Centennial Cellular Corp. Announces Record Results for the First Quarter Ended August 31, 1998.NEW YORK--(BUSINESS WIRE)--Oct. 9, 1998--Centennial Cellular Corp. announced record results for the quarter ending August 31, 1998. Total revenue for the quarter ended August 31, 1998 was $77,446,000 up $25,257,000 or 48.4% over revenue of $52,189,000 in the quarter ended August 31, 1997. Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. before depreciation and amortization for the quarter ended August 31, 1998 was $38,635,000, an increase of $16,365,000 or 73.5% over the $22,270,000 recorded for the quarter ended August 31, 1997. Revenue from Centennial's domestic wireless telephone business was $53,902,000 for the quarter ended August 31, 1998, an increase of $9,386,000 or 21.1% over revenue of $44,516,000 recorded for the quarter ended August 31, 1997. Operating income before depreciation and amortization for the quarter ended August 31, 1998 in Centennial's domestic wireless telephone business was $29,112,000, an increase of $6,418,000 or 28.3% above the quarter ended August 31, 1997. The Puerto Rico Puerto Rico (pwār`tō rē`kō), island (2005 est. pop. 3,917,000), 3,508 sq mi (9,086 sq km), West Indies, c.1,000 mi (1,610 km) SE of Miami, Fla. Wireless Telephone System began operations on December 12, 1996. Revenue from the Company's Puerto Rico Wireless Telephone System for the quarter ended August 31, 1998 was $23,544,000 an increase of $15,871,000 over revenue of $7,673,000 recorded for the quarter ended August 31, 1997. Operating income before depreciation and amortization in the Puerto Rico Wireless Telephone System for the quarter ended August 31, 1998 was $9,523,000, an increase of $9,947,000 above the operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. before depreciation and amortization of $424,000 for the quarter ended August 31, 1997. The consolidated net income for the quarter was $5,655,000 compared to a net loss of $6,786,000 for the quarter ended August 31, 1997. After dividends payable Dividends payable The declared dividend dollar amount that a company is obligated to pay. on preferred stock Stock shares that have preferential rights to dividends or to amounts distributable on liquidation, or to both, ahead of common shareholders. Preferred stock is given preference over common stock. Holders of preferred stock receive dividends at a fixed annual rate. , the Company's earnings (loss) per common share was $.06 and $(.41) for the quarters ended August 31, 1998 and 1997, respectively. The Company's wireless telephone subscribers at August 31, 1998 were 354,100 as compared to 231,600 at August 31, 1997, an increase of 122,500 subscribers or 52.9%. Domestic wireless telephone subscribers increased by 69,400 or 34.9% from 198,800 subscribers at August 31, 1997, due primarily to internal growth of subscribers in systems which it owned and operated at August 31, 1997. Subscribers of the Company's Puerto Rico Wireless Telephone System totaled 85,900 and 32,800 at August 31, 1998 and 1997, respectively. The Company's Puerto Rico Wireless Telephone System accounted for 43.3% of the Company's total subscriber increase. On July 2, 1998, the Company and CCW (Continuous Composite Write) A magneto-optic disk technology that emulates a WORM (Write Once Read Many) disk. It uses firmware in the drive to ensure that data cannot be erased and rewritten. Acquisition Corp. ("Acquisition"), a Delaware corporation A Delaware corporation is a corporation chartered in the U.S. state of Delaware. Delaware is well known as a corporate haven, and thus, over 50% of US publicly-traded corporations and 58% of the Fortune 500 companies are incorporated in the state. organized at the direction of Welsh, Carson, Anderson & Stowe VIII, L.P. ("WCAS WCAS Weinberg College of Arts and Sciences WCAS Warfighter Communication Assessment System (US DoD) VIII"), entered into an Agreement and Plan of Merger (the "Merger Agreement") providing for the merger of Acquisition with and into Centennial (the "Merger"). Centennial will continue as the surviving corporation (the "Surviving Corporation") in the Merger. The transaction is valued at approximately $2.0 billion, including indebtedness of approximately $515 million to be refinanced. Centennial will continue to operate as an independent company under its current name and management. WCAS VIII is a private investment firm and with its affiliated partnerships has been active in completing management buyouts Management buyout (MBO) Leveraged buyout whereby the acquiring group is led by the firm's management. management buyout See going private. and other private equity investments in the healthcare and information services See Information Systems. industries. Subject to the effects of proration Proration A situation during a corporate action in which the available