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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 19, 2001
LEAP WIRELESS INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-29752 33-0811062
(STATE OR OTHER JURISDICTION (COMMISSION FILE NUMBER) (I.R.S. EMPLOYER
OF INCORPORATION) IDENTIFICATION NO.)
10307 PACIFIC CENTER COURT, SAN DIEGO, CALIFORNIA 92121
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (858) 882-6000
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This Current Report on Form 8-K is filed by Leap Wireless International,
Inc., a Delaware corporation ("Leap" or the "Company"), in connection with the
matters described herein.
ITEM 5. OTHER EVENTS.
On April 19, 2001, Leap announced its financial and certain other
operational results for the quarter ended March 31, 2001 as set forth below.
The Company reported that as of March 31, 2001, customers of the
Company's Cricket service grew to just over 339,000, compared to the more than
190,000 customers reported as of December 31, 2000.
Cricket operational highlights from the first quarter of 2001 included:
- Leap launched an additional four markets -- Pueblo, Colorado; Wichita,
Kansas; and Albuquerque and Santa Fe, New Mexico -- bringing the total
potential customers covered by Cricket service in markets across the
United States to approximately 9.2 million (1998 POPs).
- Average revenue per user per month (ARPU) across all of Leap's
operational markets was approximately $35.
- Overall cost per gross customer addition (CPGA) was less than $230.
Key financial performance measures for the first quarter ended March 31,
2001 were as follows:
- Total operating revenues for Leap's U.S. operations for the first
quarter were $36.8 million, an increase of 158 percent over the
previous quarter.
- Consolidated earnings before interest, taxes, depreciation and
amortization (EBITDA) was negative $48.1 million, compared to a
negative $60.5 million at the end of the prior quarter.
- Leap's consolidated net loss for the quarter was $114.4 million or
$3.88 per share, compared to a net loss of $103.5 million or $3.82 per
share in the prior quarter. Of the $3.88 net loss per share reported
in the first quarter, $0.89 was the result of losses for Pegaso
Telecomunicaciones S.A., de C.V. ("PEGASO"), the Mexican wireless
company that Leap co-founded, recognized under the equity method of
accounting.
- Leap's total cash and cash equivalents, investments, and deposits on
pending wireless license acquisitions as of March 31, 2001 were
approximately $655 million.
- Leap's property and equipment, net of depreciation, rose to
approximately $508 million in the first quarter, an increase of
approximately 18 percent from that reported at December 31, 2000.
Other Highlights:
- International Operations -- PEGASO continued to expand. PEGASO grew
its customer base to approximately 624,000 at the end of the quarter,
up approximately 88,000 from
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the 536,000 customers reported on December 31, 2000. During the first
quarter, PEGASO also launched service in Mexicali and Saltillo, ending
the quarter with service in 10 cities in Mexico.
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LEAP WIRELESS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
March 31, December 31,
2001 2000
----------- ------------
ASSETS
Cash and cash equivalents ................................... $ 342,589 $ 338,878
Restricted cash equivalents ................................. 13,678 13,575
Short-term investments ...................................... 216,073 199,106
Inventories ................................................. 12,574 9,032
Notes receivable, net ....................................... 79,276 138,907
Other current assets ........................................ 8,066 12,746
----------- -----------
Total current assets ................................... 672,256 712,244
Property and equipment, net ................................. 507,991 430,193
Investment in unconsolidated wireless operating company ..... 8,191 34,691
Wireless licenses, net ...................................... 273,436 265,635
Goodwill and other intangible assets, net ................... 33,371 30,297
Restricted investments ...................................... 52,735 51,896
Deposits and other assets ................................... 248,965 122,451
----------- -----------
Total assets ........................................... $ 1,796,945 $ 1,647,407
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LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities .................... $ 40,331 $ 58,735
Other current liabilities ................................... 60,023 65,690
----------- -----------
Total current liabilities .............................. 100,354 124,425
Long-term debt .............................................. 1,130,318 897,878
Other long-term liabilities ................................. 40,014 41,846
----------- -----------
Total liabilities ...................................... 1,270,686 1,064,149
