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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):
February 3, 2000
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Intermedia Communications, Inc.
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(Exact name of registrant as specified in its charter)
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Delaware 59-2913586
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
0-20135
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(Commission File Number)
3625 Queen Palm Drive
Tampa, FL 33619
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(Address of principal executive offices)
(813) 829-0011
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(Telephone Number)
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ITEM 5. Other Events
On February 3, 2000, a subsidiary of Intermedia Communications, Inc.
(the "Company"), Digex, Incorporated ("Digex"), filed the attached press
release.
ITEM 7. Financial Statements and Exhibits
Exhibit 99 Press Release, dated February 3, 2000.
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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 thereunto duly authorized.
Dated: February 3, 2000
INTERMEDIA COMMUNICATIONS, INC.
(Registrant)
/s/ Robert M. Manning
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Robert M. Manning
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit
No. Description Page
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99 Press release dated February 3, 2000
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Exhibit 99
CONTACTS:
Laura Heinrich Nicole Morodan
Digex, Incorporated MS&L New York
Phone: 301-847-5998 Phone: 212-213-7140
[email protected] [email protected]
DIGEX REPORTS FOURTH QUARTER AND FULL YEAR 1999 RESULTS
FULL YEAR REVENUE INCREASES 164% OVER 1998 TO $60MM
BELTSVILLE, MD, February 3, 2000 - Digex, Incorporated (NASDAQ: DIGX),
a leading Web and application hosting service provider for businesses
worldwide, today announced that revenues for the quarter ending December 31,
1999, grew to $21.7 million from $7.8 million for the same period last year. In
1999, revenues increased to $59.8 million from $22.6 million in 1998. Servers
managed in Digex's data centers increased to 2,311 in fourth quarter 1999 from
1,048 servers in the same period last year.
"Our growth continues to be driven by the needs of enterprises,
dot.coms and application service providers (ASPs) for proven, well-engineered
platforms to quickly bring their e-business to market and to grow rapidly,"
said Mark Shull, president and CEO of Digex. "We believe the increased rate of
adoption signifies the acceptance of the Internet as the platform for business
computing. This is evidenced by the addition of new enterprise clients in the
fourth quarter such as Clorox, Dupont Pharmaceuticals and United Airlines as
well as new dot.coms like Gazelle.com, MyTurn.com and TheSauce.com. In
addition, ASPs such as Celarix and Continuity are delivering their application
services on top of Digex managed hosting platforms and represent an expanded
opportunity for revenue growth."
"The $100 million investment by Microsoft and Compaq to increase our
ability to deploy and manage large numbers of servers for ASPs further
validates Digex's leading position in managed hosting," stated Shull. "We
continue to see strong growth in the e-commerce market, and the clear
beginnings of the ASP based outsourced application model. This is particularly
true for e-commerce related applications such as electronic customer
management, logistics and fulfillment, procurement and finance. Additionally,
we are seeing the promise of Business to Business (B2B) commerce in many
industry segments, even those who have not traditionally relied on new
technologies."
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"The average annualized revenue per customer grew to slightly over
$148,000 in the fourth quarter representing a 152 percent increase in per
customer revenue year over year. This was driven by strong growth among our
existing customer base and the addition of managed solutions for new clients,"
stated Tim Adams, chief financial officer for Digex
Digex increased its installed server base by 318 servers and monthly
revenue per average server increased to $3,354 during the quarter. EBITDA loss
before certain charges was ($12.3) million in the fourth quarter as Digex
continued to add staff and grow its network and hosting infrastructure.
KEY HIGHLIGHTS FOR THE QUARTER INCLUDE:
o Significant growth in the managed hosting customer base with additions
such as Bed, Bath and Beyond, Clorox, Computer Associates, National
Securities, PCH.com and United Airlines. Significant expansion for
existing clients such as American Century, Bluefly.com and
Dealtime.com.
o Major product launches in the High Performance and Availability
product group with the Digex Akamai FreeFlow caching service, designed
to speed content delivery to high-traffic Web sites. As part of the
same product group, Digex was the first provider to offer support for
the Compaq 8500, designed for high powered, high transaction volume
e-business sites.
o Major product launches in the Security product group with the Digex
Security Scan which regularly simulates an external hacker attack on
clients' Web and application servers to probe, detect and correct
security weaknesses and the Digex Security Audit which regularly
assesses clients' servers for changes that might invite security
attacks.
o Launch of app-Link partner program, delivering value services and
program benefits for the ASP community. The program includes
participants such as Continuity, Celarix, Pandesic, Quickarrow, and
Encentris.
o Significant expansion of the Digex e-Link partner program for
Interactive Agencies and System Integrators with the addition of 18
new partners.
o Successful completion of the Y2K remediation program, whereby client
platforms, operating systems and Web software were upgraded to protect
against known Y2K bugs. Remediation was also accomplished for Digex
internal processing, network and monitoring systems. The transition to
year 2000 occurred without incident.
