<PAGE>
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): February 24, 1997
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INTERMEDIA COMMUNICATIONS INC.
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(Exact name of registrant as specified in its charter)
Delaware 59-2913586
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(State or other jurisdic- (I.R.S. Employer
tion of incorporation or Identification No.)
organization)
0-20135
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(Commission File Number)
3625 Queen Palm Drive, Tampa, Florida 33619-1309
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (813) 829-0011
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Item 5. Other Events
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On February 24, 1997, Intermedia Communications Inc. (the "Company")
announced that it intends to raise approximately $150 million (subsequently
increased to $200 million) through the private placement of Redeemable
Exchangeable PIK Preferred Stock to support the Company's expanded and
accelerated capital deployment plan. The Company plans to deploy a total of 35
local/long distance voice switches in markets throughout the eastern United
States by the end of 1999 with a total of 15 local/long distance voice switches
being deployed by the end of 1997. The Company had previously announced plans
to deploy 22 such switches by the year 2000. A concurrent expansion and
acceleration in the deployment of enhanced data switches is planned. Further,
the Company plans to open sales offices in six additional cities by the end of
1997, for a total of 29 sales offices.
Item 7. Financial Statements and Exhibits
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Exhibit 20 Press Release, dated February 24, 1997.
<PAGE>
SIGNATURE
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 thereunto duly authorized.
Date: February 27, 1997
INTERMEDIA COMMUNICATIONS INC.
------------------------------
(Registrant)
By: /s/ Robert M. Manning
-----------------------------------------
Name: Robert M. Manning
Title: Senior Vice President and Chief
Financial Officer
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EXHIBIT INDEX
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Exhibit Page
No. Description No.
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20 Press Release, dated February 24, 1997. 5
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Exhibit 20
NEWS RELEASE
[LETTERHEAD OF INTERMEDIA COMMUNICATIONS APPEARS HERE]
INTERMEDIA COMMUNICATIONS 1996 REVENUE INCREASES 168%
TO $103.4 MILLION
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COMPANY ANNOUNCES ACCELERATED STRATEGIC INITIATIVES
TAMPA, FL (February 24, 1997) -- Intermedia Communications Inc.
(Nasdaq/NM:ICIX), a rapidly growing provider of integrated telecommunications
services for business and government customers, today reported record fourth
quarter revenue of $39.1 million, a 285% increase from $10.2 million for the
fourth quarter of 1995. The significant increase in fourth quarter revenue
brought revenue for the year ended December 31, 1996, to a record $103.4
million, an increase of 168% from 1995 revenue of $38.6 million. These results
include the previously announced acquisitions of the telecommunications division
of EMI Communications, Inc. (EMI), completed on June 28, 1998, the assets of
Universal Telecom Technologies (UTT), and the data transport business of
NetSolve, Incorporated (NetSolve), both of which were completed in December
1996. Excluding these acquisitions, the Company posted internally generated
revenue growth of 91% for 1996 compared with 1995.
The Company also announced plans for additional expansion of sales and
operations within its service territory, and the accelerated deployment of local
and long distance switches to a total of 35 switches in service by the end of
1999. This expansion will increase the size of Intermedia's 1997 addressable
market from $13.4 billion to $34.3 billion.
EBITDA (earnings before interest, taxes, depreciation and amortization),
was in line with expectations at $(5.7) million for the fourth quarter compared
with $(0.6) million for the fourth quarter of 1995, and $(14.3) million for the
year compared with $.6 million for 1995.
"The Company's performance in this last quarter and over the past year
reflects our continued ability to deliver high quality services to our customers
and to demonstrate rapid, yet responsible growth with sector-leading
productivity from our employees and network," said David C. Ruberg, Intermedia's
Chairman, Chief Executive Officer and President. "This has been a year of strong
growth in all service categories and a milestone year, with our inauguration of
local exchange services. During the year we invested $125 million in deployment
of switches and
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ICIX Reports 1996, Fourth Quarter Results
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February 24, 1997
network, as well as expansion of our product portfolio. We are particularly
pleased that with the record growth of our business and the significant
investment that has been made, we continued to post improvements in key
productivity measures, including return on invested capital and revenue per
employee."
