EXHIBIT 99.1
[TMNG GLOBAL LOGO]
CONTACT:
THE MANAGEMENT NETWORK GROUP, INC. OR BRAINERD COMMUNICATORS
Janet Hall Corey Kinger (Investors)
Janet.Hall@tmng.com kinger@braincomm.com
800.876.5329 Olga Shmuklyer (Media)
shmuklyer@braincomm.com
212.986.6667
TMNG REPORTS 2005 FOURTH QUARTER AND YEAR-END RESULTS
OVERLAND PARK, KS -- FEBRUARY 16, 2006 -- The Management Network Group, Inc.
(Nasdaq: TMNG), a leading provider of management consulting services to the
global communications industry, today reported financial results for its 2005
fourth quarter and year ended December 31, 2005.
Revenue in the fourth quarter of 2005 was $6.2 million, comparable with revenue
of $6.2 million in the fourth quarter of 2004. During the quarter, gross margin
was 50.4%, compared with 47.2% in the fourth quarter of 2004. TMNG reported a
net loss of $1.8 million, or $0.05 on a diluted share basis for the fourth
quarter of 2005, compared with a net loss of $1.2 million, or $0.03 per diluted
share in last year's fourth quarter. Prior year fourth quarter net loss included
a legal settlement gain and real estate restructuring charges.
Revenue for the year ended December 31, 2005 increased 28.2% to $30.4 million,
compared with $23.7 million in 2004. Gross margin improved to 50.8% in 2005,
compared with 47.2% in 2004. Net loss for 2005 was $2.3 million, or $0.07 per
diluted share, compared with a net loss of $8.7 million or
$0.25 per diluted share in 2004, which included a $2.3 million or $0.07 per
diluted share loss from discontinued operations, along with a legal settlement
gain and real estate restructuring charges.
The company ended the fourth quarter and year with a strong cash and short-term
investments position of $49.7 million, working capital of $52.6 million,
virtually no long-term debt, and stockholders' equity of $66.1 million.
"Along with our improved performance in 2005, we were able to make strategic
investments which we believe position TMNG to take advantage of the burgeoning
markets in converged global communications, media and entertainment," said Rich
Nespola, TMNG Chairman and CEO. "With 28% revenue growth in 2005 and firm gross
margins despite the traditional seasonal weakness of the fourth quarter, we
believe we are clearly heading in the right direction. We strengthened our
go-to-market offerings targeted to wireless, Internet Protocol migration and
cable with key investments in our business offerings and the executives to drive
them. These investments, while impacting bottom-line performance near-term,
place us in an improved position to drive future growth and profitability which
are our key priorities."
"As we enter 2006 we are helping companies across the convergence spectrum -- in
communications, technology, and media content -- evaluate new business cases,
develop new market models and delivery platforms," Mr. Nespola continued. "We
are also pursuing attractive managed services opportunities in wireless and IP
network migration, and we continue to play a vital role in helping newly
combined communications players manage network integration challenges. In short,
in 2006 we expect to drive the benefits of leveraging strong relationships, new
partnerships, and our unmatched expertise into continued growth for our company
and our shareholders."
CONFERENCE CALL
TMNG will host a conference call at 5:00 p.m. ET today to discuss 2005 fourth
quarter and year-end results. Investors can access the conference call via a
live webcast on the company's website, www.tmng.com, or by dialing 877-297-4509,
passcode 6988950. A replay of the conference call will be archived on the
company's website for one week. Additionally, a replay of the call will be
available by dialing 877-519-4471, passcode 6988950, through February 24, 2005.
ABOUT TMNG
The Management Network Group, Inc. (Nasdaq: TMNG) is a leading provider of
professional services to the converging communications industry and the
financial services firms that support it. With more than 400 consultants
worldwide, TMNG's clients include communications service providers, media and
technology companies, and financial services firms. Founded in 1990, TMNG has
provided strategic and management consulting, as well as managed services, to
more than 1000 clients worldwide, including all the Fortune 500
telecommunications companies. The company is headquartered in Overland Park,
Kansas, with offices in Boston, Chicago, London, New York, Denver, Dallas, and
Washington, DC. TMNG can be reached at 1.888.480.TMNG (8664) or online at
http://www.tmng.com.
