SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K/A
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of February , 1996
----------------------------------------------------------------
GST Telecommunications, Inc.
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(Translation of Registrant's Name Into English)
999 West Hastings Street
Suite 1030
Vancouver, British Columbia
CANADA V6C 2W2
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(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F).
Form 20-F /X/ Form 40-F / /
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also hereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes / / No /X/
<PAGE>
Province of QUARTERLY REPORT
British Columbia
BRITISH COLUMBIA SECURITIES COMMISSION FORM 61
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INSTRUCTIONS
This report is to be filed by Exchange Issuers within 60 days of the end of
their first, second and third fiscal quarters and within 140 days of the end of
their fourth fiscal quarter. Three schedules (typed) are to be attached to this
report as follows:
SCHEDULE A: FINANCIAL INFORMATION
Financial information prepared in accordance with generally accepted accounting
principles for the fiscal year-to-date, with comparative information for the
corresponding period of the preceding fiscal year. This financial information
should consist of the following:
For the first, second and third fiscal quarters:
An interim financial report presented in accordance with Section 1750 of the
C.I.C.A. Handbook. This should include a summary income statement (or a
statement of deferred costs) and a statement of changes in financial position. A
summary balance sheet is also to be provided.
For the fourth fiscal quarter (year end):
Annual audited financial statements.
SCHEDULE B: SUPPLEMENTARY INFORMATION
The supplementary information set out below is to be provided when not included
in Schedule A.
1. For the current fiscal year-to-date:
Breakdown, by major category, of those expenditures and costs which are
included in the deferred costs, exploration and development expenses, cost
of sales or general and administrative expenses set out in Schedule A.
State the aggregate amount of expenditures made to parties not at arm's
length from the issuer.
2. For the quarter under review:
(a) Summary of securities issued during the period, including date of
issue, type of security (common shares, convertible debentures, etc.),
type of issue (private placement, public offering, exercise of
warrants, etc.), number, price, total proceeds, type of consideration
(cash, property, etc.), and commission paid.
(b) Summary of options granted, including date, number, name of optionee,
exercise price and expiry date.
3.As at the end of the quarter:
(a) Particulars of authorized capital and summary of shares issued and
outstanding.
(b) Summary of options, warrants and convertible securities outstanding,
including number or amount, exercise or conversion price and expiry
dates.
(c) Total number of shares in escrow or subject to a pooling agreement.
(d) List of directors.
SCHEDULE C: MANAGEMENT DISCUSSION
Review of operations in the quarter under review and up to the date of this
report, including brief details of any significant event or transaction which
occurred during the period. The following list can be used as a guide but is not
exhaustive;
Acquisition or abandonment of resource properties, acquisition of fixed
assets, financings and use of proceeds, management changes, material
contracts, material expenditures, transactions with related parties, legal
proceedings, contingent liabilities, default under debt or other
contractual obligations, special resolutions passed by shareholders.
Specifically, the managment discussion must include:
(a) disclosure of and reasons for any material differences in the actual
use of proceeds from the previous disclosure by the issuer regarding
its intended use of proceeds; and
(b) a brief summary of the investor relations activites undertaken by or
on behalf of the issuer during the quarter and disclosure of the
matiral terms of any investor relation arrangements or contracts
entered into by the issuer during the quarter.
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ISSUER DETAILS ISSUER TELEPHONE NO. FOR QUARTER DATE OF REPORT
NAME OF ISSUER ENDED Y/M/D
GST Telecommunications, Inc. (360) 254-4700 95/12/31 96/02/09
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ISSUER'S ADDRESS PROVINCE POSTAL CODE
4317 NE Thurston Way Vancouver, WA 98662
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CONTACT PERSON CONTACT'S POSITION TELEPHONE NO.
Robert H. Hanson Chief Financial Officier (307) 527-6048
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CERTIFICATE
The three schedules required to complete this Quarterly Report are attached and
the disclosure contained therein has been approved by the Board of Directors. A
copy of this Quarterly Report will be provided to any shareholder who requests
it.
