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INTELLICALL, INC. ANNOUNCES VIOLATION OF FINANCIAL RATIO COVENANTS

INTELLICALL, INC. ANNOUNCES VIOLATION OF FINANCIAL RATIO COVENANTS
 DALLAS, March 13 /PRNewswire/ -- Intellicall, Inc. (NYSE: ICL) announced today that as of June 30, Sept. 30, and Dec. 31, 1991, the company was in violation of certain financial ratio covenants under its bank line of credit and a senior note and that generally accepted accounting principles require that the debt be treated as short-term rather than long-term obligations. The covenant violations constitute an event of default under the loan agreements. The company also announced that it was restating its financial statements for the quarters ended June 30 and Sept. 30, 1991, to reflect the proper classification of the debt obligations as current liabilities at those dates. The company's previously filed financial statements improperly reflected these amounts as long-term debt.
 The company has a $45 million bank line of credit, which provides that the revolving period of the line of credit will expire on April 30, 1992, and all amounts outstanding on that date will be renewed, extended and rearranged by means of a term loan payable over the next four years. The line of credit agreement contains a clause that permits the lender to declare a default in the event of a material adverse change in the company's financial condition, operations or assets. Although the company believes that there has been no material adverse change, under generally accepted accounting principles short-term obligations that can be refinanced on a long-term basis subject to a subjective acceleration clause are considered current liabilities, rather than long-term debt. As of June 30, Sept. 30, and Dec. 31, 1991, the company had outstanding borrowing under the line of credit of $41.3 million, $38.8 million and $30.0 million, respectively.
 The line of credit agreement requires the company to maintain a specified ratio of current assets to current liabilities and a specified ratio of income to certain fixed charges. The company's $10 million senior note required the company to maintain a specified ratio of income to fixed charges, and limited debt to a specified percentage of net tangible assets. As of June 30, 1991, the ratio of the company's current assets to its current liabilities was in violation of the line of credit agreement as a result of the reclassification of the company's debt. As of Sept. 30, 1991, the company's ratio of income to fixed charges and debt as a percentage of net tangible assets was in violation of the foregoing requirements regarding the ratio of income to fixed charges
and the debt limitation. As of June 30, Sept. 30 and Dec. 31,


1991, the company had outstanding borrowings under the senior note of $10.0 million, $9.0 million and $9.0 million. In addition, the line of credit agreement and the senior note contain cross-default provisions.
 The company is filing amendments to its quarterly reports to properly reflect its liabilities as of June 30 and Sept. 30, 1991. The company's audit committee has called a meeting for March 14, 1992, to initiate an inquiry concerning the company's failure to make timely disclosure of these matters.
 As of this date, the company is engaged in discussions with its lenders seeking to obtain waivers of the covenant violations in past and future periods and to establish less stringent covenant requirements. The company anticipates that it will be required to make payments to these lenders as consideration for these concessions. Although there can be no assurances, the company believes that its lenders will provide waivers of the violations and appropriate amendments to the covenants and that the violations will not have a material adverse effect on the company's financial condition or results of operations.
 Intellicall, Inc. is a diversified telecommunications company providing innovative technology and services to private pay telephone networks throughout the United States, and is the nation's leading manufacturer of privately owned pay telephones, automated operator systems and call processing systems. Company stock is listed in alphabetical quotations as "Intellicall" or "Intelcal."
 -0- 3/13/92
 /CONTACT: Tom Floerchinger, senior vice president and chief financial officer of Intellicall, Inc., 214-416-0022, ext. 149, or Jody Kendrick or Larry Meltzer of Meltzer & Martin Public Relations, 214-953-0808, for Intellical/
 (ICL) CO: Intellicall Inc. ST: Texas IN: TLS SU:


AH -- NY050 -- 7902 03/13/92 15:38 EST
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Date:Mar 13, 1992
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