Goodman Networks 8-K Goodman Networks Reports Annual Revenue

Exhibit 99.1

Goodman Networks Reports Annual Revenue

and Earnings for Fiscal Year 2015

•   Annual Revenue $725.1 million

•   Annual Net Loss $66.5 million

•   Annual Adjusted EBITDA of $5.9 million

FRISCO, TX, March 28, 2016 –Goodman Networks Incorporated today announced financial results for fiscal year ended December 31, 2015.

Revenue was $725.1 million for the year ended December 31, 2015 compared to $1,199.2 million for the year ended December 31, 2014. The Company reported Adjusted EBITDA of $5.9 million and net loss of $66.5 million for the year ended December 31, 2015 compared to Adjusted EBITDA of $69.7 million and net loss of $14.9 million for 2014.

“2015 was a challenging year, but we are incredibly optimistic about our future as we head into 2016 and beyond,” stated Ron Hill, Goodman Networks’ executive chairman and chief executive officer. “We are looking at a number of initiatives to diversify our business. We will capitalize on new opportunities using our deep industry knowledge and experience along with our ability to quickly ramp and scale the business. We look forward to growth and diversification through new business as we target wireline carriers, cable companies, and enterprise customers for significant growth opportunities.”

Gross margin decreased to 11.9% for the year ended December 31, 2015 from 14.5% for the same period in 2014, a decrease of 2.6%. Overall margin declined primarily due to the performance of our Infrastructure Services segment. The decline in margin in our Infrastructure Services segment was driven by the reduction in revenue, lower margins on our project mix, the completion of higher cost AT&T deferred 2014 projects, and reduce pricing in our AT&T Turf 3.0 contract. Our Professional Services margin increased to 11.2% for the year ended December 31, 2015 from 7.5% for the year ended December 31, 2014. Field Services margin also increased from 13.7% for the year ended December 31, 2014 to 17.7% for the year ended December 31, 2015. The Professional Services and Field Services margins continue to improve due to our initiatives to align costs with revenue and innovate and automate business processes.

Summary financial statements for the year ended December 31, 2015 are included in Exhibit A to this earnings announcement.

Summary results are presented below.

Results for the Years ended December 31, 2014 and 2015 (dollars in thousands)

	Years Ended December 31,
	2014			2015
	Amount			Amount			Change ($)
Revenues:
Infrastructure Services	$	837,982		$	391,796		$	(446,186	)
Field Services		261,326			261,581			255
Professional Services		99,880			71,679			(28,201	)
Total revenues		1,199,188			725,056			(474,132	)
Cost of revenues:
Infrastructure Services		707,616			359,603			(348,013	)
Field Services		225,441			215,378			(10,063	)
Professional Services		92,380			63,617			(28,763	)
Total cost of revenues		1,025,437			638,598			(386,839	)
Gross profit:
Infrastructure Services		130,366			32,193			(98,173	)
Field Services		35,885			46,203			10,318
Professional Services		7,500			8,062			562
Total gross profit		173,751			86,458			(87,293	)
Gross margin as percent of segment revenues:
Infrastructure Services		15.6	%		8.2	%
Field Services		13.7	%		17.7	%
Professional Services		7.5	%		11.2	%
Total gross margin		14.5	%		11.9	%
Selling, general and administrative expenses		122,792			92,993			(29,799	)
Restructuring expense		9,998			11,653			1,655
Impairment expense		3,254			3,336			82
Other operating (income) expense		(3,285	)		—			3,285
Operating income (loss)		40,992			(21,524	)		(62,516	)
Other (income) loss		(71	)		—			71
Interest income		—			(169	)		(169	)
Interest expense		46,694			44,094			(2,600	)
Loss before income taxes		(5,631	)		(65,449	)		(59,818	)
Income tax expense		9,293			1,052			(8,241	)
Net loss from continuing operations	$	(14,924	)	$	(66,501	)	$	(51,577	)

SG&A expense of $93.0 million for the year ended December 31, 2015 decreased $29.8 million from 2014 primarily due to a reduction in headcount and other employee related costs. SG&A expense for the year ended December 31, 2014 included a $9.5 million gain recorded for the adjustment in fair value of a contingent liability. SG&A expense as a percentage of revenue for the year ended December 31, 2015 was 12.8%, an increase from 10.2% for 2014.

