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VANGUARD REPORTS $16.6 MILLION OPERATING CASH FLOW IMPROVEMENT IN 1991

VANGUARD REPORTS $16.6 MILLION OPERATING CASH FLOW IMPROVEMENT IN 1991
 GREENSBORO, N.C., March 5 /PRNewswire/ -- Vanguard Cellular Systems, Inc. (NASDAQ-NMS: VCELA) today reported results for the year ending Dec. 31, 1991 that reflect the Company's first year of positive operating cash flow (income from operations before depreciation and amortization).
 Operating cash flow improved from a negative $12.2 million in 1990 to a positive $4.4 million for 1991, an increase of $16.6 million. Operating cash flow in the fourth quarter of 1991 was a positive $2.1 million compared to a negative $4.4 million in the fourth quarter of 1990. This was the third consecutive quarter of positive operating cash flow for Vanguard.
 The increases in 1991 cash flow were driven by a combination of increases in revenues and reductions in operating expenses. Cellular service revenues increased to $64.5 million for 1991, a 21 percent growth rate from 1990 service
revenues of $53.4 million. Service revenues for the fourth quarter of 1991 grew 17 percent to $16.9 million from $14.4 million in the fourth quarter of 1990.
 Total annual costs and expenses, excluding depreciation and amortization, declined 15 percent in 1991 from 1990 levels which represented decreases in all major categories. General and administrative expenses as a percentage of service revenues dropped from 49 percent in 1990 to 37 percent in 1991. Marketing and selling expenses declined from 38 percent to 30 percent of service revenue from 1990 to 1991. Cost of service declined from 31 percent to 24 percent of service revenue year to year.
 The total number of subscribers in markets controlled by the Company increased 26 percent from the previous year to end 1991 at 69,200, representing a penetration rate of 1.25 percent of the Company 's control markets. Fourth quarter 1991 net subscriber gain was 4,600, marking the third consecutive quarter of increasing net subscriber growth. Fourth quarter gross subscriber activations were the highest in the Company's history.
 Vanguard's President and Chief Executive Officer Haynes G. Griffin commented: "We are particularly proud of our operating and financial achievements this past year considering the general recessionary pressures which have been acute in the mid-Atlantic and northeastern states where most of our operations are located. We were able to offset a slowdown in subscriber and revenue growth in the first half of the year by disciplined expense control. In the second half of the year, business conditions improved to a level where we posted increased net subscriber levels and record roaming revenues. The overall result was attainment of our most important operating objective of turning the corner on annual operating cash flow."
 The Company's 1991 net loss of $32.7 million or ($1.44) per share compared to a net loss of $29.3 million or ($1.42) per share in 1990. The 1990 loss included a one-time gain of $16.7 million or $0.81 per share resulting primarily from the transfer of the Company's interest in the Jacksonville, N.C. and Wilmington, N.C. MSAs to a joint venture with GTE Corporation. Excluding that one-time gain, net loss per share would have been ($2.23) in 1990.
 Vanguard Cellular Systems, Inc., headquartered in Greensboro, N.C., owns


interests in and operates cellular telephone systems primarily in the Eastern United States. Based on its 6.1 million "pops" including pops under contract, Vanguard is the nation's third largest independent operator of solely nonwireline cellular systems.
 VANGUARD CELLULAR SYSTEMS, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollar Amounts in Thousands, Except Per Share Data)
 3 Months Ended 12 Months Ended
 December 31, December 31,
 1991 1990 1991 1990
 (Unaudited) (See Note)
 Revenues:
 Service fees $16,944 $14,471 $64,521 $53,425
 Cellular telephone
 equipment revenues 1,307 2,178 4,837 9,947
 Cellular directory
 advertising fees - 140 - 858
 18,251 16,789 69,358 64,230
 Costs and Expenses:
 Cost of service 3,738 4,851 15,166 16,751
 Cost of cellular
 telephone equipment 1,733 3,324 6,314 11,136
 Cost of cellular
 directory publication - 734 - 2,198
 Marketing and selling 5,376 6,230 19,449 20,158
 General and
 administrative 5,312 6,138 23,996 26,227
 16,159 21,277 64,925 76,470
 Income (loss) from
 operations before
 depreciation and
 amortization 2,092 (4,488) 4,433 (12,240)
 Depreciation and
 amortization (4,931) (3,597) (19,112) (14,449)
 Loss From Operations (2,839) (8,085) (14,679) (26,689)
 Equity in earnings
 (losses) of
 unconsolidated
 cellular entities (400) (234) (230) (825)
 Net gains on dispositions
 of cellular interests 374 16,087 480 16,709
 Interest expense (4,200) (5,721) (19,292) (19,754)
 Interest income 144 289 699 888
 Loss Before Minority
 Interests (6,921) 2,336 (33,022) (29,671)
 Minority Interests (62) 133 309 359
 Net Income (Loss) $(6,983) $2,469 $(32,713) $(29,312)
 Net Income (Loss)
 Per Share $ (0.28) $ 0.12 $ (1.44) $ (1.42)
 Weighted Average
 of Common Shares
 Outstanding 24,533,217 20,673,661 22,702,117 20,636,634
 CONDENSED CONSOLIDATED BALANCE SHEETS
 December 31, December 31,
 1991 1990
 (See Note) (See note)
 Current Assets $22,202 $26,l84
 Investments in Cellular Entities 151,571 131,044
 Property and Equipment, net of
 accumulated depreciation of
 $36,489 and $22,389 74,581 75,767
 Other Assets 7,456 3,911
 Total Assets $255,810 $236,906
 Current Liabilities $ 14,348 $ 24,800
 Long-Term Debt, net of current portion 183,680 197,678
 Minority Interests 6,113 5,133
 Total shareholders' equity 51,669 9,295
 Total Liabilities and
 Shareholders' Equity $255,810 $236,906
 Note: The balance sheet information at December 31, 1991 and 1990 and the statement of operations information for the 12 months then ended have been derived from the audited financial statements at these dates.
 -0- 3/5/92
 /CONTACT: Stan Haines, Vanguard Cellular Systems, Inc., 919-545-2100/
 (VCELA) CO: Vanguard Cellular Systems, Inc. ST: North Carolina IN: TLS SU: ERN


CM-DF -- CH009 -- 5674 03/05/92 17:57 EST
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