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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
Date of report (Date of earliest event reported) DECEMBER 11, 1998
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PAGEMART WIRELESS, INC.
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(Exact Name of Registrant as Specified in Its Charter)
DELAWARE
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(State or Other Jurisdiction of Incorporation)
0-28196 75-2575229
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(Commission File Number) (IRS Employer Identification No.)
3333 LEE PARKWAY, SUITE 100, DALLAS, TX 75219
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(Address of Principal Executive Offices) (Zip Code)
(214) 765-4000
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(Registrant's Telephone Number, Including Area Code)
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ITEM 5. OTHER EVENTS.
On December 11, 1998 PageMart Wireless, Inc. issued the attached
press release.
ITEM 7. EXHIBITS.
(i) Press Release
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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.
PAGEMART WIRELESS, INC.
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(Registrant)
Date: December 11, 1998 By:/s/ FREDERICK G. ANDERSON
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Name: Frederick G. Anderson
Title: Vice President, General
Counsel and Secretary
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EXHIBIT INDEX
Exhibit Description
99(i) Press Release
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EXHIBIT 99(i)
Contact: G. Clay Myers, CFO
(214) 765-3510
[email protected]
FINANCIAL NEWS
FOR IMMEDIATE RELEASE
PAGEMART WIRELESS EXPECTS IMPROVED FINANCIAL RESULTS
IN FOURTH QUARTER, BUT EXPECTS FUTURE GROWTH TO BE
PRINCIPALLY IN AREA OF ADVANCED MESSAGING SERVICES
DALLAS, TEXAS - December 11, 1998 - As PageMart Wireless, Inc. (NASDAQ:
PMWI) prepares to launch its nationwide narrowband PCS network for advanced
messaging services, it announced today that it expects to report continued
growth in the fourth quarter in revenues, operating cash flow and average
revenue per unit per month ("ARPU") from its traditional paging business, but a
net reduction in units in service. PageMart expects its future growth to come
principally from the advanced messaging services business rather than its
traditional one-way paging business.
"Our focus this year has been on constructing our IP based narrowband
PCS network as an overlay on our existing one-way network," said John D.
Beletic, Chairman and Chief Executive Officer of PageMart. "We have also been
putting in place the organization and relationships that we expect to make 1999
the sales ramp-up year for the new advanced messaging services."
PageMart previously announced in 1998 a strategic alliance with
Metrocall, Inc. and the formation of its Telemetry and National Account
Strategic Business Units. PageMart has also increased its direct sales force by
over 66% in 1998 and intends to pursue the possibility of entering into
additional strategic alliances similar to the Metrocall relationship.
"These are the initiatives that we believe will fuel our future
subscriber growth," Beletic commented. He added that while the company expects
solid improvement in the fourth quarter financial performance of its traditional
messaging business, it continues to observe a slowing in demand for traditional
paging services.
The improvements in fourth quarter financial performance are a result
of continuing increases in ARPU and continued reductions in selling expenses.
The company expects fourth quarter 1998 recurring revenues to increase 14 to 15%
compared
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to fourth quarter 1997, resulting in higher overall ARPU. The company expects
ARPU to range from $7.95 to $8.05 in the fourth quarter 1998, up from $7.87 in
the third quarter 1998. The company expects earnings before interest, taxes,
depreciation and amortization ("EBITDA") for the fourth quarter 1998 to increase
70 to 75% compared to fourth quarter 1997.
The company's strategic alliance and local reseller distribution
channels continue to exhibit high volatility. Several of the company's large
strategic alliance partners have reviewed and updated their customer databases,
resulting in such partners reducing their units in service with the company
during the third and fourth quarters of 1998. The company believes that the
review and update process by these partners will be completed in the fourth
quarter of 1998.
The company's national retail strategic business unit has experienced
slower unit growth, coupled with an increase in disconnect rates, which has
resulted in net reductions in units in service in the fourth quarter 1998 to
date. Management believes that the current dynamics in the retail marketplace
have resulted in attracting new subscribers which have a higher propensity to
disconnect. As a consequence, several of the company's national retail programs
are being modified to address these dynamics. These modifications, once
implemented, are expected to reduce the company's overall costs of delivering
products and services to the national retail distribution channel during 1999.
As a result of the above factors, the company expects to experience a
decrease in the number of units in service during the fourth quarter 1998
ranging from 100,000 to 150,000 units. The majority of the decline in the number
of units in service is expected to be attributable to the strategic alliance and
local reseller distribution channels, collectively.
PageMart Wireless, Inc. is a leading NAFTA-and-beyond provider of
wireless messaging services. The Dallas-based company provides numeric and
alphanumeric messaging services to a total of 2.7 million customers, selling
through its own direct sales force, selected resellers, leading U.S. retailers,
and strategic alliances with major telecommunications carriers. PageMart is
currently constructing an advanced messaging network that is expected to be only
the second nationwide NPCS network deployed in the United States. This new
system is expected to support a variety of higher-value advanced
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messaging services. PageMart recorded total revenues of $277.8 million for the
year ended December 31, 1997.
This press release includes forward-looking statements that involve
risks and uncertainties that are detailed from time to time in the company's SEC
filings, including its annual report on Form 10-K for the year ended December
31, 1997, quarterly reports on Form 10-Q for the quarters ended March 31, June
30, and September 30, 1998 and its Registration Statements on Forms S-3 and S-4.
Actual results -- including sales and earnings growth and the construction
schedule for PageMart's NPCS system -- may differ materially from those
projected due to increased competition, pricing pressures, delays in new service
introductions, delays in the introduction of new paging devices, construction
delays, lack of demand for new products and services, interruptions in service
beyond the company's control, regulatory issues, and other business factors.
These forward-looking statements represent the company's judgment as of the date
of this release. The company disclaims, however, any intent or obligation to
update these forward-looking statements.
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