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 reported event): July 23, 1999
AMERICAN MOBILE SATELLITE CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 0-23044 93-0976127
(State or other (Commission File No.) (IRS Employer
jurisdiction of Identification No.)
incorporation or organization)
10802 Parkridge Boulevard
Reston, Virginia 20191-5416
(703) 758-6000
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
<PAGE>
ITEM 5. Other Events
On July 23, 1999, XM Satellite Radio Holdings Inc. ("XM Satellite
Radio"), a wholly-owned subsidiary of American Mobile Satellite Corporation (the
"Company") announced it had filed a registration statement on Form S-1 with the
Securities and Exchange Commission for an initial public offering of shares of
XM Satellite Radio's common stock.
On July 26, 1999, the Company issued its second quarter earnings
release.
<PAGE>
ITEM 7. Financial Statements and Exhibits
(c) Exhibits
The following documents are filed as exhibits to the report:
Press Release of XM Satellite Radio dated July 23, 1999.
Press Release of the Company dated July 26, 1999, relating to earnings.
<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
By: /s/ Randy S. Segal
Randy S. Segal
Senior Vice President and
General Counsel
Date: July 26, 1999
FOR IMMEDIATE RELEASE
Contact: Vicki Stearn, (202) 969-7070, [email protected]
XM SATELLITE RADIO FILES SEC REGISTRATION
STATEMENT
FOR INITIAL PUBLIC OFFERING OF COMMON STOCK
Washington, DC - July 23, 1999 - XM Satellite Radio Holdings Inc., a wholly
owned subsidiary of American Mobile Satellite Corporation (NASDAQ:SKYC), today
announced that it has filed a registration statement with the Securities and
Exchange Commission for an initial public offering of common stock. The offering
will be underwritten by joint-book-running managers Bear, Stearns & Co. Inc. and
Donaldson, Lufkin & Jenrette, and co-managed by Deutsche Banc Alex. Brown and
Merrill Lynch.
XM Satellite Radio is developing a new band of radio. The service will deliver
up to 100 channels with digital-quality sound from coast to coast directly from
its satellites to listeners in their cars and at home. XM Satellite Radio plans
to offer an innovative mix of music, talk, news, sports and children's formats
for $9.95 a month. Headquartered in Washington, DC, XM Satellite Radio has one
of only two satellite digital audio radio service (SDARS) licenses awarded by
the Federal Communications Commission in October 1997. XM's investors include
industry leaders Clear Channel Communications Inc.; DIRECTV, Inc., a unit of
Hughes Electronics Corporation; The General Motors Corporation; and a private
investment group comprised of Columbia Capital, Telcom Ventures L.L.C., and
Madison Dearborn Partners, which together recently invested $250 million in the
company. First there was AM, then FM, and soon...XM Satellite Radio.
Interested persons may obtain a written prospectus regarding XM Satellite
Radio's offering from the following: Bear, Stearns & Co. Inc., 245 Park Avenue,
New York, NY 10167; Donaldson, Lufkin & Jenrette Securities Corporation, 277
Park Avenue, New York, NY 10172; Deutsche Banc Alex. Brown 130 Liberty Street,
New York, NY 10006; and, Merrill Lynch, 250 Vesey Street, New York, NY 10281.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission but has not yet been declared effective.
These securities may not be sold nor may offers to buy be accepted prior to the
time the registration statement becomes effective. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such State.
###
<PAGE>
American Mobile Reports Second Quarter 1999 Financial Results
-------------------------------------------------------------
Reston, Va. -- July 26, 1999 -- American Mobile Satellite Corporation
(NASDAQ:SKYC) today announced financial results for the second quarter ending
June 30, 1999. Total revenues for the quarter, including equipment sales,
increased 2% to $22.9 million from $22.4 million for the same period in 1998.
Net service revenues for the quarter were $16.6 million compared with $16.7
million in the second quarter 1998. The company reported a second quarter EBITDA
loss of ($10.5) million and a net loss of ($42.4) million, or ($1.31) per share,
as compared to an EBITDA loss of ($10.4) million and a net loss of ($39.0)
million, or ($1.23) per share, for the same quarter of the previous year.
Excluding equity losses in XM Satellite Radio, which the company was required to
reflect under the equity basis of accounting as a result of the July 7, 1999 XM
transactions, the net loss for the second quarter was ($39.2) million, or
($1.21) per share.
Total revenue, service revenue and EBITDA for the quarter, all represented
sequential improvements over the first quarter 1999 results. The year over year
change in service revenue was impacted by the fourth quarter 1998 sale of the
company's maritime voice business, and the resulting wholesale revenue stream
from that market segment.
American Mobile achieved record subscriber growth during the quarter, adding
10,100 units, ending at 123,100 at June 30, 1999.
"The second quarter results include the successful beginning of many of our key
initiatives," said Walter V. Purnell, Jr., president and CEO of American Mobile.
"While the timing of our initial UPS roll-out affected revenue per user, this
major launch effort was the key driver behind our record subscriber growth.
However, beyond UPS we posted increased growth in virtually every product
category and showed particularly strong performance in our multi-mode and voice
products."
