LCC International Announces Fourth Quarter and Full Year 2006 Results

Business Wire, March 12, 2007

Gross profit margin for 2006 increased 500 basis points to 26.6% of total revenues compared with 21.6% for 2005 as a result of the Company's decision to focus on higher margin core engineering and high-end consultancy services around new and emerging technologies.

For the year ended December 31, 2006, the Company posted a net loss of $5.5 million, or $0.22 per basic and diluted share. Net loss for the year was reduced by 56% from the net loss of $12.5 million, or $0.51 per basic and diluted share, reported for 2005.

For 2006, LCC's loss from discontinued operations was $2.7 million, or a loss of $0.11 per basic and diluted share, compared with a loss of $933,000, or a loss of $0.04 per basic and diluted share, for 2005.

Fourth Quarter 2006 Financial Results

"As we exited the third quarter, and consistent with our growth strategy, it was clear that the increasing activity in the U.S. market place represented significant growth opportunities. In order to capitalize on these opportunities in 2007, and as we mentioned last quarter, we decided to incur additional costs. Accordingly, we recruited a U.S. sales force, provided them with world class sales and marketing resources, began to re-position LCC in the marketplace and began training our RF engineers to serve multiple technologies in order to increase their flexibility and value," said Mr. Douglas. "We have already begun to see a return on this investment based on the significant growth in our opportunity pipeline and the conversion into backlog, as evidenced by our recent engagements around WiMAX technologies. These activities in conjunction with a greater impact of seasonality on our business and a decision not to go forward with a significant contract due to low margins, contributed to our loss from continuing operations in the fourth quarter. We believe, however, that the sales and marketing activities and re-training of our engineers will result in our ability to capture an even greater share of the growth of the wireless industry in 2007, 2008 and beyond."

Revenues for the fourth quarter of fiscal 2006 were $28.3 million compared to $39.9 million for the fourth quarter of last year. For the quarter ended December 31, 2006, gross margin from continuing operations was $7.7 million in the fourth quarter of 2006 as compared to $8.4 million in the year-ago quarter. Gross profit margin percent increased 610 basis points to 27.2% of total revenues compared with 21.1% for the same period in 2005.

The Company reported a loss from continuing operations of $1.3 million in the fourth quarter of 2006 compared with a loss from continuing operations of $2.6 million in the comparable 2005 quarter.

LCC reported a net loss in the fourth quarter of 2006 of $2.1 million, or a loss of $0.09 per basic and diluted share, compared with a net loss of $1.9 million, or $0.08 per basic and diluted share, for the fourth quarter of 2005.

LCC's fourth-quarter 2006 loss from discontinued operations was $804,000, or $0.03 per basic and diluted share, compared with income of $725,000, or $0.03 per basic and diluted share, for the same quarter a year ago.