INTERMEDIA COMMUNICATIONS INC
8-K, 1999-04-30
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<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):       April 29,1999
                               ----------------


                         INTERMEDIA COMMUNICATIONS INC.
- -------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Delaware                                    59-2913586
   ------------------------------                 --------------------------
   (State or other jurisdiction                        (I.R.S. Employer
   of incorporation or organization)                  Identification No.)


                                    0-20135
                              --------------------
                            (Commission File Number)


3625 Queen Palm Drive, Tampa, Florida                      33619-1309
- ------------------------------------------------------------------------------
(Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code       (813) 829-0011
                                                   --------------------------
<PAGE>
 
Item 5.  Other Events

 On April 27, 1999, Intermedia Communications Inc. (the "Company") issued
the attached press release.

Item 7.  Financial Statements and Exhibits

 Exhibit 99   Press Release, dated April 27, 1999.
<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:  April 29, 1999


                                        INTERMEDIA COMMUNICATIONS INC.
                                        ------------------------------
                                                (Registrant)



                                        By:   /s/ Robert M. Manning
                                           ------------------------------
                                           Name:  Robert M. Manning
                                           Title: Senior Vice President and
                                                  Chief Financial Officer
<PAGE>
 
                                 EXHIBIT INDEX



Exhibit                                                              Page
  No.                      Description                                No.
- --------                   -----------                               ----

 99                    Press Release, dated April 27,
                       1999.

<PAGE>
 
                    Contact:  Curtis Lightburn
                              Vice President, Investor Relations
                              813-829-2408
                              [email protected]
                              --------------------------

                    Media:    Robert Pflieger
                              Golin Harris
                              202-626-1153
                              [email protected]
                              -------------------------


           Intermedia Communications Announces First Quarter Results

          Reports Record Revenue of $205 Million and Increased EBITDA

 Company also announces strategic DSL partnerships with NorthPoint and Rhythms
                          and the filing of DIGEX IPO
                                        
TAMPA, Florida (April 27, 1999) -- Intermedia Communications Inc. (NASDAQ: ICIX)
today announced record revenue of $204.7 million and positive EBITDA (as defined
below) of $15.1 million for the quarter ended March 31, 1999.

Also today, Intermedia announced Digital Subscriber Line (DSL) partnerships with
Rhythms NetConnections and NorthPoint Communications.  Intermedia currently has
the nation's largest DSL deployment in shared tenant services buildings.
Combined with the deployments planned by Rhythms and NorthPoint, the Company
will have access to the largest DSL deployment in the United States.

Also today, Intermedia's Web Hosting subsidiary, DIGEX, Incorporated, filed its
Form S-1 registration statement with the SEC for an offering of its Class A
Common Stock.

"In the first quarter, Intermedia secured additional funding to execute on the
next phase of our growth strategy," said Robert M. Manning, Intermedia's Chief
Financial Officer.  "In addition, we have taken steps to create a public market
for the stock of our DIGEX subsidiary and begin to fund DIGEX's expansion in the
rapidly growing Web Hosting marketplace."

SUMMARY OF FIRST QUARTER 1999 RESULTS

Revenue for the first quarter of $204.7 million was up 50 percent over first
quarter 1998 revenue of $136.8 million.  Competitive Local and Enhanced Data and
Internet services continued their strong growth.  Enhanced Data and Internet
services revenue was up 64 percent versus first quarter 1998, and was up 10
percent sequentially.  Competitive Local services revenue was up 57 percent
versus first quarter 1998, and was up 11 percent sequentially.
<PAGE>

April 27, 1999
First Quarter 1999 Results
Page 2
 
EBITDA for the first quarter was positive $15.1 million, a $24.9 million
improvement versus an EBITDA loss of $9.8 million for the first quarter of 1998,
and an 11 percent improvement sequentially.

"In the first quarter, we began to realize significant benefits based on our
continued focus on the execution of our core Integrated Communications Provider
strategy," said David C. Ruberg, Intermedia's Chairman, President, and Chief
Executive Officer.  "By selling multiple services to our customers, we have
greatly increased customer loyalty and also generated substantial operational
synergies.  We believe the benefits of our strategy will become larger, and more
obvious externally, over the course of the year."

REVENUE ANALYSIS

Enhanced Data and Internet Services

Enhanced Data and Internet continued its growth.  Revenue for the first quarter
was $60.1 million, an increase of 64 percent over first quarter 1998 and an
increase of 10 percent over fourth quarter 1998.

Sequential growth was seen in all data product offerings.  Internet grew 11
percent sequentially. Enterprise data services, principally frame relay and ATM,
recurring revenue grew 12 percent sequentially.  Frame relay nodes in service
increased sequentially by 3,903, from 35,268 at the end of the fourth quarter to
39,171, up 72 percent compared to first quarter 1998 and up 11 percent
sequentially.

"In the quarter, we were particularly pleased by the improving revenue growth at
DIGEX, where Web Hosting revenue was up 25 percent sequentially," said Ruberg.
"Our overall strength in Enhanced Data and Internet services is expected to be a
core component of our growth."

Competitive Local Services

Competitive Local services continued its growth.  Revenue for the quarter was
$53.0 million, an increase of 57 percent over first quarter 1998 and an increase
of 11 percent sequentially.

