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 Commission File Number:
earliest event reported):
MARCH 23, 2000 1-10210
eGLOBE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3486421
(State or other jurisdiction of (IRS Employer Identification
incorporation) Number)
1250 24th Street, NW, Suite 725
Washington, D.C. 20037
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(202) 822-8981
(Former name or former address, if changed since last report)
NA
<PAGE>
eGLOBE, INC.
--------------------------------------------------------------------------------
ITEM 5. OTHER EVENTS
eGlobe, Inc. (the "Company") hereby announces its financial results for the
month ended April 30, 2000.
Effective March 23, 2000, eGlobe merged with Trans Global Communications, Inc.
("Trans Global") utilizing the pooling of interests method of accounting.
Accordingly, the results of operations for the months ended April 30, 2000 and
1999 have been reported on a combined basis.
Revenue for the month ended April 30, 2000 of $12.9 million decreased $1.6
million from $14.5 million for the same period in 1999. This decrease occurred
primarily due to Trans Global's decision to shift away from being a purely
arbitrage resale business to a direct route and IP structure business in order
to gain the advantage of better gross profit margins in the direct route IP
business. This shift to direct route and IP structure business resulted in a
decrease of approximately $3.7 million which was offset by revenues of
approximately $2.1 million from the acquisitions of iGlobe, Inc. ("iGlobe"),
Oasis Reservations Services, Inc. and Coast International, Inc ("Coast") in the
third and fourth quarters of 1999.
Gross margin for the month ended April 30, 2000 was $1.4 million or 11.3% of
revenue as compared to $0.5 million or 3.7% of revenue for the same period in
1999. Network Services margins improved to 5.2% from 1.9% and Enhanced Services
improved to 30.2% from 14.7% for the month ended April 30, 2000 and April 30,
1999, respectively. The addition of Customer Care and Retail segments of the
business was due to acquisitions that occurred in the third and fourth quarters
of 1999 and resulted in gross margins of 6.2% and 62.8%, respectively. The
improvement in Network Services was due to higher margins on Trans Global
revenues and the acquisition of iGlobe in August 1999. The improvement in
Enhanced Services was in part due to the acquisition of Coast in December 1999
as well as more cost effective routing of telecommunications traffic.
Selling, General and Administrative expenses totaled $3.2 million for the month
ended April 30, 2000 compared to $2.0 million for the same period in 1999 for an
increase of $1.2 million. This increase was primarily due to the increase in
personnel and facilities costs resulting from acquisitions.
Non-cash operating expenses for the month ended April 30, 2000 were $2.8 million
as compared to $0.9 million for the same period in 1999. Depreciation and
amortization expense increased $1.5 million primarily due to $0.8 million
related to amortization of goodwill and other intangibles associated with the
acquisitions completed since April 1999 and to depreciation of $0.7 million
related to the increase in fixed assets at the acquired companies and additions
at Trans Global. Deferred compensation expense related to stock options of $0.7
million was recorded for the month ended April 30, 2000. There was no deferred
compensation
<PAGE>
expense related to acquisitions for the month ended April 30, 2000 as compared
to $0.3 million for the same period in 1999.
Other expense, net, for the month ended April 30, 2000 increased $383,000 from
the same period in 1999. This increase was primarily due to higher interest
expenses related to higher debt balances, loss related to the Company's
investment in i1.com, and lower interest income as compared to last year.
The current cash operating loss was $1.7 million for the month ended April 30,
2000 as compared to $1.5 million for the same period in 1999. The Company
calculates its current operations profit/loss by subtracting non-cash expenses
from its total operating cost and expenses. Non-cash expenses totaled $2.8
million and $0.9 million for the months ended April 30, 2000 and 1999,
respectively, and include amortization of goodwill and other intangibles,
depreciation and certain compensation expense. Total operating loss, including
non-cash expenses, was $4.5 million and $2.4 million for the months ended April
30, 2000 and 1999, respectively.
