UNITED STATES
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 March 31, 2003
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.
| Delaware | 52-1910372 | |
|
(state or other jurisdiction incorporation or organization) |
(IRS employer identification number) |
Elvira Rawson de Dellepiane 150
Indicate by check mark whether the registrant (1) has 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 registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Securities Exchange Act Rule 12b-2). YES o NO x
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
Indicate by check mark whether the registrant 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 x NO o
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 March 31, 2003, the registrant had outstanding 10,000,000 shares of common stock, $0.01 par value.
| Page No. | |||||||
| PART I FINANCIAL INFORMATION | F-1 | ||||||
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Item 1.
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Financial Statements
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F-1 | |||||
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Item 2.
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Management’s Discussion and Analysis of
Financial Condition and Results of Operations
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1 | |||||
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Item 3.
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Quantitative and Qualitative Disclosures About
Market Risk
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13 | |||||
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Item 4.
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Controls and Procedures
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15 | |||||
| PART II OTHER INFORMATION | 16 | ||||||
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Item 1.
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Legal Proceedings
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16 | |||||
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Item 2.
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Changes in Securities and Use of Proceeds
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16 | |||||
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Item 3.
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Defaults Upon Senior Securities
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16 | |||||
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Item 4.
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Submission of Matters to a Vote of
Security-Holders
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16 | |||||
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Item 5.
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Other Information
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16 | |||||
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Item 6.
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Exhibits and Reports on Form 8-K
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17 | |||||
| SIGNATURES | 19 | ||||||
| CERTIFICATIONS | 20 | ||||||
PART I
| Item 1. | Financial Statements |
IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| Predecessor | Successor | |||||||||
| Company | Company | |||||||||
| December 31, | March 31, | |||||||||
| 2002 | 2003 | |||||||||
| ASSETS | ||||||||||
|
CURRENT ASSETS:
|
||||||||||
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Cash and cash equivalents
|
$ | 32,563 | $ | 35,565 | ||||||
|
Trading investments
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23,021 | 26,324 | ||||||||
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Trade accounts receivable, net
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31,012 | 34,493 | ||||||||
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Other receivables
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16,674 | 13,235 | ||||||||
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Prepaid expenses
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2,746 | 3,696 | ||||||||
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Assets held for disposal
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5,485 | |||||||||
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Total current assets
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106,016 | 118,798 | ||||||||
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PROPERTY, PLANT AND EQUIPMENT, Net
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403,948 | 387,180 | ||||||||
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NON-CURRENT ASSETS:
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||||||||||
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Investments in common stock
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86 | 141 | ||||||||
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Other non-current assets
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10,633 | 10,987 | ||||||||
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Total non-current assets
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10,719 | 11,128 | ||||||||
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TOTAL
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$ | 520,683 | $ | 517,106 | ||||||
| LIABILITIES AND STOCKHOLDERS’ (DEFICIENCY) EQUITY | ||||||||||
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LIABILITIES NOT SUBJECT TO COMPROMISE:
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||||||||||
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CURRENT LIABILITIES:
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||||||||||
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Accounts payable — trade
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$ | 72,860 | $ | 52,002 | ||||||
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Current portion of long-term debt
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281,680 | 23,642 | ||||||||
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Accrued and other liabilities
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48,446 | 27,087 | ||||||||
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Total current liabilities
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402,986 | 102,731 | ||||||||
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LONG-TERM DEBT, Net
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27,592 | 243,824 | ||||||||
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OTHER LONG-TERM LIABILITIES
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15,280 | 13,765 | ||||||||
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DEFERRED REVENUES
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69,918 | 68,786 | ||||||||
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Total liabilities not subject to compromise
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515,776 | 429,106 | ||||||||
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LIABILITIES SUBJECT TO COMPROMISE
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727,522 | |||||||||
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Total liabilities
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1,243,298 | 429,106 | ||||||||
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COMMITMENTS AND CONTINGENCIES (NOTE 13)
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||||||||||
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STOCKHOLDERS’ (DEFICIENCY) EQUITY:
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||||||||||
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Common stock, $0.01 par value;
50,000,000 shares authorized, 10,000,000 shares issued
and outstanding in 2003 (including 686,000 shares held in the
common stock reserve pool)
|
100 | |||||||||
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Common stock, $0.01 par value;
300,000,000 shares authorized, 91,428,570 shares
issued and outstanding in 2002
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914 | |||||||||
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Additional paid in capital
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537,583 | 93,937 | ||||||||
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Accumulated deficit
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(1,276,845 | ) | ||||||||
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Common stock reserve pool (Note 2)
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— | (6,037 | ) | |||||||
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Deferred stock-based compensation
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(4,530 | ) | ||||||||
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Accumulated other comprehensive income
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20,263 | |||||||||
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Total stockholders’ (deficiency) equity
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(722,615 | ) | 88,000 | |||||||
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TOTAL
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$ | 520,683 | $ | 517,106 | ||||||
See notes to condensed consolidated financial statements.