Adjusted EBITDA was $5.9 million for the year ended December 31, 2015, a decrease from $69.7 million from 2014, which was driven primarily by the decline in operating income.

Goodman Networks Conference Call Information

Goodman Networks will host a conference call to discuss its financial and operational results at 8:00 AM Central Time (CT) on Tuesday, March 29, 2016. Dial-in information for the conference call is as follows:

Date:	Tuesday, March 29, 2016
Time:	8:00 AM CT
Call-in number:	(855) 548-8663 or (412) 455-6154
Participant Passcode:	75214508

Please plan on accessing the conference call 5 minutes prior to the scheduled start time. A replay of the call will be available within two hours of completion of the call and accessible for seven days. To listen to a replay of the call, please dial (855) 859-2056 or (404) 537-3406 and use passcode 75214508 prior to 10:59 PM CT on Tuesday, April 5, 2016.

About Goodman Networks Incorporated

Goodman Networks is a leading provider of end-to-end network infrastructure, field and professional services to the wireless telecommunications and satellite television industries. Since its founding in 2000, Goodman Networks has grown to become one of the largest multi-vendor network and infrastructure service providers to the telecommunications industry in the United States. Additional information can be found at www.goodmannetworks.com.

Forward-Looking Statements

This earnings release and the conference call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations, estimates and projections. Forward-looking statements are subject to risks and uncertainties that may cause actual results in the future to differ materially from the results projected or implied in any forward-looking statements contained in this earnings release. Such risks and uncertainties include our reliance on one customer for the vast majority of our revenues, our ability to maintain a level of service quality satisfactory to this customer across a broad geographic area, our ability to manage or refinance our substantial level of indebtedness and our ability to generate sufficient cash to service our indebtedness, our ability to raise additional capital to fund our operations and meet our obligations, our ability to translate amounts included in our estimated backlog into revenue or profits, business and economic conditions and trends in the telecommunications industry affecting our customers, the adequacy of our insurance and other reserves and allowances for doubtful accounts, whether the carrying value of our assets may be impaired, the future impact of any acquisitions or dispositions, the anticipated outcome of other contingent events, including litigation, liquidity and other financial needs and the availability of financing, and the other risks detailed in our filings with the Securities and Exchange Commission. We do not undertake to update forward-looking statements.

Non-GAAP Financial Measures

We present EBITDA because we consider it to be an important supplemental measure of our operating performance and we believe that such information will be used by securities analysts, investors and other interested parties in the evaluation of our results. We present Adjusted EBITDA, which adjusts EBITDA for items that management does not consider to be reflective of our core operating performance, because it may be used by certain investors as a measure of operating performance. Management considers core operating performance to be that which can be affected by managers in any particular period through their management of the resources that affect our underlying revenue and profit generating operations during that period. Adjusted EBITDA adjusts EBITDA to eliminate the impact of certain items, including: (i) share-based compensation (non-cash portion); (ii) certain restructuring fees and expenses; (iii) amortization of debt issuance costs; (iv) impairment charges recognized on our long-lived assets; and (v) fees and expenses related to the issuance of equity.

