<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
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Date of Report (Date of
earliest event reported): November 3, 1999
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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 jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
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
On November 1, 1999, Intermedia Communications Inc. (the "Company") issued
the attached press release.
Item 7. Financial Statements and Exhibits
Exhibit 99 Press Release, dated November 1, 1999.
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: November 3, 1999
INTERMEDIA COMMUNICATIONS INC.
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(Registrant)
By: /s/ Robert M. Manning
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Name: Robert M. Manning
Title: Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit Page
No. Description No.
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99 Press Release, dated November 1, 1999
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Exhibit 99
Investor Contact: Curtis Lightburn
Vice President, Investor Relations
Phone: 813-829-2408 or 888-288-7658
[email protected]
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Media Contact: Greg French
Golin Harris
Phone: 202-626-1156
[email protected]
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Intermedia Communications Announces Third Quarter Results
Revenue Growth Accelerates as Quarterly Revenue Jumps to $234.7 Million
EBITDA Increases 21% Sequentially to $12.3 Million
TAMPA, FL - November 1, 1999 - Intermedia Communications Inc. (NASDAQ: ICIX)
today announced record revenue of $234.7 million for the quarter ended September
30, 1999, an increase of 8 percent sequentially. Consolidated EBITDA increased
21 percent sequentially to $12.3 million.
"Intermedia posted stellar results in the third quarter," said David C. Ruberg,
Intermedia's president, chairman, and chief executive officer. "We have
believed for a long time that we have assembled an unmatched set of assets to
capitalize on the growth opportunities of the 21st century, and it is rewarding
to see that we have already begun to see the financial results. Our strength in
data, Internet, and Web hosting is complemented by our strength in voice
services, which enables us to meet the full array of customer needs today as
well as take advantage of, and drive, technological convergence."
SUMMARY OF THIRD QUARTER 1999 RESULTS
Revenue for the third quarter of $234.7 million was up 8 percent sequentially
over second quarter 1999 revenue of $217.9 million.
Consolidated EBITDA (as defined below) for the third quarter was positive $12.3
million, inclusive of negative EBITDA of $13.5 million at Digex.
"In the third quarter, we saw revenue growth accelerate to 35 percent on an
annualized basis versus 28 percent in the second quarter," said Robert M.
Manning, Intermedia's chief financial officer. "We are driving this growth, and
the increasingly positive financial performance in our core business, through
our focus on high growth, high margin services and substantially improved
operating efficiencies."
On August 4th, Intermedia's majority-owned Digex (NASDAQ: DIGX) subsidiary
completed an initial public offering (IPO) of its common stock. Gross proceeds
of $195.5 million were raised by issuing 18.7 percent of Digex to the public,
with Intermedia retaining 81.3 percent ownership of Digex.
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REVENUE ANALYSIS
Enhanced Data and Internet Services
Enhanced Data and Internet services continued its strong growth. Revenue for
the third quarter of 1999 was $75.7 million, an increase of 59 percent over
third quarter 1998 and an increase of 14 percent sequentially.
Revenue grew sequentially in all categories, and was led by revenue growth at
Digex, which grew 28 percent sequentially to $16.1 million in the third quarter
of 1999 versus $12.6 million in the second quarter of 1999, and was up 158
percent over the third quarter of 1998. Frame relay and ATM revenue also grew
at double digit rates sequentially, as a function of increases in managed
services as well as nodes in service.
"Intermedia has demonstrated leadership in the data and Internet arena," said
Manning. "Digex is the leader in the managed Web hosting and applications
outsourcing arena. Intermedia is one of the top 3 providers of nationwide frame
relay service, and our high speed, fiber optic Internet network has been rated
number one in key areas such as download time, customer satisfaction and
security by Boardwatch magazine, Telechoice and Network Computing magazine."
Competitive Local Services
Competitive Local services continued its growth. Revenue for the third quarter
was $61.3 million, an increase of 40 percent over third quarter of 1998 and an
increase of 11 percent sequentially.
Intermedia added 42,258 access lines in the quarter. 3,642 resale lines were
pruned, bringing the total access lines in service at the end of the period to
446,291, a 43 percent increase versus third quarter 1998. At the end of the
third quarter, 85 percent of the lines in service were on-switch.
"Our industry leading line side product, unifiedvoice.netSM, has been eagerly
embraced by the marketplace," said Manning. "The benefits of this product are
starting to materialize in our quarterly results and we expect further increases
going forward."
Interexchange Services
Interexchange revenue was $59.9 million in the third quarter, a 16 percent
decrease versus third quarter 1998, and down 7 percent sequentially.
"We have de-emphasized stand-alone long distance," said Manning. "This, in
combination with industry pricing declines and our own focus on high value
customers has lead to decreased top line long distance revenue results but
improved margins."
Integration Services
Integration Services revenue for the third quarter of 1999 was $37.7 million, an
increase of 28 percent versus third quarter of 1998 and an increase of 20
percent sequentially.
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OUTLOOK
"Overall, the third quarter results exceeded analyst expectations," said
Manning. "The results speak for themselves and we expect further improvements
going forward."
"We believe our emphasis on data and Internet services will enable us to grow at
rates which are substantially better than market averages," said Manning. "Our
assets, focus and efforts are resulting in successful execution of our business
plan."
EBITDA consists of earnings (net loss before minority interest) before interest
expense, interest and other income, income taxes, depreciation, amortization and
charges for in-process R & D and business restructuring, integration and other
charges. EBITDA does not represent funds available for management's
discretionary use and is not intended to represent cash flow from operations.
