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:
July 13, 1998
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(Date of earliest event reported)
Electric Lightwave, Inc.
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(Exact name of Registrant as specified in charter)
Delaware 0-23393 93-1035711
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
4400 NE 77th Avenue, Vancouver, WA 98662
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(Address of principal executive offices) (Zip Code)
(360)892-1000
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(Registrant's telephone number, including area code)
No change since last report
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(Former name or address, if changed since last report)
Item 5. Other Events.
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This report is being filed to make available the following press release dated
July 13, 1998.
ELECTRIC LIGHTWAVE INDEPENDENCE AND STRATEGIC OPTIONS NOT LIMITED BY
CITIZENS UTILITIES' SEPARATION ANNOUNCEMENT
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Operations Update: Provisioning System Implementation Will Temporarily
Impact Revenue Growth Despite Strong Customer Demand
VANCOUVER, Wash. -- July 13, 1998 -- Electric Lightwave Inc. (NASDAQ:
ELIX) management believes that recent fluctuations in its share price may be due
to market confusion surrounding Citizens Utilities' (NYSE: CZN, CZNPr)
separation announcement of May 18, 1998.
That announcement stated that Citizens' Board of Directors had
authorized the separation of Citizens' telecommunications businesses and its
public services businesses into two stand-alone, publicly traded companies.
The announcement further stated that the separation was being made to
unlock shareholder value and that Citizens' telecommunications businesses and
public services businesses will be better able to pursue their own strategies
and compete more effectively as separate companies. Further, the separation will
enable both businesses to take full advantage of opportunities to enhance value.
Citizens' telecommunications businesses consist principally of wholly owned
local exchange subsidiaries with approximately 900,000 access lines in 12 states
and an 83% interest in Electric Lightwave.
Daryl A. Ferguson, Electric Lightwave's chief executive officer and
Citizens president and chief operating officer said, "The separation
announcement is favorable for Electric Lightwave since its largest shareholder
will transition from a diversified utility into a company with a singular focus
on telecommunications. In no way did this announcement suggest any limitation on
Electric Lightwave's ability to remain independent or limit its ability to take
any future strategic actions to enhance shareholder value."
OPERATIONS UPDATE
Electric Lightwave continues its successful cut over to a new business
systems platform. This platform enables the integration of order flow,
provisioning, network monitoring and billing systems. Integration of an enhanced
order flow, provisioning and billing system will occur later in 1998.
Dave Sharkey, president and chief operating officer of Electric
Lightwave said, "Upon completion, we will have the one thing that every
competitive local exchange carrier wants: a scaleable provisioning system that
can handle any level of increased business from the same platform."
At the time of its first quarter earnings release on May 4, Electric
Lightwave indicated that the installation of this new provisioning system would
probably have a temporary impact on the company's ability to ramp-up its order
processing. While demand for services remains strong, as evidenced by the
company's growing revenue backlog, revenues for the second, third, and fourth
quarters are likely to be approximately 8%, on average below analysts' consensus
estimates. Electric Lightwave's gross margins remain at industry highs, and
revenues are expected to return to double-digit quarterly growth rates late in
the year.
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Sharkey added: "We are experiencing very strong demand, so this is not
a demand issue - it is a temporary constraint to our provisioning ability. We
continue to have confidence in our strategy and ability to execute our business
plan."
The company believes that it has the right combination of talent and
resources to meet the strong demand for its voice, network and enhanced data
products and in its ability to attract and retain a significant share of its
target market. This was evidenced by the company's recent agreement with Qwest
Communications, which was another execution step in its original business plan.
Based in Vancouver, Wash., Electric Lightwave is a full-service
integrated communications provider offering local and long distance telephone
service, videoconferencing, prepaid services, broadband transport, data and
Internet access services to business customers throughout the United States.
Electric Lightwave's highly rated Internet backbone was recently ranked third in
the nation for "Best Internet Value" by Boardwatch Magazine. Visit Electric
Lightwave on the Worldwide Web at www.eli.net.
Statements contained in this news release regarding financial results
and other planned events are forward-looking statements and subject to
uncertainties and risks including, but not limited to, demand for Electric
Lightwave's products and services and the company's ability to successfully
implement its strategies, each of which may be impacted by -- among other things
- -- economic, competitive or regulatory conditions. These and other applicable
risks are summarized in the company's Form 10-K Annual Report for the fiscal
year ended December 31, 1997.
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SIGNATURES
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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.
Electric Lightwave, Inc.
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Registrant
By: /s/ Kerry D. Rea
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Vice President and Controller
Date: July 13, 1998