Shared Technologies Cellular Reports Q2 and Six-Month Results
16 August 1999
Shared Technologies Cellular Reports Second-Quarter and Six-Month Results; Total Revenues Up 15% Over First Quarter; Prepaid Increases by 29%
WETHERSFIELD, Conn.--Aug. 13, 1999--Shared Technologies Cellular, Inc. (STC) today announced that revenues for the three months ended June 30, 1999 reached $6,461,000, gross margin was $1,632,000, and the net loss was $3,808,000, or $0.49 per common share on 7,739,000 shares outstanding. For the same period a year ago, total revenues were $7,180,000, gross margin stood at $2,901,000, and the net loss was $183,000, or $.02 per common share.Total revenues were up 15% over the first quarter of 1999, prepaid (or debit) revenues grew 29% over the same period, from $2,222,000 to $2,874,000. At $3,313,000, STC's rental revenues increased by 6% over the first quarter, from $3,131,000, and activations rose 2% from $270,000 to $274,000. Compared to the first quarter of 1999, gross margin was up 59%, bad debt decreased 24%, and the net loss per share fell by 56%.
Commenting on the results, STC chairman and chief executive officer Anthony D. Autorino said "The second quarter results are consistent with analyst expectations. The negative effects of the SmarTalk relationship are almost behind us. Our focus during the second and third quarters has been to build a strong nationwide marketing distribution network to position STC for significant growth."
"We now have completed agreements with many of the strongest and most recognized retailers nationwide, who will now implement a strong sales campaign starting September 1," Mr. Autorino said. "Our 55,000 distribution locations across the country should be in full operation for the important fourth quarter retail season. STC's CellEase(R) prepaid service is rapidly becoming the prepaid cellular service of choice through our various retail and distribution partners nationwide, as well as through our Internet site and television home shopping networks."
The MCI WorldCom television commercial for prepaid cellular phones (powered by STC's CellEase(R) service) will begin running on August 16 on more than a dozen cable networks, including Bravo, MTV, Nick @ Night, Sci-Fi, TBS, and USA. "The ad will run nearly 3,200 times during the next six weeks," Mr. Autorino said.
Headquartered in Wethersfield, Connecticut, STC is a national cellular services provider with over ten years of cellular experience, offering rental, prepaid, and activation services across the United States. STC offers its rental services through marketing agreements with car rental companies and various airlines and hotels throughout the United States. STC's CellEase(R) prepaid cellular programs are distributed by various partners, including MCI WorldCom . These programs all employ a universal usage card utilizing technology provided under contract by Telemac Corporation, US/Intelicom, and JRC International. As a reseller or agent for most cellular carriers, STC can offer cellular services to approximately 98% of the U.S. population. Visit the Company's web site at http://www.CellEase.com.
STC has scheduled a conference call for Monday, August 16, at 11 AM Eastern. To listen in, call 973-628-7055. Replays will be available until Friday, August 20. To hear the replay, call 402-220-2669.
Any statements released by STC that are forward-looking are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Editors and investors are cautioned that forward-looking statements involve risk and uncertainties which may affect STC's business prospects and performance. These forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from those in any forward-looking statement. Such risks and uncertainties may include, without limitation, technological obsolescence, price and industry competition, financing capabilities, dependence on major customers and relationships, or other factors discussed in STC's filings with the SEC on forms 10-K, 10-Q, and 8-K.
SHARED TECHNOLOGIES CELLULAR, INC.
Consolidated Statements of Operations (Unaudited)
Three Months Ended Six Months Ended
6/30/99 6/30/98 6/30/99 6/30/98
Revenues $6,461,000 $7,180,000 $12,082,000 $12,107,000
Cost of Revenues 4,829,000 4,279,000 9,421,000 7,151,000
Gross Margin 1,632,000 2,901,000 2,661,000 4,956,000
SG&A 4,869,000 2,650,000 9,672,000 5,227,000
Bad debt expense 289,000 295,000 669,000 558,000
Loss from
operations (3,526,000) (44,000) (7,680,000) (829,000)
Interest expense
(net) (55,000) (139,000) (249,000) (184,000)
Loss before income
taxes (3,581,000) (183,000) (7,929,000) (1,013,000)
Income tax 0 0 (7,000) (3,000)
Net loss (3,581,000) (183,000) (7,936,000) (1,016,000)
Preferred stock
dividend (227,000) -- (4,381,000) --
Net loss
applicable to
common shareholders $(3,808,000) $(183,000)$(12,317,000) $(1,016,000)
Basic and diluted
loss per
common share $(0.49) $(0.02) $(1.60) $(0.14)
Weighted average
number of
common shares
outstanding 7,739,000 7,359,000 7,682,000 7,294,000