FOURTH QUARTER HIGHLIGHTS
Transport and enhanced data services revenue increased 425% in the fourth
quarter to $27.5 million compared with $5.2 million for the same quarter last
year. Switched services generated revenue of $9.9 million, a 109% increase from
the year-earlier period, with local exchange service now contributing to this
revenue. Integration services generated revenue of $1.7 million compared with
$173,000 for the fourth quarter of 1995. Intermedia increased its base of
customers to more than 14,0000, an increase over the previous quarter of 13% and
by 41% over the fourth quarter of 1995. Overall, revenue grew by 15%
sequentially over the third quarter of 1996 despite the usual seasonal downturn
in long distance usage. The internally generated sequential revenue growth was
12% over the third quarter of 1996.
During the fourth quarter Intermedia initiated local exchange service
through its switch in Jacksonville, Florida, bringing to four the number of
local/long distance switches brought on line in 1996. The enhanced data network
was expanded during the quarter by 32 switches and 1,315 new frame relay nodes
(customer locations). Intermedia once again exerted its leadership in frame
relay network service with its unique service quality guarantee and competitive
pricing strategy. Intermedia is the fifth largest U.S. frame relay carrier,
though its direct sales territory includes only the Eastern U.S.
Fourth quarter regulatory approvals included CLEC certificates for
Kentucky, Maryland, South Carolina, New York, Illinois, and the District of
Columbia. Interconnection co-carrier agreements were signed during the quarter
with NYNEX for New York and Massachusetts, and Southwestern Bell for its entire
five-state region.
Intermedia's employee base grew during the quarter to 874, a growth of 21%
over the previous quarter, and 205% over the same period in 1995. In particular,
the Company bolstered its sales force in the fourth quarter, bringing to nearly
200 the number of direct commissioned sales people on staff. "Fourth quarter
annualized revenue was approximately $156 million," said Ruberg. "We have always
emphasized building our direct end user sales force and arming them with a full
suite of services to sell, including local, long distance and data services. We
believe this is the key to Intermedia's success in driving what we call
`productive growth.' During the quarter our revenue per employee exceeded
$190,000, and our fourth quarter annualized revenue per dollar of gross
property, plant and equipment was $.65."
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ICIX Reports 1996, Fourth Quarter Results
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February 24, 1997
The acquisitions of the assets of UTT and the transport business of
NetSolve added 1,600 new, targeted customers, network facilities and with UTT,
rapid entry into the St. Louis market.
1996 - YEAR IN REVIEW
"Our top priorities in 1996 were to establish the geographic footprint
into which we would grow and to initiate local exchange service." Ruberg said,
"We set out in 1996 to offer integrated local and long distance services, to
focus on acquiring new customer relationships by leveraging all our service
categories and to strengthen existing relationships by offering high-value
additional services. We were committed to continue our leadership in the frame
relay data networking market by introducing innovative features, and by
extending the network to key international locations."
Intermedia's accomplishments during 1996, and the first two months of 1997,
includes the following:
. Interconnection Agreements - Agreements with BellSouth, GTE, NYNEX,
Southwestern Bell and Sprint.
. CLEC Certification - Intermedia has received CLEC certification 13 states
and the District of Columbia; applications are pending in an additional 26
states.
. Local exchange services - Five DMS500 local/long distance switches are in
service.
. As of December 31, 1996, Intermedia initiated local exchange service on
approximately 7,000 access the equivalents. Additional installations in
early 1997 are accelerating.
. Expansion of frame relay internationally and domestically - Southern New
England Telephone (SNET) to resell Intermedia's service throughout service
territory. Intermedia established international operating agreements for
Columbia, Chile, Costa Rica, Panama and Puerto Rico.
. Key acquisitions - Intermedia acquired the telecommunications division of
EMI Communications, Inc; the data transport business of NetSolve, and the
assets of UTT.
EXPANDED AND ACCELERATED PLAN
"In 1996, we set the stage for the opportunity that we are announcing
today," said Ruberg. "With our EMI acquisition, we created a footprint that
covers a major portion of the U.S. telecom market -- that being the eastern half
of the country. With our end user sales force deployment now in 23 cities, 10
of these added in 1996, we began addressing a larger part of that market.
During 1996 we substantially increased the capacity of our intercity backbone
network. This added
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ICIX Reports 1996, Fourth Quarter Results
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February 24, 1997
capacity is now available to support significant new voice and data traffic,
with minimal additional cost. With this infrastructure now in place and with
the passage of the Telecom Act of 1996 and pro-competitive implementations of
the Act by most states, Intermedia is uniquely positioned to capture market
share in the newly competitive local exchange market. We are therefore
announcing the expansion that commenced with the events of 1996 just described,
prompting an acceleration of our full-service entry into a larger number of the
markets that make up our service territory. This will significantly enlarge the
total market opportunity we will address in the years ahead."