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DIRECTOR'S SIGNATURE PRINT FULL NAME DATE SIGNED
Y/M/D
/s/ Robert H. Hanson Robert Hanson 96/02/13
DIRECTOR'S SIGNATURE PRINT FULL NAME DATE SIGNED
Y/M/D
/s/ W. Gordon Blankstein W. Gordon Blankstein 96/02/12
<PAGE>
GST TELECOMMUNICATIONS, INC.
Consolidated Balance Sheets
(stated in U.S. dollars)
December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
December 31 December 31
1995 1994
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<S> <C> <C>
ASSETS
Current Assets:
Cash and Cash equivalents $ 164,757,454 3,601,769
Accounts Receivable 3,977,817 1,909,927
Notes Receivable 587,937 5,179,678
Marketable Securities 652,968 983,151
Inventory 601,401 520,605
Prepaid Expense 741,462 430,567
- ---------------------------------------------------------------------------------------------------------------
171,319,039 12,625,697
Notes Receivable 376,048 301,503
Investment in Joint Ventures 2,631,043 3,443,717
Other Investments 0 100,984
Property and Equipment, Net 43,438,602 10,524,036
Other Assets, Net 20,161,770 6,132,411
Deferred Financing Costs, Net 9,050,122 185,390
- ---------------------------------------------------------------------------------------------------------------
$ 246,976,624 33,313,738
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable and Accrued Liabilities $ 12,075,505 2,370,629
Short Term Payable 933,195 0
Deferred Revenue 289,891 133,965
- ---------------------------------------------------------------------------------------------------------------
13,298,591 2,504,594
Deferred Income Taxes 0 25,746
Long Term Debt 201,623,356 5,042,686
Non-controlling Interest in Subsidiaries 3,103,980 3,316,610
Shareholders' Equity
Share Capital 50,849,840 27,824,373
Committment to Issue Shares 1,494,051 0
Deficit 23,393,194 5,400,271
--------------------------------------------------------------------------------------------------------
28,950,697 22,424,102
--------------------------------------------------------------------------------------------------------
$ 246,976,624 33,313,738
===============================================================================================================
</TABLE>
Approved by the Board of Directors:
/s/ Robert H. Hanson Director
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/s/ W. Gordon Blankstein Director
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<PAGE>
GST TELECOMMUNICATIONS, INC.
Consolidated Statement of Operations and Deficit
(stated in U.S. dollars)
For the three months ended December 31, 1995
(with comparatives for the three months ended December 31, 1994)
(Unaudited)
<TABLE>
<CAPTION>
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December 31 December 31
1995 1994
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<S> <C> <C>
Revenues:
Telecommunication Services $ 4,534,185 117,255
Product 1,984,877 2,108,063
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6,519,062 2,225,318
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Cost of Goods Sold/Services:
Telecommunication Services 4,376,145 192,315
Product 1,521,273 877,655
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5,897,418 1,069,970
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Gross Margin 621,644 1,155,348
Operating Expenses
Audit and Legal 553,501 142,744
General,Selling and Administration 3,146,111 961,396
Marketing,Travel and Promotion 1,165,585 311,300
Research and Development 282,691 243,051
- ---------------------------------------------------------------------------------------------------------------
5,147,888 1,658,491
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Loss from Operations before Depreciation
and Amortization 4,526,244 503,143
Depreciation and Amortization 1,410,968 303,644
- ---------------------------------------------------------------------------------------------------------------
Loss from Operations 5,937,212 806,787
Other Expenses (Income):
Interest Income (268,809) (50,493)
Interest Expense 1,727,326 0
Foreign Exchange (Income)/Loss (25,117) 4,873
Loss from Joint Ventures 227,974 75,424
Other Non-op Expense (2,265) 275
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1,659,109 30,079
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Loss before Income Taxes
and Non-Controlling Interest 7,596,321 836,866
Income Tax Expense 17,178 137,725
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Loss before Non-controlling Interest
in Income of Subsidiaries 7,613,499 974,591
Non-controlling Interest in Loss of Subsidiaries (175,208) (214,519)
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Loss for the Period 7,438,291 760,072
Deficit, Beginning of Period 15,954,903 4,640,199
- ---------------------------------------------------------------------------------------------------------------
Deficit, End of Period $ 23,393,194 5,400,271
===============================================================================================================
Loss per Share $ 0.38 0.06
===============================================================================================================
</TABLE>
<PAGE>
GST TELECOMMUNICATIONS, INC.
