SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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) MARCH 22, 2000
CENTENNIAL COMMUNICATIONS CORP.
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-19603 06-1242753
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
1305 Campus Parkway
NEPTUNE, NEW JERSEY 07753
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (732) 919-1000
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS
In a press release issued March 22, 2000, Centennial Communications
Corp., a Delaware corporation ("Centennial"), announced its earnings for the
fiscal quarter ended February 29, 2000. A copy of the press release issued by
Centennial is attached hereto as Exhibit 99.1 and is incorporated by reference
herein in its entirety.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits.
99.1 Press release issued by Centennial on March 22, 2000
2
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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.
CENTENNIAL COMMUNICATIONS CORP.
By: /S/ PETER W. CHEHAYL
Name: Peter W. Chehayl
Title: Senior Vice President, Treasurer and
Chief Financial Officer
Date: March 22, 2000
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EXHIBIT INDEX
Exhibits
No. Description
99.1 Press release issued by Centennial on March 22, 2000
4
CENTENNIAL
COMMUNICATIONS
For further information, please contact:
Peter W. Chehayl
Chief Financial Officer
Centennial Communications Corp.
1305 Campus Parkway
Neptune, NJ 07753
(732) 919-1000 ext. 379
CENTENNIAL COMMUNICATIONS CORP. ANNOUNCES
RECORD THIRD QUARTER RESULTS
FOR IMMEDIATE RELEASE
NEPTUNE, NJ - MARCH 22, 2000 (NASDAQ: CYCL) Centennial Communications Corp.
("Centennial" or "the Company") announced record results for revenues and
earnings for the quarter ended February 29, 2000. Consolidated revenues grew 30%
from the same quarter last year to $127.6 million, and earnings before interest,
taxes, depreciation, amortization and recapitalization costs ("adjusted EBITDA")
increased 9% from the same quarter last year to $53.3 million.
For the nine months ended February 29, 2000 compared to the same period in the
prior year, revenues and adjusted EBITDA increased 40% and 31%, respectively.
Diluted earnings per share for the nine months were $.10.
The Company's wireless subscribers at February 29, 2000 were 585,500, compared
to 426,700 on the same date last year, an increase of 37%. Domestic cellular
subscribers increased by 53,200 during the quarter compared to an increase of
23,400 during the same quarter last year. Puerto Rico wireless subscribers
increased 7,200 during the quarter compared to an increase of 18,700 during the
same quarter last year.
"The subscriber growth in Domestic Cellular was tremendous," said Michael J.
Small, president and chief executive officer. "Centennial also created the
largest single-technology wireless footprint in the Caribbean when we announced
a transaction to enter the Dominican Republic."
In January 2000, Centennial acquired a 70% interest in All America Cables and
Radio Inc. in the Dominican Republic. The remaining 30% interest is held by
local partner, Abraham Selman. AACR is an international long distance provider
that also holds a 30MHz PCS license, a Local Multipoint Distribution System
(LMDS) license and a certificate to provide a broad range of telecommunications
services in the Dominican Republic. The Dominican Republic is one of Latin
America's fastest growing economies and has a population of 8.9 million. The
purchase price was $25 million, subject to adjustment, of which $14 million has
been paid to date and $11 million will be paid upon completion of due diligence.
In the event that we are not satisfied with the results of our due diligence, we
are not obligated to pay the remaining $11 million and we would not own the long
distance and undersea cable businesses, but would continue to own the PCS
license, the LMDS license and the certificate to provide a broad range of
telecommunications services in the Dominican Republic.
On January 11, 2000, the Company entered into a letter of intent to acquire the
cable television assets of Pegasus Communications for $170 million in cash
subject to certain closing conditions. Pegasus' cable systems serve various
communities in the western region of Puerto Rico, passing 170,000 homes with
their 123 route-miles of fiber optic and 1,268 route-miles of coaxial cable. The
Pegasus cable system has approximately 55,000 subscribers.
On March 10, 2000, Centennial announced the purchase of an international gateway
switch located in Miami, Florida from Worldport Communications. The Company
expects to connect this switch with its network in Puerto Rico utilizing
capacity it owns on Americas II undersea fiber optic cable. This switch will
reduce the Caribbean operations' cost of delivering calls to the United States.
On February 29, 2000, Centennial Communications completed an amendment and $200
million expansion of its bank facility to finance the announced transactions. A
charge of $2.5 million was recorded to Puerto Rico's general and administrative
expense as a result of the amendment to the bank facility.
For the quarter, domestic operations revenues were $76.4 million and adjusted
EBITDA was $33.1 million, up 23% and 6% respectively from the same quarter last
year. The increases are due to subscriber growth and strong growth in roaming
revenue. EBITDA was negatively impacted by the sales and marketing expenses
resulting from record net internal subscriber additions of 47,000.
