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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
July 14, 1999
Date of Report (Date of earliest event reported)
Global TeleSystems Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-23717 94-3068423
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
1751 Pinnacle Drive
North Tower, 12th Floor
McLean, VA 22102 22102
(Address of principal executive offices) (Zip Code)
(703) 918-4500
(Registrant's telephone number, including area code)
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Item 5. Other Events
On July 14, 1999, Golden Telecom, Inc. ("Golden Telecom"), a wholly
owned subsidiary of Global TeleSystems Group, Inc. (the "Company"), filed a
registration statement with the Securities and Exchange Commission to sell
shares of its common stock in an initial public offering. Prior to the
consummation of the offering, the Company will contribute to Golden Telecom the
interests the Company owns in businesses that the Company operates in Russia and
other countries of the CIS.
The shares of common stock sold in the offering will be offered and
sold by Golden Telecom. Although the number of shares to be sold in the offering
has not yet been determined, the Company expects that it will own the majority
of the outstanding shares of common stock in Golden Telecom upon the
consummation of the offering.
On June 16, 1999, the Company's stockholders approved an increase in
the Company's authorized common stock from 135 million to 270 million shares.
In June 1999, the Company's Board of Directors approved a two-for-one
split of its common stock. The stock split was effected by the distribution of a
stock dividend on July 21, 1999 to holders of the Company's common stock at the
lose of business on July 1, 1999.
The following Selected Financial Data and Selected Quarterly Financial
Data tables are being presented to reflect the effect of the two-for-one split
of the Company's common stock and are also being presented to update our Item
6. "Selected Financial Data" and Item 8. "Financial Statements and Supplementary
Data" disclosures within our previously filed Form 10-K for the year ended
December 31, 1998.
Selected Financial Data:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
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1998 1997 1996 1995 1994
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(In thousands, except per share data
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues, Net 372,392 121,461 62,497 30,458 8,348
Gross margin 134,286 24,352 17,902 6,415 256
Operating loss (145,045) (105,968) (65,579) (52,316) (18,472)
Other income (expense) (94,178) (29,985) (9,293) 10,683 521
Loss before extraordinary loss (243,052) (134,761) (76,205) (44,196) (17,951)
Extraordinary loss (12,704) -- -- -- --
Net loss (255,756) (134,761) (76,205) (44,196) (17,951)
Loss per share before extraordinary loss (1.70) (1.37) (1.01) (0.74) (0.41)
(1)
Extraordinary loss per share(1) (0.09) -- -- -- --
Net loss per share(1) (1.79) (1.37) (1.01) (0.74) (0.41)
OTHER DATA:
EBITDA(2) (66,222) (87,436) (55,866) (46,442) (16,733)
Net cash used in operating activities (120,852) (52,268) (42,763) (5,637) (18,506)
Net cash used in investing activities (455,916) (117,646) (86,421) (80,984) (22,783)
Net cash provided by financing activities 1,032,377 468,339 178,998 74,890 67,338
BALANCE SHEET DATA (AT END OF PERIOD):
Cash and cash equivalents 998,510 358,384 67,927 17,767 29,917
Property and equipment, net 643,044 259,971 46,992 34,982 12,153
Total assets 2,614,602 876,647 275,058 136,093 68,640
Total debt 1,792,314 645,710 89,349 39,379 8,694
Shareholder's equity 349,903 77,649 128,267 63,869 54,825
</TABLE>
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Selected Quarterly Financial Data:
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH TOTAL
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) QUARTER QUARTER QUARTER QUARTER YEAR
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
1999
Revenues $ 170,881
Gross Margin 68,342
Net loss (162,208)
=========
Net loss per share (1) (1.00)
=========
1998
Revenues $ 46,248 $ 65,964 $ 118,335 $ 141,845 $ 372,392
Gross Margin 13,069 20,938 45,387 54,892 134,287
Net loss before extraordinary item (37,114) (47,967) (63,696) (94,275) (243,052)
Extraordinary item (12,704) -- -- -- (12,704)
--------- --------- --------- --------- ---------
Net loss (49,818) (47,967) (63,696) (94,275) (255,756)
========= ========= ========= ========= =========
Net loss per share before extraordinary
item(1) (0.30) (0.34) (0.42) (0.61) (1.70)
Extraordinary loss per share(1) (0.10) -- -- -- (0.09)
--------- --------- --------- --------- ---------
Net loss per share(1) (0.41) (0.34) (0.42) (0.61) (1.79)(a)
========= ========= ========= ========= =========
1997
Revenues $ 22,479 $ 26,326 $ 34,780 $ 37,884 $ 121,468
Gross Margin 5,894 6,478 3,258 8,723 24,352
Net loss (20,825) (25,413) (52,439) (36,131) (134,809)
Net loss per share(1) (0.22) (0.25) (0.51) (0.34) (1.37)(a)
</TABLE>
(a) The sum of earnings per share for the four quarters will not equal earnings
per share for the total year due to changes in the average number of common
shares outstanding.
(1) Effective July 21, 1999 the Company had a two for one stock split.
The historical per share information contained herein has been restated to
reflect this split.
(2) EBITDA is earnings (loss) from operations before foreign currency
gains (losses), interest, taxes, depreciation and amortization. In computing
EBITDA, we have not included our share of the foreign currency gains (losses),
interest, taxes and depreciation and amortization that we have recognized from
our respective equity method investees, for the periods presents, that is
included within our equity in losses of ventures line item in our consolidated
statements of operations. EBITDA is a measure of a company's performance
commonly used in the telecommunications industry, but should not be construed as
an alternative to net income (loss) determined in accordance with generally
accepted accounting principles, ("GAAP"), as an indicator of operating
performance or as an alternative to ash from operating activities determined in
accordance with GAAP as a measure of liquidity.
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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 hereunto duly authorized.
Global TeleSystems Group, Inc.
(Registrant)
Date: July 23, 1999 /s/ Alan Krenek
Vice President -
Corporate Accounting