	Year Ended December 31,
	2014			2015
EBITDA and Adjusted EBITDA:
Net loss	$	(14,924	)	$	(66,501	)
Income tax expense		9,293			1,052
Interest expense, net		46,694			43,925
Depreciation and amortization		11,499			10,556
EBITDA from continuing operations		52,562			(10,968	)
Share-based compensation		6,043			5,458
Restructuring expense		9,998			11,653
Amortization of debt issuance costs		(3,482	)		(3,594	)
Asset impairments		3,254			3,336
Equity issuance costs		1,360			—
Adjusted EBITDA	$	69,735		$	5,885

Estimated Backlog

The Company refers to the amount of revenue it expects to recognize over the next 18 months from future work on uncompleted contracts, including master service agreements and new contractual agreements on which work has not begun, as its “estimated backlog.” The Company determines the amount of estimated backlog for work under master service agreements based on historical trends, anticipated seasonal impacts and estimates of customer demand based upon communications with customers. The Company’s estimated 18-month backlog as of December 31, 2015 was $1.1 billion.

Goodman Networks Contact:

Investor Relations:	Joy L. Brawner
	Chief Financial Officer
	jbrawner@goodmannetworks.com
	(972) 421-5739

Goodman Networks Incorporated

Consolidated Balance Sheets

(In Thousands, Except Share Amounts and Par Value)

	December 31, 2014			December 31, 2015
Assets
Current Assets
Cash	$	76,703		$	39,832
Accounts receivable, net of allowances for doubtful accounts of $877 at December 31, 2014 and $107 at December 31, 2015, respectively		66,354			28,812
Unbilled revenue on completed projects		16,780			11,755
Costs in excess of billings on uncompleted projects		81,410			21,060
Inventories		18,638			15,352
Prepaid expenses and other current assets		6,727			3,394
Assets held for sale		4,000			—
Income tax receivable		513			204
Total current assets		271,125			120,409
Property and equipment, net of accumulated depreciation of $29,776 at December 31, 2014 and $33,862 at December 31, 2015, respectively		24,638			21,089
Deferred financing costs, net		14,491			10,415
Deposits and other assets		2,821			2,553
Insurance collateral		12,249			15,035
Intangible assets, net of accumulated amortization of $9,361 at December 31, 2014 and $14,508 at December 31, 2015, respectively		19,558			14,412
Goodwill		69,178			69,178
Total assets	$	414,060		$	253,091
Liabilities and Shareholders’ Deficit
Current Liabilities
Accounts payable	$	94,851		$	45,886
Accrued expenses		73,574			57,194
Income taxes payable		1,783			311
Billings in excess of costs on uncompleted projects		36,316			6,061
Deferred revenue		426			2,295
Liabilities related to assets held for sale		3,646			—
Deferred rent		188			115
Current portion of capital lease and notes payable obligations		1,366			775
Total current liabilities		212,150			112,637
Notes payable, net of deferred financing cost		326,648			326,163
Capital lease obligations		1,045			400
Accrued expenses, non-current		8,484			6,921
Deferred revenue, non-current		8,874			8,973
Deferred tax liability, non-current		1,428			1,714
Deferred rent, non-current		454			414
Total liabilities		559,083			457,222
Shareholders’ Deficit
Common stock, $0.01 par value, 10,000,000 shares authorized; 1,029,072 issued and 912,754 outstanding at December 31, 2014 and December 31, 2015		10			10
Treasury stock, at cost, 116,318 shares at December 31, 2014 and December 31, 2015		(11,756	)		(11,756	)
Additional paid-in capital		18,525			25,914
Accumulated other comprehensive income		14			18
Accumulated deficit		(151,816	)		(218,317	)
Total shareholders’ deficit		(145,023	)		(204,131	)
Total liabilities and shareholders’ deficit	$	414,060		$	253,091

Goodman Networks Incorporated

Consolidated Statements of Operations

(In Thousands)

