COMPANY: FIRSTCOM CORPORATION
TICKER: FCLX
EXCHANGE: NASDAQ SMALL CAP MARKET
FORM TYPE: 425
DOCUMENT DATE: AUGUST 15, 2000
FILING DATE: AUGUST 15, 2000
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: FirstCom Corporation
Commission File No.: 001-14107
For Further Information:
Investors: Media:
Leonardo Santiago Jennifer Gery
Brainerd Communicators Brainerd Communicators
212-986-6667 212-986-6667
[email protected] [email protected]
FIRSTCOM CORPORATION ANNOUNCES RECORD 2000
SECOND QUARTER AND SIX MONTHS REVENUES;
Merger with AT&T Latin America on Track
Coral Gables, FL (August 15, 2000) - FirstCom Corporation (Nasdaq: FCLX), an
emerging facilities-based broadband communications services provider with fiber
optic networks in Chile, Peru and Colombia, today announced record revenues for
the second quarter and six months ended June 30, 2000.
Total revenues generated in the second quarter 2000 were $14.3 million, an
increase of 46% from $9.8 million generated in the second quarter of 1999.
Internet/data revenues almost doubled in the second quarter of 2000 to $6.4
million, as compared to $3.7 million in the prior year quarter. Long distance
revenues increased 56% to approximately $8.0 million, compared to $6.1 million
in the second quarter of 1999. The Company reported a net loss in the second
quarter of 2000 of $14.5 million, or ($0.46) per share, compared to a net loss
of $9.9 million, or ($0.50) per share, in the second quarter of 1999. Weighted
average shares outstanding were 31,563,569 and 19,806,468, respectively, in the
2000 and 1999 quarters.
For the first six months of 2000, total revenues rose 44% to $26.1 million,
compared to $18.1 million in the first half of 1999. Internet and data revenues
in the first half of 2000 rose 95% to $11.5 million, compared to $5.9 million in
the prior year period. Long
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distance revenues increased 20% to $14.6 million, compared to $12.2 million
during the comparable 1999 period.
The Company reported a net loss for the first 6 months of 2000 of $32.4 million
or ($1.06) per share, as compared to a net loss of $17.0 million, or ($0.88) per
share for the comparable quarter last year. Weighted average shares outstanding
were 30,612,248 and 19,461,011, respectively, in the 2000 and 1999 periods.
The Company's EBITDA (earnings before interest, taxes, depreciation and
amortization) loss for the six months ended June 30, 2000 was $13.8 million, as
compared to $4.2 million for the six months ended June 30, 1999. This increase
was primarily due to $6.4 million of merger-related expenses that included
severance, accounting and legal costs. Approximately $5.2 million of those
expenses relate to non-cash severance costs attributable to the acceleration of
unvested stock options for certain former employees.
Geographically, long distance growth in revenues grew sequentially from the
first quarter of 2000 to the second quarter of 2000 in Chile by 9% and in Peru
by 49%. The Company experienced strong sequential quarter growth in the delivery
of Internet and data services as well, reporting a 48% increase in Chile and a
55% increase in Peru.
FirstCom will convene a Special Shareholders' Meeting in New York on Monday,
August 28th to approve the merger with AT&T Latin America. If approved, the
Class A common stock shares of AT&T Latin America will begin trading on Nasdaq
on Tuesday, August 29, 2000 under the stock symbol "ATTL." FirstCom's shares
will cease to be traded on that date.
In a separate release issued today, FirstCom announced that it has received
regulatory approval to provide fixed-line telephony services in Lima, Peru.
FirstCom expects to begin service in the fourth quarter of this year, when the
interconnection points with Telefonica del Peru's network are expected to be
operational. FirstCom Peru has a signed contract with the Ministry of
Transportation and Communications for the rights to operate fixed telephony for
20 years.
Mr. Patricio E. Northland, Chairman, President and Chief Executive Officer, and,
after the merger, the Chairman, President and Chief Executive Officer of AT&T
Latin America, commented, "We are continuing to increase our customer base and
strengthen our presence in the three countries we currently serve as we prepare
for the completion of our merger with AT&T Latin America. During the quarter, we
significantly expanded our sales organization as we execute our plan build out
our organization infrastructure throughout the region. Once we complete the
merger, AT&T Latin America will combine FirstCom's existing operations in Chile,
Colombia and Peru with operations in Brazil and Argentina, two very attractive
growth markets. These regions will strategically enhance our growing fiber optic
network for broadband services.
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"Our accomplishments during the second quarter were many. We added 1,102
internet and data customers during the quarter and experienced a 35.0% increase
in the number of buildings connected in our network from the first quarter of
2000. At the end of the second quarter, our facilities-based network boasted
more than 2,666 route kilometers, an increase of 33.4% since the beginning of
the year."
