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CONTEL CELLULAR REPORTS SECOND QUARTER AND MID-YEAR RESULTS FOR 1992

CONTEL CELLULAR REPORTS SECOND QUARTER AND MID-YEAR RESULTS FOR 1992
 ATLANTA, July 27 /PRNewswire/ -- Contel Cellular Inc. (NASDAQ: CCXLA) today reported a net loss for the quarter and six months ended June 30, 1992, of $29.0 million and $57.0 million, respectively, or 29 and 57 cents per share, compared with $32.6 million and $70.2 million, or 33 cents and 70 cents per share for the corresponding 1991 periods.
 Second quarter revenues increased 19 percent to $70.6 million, compared with $59.5 million reported in 1991. Subscribers increased by 17,900, an annual rate of 28 percent, and totaled almost 271,500 at June 30, 1992. Operating cash flow (operating income before depreciation and amortization) was $12.0 million compared to $11.6 million for the corresponding 1991 period.
 Contel Cellular President and Chief Executive Officer Dennis Whipple noted that the second quarter results reflect the continued impact of the recession and the subsequent decline in both subscriber usage and the rate of new subscriber acquisitions. "As a result, the market for customer additions remains soft in several of our larger markets. However, Contel Cellular has concentrated on repositioning and restructuring our distribution channels to reduce the cost of acquiring new subscribers. This effort has already started to materialize and will continue to reduce our operating expenses this year and beyond," said Whipple. He added, "The direct sales channel has undergone significant change and is now better positioned to take advantage of the economic rebound beginning in many of our markets. In addition, our churn rate remains one of the lowest in the industry which testifies to our customers' opinion that Contel Cellular provides excellent quality service."
 Second Quarter Results Reviewed
 Service revenues, which exclude equipment sales, increased 23 percent to $65.3 million, compared to $53.3 million reported for the same period in 1991. The increase in service revenues is attributed to the increase in subscribers partially offset by lower usage per subscriber. Average monthly service revenue per subscriber declined to $81, compared with $97 for the same period in 1991. The decline in usage per subscriber is a result of the slow recovery from the recession and the increased number of casual users. Average monthly churn continues to be one of the lowest in the industry at 2.2 percent, the same as reported for the corresponding period in 1991.
 Operating loss for the second quarter of $10.5 million increased from the $6.0 million reported last year due to higher operating expenses related to the reorganization of the regions subsequent to the merger with GTE, additional start-up costs of certain RSAs, and increased fraud.
 Net loss of $29.0 million for the second quarter was $3.6 million lower than the loss reported for the second quarter last year. This reduction was primarily attributed to a $4.7 million reduction in net interest expense associated with lower interest rates, partially offset by higher borrowings, and a $3.3 million improvement in equity in earnings of unconsolidated partnerships.
 Mid-year Results Reviewed
 Total revenues for the six months totaled $133 million, 26 percent higher than the $106 million last year. Service revenues for the six months ended June 30, 1992, increased 29 percent to $123.0 million, compared to $95.4 million reported in 1991. The increase in service revenues is attributed to increased subscribers partially offset by lower usage per subscriber.
 The operating loss for the six months ended June 30, 1992, was $21.7 million, compared to $20.6 million, before one-time merger integration costs reported in 1991. The higher operating loss is attributed to an increase in depreciation and amortization of $8.8 million, and additional start-up costs associated with the operation of RSA markets, partially offset by higher revenues.
 The six months' loss of $57.0 million at June 30, 1992, was $5.8 million lower than the loss reported for the corresponding 1991 period, excluding the net effect of the one-time merger integration costs recorded in 1991. This improvement was primarily attributed to a $6.8 million reduction in net interest expense primarily associated with lower interest rates and a $4.4 million improvement in equity in earnings of unconsolidated partnerships, offset by the 1991 gains on sales of partnership interests.
