Subject: [NEXTEL-1] Tricom Announces First Quarter Results

From: [email-masked]
Date: Wed, 28 May 2003 13:23:52 -0400

Tricom Announces First Quarter Results

SANTO DOMINGO, Dominican Republic, May 23 /PRNewswire-FirstCall/ --
Tricom, S.A. today announced consolidated unaudited financial results for the
first quarter ended March 31, 2003. Operating revenues totaled $58.4 million
for the 2003 first quarter, a decrease of 8.8 percent from the 2002 first
quarter. EBITDA (earnings before interest, taxes, depreciation and
amortization) totaled $16.0 million for the 2003 first quarter compared to
$20.1 million for the 2002 first quarter. Net loss for the 2003 first quarter
was $19.0 million, or $0.29 per share.
The Company's operating revenues and EBITDA results reflect the negative
impact of currency devaluation affecting the translation of Dominican peso
generated revenues into U.S. dollars. During the 2003 first quarter, the value

of the Dominican peso against the U.S. dollar declined by approximately
15.9 percent from the 2002 fourth quarter, and by approximately 36.4 percent
year-over-year.  Excluding this effect and assuming a constant exchange rate,
consolidated operating revenues would have increased by approximately
9.5 percent year-over-year, and by approximately 4.1 percent from the 2002
fourth quarter.
Total debt, including capital leases and commercial paper, amounted to
$473.3 million at March 31, 2003, compared to $527.9 million at March 31,
2002. Net debt (total debt less cash on hand and investments) totaled
$451.0 million at March 31, 2003 compared to $498.8 million at March 31, 2002.

Capital expenditures were $4.9 million during the 2003 first quarter,
representing a 70.4 percent reduction from the 2002 first quarter, reflecting
the Company's continued policy of rationalizing its resources. The Company's
free cash flow (net cash provided by operating activities less net cash used
in investing activities) deficit was $5.4 million, a significant improvement
over a 2002 first quarter deficit of $28.4 million, reflecting the Company's
improved cash flow management and lower capital expenditures.
"In the first quarter, we continued to face a challenging operating
environment", said Arturo Pellerano, Chairman and CEO. "We remained intensely
focused on managing our costs and expenses tightly, supporting our growth
drivers by investing prudently, bringing us closer to achieving free cash flow

from operations, and continuing strengthening our balance sheet. Our focus for

2003 is to continue executing on these initiatives that will position us for
long-term success and value."
Long distance revenues grew by 7.3 percent to $24.8 million in the 2003
first quarter, primarily as a result of strong international traffic volume
derived from the Company's U.S.-based wholesale and retail operations. The
increase in long distance revenues was offset in part by a decrease in
outbound international and domestic long distance revenues generated by the
Company's Dominican Republic operations resulting from currency devaluation.
Domestic telephony revenues totaled $17.0 million in the 2003 first
quarter, a 19.5 percent decrease from the 2002 first quarter. The decrease in
domestic telephony revenues was primarily the result of the devaluation of the

Dominican peso. Domestic telephony revenue growth assuming a constant exchange

rate basis was approximately 8.9 percent compared to the first quarter of
2002, primarily as a result of the Company's continued success in attracting
higher usage business accounts and general increases in fees for local
exchange and other services. Total lines in service at March 31, 2003
decreased 20.4 percent to approximately 147,000.
Mobile revenues totaled $11.0 million in the 2003 first quarter, a
decrease of 6.0 percent from the 2002 first quarter. The decrease in mobile
revenues is primarily attributable to the devaluation of the Dominican peso,
offset in part by higher service revenues derived from the Company's
Panamanian operations and the introduction in the Dominican Republic of new
monthly plans with higher service fees. On a constant exchange rate basis,
mobile revenues grew approximately 18.7 percent compared to the first quarter
of 2002. Cellular and PCS subscribers totaled approximately 432,000 at
March 31, 2003, an 11.3 percent increase year-over-year, reflecting the
organic growth of the Company's domestic operations and subsidiaries. The
Company continues to focus on improving the quality of its subscriber base
through customer loyalty and retention programs, increasing additions in the
contract or postpaid segment, and disconnecting low-usage subscribers.
Data and Internet revenues totaled $1.5 million in the 2003 first quarter,
a 43.4 percent decrease from the 2002 first quarter. The decrease in data and
Internet revenues is primarily attributable to the devaluation of the
Dominican peso, coupled with lower revenues from broadband satellite Internet
access services.
Cable revenues totaled $4.0 million in the 2003 first quarter, a
24.4 percent decrease from the year-ago period, primarily due to the effect of

