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Exhibit 99
CONTACT: Curtis Lightburn
Intermedia Investor Relations
Vice President,
Investor Relations
813-829-0011
[email protected]
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Alan Hill
Director, Public Relations
813-829-4409
[email protected]
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INTERMEDIA COMMUNICATIONS ANNOUNCES
SECOND QUARTER RESULTS
NORMALIZED QUARTERLY REVENUE GROWS 20% TO $247 MILLION
TAMPA, FL - AUGUST 1, 2000 - Intermedia Communications Inc. (Nasdaq: ICIX)
today announced revenue of $247.4 million for the quarter ending June 30, 2000.
"Intermedia grew revenue 20 percent on a normalized basis for the second
quarter, despite the fact that revenue and margins were negatively impacted by
adjustments to reciprocal compensation, as well as deteriorating provisioning
performance from BellSouth," said David C. Ruberg, Intermedia's chairman,
president and chief executive officer.
SUMMARY OF SECOND QUARTER 2000 RESULTS
Revenue for the second quarter was $247.4 million. Consolidated EBITDA for the
second quarter was negative $70.9 million, including EBITDA losses of $18.9
million at Digex, as well as the reserves established for prior period
reciprocal compensation revenues and a reduction of in-period reciprocal
compensation revenue.
Intermedia also reduced its debt by approximately $575 million and recently
announced that it has retained Bear Stearns to explore strategic alternatives
for Digex.
"Intermedia has been making moves which are designed to strengthen our position
financially and strategically," said Robert M. Manning, Intermedia's chief
financial officer. "Our primary goal is creating shareholder value. By reducing
debt, we believe we have strengthened the company considerably. We have
sufficient funding to pursue the best growth opportunities in the industry.
And, since it is clear to us that Wall Street is reluctant to value
Intermedia's ownership of Digex, we are exploring alternatives with the primary
intent of creating value. We are also seeking to
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narrow our focus on our core network services business and increase the power
of our partnerships."
In the second quarter, Intermedia created a new revenue stream by entering into
an agreement with Global One, a leading global data networking provider, to
provide complementary network services in the United States.
"Revenue with our strategic partners was up 20 percent sequentially and 151
percent year over year," said Ruberg. "Adding a world class player like Global
One to our already formidable array is proof of the capabilities of Intermedia
and the quality and flexibility of our network."
REVENUE ANALYSIS
Data, Internet and Web Hosting
Data, Internet and Web Hosting services continued its strong growth. Revenue
for the second quarter grew to $129.8 million, up 53 percent from $84.9 million
in the year ago period.
Revenue grew in all categories, and was led by revenue growth at Digex, which
grew 234 percent year-over-year to $42.2 million in the second quarter versus
$12.6 million in the second quarter of 1999. Frame Relay, ATM and Internet
revenue grew strongly year-over-year as a function of increasing demand for
higher bandwidth connections, customer migration to fully managed networks and
rapid increases from Intermedia's strategic partner channel.
Intermedia increased its Frame and ATM switches by 6 in the quarter to 199 and
increased its Network to Network Data Interconnections (NNIs) by 76 to 1,035,
by far the most of any provider in the country.
Local Access and Voice
Local Access and Voice revenues for the second quarter were $80.7 million.
In the second quarter, Intermedia increased access lines in service by 39,657,
bringing the total in service at the end of the quarter to 605,770. All of the
additions were on-switch. At the end of the second quarter, 91 percent of lines
in service were on-switch, up from 89 percent at the end of the first quarter
and up from 77 percent one year ago.
Intermedia increased its on-net building count to 4,461. Intermedia's Advanced
Building Networks (ABN) unit increased its portfolio to 670 buildings and total
square footage to approximately 200 million. Intermedia has deployed DSLAMs in
290 of these buildings in 17 markets and Internet penetration and revenue are
growing rapidly.
Systems Integration
Systems Integration revenue for the quarter was $36.9 million, up from $31.4
million in the year ago period but down from $38.6 million in the first
quarter.
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EBITDA consists of earnings before interest and other income, deferred
compensation, income taxes, depreciation, amortization and charges for
in-process R & D and business restructuring, integration and other 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 income (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 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, 1999, 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 data, voice 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 a tier one Internet service provider (ISP) to businesses and is
consistently rated at or near the top of all ISPs for network performance and
customer service by industry publications such as Boardwatch magazine.
Intermedia is headquartered in Tampa, Florida and can be found on the World
Wide Web at www.intermedia.com.
