SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
October 20, 1998
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Date of report (Date of earliest event reported)
Tel-Save Holdings, Inc.
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(Exact Name of Registrant as Specified in Charter)
Delaware 0-26728 23-2827736
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
6805 Route 202, New Hope, PA 18938
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(Address of Principal Executive Offices)
215-862-1500
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Registrant's telephone number, including area code
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Item 5. Other Events.
Tel-Save Holdings, Inc. (the "Company") announced on October 20, 1998 certain
estimated results for its third quarter ended September 30, 1998:
- Estimated revenues of approximately $120-$125 million;
- After an extraordinary gain of $.87 per share, an estimated net loss
for the quarter of between $.70 and $.80 per share;
- General and administrative expenses estimated at about the same
percentage of revenues as in the second quarter of 1998, but an
estimated improvement in gross margin from 16.2% in the second quarter
to approximately 18.6% in the third quarter;
- Revenues under the Company's agreement with America Online, Inc.
("AOL") estimated to exceed all other Company revenues in the third
quarter;
- Cash, marketable securities and notes receivable of approximately $140
million at September 30, 1998
In the October 20 announcement, the Company also reported that it had achieved
positive cash flow starting in the month of September, that it expects to report
positive earnings in the fourth quarter of 1998 and that it had expensed the
bulk of the up front AOL payments and warrants and, on a going forward basis,
expects to average approximately $2 million per quarter in expenses for the next
eleven quarters, compared to an average over the last four quarters (including
the third quarter) of $22 million per quarter.
The Company also announced, on October 29, 1998, that it was resuming the
authorized repurchases of its common stock that had been suspended in early
September 1998. See the October 29, 1998 Press Release included in this Report
as an Exhibit, which press release is incorporated herein by this reference.
Certain of the statements contained herein may be considered forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. Such statements are
identified by the use of forward-looking words or phrases, including, but not
limited to, "estimates", projected", "expects", "expected", "anticipates" and
"anticipated". These forward-looking statements are based on the Company's
current expectations. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, there can be no
assurance that such expectations will prove to have been correct.
Forward-looking statements involve risks and uncertainties and the Company's
actual results could differ materially from the Company's expectations.
Important factors that could cause such actual results to differ materially
include, among others, adverse developments in the Company's relationship with
AT&T or AOL, increased price competition for long distance service, failure of
the marketing of long distance services under the AOL Agreement or the need to
incur greater marketing costs to maintain expected customer bases, attrition in
the number of end users, increased implementation of PIC freezes by local
telephone companies and changes in governmental policy, regulation and
enforcement. The Company undertakes no obligations to update its forward-looking
statements.
Item 7. Financial Statements and Exhibits.
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99.1 Press Release of Registrant, dated October 29, 1998
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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.
Tel-Save Holdings, Inc.
(Registrant)
Date: October 29, 1998 By: /s/ Aloysius T. Lawn, IV
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General Counsel
Exhibit 99.1
TEL-SAVE TO RESUME SECURITIES REPURCHASES
NEW HOPE, Pa., Oct 29/PRNewswire/ - Tel-Save Holdings, Inc. (Nasdaq: TALK)
reported today that it was resuming the authorized repurchases of its common
stock that had been suspended in early September 1998. As previously announced,
the Company's Board has authorized the purchase, from time to time, of up to
$300 million of Tel-Save's common stock and other securities, subject to working
capital requirements. At the time the share repurchases were suspended, Tel-Save
had paid for 14,690,500 shares of its common stock, certificates for
approximately 1.7 million of which have still not been delivered to the Company.
The Company noted that it expected it would affect future share repurchases in
such a manner as would not result in payment for such shares before the
certificates for such shares are delivered to the Company. Tel-Save also has
purchased, and may, from time to time in the future, purchase, its convertible
notes under the authorized purchase program.
Tel-Save Holdings, Inc. is a nationwide provider of telecommunications
services utilizing its state-of-the-art telecommunications network - One Better
Net ("OBN"). Tel-Save headquarters are located at 6805 Route 202, New Hope,
Pennsylvania 18938