Consolidated Statements of Changes in Financial Position (stated in U.S.
dollars) For the three months ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
December 31 December 31
1995 1994
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash provided by (used in)
Operations:
Loss for the Period $ (7,438,291) (760,072)
Items not involving Cash:
Non-controlling Interest in Loss of Subsidiaries (175,208) (214,519)
Loss from Joint Venture 227,974 75,424
Deferred Income Tax 0 (5,655)
Accretion of Interest 1,016,725 0
Amortization and Depreciation 1,410,968 0
Issuance of stock for Financing Commitment 396,088 303,644
--------------------------------------------------------------------------------------------------------
(4,561,744) (601,178)
--------------------------------------------------------------------------------------------------------
Changes in Non-cash Operating Working Capital:
Accounts Receivable 327,849 (488,613)
Notes Receivable 18,733 32,150
Inventory (214,312) (146,093)
Prepaid Expenses (96,239) (295,786)
Accounts Payable and Accrued Liabilities (861,135) (567,852)
Deferred Revenue (82,739) 26
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(907,843) (1,466,168)
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Cash provided by (used in) from Operations (5,469,587) (2,067,346)
--------------------------------------------------------------------------------------------------------
Financing Activities:
Issuance of Common Stock and Exercise of Warrants 287,463 2,749,657
Deferred Financing Costs (7,927,918) (115,741)
Proceeds from Long Term Debt 180,772,667 5,042,686
Notes Receivable (159,136) 25,026
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172,973,076 7,701,628
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Investments:
Sale of Shares of a Subsidiary 0 300,000
Purchase/Sale of Marketable Securities 217,656 (140,543)
Acquisition of Property and Equipment (8,091,010) (6,228,368)
Other Investments 0 (45,000)
Purchase of Other Assets (897,015) (137,195)
--------------------------------------------------------------------------------------------------------
(8,770,369) (6,251,106)
--------------------------------------------------------------------------------------------------------
Increase (Decrease) in Cash 158,733,120 (616,824)
Cash, Beginning of Period 6,024,334 4,218,593
- ---------------------------------------------------------------------------------------------------------------
Cash, End of Period $ 164,757,454 3,601,769
===============================================================================================================
</TABLE>
<PAGE>
GST Telecommunications, Inc.
Quarterly Report
For the quarter ended December 31, 1995
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SCHEDULE B: SUPPLEMENTARY INFORMATION
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1. During the three months ended December 31, 1995, $ 47,500 (U.S. funds) was
paid to a company owned by a director for consulting services.
2. During the quarter ended December 31, 1995:
a) Securities issued:
Oct. 6/95 - 22,000 common shares issued @ $4.25 (US
funds) per share for cash proceeds of $93,500 (US
funds). re: Exercise of stock options.
Oct. 6/95 - 25,200 common shares issued @ $6.34 (US
funds) per share for deemed value of $159,768 (US
funds). re: Bonus Shares as consideration for loan to
company.
Oct. 20/95 - 50,000 common shares issued @ $5.50 (Cdn
funds) per share for cash proceeds of $201,245 (US
funds). re: Exercise of warrants.
Oct. 20/95 - 1,000,000 common shares issued @ $10.00
(US funds) deemed per share. re: Acquisition of final
20% of GST Telecom. Shares registered to escrow agent
and held in escrow.
Nov. 20/95 - 101 common shares issued @ $5.00 (US
funds) per share for cash proceeds of $505 (US funds).
re: Exercise of stock options.