currency devaluation. Cable revenue growth in the 2003 first quarter on a
constant exchange rate basis was approximately 3.0 percent compared to the
2002 first quarter, and 7.6 percent compared to the 2002 fourth quarter. To
offset the impact of currency devaluation on cable revenues, the Company
instituted price increases for its basic, expanded basic and premium services
that were too recent to have a significant impact on the 2003 first quarter
results. Cable subscribers totaled approximately 69,000 at March 31, 2003, a
1.3 percent increase year-over-year.
Consolidated operating costs and expenses remained stable at $62.4 million
in the 2003 first quarter compared to $62.6 million in the 2002 first quarter.

First quarter operating costs and expenses reflect higher depreciation and
amortization charges and increased cost of sales and services, partially
offset by a decrease in selling, general and administrative (SG&A) expenses,
as well as the elimination of expenses in lieu of income taxes.
Cost of sales and services increased by 8.4 percent to $22.4 million
during the 2003 first quarter, primarily as a result of higher transport and
interconnection charges and fees paid for cable signals and programming
content. SG&A expenses decreased by 14.0 percent to $20.0 million in the 2003
first quarter, compared to $23.2 million in the 2002 first quarter, and by
12.8 percent compared to the 2002 fourth quarter, primarily due to expense
control and efficiency measures, as well as the effect of currency devaluation

on Dominican peso denominated expenses. As a percentage of total operating
revenues, SG&A expenses decreased to 34.2 percent in the 2003 first quarter
compared to 36.3 percent in the 2002 first quarter.
On December 18, 2002, the Company filed a Registration Statement with the
Securities and Exchange Commission (SEC) for the proposed exchange of all
$200 million of its outstanding 11 3/8% Senior Notes due 2004 for New Notes
and Warrants. The Company also expects to solicit consents from the holders of

the outstanding Senior Notes to amend or eliminate certain of the covenants
contained in the indenture of its currently outstanding 11 3/8% Senior Notes.
At this time the Registration Statement has not been declared effective and
the final details of the exchange offer have not been finalized. Currently,
the SEC is reviewing the Registration Statement.
The New Notes and Warrants may not be sold nor may offers to buy be
accepted prior to the time the Registration Statement becomes effective. This
press release shall not constitute an offer to buy nor shall there be any sale

of the New Notes or Warrants in any State in which such offer, solicitation or

sale would be unlawful prior to registration or qualification under the
securities laws of any such State.
The Company provides financial measures generated using non-generally
accepted accounting principles (GAAP) that management believes are useful
measures in evaluating the Company's financial performance. The schedules
accompanying this press release provide reconciliation for all non-GAAP
financial measures mentioned in this announcement.

About TRICOM
Tricom, S.A. is a full service communications services provider in the
Dominican Republic. We offer local, long distance, mobile, cable television
and broadband data transmission and Internet services. Through Tricom USA, we
are one of the few Latin American based long distance carriers that is
licensed by the U.S. Federal Communications Commission to own and operate
switching facilities in the United States. Through our subsidiary, TCN
Dominicana, S.A., we are the largest cable television operator in the
Dominican Republic based on our number of subscribers and homes passed. We
also offer digital mobile integrated services including two-way radio and
paging services in Panama using iDEN(R) technology. For more information about

Tricom, please visit http://www.tricom.net

Cautionary Language Concerning Forward-Looking Statements
Statements in this press release that are not strictly historical in
nature are forward-looking statements. These statements are only predictions
based on current information and expectations and involve a number of risks
and uncertainties. Actual events or results may differ materially due to
various factors. Factors which may cause actual results to differ materially
from those discussed herein include economic considerations that could affect
demand for telecommunications services and the ability of the Company to make
collections, inflation, regulatory factors, legal proceedings, exchange
controls and occurrences in currency markets, competition, and the risk
factors set forth in the Company's various filings with the Securities and
Exchange Commission, including its more recently filed Annual Report on Form
20-F. The Company undertakes no obligation to revise these forward-looking
statements to reflect events or circumstances after the date hereof.