Access lines in service grew to 376,742, a 71 percent increase versus first
quarter 1998.  At the end of the first quarter, 74 percent of the lines in
service were on-switch.

"Our focus on selling access lines that are on-switch has improved gross
margins, operating efficiency and customer service," said Manning.  "In the
first quarter, we launched our line side local and long distance service, called
Unified Voice(SM), which we believe will increase our ability to provide
integrated services to small and medium sized businesses."



Interexchange Services
<PAGE>

April 27, 1999
First Quarter 1999 Results
Page 3
 
Interexchange revenue was $67.6 million in the first quarter, a 51 percent
increase versus first quarter 1998, and up slightly versus fourth quarter 1998.

Integration Services

Integration Services revenue for the quarter was $24.0 million, an increase of
10 percent  versus first quarter of 1998 and an increase of 2 percent
sequentially.

OUTLOOK

"Overall, the first quarter results were consistent with our expectations," said
Manning.  "Our growth rate has increased, and we believe that the we are on
track to further grow revenues, particularly in the second half of 1999."

"As we continue to scale our business, we improve our ability to add revenue
efficiently over the assets we have deployed," said Manning.  "We are seeing
meaningful improvements in provisioning productivity and customer loyalty.  We
anticipate this will also result in further improvements in network efficiencies
and gross margins.  We have made additional progress in integrating our
acquisitions, and as a result we are seeing improved operating efficiencies in
our core business."

EBITDA consists of earnings before 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 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.

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.  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.



Intermedia Communications 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,
<PAGE>
 
April 27, 1999
First Quarter 1999 Results
Page 4

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 Communications Inc. is headquartered in Tampa,
Florida.

INTERNET USERS: Intermedia news releases, investor contacts and other useful
information are available on Intermedia's website at www.intermedia.com.  To
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.

<PAGE>
 
April 27, 1999
First Quarter 1999 Results
Page 5
                           
                        INTERMEDIA COMMUNICATIONS INC.
                             Financial Highlights
                     (In thousands, except per share data)


<TABLE> 
<CAPTION> 
                                                        Three Months Ended
                                                             March 31,
                                                     --------------------------
                                                         1999          1998
                                                     ------------  ------------
<S>                                                  <C>           <C>
Revenue:
 Local network                                       $    52,982   $    33,677
 Enhanced data                                            60,093        36,537
 Interexchange                                            67,613        44,751
 Integration                                              24,034        21,821
                                                     -----------   -----------
 Total revenue                                           204,722       136,786
 
Expenses:
 Network operations                                       93,908        71,543
 Facilities administration and maintenance                22,636        15,033
 Cost of goods sold                                       15,804        13,690
 Selling, general and administrative                      57,314        46,347
 Depreciation and amortization                            71,611        40,776
 Charge for in-process R&D                                     -        63,000
 Business restructuring and
    integration expenses                                   5,399             -
                                                     -----------   -----------
    Total operating expenses                             266,672       250,389
                                                     -----------   -----------
Loss from operations                                     (61,950)     (113,603)
 
Other income (expense):
 Interest expense                                        (62,178)      (49,301)
 Other income                                              6,558        10,729
                                                     -----------   -----------
 
Net loss                                                (117,570)     (152,175)
Preferred stock dividends & accretions                   (22,483)      (18,594)
                                                     -----------   -----------
Net loss attributable to common
 shareholders                                        $  (140,053)  $  (170,769)
                                                     ===========   ===========
 
Loss per common share /(1)/:
Net loss before charge for in-process
 R&D and business restructuring including
 other income, expenses and preferred
 stock dividends and accretions                           $(2.73)       $(3.05)
Charge for in-process R&D                                      -         (1.78)
Charge for business restructuring                          (0.11)            -
                                                     -----------   -----------
Net loss per common share                                 $(2.84)       $(4.83)
                                                     ===========   ===========
 
Weighted average shares
 outstanding /(1)/                                    49,352,830    35,306,268
 
EBITDA /(2)/                                         $    15,060   $    (9,827)
 
</TABLE>
/(1)/  Share and per share amounts have been restated to reflect the two-for-one
       stock split in June 1998.

/(2)/  EBITDA  consists of earnings before 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 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.
<PAGE>
 
April 27, 1999
First Quarter 1999 Results
Page 6

<TABLE>
<CAPTION>
Other  Data:
                                                March 31,  December 31,
                                                  1999         1998
                                                ---------  ------------
<S>                                             <C>        <C>
Local and Long Distance Services:/(1)/
 Buildings/(2)/                                     4,359         4,342
 Voice switches in operation                           23            23
 Access line equivalents                          376,742       347,584
 Access line equivalents per local switch(3)       13,862         8,102
 
 
Enhanced Data Services:/(1)/
 Data switches in operation                           167           177
 Nodes in service/(4)/                             39,171        35,268
 NNI connections                                      728           680
 
 Employees                                          4,123         3,931
 
</TABLE>

(1)  Amounts reflected in the table are based upon information contained in the
     Company's operating records.
(2)  Includes both on-net direct connections with Intermedia-owned fiber optic
     cable and on-net extended connections with leased circuits.
(3)  Calculated by dividing the number of on-switch access line equivalents by
     the number of switches providing local service.
(4)  Amount represents an individual point of origination and termination of
     data served by the Company's enhanced network.



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