MCLEAN, VA. (May 10) BUSINESS WIRE -May 10, 1999--LCC International, Inc. (NASDAQ: LCCI), one of the world's largest RF engineering and wireless telecommunications consulting firms, today reported revenues from continuing operations for the first quarter ended March 31, 1999 of $17.7 million, down 21.9% from the $22.6 million posted in the first quarter of 1998.
The Company reported an operating profit from its core telecom services business offset by planned operating losses from its tower ownership and management business consistent with its ongoing build plan.
Normalized income from the Company's core telecom business (income from continuing operations excluding convertible debt interest, non-cash compensation and foreign currency transaction losses from the Company's operations in Brazil) for the first quarter was $0.6 million or $0.03 per share (on 18.5 million shares).
Normalized loss from the Company's tower ownership and management business was $(0.7) million or $(0.04) per share (on 18.5 million shares), resulting in a consolidated normalized loss from continuing operations of $(0.2) million or $(0.01) per share. Consolidated normalized income from continuing operations was $1.1 million or $0.06 per share (on 18.9 million shares) in 1998.
The loss from continuing operations for the first quarter (exclusive of normalization adjustments) was $(1.9) million compared to income of $0.7 million for the first quarter of 1998. Basic and diluted loss per share from continuing operations for the first quarter were each $(0.12).
Dr. Rajendra Singh, interim president and chief executive officer of LCC said, "As we announced in November 1998, we implemented an overall cost containment program which included reductions in our workforce, reductions in the use of and dependency on outside contractors, closing underutilized offices and subletting excess space. We are happy to report that we have generated positive operating income in our RF Engineering and Network Deployment businesses as a result of these measures."
Dr. Singh continued, "While we are pleased with the progress we have made on cost reductions, we are not satisfied with our revenue results. As we have said before, we face increased competition in our core business and need to significantly upgrade our sales and marketing efforts. In response, we have implemented a new sales plan to re-energize our top line growth and continue to work large contract opportunities we have previously discussed. We feel confident about finalizing these agreements in the second quarter."
Commenting on the Company's discontinued operations, Dr. Singh said, "We continue with discussions on the sale of our hardware and software businesses. We anticipate that any gain on the sale of the product businesses would be sufficient to offset operating losses accumulated up until the date of sale and believe we are well within our originally anticipated time frame for completing an agreement to divest these business units."
Statements included in this news release which are not historical in nature are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 including, without limitation, statements regarding financing plans, the divestiture of the Company's product businesses, the hiring of new personnel, the Company's financial performance for current and prior years, the Company's ability to pursue new business opportunities, and those factors highlighted in LCC International, Inc.'s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which could cause the Company's actual results to materially differ from forward-looking statements made by the Company.
LCC International, Inc., (http://www.lcc.com) one of the world's largest wireless consulting firms, has been serving the telecommunications industry since 1983. The Company is engaged in three primary areas of business: RF Engineering & Network Deployment services, Tower Ownership & Management, and Planning & Optimization Software and Field Measurement products.
LCC INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three months ended
March 31,
1999 1998
---- ----
Revenues:
Service $ 17,445 $ 22,506
Tower ownership and management 228 127
--------- ---------
Total revenues 17,673 22,633
--------- ---------
Cost of revenues
Service 11,705 15,616
Tower ownership and management 225 72
--------- ---------
Total cost of revenues 11,930 15,688
--------- ---------
Gross profit 5,743 6,945
--------- ---------
Operating expenses:
Sales and marketing 1,552 789
General and administrative 3,704 3,912
Non-cash compensation 106 109
Depreciation and amortization 719 428
--------- ---------
Total operating expenses 6,081 5,238
--------- ---------
Operating income (loss) (338) 1,707
---------- ---------
Other income (expense):
Interest income 220 250
Interest expense (701) (573)
Other (1,399) (173)
----------- ----------
Total other income (expense) (1,880) (496)
----------- ----------
Income (loss) from continuing
operations before income taxes (2,218) 1,211
Provision (benefit) for income taxes (326) 480
----------- ---------
Income (loss) from continuing
operations (1,892) 731
Loss from discontinued operations
net of tax benefits - (432)
----------- ---------
Net income (loss) $ (1,892) $ 299
=========== =========
Net income (loss) per share:
Continuing Operations
Basic $ (0.12) $ 0.05
=========== ========== Diluted $ (0.12) $ 0.05
