ATLANTA, April 16 /PRNewswire/ -- Preferred Networks, Inc.
(OTC Bulletin Board: PFNT) (PNI), a leading outsourcing services provider to
the wireless industry, today reported improved revenues and EBITDA (earnings
before interest, taxes, depreciation and amortization, a standard measure of
operating cashflow in the wireless industry) for the fourth quarter and for
the year ended December 31, 1998.
Total revenues for the fourth quarter of 1998 increased 8.2% to
$10.4 million from $9.7 million for the fourth quarter of 1997. EBITDA
improved by 34.0% to negative $1.6 million for the fourth quarter of 1998
compared to negative $2.4 million for the fourth quarter of 1997. The net
loss for the fourth quarter of 1998 was $4.6 million, or $0.33 per share,
compared to a loss of $4.4 million, or $0.30 per share, for the prior year
period.
For the twelve months ended December 31, 1998, total revenues increased
8.7% to $39.1 million from $36.0 million in 1997. For the twelve months ended
December 31, 1998, EBITDA improved to negative $6.5 million compared to
negative $11.3 in 1997. The net loss for 1998 was $15.2 million compared to a
net loss of $19.2 million in 1997. The net loss attributable to common
stockholders was $18.2 million in 1998 or $1.12 per share compared to
$20.2 million in 1997 or $1.26 per share.
Beginning in 1999, the Company was not in compliance with certain of the
financial covenants under its senior credit facility, which would allow the
lender to declare a default and accelerate the maturity of the debt. As of
April 13, 1999, the Company has accepted a non-binding proposal from its
senior lender to amend certain terms and conditions of its senior credit
facility. Management believes that if this proposal is executed by the lender
in the form of an amendment to its senior credit facility, the Company will be
able to meet its debt covenants in 1999 and all of its debt would revert to
monthly payments of principal and interest, which the Company believes it
would be able to satisfy in 1999. Management believes that the amendment of
its senior credit facility will occur during the second quarter of 1999,
although there can be no assurances that the transaction will be consummated
or that the terms will be as currently desired.
Commenting on the results, Chairman and Chief Executive Officer, Mark H.
Dunaway said, "We are pleased with our continued growth in total revenues and,
in particular, our even greater improvement in bottom line performance. We
believe the market for our services has strengthened during 1998, with our
customers focusing on sales and marketing to their subscribers, while
outsourcing their backbone and support requirements to PNI. We believe the
environment of "subscribers at any cost" that characterized the 1996 and 1997
marketplace is behind us and that PNI is well positioned to take advantage of
the demand for cost-efficient, flexible, non-branded wireless services that
support companies in competing effectively for subscribers."
Dunaway added, "PNI has one of the lowest debt ratios in the industry and
we have consistently reduced our cash requirements during each of 1998 and
1997. We believe the amendment of our senior credit facility will provide the
funding and flexibility we require to enable us to achieve our business plan."
At December 31, 1998, PNI's Access Services Division was operating in
28 markets and had 525,274, units in service, an 15.5% increase from 454,795
units in service at December 31, 1997.
Preferred Networks, Inc., headquartered in metropolitan Atlanta, provides
outsourcing solutions to the wireless industry, which allow companies to offer
branded wireless services directly to subscribers, while relying on PNI to
provide high-quality network, technical, and product services. PNI offers its
services through its PNI Access Services Division(SM), a provider of wholesale
paging network services and one of the largest carrier's carriers in the U.S.,
and through its wholly-owned subsidiaries: PTS, a provider of paging network
equipment installation, maintenance and engineering services; and EPS, a
national provider of paging and cellular product repair services, sales of
new, used and refurbished paging and cellular products and inventory
management services. PNI's address on the World Wide Web is:
http://www.pni.net.
Safe Harbor Statement Under the Private Securities Litigation Reform Act
of 1995: The statements contained in this release which are not historical
facts, such as those concerning future financial performance and growth, are
forward-looking statements that are subject to risks and uncertainties,
including those identified in the Company's 1998 Annual Report on Form 10-K,
and actual results could differ materially from those anticipated in the
forwarding-looking statements.
