biz.yahoo.com
Wednesday July 7, 5:45 pm Eastern Time
Company Press Release
SOURCE: Leap Wireless International, Inc.
Leap Wireless International Files Form 8-K/A Reflecting Changes in
Its Accounting Treatment of Certain of its Holdings
Changes Result in a Revision to Third Quarter Earnings
SAN DIEGO, July 7 /PRNewswire/ -- Wireless communications carrier,
Leap Wireless International, Inc. (Nasdaq: LWIN - news), reported
that it has filed a Form 8-K/A today which reflects the pro forma
consolidation of Chilesat Telefonia Personal S.A. following Leap
Wireless' acquisition of the remaining 50% of that company on April
19, 1999. The Form 8-K/A also reflects Leap Wireless' recent
determination to adopt in its third fiscal quarter the equity method
of accounting for its existing investment in a United States
telecommunications operator which, in March, began offering the
Cricket(SM) flat rate, unlimited calling service based on a concept
developed by Leap. Under generally accepted accounting principles,
the application of the equity method of accounting to the existing
investment requires all prior periods presented in the Company's
financial statements to be adjusted retroactively. This retroactive
adjustment is reflected in the pro forma financial statements
included in the Form 8-K/A and will be reflected in the Form 10-Q for
the fiscal quarter ended May 31, 1999 which Leap Wireless expects to
file on or before July 14, 1999.
As a result of this application of the equity method of accounting,
Leap Wireless has revised the previously announced results for its
third fiscal quarter and has recorded $4.5 million or $0.25 per share
in additional equity losses during the three months ended May 31,
1999, and $28.5 million in additional equity losses in prior periods.
As revised, revenues for Leap Wireless' operating companies for the
third quarter of fiscal 1999 rose to $4.0 million. Operating expenses
for Leap Wireless' operating companies for the third quarter of
fiscal 1999 were $57.8 million, compared to $7.3 million in the third
quarter of the prior fiscal year. Net losses for Leap Wireless'
operating companies for the third fiscal quarter of 1999 were $62.3
million compared to net losses of $17.8 million in the third fiscal
quarter of 1998. The results of Leap's foreign unconsolidated
operating companies are as of and for the three months ended March
31, a two-month reporting lag. Leap's share of the net losses of the
operating companies was $40.7 million for the third quarter of fiscal
1999, including the $4.5 million in additional equity losses,
compared to $7.7 million in the third fiscal quarter of 1998.
Leap's revised consolidated net loss for the third quarter of fiscal
1999 was $46.7 million or $2.60 per share compared to a net loss of
$11.1 million or $0.63 per share for the same period in 1998. These
reported losses include Leap's share of the losses incurred by its
operating companies and general and administrative expenses incurred
directly by Leap.
About Leap Wireless International, Inc.
Headquartered in San Diego, California, Leap Wireless International
is a wireless communications carrier that deploys, owns, and operates
networks in domestic and international markets with strong growth
potential. Through its operating companies, Leap has launched all-
digital wireless networks in Chile, Mexico, the U.S., and Russia.
Upon completion of Leap Wireless' pending U.S. asset acquisitions,
Leap Wireless will have interests in existing and planned
telecommunications systems covering 176.4 million potential
customers, of which Leap's equity share is approximately 71.9
million. Leap Wireless is also seeking to acquire additional C-block
spectrum as the high bidder for 36 licenses in the federal
governments recently completed re-auction of broadband PCS spectrum.
If granted final approval from the FCC, these licenses will raise
Leap Wireless' potential customer base to 187.6 million, of which
Leap's equity share will be 83.1 million. For more information about
Leap Wireless, please call Investor Relations at 1-619-882-6111 or
visit the company's web site at www.leapwireless.com.
Leap Wireless International, Inc.
(a development stage company)
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
(restated)
May 31, 1999
(Unaudited) August 31, 1998
ASSETS
Cash and cash equivalents $23,527 $--
Accounts receivable 1,523 --
Inventories 1,421 --
Recoverable taxes 3,308 --
Other current assets 1,770 --
Total current assets 31,549 --
Property and equipment - net 125,761 --
Investments in unconsolidated
wireless operating companies 123,254 97,719
Loans receivable from
unconsolidated wireless
operating company -- 27,968
Other loans receivable 7,768 25,227
Intangible assets 59,694 --
Deposits and other assets 18,078 6,838
Total assets 366,104 157,752
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued liabilities $7,851 $5,789
Loans payable to banks 16,657 9,000
Notes payable and other
current liabilities 36,146 --
Total current liabilities 60,654 14,789
Long-term debt 152,306 --
Other liabilities 9,207 --
Total liabilities 222,167 14,789
Stockholders' equity:
Preferred stock - authorized
10,000,000 shares $.0001 par value,
no shares issued and outstanding -- --
Common stock - authorized 75,000,000
shares; $.0001 par value, 18,098,984
shares issued and outstanding 2 --
Additional paid-in capital 288,953 --
Former parent capital -- 197,598
Deficit accumulated during the
development stage (142,302) (52,283)
Accumulated other comprehensive loss (2,716) (2,352)
Total stockholders' equity 143,937 142,963
Total liabilities and
stockholders' equity $366,104 $157,752
Leap Wireless International, Inc.
(a development stage company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(restated and unaudited)
For the Period
Three Months Ended Nine Months Ended September 1, 1995
May 31, May 31 (inception) to
1998 1998 1999 1998 May 31, 1999
Equity in net loss of
unconsiolidated
wireless operating
companies $(40,657) $(7,672) $(78,917) $(11,132) $(106,398)
General and
administrative
expenses (6,216) (3,408) (14,765) (5,577) (40,410)
Interest income 2,522 -- 7,901 -- 8,744
Interest expense (2,326) -- (4,238) -- (4,238)
Net loss $(46,677) $(11,080) $(90,019) $(16,709) $(142,302)
Unaudited basic and
diluted net loss
per common share $(2.60) $(0.63) $(5.06) $(0.95) --
Shares used to
calculate unaudited
basic and diluted net
loss per common
share 17,952 17,648 17,794 17,648 --
SOURCE: Leap Wireless International, Inc. |
