| IPO Company Profile |
| Current Quote | News | SEC Filings | Peer IPO Companies |
| USN Communications, Inc. |
| 10 South Riverside Plaza, Suite 401, Chicago, IL 60606 * (312) 906-3600 |
| The company is one of the fastest growing competitive local exchange carriers in the U.S. The company offers a bundled package of telecommunications products, including local and long distance telephony, voice mail, paging, teleconferencing. |
| Manager | Tier | Phone |
| Merrill Lynch & Co. | Lead Manager | (212) 449-4600 |
| Cowen & Company | Co-manager | (212) 495-6000 |
| Donaldson, Lufkin & Jenrette Securities Corp. | Co-manager | (212) 371-0641 |
| NASNTL: | USNC | Service: | SIC 4813 | |
| Type of Shares: | Common Shares | Filing Date: | 10/21/97 | |
| U.S. Shares: | 6,400,000 | Offer Date: | 2/3/98 | |
| Non-U.S. Shares: | 1,600,000 | Filing Range: | $16.00 - $18.00 | |
| Primary Shares: | 8,000,000 | Offer Price: | $16.00 | |
| Secondary Shares: | 0 | Gross Spread: | $1.12 | |
| Offering Amount: | $136,000,000 | Selling: | $0.65 | |
| Expenses: | $1,100,000 | Reallowance: | $0.10 | |
| Post-IPO Shares: | - | |||
| Employees: | 868 |
| Issuer's Law Firm: | Skadden, Arps, Slate, Meagher & Flom |
| Bank's Law Firm: | Akin, Gump, Strauss, Hauer & Feld |
| Auditor: | Deloitte & Touche |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $9.81 | $11.72 | $4.80 | Assets: | $44.15 |
| Net Income: | -$25.05 | -$44.26 | -$0.73 | Curr Assets: | $24.61 |
| EPS: | -$61.70 | -$16.12 | Liabilities: | $92.17 | |
| Prior EPS: | -$37.51 | -$9.18 | Curr Liab: | $18.20 | |
| Cash Flow/Oper: | -$0.42 | -$0.55 | Equity: | -$48.03 | |
| Cash Flow/Fin: | -$7.17 | $9.19 | Cash: | $15.72 | |
| Cash Flow/Inv: | Working Cap: | $6.41 | |||
| Competition |
| The Company operates in a highly competitive environment and has no significant market share in any market in which it operates. The Company expects that competition will continue to intensify in the future due to regulatory changes, including continued implementation of the Telecommunications Act, and the increase in the size, resources and number of market participants. In each of its markets, the Company faces competition for local service from larger, better capitalized incumbent providers. Additionally, the long distance market is already significantly more competitive than the local exchange market because the incumbent local exchange carriers ("ILECs"), including the RBOCs, have historically had a monopoly position within the local exchange market. In the local exchange market, the Company also faces competition or prospective competition from one or more CLECs, many of which have significantly greater financial resources than the Company, and from other competitive providers, including non-facilities-based providers like the Company. For example, AT&T; Corp. ("AT&T;"), MCI Communications Corporation ("MCI") and Sprint Corporation ("Sprint"), among other carriers, have each begun to offer local telecommunications services in major U.S. markets using their own facilities or by resale of the ILECs' or other providers' services. In fact, certain competitors, including AT&T;, MCI and Sprint, have entered into interconnection agreements with Ameritech with respect to the States of Illinois, Michigan and Ohio. These competitors either have begun or in the near future likely will begin offering local exchange service in those states, subject to the joint marketing restrictions under the Telecommunications Act described below. In addition, some of these competitors have entered into interconnection agreements with NYNEX and either have begun or in the near future likely will begin offering local exchange service in New York and Massachusetts, subject to such joint marketing restrictions. In addition to these long distance service providers, entities that currently offer or are potentially capable of offering switched services include CLECs, cable television companies, electric utilities, other long distance carriers, microwave carriers, wireless telephone system operators and large customers who build private networks. Many facilities-based CLECs and long distance carriers, for example, have committed substantial resources to building their networks or to purchasing CLECs or IXCs with complementary facilities. By building or purchasing a network or entering into interconnection agreements or resale agreements with incumbent ILECs, including RBOCs, a facilities-based provider can offer single source local and long distance services similar to those offered by the Company. Such additional alternatives may provide such competitors with greater flexibility and a lower cost structure than the Company. In addition, some of these CLECs and other facilities-based providers of local exchange service are acquiring or being acquired by IXCs that are not subject to joint marketing restrictions. These combined entities may provide a bundled package of telecommunications products, including local and long distance telephony, that is in direct competition with the products offered by the Company. |
| Business Plan |
| The Company's objective is to be a leading provider of integrated local and long distance services and other telecommunications products to small and medium-sized businesses in its target markets. The Company expects to achieve this goal through the successful implementation of its growth strategy which includes the following: (I) Provide An Integrated Telecommunications Solution, (ii) focus on Large, Underserved Market, (iii) Leverage Ubiquitous Networks, (iv) Rapid Market Entry and (iv) Expand Local Services. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for general corporate purposes including funding the expansion of the company's sales, customer care and provisioning organizations, enhancement of the company's billing system and potentially acquisitions. |
| Name of Shareholder | % Owned Before | % Owned After |
| William A. Johnston | 37.82% | |
| HarbourVest Partners, LLC | 37.82% | |
| Merrill Lynch Global Allocation Fund, Inc. | 34.75% | |
| Ian M. Kidson | 29.05% | |
| Donald J. Hofmann, Jr. | 29.05% | |
| CIBC Wood Gundy | 29.05% | |
| Chase Venture Capital Associates, L.P. | 29.05% | |
| BT Capital Partners, Inc. | 22.04% | |
| Fidelity Capital | 19.11% | |
| Prime New Ventures | 8.07% | |
| Dean M. Greenwood | 8.07% |
| Officer Name | Title | Age |
| J. Thomas Elliott | Chairman of the Board, President, Chief Executive Officer and Director | 50 |
| Dennis B. Dundon | Chief Operating Officer | 52 |
| Gerald J. Sweas | Executive Vice President and Chief Financial Officer | 49 |
| Steven J. Parrish | Executive Vice President, Operations | 41 |
| Ryan Mullaney | Executive Vice President, Sales | 41 |
| Ronald W. Gavillet | Executive Vice President, Strategy & External Affairs | 38 |
| Thomas A. Monson | Vice President, General Counsel and Secretary | 37 |
| Lane Foster | Vice President, Human Resources and Organizational Development | 53 |
| Meil A. Bethke | Vice President, Information Systems | 37 |
| Thad J. Pellino | Vice President, Marketing | 35 |
| Ellen C. Craig | Vice President, Regulatory Affairs | 59 |