BCGI statement about the current quarter
Business Wire - September 09, 1999 17:59
WOBURN, Mass.--(BUSINESS WIRE)--Sept. 9, 1999--Boston Communications Group, Inc. (NASDAQ: BCGI) today announced that it expects to report a net loss for the third quarter of $(.03) to $(.05) per share, excluding a one-time pre-tax charge related to the Systems Division of approximately $1.8 million. The net loss is expected to range between $(.13) and $(.16) after the impact of the charge.
Although the Company expects to increase its gross subscriber additions compared to the second quarter of 1999, a recent hardware outage on the prepaid platform combined with the impact from the lower growth rate of the previous quarter, low seasonal usage and continued churn will negatively impact the Company's results for the third quarter. Profit for the third quarter will also be impacted by a shortfall in the Teleservices Division due to a software problem that resulted in calls going unanswered. The software has since been corrected and the Company does not anticipate that these issues will recur. The Company also expects that the Systems Division will continue to underperform for the quarter.
On July 1, 1999 the Company announced it had appointed Jerrold Adams as General Manager of the Systems Division and tasked him with creating a plan to redirect the Division to improve future operating results. As a result, the Company has committed to a plan to reorganize the Systems Division that will result in a pre-tax charge to third quarter earnings of approximately $1.8 million. The charge principally relates to expenses associated with inventory write-downs to bring the level of inventory in line with future sales strategy as well as severance and lease termination costs. As part of the plan, the Company also recently announced an agreement with Centigram to distribute its prepaid systems abroad.
Additionally, the Company announced that beginning in the fourth quarter of this year its carrier customers will have the option to license BCGI software to allow them to provide prepaid customer care in-house, if they choose. "By allowing the carriers to have more flexibility by enabling them to have access to our proprietary software, there is likely to be a change in our revenue mix from recurring Teleservices customer service fees to software licensing and maintenance fees. As a result, while the Company expects lower revenue growth for the Teleservices Division, the software licensing option may improve overall profitability for the Company," said E.Y Snowden, President and Chief Executive Officer.
Boston Communications Group (BCGI), is the leading provider of prepaid services to wireless carriers in North and South America. Founded in 1988, BCGI provides wireless carriers with a range of resources and support services targeted to address the unique needs of this growing industry. BCGI provides one or more of its services to nine of the top ten wireless carriers in the United States, who generate over 75 percent of industry revenues, plus more than 80 additional carriers. Each service plays an integral role in the Company's mission: to help wireless carriers focus resources on their areas of expertise while improving quality, enhancing revenue and controlling costs. Please visit BCGI's web site at bcgi.net. |
