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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

x  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2002

OR
o  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                               to                               

Commission File Number: 000-29085

IMPSAT Fiber Networks, Inc.

IMPSAT S.A.
(Exact name of registrant as specified in its charter)
     
Delaware
Argentina
(state or other jurisdiction of
incorporation or organization) 		  52-1910372
Not Applicable
(IRS employer identification number)

Alférez Pareja 256 (1107)

Buenos Aires, Argentina
(5411) 5170-0000
(Address, including zip code, and telephone number, including area code,
of registrants’ principal executive offices)

      Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days.     YES x     NO o

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS

      Indicate by check mark whether the Company has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.     YES n/a     NO n/a

APPLICABLE ONLY TO CORPORATE ISSUERS

      Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of September 30, 2002, the Company had outstanding 91,428,570 shares of Common Stock, $0.01 par value.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Disclosure Controls and Procedures
PART II OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security-Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
Certification for Richardo Verdaguer
Certification for Hector Alonso
Certification for Marcelo Girotti
Certification for Jorge Paternostro

Table of Contents
IMPSAT Fiber Networks, Inc.
IMPSAT S.A.

INDEX

               
PART I  FINANCIAL INFORMATION     F-1  
 
Item 1.
 
Financial Statements
    F-1  
 
Item 2.
 
Management’s Discussion and Analysis of Financial Condition and Results of Operations
    1  
 
Item 3.
 
Quantitative and Qualitative Disclosures About Market Risk
    18  
 
Item 4.
 
Disclosure Controls and Procedures
    19  
PART II  OTHER INFORMATION     19  
 
Item 1.
 
Legal Proceedings
    19  
 
Item 2.
 
Changes in Securities
    19  
 
Item 3.
 
Defaults Upon Senior Securities
    19  
 
Item 4.
 
Submission of Matters to a Vote of Security-Holders
    19  
 
Item 5.
 
Other Information
    19  
 
Item 6.
 
Exhibits and Reports on Form 8-K
    19  
SIGNATURES     22  
CERTIFICATIONS     23  

Table of Contents

PART I

FINANCIAL INFORMATION

Item 1.     Financial Statements

IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. Dollars)
(Unaudited)
                     
December 31, September 30,
2001 2002
ASSETS
CURRENT ASSETS:
               
 
Cash and cash equivalents
  $ 35,606     $ 33,096  
 
Trading investments
    29,319       26,074  
 
Trade accounts receivable, net
    58,411       38,209  
 
Other receivables
    39,003       15,814  
 
Prepaid expenses
    3,429       3,443  
     
     
 
   
Total current assets
    165,768       116,636  
     
     
 
BROADBAND NETWORK, Net
    310,598       220,926  
     
     
 
PROPERTY, PLANT AND EQUIPMENT, Net
    214,459       183,806  
     
     
 
NON-CURRENT ASSETS:
               
 
Investments in common stock
    3,307       1,594  
 
Deferred financing costs, net
    10,752          
 
Other non-current assets
    13,690       12,045  
     
     
 
   
Total non-current assets
    27,749       13,639  
     
     
 
TOTAL
  $ 718,574     $ 535,007  
     
     
 
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
LIABILITIES NOT SUBJECT TO COMPROMISE:
               
CURRENT LIABILITIES
               
 
Accounts payable — trade
  $ 86,999     $ 71,109  
 
Short-term debt
    8,323          
 
Current portion of long-term debt
    959,076       282,292  
 
Accrued and other liabilities
    79,237       64,494  
     
     
 
   
Total current liabilities
    1,133,635       417,895  
LONG-TERM DEBT, Net
    23,189       29,238  
OTHER LONG-TERM LIABILITIES
    14,973       9,409  
DEFERRED REVENUES
    99,419       95,630  
     
     
 
   
Total liabilities not subject to compromise
    1,271,216       552,172  
     
     
 
LIABILITIES SUBJECT TO COMPROMISE
            727,522  
     
     
 
   
Total liabilities
    1,271,216       1,279,694  
     
     
 
COMMITMENTS AND CONTINGENCIES (NOTE 13)
               
STOCKHOLDERS’ DEFICIENCY:
               
 
Common Stock, $0.01 par value; 300,000,000 shares authorized, 91,428,570 shares issued and outstanding at December 31, 2001 and September 30, 2002
    914       914  
 
Additional paid in capital
    537,924       538,349  
 
Accumulated deficit
    (1,072,330 )     (1,309,157 )
 
Deferred stock-based compensation
    (5,438 )     (5,438 )
 
Accumulated other comprehensive (loss) income
    (13,712 )     30,645  
     
     
 
   
Total stockholders’ deficiency
    (552,642 )     (744,687 )
     
     
 
TOTAL
  $ 718,574     $ 535,007  
     
     
 
See notes to condensed consolidated financial statements.

