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
Date of report (Date of earliest event reported) February 6, 1998
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) (ZIP CODE)
Registrant's telephone number, including area code 215-862-1500
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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ITEM 5. OTHER EVENTS.
See attached press releases dated February 6, 1998 and February 20,
1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
99.1 Press Release of Registrant, dated February 6, 1998.
99.2 Press Release of Registrant, dated February 20, 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: March 9, 1998 By: Aloysius T. Lawn, IV
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General Counsel and Secretary
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EXHIBIT INDEX
99.1 Press Release of Registrant, dated February 6, 1998.
99.2 Press Release of Registrant, dated February 20, 1998.
EXHIBIT 99.1
Tel-Save Reports 1997 Results
NEW HOPE, Pa., Feb. 6 /PRNewswire/ -- Tel-Save Holdings, Inc. (Nasdaq:
TALK), a nationwide provider of telecommunications services, reported results
for fiscal 1997.
For the year ended December 31, 1997 revenues totaled $304.8 million, an
increase of $72.4 million or 31%. Net loss for 1997 totaled $20.9 million or
$.33 per share on a diluted basis. For the quarter ended December 31, 1997
revenues totaled $78.3 million, an increase of $14.0 million or 22% versus the
same period a year ago. Net loss for the quarter was $21.2 million or $.32 per
share on a diluted basis.
Tel-Save Chairman and CEO Dan Borislow commented: "1997 was an excellent
year for Tel-Save highlighted by the completion of the Company's
telecommunications network One Better Network(TM) (OBN(R)) and an exclusive
marketing agreement with America Online. In addition, we reported another record
revenue year. OBN is performing excellently and we have backed it up with AT&T's
Carrier Solutions Platform to accommodate our continued growth. We did not
complete the Shared Technologies merger which effected our revenues for the
quarter, but the $71 million break-up was a considerable cash windfall."
Borislow continues with: "The online/internet model is proving to be highly
efficient and desirable, even to the point where competitors seek to copy it, as
evidenced by the entry of the other company we admire most, AT&T. We are certain
that with our low acquisition and cost structure, combined billing, and our
partnership with America Online, that this will be the best vehicle to offer
telecom services into the future."
The Company also reported that approximately 200,000 telephone lines are
expected to be generated through the marketing to date under its agreement with
America Online. The Company attributes this success to the 9c-everyday, 24 hours
a day rate and five second sign up process on Keyword: LD. Borislow stated: "Our
key objective for 1998 is to maximize the expansion of Tel-Save. It is our
belief that the regulatory environment favors larger companies. Rapid growth
will position us better to acquire strategic assets or to be acquired. With this
in mind, we plan to significantly increase our spending for AOL. Over the next
two quarters we may incur up to $100 million in marketing expenses based on
performance, with an objective of acquiring up to 2 million subscribers very
quickly. With approximately 200,000 lines to be generated through the marketing
to date we expect to exit 1998 at or above analysts projections. Now that issues
involving branding are resolved and our online area finalized, we will commence
with substantial online and offline efforts, albeit delayed six to eight weeks.
I am very pleased with our progress to date and appreciate the time and effort
devoted by AOL, particularly their most senior managers
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in making our online/internet venture one of the leading commerce areas based on
revenues."
Borislow concluded with: "A number of potential suitors have expressed
various levels of interest in acquiring Tel-Save. Consistent with our belief
that the Company must either be or become part of a larger organization,
management has engaged in several discussions regarding the potential sale of
the Company and intends to continue to explore this alternative. However, we
cannot at this time assess the likelihood that these or other discussions will
lead to a sale of the Company or predict what the terms of such a sale, if any,
might be. In addition, there can be no assurance that any sale of the Company at
this time would be at a significant premium to the current market price of the
Company's stock."
The following contains operating results for the years ended December 31,
1997 and 1996:
TEL-SAVE HOLDINGS, INC.
OPERATING RESULTS
(In thousands, except per share amounts)
Year Ended
December 31
1997 1996
Revenues $ 304,768 $ 232,424
Income (loss) before provision
for income taxes (34,336) 32,373
Provision (benefit) for income taxes (13,391) 12,205
Net income (loss) (20,945) 20,168
Basic EPS $ (.33) $ .38
Weighted average common shares-Basic 64,168 52,650
Diluted EPS $ (.33) $ .35
Weighted average common shares-Diluted 64,168 57,002
TEL-SAVE HOLDINGS, INC.
BALANCE SHEET HIGHLIGHTS
(In thousands)
December 31, 1997 December 31, 1996
Cash and marketable securities $528,999 $157,260
Other current assets 156,906 44,625
Total current assets 685,905 201,885
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Other assets 117,586 55,123
Current liabilities 56,263 26,288
Other liabilities 35,800 0
Convertible debt 500,000 0
Stockholders' equity 211,428 230,720
Tel-Save Holdings, Inc. is a nationwide provider of telecommunication
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.
EXHIBIT 99.2
Tel-Save Engages Investment Banker
NEW HOPE, Pa., Feb. 20 /PRNewswire/ -- Tel-Save Holdings, Inc.
(Nasdaq:TALK), a nationwide provider of telecommunications services announced
that it had engaged Salomon Smith Barney to advise the Company with respect to
the possible sale of the Company. As indicated in the Company's February 6
release, management of the Company is continuing to explore this sale
alternative and is continuing discussions with a number of potential suitors who
have expressed various levels of interest in acquiring the Company. However, the
Company cannot at this time assess the likelihood that these or other
discussions will lead to a sale of the Company or predict what the terms of such
a sale, if any, might be.
Tel-Save Holdings, Inc. is a nationwide provider of telecommunication
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.
