ATLANTA, Aug. 4 /PRNewswire/ -- Preferred Networks, Inc. (Nasdaq: PFNT)
(PNI), a leading outsourcing services provider to the wireless industry, today
reported second quarter 1998 financial results marked by a continued
improvement in EBITDA (earnings before interest, taxes, depreciation and
amortization), a standard measure of operating cash flow in the wireless
industry, for the third consecutive quarter.
Total revenues increased by 2.9% to $9.9 million for the second quarter of
1998 compared to $9.6 million for the second quarter of 1997. EBITDA improved
by 59.9% to negative $1.2 million for the second quarter of 1998 compared to
negative $3.0 million for the second quarter of 1997. Net loss for the second
quarter of 1998 was $3.0 million or $0.23 per share compared to a loss of
$5.0 million or $0.32 per share for the second quarter of 1997.
Total revenues for the six months ended June 30, 1998 increased by 10.3%
to $19.5 million compared to $17.7 million for the six months ended June 30,
1997. EBITDA improved by 58.0% to negative $2.5 million for the six months
ended June 30, 1998 compared to negative $5.9 million for the six months ended
June 30, 1997. Net loss for the six months ended June 30, 1998 was
$6.3 million or $0.47 per share compared to a loss of $9.8 million or
$0.62 per share for the six months ended June 30, 1997.
Commenting on the results, Chairman and Chief Executive Officer, Mark H.
Dunaway said, "This quarter marks an exciting milestone for PNI. One year
ago, we announced our plans to maximize our expanded outsourcing platform to
focus on providing multiple service solutions to large, multi-market
companies. Today, we have established customer relationships with many of the
largest companies in the wireless industry, including fourteen of the
twenty largest paging companies, several large international wireless
equipment companies, and multiple PCS, cellular and paging companies."
Dunaway added, "The benefits of our efforts during these past
twelve months have shown in consistent improvement in our financial results
and the strong contribution from each of our three service areas: network,
technical and product services. We are excited about PNI's position in the
marketplace as more and more companies in wireless continue to embrace
outsourcing solutions as strategic components of their growth plans."
At June 30, 1998, PNI's Network Services Division was operating in
27 markets and had 501,516 units in service, an 18.0% increase from
424,991 units in service at June 30, 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 Network Services Division, 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: Preferred Technical Services, Inc., a
provider of paging network equipment installation, maintenance and engineering
services; and EPS Wireless, Inc., 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 1997 Annual Report on Form 10-K
and Form 10-Q for the period ending March 31, 1998, and actual results could
differ materially from those anticipated in the forward-looking statements.
PREFERRED NETWORKS, INC.
FINANCIAL HIGHLIGHTS
(Unaudited)
(dollars in thousands, except per share data)
Three Months ended June 30,
1998 1997
Revenues
Network services $ 3,295 33.4% $ 3,251 33.9%
Product sales 3,621 36.7% 3,473 36.2%
Other services 2,947 29.9% 2,865 29.9%
Total revenues 9,863 100.0% 9,589 100.0%
Costs of revenues
Network services 2,186 22.3% 2,195 22.9%
Product sales 3,105 31.5% 3,559 37.1%
Other services 2,254 22.9% 2,359 24.6%
Total cost of
revenues 7,545 76.7% 8,113 84.6%
Gross margin 2,318 23.3% 1,476 15.4%
Selling, general and
administrative
expenses 3,494 35.4% 4,127 43.0%
Depreciation and
amortization 1,632 16.5% 1,804 18.8%
Other expenses (a) -- -- 278 2.9%
Operating loss (2,808) (28.6%) (4,733) (49.3%)
Interest expense (294) (3.0%) (380) (4.0%)
Interest income 126 1.3% 79 0.8%
Net loss $(2,976) (30.3%) $(5,034) (52.5%)
EBITDA $(1,176) (11.9%) $(2,929) (30.6%)
Net loss per share
of common stock $ (0.23) $ (0.32)
Weighted average number
of common shares
used in calculating
net loss per share
of common stock 16,242,004 16,099,603
Six Months ended June 30,
1998 1997
Revenues
Network services $ 6,558 33.6% $ 5,817 32.9%
Product sales 7,516 38.5% 6,406 36.2%
Other services 5,453 27.9% 5,482 30.9%
Total revenues 19,527 100.0% 17,705 100.0%
Costs of revenues
Network services 4,341 22.2% 4,103 23.2%
Product sales 6,337 32.4% 6,639 37.5%
Other services 4,219 21.6% 4,385 24.7%
Total cost of
revenues 14,897 76.2% 15,127 85.4%
Gross margin 4,630 23.8% 2,578 14.6%
Selling, general and
administrative
expenses 7,117 36.4% 8,219 46.4%
Depreciation and
amortization 3,391 17.4% 3,450 19.5%
Other expenses (a) -- -- 278 1.6%
Operating loss (5,878) (30.0) (9,369) (52.9)
Interest expense (621) (3.2%) (606) (3.4%)
Interest income 201 1.0% 217 1.2%
Net loss $(6,298) (32.2%) $(9,758) (55.1%)
EBITDA $(2,487) (12.7%) $(5,919) (33.4%)
Net loss per share
of common stock $ (0.47) $ (O.62)
Weighted average number
of common shares
used in calculating
net loss per share
of common stock 16,21O,627 15,979,804
(a) Other expenses includes $278,000 in 1997 charges that reflect certain
non-recurring severance expenses associated with cost reduction
measures primarily in the area of SG&A.
PREFERRED NETWORKS, INC.
BALANCE SHEET DATA
(Unaudited)
(dollars in thousands)
June 30, 1998 December 31, 1997
Cash and cash equivalents $ 9,428 $ 7,563
Total current assets 17,297 14,748
Property and equipment, net 23,904 25,569
Total assets 66,040 66,233
Total debt 19,402 19,782
Redeemable preferred stock 22,287 13,956
Stockholders' equity 21,073 27,773
Total liabilities and
stockholders' equity 66,040 66,233
SOURCE Preferred Networks, Inc.
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Related links:
http://www.pni.net
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 109794
CONTACT:
Kathryn Loev Putnam, Senior Vice President
and Chief Financial Officer of Preferred Networks, 770-582-3507
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