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
October 29, 1998
Date of Report (Date of earliest event reported)
AMERICAN MOBILE SATELLITE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-23044 93-0976127
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10802 Parkridge Boulevard, Reston, Virginia 20191-5416
(Address of principal executive offices) (Zip Code)
(703) 758-6000
(Registrant's telephone number, including area code)
<PAGE>
Item 5. Other Events
On October 29, 1998, American Mobile Satellite Corporation ("American Mobile")
announced the financial results for its third quarter ended September 30, 1998.
On that date it also announced that it reached an agreement with Stratos Global
Corporation to consolidate American Mobile's marine distribution channel. In
addition, on that date, American Mobile announced that, effective January 1,
1999, its President Walt Purnell would assume the added responsibilities of
chief executive officer, with Gary Parsons continuing as Chairman of the Board
with oversight of mergers and acquisitions, strategic planning and American
Mobile's investment in XM Satellite Radio, Inc.
<PAGE>
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 hereunto duly authorized.
AMERICAN MOBILE SATELLITE CORPORATION
(Registrant)
Date: October 29, 1998 /s/ Randy S. Segal
Randy S. Segal
Secretary
FOR IMMEDIATE RELEASE
AMERICAN MOBILE ANNOUNCES THIRD QUARTER 1998 FINANCIAL
RESULTS
RESTON, Va. - October 29, 1998 - American Mobile Satellite Corporation (NASDAQ:
SKYC) today announced financial results for its third quarter ended September
30, 1998. Net service revenues for the quarter increased to $17.7 million from
$5.6 million for the same period in 1997, an increase of 216%. Total revenues,
including equipment sales, were $21.8 million compared with $10.8 million in the
third quarter of 1997, an increase of 102%. The company reported a third quarter
EBITDA loss of ($8.5) million, compared to ($9.4) million in the third quarter
of 1997 and a net loss of ($36.3) million, or $(1.14) per share, compared to
($26.3) million, or ($1.04) per share, in the prior year's third quarter.
Excluding the acquisition of ARDIS, net service revenues increased 29 percent
over the same quarter in 1997, with EBITDA loss declining by 23 percent.
"During the third quarter, American Mobile achieved a significant milestone. Our
customer base has surpassed 100,000 wireless communications users nationwide,"
said Gary Parsons, chairman and CEO, American Mobile. "The addition of roughly
10,000 new subscribers, combined with improved revenue and EBITDA trends, shows
continued solid growth in American Mobile's core transportation and field
service market segments."
According to Walt Purnell, president of American Mobile, "Our subscriber growth
is being led by organizations committing and recommitting their mission-critical
applications to American Mobile. These companies include CNF Transportation, a
large new customer which recently named American Mobile its exclusive wireless
data network, and NCR, a long-standing customer which signed a contract
extension following an extensive network evaluation. American Mobile addresses
the complete wireless communications needs of its customers with superior
coverage, unparalleled service and proven project management experience."
As announced separately, American Mobile reached agreement with Stratos Global
Corporation making Stratos the exclusive distributor of American Mobile's
maritime product to authorized dealers and existing Skycell customers. American
Mobile will continue to offer capacity on a wholesale non-exclusive basis to
other parties who serve the maritime market. As part of the agreement, Stratos
will pay US $8.5 million for selected assets and contracts of American Mobile's
maritime operation. Combining American Mobile's maritime efforts with those of
Stratos is expected to provide improved focus and service to maritime customers,
and an opportunity to more aggressively develop the maritime marketplace.
<PAGE>
Also, effective January 1, 1999, American Mobile announced that its president,
Walt Purnell, would assume the added responsibilities of chief executive
officer. Gary Parsons will continue as Chairman of the Board, overseeing mergers
and acquisitions, strategic planning and American Mobile's investment in XM
Satellite Radio, Inc. "This step is in recognition of Walt's excellent
performance in integrating the two companies during this past year, and allows
us to focus our executive attention on the strategic opportunities which are
important to American Mobile's future." said Gary Parsons.
About American Mobile
American Mobile (www.AmMobile.com) owns and operates an integrated
terrestrial/satellite network and provides a wide range of mobile communication
services, including digital voice dispatch, data communications, dual-mode
mobile messaging, position reporting services, and satellite telephone to the
continental U.S., Alaska, Hawaii, Puerto Rico, the Virgin Islands, and hundreds
of miles of U.S. coastal waters. American Mobile services are used in the
transportation, field service, maritime, two-way messaging and telemetry
markets. The company's major shareholders include Hughes Communications, Inc.,
Motorola, Inc., Singapore Telecom, and AT&T Wireless Services.
# # #
Factors that could cause forward-looking statements in this news release to
differ materially from actual results are discussed in American Mobile Satellite
Corporation's Form 10K for the year ended December 31, 1997, and other periodic
filings the company has made with the Securities and Exchange Commission. Copies
of the filings are available upon request from American Mobile Satellite
Corporation's investor relations department.
Reference: #98- 26
For more information contact:
Naomi Yeransian Jon Bornstein/Albie Jarvis
American Mobile, Public Relations Copithorne & Bellows
847-478-4233 919-562-6787/617-450-4300
[email protected] [email protected]
Eric Swank
American Mobile, Investor Relations
703-758-6121
[email protected]