F-1

Table of Contents

IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. Dollars, except per share amounts)
(Unaudited)
                                       
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2002 2001 2002
NET REVENUES:
                               
 
Data and value added services
  $ 59,097     $ 43,901     $ 178,186     $ 138,289  
 
Internet
    11,612       6,333       34,453       21,454  
 
Telephony
    3,406       2,915       6,562       11,234  
 
Services to carriers
    1,560       1,823       5,727       5,323  
 
Sales of equipment
    895       336       11,718       762  
     
     
     
     
 
     
Total net revenues from services and equipment
    76,570       55,308       236,646       177,062  
     
     
     
     
 
 
Broadband network development revenues
                    7,197          
     
     
     
     
 
     
Total net revenues
    76,570       55,308       243,843       177,062  
     
     
     
     
 
COSTS AND EXPENSES:
                               
 
Direct costs:
                               
   
Contracted services
    10,150       3,676       30,094       15,013  
   
Other direct costs
    7,653       5,629       20,816       17,190  
   
Leased capacity
    21,851       17,422       67,236       57,321  
   
Broadband network cost
                    3,335          
   
Cost of equipment sold
    722       67       8,219       307  
     
     
     
     
 
     
Total direct costs
    40,376       26,794       129,700       89,831  
     
     
     
     
 
 
Salaries and wages
    20,835       10,852       64,932       36,487  
 
Selling, general and administrative
    12,251       6,243       41,721       20,406  
 
Provision for asset impairment
    234,625               234,625          
 
Depreciation and amortization
    32,888       16,706       92,566       63,974  
     
     
     
     
 
     
Total costs and expenses
    340,975       60,595       563,544       210,698  
     
     
     
     
 
Operating loss
    (264,405 )     (5,287 )     (319,701 )     (33,636 )
     
     
     
     
 
OTHER INCOME (EXPENSES):
                               
 
Interest income and investment gains
    1,706       436       9,798       1,963  
 
Interest expense (contractual interest of $36,899 and $114,385 in 2002, respectively)
    (35,761 )     (13,438 )     (105,983 )     (86,117 )
 
Net loss on foreign exchange
    (26,132 )     (62,621 )     (50,282 )     (115,052 )
 
Recognition of other-than-temporary decline in value of investments
    (19,537 )             (19,537 )        
 
Reorganization items
            (9,297 )             (14,989 )
 
Other loss, net
    (311 )     (2,105 )     (163 )     (3,805 )
     
     
     
     
 
     
Total other expenses
    (80,035 )     (87,025 )     (166,167 )     (218,000 )
     
     
     
     
 
LOSS BEFORE INCOME TAXES
    (344,440 )     (92,312 )     (485,868 )     (251,636 )
BENEFIT FROM (PROVISION FOR) FOREIGN INCOME TAXES
    84       (407 )     (26,403 )     (1,558 )
     
     
     
     
 
LOSS BEFORE EXTRAORDINARY GAIN ON EARLY EXTINGUISHMENT OF DEBT
    (344,356 )     (92,719 )     (512,271 )     (253,194 )
GAIN ON EARLY EXTINGUISHMENT OF DEBT
                            16,367  
     
     
     
     
 
NET LOSS
  $ (344,356 )   $ (92,719 )   $ (512,271 )   $ (236,827 )
     
     
     
     
 
NET LOSS PER COMMON SHARE:
                               
 
LOSS BEFORE EXTRAORDINARY ITEM
  $ (3.77 )   $ (1.01 )   $ (5.60 )   $ (2.77 )
 
EXTRAORDINARY ITEM
                            0.18  
     
     
     
     
 
 
NET LOSS, BASIC AND DILUTED
  $ (3.77 )   $ (1.04 )   $ (5.60 )   $ (2.59 )
     
     
     
     
 
WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
                               
 
BASIC AND DILUTED
    91,429       91,429       91,429       91,429  
     
     
     
     
 
See notes to condensed consolidated financial statements.

F-2

Table of Contents

IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands of U.S. Dollars)
(Unaudited)
                                     
Three Months Ended Nine Months Ended
September 30, September 30,
2001 2002 2001 2002
NET LOSS
  $ (344,356 )   $ (92,719 )   $ (512,271 )   $ (236,827 )
     
     
     
     
 
OTHER COMPREHENSIVE (LOSS) INCOME:
                               
 
Foreign currency translation adjustment
    (488 )     37,247       (5,470 )     44,954  
 
Change in unrealized loss on investments available for sale
    (407 )     (225 )     (8,852 )     (1,454 )
 
Recognition of other-than-temporary decline in value of investment
    19,537       41       19,537       857  
     
     
     
     
 
   
TOTAL
    18,642       37,063       5,215       44,357  
     
     
     
     
 
COMPREHENSIVE LOSS
  $ (325,714 )   $ (55,656 )   $ (507,056 )   $ (192,470 )
     
     
     
     
 

See notes to condensed consolidated financial statements.

F-3

Table of Contents

IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES

(DEBTOR-IN-POSSESSION)

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIENCY

FOR NINE MONTHS ENDED SEPTEMBER 30, 2002
(In thousands of U.S. Dollars)
(Unaudited)