Exhibit 99.1
{GRAPHIC OMITTED}
FOR IMMEDIATE RELEASE
CONTACT:.
THE MANAGEMENT NETWORK GROUP, INC. OR BRAINERD COMMUNICATORS
Regina Whitley Brian Schaffer (Investors)
regina.whitley@tmng.com schaffer@braincomm.com
800.876.5329 x340 Ray Yeung (Media)
yeung@braincomm.com
212.986.6667
TMNG REPORTS 2004 SECOND QUARTER RESULTS
OVERLAND PARK, KS - AUGUST 5, 2004 - 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 2004 second
quarter ended July 3, 2004.
Revenue in the second quarter of 2004 was $5.2 million, compared with $5.0
million in the second quarter of 2003 and with $5.8 million in the first quarter
of 2004. During the quarter gross margin was 46.2%, compared with 46.8% in the
second quarter of 2003 and 48.7% in the first quarter of 2004. Net loss for the
second quarter was $2.1 million, or $0.06 per diluted share, compared with a net
loss of $18.7 million, or $0.56 per diluted share in last year's second quarter.
Included in the second quarter of 2003 are charges totaling $0.50 per diluted
share, reflecting an $18.9 million impairment charge for goodwill and other
intangible assets and a $5.2 million charge resulting from a valuation allowance
on tax assets.
The company ended the second quarter with a strong cash position of $49.5
million, virtually no long-term debt, stockholders' equity of $68.2 million, and
working capital of approximately $54.7 million.
In the first six months of 2004, revenue was $11.0 million, compared with $12.2
million in the first six months of 2003. Gross margin was 47.5% for 2004
year-to-date period, compared with 48.4% in the year ago corresponding period.
Net loss for the six months was $6.4 million, or $0.18 per diluted share, which
includes a $0.06 per diluted share loss from discontinued operations, compared
with a net loss of $20.0 million, or $0.60 per diluted share in 2003, including
the aforementioned special charges.
"The telecom industry we serve continues to be characterized by unpredictable,
rapidly shifting market conditions, and within this environment TMNG continues
to focus sharply on positioning itself to drive top-line improvement," said Rich
Nespola, TMNG Chairman and CEO. "That positioning is evident in our growing
presence in wireless, in a world where wireless is transforming the
communications industry, and in emerging Internet-based telephony and broadband
technologies. We're facing the challenges by strengthening our relationships
with industry leaders and top channel partners, by running a lean business, and
by providing clients with a depth of experience that is unmatched in telecom. We
continue to believe we are in position to drive revenue growth, and based on
booked business currently being serviced, the company presently anticipates
sequential revenue improvement in the third quarter."
CONFERENCE CALL
TMNG will host a conference call at 5:00 p.m. ET today to discuss 2004 second
quarter results. Investors can access the conference call via a live webcast on
the company's Web site, www.tmng.com, or by dialing 877-297-4509. A replay of
the conference call will be archived on the company's Web site for one week.
Additionally, the archived call can be accessed by dialing 877-519-4471, pin
number 4714034, through August 11, 2004.
ABOUT TMNG
The Management Network Group, Inc. (Nasdaq: TMNG) is a leading provider of
strategy, management, marketing, operational and technology consulting services
to the global communications industry. With more than 400 consultants worldwide,
TMNG serves communications service providers, technology companies, and
financial services firms. Since the company's inception in 1990, TMNG and its
subsidiaries - TMNG Strategy, TMNG Marketing, TMNG Technologies and TMNG Europe
- - have served more than 1,000 clients worldwide, including all the Fortune 500
telecommunications companies. TMNG is headquartered in Overland Park, Kansas,
with offices in Boston, Chicago, Dallas, San Diego, London, New York, San
Francisco, Toronto, Utrecht and Washington, D.C. 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 GOODS AND 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-to-Date
July 3, 2004 June 28, 2003 July 3, 2004 June 28, 2003
Revenues $ 5,184 $ 4,963 $10,963 $12,203
Cost of services:
Direct cost of services 2,739 2,724 5,652 6,397
Equity related charges (benefit) 52 (84) 106 (104)
--------- --------- ---------- ---------
Total 2,791 2,640 5,758 6,293
Gross profit 2,393 2,323 5,205 5,910
Operating expenses:
Selling, general and administrative 4,007 5,030 8,104 9,872
Goodwill and intangible asset impairment 18,942 18,942
Equity related charges (benefit) 232 (8) 515 3
Depreciation and amortization 390 869 910 1,814
--------- --------- ---------- ---------
Total 4,629 24,833 9,529 30,631
--------- --------- ---------- ---------
Loss from continuing operations (2,236) (22,510) (4,324) (24,721)
Other income, net 139 146 266 306
--------- --------- ---------- ---------
Loss from continuing operations before
income tax (provision) benefit (2,097) (22,364) (4,058) (24,415)
Income tax ([provision) benefit (20) 3,619 (34) 4,367
--------- --------- ---------- ---------
Loss from continuing operations (2,117) (18,745) (4,092) (20,048)
--------- --------- ---------- ---------
Discontinued operations:
Net income (loss) from discontinued
operations 8 (63) 79
Loss on disposition of discontinued
operations (2,213)
--------- --------- ---------- ---------
Net loss $ (2,117) $(18,737) $ (6,368) $(19,969)
========= ========= ========== =========
Loss from continuing operations per
common share
Basic and diluted $ (0.06) $ (0.56) $ (0.12) $ (0.60)
========= ========= ========== =========
Loss from discontinued operations
per common share
Basic and diluted $ (0.06)
========= ========= ========== =========
Net loss per common share
Basic and diluted $ (0.06) $ (0.56) $ (0.18) $ (0.60)
========= ========= ========== =========
Shares used in calculation
of net loss per common share
Basic and diluted 34,625 33,372 34,564 33,359
========= ========= ========== =========
THE MANAGEMENT NETWORK GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
unaudited
(in thousands)
ASSETS
July 3, 2004 January 3, 2004
CURRENT ASSETS:
Cash and cash equivalents $49,466 $52,875
Receivables, net 7,839 6,864
Refundable income taxes 1,314 1,557
Other assets 810 710
-------- --------
Total current assets 59,429 62,006
GOODWILL 13,366 15,528
INTANGIBLES, net 922 1,478
PROPERTY & EQUIPMENT, net 1,278 1,558
OTHER ASSETS 430 402
-------- --------
TOTAL ASSETS $ 75,425 $ 80,972
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 771 $ 635
Accrued liabilities and other 3,920 4,140
-------- --------
Total current liabilities 4,691 4,775
NONCURRENT LIABILITIES 2,526 2,828
STOCKHOLDERS' EQUITY 68,208 73,369
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 75,425 $ 80,972
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