Leap Wireless Fraud -5: Amended Vendor Pacts In March
DOW JONES NEWSWIRES
"We are optimistic that the vendors will work with us as they have done in
the past, and we will be able to refinance our vendor facilities or simply
amend this particular covenant if our business continues to perform as
expected," Leap Wireless Chairman and Chief Executive Harvey White said
in the statement.
In March, Leap Wireless amended agreements with Ericsson (ERICY),
Lucent Technologies Inc. (LU) and Nortel Networks Corp. (NT) to revise
certain covenants that would have taken effect in the December 2002 and
March 2003 quarters. In exchange for relaxing these covenants, Leap
agreed to minimum EBITDA covenants beginning in the June 2002 quarter.
Leap Wireless said it believes financial costs related to the fraudulent
activity that occurred during the first quarter were included in the financial
results reported for that quarter.
In the first quarter ended March 31, Leap Wireless reported a loss of $4.89
a share excluding a gain on the sale of wireless a license. Including the
gain, the loss was $196.6 million, or $5.32 a share, on revenue of $140.2
million.
Shares of Leap Wireless closed Wednesday at $1.68, down 31 cents, or
15.6%, in Nasdaq trading. The stock is down 90.7% in the past 26 weeks,
hitting a 52-week low of $1.50 on June 4.
Company Web site: leapwireless.com
-Lisa Reynolds; Dow Jones Newswires; 201-938-5400
Updated June 13, 2002 8:50 a.m. EDT
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