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o Entered into strategic relationship with Computer Associates to use CA
Unicenter TNG for Web site management, software distribution and
inventory control.
EBITDA before certain charges consists of earnings (net loss) before
interest expense, interest and other income, income taxes, deferred
compensation, depreciation, and amortization. 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 also not be construed as a substitute for operating income or a
better measure of liquidity than cash flow from operating activities, which are
determined in accordance with generally accepted accounting principles. This
caption excludes components that are significant in understanding and assessing
the results of operations and cash flows. In addition, EBITDA before certain
charges is not a term defined by generally accepted accounting principles and
as a result EBITDA before certain charges may not be comparable to similarly
titled measures used by other companies. However, the Company believes that
EBITDA before certain charges is relevant and useful information that is often
reported and widely used by analysts, investors and other interested parties in
the Web site and application hosting industry. Accordingly, the Company is
disclosing this information to permit a more comprehensive analysis of the
Company's operating performance, as an additional meaningful measure of
performance and liquidity, and to provide additional information with respect
to the Company's ability to meet future debt service, capital expenditures and
working capital requirements.
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 Digex's
services and the ability of Digex to successfully implement its strategies,
each of which may be impacted, among other things, by economic, competitive or
technological conditions. These and other applicable risks are summarized under
the caption "Risk Factors" in the Company's Prospectus dated January 25, 2000,
and are updated periodically through the filing of reports and registration
statements with the Securities and Exchange Commission.
ABOUT DIGEX
Digex is a leading provider of Web and application hosting services
for some of the world's leading companies that rely on the Internet as a
critical business tool. Digex also offers value-
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added enterprise and professional services, including performance and security
testing, monitoring, reporting, and networking services. Digex customers, from
mainstream corporations to Internet-based businesses, leverage Digex's services
to deploy secure, scalable, high performance business solutions, including
electronic retailing, online banking, online procurement, and customer
self-service applications. Additional information on Digex is available at
http://www.digex.com
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DIGEX, INCORPORATED
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE INFORMATION)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
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December 31, 1999 December 31, 1998 December 31, 1999 December 31, 1998
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(unaudited) (unaudited) (unaudited)
<S> <C> <C> <C> <C>
Revenues $ 21,654 $ 7,772 $ 59,786 $ 22,635
Costs and expenses:
Cost of operations 2,612 2,591 9,656 6,710
Cost of services 7,989 2,632 21,750 7,044
Selling, general and administrative 23,367 4,930 70,213 17,512
Deferred compensation 790 1,299
Depreciation and amortization 10,958 2,028 29,070 8,109
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Total costs and expenses 45,716 12,181 131,988 39,375
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Loss from operations (24,062) (4,409) (72,202) (16,740)
Other income (expense)
Interest expense (482) -- (1,094) --
Interest and other income 2,165 -- 3,458 --
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Net loss before income tax benefit (22,379) (4,409) (69,838) (16,740)
Income tax benefit -- 159 4,839 159
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Net loss $ (22,379) $ (4,250) $ (64,999) $ (16,581)
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Net loss per common share -
basic and diluted(1) $ (0.36) $ (0.09) $ (1.19) $ (0.33)
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Shares used in computing basic and
diluted net loss per share 61,500,000 50,000,000 54,726,027 50,000,000
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EBITDA(2) (12,314) (2,381) (41,833) (8,631)
</TABLE>
(1) Basic and diluted loss per share have been calculated assuming that the
common shares issued in connection with the Company's recapitalization in
April 1999 were outstanding for all periods presented.
(2) EBITDA before certain charges consists of earnings (net loss) before
interest expense, interest and other income, income taxes, deferred
compensation, depreciation and amortization. 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 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 before certain charges 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.