cash or shares are not sufficient to satisfy the offers tendered by shareholders. Therefore, a proportion of both cash and shares is granted for each offer tendered. , pursuant to the Merger Agreement, outstanding shares of Class A Common Stock of Centennial will be converted into the right to receive $43.50 per share in cash or to receive common shares of the Surviving Corporation (the "Surviving Corporation Shares") representing up to 7.1% of the Surviving Corporation Shares outstanding immediately after the Merger. Class B Common Stock ("Class B Common Stock") will be converted into the right to receive $43.50 in cash; provided, that if the aggregate number of Surviving Corporation Shares elected to be received by Centennial's existing stockholders is less than 7.1% of the common shares of the Surviving Corporation outstanding immediately after the Merger, then a number of Class B Common Stock equal to the pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. portion of such shortfall will be converted into Surviving Corporation Shares. All outstanding shares of Convertible Redeemable Preferred Stock and Second Series Convertible Redeemable Preferred Stock of Centennial will be converted into the right to receive $43.50 per share in cash on an as converted basis. The transaction was structured to be accounted for as a recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. . Because existing holders of common stock of the Company must receive in the Merger an amount of Surviving Corporation Shares equal to 7.1% of the common shares of the Surviving Corporation outstanding immediately after the effective time of the Merger (the "Effective Time"), stockholders who do not elect to receive any shares may, due to proration, be required to receive some Surviving Corporation Shares. In addition, stockholders who elect to receive shares may, due to proration, receive Surviving Corporation Shares and receive cash in amounts which vary from the amounts such holders elected. Following the Merger, the stockholders of Acquisition will own 92.9% of the outstanding shares of the Surviving Corporation. In connection with the Merger, Acquisition has received a commitment from a third party for financing for Acquisition and certain existing and future subsidiaries of the Company in the aggregate amount of approximately $1.6 billion in the form of senior secured credit facilities credit facilities npl → facilidades fpl de crédito credit facilities npl → facilités fpl de paiement credit facilities and an unsecured bridge loan. Additionally, an affiliate of WCAS VIII has agreed to purchase approximately $150 million aggregate amount of subordinated notes of the Surviving Corporation and WCAS VIII and other equity investors have agreed to purchase approximately $350 million of common stock of the Surviving Corporation. It is anticipated that this funding will be used to pay the merger consideration described above, repay or repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. certain indebtedness of the Company and pay related fees and expenses. Additionally, pursuant to the Merger Agreement, the Company has agreed that, upon the request of Acquisition, it will commence offers to repurchase its two outstanding issuances of public debt (the "Debt Offers"). Pursuant to the Merger Agreement and at the request of Acquisition, the Company commenced the Debt Offers on September 8, 1998. Through October 8, 1998, over 99% of the Company's public debt has been tendered to the Company. As a condition to the closing of the Merger, the Company must redeem its two public debt issuances of $350 million in the aggregate prior to the closing date of the Merger. The estimated cost to the Company of the redemption, including accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. , is approximately $406 million based upon current market condition, U.S. treasury U.S. Treasury Created in 1798, the United States Department of the Treasury is the government (Cabinet) department responsible for issuing all Treasury bonds, notes and bills. Some of the government branches operating under the U.S. Treasury umbrella include the IRS, U.S. yields as of September 29, 1998 and an assumed payment date of October 15, 1998. The Company's obligation to accept for purchase, and to pay for, the public debt validly tendered is subject to certain conditions, including the consumation of the Merger, which, in turn, is subject to certain other conditions. The Merger is subject to certain conditions, including the approval of Centennial's shareholders, the receipt of certain approvals from the Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. and the funding of the committed financing arrangements. The Company completed filing the applications seeking FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. transfer approvals of the Merger. The