailing sales and marketing
initiatives, the cost of information system and software changes, certain assets
deemed no longer recoverable and the effect of recent regulatory commission
orders.
In addition, Mr. DeSantis stated that $140 million of the $175 million
reduction to the 1997 capital budget impacts the Communications Sector. The
recent Federal Communications Commission orders related to access charge reform
and the Universal Service Fund subsidies have dictated reconsideration of the
company's rural telephone investment program.
Mr. DeSantis said that these and other planned actions will strengthen
the company's operations and improve profitability in succeeding 1997 quarters
and beyond.
Citizens Utilities (NYSE: CZNA, CZNB, CZNPr) provides
telecommunications and public utility services to approximately 1.6 million
customers in 22 states. Citizens Communications operates an integrated
distribution network over which it provides local, long distance, paging,
cellular, network sales and other communications products and services. Citizens
also has investments in Centennial Cellular Corp. (NASDAQ: CYCL) and Hungarian
Telephone and Cable Corp. (ASE: HTC) and owns Electric Lightwave, Inc., a
leading competitive provider of communications services for business and
long-distance carriers in the western United States.
This press release contains forward-looking statements relating to
future expenses, capital expenditures, revenues, charges and earnings. These
statements may differ from actual future results due to, but not limited to, the
actual effects of the restructuring, reduction in capital expenditures and other
actions described herein, changes in the local and overall economy, the nature
and pace of technological change, the number and effectiveness of competitors in
the company's markets, success in marketing and selling expenditures and
efforts, weather conditions, changes in legal and regulatory policy, name
recognition, and the mix of products and services offered in the company's
target markets. Investors may wish to consider these important factors in
evaluating any statements herein.
