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 15, 1994
COMSAT Corporation
(Exact name of Registrant as specified in Charter)
District of Columbia 1-4929 52-0781863
(State or other juris- (Commission (IRS Employer
diction of incorporation File Number) Identification
Number)
6560 Rock Spring Drive, Bethesda, MD 20817
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (301) 214-3000
Not applicable.
(Former name or former address, if changed since last report).
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Item 5. Other Events
Attached to this report as Exhibit 20, and incorporated by
reference in this item, is a Press Release of the Corporation,
distributed on April 15, 1994, describing the Corporation's
financial results for the quarter ending March 31, 1994.
Item 7. Financial Statements and Exhibits
(c) Exhibits (listed according to the number assigned in
Item 601 of Regulation S-K).
Exhibit No. Description
20 Press Release dated April 15, 1994.
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<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 hereunto duly authorized.
COMSAT Corporation
By: /s/ Allen E. Flower
-------------------------
Allen E. Flower
Controller
Date: April 18, 1994
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EXHIBIT INDEX
Exhibit No. Description Page
20 Press Release dated April 15, 1994. 5
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EXHIBIT 20
NEWS RELEASE FROM: COMSAT Corporation
6560 Rock Spring Drive
Bethesda, MD 20817
PHONE: 301 214 3658
FAX: 301 214 7130
DATE: April 15, 1994
COMSAT REPORTS FIRST QUARTER 1994 RESULTS
AND DECLARES DIVIDEND
BETHESDA, MD - COMSAT Corporation (NYSE:CQ) today reported record
first quarter 1994 revenues of $169.5 million, up two percent
over the $166.3 million reported for the same period a year
earlier. Net income was $18.3 million, or 45 cents per share,
compared to the same numbers for the first quarter of 1993 --
before the cumulative effect for the change in tax accounting.
"We are committed to achieving our goal of double-digit
growth in earnings for the year," said Bruce L. Crockett,
President and CEO. "We are continuing to look for additional
opportunities to enhance revenues and have implemented cost-
containment programs."
COMSAT Video Enterprises, Inc. (CVE) saw revenues grow 20
percent, from $21.7 million a year ago to $26.1 million in the
first quarter of this year. Operating income was $2.2 million,
slightly less than a year ago, based on depreciation costs and
severe winter weather along the East Coast and the California
earthquake that hindered the rate of installations and sales. The
total number of installed and backlog hotel rooms for the On
Command Video service reached 293,000 in the first quarter,
compared to 111,000 for the same period last year.
Revenues in the International Communications segment, which
includes COMSAT World Systems (CWS) and COMSAT International
Ventures (CIV), were $63.9 million, or about $1 million less than
a year ago. An increase in traffic was offset by rate cuts in
long-term contracts. Operating income was down 21 percent to
$22.0 million -- largely due to a depreciation increase of 14
percent, resulting from the launch of the first INTELSAT VII
satellite in the fourth quarter of 1993.
COMSAT Mobile Communications (CMC) revenues fell by 12
percent to $44 million from $50.0 million a year earlier. The
drop was due primarily to a decrease in traffic from a year
earlier when world events such as the crisis in
(more)
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COMSAT -- Q1'94 RESULTS -- page two 4/15/94
Somalia result in record system usage, and also was offset by
price cuts and conversions to digital service. Operating income
was off 23 percent, $13.0 million to $10.0 million, from the same
period a year ago due to lower revenues and additional
depreciation.
Crockett said rate reductions in both CWS and CMC "were
factored into our financial planning and we expect improved
results for the remainder of the year." He said the company's
belief that lower rates will stimulate demand has already begun
to show up in World System's traffic.
COMSAT Technology Services (CTS) revenues increased 21
percent to $24.3 million from $20.1 million a year earlier.
Operating income increased $2.1 million from the first quarter of
1993. The CTS merger with Radiation Systems, Inc. of Sterling,
VA, will be completed in the second quarter of 1994. The new
business unit will be called COMSAT RSI.
Other corporate revenues were up $1.6 million, primarily due
to the success of the company's NBA Denver Nuggets, which showed
paid attendance, ticket sales and net gate receipts sharply
higher than a year earlier, when bond redemption costs were
incurred.
The Board of Directors declared a regular quarterly dividend
of 18.5 cents per share, payable June 13, 1994, to shareholders
of record May 13, 1994. This is the 95th consecutive quarterly
dividend declared by the corporation.
COMSAT Corporation (NYSE:CQ) is an international
communications, information and entertainment-distribution
services company. It provides voice, video and data services to
customers worldwide by fixed and mobile technologies and is the
largest owner and user of the global INTELSAT and Inmarsat
communications satellite networks. COMSAT Corporation also
furnishes satellite systems integration, wireless networks and
technical consulting; offers on-demand entertainment and
information services to the hospitality industry, and owns the
NBA Denver Nuggets.
