Cellular Technical Services Reports 2002 Third-Quarter Results and Provides Update on Operations.Business Editors SEATTLE--(BUSINESS WIRE)--Nov. 8, 2002 Cellular Technical Services Company, Inc. (Nasdaq:CTSC CTSC Cathepsin CTSC Clinical and Translational Science Center (University of California at Davis) CTSC Chenega Technology Services Corporation CTSC Canadian Technical Security Conference (Burlington, ON, Canada) ) ("CTS (1) (Clear To Send) The RS-232 signal sent from the receiving station to the transmitting station that indicates it is ready to accept data. Contrast with RTS. (2) (Common Type System) The data typing used in . "), a provider of products and services for the prepaid pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. and wireless communications wireless communicationsSystem using radio-frequency, infrared, microwave, or other types of electromagnetic or acoustic waves in place of wires, cables, or fibre optics to transmit signals or data. industries, today reported its third quarter financial results for 2002.
Summary of Financial Highlights
(Dollar amounts in 000s, except per share data)
Three Months Nine Months
Ended 9/30 Ended 9/30
2002 2001 2002 2001
------- ------- -------- --------
Revenue $3,728 $5,370 $9,417 $16,499
Net Income (Loss) $(783) $81 $(2,764) $535
Net Income (Loss) Per Share
Basic and Diluted $(0.34) $0.04 $(1.21) $0.23
Total revenue decreased to $3.7 million in the three months ended Sept. 30, 2002, compared to the prior year quarter, and to $9.4 million from $16.5 million for the nine months ended Sept. 30, 2002, compared to the prior year period. 2001 was the final year of revenue for CTS' Blackbird blackbird, common name in North America of a perching bird allied to the bobolink, the meadow lark, the oriole, and the grackle and belonging to the family Icteridae. The European blackbird, Turdus merula, is a thrush. Platform product suite, which accounted for $1.3 million in revenue in the third quarter of 2001 and $4.1 million in revenue for the nine months ended Sept. 30, 2001, compared to zero in both 2002 periods. As previously reported, our Blackbird business ended in December 2001 and we forecast no additional revenue from that segment in future periods. CTS reported a quarterly net loss of $783,000 compared to net income of $81,000 in the prior year period. The change is due to several factors: i) total gross margin decreased by $1,116,000 as the Blackbird business provided $994,000 in the prior year and decreased 2002 Isis Isis, in Egyptian religion Isis (ī`sĭs), nature goddess whose worship, originating in ancient Egypt, gradually extended throughout the lands of the Mediterranean world during the Hellenistic period and became one of the chief gross margins of $122,000 due to volume reductions and cost increases; ii) operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. reductions of $290,000; and iii) a combination of reduced other income, interest income and income taxes of $38,000. Revenue from the Company's Isis Telecommunications Communicating information, including data, text, pictures, voice and video over long distance. See communications. , Inc. subsidiary ("Isis") decreased 8% to $3.7 million in revenue during the third quarter of 2002 compared to $4.1 million in the 2001 period, and 24% to $9.4 million in revenue for the nine months ended Sept. 30, 2002, compared to $16.5 million in the 2001 period. Today, with long-distance prices down substantially, customers need to purchase fewer cards to get the same amount of calling time, impacting Isis' revenue and profitability. Since the Company's common stock traded below $1.00 for 30 consecutive trading days In Business, the trading day is the time span that a particular stock exchange is open. For example, the New York Stock Exchange is, as of 2006, open from 09:30AM to 4:00PM. Trading days never take place on weekends. , the Company received a notice from Nasdaq stating that it has 180 days until April 30, 2003, to regain compliance by closing at least a minimum price of $1.00 a share for 10 consecutive days to continue its listing on the Nasdaq SCM (1) (Software Configuration Management, Source Code Management) See configuration management. (2) See supply chain management. . With approximately 2.29 million shares outstanding, the market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. at a price of $1.00 is just under $2.3 million. Stephen Katz
Stephen Katz (1946 in New York City – 18 October, 2005 in Plano, Texas) was an American teacher and screenwriter. , CTS chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , noted, "As of Sept. 30, 2002, we had $4.0 million in cash, $4.1 million of working capital and no bank debt. We have made the difficult decision to cease development efforts of our Neumobility LBS (Location-Based Services) See mobile positioning. platform and applications division. This is due to the uncertainty in both timing and magnitude of future revenue streams combined with the large continuing investment required to sustain, market and support the products. We have reduced our workforce by 13 personnel in the Neumobility division this week. We will, however, continue to seek outside partners or investors for the Neumobility IP portfolio and product suite. We are currently evaluating severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when and any potential facilities or equipment related charges to be accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. in the fourth quarter related to the closure of this division. During the fourth quarter of 2002 we anticipate incurring in·cur tr.v. in·curred, in·cur·ring, in·curs 1. To acquire or come into (something usually undesirable); sustain: incurred substantial losses during the stock market crash. 