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UNITED STATES CELLULAR REPORTS RECORD GAINS IN CUSTOMERS, REVENUES AND CASH FLOW

 CHICAGO, Oct. 28 /PRNewswire/ -- United States Cellular Corp. (AMEX: USM) reported record growth in customers, revenues and operating cash flow during the third quarter ended Sept. 30, 1993. Customers served by USM's majority-owned and managed systems ("consolidated markets") as of that date increased 68 percent from twelve months earlier, fueling a 59 percent increase in service revenues. The rise in service revenues resulted in a 132 percent increase in operating cash flow during the third quarter. USM generated operating income before minority share of $228,000 during the third quarter compared to an operating loss before minority share of $2.7 million in the prior year. The net loss improved to $843,000, or $.01 per share, in 1993 compared to $6.0 million, or $.12 per share, in 1992. The improvement in operating income was complemented by increased investment income, which rose $2.3 million, as well as gains totaling $4.9 million which resulted from the sales of two investment interests during the third quarter. On a comparable basis, excluding nonrecurring and unusual items, third quarter 1993 net loss increased 4 percent to $5.7 million and net loss per share decreased 6 percent to $.10, both as compared to the third quarter of 1992.
 As a result of the acquisition of two markets and the start-up of two additional markets during the third quarter of 1993, the company's consolidated markets totaled 111 at Sept. 30, 1993, compared to 87 such markets at Sept. 30, 1992.
 Third Quarter Results
 Service revenues totaled $67.1 million for the three months ended Sept. 30, 1993, a 59 percent increase over the $42.2 million reported in 1992. This improvement was primarily driven by continued growth in the number of customers served. USM's consolidated markets served 225,400 customers at Sept. 30, 1993, a 68 percent increase over the 134,500 customers served at Sept. 30, 1992. Excluding acquisitions, USM's distribution channels added 26,800 new customers during the third quarter compared to 13,300 new customers added during the same quarter in 1992, a 102 percent increase. Acquisitions added another 9,500 customers in the third quarter of 1993; there were no acquisition effects on third quarter 1992 customer additions.
 FINANCIAL HIGHLIGHTS
 THREE MONTHS ENDED SEPT. 30
 (Unaudited, Dollars in Millions)
 Pct.
 1993 1992 Change
 Service Revenues $ 67.1 $ 42.2 59
 Operating Cash Flow 12.1 5.2 132
 Operating Income (Loss)
 before Minority Share 0.2 (2.7) 108
 Investment and Other Income 10.2 2.7 279
 Interest Expense 9.8 5.1 92
 Net (Loss) $ (0.8) $ (6.0) 86
 Average monthly service revenue per customer remained strong at $106 for the most recent quarter, as compared to $110 for the same period in 1992 and $102 during the second quarter of 1993. Inbound, or keeper, roamer revenue per customer averaged $38 in the third quarter of 1993 compared to $34 in 1992. The growth in total service revenues drove a $6.9 million increase in operating cash flow and a $2.9 million increase in operating income before minority share both as compared to the third quarter of 1992.
 "We are very pleased with the substantial improvements in operating cash flow in the third quarter," reported H. Donald Nelson, the company's president and chief financial officer. "We are particularly pleased with this growth because it comes in a quarter in which we more than doubled our net customer additions. Our continuing focus on reducing marketing and other costs through clustering has enabled us to turn excellent revenue growth into bottom-line operating improvements. Revenue per customer, while slightly lower than last year, remained strong and was an improvement over the second quarter."
 Operating expenses, excluding depreciation and amortization, increased 45 percent to $57.1 million in 1993 from $39.3 million in 1992. Depreciation and amortization rose 50 percent to $11.0 million due to a 53 percent increase in license costs and a 56 percent increase in average fixed asset balances from the third quarter of 1992. The company's network consisted of 444 cell sites serving 87 such markets at Sept. 30, 1992. Operating cash flow totaled $12.1 million for the most recent quarter, representing 18 percent of service revenues, compared to $5.2 million, or 12 percent of service revenues during the same period last year.
 Operating income before minority share totaled $228,000 in the third quarter of 1993 compared to a loss of $2.7 million in the same period of 1992. Investment income increased $2.3 million to $5.5 million due to increased investment income recorded reflecting improved results in markets managed by others. The sales of two investment interests during the quarter resulted in gains totaling $4.9 million. Interest expense rose by $4.7 million, or 92 percent, resulting from a 94 percent increase in the company's average debt balance from the third quarter of 1992. For the quarter, the company reported a net loss of $843,000, or $.01 per share, compared to a net loss of $6.0 million, or $.12 per share, in 1992. On a comparable basis, excluding nonrecurring and unusual items, the net loss increased 4 percent to $5.7 million and net loss per share decreased percent to $.10.
 Nine Months Ended Results
