SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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 June 30, 2003
OR
| ¨ | 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 000-22003
US UNWIRED INC.
(Exact name of registrant as specified in its charter)
| Louisiana | 72-1457316 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 901 Lakeshore Drive Lake Charles, LA |
70601 | |
| (Address of principal executive offices) | (Zip code) | |
(337) 436-9000
(Registrant’s telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
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 ¨
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
There were 128,831,535 shares of common stock, $0.01 par value per share, outstanding at July 31, 2003.
| Page | ||||
| Item 1. |
Financial Statements |
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| 3 | ||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
20 | ||
| Item 4. |
32 | |||
| Part II—OTHER INFORMATION |
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| Item 5. |
32 | |||
| Item 6. |
63 | |||
| 64 | ||||
2
Part I Financial Information
Item 1. Financial Statements
US UNWIRED INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| June 30, 2003 |
December 31, 2002 |
|||||||
| (Unaudited) | (Note 1) | |||||||
| Assets |
||||||||
| Current assets: |
||||||||
| Cash and cash equivalents |
$ | 74,615 | $ | 61,985 | ||||
| Restricted cash |
30,346 | 33,218 | ||||||
| Subscriber receivables, net |
35,604 | 47,727 | ||||||
| Other receivables |
8,293 | 2,661 | ||||||
| Inventory |
5,465 | 5,315 | ||||||
| Prepaid expenses and other assets |
21,051 | 15,077 | ||||||
| Receivables from related parties |
646 | 681 | ||||||
| Receivables from officers |
72 | 101 | ||||||
| Total current assets |
176,092 | 166,765 | ||||||
| Property and equipment, net |
449,650 | 484,014 | ||||||
| Restricted cash |
— | 8,000 | ||||||
| Goodwill |
46,705 | 51,961 | ||||||
| Intangibles, net |
59,222 | 78,292 | ||||||
| Notes receivable from unconsolidated affiliates |
1,848 | 1,811 | ||||||
| Other assets |
40,157 | 40,587 | ||||||
| Total assets |
$ | 773,674 | $ | 831,430 | ||||
| Liabilities and stockholders’ deficit |
||||||||
| Current liabilities: |
||||||||
| Accounts payable |
$ | 25,065 | $ | 28,301 | ||||
| Accrued expenses |
85,853 | 67,665 | ||||||
| Current maturities of long term obligations |
8,797 | 5,018 | ||||||
| Current maturities of long term obligations in default |
350,921 | — | ||||||
| Total current liabilities |
470,636 | 100,984 | ||||||
| Long term obligations, net of current maturities |
427,519 | 411,995 | ||||||
| Long term obligations in default, net of current maturities |
— | 350,207 | ||||||
| Deferred gain |
32,110 | 34,581 | ||||||
| Investments in and advances to unconsolidated affiliates |
3,993 | 3,901 | ||||||
| Stockholders’ deficit: |
||||||||
| Common stock |
1,288 | 1,288 | ||||||
| Additional paid in capital |
659,591 | 657,459 | ||||||
| Retained deficit |
(821,303 | ) | (728,811 | ) | ||||
| Promissory note |
(160 | ) | (174 | ) | ||||
| Total stockholders’ deficit |
(160,584 | ) | (70,238 | ) | ||||
| Total liabilities and stockholders’ deficit |
$ | 773,674 | $ | 831,430 | ||||
See accompanying notes to condensed consolidated financial statements
3
US UNWIRED INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(Unaudited)
| For the three months ended June 30, |
For the six months ended June 30, |
|||||||||||||||
