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UNITED STATES CELLULAR REPORTS SUBSTANTIAL INCREASES IN FIRST QUARTER CUSTOMERS, REVENUES AND CASH FLOWS

 CHICAGO, April 29 /PRNewswire/ -- United States Cellular Corp. (AMEX: USM) today reported substantial increases in customers, service revenues and operating cash flows during the first quarter of 1993. Operating cash flow increased $2.8 million, or 81 percent, reflecting a 60 percent increase in customers and a 55 percent rise in service revenues. Operating loss before minority share increased by 26 percent to $3.4 million, and the net loss totaled $9.2 million, or $.17 per share, in 1993 compared to net income of $8.3 million, or $.15 per share, in 1992. In 1992, USM recognized $14.9 million of gains on the sale and exchange of cellular interest and reported net income for the quarter.
 The company completed the acquisition of ten markets during the first quarter of 1993, nine of which were operational at March 31, 1993. As a result, the company included 101 majority-owned and managed systems in its consolidated results at March 31, 1993 compared to 78 such systems at March 31, 1992.
 Service revenues totaled $45.4 million for the three months ended March 31, 1993, a 55 percent increase over the $29.3 million reported in 1992. The primary driver behind the increase in service revenues was continued growth in the number of customers served. USM's majority- owned and managed markets served 173,800 customers at March 31, 1993, a 60 percent increase over the 108,600 customers served at March 31, 1992. Excluding acquisitions, the company's distribution channels added 13,600 new customer during the quarter, a 116 percent increase over the 6,300 new customers added during 1992. Acquisitions added another 9,400 customers in 1993 and 5,300 in 1992. Average monthly service revenue per subscriber totaled $92 in 1993 compared to $95 in 1992. The growth in service revenues resulted in a $2.8 million increase in operating cash flows, which totaled $6.3 million 1993 compared to $3.5 million in 1992.
 UNITED STATES CELLULAR CORP.
 Financial Highlights
 (Unaudited, dollars in millions)
 Three months ended March 31 1993 1992 Percent change
 Service Revenues $45.4 $29.3 55
 Operating (loss) before
 minority share (3.4) (2.7) (26)
 Operating cash flows 6.3 3.5 91
 Gain on sale of
 cellular interests -- 14.9 100
 Interest expense 7.7 4.4 73
 Net income (loss) $(9.2) $ 8.2 (211)
 "We are off to a strong start in 1993," reported H. Donald Nelson, the company's president and chief executive officer. "First quarter customer growth was outstanding, and revenue per customer per customer held up well despite the severe weather conditions our eastern markets experienced in March."
 Operating expenses, excluding depreciation and amortization, increased 52 percent to $41.5 million in 1993 from $27.3 million in 1992. System operations expense rose 38 percent to $13.2 million both as a result of the addition of 120 cell sites to the company's coverage areas as well as the increased cost of serving a 60 percent larger customer base. Marketing and selling expenses, including losses on the sale of cellular telephones, increased 88 percent to $10.8 million as a result of both a 72 percent increase in gross customer activations in 1993 and a 9 percent rise in cost per gross activation. General and administrative expenses were up 44 percent to $15.1 million primarily due to a 29 percent increase in the number of majority-owned and managed markets and the increase in the customer base.
 Depreciation and amortization rose 57 percent to $9.7 million resulting from a 60 percent increase in license costs and a 52 percent increase in fixed assets from March 31, 1992. License cost amortization totaled $3.6 million during the first quarter of 1993. USM's consolidated cellular systems consisted of 362 cell sites serving 78 such markets in March 31, 1992.
 Operating loss before minority share totaled $3.4 million in the first quarter of 1993 compared to a loss of $2.7 million in the same period of 1992. Interest expense rose by $3.2 million during the quarter, or 73 percent, resulting from an 87 percent increase in the company's debt balances from March 31, 1992, to March 31, 1993. In 1992, USM recorded gains totaling $14.9 million related to the sale and exchange of certain of its cellular interest. No such gains were recorded in 1993. As a result, USM reported a net loss of $9.2 million, or $.17 per share, for the quarter compared to net income of $8.3 million, or $.15 per share, in 1992.
 USM continued to increase its opportunities for future growth by agreeing to acquire majority interests in four markets during the quarter. These markets represent approximately 607,000 population equivalents (pops). In total, the company owned or had agreements to acquire interest representing approximately 21.8 million pops as of March 31, 1993.