F-1
IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Predecessor Company | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | |||||||||||
| 2002 | 2003 | ||||||||||
|
NET REVENUES:
|
|||||||||||
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Broadband and satellite
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$ | 46,314 | $ | 41,382 | |||||||
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Internet
|
7,854 | 5,733 | |||||||||
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Value added services
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3,617 | 4,781 | |||||||||
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Telephony
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4,344 | 4,106 | |||||||||
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Sales of equipment
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284 | 74 | |||||||||
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Total net revenues
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62,413 | 56,076 | |||||||||
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COSTS AND EXPENSES:
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|||||||||||
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Direct costs:
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|||||||||||
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Contracted services
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6,233 | 4,447 | |||||||||
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Other direct costs
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6,535 | 4,227 | |||||||||
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Leased capacity
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20,385 | 17,601 | |||||||||
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Cost of equipment sold
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117 | 48 | |||||||||
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Total direct costs
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33,270 | 26,323 | |||||||||
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Salaries and wages
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13,042 | 10,727 | |||||||||
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Selling, general and administrative
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7,351 | 5,506 | |||||||||
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Depreciation and amortization
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23,908 | 19,216 | |||||||||
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Total costs and expenses
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77,571 | 61,772 | |||||||||
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Operating loss
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(15,158 | ) | (5,696 | ) | |||||||
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OTHER INCOME (EXPENSES):
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|||||||||||
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Interest income
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355 | 200 | |||||||||
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Interest expense (contractual interest of $21,801
in 2003)
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(33,800 | ) | (1,909 | ) | |||||||
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Net (loss) gain on foreign exchange
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(7,365 | ) | 9,969 | ||||||||
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Recognition of other-than-temporary decline in
value of investments
|
(674 | ) | |||||||||
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Reorganization items
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724,807 | ||||||||||
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Other (loss) income, net
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(1,397 | ) | 2,781 | ||||||||
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Total other (expenses) income
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(42,881 | ) | 735,848 | ||||||||
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(LOSS) INCOME BEFORE INCOME TAXES
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(58,039 | ) | 730,152 | ||||||||
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PROVISION FOR FOREIGN INCOME TAXES
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(438 | ) | (406 | ) | |||||||
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NET (LOSS) INCOME
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$ | (58,477 | ) | $ | 729,746 | ||||||
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NET (LOSS) INCOME PER COMMON SHARE:
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|||||||||||
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BASIC AND DILUTED
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$ | (0.64 | ) | $ | 7.98 | ||||||
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WEIGHTED AVERAGE NUMBER OF COMMON SHARES:
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|||||||||||
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BASIC AND DILUTED
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91,429 | 91,429 | |||||||||
See notes to condensed consolidated financial statements.