EBITDA should not be considered as an alternative to net loss as an indicator of
the Company's operating performance or to cash flows as a measure of liquidity.
In addition, EBITDA is not a term defined by generally accepted accounting
principles, and, as a result, the measure of EBITDA presented herein may not be
comparable to similarly titled measures used by other companies.
Forward Looking Statements
Statements contained in this news release regarding expected financial results
and other planned events are forward-looking statements, subject to
uncertainties and risks, including, but not limited to, the demand for
Intermedia's services, the ability of Intermedia to complete its restructuring
and integration program, and the ability of the Company to successfully
implement its strategies, each of which may be impacted, among other things, by
economic, competitive or regulatory conditions and the ability of Intermedia to
successfully complete its Y2K remediation project. These and other applicable
risks are summarized under the caption "Risk Factors" in the Company's Form 10-K
Annual Report for its fiscal year ended December 31, 1998, and are updated
periodically through the filing of reports and registration statements with the
Securities and Exchange Commission.
About Intermedia
Intermedia provides integrated solutions to business and government customers.
These solutions include voice and data, local and long distance, and advanced
network access services in major U.S. markets. Intermedia's enhanced data
portfolio, including frame relay networking, ATM, and a full range of business
Internet solutions and web hosting services, offers seamless end-to-end service
virtually anywhere in the world.
Intermedia is one of the top 5 Internet services providers (ISPs) to businesses
and is consistently rated at or near the top of all ISPs for network performance
and customer services by such industry publications as Keynote and Boardwatch.
Intermedia is headquartered in Tampa, Florida. Intermedia can be found on the
World Wide Web at www.intermedia.com.
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INTERNET USERS: Intermedia news releases, investor contacts and other useful
information are available on Intermedia's website at www.intermedia.com. To
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receive news releases by e-mail or to request that information be mailed to you,
please visit the Investor Relations section of our website, and go to the
"Request Information" link.
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INTERMEDIA COMMUNICATIONS INC.
Financial Highlights
(Unaudited)
(In thousands, except share and other data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
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1999 1998 1999 1998
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Revenues:
<S> <C> <C> <C> <C>
Local network services $ 61,324 $ 43,778 $ 169,781 $ 115,648
Enhanced data services 75,688 477,585 202,456 126,790
Interexchange services 59,910 71,552 191,852 199,049
Integration services 37,744 29,438 93,188 77,882
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Total revenues 234,668 192,353 657,277 519,369
Expenses:
Network operations 96,113 83,778 284,017 243,337
Facilities administration and maintenance 26,871 74,935 72,678 48,503
Cost of goods sold 23,850 19,014 59,155 49,923
Selling, general and administrative 75,580 59,482 203,996 162,231
Depreciation and amortization 80,951 54,574 226,692 145,565
Charge-off of purchased in process R & D - - - 63,000
Business restructuring, integration
and other charges 5,551 1,791 14,349 51,872
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Total operating expenses 308,876 233,574 860,887 764,431
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Loss from operations (74,210) (41,221) (203,610) (245,062)
Other income (expense):
Interest expense (70,106) (53,942) (201,508) (151,101)
Interest and other income 8,941 9,310 29,248 26,078
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Net loss before minority interest (135,375) (85,853) (375,870) (370,085)
Minority interest in net loss of subsidiary 2,608 - 2,608 -
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Net loss (132,767) (85,853) (373,262) (370,085)
Preferred stock dividends and accretions (23,338) (30,647) (68,786) (68,118)
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Net loss attributable to common stockholders $ (156,105) $ (116,500) $ (442,048) $ (438,203)
================== ============= ============= =============
Loss per common share:
Net loss attributable to common stockholders
before charge for in-process R&D and
restructuring $ (2.97) $ (2.44) $ (8.54) $ (7.71)
Charge for in-process R&D - - - (1.50)
Charge for business restructuring, integration
and other charges (0.11) (0.04) (0.29) (1.24)
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Basic and diluted net loss per common share $ (3.08) $ (2.48) $ (8.83) $ (10.45)
================== ============= ============= =============
Weighted average shares outstanding basic
and diluted 50,739,106 47,041,191 50,038,881 41,948,399
EBITDA (1) $ 12,252 $ 15,144 $ 37,431 $ 15,375
</TABLE>
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Other Data:
<TABLE>
<CAPTION>
September 30, 1999 June 30, 1999
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Local and Long Distance Services (2)
<S> <C> <C>
Buildings (3) 4,390 4,374
Voice switches in operation 27 25
Access line equivalents 446,291 407,675
Enhanced Data Services (2)
Data switches in operation 176 173
Nodes in service (5) 46,083 42,741
NNI connections 827 793
Employees 4,575 4,252
</TABLE>
(1) EBITDA consists of earnings (net loss before minority interest) before
interest expense, interest and other income, income taxes, depreciation,
amortization and charges for in-process R&D and business restructuring and
integration expenses. EBITDA does not represent funds available for
management's descretionary use and is not intended to represent cash flow
from operations. EBITDA should not be considered as an alternative to net
loss as an indicator of the Company's operating performance or to cash
flows as a measure of liquidity. In addition, EBITDA is not a term defined
by generally accepted accounting principles, and, as a result, the measure
of EBITDA presented herein may not be comparable to similarly titled
measures used by other companies.
(2) Amounts reflected in the table are based upon information contained in the
Company's operating records.
(3) Includes both on-net direct connections with intermedia-owned fiber optic
cable and on-net extended connections with leased circuits.
(4) Calculated by dividing the number of on-switch access line equivalents by
the number of switches providing local service.
(5) Amount represents an individual point of origination and termination of data
served by the Company's enhanced network.
