CELLULAR COMMUNICATIONS ANNOUNCES OPERATING RESULTS FOR THIRD QUARTER 1991
CELLULAR COMMUNICATIONS ANNOUNCES OPERATING RESULTS FOR THIRD QUARTER 1991 NEW YORK, Nov. 14 /PRNewswire/ -- Cellular Communications, Inc. (NASDAQ: COMMP) (CCI) announced today its operating results for the three and nine months ended Sept. 30, 1991. On Aug. 1, 1991, CCI and PacTel formed a joint venture equally owned by CCI and PacTel comprised of CCI's cellular telephone interests in Ohio and PacTel's cellular telephone interests in Michigan and Ohio. Effective with the formation of the joint venture, CCI no longer consolidates its former Ohio cellular telephone interests that were contributed to the joint venture ("CCI Ohio"). Instead, CCI records 50 percent of the net income of the joint venture as "equity in net income of joint venture." As a result of this change, comparisons of 1991 and 1990 results may not be meaningful and, therefore, 1990 results are not presented. The following summarizes the pro forma results of the joint venture as if it had existed at the beginning of the respective periods of the three and nine months ended Sept. 30, 1991 and 1990. CCI/PACTEL JOINT VENTURE (In thousands, except subscribers) Three Months ended Sept. 30; 1991 1990 Revenues: Service $63,636 $52,087 Equipment, net 1,969 588 Total 65,605 52,675 Expenses: Operating 14,008 10,248 SG&A 25,102 19,845 Total 39,110 30,093 Operating income 26,495 22,582 Depreciation & amortization (12,625) (10,379) Interest and other, net 406 789 Restructuring charges (1,117) -- Net income $13,159 $12,992 Ending Subscribers 258,200 195,500 CCI/PACTEL JOINT VENTURE (In thousands) Nine Months ended Sept. 30; 1991 1990 Revenues: Service $ 175,966 $144,028 Equipment, net 5,058 2,543 Total 181,024 146,571 Expenses: Operating 36,481 28,768 SG&A 69,948 56,599 Total 106,429 85,367 Operating income 74,595 61,204 Depreciation & amortization (36,873) (30,821) Interest and other, net 2,308 1,537 Restructuring charges (1,117) -- Net income $38,913 $31,920 Discussion of Three Month Joint Venture Results Cellular service revenue increased from $52,087,000 to $63,636,000 primarily because of the increase in the number of subscribers. The gross margin from equipment increased in 1991 due to increased revenue from the joint venture's cellular phone rental program. Operating expenses increased from $10,248,000 to $14,008,000, representing 19.7 percent and 22.0 percent of service revenues, respectively. The increase
in absolute and percentage terms is due to the increasing level of subscriber activity and the company's expanded cellular network subject to the Ohio personal property tax. Operating expenses in 1991 also include charges relating to a temporary toll free promotion in the northern Ohio region.
Selling, general and administrative expenses rose from $19,845,000 to $25,102,000. The increase was attributable to the increase in the number of subscriber activations and the costs of servicing and maintaining the larger subscriber base. Depreciation and amortization expense increased from $10,379,000 to $12,625,000 due to the significant increase in the number of rented telephones and the increase in cellular network and in-house billing computer equipment to serve the increased subscriber base. The charge of $1,117,000 was a result of organizational restructuring upon the creation of the joint venture. The results of operations for CCI for the three and nine months ended Sept. 30, 1991 are given below. CCI (In thousands, except per share data) Three Months Ended Sept. 30, 1991 Revenues: Service $ 12,208 Equity in net income of joint venture 4,487 Equipment, net 364 Total 17,059 Expenses: Operating 3,450 SG&A 8,616 Total 12,066 Operating income 4,993 Depreciation and amortization (5,255) Net interest (expense) (3,852) Nonrecurring charges (3,706) (Loss) before extraordinary item (7,820) Extraordinary item (2,405) Net (loss) $(10,225) Net (loss) per common share before extraordinary item $(.19) Net (loss) per common share $(.25) Weighted average shares 41,229 Nine Months ended Sept. 30; 1991 Revenues: Service $ 73,758 Equity in net income of joint venture 4,487 Equipment, net 3,270 Total 81,515 Expenses: Operating 18,098 SG&A 37,628 Total 55,726 Operating income 25,789 Depreciation and amortization (26,708) Net interest (expense) (8,653) Nonrecurring charges (7,873) Gain on sale of partnership interest -- Provision for income taxes -- Income (loss) before extraordinary items (17,445) Extraordinary items (2,405) Net income (loss) $(19,850) Net income (loss) per common share before extraordinary items $(.44) Net income (loss) per common share $(.50) Weighted average shares 40,242 Discussion of Three Month CCI Results Equity in not income of Joint Venture was $4,487,000 in 1991 because the Joint Venture was formed on Aug. 1, 1991. CCI incurred $3,706,000 of special legal, accounting and financial advisory fees relative to the Merger Agreement during the three months ended Sept. 30, 1991. During 1991, CCI recognized an extraordinary loss of $2,405,000 from the write-off of deferred financing costs due to the early extinguishment of its old loan agreement. -0- 11/14/91 /CONTACT: J. Barclay Knapp, chief operating officer, or Richard J. Lubasch, vice president-general counsel, 212-319-7014, both of CCI/ (COMMP) CO: Cellular Communications, Inc. ST: New York IN: TLS SU: ERN JT -- NY008 -- 4263 11/14/91 08:56 EST
|Printer friendly Cite/link Email Feedback|
|Date:||Nov 14, 1991|
|Previous Article:||DOW DECLARES QUARTERLY DIVIDEND|
|Next Article:||MARION MERRELL DOW'S LYONS ON DOW'S BOARD OF DIRECTORS|