 "These recent acquisition serve to further strengthen our existing clusters," Nelson noted. "Each new market is adjacent to and further expands one of our clusters. We enhanced our southern Texas cluster with the addition of the Victoria Metropolitan Statistical Area (MSA). Built entirely through acquisitions, this cluster now consists of two MSAs and three Rural Service Areas (RSAs) with a total population of nearly 750,000. We also acquired the right to serve the RSA which contains the interstate highway connecting our Peoria, Ill., and Davenport, Iowa, markets. USM will continue to selectively acquire markets that enhance and expand our clusters."
 The effects of the company's acquisition program on its capital structure are summarized on the following table. The company had a total of 54.4 million common shares outstanding and commitments to issue an additional 10.4 million common shares in the future. These future shares include 6.3 million shares issuable for completed acquisitions, 3.0 million shares to be issued for pending acquisitions, and 1.1 million shares to be issued to redeem preferred shares currently outstanding. USM also had $471 million in total debt at March 31, 1993, including $401 million under the Revolving Credit Agreement with its parent company, Telephone and Data Systems, Inc. (TDS). Additionally, the company had debt commitments to TDS totaling $9 million at March 31, 1993 related to pending acquisitions.
 UNITED STATES CELLULAR CORP.
 (Unaudited, in Millions)
 Debt Equity Shares(A)
 Outstanding at March 31, 1993
 Common shares(B) $27.0 27.0
 Series A Common Shares 27.4 27.4
 Preferred Shares(C) 19.7
 Additional Paid-in Capital 377.5
 Debt $470.8
 Total Outstanding
 at March 31, 1993 470.8 451.6 54.4
 Estimated common shares
 issuable for completed
 acquisitions 129.4 6.3(B)
 Estimated debt and common shares
 to be issued for pending
 acquisitions 9.1 63.5 3.0(B)
 Preferred shares redeemable
 for common shares 1.1(B)
 March 31, 1993, totals adjusted for
 anticipated acquisition-related
 transactions $479.9 $644.5 64.8(D)
 (A) -- The information in the table above and these footnotes assumes the issuance of USM shares in all instances in which USM has the choice to issue USM shares, TDS shares or cash.
 (B) -- The aggregate 10.4 million common shares committed for issuance in future years are scheduled to be issued as follows: approximately 3.0 million shares in 1993, 5.6 million in 1994 and 1.8 million in 1995 and later years.
 (C) -- Preferred shares are convertible into 1.1 million USM common shares.
 (D) -- When all shares are issued for acquisitions and redemption of preferred shares, TDS will own 76 percent of USM's common stock.
 Headquartered in Chicago, USM manages and invests in cellular systems throughout the United States. As of March 31, 1993, USM owned or had rights to acquire interests representing 21.8 million pops in 196 markets. At that date, USM managed operational systems serving 123 markets.
 Today, at 2 p.m. CDT, TDS and USM will hold a joint news conference by phone to discuss first quarter 1993 results of operations. The news conference is available by calling 800-837-1012. For further information, call the contact below.
 UNITED STATES CELLULAR CORP. FINANCIAL HIGHLIGHTS
 (Unaudited, dollars in thousands, except per share amounts)
 Three Months Ended
 1993 1992 Amount Percent
 Increase (Decrease)
 Operating revenues
 Service Revenues $ 45,434 $ 29,261 $ 16,173 55.3
 Equipment Sales 2,335 1,495 840 56.3
 Total $ 47,769 30,756 17,013 55.3
 Operating Expenses
 (excluding depreciation
 and amortization)
 System operations 13,152 9,516 3,636 38.2
 Marketing and
 selling 9,311 4,552 4,759 104.6
 Cost of equipment sold 3,871 2,726 1,145 42.1
 General and
 administrative 15,124 10,466 4,658 44.5
 Total 41,458 27,260 14,198 52.1
 Operating Cash Flows 6,311 3,496 2,815 80.5
 Depreciation 5,549 3,472 2,077 59.8
 Amortization of
 intangibles 4,142 2,704 1,438 53.2
 Total 9,691 6,176 3,515 56.9
 Operating (Loss) Before
 Minority Share (3,380) (2,680) (700) (26.1)
 Minority Share of
 Operating (Income) (767) (857) 90 10.5
 Operating (Loss) (4,147) (3,537) (610) (17.2)
 Investment Income, Net
 of License Cost
 Amortization 2,831 3,032 (201) (6.6)
 Gain on Sale of
 Cellular Interests -- 14,875 (14,875)(100.0)
 Other Income
 (Expense) 124 (792) 916 115.6
 Interest Expense (7,687) (4,444) (3,243) (73.0)
 Net Income (Loss) $ (9,208) $ 8,284 $(17,492)(211.1)
 Weighted Average Common
 and Series A Common
 Shares (000s) 53,991 55,478 (1,487) (2.7)
 Net Income (Loss)
 Per Common Share $(.17) $.15 $(.32)(213.3)
 Consolidated Net
 Revenue
 Subscribers 173,800 108,600 65,200 60.0
 Total Net Revenue
 Subscribers in All
 Managed Markets 202,300 127,400 74,900 58.8
 N/M -- Percent change not meaningful.
 -0- 4/29/93
 /CONTACT: Kenneth R. Meyers, vice president-Finance of United States Cellular Corp., 312-399-8900/
 (USM)


CO: United States Cellular Corp. ST: Illinois IN: TLS SU: ERN

TS -- NY104 -- 2796 04/29/93 15:24 EDT
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