	2013			2014			2015
Revenues	$	931,745		$	1,199,188		$	725,056
Cost of revenues		806,109			1,025,437			638,598
Gross profit (exclusive of depreciation and amortization included in selling, general and administrative expense shown below)		125,636			173,751			86,458
Selling, general and administrative expenses		121,106			122,792			92,993
Restructuring expense		—			9,998			11,653
Impairment expense		—			3,254			3,336
Other operating income		—			(3,285	)		—
Operating income (loss)		4,530			40,992			(21,524	)
Other income		(25	)		(71	)		—
Interest expense, net		40,287			46,694			43,925
Loss before income taxes		(35,732	)		(5,631	)		(65,449	)
Income tax expense		7,506			9,293			1,052
Net loss	$	(43,238	)	$	(14,924	)	$	(66,501	)
Other comprehensive income:
Foreign currency translation adjustments		—			14			4
Comprehensive loss	$	(43,238	)	$	(14,910	)	$	(66,497	)

Goodman Networks Incorporated

Consolidated Statements of Cash Flows

(In Thousands)

	2013			2014			2015
Operating Activities
Net income (loss)	$	(43,238	)	$	(14,924	)	$	(66,501	)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization of property and equipment		4,522			5,806			5,410
Amortization of intangible assets		5,236			5,694			5,146
Amortization of debt discounts and deferred financing costs		2,509			4,527			3,594
Impairment charges		—			7,158			3,336
Change in estimate of doubtful accounts		337			1,626			(153	)
Deferred tax expense		5,715			11,415			286
Share-based compensation expense		4,453			6,668			5,889
Accretion of contingent consideration		846			515			—
Change in fair value of contingent consideration		(200	)		(9,519	)		(726	)
Change in fair value of guarantee of indebtedness		—			(1,500	)		—
Loss on sale of property and equipment		111			292			215
Gain on sale of MDU assets		(1,472	)		—			—
Changes in:
Accounts receivable		(6,728	)		41,726			37,697
Unbilled revenue		(1,679	)		3,554			5,025
Costs in excess of billings on uncompleted projects		(63,975	)		18,371			60,350
Inventories		9,186			4,245			3,286
Prepaid expenses and other assets		7,880			8,807			681
Accounts payable and other liabilities		43,796			(66,767	)		(62,493	)
Income taxes payable / receivable		1,934			18,053			(1,164	)
Billings in excess of costs on uncompleted projects		(1,861	)		(10,375	)		(30,255	)
Deferred revenue		—			9,289			1,968
Deferred rent		—			—			(164	)
Net cash provided by (used in) operating activities		(32,628	)		44,661			(28,573	)
Investing Activities
Purchases of property and equipment		(4,019	)		(17,615	)		(4,720	)
Payments for intangible assets		(8	)		—			—
Proceeds from the sale of MDU Assets		12,500			—			—
Proceeds from the sale of property and equipment		76			275			3,511
Purchase of Cellular Specialties, Inc.		(18,000	)		—			—
Purchase of Multiband		(101,092	)		—			—
Purchase of Design Build Technologies		(1,306	)		—			—
Checks issued in excess of bank balance with the purchase of subsidiaries		(254	)		—			—
Change in due from shareholders		138			3			—
Net cash used in investing activities		(111,965	)		(17,337	)		(1,209	)
Financing Activities
Proceeds from lines of credit		517,516			1,095,560			764,879
Payments on lines of credit		(517,516	)		(1,095,560	)		(764,879	)
Proceeds from issuance of the Tack-On Notes		105,000			—			—
Payments on capital lease and notes payable obligations		(4,112	)		(8,096	)		(4,607	)
Payments on contingent arrangements		—			(670	)		(2,500	)
Payments for deferred financing costs		(12,865	)		(1,360	)		—
Proceeds from the issuance of common stock		13			—			—
Proceeds from exercise of warrants and stock options		—			43			—
Purchase of treasury stock		(4,995	)		—			—
Net cash provided by (used in) financing activities		83,041			(10,083	)		(7,107	)
Effect of exchange rate changes on cash		—			23			18
Increase (Decrease) in cash		(61,552	)		17,264			(36,871	)
Cash, Beginning of Period		120,991			59,439			76,703
Cash, End of Period	$	59,439		$	76,703		$	39,832