Title: Leap Announces Company's Emergence from Chapter 11
Date: 8/17/2004 7:00:00 AM
SAN DIEGO--(BUSINESS WIRE)--Aug. 17, 2004--Leap Wireless
International, Inc.:
-- Company Concludes Financial Restructuring with Strong Balance
Sheet Reflecting a Substantial Reduction in Long-Term Debt;
-- Company Focuses on Cash Flow Generation and Measured,
Strategic Growth
Leap Wireless International, Inc., a leading provider of
innovative and value-driven wireless communications services, today
announced that the Company has emerged from Chapter 11 bankruptcy
protection as a stronger company, well positioned for the future. The
Company now has an improved capital structure that reflects a
significant and growing cash balance with leverage ratios among the
best in the wireless industry.
"This is a bright day for our company," said Bill Freeman, chief
executive officer of Leap. "Our emergence from Chapter 11 is a
testament to the outstanding support we received from our customers,
suppliers and especially our employees across the nation, who have
continued to display their extraordinary dedication to growing the
business and providing customers across the country with best-in-class
services. Our emergence from bankruptcy is not the finish line -- it
is the start of a new era for our company. Our focus going forward
will be on continuing to strengthen our business through the
development and implementation of new, customer-driven services that,
over time, are expected to drive the growth of our business. We have
an enormous opportunity before us and I am thrilled to work with our
highly talented group of employees as we continue to progress as a
value leader in the telecommunications industry."
The Company's Fifth Amended Joint Plan of Reorganization is now
effective and the Company has begun to distribute new equity and debt
securities as per the Plan. Leap expects that its new common stock
will be quoted for trading on the OTC Bulletin Board under the ticker
symbol "LEAP." The Company anticipates that it will apply for listing
on the NASDAQ National Market System upon satisfaction of the listing
criteria established by NASDAQ, including a minimum number of round
lot shareholders.
"We are extremely proud of the Company's achievements during the
restructuring process, which are reflected in the financial results we
recently reported for the second quarter," said Doug Hutcheson,
executive vice president and chief financial officer of Leap. "We have
successfully utilized the tools available to us during our
restructuring to reduce our long-term debt, optimize our cost
structure and improve the operational efficiency of our business. As a
result, we have emerged as a business that is generating substantial
positive cash flow and is supported by a strong balance sheet that
reflects a reduction of more than $2 billion in long-term debt. We
believe this has put us in a solid position to achieve our goal of
ensuring that Leap remains a financially strong company that is ready
to seize the growth opportunities we see before us."
"With the financial restructuring of its business behind it, Leap
is now well positioned for market success by taking a different
approach to providing service to customers that remain under-served by
traditional wireless carriers," said Scott Ellison, Program Director
for Wireless & Mobile Communications for IDC, a global market
intelligence and advisory firm. "With its reduced cost structure,
market experience, and a business model designed to serve
under-penetrated subscriber segments, Leap is well positioned in the
marketplace as a differentiated provider targeting new wireless growth
opportunities," he added.
Leap's operating subsidiary, Cricket Communications, Inc., is
emerging from its restructuring with a strong customer base and
value-driven services designed to meet the needs of a wide range of
consumers and businesses. Cricket has expanded its portfolio to
include four new service plans, including its popular Cricket
Unlimited(TM). The plan includes: unlimited anytime calls within a
Cricket calling area, unlimited domestic long distance (except
Alaska), unlimited text messaging, voicemail, caller ID, call waiting,
and up to three directory assistance calls per month with no long-term
service agreement required. Cricket has also introduced several
latest-generation handsets, including the Audiovox 8900 camera phone,
Kyocera SE47 Slider, Kyocera KE433c Rave, and the Motorola E310.
Additionally, the Company has made significant improvements to its
operations and customer service, including: implementing a new
indirect dealer compensation program that aligns dealer incentives
with the Company's customer retention strategies; introducing a new
store design focused on improving Cricket's customer retail
experience; accelerating the Company's rebate payments; improving
staffing levels at retail locations, which allows the Company to
assist customers more efficiently; increasing call center service
levels for customers who call its 1-800 service line; and launching
new payment options, which provide customers with additional
flexibility in how they pay for their Cricket(R) service.
"Throughout the restructuring process we have remained committed
to offering our customers the highest quality, all-digital CDMA
networks available, which third-party drive tests have confirmed are
among the best in the nation," said Glenn Umetsu, executive vice
president and chief operating officer of Leap. "In addition, we have
made great strides in improving our customers' experience with
Cricket(R) from the moment they first enter our stores. The steps we
have taken to prepare the Company for the future would have been
difficult without the continued cooperation we received from our
suppliers and dealers and we appreciate their support during this
process. As we close this chapter in our company's history, we look
forward to further strengthening our relationships with them and
implementing the Company's plans to support our future growth."
Cricket continues to lead the industry in the landline
displacement trend. According to a recent Company survey, 43 percent
of Cricket's customers do not have a traditional landline phone,
compared to four percent industrywide, according to the Yankee Group,
a firm that analyzes telecommunications trends. Approximately 88
percent of Cricket customers surveyed report they use Cricket as their
primary phone. Both statistics have climbed steadily over the past few
years.
Leap also announced the creation of a new board of directors
consisting of the following members:
-- Wayne Barr, Jr., senior managing director of Capital &
Technology Advisors LLC (C&TA)
-- Dr. Rajendra Singh, co-founder of LCC International
-- Michael B. Targoff, founder and CEO of Michael B. Targoff &
Co.
-- Gerald Stevens-Kittner, former senior vice president for
legislative and regulatory affairs, CAI Wireless Systems, Inc.
Additionally, the following parties are expected to be appointed
as directors for Leap in the near future:
-- James D. Dondero, founder and president of Highland Capital
Management, L.P.
-- Dr. Mark H. Rachesky, founder and president of MHR Fund
Management LLC
-- William M. Freeman, chief executive officer of Leap
Including Mr. Freeman, the Company's executive management team
consists of:
-- Stewart D. (Doug) Hutcheson, executive vice president and
chief financial officer
-- Glenn Umetsu, executive vice president and chief operating
officer
-- David B. Davis, senior vice president, operations
-- Robert J. Irving, Jr., senior vice president and legal counsel
-- Leonard C. Stephens, senior vice president, human resources
"The management team looks forward to working with our new board
of directors," said Freeman. "The high level of expertise and insight
they bring with them is expected to serve the Company well as it
progresses into the future. In addition, I would like to take this
opportunity thank the outgoing board for their guidance and direction
as we navigated through a challenging period in the Company's
history." |