| 2003 |
2002 |
2003 |
2002 |
|||||||||||||
| Revenues: |
||||||||||||||||
| Subscriber |
$ | 99,252 | $ | 89,553 | $ | 193,525 | $ | 145,668 | ||||||||
| Roaming |
32,490 | 49,601 | 59,981 | 80,344 | ||||||||||||
| Merchandise sales |
5,070 | 4,742 | 11,440 | 9,029 | ||||||||||||
| Other revenue |
691 | 516 | 1,304 | 1,441 | ||||||||||||
| Total revenue |
137,503 | 144,412 | 266,250 | 236,482 | ||||||||||||
| Expense: |
||||||||||||||||
| Cost of service |
53,085 | 64,861 | 104,931 | 104,836 | ||||||||||||
| Merchandise cost of sales |
8,961 | 10,317 | 18,451 | 18,307 | ||||||||||||
| General and administrative |
37,717 | 38,097 | 72,994 | 64,066 | ||||||||||||
| Sales and marketing |
20,405 | 28,381 | 45,951 | 49,925 | ||||||||||||
| Non-cash stock compensation |
1,064 | 1,236 | 2,131 | 2,402 | ||||||||||||
| Depreciation and amortization |
29,991 | 31,650 | 60,152 | 45,835 | ||||||||||||
| IWO asset abandonment charge |
— | — | 12,403 | — | ||||||||||||
| Total operating expense |
151,223 | 174,542 | 317,013 | 285,371 | ||||||||||||
| Operating loss |
(13,720 | ) | (30,130 | ) | (50,763 | ) | (48,889 | ) | ||||||||
| Other income (expense): |
||||||||||||||||
| Interest expense |
(21,249 | ) | (19,779 | ) | (41,939 | ) | (29,886 | ) | ||||||||
| Gain (loss) on sale of assets |
(5 | ) | 3 | 76 | 3 | |||||||||||
| Total other expense |
(21,254 | ) | (19,776 | ) | (41,863 | ) | (29,883 | ) | ||||||||
| Loss before equity in income (loss) of unconsolidated affiliates |
(34,974 | ) | (49,906 | ) | (92,626 | ) | (78,772 | ) | ||||||||
| Equity in income (loss) of unconsolidated affiliates |
(46 | ) | 160 | 134 | 665 | |||||||||||
| Net loss |
$ | (35,020 | ) | $ | (49,746 | ) | $ | (92,492 | ) | $ | (78,107 | ) | ||||
| Basic and diluted loss per share |
$ | (0.27 | ) | $ | (0.39 | ) | $ | (0.72 | ) | $ | (0.73 | ) | ||||
| Weighted average outstanding common shares |
128,832 | 128,777 | 128,832 | 107,353 | ||||||||||||
See accompanying notes to condensed consolidated financial statements
4
US UNWIRED INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
| For the six months ended June 30, |
||||||||
| 2003 |
2002 |
|||||||
| Cash flows from operating activities |
||||||||
| Net cash provided by (used in) operating activities |
$ | 21,051 | $ | (16,536 | ) | |||
| Cash flows from investing activities |
||||||||
| Proceeds from restricted cash |
10,871 | — | ||||||
| Proceeds from sale of assets |
350 | 10,016 | ||||||
| Distributions from unconsolidated affiliates |
250 | — | ||||||
| Payments for the purchase of equipment |
(18,205 | ) | (63,202 | ) | ||||
| Acquisition of business, net of cash acquired |
— | (61,475 | ) | |||||
| Proceeds from maturities of investments |
— | 10,935 | ||||||
| Net cash used in investing activities |
(6,734 | ) | (103,726 | ) | ||||
| Cash flows from financing activities |
||||||||
| Principal payments of long-term debt |
(1,689 | ) | (343 | ) | ||||
| Proceeds from long-term debt |
— | 60,000 | ||||||
| Proceeds from stock options exercised |
— | 212 | ||||||
| Proceeds from promissory notes |
— | 19 | ||||||
| Debt issuance costs |
— | (762 | ) | |||||
| Net cash (used in) provided by financing activities |
(1,689 | ) | 59,126 | |||||
| Net increase (decrease) in cash and cash equivalents |
12,628 | (61,136 | ) | |||||
| Cash and cash equivalents at beginning of period |
61,985 | 100,589 | ||||||
| Cash and cash equivalents at end of period |
$ | 74,613 | $ | 39,453 | ||||