Shared Technologies Cellular Reports Q3 and Nine-Month Results
16 November 1999
Shared Technologies Cellular Reports Third-Quarter and Nine-Month Results; Total Revenues Up 22% Over Second Quarter; Prepaid Increases by 43%
WETHERSFIELD, Conn.--Nov. 15, 1999--Shared Technologies Cellular, Inc. (STC) today announced that revenues for the three months ended September 30, 1999 reached $7,893,000, gross margin was $2,262,000, and the net loss was $3,642,000, or $0.45 per common share on 8,148,000 shares outstanding. For the same period a year ago, total revenues were $8,639,000, gross margin stood at $3,504,000, and the net loss was $1,021,000, or $.14 per common share on 7,405,000 shares outstanding.Total revenues were up 22% over the second quarter of 1999 from $6,461,000 to $7,893,000; prepaid revenues grew 43% over the same period, from $2,874,000 to $4,117,000. At $3,459,000, STC's rental revenues increased by 4% over the second quarter, from $3,313,000, and activations rose 16% from $274,000 to $317,000. Compared to the second quarter of 1999, gross margin was up 39%, and the net loss per share fell by 9%.
Commenting on the results, STC chairman and chief executive officer Anthony D. Autorino said "The clearest view into what STC has accomplished in the third quarter is obtained by looking at second-quarter results. Those numbers reflected significant progress towards our goal of becoming the dominant force in prepaid cellular, and the numbers this quarter show an unmistakable acceleration. When one considers what is happening in the fourth quarter, we're confident STC will enter the 21st Century in a positive mode."
Mr. Autorino said "STC's distribution and retail partners are coming online in very rapid fashion, although a full quarter behind our original plans. We expect to add over 100,000 new customers in the fourth quarter and end the year in a profitable and high-growth mode. Customer response to our retail distribution provides ample evidence that our prepaid cellular program, with its availability and affordable pricing, has won favor with the American consumer."
Mr. Autorino also said that recent studies published by The Yankee Group indicate that previous projections of wireless prepaid subscribers have had to be drastically modified. "In 1997, The Yankee Group predicted that there would be 1.5 million wireless prepaid subscribers by the end of 1999; now they're saying the number is more like 3.6 million." Mr. Autorino cited the Yankee Group's opinion that the next 12 to 18 months will see "significant developments" in the area of wireless prepaid replenishment methods and technologies, and he expressed satisfaction that the STC's CellEase(R) program had been singled out for its "innovative replenishment system." "We agree with the Yankee Group when they say `CellEase parallels what MasterCard did for the banking industry through its universally accepted logo on private-branded credit cards.'"
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 Tuesday, November 16, at 2 PM Eastern. To listen in, call 973-628-7055. Replays will be available until Friday, November 19. To hear the replay, call 402-220-0909.
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 Nine Months Ended
9/30/99 9/30/98 9/30/99 9/30/98
Revenues $7,893,000 $8,639,000 $19,975,000 $20,746,000
Cost of Revenues 5,631,000 5,135,000 15,052,000 12,286,000
Gross Margin 2,262,000 3,504,000 4,923,000 8,460,000
SG&A 5,259,000 3,955,000 14,931,000 9,182,000
Bad debt expense 237,000 356,000 906,000 914,000
Loss from
operations (3,234,000) (807,000) (10,914,000) (1,636,000)
Interest expense
(net) (175,000) (214,000) (424,000) (398,000)
Loss before
income taxes (3,409,000) (1,021,000) (11,338,000) (2,034,000)
Income tax 0 0 (7,000) (3,000)
Net loss (3,409,000) (1,021,000) (11,345,000) (2,037,000)
Preferred stock
dividend (233,000) -- (4,614,000) --
Net loss applicable
to common
shareholders $(3,642,000) $(1,021,000) $(15,959,000) $(2,037,000)
Basic and diluted
loss per
common share $(0.45) $(0.14) $(2.04) $(0.28)
Weighted average
number of
common shares
outstanding 8,148,113 7,405,570 7,839,159 7,331,503