 Contel Cellular provides mobile and portable-telephone services in 36 metropolitan markets in the United States. The company is a limited partner in 29 additional metropolitan markets and has ownership interests in 84 rural service areas. Based on total-market population or POPs, Contel Cellular is the sixth-largest cellular company in the United States, with interests in cellular systems representing 24.2 million POPs.
 Contel Cellular is a publicly-traded company, of which 90 percent of the outstanding shares are indirectly owned by GTE Corp. (NYSE: GTE).
 GTE is the fourth-largest publicly-owned telecommunications company in the world. With approximately $20 billion in revenues in 1991, the corporation is the largest U.S.-based local-telephone company and the second-largest cellular-service provider in the United States.
 CONTEL CELLULAR INC.
 Consolidated Statements of Operations
 (Thousands, except per share data)
 Unaudited
 3 mos. ended 6/30/92 6/30/91 Pct. chg.
 Revenues & sales:
 Service revenues $65,315 $53,270 22.6
 Equipment sales 5,323 6,252 (14.9)
 Total 70,638 59,522 18.7
 Costs and expenses:
 Cost of services 7,881 9,498 (17.0)
 Cost of equipment sales 9,114 8,088 12.7
 Selling, general & admin. 41,658 30,378 37.1
 Depreciation 12,196 9,491 28.5
 Amortization of intangibles 10,329 8,093 27.6
 Merger integration costs --- --- ---
 Total 81,178 65,548 23.8
 Operating loss (10,540) (6,026) 74.9
 Interest expense, net 37,277 42,004 (11.3)
 Loss before minority interests (47,817) (48,030) (0.4)
 Minority interests 89 634 (86.0)
 Loss from consolidated oper. (47,728) (47,396) 0.7
 Equity in earnings of
 unconsolidated partnerships 6,090 2,762 120.5
 Gains on sales of partnership
 interests --- 128 (100.0)
 Loss before income taxes (41,638) (44,506) (6.4)
 Benefit from income taxes (12,673) (11,889) 6.6
 Net loss $(28,965) $(32,617) (11.2)
 Net loss per share $ (0.29) $ (0.33) (11.2)
 Wtd. average shares outstanding 99,941 99,946 ---
 6 mos. ended 6/30/92 6/30/91 Pct. chg.
 Revenues & sales:
 Service revenues $ 123,045 $95,410 29.0
 Equipment sales 9,999 10,596 (5.6)
 Total 133,044 106,006 25.5
 Costs and expenses:
 Cost of services 16,709 17,886 (6.6)
 Cost of equipment sales 16,062 14,133 13.6
 Selling, general & admin. 78,278 59,697 31.1
 Depreciation 23,030 18,682 23.3
 Amortization of intangibles 20,665 16,187 27.7
 Merger integration costs --- 11,668 ---
 Total 154,744 138,253 11.9
 Operating loss (21,700) (32,247) (32.7)
 Interest expense, net 73,002 79,788 (8.5)
 Loss before minority interests (94,702) (112,035) (15.5)
 Minority interests 859 1,472 (41.6)
 Loss from consolidated oper. (93,843) (110,563) (15.1)
 Equity in earnings of
 unconsolidated partnerships 10,876 6,465 68.2
 Gains on sales of partnership
 interests --- 6,861 (100.0)
 Loss before income taxes (82,967) (97,237) (14.7)
 Benefit from income taxes (25,929) (27,038) (4.1)
 Net loss $(57,038) $(70,199) (18.7)
 Net loss per share $ (0.57) $ (0.70) (18.7)
 Wtd. average shares outstanding 99,941 99,943 ---
 -0- 7/24/92
 /CONTACT: Ted Carrier, 404-804-3549, or Jeff Keller, 404-391-8358, both of Contel Cellular/
 (CCXLA GTE) CO: Contel Cellular Inc.; GTC Corporation ST: Georgia IN: TLS SU: ERN


BR-BN -- AT009 -- 3604 07/27/92 14:58 EDT
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Date:Jul 27, 1992
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