This release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking statements
involve risks and uncertainties. In particular, any statements contained herein
regarding expectations with respect to future business, revenues or
profitability are subject to known and unknown risks, uncertainties, and
contingencies, many of which are beyond the Company's control, which may cause
actual results, performance, or achievements to differ materially from those
projected or implied in such forward-looking statements. Factors that might
affect actual results, performance, or achievements include, among other things,
conditions in the telecommunications industry, overall economic and business
conditions, the demand for the Company's services, and technological advances
and competitive factors in the markets in which the Company competes. These
risks and uncertainties are described in detail from time to time in TMNG's
filings with the Securities and Exchange Commission.
(Please see attached financial tables)
THE MANAGEMENT NETWORK GROUP, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
QUARTER ENDED YEAR ENDED
----------------------------------- -----------------------------------
December 31, 2005 January 1, 2005 December 31, 2005 January 1, 2005
Revenues ................................. $ 6,237 $ 6,195 $30,378 $23,704
Cost of services:
Direct cost of services ................ 3,075 3,226 14,834 12,319
Equity related charges ................. 19 48 100 205
------- ------- ------- -------
Total ................................ 3,094 3,274 14,934 12,524
Gross profit ............................. 3,143 2,921 15,444 11,180
Operating expenses:
Selling, general and administrative .... 5,060 3,560 17,976 15,358
Legal settlement ....................... (1,294) (1,294)
Real estate restructuring .............. 1,545 75 1,545
Equity related charges ................. 170 182 618 958
Depreciation and amortization .......... 200 377 822 1,671
------- ------- ------- -------
Total ................................ 5,430 4,370 19,491 18,238
------- ------- ------- -------
Loss from continuing operations .......... (2,287) (1,449) (4,047) (7,058)
Other income, net ........................ 521 243 1,758 688
------- ------- ------- -------
Loss from continuing operations before
income tax provision ................... (1,766) (1,206) (2,289) (6,370)
Income tax provision ..................... (5) (2) (36) (49)
------- ------- ------- -------
Loss from continuing operations .......... (1,771) (1,208) (2,325) (6,419)
Net loss from discontinued operations .... (2,276)
------- ------- ------- -------
Net loss ................................. $(1,771) $(1,208) $(2,325) $(8,695)
======= ======= ======= =======
Loss from continuing operations per
common share
Basic and diluted ...................... $ (0.05) $ (0.03) $ (0.07) $ (0.18)
======= ======= ======= =======
Net loss from discontinued operations
per common share
Basic and diluted ...................... $ (0.07)
=======
Net loss per common share
Basic and diluted ...................... $ (0.05) $ (0.03) $ (0.07) $ (0.25)
======= ======= ======= =======
Shares used in calculation of net
loss per common share
Basic and diluted ...................... 35,476 34,716 35,175 34,619
======= ======= ======= =======
THE MANAGEMENT NETWORK GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
ASSETS
December 31, 2005 January 1, 2005
CURRENT ASSETS:
Cash and cash equivalents $10,951 $10,882
Short-term investments 38,700 41,300
Receivables, net 6,149 6,178
Refundable income taxes 117 769
Other assets 1,262 1,176
------- -------
Total current assets 57,179 60,305
GOODWILL 13,365 13,365
INTANGIBLES, net 1,651 487
PROPERTY & EQUIPMENT, net 900 896
OTHER ASSETS 454 300
------- -------
TOTAL ASSETS $73,549 $75,353
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 1,025 $ 845
Accrued liabilities and other 3,562 4,339
------- -------
Total current liabilities 4,587 5,184
NONCURRENT LIABILITIES 2,819 3,422
STOCKHOLDERS' EQUITY 66,143 66,747
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $73,549 $75,353
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