Cellular Technical Services Reports Third Quarter Results.

Business Editors

SEATTLE--(BUSINESS WIRE)--Nov. 13, 2000

Cellular Technical Services Company, Inc. (Nasdaq:CTSC) ("CTS"), a leading provider of real-time information management systems for the wireless communications industry, today reported financial results for the third quarter of 2000.

                    Summary of Financial Highlights
            (Dollar amounts in 000s, except per share data)

                    Three Months Ended 9/30   Nine Months Ended 9/30
                       2000       1999            2000        1999

Revenue               $8,041     $2,576         $19,356      $8,131
Net Income               $65       $784          $2,576      $1,992
Net Income Per Share
 Basic                 $0.03      $0.34           $1.13       $0.87
 Diluted               $0.03      $0.34           $1.10       $0.87

Revenue increased 212% in the third quarter of 2000 over the comparable quarter of 1999, and increased 138% for the first nine months compared to the 1999 period. The increases are due to prepaid phone card revenue from the Company's Isis Telecommunications, Inc. subsidiary ("Isis"), totaling $6.3 million in the current quarter and $13.2 million for the first nine months of 2000. The Company began sales of phone cards in late December 1999. Quarterly Isis revenue increased sequentially 50% over the second quarter of 2000. Blackbird product line revenue declined 31%, or $0.8 million, in the third quarter and 24%, or $2.0 million, in the first nine months of 2000 as compared to the prior year periods, in line with expectations.

Net income decreased to $0.1 million in the third quarter from $0.8 million in 1999. Net income during the third quarter of 1999 was positively impacted by a net $0.4 million state tax refund, while net income during the current quarter was negatively impacted by a $0.8 million one-time charge for the write-off of phone-card inventory due to the bankruptcy of a supplier. Excluding the one-time Isis inventory write-off and the 1999 state tax refund, net income from operations for the 2000 period would have been $0.9 million against $0.4 million for the 1999 quarter. Net income for the nine months ended September 30, 2000 includes a non-recurring legal settlement received of approximately $1.2 million, net of expenses, during the second quarter of 2000.

Steve Katz, Chairman and CEO noted, "Our accomplishments for the third quarter include: all of our outstanding litigation was settled, we completed a move to new premises, our investment in KSI, Inc. was converted to stock in TruePosition, Inc., and on the software development side, our first commercial applications for the emerging geo-location market are being alpha-tested and we expect to be in a position to deliver products in the Q1-Q2 timeframe next year." Katz also noted, "as previously reported, although our base Blackbird business continues to provide profits and positive cash flow, we anticipate its revenue decline will accelerate in 2001."

CTS provides real-time information processing and management solutions for the telecommunications industry. Over the past 11 years, CTS has used its extensive experience with real-time wireless call processing to create technologically advanced solutions for this industry, including integrated solutions for fraud management. Today, CTS is building a more diversified, vertically structured organization with a focus on providing a wide range of products and services.

Due to the delay in reporting the current quarter's results, the Company has decided not to hold a conference call this quarter and will begin quarterly investor conference calls starting with the 2000 annual earnings release.

Special Note Regarding Forward-Looking Statements: This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act 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: dependence on analog cellular networks for certain products and services; vulnerability to rapid industry change and technological obsolescence; 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 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; manufacturing difficulties, including 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, except per share amounts)


                        September 30, 2000      December 31, 1999
                              (unaudited)


Cash                          $4,070                  $4,787
Accounts Receivable, net       1,596                   2,647
Inventories, net               2,310                     592
Total Assets                  11,322                  10,202
Working Capital                5,325                   3,621
Stockholders' Equity           8,276                   5,673


               CELLULAR TECHNICAL SERVICES COMPANY, INC.
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                 (in 000's, except per share amounts)
                              (unaudited)


                 Three Months Ended           Nine Months Ended
                    September 30,               September 30,
                  2000         1999          2000           1999

REVENUES
Systems         $     0     $    421     $     609      $   1,597
Services          1,777        2,155         5,564          6,534
Phone cards       6,264           --        13,183             --
                -------     --------     ---------      ---------

Total Revenues    8,041        2,576        19,356          8,131

COSTS AND EXPENSES
Cost of systems,
 services and
  phone cards     7,340          886        15,112          2,999
Sales and
 marketing          326          176           961            517
General and
 administrative     317          544         1,514          1,696
Research and
 development        394          402         1,043          1,241
                -------     --------     ---------      ---------
Total Costs and
 Expenses         8,377        2,008        18,630          6,453
                -------     --------     ---------      ---------

INCOME (LOSS)
 FROM OPERATIONS   (336)         568           726          1,678

OTHER INCOME, net    95          112         1,644            128

INTEREST INCOME,
 net                129          116           356            214
                -------     --------     ---------      ---------

INCOME (LOSS) BEFORE
 INCOME TAXES AND
  MINORITY
   INTEREST        (112)         796         2,726          2,020


PROVISION FOR
 INCOME TAXES        (1)         (12)          (58)           (28)
                -------     --------     ---------      ---------

NET INCOME (LOSS)
 BEFORE MINORITY
  INTEREST         (113)         784         2,668          1,992

MINORITY INTEREST   178           --           (92)            --
                -------     --------     ---------      ---------

NET INCOME      $    65     $    784     $   2,576      $   1,992
                =======     =========    =========      =========

EARNINGS PER SHARE:

     Basic      $  0.03     $   0.34     $    1.13      $    0.87
                =======     =========    =========      =========

     Diluted    $  0.03     $   0.34     $    1.10      $    0.87
                =======     =========    =========      =========

WEIGHTED AVERAGE SHARES OUTSTANDING:

     Basic        2,289        2,281         2,286          2,281

     Diluted      2,336        2,298         2,349          2,287