Mr. Northland continued, "Yesterday's announcement of receiving regulatory
approval to provide fixed-line telephone services in Lima is indicative of the
support we are receiving in the region and the increasing trend toward the
opening of telecommunications markets to competition. We expect to begin service
during the fourth quarter."
About FirstCom Corporation
FirstCom Corporation operates as a publicly traded (NASDAQ: FCLX) competitive
local exchange carrier in four major metropolitan business centers in Chile,
Colombia and Peru. With annual revenues in 1999 of $38 million and approximately
650 employees at year-end, FirstCom owns and operates a technologically
advanced, fiber optic IP/ATM backbone-network and provides a wide range of
integrated communications services.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of
1995: The foregoing statements involve known and unknown risks and uncertainties
that may cause FirstCom's actual results or outcomes to be materially different
from those anticipated and discussed in this press release. Except for
historical information contained in this press release, the matters discussed
contain forward-looking statements that involve risks and uncertainties,
including but not limited to economic, competitive, governmental and
technological factors detailed in the Company's filings with the Securities and
Exchange Commission, which readers are urged to read carefully in assessing the
forward-looking statements contained herein.
- Tables to Follow -
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FirstCom Corporation
Selected Operating Statistics
<TABLE>
<CAPTION>
Chile Peru Colombia Corporate Total
----- ---- -------- --------- -----
<S> <C> <C> <C> <C>
NETWORK INSTALLATION
Route Kilometers - metropolitan areas 343 1,346 977 2,666
Route Kilometers - domestic - - - -
Fiber Kilometers - metropolitan areas 5,761 33,165 19,551 58,477
Fiber Kilometers - domestic - - - -
Buildings Connected 295 1,009 902 2,206
Ports Sold 1,610 1,131 2,056 4,797
Data & Dedicated Internet Customers 1,089 1,053 422 2,564
Employees 314 318 196 18 846
</TABLE>
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FIRSTCOM CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
6/30/00 12/31/99
----------- ---------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents .............................................. $ 16,778 $ 12,986
Restricted cash ........................................................ 97 645
Restricted investments ................................................. 10,410 20,440
Accounts receivable, net ............................................... 14,223 11,041
Prepaid expenses and other current assets .............................. 5,928 2,775
--------- ---------
Total current assets ................................................... 47,436 47,887
Property, plant, and equipment, net .................................... 108,125 92,469
Intangible assets, net ................................................. 16,799 17,704
Deferred financing costs and other assets .............................. 13,661 14,050
--------- ---------
Total assets ........................................................... $ 186,021 $ 172,110
========= =========
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities:
Short-term bank debt ................................................... $ 10,663 $ 55
Vendor financing, current .............................................. 1,358 814
Current maturities of long-term debt ................................... 638 50
Lease obligations, current ............................................. 30 70
Accounts payable ....................................................... 12,694 12,653
Accrued interest ....................................................... 3,688 3,716
Other accrued expenses ................................................. 2,213 5,334
Deferred income taxes .................................................. 302 302
Other current liabilities .............................................. 2,452 1,220
--------- ---------
Total current liabilities .............................................. 34,038 24,214
Senior notes, net ...................................................... 133,692 133,197
Long-term bank debt .................................................... - 2,008
Vendor financing ....................................................... 5,760 4,050
Lease obligations, less current portion ................................ 133 142
Deferred income taxes .................................................. 2,134 2,228
Other Liabilities ...................................................... 5,019 239
--------- ---------
Total liabilities ...................................................... 180,776 166,078
Minority interest ...................................................... 2,925 3,012
Redeemable Preferred Stock, $.001 par value, authorized
10,000,000 shares, issued and outstanding 1,448,885 and 1,345,507 shares
as of June 30, 2000 and December 31, 1999,
respectively ........................................................... 12,527 11,720
STOCKHOLDERS' DEFICIT
Common stock, $.001 par value, authorized
50,000,000 shares, issued and outstanding
31,762,195 and 26,858,526 shares as of June 30, 2000 and December 31,
1999, respectively ..................................................... 32 27
Additional paid in capital ............................................. 91,557 68,476
Warrants ............................................................... 26,737 26,737
Accumulated deficit .................................................... (128,296) (95,057)
Cumulative translation adjustments ..................................... (237) (238)
--------- ---------
(10,207) (55)
Shareholder loans ...................................................... - (8,645)
--------- ---------
Total stockholders' deficit ................................... (10,207) (8,700)
--------- ---------
Total liabilities and stockholders' deficit ............... .... $ 186,021 $ 172,110
========= =========
</TABLE>