# # #
COMSAT CONTACTS:
- ----------------
Mike Troiano Investor Relations (301) 214-3244
Joe Tomkowicz News Media (301) 214-3658
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COMSAT CORPORATION
CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
(in millions except per share amounts)
<TABLE>
<CAPTION>
For The Three Months Ended
--------------------------
March 31, March 31,
1994 1993
-------- --------
<S> <C> <C>
REVENUES $169.5 $166.3
------ ------
OPERATING EXPENSES:
Cost of Services 88.4 87.1
Depreciation and Amortization 39.3 33.5
Research and Development 2.6 3.2
General and Administrative 5.4 5.3
------ ------
Total Operating Expenses 135.7 129.1
------ ------
OPERATING INCOME 33.8 37.2
OTHER INCOME (EXPENSE), NET 1.1 (1.2)
INTEREST INCOME 0.2 0.2
INTEREST COST (11.8) (11.9)
INTEREST CAPITALIZED 5.7 5.1
------ ------
INCOME BEFORE TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE 29.0 29.4
INCOME TAX EXPENSE (10.7) (11.1)
------ ------
INCOME BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 18.3 18.3
CUMULATIVE EFFECT OF ACCOUNTING
CHANGE FOR INCOME TAXES - 1.3
------ ------
NET INCOME $18.3 $19.6
====== ======
EARNINGS PER COMMON SHARE:
Before cumulativ effect of accounting
change $0.45 $0.45
Cumulative effect of accounting change - 0.03
------- -------
Net income $0.45 $0.48
======= =======
AVERAGE SHARES 41.0 40.3
Note: Average share and per share amounts have been restated for
a two-for-one stock split in 1993.
</TABLE>
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COMSAT CORPORATION
OPERATING RESULTS BY BUSINESS SEGMENT (UNAUDITED)
(in millions)
<TABLE>
<CAPTION>
1993 1994
-------------------------------- -----
QTR 1 QTR 2 QTR 3 QTR 4 TOTAL QTR 1
-----------------------------------------
<S> <C> <C> <C> <C> <C> <C>
INTERNATIONAL COMMUNICATIONS $64.9 $63.5 $61.7 $59.8 $249.9 $63.9
MOBILE COMMUNICATIONS 50.0 47.2 47.3 45.5 190.0 44.0
VIDEO ENTERPRISES 21.7 23.1 26.1 24.9 95.8 26.1
TECHNOLOGY SERVICES 20.1 19.7 18.7 29.8 88.3 24.3
ELIMINATIONS AND OTHER 9.6 0.6 (1.3) 7.5 16.4 11.2
------------------------------------------
TOTAL REVENUES $166.3 $154.1 $152.5 $167.5 $640.4 $169.5
====== ====== ====== ====== ====== ======
OPERATING INCOME (LOSS)
INTERNATIONAL COMMUNICATIONS $27.9 $25.1 $22.4 $13.6 $89.0 $22.0
MOBILE COMMUNICATIONS 13.0 11.6 12.4 11.1 48.1 10.0
VIDEO ENTERPRISES (1) 2.3 2.6 3.6 3.2 11.7 2.2
TECHNOLOGY SERVICES (1.2) 0.2 0.4 1.3 0.7 0.9
OTHER (1) (4.8) (2.5) (2.1) (2.0) (11.4) (1.3)
------------------------------------------
TOTAL OPERATING INCOME $37.2 $37.0 $36.7 $27.2 $138.1 $33.8
====== ===== ===== ===== ====== =====
</TABLE>
(1) 1993 operating income results for Video Enterprises and Other
have been restated for a change in the method of allocation
division overhead costs.
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COMSAT CORPORATION
CONDENSED BALANCE SHEETS (UNAUDITED)
(in millions)
<TABLE>
<CAPTION>
March 31, December 31,
1994 1993
--------- ----------
<S> <C> <C>
CURRENT ASSETS:
RECEIVABLES $148.4 $143.3
OTHER CURRENT ASSETS 42.0 35.2
-------- --------
TOTAL CURRENT ASSETS 190.4 178.5
-------- --------
PROPERTY IN SERVICE, NET 952.2 968.9
PROPERTY UNDER CONSTRUCTION 381.8 339.2
OTHER ASSETS 185.1 165.9
-------- --------
TOTAL ASSETS $1,709.5 $1,652.5
======== ========
CURRENT LIABILITIES:
CURRENT NOTES PAYABLE $154.4 $118.1
ACCOUNTS PAYABLE AND ACCRUED
LIABILITIES 77.9 97.3
OTHER CURRENT LIABILITIES 35.8 62.4
-------- --------
TOTAL CURRENT LIABILITIES 268.1 277.8
-------- --------
LONG-TERM DEBT 437.6 402.4
OTHER NONCURRENT LIABILITIES 287.3 271.5
MINORITY INTEREST 23.2 21.4
EQUITY 693.3 679.4
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS'
EQUITY $1,709.5 $1,652.5
======== ========
</TABLE>
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COMSAT CORPORATION
CONDENSED CASH FLOW STATEMENTS (UNAUDITED)
(in millions)
<TABLE>
<CAPTION>
For The Three Months Ended
--------------------------
March 31, March 31,
1994 1993
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $18.3 $19.6
Adjustment for Noncash Expenses -
Depreciation and Amortization 39.3 33.5
Changes in Operating Assets and
Liabilities (23.3) 8.2
Other (6.1) (4.5)
----- -----
Net Cash provided by Operating
Activities 28.2 56.8
----- -----
CASH FLOWS FOR INVESTING ACTIVITIES:
Purchase of Property and Equipment (85.3) (44.5)
Decrease in INTELSAT Ownership 6.6 9.7
Other (14.0) 3.0
----- -----
Net Cash Used in Investing Activities (92.7) (31.8)
----- -----
CASH FLOWS FOR FINANCING ACTIVITIES:
Dividends Paid (7.4) (7.3)
Net Borrowings (Repayments) 76.8 (15.0)
Other 2.8 2.7
----- -----
Net Cash Provided by (Used for)
Financing Activities 72.2 (19.6)
----- -----
NET INCREASE IN CASH AND CASH
EQUIVALENTS 7.7 5.4
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 8.8 3.9
----- -----
CASH AND CASH EQUIVALENTS,
END OF PERIOD $16.5 $9.3
===== =====
</TABLE>
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