F-2
IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
| Predecessor Company | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2002 | 2003 | |||||||||
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NET (LOSS) INCOME
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$ | (58,477 | ) | $ | 729,746 | |||||
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OTHER COMPREHENSIVE LOSS:
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||||||||||
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Foreign currency translation adjustment
|
(265 | ) | (4,097 | ) | ||||||
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Change in unrealized (loss) gain on investments
available for sale
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(867 | ) | 55 | |||||||
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Recognition of other-than-temporary decline in
value of investment
|
674 | |||||||||
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TOTAL
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(458 | ) | (4,042 | ) | ||||||
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COMPREHENSIVE (LOSS) INCOME
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$ | (58,935 | ) | $ | 725,704 | |||||
See notes to condensed consolidated financial statements.
F-3
IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ (DEFICIENCY) EQUITY
| Common | Accumulated | ||||||||||||||||||||||||||||||||
| Common Stock | Additional | Stock | Deferred | Other | |||||||||||||||||||||||||||||
| Paid In | Accumulated | Reserve | Stock-Based | Comprehensive | |||||||||||||||||||||||||||||
| Shares | Amount | Capital | Deficit | Pool | Compensation | Income (Loss) | Total | ||||||||||||||||||||||||||
|
BALANCE AT DECEMBER 31, 2002
(PREDECESSOR COMPANY) |
91,428,570 | $ | 914 | $ | 537,583 | $ | (1,276,845 | ) | $ | (4,530 | ) | $ | 20,263 | $ | (722,615 | ) | |||||||||||||||||
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Amortization of amount paid in excess of carrying
value of net assets acquired from related party
|
142 | 142 | |||||||||||||||||||||||||||||||
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Change in unrealized loss on investment available
for sale
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55 | 55 | |||||||||||||||||||||||||||||||
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Foreign currency translation adjustment
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(4,097 | ) | (4,097 | ) | |||||||||||||||||||||||||||||
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Net income for the period
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729,746 | 729,746 | |||||||||||||||||||||||||||||||
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BALANCE AT MARCH 31, 2003
(Predecessor Company) |
91,428,570 | 914 | 537,725 | (547,099 | ) | (4,530 | ) | 16,221 | 3,231 | ||||||||||||||||||||||||
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Elimination of Predecessor Company
stockholder’s equity
|
(91,428,570 | ) | (914 | ) | (537,725 | ) | 547,099 | 4,530 | (16,221 | ) | (3,231 | ) | |||||||||||||||||||||
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Issuance of Successor Company common stock
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10,000,000 | 100 | 93,937 | $ | (6,037 | ) | 88,000 | ||||||||||||||||||||||||||
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BALANCE AT MARCH 31, 2003
(SUCCESSOR COMPANY) |
10,000,000 | $ | 100 | $ | 93,937 | $ | — | $ | (6,037 | ) | $ | — | $ | — | $ | 88,000 | |||||||||||||||||
See notes to condensed consolidated financial statements.
F-4
IMPSAT FIBER NETWORKS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Predecessor Company | ||||||||||||
| Three Months Ended | ||||||||||||
| March 31, | ||||||||||||
| 2002 | 2003 | |||||||||||
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CASH FLOWS FROM OPERATING ACTIVITIES:
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||||||||||||
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Net (loss) income
|
$ | (58,477 | ) | $ | 729,746 | |||||||
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Adjustments to reconcile net (loss) income
to net cash provided by operating activities:
|
||||||||||||
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Amortization and depreciation
|
23,908 | 19,216 | ||||||||||
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Gain on extinguishment of debt
|
(728,203 | ) | ||||||||||
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Stock-based compensation
|
1,760 | |||||||||||
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Deferred income tax provision
|
82 | |||||||||||
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Provision for doubtful accounts
|
3,017 | 515 | ||||||||||
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Recognition of other-than-temporary decline in
value of investments
|
674 | |||||||||||
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Changes in assets and liabilities:
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