Exhibit 99.1
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CONTACT:
BRAINERD COMMUNICATORS
Corey Kinger (Investors)
kinger@braincomm.com
Olga Shmuklyer (Media)
shmuklyer@braincomm.com
212.986.6667
TMNG REPORTS 2005 SECOND QUARTER RESULTS
OVERLAND PARK, KS - AUGUST 4, 2005 - 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 second
quarter ended July 2, 2005.
Revenue in the second quarter of 2005 increased 73.9% to $9.0 million, compared
with revenue of $5.2 million in the second quarter of 2004. During the quarter,
gross margin improved to 49.5%, compared with 46.2% in the second quarter of
2004. TMNG reported net income of $30,000, or roughly breakeven on a diluted
share basis for the second quarter of 2005, compared with a net loss of $2.1
million, or $0.06 per diluted share in last year's second quarter.
For the six months ended July 2, 2005, revenue increased 46.7% to $16.1 million,
compared with $11.0 million in the first six months of 2004. During the same
period gross margin was 50.4%, compared with 47.5% in the comparable year-ago
period. Net loss for the first six months of 2005 was $578,000, or $0.02 per
diluted share, compared with a net loss of $6.4 million or $0.18 per diluted
share in first six months of 2004, which includes a $0.06 per diluted share loss
from discontinued operations.
The company ended the second quarter with a strong cash and short-term
investments position of $50.4 million, working capital of approximately $54.9
million, virtually no long-term debt, and stockholders' equity of $66.7 million.
"We enjoyed increased revenue momentum in the second quarter and increased
breadth and depth in our client base as our customers seek to integrate, upgrade
and migrate their communications networks to wireless and internet protocol
platforms," said Rich Nespola, TMNG Chairman and CEO. "Through our work on
several high-profile and leading-edge engagements, we are able to gain valuable
experience and are developing proprietary toolsets that we believe will enhance
TMNG's competitive advantage in the future. We are making investments in these
capabilities that, while restraining near-term profitability, should position us
to continue the trend of year-over-year revenue growth while building toward
sustainable growth and profitability in 2006 and beyond."
CONFERENCE CALL
TMNG will host a conference call at 5:00 p.m. ET today to discuss 2005 second
quarter 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. 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 6305848, through August 12, 2005.
ABOUT TMNG
The Management Network Group, Inc. (Nasdaq: TMNG) is a leading provider of
strategy, management, marketing, and operational 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 Operations 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, London, New York, San Francisco, 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 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 2, 2005 July 3, 2004 July 2, 2005 July 3, 2004
Revenues $ 9,017 $ 5,184 $ 16,084 $ 10,963
Cost of services:
Direct cost of services 4,519 2,739 7,913 5,652
Equity related charges 34 52 69 106
---------- ---------- ---------- ----------
Total 4,553 2,791 7,982 5,758
Gross profit 4,464 2,393 8,102 5,205
Operating expenses:
Selling, general and 4,532 4,007 8,557 8,104
administrative
Real estate restructuring 75
Equity related charges 200 232 388 515
Depreciation and
amortization 173 390 455 910
---------- ---------- ---------- ----------
Total 4,905 4,629 9,475 9,529
---------- ---------- ---------- ----------
Loss from continuing operations (441) (2,236) (1,373) (4,324)
Other income, net 474 139 813 266
---------- ---------- ---------- ----------
Income (loss) from continuing 33 (2,097) (560) (4,058)
operations before income tax
provision
Income tax provision (3) (20) (18) (34)
---------- ---------- ---------- ----------
Income (loss) from continuing 30 (2,117) (578) (4,092)
operations
Net loss from discontinued (2,276)
operations ---------- ---------- ---------- ----------
Net income (loss) $ 30 $ (2,117) $ (578) $ (6,368)
========== ========== ========== ==========
Income (loss) from continuing
operations per common share
Basic and diluted $ 0.00 $ (0.06) $ (0.02) $ (0.12)
========== ========== ========== ==========
Net loss from discontinued
operations per common share
Basic and diluted $ (0.06)
========== ========== ========== ==========
Net income (loss) per common share
Basic and diluted $ 0.00 $ (0.06) $ (0.02) $ (0.18)
========== ========== ========== ==========
Shares used in calculation of net
income (loss) per common share
Basic 35,104 34,625 35,040 34,564
========== ========== ========== ==========
Diluted 35,461 34,625 35,040 34,564
========== ========== ========== ==========
THE MANAGEMENT NETWORK GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
ASSETS
July 2, 2005 January 1, 2005
CURRENT ASSETS:
Cash and cash equivalents $ 11,165 $ 10,882
Short-term investments 39,250 41,300
Receivables, net 8,986 6,178
Refundable income taxes 164 769
Other assets 977 1,176
------------ ------------
Total current assets 60,542 60,305
GOODWILL 13,365 13,365
INTANGIBLES, net 285 487
PROPERTY & EQUIPMENT, net 1,017 896
OTHER ASSETS 300 300
------------ ------------
TOTAL ASSETS $ 75,509 $ 75,353
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 896 $ 845
Accrued liabilities and other 4,764 4,339
------------ ------------
Total current liabilities 5,660 5,184
NONCURRENT LIABILITIES 3,119 3,422
STOCKHOLDERS' EQUITY 66,730 66,747
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 75,509 $ 75,353
============ ============
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