INTERNET USERS: Intermedia news releases, investor contacts and other useful
information are available on Intermedia's Web site 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 the Web site, 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 Six Months Ended
June 30, June 30,
------------ ------------ ------------ ------------
2000 1999 2000 1999
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Local Access and Voice $ 80,720 $ 101,575 $ 189,264 $ 203,832
Data, Internet and Web Hosting 129,801 84,904 244,328 163,335
Integration services 36,902 31,410 75,525 55,444
------------ ------------ ------------ ------------
Total revenues 247,423 217,889 509,117 422,611
Expenses:
Network operations 92,586 93,996 182,755 187,904
Facilities administration and maintenance 43,469 23,171 81,484 45,807
Cost of goods sold 28,726 19,501 55,415 35,305
Selling, general and administrative 153,537 71,022 245,184 128,315
Depreciation and amortization 117,195 74,130 206,505 145,741
Deferred compensation 1,047 80 4,711 101
Business restructuring, integration and other
charges 6,731 3,439 9,362 8,838
------------ ------------ ------------ ------------
Total operating expenses 443,291 285,339 785,416 552,011
------------ ------------ ------------ ------------
Loss from operations (195,868) (67,450) (276,299) (129,400)
Other income (expense):
Interest expense (64,347) (69,224) (137,280) (131,402)
Gain on sale of Digex stock -- -- 864,321 --
Interest and other income 17,007 13,749 30,826 20,307
------------ ------------ ------------ ------------
Net income (loss) before minority interest,
income taxes, and extraordinary item (243,208) (122,925) 481,568 (240,495)
Provision for income taxes (2,193) -- (25,616) --
------------ ------------ ------------ ------------
Net income (loss) before minority interest and
extraordinary item (245,401) (122,925) 455,952 (240,495)
Minority interest in net loss of subsidiary 13,082 -- 21,381 --
------------ ------------ ------------ ------------
Net income (loss) before extraordinary item (232,319) (122,925) 477,333 (240,495)
Extraordinary gain on early retirement of debt,
net of tax 19,861 -- 19,861 --
------------ ------------ ------------ ------------
Net income (loss) (212,458) (122,925) 497,194 (240,495)
Preferred stock dividends and accretions (31,747) (22,965) (57,694) (45,448)
------------ ------------ ------------ ------------
Net income (loss) attributable to common
stockholders $ (244,205) $ (145,890) $ 439,500 $ (285,943)
============ ============ ============ ============
Net income (loss) per common share:
Net (loss) attributable to common stockholders
before restructuring, gain on sale of Digex
stock, and extraordinary item $ (4.82) $ (2.85) $ (8.22) $ (5.58)
Gain on sale of Digex stock -- -- 16.32
Charge for business restructuring, integration
and other charges $ (0.13) $ (0.07) $ (0.18) $ (0.18)
------------ ------------ ------------ ------------
Basic net income (loss) per common share
before extraordinary item $ (4.94) $ (2.92) $ 7.92 $ (5.76)
Extraordinary item $ 0.37 $ 0.37
------------ ------------ ------------ ------------
Basic net income (loss) per common share $ (4.57) $ (2.92) $ 8.30 $ (5.76)
Diluted net income (loss) per common share
before extraordinary item (4.94) (2.92) 5.63 (5.76)
Extraordinary item $ 0.37 $ 0.25
------------ ------------ ------------ ------------
Diluted net income (loss) per common share (4.57) (2.92) 5.88 (5.76)
Shares used in computing basic and diluted
Net income (loss) per share:
Basic 53,403,956 50,009,473 52,974,683 49,682,966
Diluted 53,403,956 50,009,473 79,346,428 49,682,966
EBITDA(1) $ (70,895) $ 10,199 $ (55,721) $ 25,280
</TABLE>
Operating Data:
<TABLE>
<CAPTION>
June 30, 2000 March 31, 2000
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<S> <C> <C>
Data, Internet and Web Hosting Assets(2)
Web hosting servers 3,647 2,911
Data switches in operation 199 193
NNI connections 1,035 959
Access and Voice Assets(2)
Buildings(3) 4,461 4,437
Voice switches in operation 29 29
Access line equivalents 605,770 566,113
Employees 5,673 5,433
</TABLE>
(1) EBITDA before certain charges consists of earnings (net loss before
minority interest) before interest expense, interest and other income,
income taxes, depreciation, amortization, charges for in-process R&D
and business restructuring and integration expenses, and deferred
compensation. EBITDA before certain charges does not represent funds
available for management's discretionary use and is not intended to
represent cash flow from operations. EBITDA before certain charges
should not be considered as an alternative to net income (loss) as an
indicator of the Company's operating performance or to cash flows as a
measure of liquidity. In addition, EBITDA before certain charges is not
a term defined by generally accepted accounting principles, and, as a
result, the measure of EBITDA before certain charges 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.