2. approximately $0.1 million in cash severance charges and in the range of $0.1-$0.4 million in a combination of other charges related to the writedown writedown A reduction in the value of an asset carried on a firm's financial statements. For example, the firm's accountants, believing the inventory is overvalued, may decide to take a writedown by reducing inventory valuation. of excess computer equipment and lease costs related to excess facilities to be paid through the third quarter of 2003. We forecast ending the year 2002 with approximately $3.2 million in cash. "We believe that the business outlook is positive at TruePosition, Inc., an LBS company in which we have a substantial investment, especially given recent issues with competing technologies and TruePosition's strong intellectual property portfolio. Additionally, we are continuing to evaluate a variety of strategic alternatives with respect to our Isis prepaid products subsidiary and our other assets other assets Assets of relatively small value. For financial reporting purposes, firms frequently combine small assets into a single category rather than listing each item separately. ." The Company expects to schedule a conference call to discuss its results and operations to be held during the first week of December. Special Note Regarding Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. : This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995 that involve risks and uncertainties that could cause actual results for CTS or its affiliates to differ materially from those expressed or implied in the applicable statements. These risks and uncertainties include but are not limited to: vulnerability to rapid industry change and technological obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. ; limited customer base and reliance on a relatively small number of customers and customer contracts; dependence on a limited number of existing products and services; uncertainty of continued demand for and market penetration Noun 1. market penetration - the extent to which a product is recognized and bought by customers in a particular market penetration - the act of entering into or through something; "the penetration of upper management by women" of its existing products and services under existing and future contracts; uncertainty in its ability to timely develop, introduce and gain acceptance of new products and services; uncertainty of the demand for and market penetration of new products and services; the possible impact of competitive products and pricing; the risk that its current and future products may contain errors or be affected by technical problems that would be difficult and costly to detect and correct; reliance on a limited number of outside vendors for key components and processes; potential difficulties in managing changing business conditions; dependence on key personnel; the availability of financing; and other risks described in CTS' filings with the Securities and Exchange Commission.
CELLULAR TECHNICAL SERVICES COMPANY, INC.
SELECTED CONSOLIDATED BALANCE SHEET DATA
(in 000's)
September 30, 2002 December 31, 2001
--------------------------------------
Cash $3,996 $6,353
Accounts Receivable,
net 768 529
Inventories, net 414 531
Total Assets 7,420 9,990
Working Capital 4,057 6,523
Stockholders' Equity 6,115 8,879
CELLULAR TECHNICAL SERVICES COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in 000's, except per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------
2002 2001 2002 2001
--------- -------- --------- --------
REVENUE
Phonecards $3,728 $4,052 $9,417 $12,395
Services and Systems -- 1,318 -- 4,104
--------- -------- --------- --------
Total Revenue 3,728 5,370 9,417 16,499
COSTS AND EXPENSES
Cost of phonecards 3,645 3,847 9,262 12,187
Cost of services and systems -- 324 -- 1,078
Sales and marketing 251 283 788 1,054
General and administrative 221 447 871 1,404
Research and development 402 434 1,217 1,411
--------- -------- --------- --------
Total Costs and Expenses 4,519 5,335 12,138 17,134
--------- -------- --------- --------
LOSS FROM OPERATIONS (791) 35 (2,721) (635)
OTHER INCOME, net
-- 2 5 947
INTEREST INCOME, net 13 63 64 244
--------- -------- --------- --------
INCOME (LOSS) BEFORE INCOME TAXES
AND CHANGE IN ACCOUNTING
PRINCIPLE (778) 100 (2,652) 556
INCOME TAX PROVISION 5 19 12 21
--------- -------- --------- --------
INCOME (LOSS) BEFORE THE EFFECT
OF A CHANGE IN ACCOUNTING
PRINCIPLE (783) 81 (2,664) 535
CUMULATIVE EFFECT OF A CHANGE IN
ACCOUNTING PRINCIPLE -- -- (100) --
--------- -------- --------- --------
NET INCOME (LOSS) $(783) $81 $(2,764) $535
========= ======== ========= ========
BASIC AND DILUTED PER SHARE DATA:
Income (loss) before the
effect of a change in
accounting principle $ (0.34) $ 0.04 $ (1.17) $ 0.23
Cumulative effect of a
change in accounting
principle -- -- (0.04) --
========= ======== ========= ========
Net income (loss) $(0.34) $0.04 $(1.21) $0.23
========= ======== ========= ========
WEIGHTED AVERAGE SHARES
OUTSTANDING:
Basic 2,292 2,292 2,292 2,292
Diluted 2,292 2,297 2,293 2,301
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