| US Lec Corp. | |||
| Ticker: | CLEC | 212 South Tyron Street, Suite 1540 | |
| Exchange: | NASDAQ-National Market | Charlotte, NC 28281 | |
| Industry: | Service (SIC Code 4813) | (704) 319-1000 | |
| # of Employees: | 78 | ||
| Type of Shares: | Class A Common Shares | Filing Date: | 2/13/98 | |
| U.S. Shares: | 5,500,000 | Offer Date: | 4/23/98 | |
| Non-U.S. Shares: | 0 | Filing Range: | $13.00 - $15.00 | |
| Primary Shares: | 5,500,000 | Offer Price: | $15.00 | |
| Secondary Shares: | 0 | Gross Spread: | $1.05 | |
| Offering Amount: | $77,000,000 | Selling: | $0.63 | |
| Expenses: | $0 | Reallowance: | $0.10 | |
| Shares Out After: | 26,430,270 |
| Manager | Tier | Phone |
| Salomon Smith Barney | Lead Manager | (212) 723-7300 |
| Bear, Stearns & Co. Inc. | Co-manager | (212) 272-4850 |
| Wheat First Union | Co-manager |
| Issuer's Law Firm: | Moore & Van Allen |
| Bank's Law Firm: | Paul, Hastings, Janofsky & Walker |
| Auditor: | Deloitte & Touche |
| Registrar/Transfer Agent: | First Union National Bank North Carolina |
Dollar amounts in U.S. millions except for per share data | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/97 | 12/31/97 | ||||
| Revenue: | $6.46 | Assets: | $22.68 | ||
| Net Income: | -$4.61 | Curr Assets: | $9.65 | ||
| EPS: | -$0.25 | Liabilities: | $16.92 | ||
| Prior EPS: | -$0.06 | Curr Liabilities: | $11.92 | ||
| Cash Flow/Oper: | -$5.59 | Equity: | $5.76 | ||
| Cash Flow/Fin: | $14.01 | Cash: | $3.19 | ||
| Cash Flow/Inv: | -$5.95 | Working Cap: | -$2.27 | ||
| Business Description |
| The company purchases and deploys switching equipment and leases fiber optic transmission capacity from competitive access providers, other CLECs and incumbent local exchange carriers. The Company was founded in June 1996 after passage of the Telecommunications Act of 1996 (the "Telecom Act"), which enhanced the competitive environment for local exchange services. The Company initiated service in Charlotte, North Carolina in March 1997, becoming one of the first CLECs in North Carolina to provide switched local exchange services, and subsequently initiated service in Raleigh and Greensboro, North Carolina and in Atlanta, Georgia. As of February 28, 1998, the Company had Equivalent Access Lines (as defined in the Glossary) in service. US LEC plans to enter 15 new markets in Tennessee, Florida, South Carolina, Virginia and North Carolina by the end of 1999. US LEC's objective is to become the primary provider of switched local telecommunications services to its existing and target customers. |
| Competition |
| The telecommunications industry is highly competitive. In each of the Company's existing and target markets, the Company competes and will continue to compete principally with the ILECs serving that area. ILECs are established providers of local telephone services to all or virtually all telephone subscribers within their respective service areas. ILECs also have greater financial and personnel resources, brand name recognition and long-standing relationships with regulatory authorities at the federal and state levels. The Company also faces, and expects to continue to face, competition from other current and potential market entrants, including long distance carriers seeking to enter, reenter or expand entry into the local exchange marketplace, and from other CLECs, CAPs, cable television companies, electric utilities, microwave carriers, wireless telephone system operators and private networks built by large end-users. In addition, a continuing trend toward combinations and strategic alliances in the telecommunications industry could give rise to significant new competitors. Many of these current and potential competitors have financial, personnel and other resources, including brand name recognition, substantially greater than those of the Company, as well as other competitive advantages over the Company. The Company also competes with long distance carriers in the provision of long distance services. Although the long distance market is dominated by four major competitors, hundreds of other companies also compete in the long distance marketplace. |
| Business Plan |
| US LEC's objective is to become the primary provider of switched local telecommunications services to its existing and target customers. The principal elements of US LEC's strategy include: (I) Deploy a Capital-Efficient Network; (ii) Focus on a Southeastern Cluster of Operations; (iii) Target Telecommunications-Intensive Customers; (iv) Install a Robust, Uniform Technology Platform; (v) Employ a Direct Sales Force with Extensive Local Market Experience and (vi) Implement Efficient Provisioning Processes. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for capital expenditures and working capital relating to its expansion into new markets. |