Text of LWIN's 1.452 million customers news release :
biz.yahoo.com
Wednesday July 3, 7:00 am Eastern Time
Press Release
SOURCE: Leap Wireless International, Inc.
Leap Ends Second Quarter with Approximately 1.452 Million Cricket Customers
~ Company Expects to Provide Business Outlook in Second Quarter Earnings Release Scheduled for July 24th, 2002 ~
SAN DIEGO, July 3 /PRNewswire-FirstCall/ -- Leap Wireless International, Inc. (Nasdaq: LWIN - News) today reported that it ended the second quarter of fiscal year 2002 with approximately 1.452 million Cricket customers. This was up from 1.387 million customers that the Company reported as of March 31, 2002 and below the Company's guidance of at least 1.5 million customers at the end of the second quarter of 2002.
"We believe that our Cricket service offers both a wireline alternative and a value that addresses the mass consumer market that distinguishes us from the rest of the industry and allow us to pursue a broader market than traditional carriers. During the second quarter, the slow economy and lower demand in the wireless sector prompted traditional carriers to launch unusually aggressive dealer incentives and handset promotions, particularly late in the quarter," said Harvey P. White, Leap's chairman and CEO. "We believe we made the right business decision not to match these promotions and instead we are concentrating on growth and retention incentives to encourage rational, sustainable, 'smart growth' and to attract loyal customers who will continue to contribute to our bottom line results."
"As previously announced, we are pleased with the success of the new policies and procedures we implemented early in the quarter to prevent fraud and mitigate its cost on our business. These procedures have helped us to screen out customers who may have engaged in fraud and to identify and eliminate some 15 percent of indirect sales locations that were under- performing or suspected of improper activity," said Susan G. Swenson, Leap's president and chief operating officer. "Over the last two months, we estimate we have prevented the activation of or otherwise cleared from our system approximately 50,000 people who either would not or could not provide appropriate identification to meet our new identity validation requirements. These efforts have significantly reduced fraud and its cost to our business. In addition, the procedures we have implemented provide us with a strong foundation for continuing to identify and combat potential fraud while we focus on growing our business and continuing to improve its performance."
As previously reported, the Company believes that virtually all of the customers involved in fraud at the end of the first quarter have been removed from its system or have been turned into paying customers. Leap expects to see a resulting negative impact on its calculated revenue per user, customer acquisition cost and churn metrics during the second quarter of 2002, with improvement in these metrics expected later in the year as the Company continues to mitigate the effects of fraud. With the exception of some normal delays in the reporting of credit card misuse, which the Company does not believe is material, Leap believes that the financial costs related to the fraudulent activity that occurred during the first quarter were included in the financial results reported for that quarter.
Leap expects to report on its results of operations for the second quarter and update the Company's business outlook for the rest of 2002 in a press release to be distributed before market open on Wednesday, July 24, 2002. Details regarding the conference call discussing these results, during which forward looking and other material information will be discussed, are as follows:
Date and Time: Wednesday, July 24th, 11:00 a.m. ET
Dial in number (US/Canada/International): 706-645-0204
A live broadcast of Leap's second quarter conference call is planned to be available online at leapwireless.com on July 24, 2002 at 11:00 a.m. ET. An online replay is planned to follow shortly thereafter and will be available until August 15, 2002. To listen to the call, please go to the Web site at least 15 minutes prior to the start time to register, download and install any necessary audio software. The telephonic rebroadcast will be available two hours after the completion of the call and will be available until close of business on July 31, 2002. Interested parties can access the rebroadcast by dialing 706-645-9291 and entering reservation number 4734609 followed by the # key.
SOURCE: Leap Wireless International, Inc.
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