Dec. 5/95 - 33,760 common shares issued @ $7.00 (US
funds) per share for deemed value of $236,320 (US
funds). re: Bonus Shares as consideration for loan to
company.
b) Options granted:
50,000 options @ $5.00 (US funds) per share. Issued as
of December 29, 1995 pursuant to an employment
agreement dated August 17, 1994. Expiration date of
August 16, 1999. Vested as to 20% per year.
<PAGE>
3 As at December 31, 1995:
(a) Share Capital
An unlimited number of common shares without nominal or par value
issued: 19,831,351 common shares for $50,849,840 (U.S. funds)
(b) Outstanding options, warrants and convertible securities:
Exercise/
Description # Common Conversion Expiration
of Securities Shares Issuable Price Date
------------- --------------- ----------
Options 352,300 $4.25 U.S. Jun. 23/97
Options 10,000 $4.50 U.S Oct. 3/97
Options 40,000 $4.38 U.S Feb. 21/98
Options 133,140 $5.00 U.S Feb. 28/99
Options 60,000 $5.00 U.S Feb. 28/99
Options 50,000 $5.00 U.S Aug. 16/99
Options 40,818 $3.55 U.S Jan. 4/2000
Options 925,000 $6.75 U.S Sept. 21/2000
Warrants 930,900 $10.00 Cdn Mar. 31/96
Warrants 187,500 $5.52 U.S Oct. 23/96
Warrants 62,500 $5.52 U.S Oct. 23/96
Warrants 125,000 $5.62 U.S Apr. 26/97
There is a right outstanding to purchase 250,000 units at a price per unit
equal to the average Common Share price for the 30 trading days preceding
the date of the purchase of the units. The units are comprised of one
Common Share and one-half of a share purchase warrant exercisable for two
years at a price equal to 120% of the unit purchase price.
(c) Total shares in escrow or subject to pooling: 1,750,000.
(d) List of Directors
Ian Watson
Robert Hixon Hanson
Peter Ernest Legault
W. Gordon Blankstein
Eamon D. Hoey
Jack Armstrong
John Warta
Takashi Yoshida
Thomas E. Sawyer
Steve Irwin
<PAGE>
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SCHEDULE C : MANAGEMENT DISCUSSION
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1) See attached schedule
2) Cost of Sales for the period ended December 31, 1995 comprised of the
following:
Beginning Inventory October 1, 1995 $ 387,089
Carrier Usage $ 4,226,081
Engineering and Operations 958,023
Direct Materials 777,443
Direct Labor 104,333
Overhead 45,850 6,111,730
-----------------------------
6,498,819
Ending Inventory at December 31, 1995 601,401
---------------
Cost of Goods Sold $ 5,897,418
===============
<PAGE>
GST Telecommunications, Inc.
General, Selling, & Administrative Expense Detail
(Stated in U.S. Dollars)
For the three months ended December 31, 1995
(unaudited)
Total
Salary & Benefits $1,704,672
Customer Service $ 42,280
Office Facilities & Exp $1,167,497
Telephone $ 139,050
Other Operating Costs $ 92,612
----------
$3,146,111
----------
<PAGE>
GST Telecommunications, Inc.
Marketing, Travel & Promotion Expense Detail
(Stated in U.S. Dollars)
For the three month ended December 31, 1995
(unaudited)
Marketing $ 1,036,372
Travel $ 121,691
Shareholder Information $ 2,149
Promotion $ 5,373
----------
$1,165,585
----------
<PAGE>
SCHEDULE "C" MANAGEMENT DISCUSSION
During the three months ended December 31, 1995, revenues amounted to
$6,519,062, an increase of $4,293,744 compared to the three months ended
December 31, 1994. The increase was principally the result of increased revenues
by the Company's wholly-owned manufacturing subsidiary, National Applied
Computer Technologies ("NACT"), the Company's wholly-owned long distance
telecommunication services subsidiary, GST Net, which is comprised of two
wholly-owned subsidiaries, International Telemanagement Group ("ITG") and
Wasatch International Network Services ("WINS"). To a lesser extent, the
increase was also attributable to the recognition of the revenues of the
Company's wholly-owned network telecommunication services subsidiary GST
Telecom, Inc., which consists of three affiliated companies, GST Pacwest Telecom
Hawaii, Inc., GST Pacific Lightwave, Inc. and GST Tucson Lightwave, Inc.
