Exhibit 99.1
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 THIRD QUARTER RESULTS
OVERLAND PARK, KS - NOVEMBER 4, 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
third quarter ended October 2, 2004.
Revenue in the third quarter of 2004 was $6.5 million, compared with $4.7
million in the third quarter of 2003 and with $5.2 million in the second quarter
of 2004. During the quarter gross margin was 46.7%, compared with 46.8% in the
third quarter of 2003 and 46.2% in the second quarter of 2004. Net loss for the
third quarter was $1.1 million, or $0.03 per diluted share, compared with a net
loss of $2.7 million, or $0.08 per diluted share in last year's third quarter.
The company ended the third quarter with a strong cash position of $49.1
million, virtually no long-term debt, stockholders' equity of $67.4 million, and
working capital of approximately $54.2 million.
In the first nine months of 2004, revenue was $17.5 million, compared with $16.9
million in the first nine months of 2003. Gross margin was 47.2% for 2004
year-to-date period, compared with 48.0% in the year ago corresponding period.
Net loss for the nine months was $7.5 million, or $0.22 per diluted share, which
includes a $2.3 million, or $0.07 per diluted share loss from discontinued
operations related to the former hardware segment of the business. This compares
to a net loss of $22.6 million, or $0.68 per diluted share for the first nine
months of 2003. Results for the first nine months of fiscal 2003 included a
non-cash goodwill and intangible asset impairment charge of $18.9 million.
"TMNG's third quarter revenue growth evidences early success from our
initiatives to transform our business model and consulting offerings toward
wireless and IP-based technology platforms," said Rich Nespola, TMNG Chairman
and CEO. "Our well-established wireless practice has helped drive a sequential
increase in new customers, while our emerging TMNG Resources group is gaining
traction by providing near-term management and strategic talent to service
providers beginning their own transformations. Our focus is on leveraging these
early successes to build the revenue momentum back into the business that is
necessary to drive a return to profitability. And while the continued volatility
in the telecom industry means that our near-term results will remain
unpredictable, we are supported by our strong balance sheet which will enable us
to continue to fund on-going strategic initiatives."
CONFERENCE CALL
TMNG will host a conference call at 5:00 p.m. ET today to discuss 2004 third
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, a replay of the call can be accessed by dialing 877-519-4471, pin
number 5299328, through November 10, 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 SHARE AND PER SHARE DATA)
QUARTER ENDED YEAR-TO-DATE
October 2, September 27, October 2, September 27,
2004 2003 2004 2003
Revenues $ 6,546 $ 4,691 $ 17,509 $ 16,894
Cost of services:
Direct cost of services 3,441 2,506 9,093 8,903
Equity related charges (benefit) 51 (10) 157 (114)
--------- --------- ---------- ----------
Total
3,492 2,496 9,250 8,789
Gross profit 3,054 2,195 8,259 8,105
Operating expenses:
Selling, general and administrative 3,694 4,225 11,798 14,097
Goodwill and intangible asset impairment 18,942
Equity related charges 261 7 776 10
Depreciation and amortization 384 711 1,294 2,525
--------- --------- ---------- ----------
Total 4,339 4,943 13,868 35,574
--------- --------- ---------- ----------
Loss from continuing operations (1,285) (2,748) (5,609) (27,469)
Other income, net 179 127 445 433
--------- --------- ---------- ----------
Loss from continuing operations before income tax
(provision) benefit (1,106) (2,621) (5,164) (27,036)
Income tax (provision) benefit (13) (47) 4,367
--------- --------- ---------- ----------
Loss from continuing operations (1,119) (2,621) (5,211) (22,669)
--------- --------- ---------- ----------
Net income (loss) from discontinued operations (including
impairment and severance charges) (30) (2,276) 49
--------- --------- ---------- ----------
Net loss $ (1,119) $ (2,651) $ (7,487) $(22,620)
========== ========= ========== ==========
Loss from continuing operations per common share
Basic and diluted $ (0.03) $ (0.08) $ (0.15) $ (0.68)
========== ========== ========== ==========
Loss from discontinued operations per common share
Basic and diluted $ (0.07)
========== ========= ========== ==========
Net loss per common share
Basic and diluted $ (0.03) $ (0.08) $ (0.22) $ (0.68)
========== ========= ========== ==========
Shares used in calculation of net loss per common share
Basic and diluted 34,631 33,458 34,586 33,392
========== ========= ========== ==========
THE MANAGEMENT NETWORK GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
ASSETS
October 2, September 27,
2004 2003
CURRENT ASSETS:
Cash and cash equivalents $ 49,096 $ 52,875
Receivables, net 7,711 6,864
Refundable income taxes 1,336 1,557
Other assets 825 710
----------- -----------
Total current assets
58,968 62,006
GOODWILL 13,365 15,528
INTANGIBLES, net 704 1,478
PROPERTY & EQUIPMENT, net 1,104 1,558
OTHER ASSETS 445 402
----------- -----------
TOTAL ASSETS $ 74,586 $ 80,972
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 583 $ 635
Accrued liabilities and other 4,198 4,140
----------- -----------
Total current liabilities
4,781 4,775
NONCURRENT LIABILITIES 2,383 2,828
STOCKHOLDERS' EQUITY 67,422 73,369
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 74,586 $ 80,972
=========== ===========