=========== ========== Discontinued operations
Basic $ - $ (0.03)
=========== ========== Diluted $ - $ (0.03)
=========== ==========Net income (loss) per share:
Basic $ (0.12) $ 0.02
=========== ========== Diluted $ (0.12) $ 0.02
=========== ==========
Normalized income (loss) data:
Income (loss) from continuing
operations before $ (2,218) $ 1,211
income taxes
Interest on convertible debt 550 550
Foreign currency transaction
losses - (Brazil) 1,369 -
Non-cash compensation 106 109
----------- ----------
Normalized income (loss) from
continuing operations before (193) 1,870
income taxes
Provision (benefit) for income taxes (28) 741
----------- ----------
Normalized income (loss) from
continuing operations $ (165) $ 1,129
=========== ==========
Normalized income (loss) from
continuing operations per share $ (0.01) $ 0.06
=========== ==========
Common shares used in the
calculation of net income
per share:
Basic 15,640 15,283
=========== ========== Diluted 15,640 16,030
=========== ========== Normalized 18,481 18,871
=========== ==========
LCC International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(In thousands, except per share data)
March 31, December 31,
1999 1998
---- ----
(unaudited)
ASSETS:
Current assets:
Cash and cash equivalents $ 4,645 $ 4,240
Short-term investments 113 113
Receivables, net of allowance for
doubtful accounts of $10,284 and
$10,453 at March 31, 1999
and December 31, 1998, respectively:
Trade accounts receivable 13,062 13,028
Due from related parties and
affiliates 904 611
Unbilled receivables 5,815 6,078
Deferred income taxes, net 9,527 12,050
Prepaid expenses and other current
assets 2,781 3,072
Net assets of discontinued operations 10,174 9,139
--------- ---------
Total current assets 47,021 48,331
Property and equipment, net 29,908 22,132
Deferred income taxes, net 15,553 12,705
Other assets 1,171 1,036
--------- ---------
$ 93,653 $ 84,204
========= ========LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Note payable $ 4,211 $ -
Accounts payable 4,853 4,637
Accrued expenses 10,171 8,153
Accrued employee compensation
and benefits 8,891 9,702
Deferred revenue 510 277
Income taxes payable 8,016 7,894
Obligations under incentive plans - 55
Other current liabilities 3,462 3,142
--------- ---------
Total current liabilities 40,114 33,860
Note payable 5,000 -
Convertible subordinated debt 50,000 50,000
Other liabilities 23 115
--------- ---------
Total liabilities 95,137 83,975
--------- ---------
Preferred Stock:
10,000 shares authorized;
shares issued and outstanding - -
Class A common stock, $.01 par value:
70,000 shares authorized;
7,201 and 7,180 shares issued
and outstanding at March 31,1999
and December 31, 1998, respectively 72 72
Class B common stock, $.01 par value:
20,000 shares authorized;
8,461 shares issued and outstanding
at March 31,1999 and
December 31, 1998 85 85
Paid-in capital 37,306 37,130
Retained deficit (35,483) (33,590)
Note receivable from shareholder (2,100) (2,100)
----------- ----------
Subtotal (120) 1,597
Accumulated other comprehensive
loss - accumulated
foreign currency translation
adjustments (1,364) (1,368)
----------- -----------
Total shareholders' equity (1,484) 229
----------- ---------
$ 93,653 $ 84,204
========= =========
LCC International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three months ended
March 31,
1999 1998
---- ----
Cash flows from operating activities:
Income (loss) from continuing operations $(1,892) $ 731
Adjustments to reconcile income (loss)
from continuing
operations to net cash provided by
(used in) operating activities:
Depreciation and amortization 719 428
Non-cash compensation 106 109
Loss from investments in joint
ventures, net - 155
Changes in operating assets and
liabilities:
Trade, unbilled, and other receivables (64) 969
Accounts payable and accrued expenses 1,423 (3,659)
Other current assets and liabilities 3,434 468
Other noncurrent assets and
liabilities (2,724) 756
--------- ---------
Net cash provided by (used in)
operating activities 1,002 (43)
--------- ----------
Cash flows from investing activities:
Decrease in short term
investments, net - 8,552
Purchases of property and equipment (7,833) (5,811)
-------- ----------
Net cash (used in) provided by
investing activities (7,833) 2,741
-------- ---------
Cash flows from financing activities:
Proceeds from issuance of common
stock, net 61 333
Proceeds from exercise of options - 2,502
Proceeds from note payable/ line
of credit 9,211 -
-------- ---------
Net cash provided by financing
activities 9,272 2,835
-------- ---------
Net increase in cash and cash
equivalents - continuing operations 2,441 5,533
Net (decrease) increase in cash and
cash equivalents - discontinued
operations (2,036) 862
--------- ---------
Net increase in cash and cash
equivalents 405 6,395
Cash and cash equivalents at
beginning of period 4,240 14,878
-------- ---------
Cash and cash equivalents at
end of period $ 4,645 $ 21,273
======== =========
--------------------------------------------------------------------------------
SF/ph*
CONTACT: LCC International, Inc., McLean
Tricia Drennan
Director of Corporate Communications &
Investor Relations
703/873-2390
Fax: 703/873-2300
tricia_drennan@lcc.com
KEYWORD: VIRGINIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS
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