Also for the quarter, Puerto Rico revenues were $51.2 million and adjusted
EBITDA was $20.2 million, up 43% and 15% respectively from the same quarter last
year. CLEC revenues for the quarter reached $9.9 million from $5.1 million in
the same quarter last year. In November, the Company received a letter from the
Puerto Rico Telephone Company disputing amounts owed for ISP traffic that
terminated on Centennial's network. Centennial believes that this money is due
under a valid tariff. Pending a resolution of this matter, the Company has
increased its reserve for bad debt.
Centennial is one of the largest independent wireless telecommunications service
providers in the United States, Puerto Rico and the Dominican Republic with
approximately 17.4 million Net Pops. Centennial's domestic Rural Cellular
operation has 6.1 million Net Pops and serves over 416,500 customers. Centennial
de Puerto Rico, is a fully integrated provider of communications services in
Puerto Rico, utilizing a PCS license that covers 3.9 million Pops in Puerto Rico
and the U.S. Virgin Islands and a Competitive Local Exchange Carrier license to
operate in Puerto Rico. In addition, the Company now owns 70% of a PCS license
in the Dominican Republic representing approximately 6.2 million Net Pops, and
holds minority shares representing approximately 1.2 million Net Pops in U.S.
cellular operations controlled and managed by other operators.
Welsh, Carson, Anderson & Stowe (WCAS) and an affiliate of The Blackstone Group
are controlling shareholders of Centennial. WCAS is a private investment firm
based in New York and founded in 1979. WCAS currently manages over $8 billion in
private equity capital and focuses primarily on the information services and
healthcare industries. The Blackstone Group is a New York based private
investment bank whose current corporate investment vehicle, Blackstone Capital
Partners III Merchant Banking Fund, LP, has approximately $3.8 billion in
committed capital.
"Safe Harbor" Statement Under the Private Securities Litigation Reform Act 1995:
Information in this release that involves Centennial's expectations, beliefs,
hopes, plans, intentions or strategies regarding the future are forward-looking
statements that involve risks and uncertainties. All forward-looking statements
included in this release are based upon information available to Centennial as
of the date of the release, and we assume no obligation to update any such
forward-looking statement. These statements are not guarantees of future
performance, and actual results could differ materially from our current
expectations.
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CENTENNIAL CELLULAR CORP.
STATISTICS
February 29, 2000
($000's, except per subscriber data)
Three Months Ended Nine Months Ended
Feb-00 Feb-99 Feb-00 Feb-99
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<S> <C> <C> <C> <C>
DOMESTIC
Subscribers 416,500 309,300 416,500 309,300
Net Gain - Subscribers 53,200 23,400 95,900 56,600
Revenue per Average Customer $64 $68 $68 $69
Roaming Revenue $27,293 $21,717 $83,905 $59,596
Penetration 6.9% 5.2% 6.9% 5.2%
Monthly Churn 1.8% 2.1% 1.9% 1.9%
Monthly MOU's per Customer 120 100 116 107
Cost to Acquire per Activation $248 $281 $273 $297
Capital Additions $9,455 $6,389 $33,435 $22,981
PUERTO RICO
Wireless Revenue $41,338 $30,764 $118,184 $76,093
Wireline Revenue $9,903 $5,085 $27,112 $11,518
Wireless Subscribers 169,000 117,400 169,000 117,400
Net Gain - Subscribers 7,200 18,700 35,500 48,600
Revenue per Average Wireless Customer $84 $95 $86 $91
Penetration 4.3% 3.0% 4.3% 3.0%
Monthly Churn 4.2% 3.3% 3.8% 3.5%
Monthly MOU's per Wireless Customer 512 461 481 433
Capital Additions $28,245 $21,372 $66,744 $45,277
Fiber Route Miles 391 314 391 314
Access Lines 15,337 6,410 15,337 6,410
REVENUES
Consolidated $127,621 $97,993 $368,423 $262,591
Domestic $76,380 $62,144 $223,127 $174,980
Puerto Rico $51,241 $35,849 $145,296 $87,611
ADJUSTED EBITDA (1)
Consolidated $53,347 $48,778 $171,299 $130,349
Domestic $33,138 $31,254 $110,024 $91,521
Puerto Rico $20,209 $17,524 $61,275 $38,828
LIQUIDITY
Total Debt Less Cash Equivalents $1,470,353 $1,372,000 $1,470,353 $1,372,000
(1) Adjusted EBITDA for the three and nine months ended February 1999 excludes
one time charges associated with the recapitalization.
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