(Six tables to follow)

TRICOM, S.A. AND SUBSIDIARIES
Selected Financial and Operating Data (unaudited)
(In US$)
Three Months Ended
31-Mar-2002     31-Mar-2003     % Chng.

Capital expenditures,
including capital leases   $16,394,171      $4,860,598        -70.4%
Total employees                   1,756           1,526        -13.1%

Economic Statistics (1)
Consumer price index (aggregate)  1.75%           9.30%       +755 bp
Exchange rate (at period end)   $17.61          $24.65         +40.0%
Avg. period exchange rate       $17.45          $23.80         +36.4%

Lines in service
(at period end)                185,201         147,472        -20.4%
Avg. revenue per line in service $38.17          $37.26         -2.4%
Churn rate                         1.3%            2.8%

Cellular & PCS subscribers
(at period end) (2)            388,317         432,058        +11.3%
Minutes of use (in 000s)         54,521          64,704        +18.7%
Avg. revenue per user (blended)   $9.44           $6.58        -30.3%
Churn rate                         4.3%            3.6%

Digital trunking subscribers
(at period end) (3)               n.a.           9,394          n.a.
Avg. revenue per user              n.a.          $53.72          n.a.
Churn rate                         n.a.            0.5%

Equivalent cable subscribers
(at period end)                 67,659          68,528         +1.3%
Avg. revenue per equivalent
cable subscriber                $17.66          $14.79        -16.3%
Churn rate                         1.9%            5.1%

Data/Internet subscribers
(at period end)                  9,672          10,577         +9.4%
Paging subscribers               10,988           8,169        -25.7%

Long distance minutes
(in 000s) (4)                  231,905         304,046        +31.1%

Footnote:
(1) Source: Dominican Republic Central Bank
(2) Represents cellular and PCS subscribers in the Dominican Republic
(3) Represents mobile subscribers in Panama.
(4) Includes inbound, outbound and domestic long distance minutes.

TRICOM, S.A. AND SUBSIDIARIES
Consolidated Balance Sheets
(In US$)
December 31,     March 31,
2002           2003
(Audited)     (Unaudited)
Assets

Current assets
Cash on hand and in banks                      $6,080,303     $6,353,737

Accounts receivable:
Customers                                     26,253,107     26,150,891
Carriers                                       3,806,849      5,471,411
Others                                         2,848,287      1,838,864
32,908,243     33,461,166
Allowance for doubtful accounts               (7,763,109)    (7,762,411)
Accounts receivable, net                   25,145,134     25,698,755

Inventories, net of allowances                  3,937,678      2,401,629
Certificates of deposits                       15,900,710     15,900,710
Prepaid expenses                                7,099,415      6,086,794
Deferred income taxes                           1,307,870      1,307,870
Total current assets                       59,471,110     57,749,495

Mortgage investments                              463,542        626,053
Property and equipment, net                   668,120,192    653,847,833
Intangible assets                               6,946,978      6,946,978
Goodwill, net of amortization                  21,914,327     21,914,327
Other assets at cost, net of amortization      25,312,934     24,463,631
$782,229,083   $765,548,317

TRICOM, S.A. AND SUBSIDIARIES
Consolidated Balance Sheets (cont.)
(In US$)                                      December 31,     March 31,
2002          2003
Liabilities and Stockholders' Equity    (Audited)

Current liabilities
Notes payable:
Borrowed funds                              $38,609,926    $38,889,608
Commercial paper                              9,907,583     20,528,348
Current portion of long-term debt            30,724,888     30,220,626
79,242,397     89,638,582

Current portion of capital leases               2,738,413      3,482,284

Accounts payable:
Carriers                                     11,032,780     12,711,250
Suppliers                                    15,746,551     13,606,422
Others                                        7,384,780      7,826,777
34,164,111     34,144,449

Other liabilities                              14,910,246     14,294,064
Accrued expenses                               17,837,390     15,178,950
Total current liabilities                   148,892,557    156,738,329