PREFERRED NETWORKS, INC.
Financial Highlights
(dollars in thousands, except per share data)
Unaudited
Three months ended Three months ended
December 31, December 31,
1998 1997
Revenues
Network Services $3,318 31.8% $3,372 34.9%
Product Sales 4,049 38.7% 4,080 42.3%
Other Services 3,075 29.5% 2,201 22.8%
Total Revenues 10,442 100.0% 9,653 100.0%
Costs of Revenues
Network Services 2,035 19.5% 2,182 22.6%
Product Sales 3,283 31.4% 3,713 38.5%
Other Services 3,293 31.6% 2,343 24.3%
Total Cost
of Revenues 8,611 82.5% 8,238 85.3%
Gross Margin 1,831 17.5% 1,415 14.7%
Selling, General and
Administrative
Expenses 3,437 32.9% 3,849 39.9%
Depreciation and
Amortization 1,989 19.0% 1,697 17.6%
Other Expenses (a) -- -- -- --
Operating Loss (3,595) (34.4%) (4,131) (42.8%)
Interest Expense (1,077) (10.3%) (348) (3.6%)
Interest Income 61 0.6% 101 1.0%
Net Loss (4,611) (44.2%) ($4,378) (45.4%)
EBITDA ($1,606) (15.4%) ($2,434) (25.2%)
Net Loss per share
of Common Stock ($0.33) -- ($0.30) --
Weighted Average Number of
Common Shares used in
Calculating Net Loss
per Share of
Common Stock 16,265,377 -- 16,140,552 --
Audited
Twelve months ended Twelve months ended
December 31, December 31,
1998 1997
Revenues
Network Services $13,204 33.8% $12,456 34.6%
Product Sales 15,255 39.0% 13,603 37.8%
Other Services 10,667 27.2% 9,922 27.6%
Total Revenues 39,126 100.0% 35,981 100.0%
Costs of Revenues
Network Services 8,537 21.8% 8,316 23.1%
Product Sales 13,248 33.9% 13,553 37.7%
Other Services 9,392 24.0% 9,140 25.4%
Total Cost
of Revenues 31,177 79.7% 31,009 86.2%
Gross Margin 7,949 20.3% 4,972 13.8%
Selling, General and
Administrative
Expenses 14,312 36.6% 16,030 44.6%
Depreciation and
Amortization 6,963 17.8% 6,993 19.4%
Other Expenses (a) 170 -- 278 --
Operating Loss (13,495) (34.5%) (18,329) (50.9%)
Interest Expense (2,048) (5.2%) (1,278) (3.6%)
Interest Income 352 0.9% 455 1.3%
Net Loss ($15,191) (38.8%) ($19,152) (53.2%)
EBITDA ($6,533) (16.7%) ($11,336) (31.5%)
Net Loss per share
of Common Stock ($1.12) -- ($1.26) --
Weighted Average Number
of Common Shares used
in Calculating Net Loss
per Share of Common
Stock 16,257,586 -- 16,059,637 --
(a) Other expenses incurred in 1997 represent certain non-recurring
severance expenses associated with cost reduction measures
primarily in the area of SG&A and in 1998 represent severance
expenses related to executive management personnel changes at EPS.
PREFERRED NETWORKS, INC.
Balance Sheet Data
(dollars in thousands, except per share data)
December 31, 1998 December 31, 1997
Cash and cash equivalents $ 6,702 $ 7,563
Total current assets 14,659 14,748
Property and equipment, net 21,556 25,569
Total assets 60,033 66,232
Total debt 19,033 19,782
Redeemable preferred stock 23,968 13,956
Stockholders' equity 10,556 27,773
Total liabilities
and stockholders' equity 60,033 66,232
SOURCE Preferred Networks, Inc.
 back to top
Related links:
http://www.pni.net
Company News On-Call:
http://www.prnewswire.com/comp/109794.html or fax,
800-758-5804, ext. 109794
CONTACT:
Kathryn Loev Putnam, Senior Vice President
and Chief Financial Officer of Preferred Networks, 770-582-3507
|
