Exhibit 99.1
[GRAPHIC OMITTED]
CONTACT:
The Management Network Group, Inc. or Brainerd Communicators
Janet Hall Corey Kinger (Investors)
Janet.Hall@tmng.com kinger@braincomm.com
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800.876.5329 Olga Shmuklyer (Media)
shmuklyer@braincomm.com
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212.986.6667
TMNG REPORTS 2006 SECOND QUARTER RESULTS
Overland Park, KS - August 8, 2006 - TMNG Global (Nasdaq: TMNG), a leading
provider of management consulting services to the global communications, media
and entertainment industries, today reported financial results for its 2006
second quarter ended July 1, 2006.
Revenue in the second quarter of 2006 increased 5.8% to $9.5 million, compared
with revenue of $9.0 million in the second quarter of 2005. During the quarter,
gross margin was relatively flat at 49.1%, compared with 49.5% in the second
quarter of 2005. TMNG reported a net loss of $2.5 million or $0.07 per diluted
share for the second quarter of 2006, compared with net income of $30,000, or
roughly breakeven on a diluted share basis in last year's second quarter. The
second quarter 2006 net loss is largely attributable to increased selling,
general and administrative expenses associated with the ADVENTIS Ltd.
international business and increased equity-related charges related to the
adoption of SFAS 123R.
For the six months ended July 1, 2006, revenue increased 3.9% to $16.7 million,
compared with $16.1 million in the first six months of 2005. During the same
period gross margin was 49.7%, compared with 50.4% in the comparable year-ago
period. Net loss for the first six months of 2006 was $4.0 million or $0.11 per
diluted share, compared with a net loss of $578,000 or $0.02 per diluted share
in first six months of 2005.
The company ended the second quarter with a cash and short-term investments
position of $42.1 million, working capital of approximately $48.1 million,
virtually no long-term debt, and stockholders' equity of $63.9 million. Cash and
short-term investments are down from end of first quarter, reflecting the
acquisition of the ADVENTIS Ltd. international business and the transitional
impact of integrating its billing operations, resulting in a temporary increase
in accounts receivable. Accounts receivable are expected to return to more
normalized levels in the third quarter.
Second quarter revenue growth reflects the successful repositioning of TMNG's
strategic consultative offerings in areas like wireless, cable and media
convergence, as well as the quicker-than-expected ramp-up of revenue
contribution from the former ADVENTIS Ltd. international business. Revenues also
reflect implementation-phase work on a large managed services offering in the
MVNE arena; however, the Company reports that it will not be servicing this
engagement on an ongoing basis due to a recent decision, subsequent to the end
of the second quarter, by the customer to support its prepaid wireless launch on
its existing platform.
"TMNG continues to generate good revenue growth driven by strategic consulting
offerings that are aligned with market needs in a converging media,
entertainment and communications world," said Rich Nespola, TMNG Global Chairman
and CEO. "As evidenced by the addition of 23 new clients in the second quarter,
we are seeing continued strength in strategy, particularly in the wireless arena
and now the cable market. The acquisition of the ADVENTIS assets is already
bearing fruit with notable new client wins and a healthy pipeline in the
European and Asian markets, and we have more recently added key ADVENTIS assets
in the U.S.
"Despite the disappointment with a client's surprise switch to its in-house
platform to support its upcoming prepaid wireless offering internally, we retain
a positive outlook on the opportunities for growth in both our established
consulting and developing managed services offerings," Mr. Nespola continued.
"Ultimately, TMNG is focused on generating revenue growth and achieving
profitability."
CONFERENCE CALL
TMNG will host a conference call at 5:00 p.m. ET today to discuss 2006 second
quarter results. Investors can access the conference call via a live webcast on
the company's website, www.tmng.com, or by dialing 888-332-7254, passcode
7638929. 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 7638929, through August 18, 2006.
ABOUT TMNG GLOBAL
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 Global's clients include communications service providers,
entertainment, media and technology companies, and financial services firms.
Founded in 1990, TMNG Global 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 Berlin, Boston, Chicago, London, New
York, Denver, Dallas, Shanghai and Washington, D.C. TMNG Global 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 1, 2006 July 2, 2005 July 1, 2006 July 2, 2005
Revenues $ 9,541 $ 9,017 $ 16,704 $ 16,084
Cost of services (including equity
related charges of $134 and $34
for the thirteen weeks and $327
and $69 for the twenty six weeks
ended July 1, 2006 and July 2,
2005, respectively) 4,854 4,553 8,398 7,982
Gross profit 4,687 4,464 8,306 8,102
Operating expenses:
Selling, general and administrative
(including equity related charges
of $711 and $200 for the thirteen
weeks and $1,221 and $388 for the
twenty-six weeks ended July 1, 2006
and July 2, 2005, respectively) 7,338 4,732 12,820 8,945
Real estate restructuring - - 75
Depreciation and amortization 341 173 555 455
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Total 7,679 4,905 13,375 9,475
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Loss from continuing operations (2,992) (441) (5,069) (1,373)
Other income, net 545 474 1,080 813
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Income (loss) from continuing
operations before income tax
provision (2,447) 33 (3,989) (560)
Income tax provision (13) (3) (34) (18)
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Net income (loss) $ (2,460) $ 30 $ (4,023) $ (578)
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Income (loss) per common share
Basic and diluted $ (0.07) $ 0.00 $ (0.11) $ (0.02)
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Shares used in calculation of net
income (loss) per common share
Basic 35,731 35,104 35,678 35,040
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Diluted 35,731 35,461 35,678 35,040
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THE MANAGEMENT NETWORK GROUP, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
ASSETS
July 1, 2006 December 31, 2005
CURRENT ASSETS:
Cash and cash equivalents $ 6,392 $ 10,951
Short-term investments 35,750 38,700
Receivables, net 11,171 6,149
Refundable income taxes 111 117
Other assets 1,389 1,262
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Total current assets 54,813 57,179
GOODWILL 14,745 13,365
INTANGIBLES, net 1,647 1,651
PROPERTY & EQUIPMENT, net 1,108 900
OTHER ASSETS 821 454
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TOTAL ASSETS $ 73,134 $ 73,549
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable $ 1,650 $ 1,025
Accrued liabilities and other 5,034 3,657
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Total current liabilities 6,684 4,682
NONCURRENT LIABILITIES 2,515 2,819
STOCKHOLDERS' EQUITY 63,935 66,048
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 73,134 $ 73,549
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