----------- -----------
Stockholders' equity:
Preferred stock ........................................... -- --
Common stock .............................................. 3 3
Additional paid-in capital ................................ 948,990 893,401
Unearned stock-based compensation ......................... (8,256) (10,019)
Accumulated deficit ....................................... (417,283) (302,898)
Accumulated other comprehensive income .................... 2,805 2,771
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Total stockholders' equity ............................. 526,259 583,258
----------- -----------
Total liabilities and stockholders' equity ............. $ 1,796,945 $ 1,647,407
=========== ===========
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LEAP WIRELESS INTERNATIONAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Three Months Ended
March 31,
--------------------------------------------
2001 2000 2000 Pro Forma(1)
--------- -------- -----------------
Revenues:
Service revenues ...................................... $ 25,655 $ 9,418 $ 2,762
Equipment revenues .................................... 11,098 573 1,437
--------- -------- --------
Total revenues ................................ 36,753 9,991 4,199
--------- -------- --------
Operating expenses:
Cost of service ....................................... (12,226) (2,783) (1,312)
Cost of equipment ..................................... (30,938) (13,248) (4,459)
Selling and marketing ................................. (17,015) (6,676) (1,476)
General and administrative expenses ................... (24,686) (15,427) (11,791)
Depreciation and amortization ......................... (14,787) (5,242) (6,029)
--------- -------- --------
Total operating expenses ...................... (99,652) (43,376) (25,067)
--------- -------- --------
Operating loss ........................................ (62,899) (33,385) (20,868)
Equity in net loss of investments in and loan
receivable from unconsolidated wireless
operating companies ................................... (26,182) (29,583) (19,144)
Interest income ......................................... 10,899 4,691 4,687
Interest expense ........................................ (37,611) (16,160) (13,890)
Foreign currency transaction gains (losses), net ........ (1,235) 1,399 --
Other income, net ....................................... 3,576 635 665
--------- -------- --------
Loss before income taxes and extraordinary item ......... (113,452) (72,403) (48,550)
Income taxes ............................................ (933) -- --
--------- -------- --------
Loss before extraordinary item .......................... (114,385) (72,403) (48,550)
Extraordinary loss on early extinguishment of debt ...... -- (4,422) (4,422)
--------- -------- --------
Net loss ...................................... $(114,385) $(76,825) $(52,972)
========= ======== ========
Basic and diluted net loss per common share:
Loss before extraordinary item ........................ $ (3.88) $ (3.23) $ (2.17)
Extraordinary loss .................................... -- (0.20) (0.20)
--------- -------- --------
Net loss ...................................... $ (3.88) $ (3.43) $ (2.37)
========= ======== ========
Shares used in per share calculations:
Basic and diluted ..................................... 29,462 22,397 22,397
========= ======== ========
(1) The pro forma results for the three months ended March 31, 2000 assume that
the Company had purchased substantially all the assets of Chase
Telecommunications Holdings, Inc. on January 1, 2000 and had sold its interest
in Smartcom S.A. on December 31, 1999.
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LEAP WIRELESS INTERNATIONAL, INC.
SELECTED SEGMENT DATA
(UNAUDITED)
(IN THOUSANDS)
As of and for the
Three Months Ended
March 31,
---------------------------
2001 2000
----------- ---------
United States:
Revenues ............................. $ 36,753 $ 4,199
EBITDA ............................... (41,017) (8,837)
Operating loss ....................... (55,358) (14,506)
Capital expenditures ................. (86,037) (35,886)
Purchase of wireless licenses ........ (6,714) (73,154)
Total assets ......................... 1,173,583 213,635
Mexico(1):
Revenues ............................. 38,295 4,652
EBITDA ............................... (87,871) (48,482)
Operating loss ....................... (100,660) (53,509)
Capital expenditures ................. (99,133) (66,067)
Total assets ......................... 806,215 597,566
(1) The results of the Mexico segment are for the quarters ended December 31,
2000 and 1999, a three month reporting lag.
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SIGNATURE
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.
Date: April 19, 2001 LEAP WIRELESS INTERNATIONAL, INC.
By: /s/ JAMES E. HOFFMANN
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James E. Hoffmann
Senior Vice President, General
Counsel and Secretary
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