Reserve for severance indemnities                 675,742        583,099
Deferred income tax                             1,691,779      1,691,779
Commercial paper                               41,708,647     42,478,569
Capital leases, excluding current portion      11,792,908     11,049,037
Long-term debt, excluding current portion     332,082,076    326,639,283
Total liabilities                           536,843,709    539,180,096

Minority interest

Stockholders' equity:
Class A Common Stock at par value RD$10:
Authorized 55,000,000 shares;
45,458,041 shares issued at December 31,
2002 and March 31, 2003                     24,951,269     24,951,269

Class B Stock at par value RD$10: Authorized
25,000,000 shares at December 31, 2002
and March 31, 2003; 19,144,544 issued
at December 31, 2002 and March 31, 2003     12,595,095     12,595,095
Additional paid-in-capital                  275,496,964    275,496,964
Retained earnings (loss)                    (65,634,197)   (84,651,350)
Other comprehensive income-foreign
currency translation                        (2,023,757)    (2,023,757)
Stockholders equity, net                  245,385,374    226,368,221

$782,229,083   $765,548,317

TRICOM, S.A. and Subsidiaries
Consolidated Statement of Operations (Unaudited)
(In US$)                                         Three Months Ended
March 31,
2002           2003
(Restated)
Operating revenues:
Long distance                                $23,164,847    $24,848,953
Domestic telephony                            21,149,522     17,015,813
Mobile                                        11,747,000     11,044,356
Cable                                          5,255,090      3,971,008
Data and Internet                              2,712,080      1,535,489
Other                                             22,095          3,120
Total operating revenues                    64,050,634     58,418,739

Operating costs and expenses:
Cost of sales and services                    20,698,561     22,429,849
Depreciation and amortization                 16,574,068     19,994,796
Expense in lieu of income taxes                2,054,103             --

Selling, general and administrative expenses  23,247,873     19,987,256
Total operating costs and expenses          62,574,605     62,411,901

Operating income (loss)                      1,476,029     (3,993,162)

Other income (expenses):
Interest expense                             (13,631,613)   (15,459,868)
Interest income                                  479,665        282,469
Foreign currency exchange gain (loss)            176,503        767,023
Other, net                                       373,517         66,419
Other expenses, net                        (12,601,928)   (14,343,957)

Earnings (loss) before income taxes and
minority interest                            (11,125,899)   (18,337,119)

Income taxes, net                                (136,994)      (680,034)

Earnings (loss) before minority interest      (11,262,893)   (19,017,153)

Minority interest                                 712,650             --

Net earnings (loss)                          $(10,550,243)  $(19,017,153)

Earnings (loss) per common share:
Earnings (loss) before minority interest         $ (0.26)       $ (0.29)
Minority interest                                   0.02             --

Earning (loss) per common share                  $ (0.24)       $ (0.29)

Average number of common shares used in
calculation                                  43,390,464     64,602,585

EBITDA                                       $20,104,200    $16,001,634

TRICOM, S.A. and subsidiaries
Consolidated Statement of Cash Flows (Unaudited)
(In US$)                                             Year ended
March 31,
2002          2003

Cash flows from operating activities:
Net earnings (loss)                        $(10,550,243)  $(19,017,153)
Adjustments to reconcile net earnings
(loss) to net cash provided by operating
activities:
Depreciation                               16,074,171     18,883,716
Allowance for doubtful accounts             1,661,968      1,521,796
Amortizations debt issue cost                      --      1,111,080
Expense for severance indemnities                  --         80,579
Minority interest                            (712,650)            --
Net changes in assets and liabilities:
Accounts receivable                      (3,785,370)    (2,075,417)
Inventories                                (623,214)     1,785,290
Prepaid expenses                            619,604      1,012,621
Other assets                              (1,465,118)      (261,777)
Accounts payable                          (8,567,097)       (19,662)
Other liabilities                        (12,274,056)      (616,182)
Accrued expenses                           7,732,881     (2,658,440)
Reserve for severance indemnities           (215,736)      (173,222)
Total adjustments                      (1,554,617)    18,590,382
Net cash provided by (used in) operating
activities                                 $(12,104,860)     $(426,771)

Cash flows from investing activities:
Cancellation (acquisition) of investments      $52,797      $(162,511)
Acquisition of property and equipment      (16,394,171)    (4,860,598)
Net cash used in investing activities    (16,341,374)    (5,023,109)

