1
EXHIBIT 99.1
[LOGO]
EDWARD F. STAIANO RESIGNS AS VICE CHAIRMAN AND CEO
IRIDIUM LLC BOARD OF DIRECTORS FORMS EXECUTIVE COMMITTEE; INTERIM CEO APPOINTED
Washington, D.C. - Iridium LLC announced today that its Board of Directors
has formed an Executive Committee to manage the Company's day-to-day
operations and that it has appointed John A. Richardson to the position of
interim Chief Executive Officer, effective immediately. Executive
Committee members include, Mr. Richardson; Alberto Finol, Chairman of
Iridium SudAmerica Corporation; John Mitchell, former Vice Chairman of the
Board of Motorola Inc.; Richard L. Lesher, Director of Iridium World
Communications Ltd. and former President of the U.S. Chamber of Commerce;
and Yoshiharu Yasuda, President of Nippon Iridium Corporation.
The Committee will pursue selection of a new Chief Executive Officer to
replace Dr. Edward F. Staiano, who today submitted his resignation. Dr.
Staiano also resigned his position as Chairman of Iridium World
Communications, Ltd.
Robert W. Kinzie, Chairman of the Board of Iridium LLC, praised Dr. Staiano's
work during the technical implementation of the Iridium program. "Dr. Staiano
led Iridium LLC through the successful deployment phase of the Iridium project.
The Iridium system has achieved outstanding service performance and worldwide
availability. We thank him for his significant technical and licensing
accomplishments in guiding the project to this stage of completion", he said.
--more--
2
Interim CEO John A. Richardson who is currently serving as CEO of Iridium Africa
Corporation, has extensive experience in both international business operations
and financial services. He was an Executive Director of Hutchison Whampoa Ltd.
in Hong Kong for twelve years during its extensive corporate restructuring in
the late 1970s and early 1980s, culminating in his appointment as CEO from 1979
to 1985. In the early 1990s he was Chairman of the Management Committee of EXCO,
a U.K. based international brokerage and foreign exchange trading business which
after corporate restructuring was re-listed on the London stock exchange in
1993. He was most recently Chairman and CEO of Barclays Bank-BZW Asia.
Iridium LLC became the world's first global satellite phone and paging company
on November 1, 1998. The network of 66 low-earth orbiting satellites, combined
with terrestrial cellular systems, enables customers to communicate virtually
anywhere in the world using one phone and pager, one phone number, and receiving
one monthly bill. Customers access participating local cellular networks when
available, and the Iridium satellite network when outside terrestrial cellular
coverage. Iridium World Communications, Ltd. (NASDAQ: IRID) is the public
investment vehicle of Iridium LLC.
###
Iridium is a registered trademark and service mark of Iridium LLC (C) 1999
3
[Logo]
IRIDIUM REPORTS FIRST QUARTER RESULTS (NASDAQ: IRID)
WASHINGTON, D.C. -- Iridium LLC today announced revenues for the first quarter
ending March 31, 1999 of $1, 451,000.00, and a net loss of $505 million, or
$3.45 loss per Class 1 Interest. To partially offset substantially lower than
anticipated revenues, Iridium is reducing expenses in areas not essential to
generating increased revenues. The details of the financial results are shown in
the accompanying table. As of March 31, there were approximately 10,294
customers on the Iridium system, including 7,188 satellite-homed voice
customers, 1,031 cellular-homed voice customers and 2,075 satellite paging
customers.
The Company is in the early stages of its transition from development to
commercialization stage, and many of the customers included in the current
results may be, or may have been during the reporting period, in a mode of
evaluation and test of the Iridium services. Furthermore, the Company believes
that the reported results reflect that periods as long as several weeks can
normally be encountered from the date of customer activation, which these
results report, and the actual usage of the services by such customers.
Iridium's efforts to attract customers were hindered by a number of factors
during the period, notably, limited availability of some handset models and
accessories in many markets, and delays by the overall Iridium distribution
network to field sufficient numbers of properly trained and equipped
salespeople. With the commencement of handset shipments by Kyocera Corporation
late in the quarter, and with Motorola now shipping virtually all Iridium
accessories, production by the manufacturers is now adequate, although a number
of distribution and importation issues continue to constrain actual product
availability in many markets.
"Although we have succeeded in building a network that is providing high-quality
service to our customers, we were very disappointed with our first quarter
customer and revenue numbers," said John A. Richardson, Iridium's interim CEO.
"Clearly, we have a great deal of work to do to improve our marketing,
distribution and sales activities all over the world. Over the course of the
first quarter, we have identified major causes for the poor sales
4
performance, and are initiating aggressive actions in response, acting in
concert with our regional Gateway partners, our equipment suppliers, and the
outstanding roster of service providers and roaming partners they have
enlisted."
Iridium LLC, its gateway partners, and its equipment suppliers are initiating a
number of significant actions to address the sales shortfall, including:
tailoring the Iridium product and service offering to better fit the identified
market demand, accelerating introduction of Iridium products and services by the
types of distribution channel that have proven to be the most effective to date,
and reconsideration of product and service prices.
Iridium LLC became the world's first operational global satellite phone and
paging company on November 1, 1998. The network of 66 low-earth orbiting
satellites, combined with terrestrial cellular systems, enables customers to
communicate virtually anywhere in the world using one phone and pager, one phone
number, and receiving one monthly bill. Customers access participating local
cellular networks when available, and the Iridium satellite network when outside
terrestrial cellular coverage. Iridium World Communications, Ltd. (NASDAQ: IRID)
is the public investment vehicle of Iridium LLC.
This release contains forward-looking statements, including statements regarding
projected revenues and subscribers, service enhancements to the Iridium system
and equipment availability. These forward-looking statements are based on a
number of assumptions and actual results may be materially different from those
expressed or implied by such statements. For a description of factors which may
cause results for Iridium to differ materially from those expressed or implied
by such forward-looking statements, please consult the Securities and Exchange
Act filings of Iridium World Communications Ltd. (Nasdaq: IRID).
# # #
Iridium is a registered trademark and service mark of Iridium LLC (C) 1999
5
IRIDIUM LLC
(A DEVELOPMENT STAGE LIMITED LIABILITY COMPANY)
SELECTED FINANCIAL DATA
(DOLLARS IN THOUSANDS EXCEPT FOR CLASS 1 INTEREST DATA)
THREE
MONTHS ENDED
MARCH 31, 1999
--------------
CONSOLIDATED STATEMENT OF LOSS DATA:
Revenue $ 1,451
EBITDA Loss $ 180,359
Depreciation and amortization $ 205,901
Interest expense, net $ 119,141
----------------
Net loss $ 505,401
================
Net loss applicable to Class 1 Interests $ 507,068
================
Net loss per Class 1 Interest $ 3.45
================
Weighted average interests used in
computing Net loss per Class 1 Interest 146,781,298
================
MARCH 31, 1999
----------------
CONSOLIDATED BALANCE SHEET DATA:
Cash and cash equivalents $ 195,443
Property and equipment - net $ 3,412,809
Total assets $ 3,719,514
Bank debt $ 1,280,000
Senior notes (net of discount) $ 1,406,766
Senior subordinated notes (net of discount) $ 337,423
Total Members' equity $ 214,603
###
Iridium is a registered trademark and service mark of Iridium LLC (C) 1999