<PAGE>
eGLOBE, INC.
CONSOLIDATED BALANCE SHEETS
AS OF APRIL 30, 2000 (UNAUDITED) AND DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
APRIL 30, 2000 DECEMBER 31,
(UNAUDITED) 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT:
Cash and cash equivalents $ 6,345,000 $ 4,309,000
Accounts receivable, net 24,084,000 15,142,000
Other current assets 3,048,000 3,629,000
-------------------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 33,477,000 23,080,000
PROPERTY AND EQUIPMENT, NET 39,722,000 42,078,000
GOODWILL, NET 22,689,000 24,904,000
OTHER INTANGIBLE ASSETS, NET 19,416,000 21,674,000
OTHER ASSETS 3,698,000 2,059,000
-------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $119,002,000 $113,795,000
-------------------------------------------------------------------------------------------------------------
LIABILITIES, MINORITY INTEREST, REDEEMABLE STOCK AND STOCKHOLDERS' EQUITY
CURRENT:
Accounts payable and accrued expenses $ 59,641,000 $ 52,550,000
Income taxes payable 597,000 560,000
Notes payable and current maturities of long-term debt 12,418,000 12,544,000
Deferred revenue 1,154,000 1,331,000
Other liabilities 1,644,000 797,000
TOTAL CURRENT LIABILITIES 75,454,000 67,782,000
ACCOUNTS PAYABLE - LONG-TERM - 1,000,000
LONG-TERM DEBT, NET OF CURRENT MATURITIES 13,297,000 13,495,000
-------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 88,751,000 82,277,000
-------------------------------------------------------------------------------------------------------------
MINORITY INTEREST 2,694,000 2,800,000
REDEEMABLE STOCK 23,065,000 700,000
STOCKHOLDERS' EQUITY 4,492,000 28,018,000
-------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES, MINORITY INTEREST, REDEEMABLE
STOCK AND STOCKHOLDERS' EQUITY $119,002,000 $113,795,000
-------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
eGLOBE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
ONE MONTH ENDED APRIL 30, 2000 AND 1999 (UNAUDITED)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ONE MONTH ONE MONTH
ENDED ENDED
APRIL 30, 2000 APRIL 30, 1999
-------------------------------------------------------------------------------------------------------------
<S> <C> <C>
REVENUE $12,949,000 $ 14,482,000
COST OF REVENUE 11,489,000 13,949,000
-------------------------------------------------------------------------------------------------------------
GROSS PROFIT 1,460,000 533,000
-------------------------------------------------------------------------------------------------------------
COSTS AND EXPENSES:
Selling, general and administrative 3,182,000 1,966,000
Non-cash operating expenses 2,806,000 921,000
-------------------------------------------------------------------------------------------------------------
TOTAL COSTS AND EXPENSES 5,988,000 2,887,000
-------------------------------------------------------------------------------------------------------------
LOSS FROM OPERATIONS (4,528,000) (2,354,000)
-------------------------------------------------------------------------------------------------------------
OTHER EXPENSE (573,000) (190,000)
-------------------------------------------------------------------------------------------------------------
NET LOSS (5,101,000) (2,544,000)
-------------------------------------------------------------------------------------------------------------
PREFERRED STOCK DIVIDENDS (5,831,000) (372,000)
-------------------------------------------------------------------------------------------------------------
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $(10,932,000) $(2,916,000)
-------------------------------------------------------------------------------------------------------------
NET LOSS PER SHARE (BASIC AND DILUTED) $ (0.13) $ (0.05)
-------------------------------------------------------------------------------------------------------------
WEIGHTED AVERAGE SHARES OUTSTANDING 81,337,248 59,794,694
-------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of 15(d) 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.
eGlobe, Inc.
(Registrant)
Date: August 7, 2000 By /S/ Anne Haas
-----------------------------------
Anne Haas
Chief Accounting Officer, Treasurer