With respect to NACT, revenue increased by $272,240, or 12.9%, versus the
earlier comparable period, as a result of increased wholesale service revenues
and sales of switching and network management and billing systems. The gross
profit margins with respect to NACT's manufacturing operations was 64.0% for the
three months ended December 31, 1995.
With respect to ITG, an interexchange carrier based in Lima, Ohio, revenue was
recognized of $3,624,051 for the three months ended December 31, 1995. No
revenues were recognized for the comparable period as ITG was purchased on May
1, 1995 by GST Net, an affiliate of the Company.
With respect to WINS, a wholesale and other retail carrier services company,
revenue was recognized of $231,425 for the three months ended December 31, 1995,
and no revenues were recognized for the comparable period, inasmuch as WINS did
not begin to offer such services until after the end of that period. WINS
provides the switching equipment, technical and network management support and
billing services for those customers who do not own their own switches. To those
customers who require carrier services, WINS provides such services on a resale
basis, utilizing NACT's contract with major interexchange carrier.
Operating expenses increased by $3,489,397, in the three months ended December
31, 1995, principally as a result of higher salary and benefit costs incurred
during the period, as the Company continues to add a significant number of
sales, marketing and management employees. Also, contributing to the increase
was a higher level of legal, audit, travel and other expenses associated with
the Company's financing and investing activities.
<PAGE>
Depreciation and amortization increased significantly in the three month period,
principally as a result of the increased provision for depreciation occasioned
by a higher asset base that existed in the prior period.
Other expenses increased significantly in the three month period, principally as
a result of an increase in interest expense due to the $180.0 million private
placement debt securities financing and to a lesser extent the increase in
losses from joint ventures. Offsetting these factors was an increase of $218,316
in interest income, the result of interest earned on the proceeds of the
aforementioned debt financing.
On October 20, 1995, the Company acquired the remaining 20% of GST Telecom, Inc.
from Pacwest LLC, for consideration of 1,000,000 shares of the Company's Common
Stock.
On December 20, 1995, the Company realized gross proceeds of U.S. $180,001,683
from the private placement to institutional investors in the U.S. consisting of
a package of debt securities, arranged by the international investment banking
firm of Morgan Stanley & Co., Incorporated. Of the net proceeds of the Offering,
$2.0 million was applied to the repayment of short-term indebtedness, and the
balance will be used for capital expenditures, to fund future operating deficits
and for working capital purposes.
The Company has submitted proposals for approximately $65.3 million of debt
financing under the Tomen America master financing agreement for its network
projects in Tucson, Albuquerque, and the upgrade of its Hawaiian network. Tomen
America has approved $27.0 million of financing for such projects. Under the
agreement, Tomen has agreed to lend up to $100.0 million to subsidiaries of GST
Telecom, Inc. for the development and construction of network projects. The
agreement further provides that Tomen will evaluate each network project
separately to determine if it will participate in financing the project.
At December 31, 1995, the Company had $165,410,422 in cash and cash equivalents,
compared to $4,584,920 at December 31, 1994. The Company continues to invest
substantial sums of capital, principally in GST Telecom, for the development and
construction of telecommunications networks.
<PAGE>
Schedule D
Summary Financial Data
GST USA, Inc.
Consolidated Balance Sheet
December 31, 1995 and 1994
(unaudited)
(stated in U.S. Dollars)
<TABLE>
<CAPTION>
1995 1994
ASSETS
<S> <C> <C>
Current Assets $ 154,488,651 $ 1,206,497
Long Term Assets $ 74,441,259 $ 20,213,723
----------------------------------------------
TOTAL ASSETS $ 228,929,910 $ 21,420,220
==============================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities $ 12,471,755 $ 2,405,651
Long Term Liabilities $ 181,257,921 $ 5,068,432
Minority Interest $ 3,103,980 $ 3,316,610
----------------------------------------------
Total Liabilities $ 196,833,656 $ 10,790,693
----------------------------------------------
Share Capital $ 48,512,591 $ 11,451,309
Accumulated Deficit $ (16,416,337) $ (821,782)
----------------------------------------------
Total Shareholders' Equity $ 32,096,254 $ 10,629,527
----------------------------------------------
----------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 228,929,910 $ 21,420,220
==============================================
</TABLE>
<PAGE>
Schedule D
Summary Financial Data
GST USA, Inc.