During the second quarter a number of significant business initiatives were
announced by American Mobile, including the following:
o A strategic alliance with SkyTel Communications to pursue joint
opportunities in the wireless data market. (April 7)
o Debuted eLinksm wireless email service. In addition to delivering
interactive, two-way communications, the product is the first to provide
mobile professionals with integrated wireless access to a broad range of
corporate and Internet email and personal information management (PIM)
applications. (May 4)
o A five-year contract extension with AT&T for satellite dispatch and
wireless telephone communications services. (May 24)
o Announced the acquisition of the remaining minority interest in XM
Satellite Radio from Worldspace, Inc. in exchange for 8.6 million shares of
American Mobile stock. Simultaneously, XM Satellite Radio announced a $250
million investment commitment by industry leaders General Motors, DirecTV,
Clear Channel Communications, and a group of financial investors. XM also
announced a long-term supply and distribution agreement with GM. (June 8)
o An agreement with Southeastern Freight Lines, Inc. to equip their
entire 2,000-truck fleet with mobile messaging services. (June 8)
o The initial roll-out of the multi-year contract with UPS to provide
wireless data communications in support of their new generation package
tracking device, DIAD III. American Mobile's ARDIS(R) network allows UPS
delivery personnel to transmit real-time package information to the
company's TotalTrack package tracking system. (June 14)
###
<PAGE>
o An agreement with ACS to provide wireless data solutions to enhance
the servicing of 7,000 ATM machines. (June 22)
Added Purnell, "Our substantial list of second quarter operational
accomplishments and significant strategic developments places American Mobile in
an enhanced position to further expand and leverage our core strengths."
~~~
American Mobile Satellite Corporation will hold its second quarter conference
- ------------------------- ----------- ---------------------------- ----------
call on Tuesday August 3rd, 1999 at 11am EDT. To participate please dial:
- -------------------------------------------------------------------------
(888) 243-0812
--------------
or
--
(703) 736-7293
--------------
The playback number for the call is (888) 266-2081 or (703) 925-2533. The
playback pass code is: 1761927.
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 United States, Alaska, Hawaii, Puerto Rico, the U.S. Virgin Islands,
and hundreds of miles of U.S. coastal waters. American Mobile services are used
in the transportation, field service, maritime, emergency services, and
telemetry markets, and with eLinksm in the two-way wireless email market.
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, 1998, 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.
###
Contact: American Mobile American Mobile
Eric Swank Donald L. Campbell
Director, Investor Relations Director, Corporate Communications
(703) 758-6121 (703) 758-6280
[email protected] [email protected]
Copithorne & Bellows
Jon Bornstein/Jennifer Riggle
(919) 562-6787/(703) 313-4142
[email protected]
###
<PAGE>
AMERICAN MOBILE SATELLITE CORPORATION
FINANCIAL HIGHLIGHTS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Income Statement Data Three Months Ended June 30, Six Months Ended June 30,
- --------------------- --------------------------- -------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Total revenues $22,873 $22,410 $43,103 $32,432
Service revenues $16,622 $16,670 $32,786 $23,088
Revenue from Equipment Sales $6,251 $5,740 $10,317 $9,344
Cost of service and operations $16,516 $16,918 $34,386 $24,646
Cost of equipment sold $6,594 $5,415 $11,122 $9,296
Sales and advertising $5,721 $4,711 $10,470 $7,733
General and administrative $4,591 $5,773 $9,360 $9,404
Depreciation and amortization $13,632 $14,457 $27,404 $24,620
EBITDA ($10,549) ($10,407) ($22,235) ($18,647)
Net Loss ($42,377) ($38,963) ($85,520) ($64,205)
Net Loss per share ($1.31) ($1.23) ($2.65) ($2.25)
Net Loss excluding equity loss from XM Radio ($39,179) ($78,828)
Net Loss per share excluding loss from XM Radio ($1.21) ($2.44)
Weighted average shares outstanding 32,416 31,719 32,321 28,502
</TABLE>
<TABLE>
<CAPTION>
Balance Sheet Data Jun 30, 1999 Dec 31, 1998
- ------------------ ------------ ------------
<S> <C> <C>
Cash and cash equivalents $1,314 $2,285
Total assets $464,852 $489,794
Debt and capital leases (incl. current portions) $526,995 $477,672
Stockholders' deficit ($115,238) ($37,023)
</TABLE>
<TABLE>
<CAPTION>
Subscribers by Market Segment - as of: 9/30/98 12/31/98 3/31/99 6/30/99
- -------------------------------------- ------- -------- ------- -------
<S> <C> <C> <C> <C>
Field Service 48% 47% 44% 41%
Transportation 26% 27% 31% 33%
Telemetry 10% 10% 10% 10%
Maritime 3% 3% 3% 4%
Other 13% 13% 12% 12%
</TABLE>
<TABLE>
<CAPTION>
Subscribers by Product Type - as of: 6/30/98 9/30/98 12/31/98 3/31/99 6/30/99
- ------------------------------------ ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
Voice 11,600 12,400 13,000 13,400 14,500
Data 80,100 89,100 92,700 99,600 108,600
Total 91,700 101,500 105,700 113,000 123,100
</TABLE>
<TABLE>
<CAPTION>
Average Revenue Per Subscriber Per Month 2Q97 3Q97 4Q97 1Q98 2Q98 3Q98 4Q98 1Q99 2Q99
- ---------------------------------------- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Voice $123 $121 $108 $110 $113 $117 $101 $85 $81
Data (pro forma number includes ARDIS $51 $52 $49 $44 $41
subscribers prior to acquisition)
</TABLE>
