Cellular Technical reports first profitable year with 1994 EPS of 15 cents; Cites "excellent preliminary results" from Blackbird(TM) beta test.

SEATTLE--(BUSINESS WIRE)--March 6, 1995--Cellular Technical Services Company Inc. (Nasdaq NM Symbol:CTSC)("CTS") today announced its first profitable year, reporting financial results for the fourth quarter and year ended Dec. 31, 1994.

Revenue in 1994 increased 90 percent to $10.01 million compared with $5.27 million in 1993. Net income for the year was $1.55 million, or 15 cents per share, compared with a loss of $(1.21 million), or (14 cents) per share, in 1993.

For the fourth quarter, revenue increased 60 percent to $2.43 million compared with $1.52 million in the prior year period. Net income for the quarter was $103,333, or 1 cent per share compared with a net loss of $(80,881), or (1 cent) per share in the same period in 1993.

Bob Dahut, CTS President said, "1994 was a pivotal year for CTS. We signed several contracts with major wireless carriers for our Real-Time Collection and Distribution (post-call) Platform applications, including the Axys(TM) contract with McCaw Cellular, which results in our first full-year profit. These agreements represent the creation of a solid customer base that we can build on by selling additional applications to existing customers and marketing to new customers in both the domestic and international markets."

During 1994, CTS added significant resources to support its rapid growth. "We've added key people to our sales and marketing team, as well as customer service and research and development. The result is that we are now better able to identify and move quickly to meet customer requirements," said Dahut.

For CTS, one of the most important events of 1994 was the introduction of the Blackbird Pre-Call Platform, "a key addition to our product offering," said Dahut. Blackbird is an integrated software and hardware system designed to provide an array of pre-call information management applications for wireless communications service providers. Blackbird's first such application, the PreTect(TM) fraud interdiction system, is aimed at the growing problem of cellular fraud involving the use of counterfeit or "cloned" phones. Cloning has become a major issue for cellular service providers, costing the industry as much as $1 billion annually. "The marketplace clearly needs a solution to the cloning problem today. We believe applications using the Blackbird Platform, such as PreTect, can provide that solution on a timely and cost effective basis," said Dahut.

CTS recently completed its portion of a beta test with L.A. Cellular involving 10 cell sites in the Los Angeles area. The test will now be expanded by L.A. Cellular to up to 50 cell sites. "Our results to date have been excellent," said Dahut. "In controlled tests, PreTect has been able to identify and terminate counterfeit calls, before than can enter the carrier's system, with an accuracy rate of better than 90 percent. Most importantly, the test has shown PreTect's ability to consistently make the interdiction decision without impacting service to legitimate customers. Based on these results, we will begin selling the Blackbird Platform and the PreTect applications immediately."

Dahut said contract negotiations with L.A. Cellular have already begun and CTS is scheduled to meet soon with several other major carriers who have expressed a "strong interest" in deploying Blackbird in their markets. "We expect Blackbird sales to be a significant part of revenue growth in 1995," said Dahut. "Our quarter-to-quarter results will likely continue to be uneven and may show losses in some periods due to the long sales cycles and staggered contract payments that characterize our business. However, on a full-year basis, we expect revenue to grow at an even faster rate than it did in 1994," he said.

Cellular Technical Services develops, markets and supports real-time information management systems for the wireless communications industry. The company's innovative technologies and open systems philosophy help cellular carriers obtain real-time information and maximize value, control and flexibility of their systems.

              Cellular Technical Services Company Inc.
                 Fourth quarter and year-end 1994
                     Selected Financial Data

                                      1994            1993
Three months ended Dec. 31:
Revenues                            $2,432,582      $1,518,144
Net income (loss)                   $  103,333      $  (80,881)
Net income (loss) per common share  $     0.01      $    (0.01)
Weighted average shares outstanding 10,963,168       8,752,582

Year ended Dec. 31:
Revenues                           $10,012,080      $5,267,685
Net income (loss)                   $1,549,871     $(1,206,335)
Net income (loss) per common share  $     0.15      $    (0.14)
Weighted average shares outstanding 10,148,663       8,681,840

CONTACT: Lippert/Heilshorn & Associates Inc.

Laura Wilker, ext. 106

Bharti Malkani, ext. 119

212/838-3777

or

Cellular Technical Services Co. Inc.

Joseph D. Pititto, 516/887-0494