________________________________________________________________________________ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ______________ FORM 8-K/A CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ______________ Date of Report (Date of earliest event reported): January 22, 1999 PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED (Exact name of registrant as specified in its charter) DELAWARE 0-29092 54-1708481 (State or Other Jurisdiction of (Commission (IRS Employer Incorporation) File Number) Identification No.) 1700 OLD MEADOW ROAD, SUITE 300, MCLEAN, VIRGINIA 22102 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (703) 902-2800 ________________________________________________________________________________
ITEMS 1-4. NOT APPLICABLE. ITEM 5. PRIMUS Telecommunications Group, Incorporated ("Primus" or the "Company") has completed an offering of $200 million of senior notes to institutional buyers. The previously announced offering of $175 million of senior notes was increased to accommodate institutional demand for the securities. The notes bear interest at 11-1/4% per year and mature in January 2009. The proceeds from the offering will fund the Company's installation of 11 additional switches in Europe, one in the United States and another in Japan, as well as the acquisition of additional capacity on both existing and future international and domestic fiber optic cable systems. The pro forma financial statements filed herewith supersede and replace those previously filed on Form 8-K by Primus on January 7, 1999. ITEM 6. NOT APPLICABLE. ITEM 7. (b) PRO FORMA FINANCIAL STATEMENTS. --------- PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED UNAUDITED PRO FORMA FINANCIAL DATA The following unaudited pro forma consolidated financial statements are based on the historical presentation of the consolidated financial statements of the Company, TresCom International, Inc. ("TresCom"), USFI, Inc. and TelePassport L.L.C. The Unaudited Pro Forma Consolidated Statement of Operations for the nine months ended September 30, 1998 gives effect to the merger between a wholly- owned subsidiary of Primus and TresCom consummated on June 9, 1998 (the "TresCom Merger"), the offering of its 9-7/8% Senior Notes due 2008 (the "1998 Senior Notes") and the offering ("Offering") of its 11-1/4% Senior Notes due 2009 (the "Notes") as if they had occurred on January 1, 1998. The Unaudited Pro Forma Consolidated Statement of Operations for the year ended December 31, 1997 gives effect to the October 1997 acquisition by Primus of TelePassport L.L.C. and USFI, Inc. (the "TelePassport/USFI Acquisition"), the TresCom Merger, the offering of 11-3/4% Senior Notes due 2004 (the "1997 Senior Notes"), the offering of the 1998 Senior Notes and the Offering as if they had occurred on January 1, 1997. The unaudited pro forma consolidated financial statements do not give effect to the repayment of the outstanding balance under TresCom's senior secured revolving credit facility in January 1999 (The "TresCom Facility"). The unaudited pro forma consolidated financial statements should be read in conjunction with the historical financial statements, including notes thereto, of Primus, TresCom, USFI, Inc. and Telepassport LLC, which have previously been filed with the Securities and Exchange Commission. The unaudited pro forma consolidated financial statements may not be indicative of the results that actually would have occurred if the transactions had been in effect on the dates indicated or which may be obtained in the future.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998 (IN THOUSANDS) PRO FORMA TRESCOM OFFERING AS PRIMUS(1) TRESCOM(2) ADJUSTMENTS ADJUSTMENTS ADJUSTED --------------------------------------- --------------- ---------- Net revenue............. $295,573 $71,342 $(1,817)(3) $ -- $359,141 (5,957)(4) Cost of revenue......... 249,406 60,632 (5,957)(4) 304,081 -------- ------- ------- ----------- --------- Gross margin............ 46,167 10,710 (1,817) -- 55,060 Operating expenses Selling, general, and administrative........ 57,389 16,050 (1,817)(3) 71,622 Depreciation and amortization.......... 15,322 3,215 (1,046)(5) 19,949 2,458 (6) -------- ------- ------- ----------- --------- Total operating expenses.............. 72,711 19,265 (405) -- 91,571 -------- ------- ------- ----------- --------- Loss from operations.... (26,544) (8,555) (1,412) -- (36,511) Interest expense........ (28,235) (754) (23,118)(8) (52,107) Interest income......... 8,634 -- 8,634 Other income (expense).. -- 288 288 -------- ------- ------- ----------- --------- Loss before income taxes.................. (46,145) (9,021) (1,412) (23,118) (79,696) Income taxes............ -- -- -- (7) -- -- -------- ------- ------- ----------- --------- Net loss................ $(46,145) $(9,021) $(1,412) $(23,118) $(79,696) ======== ======= ======= =========== ========= - -------- (1) Represents the historical results of operations of the Company for the nine months ended September 30, 1998. (2) Represents the historical results of operations of TresCom from January 1, 1998 through June 9, 1998 (acquisition date). TresCom Adjustments: (3) To reflect the reclassification of TresCom's bad debt expenses from selling, general and administrative expenses to a reduction of net revenue to conform to Primus's accounting policies. (4) To eliminate the effects of intercompany transactions between Primus and TresCom. (5) To reverse amortization expense associated with TresCom's previously acquired customer list and the excess of purchase price over the fair value of net assets acquired. (6) To record amortization expense associated with TresCom's previously acquired customer list and the excess of purchase price over the fair value of net assets acquired. (7) The pro forma adjustment to the income tax provision is zero because a valuation reserve was applied in full to the tax benefit associated with the pro forma loss before income taxes. Offering Adjustments: (8) To reflect pro forma interest expense and amortization of deferred financing costs related to the 1998 Senior Notes and the Notes.
PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 1997 (IN THOUSANDS) PRO FORMA AS ADJUSTED USFI/ TELEPASSPORT AND TRESCOM ------------------------------------ USFI/ PRO FORMA PRIMUS USFI, TELEPASSPORT TELEPASSPORT TRESCOM OFFERING AS (1) INC.(2) LLC (2) TRESCOM (3) ADJUSTMENTS ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTED -------- -------- ------------ ----------- ------------ ----------- -------- ----------- --------- Net revenue.......... $280,197 $27,040 $ 3,108 $157,641 $(9,673)(4) $(4,159)(7) $448,929 $ -- $ 448,929 (5,225)(8) Cost of revenue...... 252,731 20,907 2,704 124,365 (8,029)(4) (5,225)(8) 387,453 387,453 -------- ------- ------- -------- ------- ------- ------- -------- --------- Gross margin......... 27,466 6,133 404 33,276 (1,644) (4,159) 61,476 -- 61,476 Operating expenses: Selling, general, and administrative..... 50,622 11,182 1,389 36,386 (4,159)(7) 95,420 95,420 Depreciation and amortization....... 6,733 674 74 6,599 409 (5) (2,167)(9) 22,155 22,155 9,833 (10) -------- ------- ------- -------- ------- ------- -------- -------- --------- Total operating expenses........... 57,355 11,856 1,463 42,985 409 3,507 117,575 -- 117,575 -------- ------- ------- -------- ------- ------- -------- -------- --------- Loss from operations.......... (29,889) (5,723) (1,059) (9,709) (2,053) (7,666) (56,099) -- (56,099) Interest expense............. (12,914) (18) (1,146) (14,078) (54,988)(12) (69,066) Interest income...... 6,238 6,238 6,238 Other income (expense)........... 407 25 162 594 594 -------- ------- ------- -------- ------- ------- -------- -------- --------- Loss before income taxes........ (36,158) (5,698) (915) (10,855) (2,053) (7,666) (63,345) (54,988) (118,333) Income taxes......... (81) -- -- -- -- (6) -- (11) (81) (81) -------- ------- ------- -------- ------- ------- -------- -------- --------- Net loss............. $(36,239) $(5,698) $ (915) $(10,855) $(2,053) $(7,666) $(63,426) $(54,988) $(118,414) ======== ======= ======= ======== ======= ======= ======== ======== ========= - --------- (1) Represents the historical results of operations of the Company for the year ended December 31, 1997. (2) Represents the historical results of operations of USFI, Inc. and TelePassport LLC for the period from January 1, 1997 through October 20, 1997 (acquisition date). (3) Represents the historical results of operations of TresCom for the year ended December 31, 1997. USFI/TelePassport adjustments: (4) To eliminate selected net revenue and cost of revenue for a portion of the customer base which was not purchased. (5) To record amortization expense associated with the acquired customer list and the excess of purchase price over the fair value of net assets acquired. (6) The pro forma adjustment to the income tax provision is zero as a valuation reserve was applied in full to the tax benefit associated with the pro forma net loss before income taxes. TresCom adjustments: (7) To reflect the reclassification of Trescom's bad debt expenses from selling, general and administrative expenses to a reduction of net revenue to conform to Primus's accounting policies. (8) To eliminate the effects of intercompany transactions between Primus and TresCom. (9) To reverse amortization expense associated with TresCom's previously acquired customer list and the excess of purchase price over the fair value of net assets acquired. (10) To record amortization expense associated with TresCom's previously acquired customer list and the excess of purchase price over the fair value of net assets acquired. (11) The pro forma adjustment to the income tax provision is zero as a valuation reserve was applied in full to the tax benefit associated with the pro forma net loss before income taxes. Offering adjustments: (12) To reflect pro forma interest expense and amortization of deferred financing costs related to the 1997 Senior Notes, the 1998 Senior Notes and the Notes.
CAPITALIZATION The following table sets forth as of September 30, 1998: (i) the actual capitalization of the Company; and (ii) the actual capitalization of the Company adjusted to give effect to (A) the Offering of the Notes, less discounts, commissions, and estimated expenses of the Offering payable by the Company, and the application of the estimated net proceeds therefrom, and (B) the repayment of the outstanding balance under the TresCom Facility in January 1999. This table should be read in conjunction with the Company's Unaudited Pro Forma Financial Data and the notes thereto. As of September 30, 1998 ---------------------------- Actual As Adjusted ---------- ------------ (Dollars in thousands, except share data) Cash and cash equivalents.... $179,070 $348,516 Restricted investments (including current and long-term).................. 49,905 49,905 -------- -------- Total cash, cash equivalents and restricted investments.... $228,975 $398,421 ======== ======== Debt and capital lease obligations: TresCom Facility........... $ 23,554 $ -- 11-3/4% Senior Notes due 2004...................... 222,888 222,888 9-7/8% Senior Notes due 2008...................... 150,000 150,000 11-1/4% Senior Notes due 2009...................... -- 200,000 Notes payable.............. 558 558 Capital lease obligations............... 14,003 14,003 -------- -------- Total debt and capital lease obligations....... 411,003 587,449 Stockholders' equity: Common Stock, $.01 par value--80,000,000 shares authorized; 28,041,692 shares actual and as adjusted, issued and outstanding............... 280 280 Additional paid-in capital................... 234,405 234,405 Accumulated deficit........ (94,150) (94,150) Cumulative translation adjustment................ (4,226) (4,226) -------- -------- Total stockholders' equity.................. 136,309 136,309 -------- -------- Total capitalization..... $547,312 $723,758 ======== ========
(c) EXHIBITS. -------- None ITEM 8. NOT APPLICABLE. 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. PRIMUS TELECOMMUNICATIONS GROUP, INCORPORATED By: /s/ NEIL L. HAZARD -------------------------------- Neil L. Hazard Executive Vice President and Chief Financial Officer Date: February 3, 1999