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FIRSTCOM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS OF US DOLLARS, EXCEPT SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30, THREE MONTHS ENDED JUNE 30
------------------------------ ------------------------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Long Distance ............................ $ 14,610 $ 12,166 $ 7,960 $ 6,141
Internet and data ........................ 11,485 5,920 6,386 3,664
------------ ------------ ------------ ------------
26,095 18,086 14,346 9,805
Operating expenses:
Cost of revenues: .......................... 11,941 11,785 6,632 5,757
Selling, general and administrative ........ 21,445 10,385 11,390 6,040
Non-cash compensation and
Consulting expenses ....................... 115 152 58 70
Depreciation and amortization .............. 6,261 2,703 3,325 1,811
Merger expense ............................. 6,443 -- 306 --
------------ ------------ ------------ ------------
46,205 25,025 21,711 13,678
Loss from operations ....................... (20,110) (6,939) (7,365) (3,873)
Interest expense ........................... (11,731) (10,720) (5,877) (6,216)
Interest income ............................ 502 1,367 110 566
Other income/(expense), net ................ (1,081) (435) (1,351) (57)
------------ ------------ ------------ ------------
Net loss before income taxes and minority
interest expense ......................... ($ 32,420) ($ 16,727) ($ 14,483) ($ 9,580)
Income taxes ............................... (143) (252) (126) (252)
------------ ------------ ------------ ------------
Net loss before minority interest .......... ($ 32,563) ($ 16,979) ($ 14,609) ($ 9,832)
Minority Interest .......................... 133 (62) 133 (62)
------------ ------------ ------------ ------------
Net Loss ................................... ($ 32,430) ($ 17,041) ($ 14,476) ($ 9,894)
============ ============ ============ ============
Net basic and diluted loss per share ....... ($ 1.06) ($ 0.88) ($ 0.46) ($ 0.50)
============ ============ ============ ============
Weighted average common shares outstanding . 30,612,248 19,461,011 31,563,569 19,806,468
============ ============ ============ ============
</TABLE>
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FIRSTCOM CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS OF US DOLLARS)
(UNAUDITED)
SIX MONTHS ENDED JUNE 30,
-----------------------
2000 1999
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss .......................................... ($32,430) ($17,041)
Adjustments to reconcile net loss to net cash used
in operating activities:
Depreciation and amortization expense ............ 6,261 2,703
Amortization of deferred financing costs and
original issue discounts ......................... 886 934
Accretion of discount on restricted investments .. (723) (995)
Capitalized interest related to network
construction ..................................... (260) (1,532)
Deferred financing cost .......................... 697 --
Bad Debt Expense ................................. 711
Minority Interest expense ........................ 62
Non-cash compensation and consulting expense ..... 5,212 --
Changes in operating assets and liabilities:
Accounts receivable ............................. (3,185) (2,551)
Prepaid expenses and other current assets ....... (3,151) (990)
Intangible Assets ............................... 904 --
Other assets .................................... (6) (142)
Accounts payable and accrued expenses ........... (3,104) 3,666
Other liabilities ............................... 5,925 1,366
-------- --------
Net cash used in operating activities ............. (22,263) (14,520)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of telecommunications network ........... (28,578) (18,390)
Increase(decrease)in restricted cash ............. (548) 21,433
Acquisition of Teleductgos, net .................. -- (4,936)
-------- --------
Net cash used in investing activities ............. (29,126) (1,893)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Use of Restricted Investment ..................... 10,031 10,500
Repayment of Shareholder Loans ................... 8,645 --
Net proceeds from vendor financing ............... 2,449 557
Exercise of stock options ........................ 23,087 4,501
Payments under leasing obligations ............... (40) (83)
Convertible preferred stock issue-net ............ 807 9,600
Net change in bank debt and promissory notes ..... 10,202 (3,569)
-------- --------
Net cash provided by financing activities ......... 55,181 21,506
-------- --------
Net increase in cash and cash
equivalents ....................................... 3,792 5,093
-------- --------
Cash and cash equivalents at beginning of year .... 12,986 8,892
-------- --------
Cash and cash equivalents at end of period ........ $ 16,778 $ 13,985
======== ========
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In connection with the FirstCom/AT&T Latin America merger, FirstCom has filed a
definitive proxy statement and AT&T Latin America has filed a registration
statement on Form S-4. We urge investors and security holders to read the
definitive proxy statement and registration statement before they make a
decision concerning the merger. Security holders may obtain a free copy of those
documents and other documents filed by FirstCom Corporation at the SEC's web
site at www.sec.gov. In addition, documents filed with the SEC by FirstCom may
also be obtained from FirstCom Corporation by directing such request to FirstCom
Corporation, 220 Alhambra Circle, Coral Gables, Florida 33134.
The members of the board of directors of FirstCom Corporation are Patricio E.
Northland, George Cargill, Andrew Hulsh and David Kleinman. As of the date
hereof, there are no other "participants in the solicitation," within the
meaning of Rule 14a-12 under the Securities Exchange Act of 1934, as amended.
Information concerning the directors is set forth in the definitive proxy
statement filed with the SEC.
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