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U.S. Long Distance reports second quarter results; SG&A Expenses 23.4% vs. 29.6%; EBITDA Increases 183%.

SAN ANTONIO--(BUSINESS WIRE)--April 24, 1997--U.S. Long Distance Corp. (NASDAQ/NMS:USLD) today reported revenues for the second quarter ended March 31, 1997 of $53.2 million, representing a 22% increase over revenues of $43.7 million for the second quarter of 1996.

For the second quarter of 1997, the Company earned net income of $1,445,000 or $0.09 per share, compared to a loss of $755,000 on a pro forma basis, or $0.05 per share, for the comparable quarter of the prior year. As previously reported, U.S. Long Distance completed the spin-off of its billing and information management services business, Billing Information Concepts Corp. ("Billing"), on Aug. 2, 1996.

For the six months ended March 31, 1997, the Company reported net income of $2.6 million, or $0.16 per share, versus a loss of $1.3 million, or $0.09 per share, reported for the six months ended March 31, 1996. Revenue for the first six months of fiscal 1997 increased 22% to $101.9 million compared with $83.4 million for the same period a year ago.

Direct dial revenues increased 37% to $39.7 million for the second quarter of 1997 from $29.0 million for the second quarter of 1996. Operator services revenues declined 9% to $13.2 million for the second quarter of 1997 from $14.6 million for the same period in 1996. In addition, the Company entered the local service market in Texas, reporting $196,000 in local service revenues during the second quarter of 1997.

SG&A expenses in the second quarter of 1997 declined to 23.4% of revenue from 29.6% in the second quarter of the prior year and from 24.5% in the first quarter of 1997. This second quarter decrease represents the fourth sequential quarter the Company's SG&A percentage has declined. While USLD's revenue grew $9.5 million from the prior year second quarter, SG&A expense decreased by $506,000, or 4%, over the same period.

During the second quarter of 1997, the Company reported a 183% increase in EBITDA (earnings before interest, taxes, depreciation and amortization) to $5.2 million from $1.9 million reported in the second quarter of 1996.

"I am extremely proud of our management team's ability to control SG&A expense, while at the same time continuing to generate solid revenue growth," said Larry M. James, president and chief executive officer. "The direct dial long distance segment of our business continues to post solid gains. In addition, our margins remain strong even with the addition of our new switch in Atlanta, Georgia, which was installed in January. I am also pleased to report our expansion into the local service market is on track, and we are already providing local service to over 5,000 privately owned pay telephones in Texas."

James stated, "We are using the operator services segment of our business as a platform to launch our local service product. We anticipate that this segment of our business will provide USLD with a competitive edge to penetrate the local market." USLD's strategy in the local arena is to roll out three product offerings over a six-month period. The first is a resale product targeted to the Company's private pay telephone customers. During the second quarter, USLD provisioned approximately 5,000 local lines servicing private pay telephones in Texas, generating approximately $200,000 in revenue for the quarter. A resale local product will be offered to commercial customers beginning in the third quarter, and a switched local product will be offered to commercial and pay telephone customers in selected markets in the fourth quarter of 1997. Initially, all three products will be sold into the Company's existing customer base in an effort to leverage existing strong relationships and minimize SG&A expenses. The Company anticipates that it will have approximately 30,000 pay telephones and more than 60,000 commercial lines on its local service products by the end of fiscal 1998.

Certain statements contained herein are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements are based upon the belief of the Company's management, as well as assumptions made beyond information currently available to the Company's management. Because such "forward-looking statements" are subject to risks and uncertainties, actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, competitive factors, general economic conditions, customer relations, relationships with vendors, government supervision and regulation, product introductions and acceptance, technological changes, changes in industry practices, and other factors discussed in filings made by the Company with the Securities and Exchange Commission.

U.S. Long Distance is a publicly traded company, providing service primarily to business customers throughout the United States. The Company offers an integrated group of communications services including direct dial long distance, local service, pre-paid calling cards, travel cards, Internet access, data transmission and calling center services. The U.S. Long Distance network consists of a highly advanced, digital switching system that provides nationwide fiber-optic access throughout the United States.

U.S. LONG DISTANCE CORP. and SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

The Consolidated Statements of Operations included in this release reflect the continuing operations of the Company for the three and six-month periods ended March 31, 1997. A Consolidated Pro Forma Statement of Operations is presented below for the three and six-month periods ended March 31, 1996 and is based on the historical statement of that period adjusted to reflect a pro forma benefit for income taxes at a 42% tax rate for purposes of comparability. This pro forma statement of operations has been provided for comparability purposes and excludes the operations of Billing Information Concepts Corp. ("Billing") due to the Aug. 2, 1996 spin-off of Billing from U.S. Long Distance Corp.
 Three Months Ended Six Months Ended
 Pro Forma Pro Forma
 March 31, March 31, March 31, March 31,
 1997 1996 1997 1996
Operating revenues:
 Direct dial long
 distance services $39,732 $29,046 $75,107 $54,080
Operator services 13,240 14,609 26,612 29,283
Local services 196 0 196 0
 ---- ---- ---- ----
 Total operating revenues 53,168 43,655 101,915 83,363
Cost of services 35,516 28,875 67,497 55,261
 ---- ---- ---- ----
 Gross profit 17,652 14,780 34,418 28,102
Selling, general and
 administrative expense 12,423 12,929 24,354 24,311
Depreciation and
 amortization expense 2,704 2,938 5,347 5,709
 Income (loss) from ---- ---- ---- ----
 operations 2,525 (1,087) 4,717 (1,918)
Other expense, net (137) (215) (351) (401)
Income (loss) before ---- ---- ---- ----
 income tax benefit
 (provision) 2,388 (1,302) 4,366 (2,319)
Income tax benefit
 (provision) (943) 547 (1,768) 975
 ---- ---- ---- ----
Net income (loss) $ 1,445 $ (755) $ 2,598 $ (1,344)
 ---- ---- ---- ----
Net income (loss)
 per common share $ 0.09 $ (0.05) $ 0.16 $ (0.09)
Weighted average common
 shares and common share
 equivalents outstanding 16,423 15,189 16,286 15,021

Gross profit margin 33.2% 33.9% 33.8% 33.7%
Selling, general and
 administrative expense
 % of revenue 23.4% 29.6% 23.9% 29.2%
Earnings before interest,
 taxes, depreciation and
 amortization ("EBITDA")
 % of revenue (A) 9.8% 4.2% 9.9% 4.5%



Note to Consolidated Statements of Operations:

(A) EBITDA is a profitability/cash flow measurement that is commonly used in the telecommunications industry.

CONTACT: U.S. Long Distance, San Antonio

Karen R. Mella, 210/525-6228

karen.mella@usld.com
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