Consolidated Income Statement
For the Three Months Ended December 31, 1995 and 1994
(unaudited)
(stated in U.S. Dollars)
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
SALES $ 6,519,062 $ 2,225,318
Cost of Goods Sold $ 5,988,024 $ 1,148,141
--------------------------------------
Gross Margin $ 531,038 $ 1,077,177
--------------------------------------
Operating Expenses $ 6,100,498 $ 1,699,403
--------------------------------------
Operating Loss $ (5,569,460) $ (622,226)
--------------------------------------
Other Expenses $ 1,318,201 $ 23,188
Operating Loss before Income taxes
and Minority Interest --------------------------------------
$ (6,887,661) $ (645,414)
--------------------------------------
Income Taxes $ 17,229 $ 151,398
--------------------------------------
Operating Loss before Minority Interest $ (6,904,890) $ (796,812)
--------------------------------------
Minority Interest $ 175,208 $ 214,519
--------------------------------------
NET LOSS $ (6,729,682) $ (582,293)
--------------------------------------
--------------------------------------
Deficit, beginning of period $ (9,686,655) $ (239,489)
--------------------------------------
--------------------------------------
Deficit, end of period $ (16,416,337) $ (821,782)
======================================
</TABLE>
<PAGE>
Schedule D
Summary Financial Data
GST USA, Inc.
Consolidated Statement of Changes in Financial Position
For the Three Months Ended December 31, 1995 and 1994
(unaudited)
(stated in U.S. Dollars)
<TABLE>
<CAPTION>
1995 1994
Operations:
<S> <C> <C>
Loss for the Period $ (6,729,682) $ (582,293)
Items not involving cash $ 2,275,519 $ (601,178)
Changes in Working Capital $ (1,203,506) $ 3,300,458
----------------------------------------------
Cash provided by (used in) operations $ (5,657,669) $ 2,116,987
----------------------------------------------
Cash provided by (used in) investing activities $ (6,841,011) $ (6,784,134)
Cash provided by (used in) financing activities $ 153,651,658 $ 4,951,971
----------------------------------------------
Increase (decrease) in cash and cash equiavlents $ 141,152,978 $ 284,824
----------------------------------------------
----------------------------------------------
Cash and cash equivalents, beginning of period $ 3,893,676 $ 1,309,788
----------------------------------------------
----------------------------------------------
Cash and cash equivalents, end of period $ 145,046,654 $ 1,594,612
----------------------------------------------
</TABLE>
<PAGE>
Schedule E
GST TELECOMMUNICATION, INC.
RECONCILIATION BETWEEN GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
IN CANADA AND IN THE UNITED STATES
These financial statements have been prepared by management in accordance with
generally accepted accounting principles in Canada. Except for the loss per
share calculation, these financial statements also conform in all material
respects, with those accounting principles that are generally accepted in the
United States. For U.S. GAAP purposes, loss per share is $ 0.40 and $ 0.06 for
the three months ended December 31, 1995 and 1994 respectively.
<PAGE>
INCORPORATION BY REFERENCE
This Form 6-K/A is incorporated by reference into the
Registrant's Registration Statements on Form F-3 (Registration
No. 33-95324, 33-97096 and 333-1538) and Registration Statement
on Form S-8 (Registration No. 33-94072).
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.
GST Telecommunications, Inc.
----------------------------
(Registrant)
Date: May 6, 1996 By /s/ Robert H. Hanson
--------------------------
Robert H. Hanson
Senior Vice President