Cash flows from financing activities:
Borrowed (paid) funds                        12,037,208        279,682
Current portion of capital lease             (1,049,687)            --
Issuance of commercial paper                 16,636,617     11,390,687
Payments of long-term debt                  (18,672,446)    (5,947,055)
Proceeds from issuance of long term debt     20,757,717             --
Net cash provided by financing activities  29,709,409      5,723,314

Net increase in cash and cash equivalents      1,263,175        273,434

Cash and cash equivalents at beginning of the
period                                       12,576,050      6,080,303

Cash and cash equivalents at end of period   $13,839,225     $6,353,737

Non-GAAP and Other Financial Measures
EBITDA is the primary basis used by our management to measure the
operational strength and performance of all of our operating segments and
operating units.  Management uses Free Cash Flow as an additional performance
measure and as an indicator of our ability to pay debt and make strategic
investments. Management uses Net Debt as a measure of debt that will require
cash from future operations or financings, and provides an overall appearance
of a company's debt situation because cash is applied against the debt.
EBITDA typically consists of earnings (loss) before interest and other
income and expenses, income taxes and depreciation and amortization. Until
September 1, 2002, we made payments to the Dominican government in lieu of
income taxes.  As a result, we calculated EBITDA prior to the deduction of
payments to the Dominican government in lieu of income taxes.  Our calculation

of EBITDA also adds impairment charges, if any, related to fixed and
intangible assets, which are non-cash charges.  Our calculation of EBITDA may
not be comparable to EBITDA calculated by other companies.  We believe that
EBITDA is useful to investors because EBITDA is commonly used in the
telecommunications industry to analyze companies on the basis of operating
performance, leverage and liquidity.  EBITDA also is used in covenants in bank

credit facilities and high yield indentures to measure a borrower's ability to

incur debt and for other purposes, and may be the preferred measure for these
purposes. Because we use EBITDA as the measure to evaluate the performance of
our businesses, we reconcile it to operating income, the most directly
comparable financial measure calculated and presented in accordance with
Generally Accepted Accounting Principles (GAAP). We believe our measure of
EBITDA is a non-GAAP measure as contemplated by Regulation G.
We define Free Cash Flow as cash provided by operating activities less
cash provided by investing activities. We believe Free Cash Flow is a non-GAAP

measure as contemplated by Regulation G.
We define Net Debt as the total aggregate amount of our consolidated debt
(short and long term), including capital lease obligations, less cash on hand
and in banks and equivalents (including investments).  We believe Net Debt is
a non-GAAP measure as contemplated by Regulation G.
EBITDA and Free Cash Flow should not be considered as substitutes for
operating income (loss), net income (loss), net cash provided by operating
activities or other measures of performance or liquidity reported in
accordance with GAAP. Net Debt should not be considered a substitute for Total

Debt.

A quantitative reconciliation of EBITDA, Free Cash Flow and Net Debt
follows:

TRICOM, S.A. AND SUBSIDIARIES
Reconciliation of Non-GAAP Financial Measures
(In US$)
Three Months Ended
Unaudited                                    31-Mar-2002    31-Mar-2003

EBITDA
Operating income (loss)                       $1,476,029    $(3,993,162)
Plus: Expense in lieu of income taxes         $2,054,103            $--

Plus: Depreciation and amortization          $16,574,068    $19,994,796
EBITDA                                       $20,104,200    $16,001,634

Unaudited

Free Cash Flow
Net cash provided by (used in) operating
activities                                 $(12,104,860)     $(426,771)
Less: Net cash used in investing activities $(16,341,374)   $(5,023,109)
Free cash flow surplus (deficit)            $(28,446,234)   $(5,449,880)

Unaudited

Net Debt
Short-term debt, including capital leases
and commercial paper                       $147,200,156    $93,120,866
Long-term debt, including capital leases
and commercial paper                       $380,663,981   $380,166,889
Less: Cash on hand and investments           $29,039,225    $22,254,447
Net debt                                    $498,824,912   $451,033,308

For additional information, please visit Tricom's Investor Relations
website at http://www.tdr-investor.com or contact our Investor Relations
department at the above numbers.

SOURCE Tricom, S.A.
Web Site: http://www.tricom.net http://www.tdr-investor.com

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