Intermedia plans to deploy a total of 35 local/long distance switches in
markets throughout the Eastern U.S. by the end of 1999 with a total of 15 being
deployed by year-end 1997. The Company had previously announced plans to deploy
22 such switches by 2000. A concurrent expansion and acceleration in the
deployment of enhanced data switches is planned; Intermedia expects to have 150
enhanced data switches in operation in approximately 110 cities by year-end
1998. Further, the Company plans to open sales offices in six additional cities
by the end of 1997, for a total of 29 sales offices.
To support this expanded, accelerated plan, the Company intends to
raise approximately $150 million through the private Issuance of Redeemable
Exchangeable PIK Preferred Stock.
Statements contained in this news release regarding expected revenues
and other planned events are forward-looking statements, subject to
uncertainties and risks, including, but not limited to, the availability of
financing at satisfactory terms, the demand for Intermedia's products and
services, and the ability of the Company to successfully implement its expanded
and accelerated capital deployment plan, each of which may be impacted, among
other things, by economic, competitive or regulatory conditions.
Headquartered in Tampa, Intermedia Communications is a rapidly growing
provider of integrated telecommunications solutions for business, government and
the telecommunications industry. Intermedia is known for its ability to package
integrated telecommunications solutions to meet each customer's specific
requirements. The Company provides voice, data and video services, local and
long-distance voice services; advanced access services in selected cities
throughout the eastern U.S.; and enhanced data services, including frame relay
and Internet access, to business and government customer locations in over 2,200
cities nationwide and internationally - offering seamless, end-to-end service
virtually anywhere in the world. Intermedia can be found on the World Wide Web
at http://www.icix.net.
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ICIX Reports 1996, Fourth Quarter Results
Page 5
February 24, 1997
INTERMEDIA COMMUNICATIONS INC.
Financial Highlights
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31, December 31,
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1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Revenue:
Transport and enhanced data $27,479,263 $ 5,238,563 $ 66,741,879 $ 18,124,175
Switched 9,885,905 4,740,523 31,592,575 18,894,544
Systems integration 1,698,592 172,787 5,062,433 1,611,755
------------ ----------- ------------ ------------
Total Revenue 39,063,760 10,151,873 103,396,887 38,630,574
Expense:
Facilities administration,
maintenance and line cost 32,060,484 5,745,012 81,105,107 22,989,195
Selling general and
administrative 12,725,892 5,056,328 36,609,846 14,992,458
Depreciation and amortization 7,767,146 2,980,315 19,835,686 10,195,871
------------ ----------- ------------ ------------
Total operating expenses 52,553,522 13,781,655 137,550,639 48,177,524
------------ ----------- ------------
Income (loss) from operations (13,489,762) (3,629,782) (34,153,752) (9,546,950)
Interest expense (11,034,513) (5,724,687) (35,213,179) (15,358,684)
Other income 2,967,147 1,612,880 12,168,220 4,156,992
------------ ----------- ------------ ------------
Net loss $(21,557,128) $(7,741,589) $(57,198,711) $(20,748,642)
============ =========== ============ ============
Net loss per share $ (1.33) $ (0.75) $ (4.08) $ (2.07)
============ =========== ============ ============
Weighted average shares
outstanding 16,257,759 10,358,019 11,017,597 10,035,774
EBITDA* $ (5,722,616) $ (649,467) $(14,318,066) $ 648,921
</TABLE>
*Earnings before interest, taxes, depreciation and amortization (EBITDA) is a
measure of operating cash flow.
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ICIX Reports 1996, Fourth Quarter Results
Page 6
February 24, 1997
Statistical Data:
December 31,
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1996 1995
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Transport Services:
Buildings connected (Direct On-Net) 487 380
Route miles 655 504
Fiber optic miles 24,122 17,128
Network cities:
in operation 9 8
under development 1 2
Enhanced Data Services:
Data switches installed 89 30
Frame relay cities 2,266 600
Nodes in service 9,777 2,286
NNI connections 235 47
Local and Long Distance Services:
Voice switches in operation 5 1
Long distance billable minutes 69,118,148 32,912,501
Access line equivalents 7,000 0
Total assets $512,940,377 $216,018,125
Employees 874 287
Stock Price High Low Close
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Fourth Quarter $35.00 $ 21.00 $ 25.75
1996 $38.50 $13.875 $ 25.75
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