 For the nine months ended Sept. 30, 1993, service revenues increased to 53 percent, totaling $168.2 million compared to $109.7 million a year earlier. Continued growth in the company's customer base was the primary driver behind this improvement. As of Sept. 30, 1993, the customer base in the company's consolidated markets totaled 225,400, a 68 percent increase from Sept. 30, 1992. Excluding acquisitions and divestitures, USM added 57,200 new customers during the first nine months of 1993 compared to 32,100 during the same period in 1992, a 78 percent increase. Average monthly revenue per customer totaled $99 during the first nine months of 1993 compared to $104 in 1992. Operating expenses, including losses on equipment sales, totaled $170.7 million for the first nine months of 1993, a 47 percent increase over the same period in 1992. Operating loss before minority share improved to $2.6 million in 1993, a 57 percent reduction from the first nine months of 1992. Operating cash flow increased 95 percent to $29.5 million in 1993, up from $15.1 million in 1992. Investment and other income fell $4.3 million in 1993, as gains totaling $14.3 million were recognized in 1992 from the sale of cellular interests while gains from sales transactions in 1993 totaled $4.9 million. Net loss for the first nine months of 1993 totaled $14.2 million, or $.26 per share, compared to a net loss of $1.7 million, or $.03 per share, in 1992. On a comparable basis, excluding nonrecurring and unusual items, the net loss increased 19 percent to $19.1 million and net loss per share rose 8 percent to $.35.
 FINANCIAL HIGHLIGHTS
 THREE MONTHS ENDED SEPT. 30
 (Unaudited, Dollars in Millions)
 Pct.
 1993 1992 Change
 Service Revenues $168.2 $109.7 53
 Operating Cash Flow 29.5 15.1 95
 Operating Income (Loss)
 before Minority Share (2.6) (6.1) 57
 Investment and Other Income 19.0 23.3 (19)
 Interest Expense 26.4 14.6 81
 Net (Loss) $(14.2) $ (1.7) N/M
 Looking to build on its continued strong operating growth, the company's ongoing acquisition program added opportunities for future growth during the third quarter. The company agreed to acquire majority interests in four markets during the quarter, representing approximately 560,000 population equivalents ("pops") in markets that strengthen its existing clusters. In total, the company owned or had agreements to acquire interests representing approximately 23.0 million pops as of Sept. 30, 1993.
 "We will continue to pursue acquisition opportunities which allow us to build value as we further develop our clustering strategy," Nelson noted.
 Acquisitions
 The effects of the company's acquisition program on its capital structure are summarized on the table shown on the next page. The company had a total of 57.0 million common shares outstanding as of Sept. 30, 1993. Pursuant to a rights offering made to shareholders of record as of Oct. 22, 1993, the company will issue approximately 11.5 million common shares during the fourth quarter of 1993. Additionally, the company has commitments to issue up to an additional 10.9 million common share in the future. These commitments include approximately 5.5 million shares issuable for completed acquisitions, 4.3 million shares to be issued for pending acquisitions and 1.1 million shares to be issued to redeem preferred shares currently outstanding. The company also had $540 million in total debt at Sept. 30, 1993, including $473 million under the Revolving Credit Agreement with Telephone and Data Systems, Inc. ("TDS"). Pursuant to the rights offering, the company will reduce its debt outstanding under the Revolving Credit Agreement by approximately $378 million during the fourth quarter.
 (Unaudited, in Millions)
 Debt Equity Shares(A)
 Outstanding at Sept. 30, 1993
 Common Shares(B) $ 29.5 29.5
 Series A Common Shares 27.5 27.5
 Preferred Shares(C) 19.7
 Additional Paid-in Capital 456.1
 Debt $540.2
 Total Outstanding At
 Sept. 30, 1993 540.2 532.8 57.0
 Common shares
 issuable pursuant
 to rights offering (377.6) 377.6 11.5
 Estimated common
 shares issuable for
 complete acquisition 119.1 5.5(B)
 Estimated common shares
 to be issued for
 pending acquisitions 120. 1 4.3(B)
 Preferred shares redeemable
 for common shares 1.1(B)
 Sept. 30, 1993 totals
 adjusted for rights
 offering and anticipated
 acquisition-related
 transactions $162.6 $1,149.6 79.4(B)
 NOTES: (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) Assuming USM shares are issued in all instances in which USM has the choice to issue USM shares or cash, the aggregate 10.9 million common shares committed for issuance in future years are scheduled to be issued as follows: approximately 3.1 million shares in 1993, 6.0 million in 1994 and 1.8 million in 1995 and later years. Assuming all shares are issued for acquisitions and redemption of preferred shares, TDS will own approximately 79 percent of USM's common stock.
 (C) Preferred shares are convertible into 1.1 million USM common shares.
 Headquartered in Chicago, USM manages and invests in cellular systems throughout the United States. As of Sept. 30, 1993, USM owned or had rights to acquire interest representing 23.0 million pops in 203 markets. At that date, USM managed operational systems serving 132 markets.
 -0- 10/28/93
 /NOTE TO EDITOR: Today, at 2 p.m., CDT, TDS and USM held a joint news conference by phone to discuss third quarter 1993 and nine months to date results of operations. The news conference is available by calling 800-837-1012. For further information, please contact Kenneth R. Meyers, vice president-finance, at 312-399-8900/
 /CONTACT: Kenneth R. Meyers, vice president-finance of United States Cellular, 312-399-8900/
 /FIRST AND FINAL ADD -- TABULAR MATERIAL -- TO FOLLOW/
 (USM)


CO: United States Cellular Corporation ST: Illinois IN: TLS SU: ERN

TM -- NY130 -- 8197 10/28/93 17:40 EDT
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Date:Oct 28, 1993
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