last of these applications that are material to the transaction was placed on public notice by the FCC on August 17, 1998 and was eligible for grant beginning September 17, 1998. Although there can be no assurance that these applications will be granted promptly, the Company has no reason to believe that the applications will not be approved in a timely manner. In addition, Acquisition and the Company submitted their Notification and Report Forms with respect to the Merger on September 11, 1998 and on September 25, 1998, the Company's request for early termination of the waiting period under the HSR HSR homogeneously staining regions. Act was granted. Simultaneously with the execution of the Merger Agreement, Century Communications Corp., the holder of a majority of the voting power of Centennial, agreed to vote its shares of Centennial in favor of the Merger so long as the Merger Agreement remains in effect. Because Century agreed to approve the Merger by written consent in lieu of Instead of; in place of; in substitution of. It does not mean in addition to. meeting, and controls, on a fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. basis, more than a majority of the outstanding votes of the Company required to approve the Merger, no further vote is necessary to approve the Merger. The Merger Agreement provides for the payment of certain fees and the reimbursement Reimbursement Payment made to someone for out-of-pocket expenses has incurred. of certain expenses to Acquisition in the event of a termination of the Merger Agreement under certain circumstances. On August 21, 1998, the Company filed a Preliminary Information Statement with the Securities and Exchange Commission relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the merger transaction and anticipates filing a Registration Statement on Form S-4 which incorporates this Information Statement in the near future. The Information Statement/Prospectus also constitutes the prospectus of the Surviving Corporation for the issuance of shares of common stock in connection with the transactions contemplated by the Merger Agreement. Centennial Cellular Corp. acquires, operates, and invests in wireless telephone systems throughout the continental United States United States territory, including the adjacent territorial waters, located within North America between Canada and Mexico. Also called CONUS. and the Commonwealth of Puerto Rico. The Company's current wireless telephone interests represent approximately 10.1 million Net Pops (derived from the 1990 Census Report of the Bureau of the Census Noun 1. Bureau of the Census - the bureau of the Commerce Department responsible for taking the census; provides demographic information and analyses about the population of the United States Census Bureau , United States Department of Commerce The United States Department of Commerce is the Cabinet department of the United States government concerned with promoting economic growth. It was originally created as the United States Department of Commerce and Labor on February 14, 1903. ). Approximately 6.5 million of these Net Pops are represented by the Company's wireless telephone systems located in the continental United States, including approximately 1.1 million Net Pops related to the Company's minority equity investments in partnerships owning wireless telephone systems. The balance of approximately 3.6 million Net Pops represents the Company's interest in its wireless telephone systems in Puerto Rico. Based on 1996 Pops included in the 1997 Kagan Cellular Telephone Atlas, the Company's current wireless telephone interests represent approximately 10.9 million Net Pops. Approximately 7.1 million of these Net Pops are represented by the Company's wireless telephone systems located in the continental United States, including approximately 1.2 million Net Pops related to the Company's minority equity investments in partnerships owning wireless telephone systems. The balance of approximately 3.8 million Net Pops represents the Company's interest in its wireless telephone systems in Puerto Rico.
CENTENNIAL CELLULAR CORP.
Three Months Three Months
Ended 8/31/98 Ended 8/31/97 % Change
Revenue from Wireless
Telephone Services $77,446,000 $52,189,000 48.4%
Operating Income Before
Deprec. & Amortization 38,635,000 22,270,000 73.5%
Operating Income Before
Deprec. & Amortization -
Domestic 29,112,000 22,694,000 28.3%
Operating Income (Loss) Before
Deprec. & Amortization-
Puerto Rico 9,523,000 (424,000) 2,346.0%
Operating Income (Loss) 6,831,000 (2,792,000) 344.7%
Interest Expense - Net 11,131,000 10,041,000 10.9%
Net Income (Loss) 5,655,000 (6,786,000) 183.3%
*Earnings (Loss) Per Share .06 (.41)
Weighted Average Number
Of Shares 25,629,000 26,860,000
*After preferred stock dividends
|
|
||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion