Leap Wireless International Inc., the San Diego-based provider of flat-rate wireless telephone service primarily in middle market cities, reported 2004 net income of $904.6 million, compared with the prior year, when it reported a net loss of $597.4 million.
The company that filed for bankruptcy in 2003 and emerged from Chapter 11 reorganization in August, stated, “This combined net income result for the fiscal year 2004 is not indicative of the company’s expected future performance.”
The unusual profits were the result of Leap’s employing “fresh start accounting” beginning in July, and adding reorganization items, and other bankruptcy related changes to its balance sheet. Leap said its operating loss last year, before the net of $962.4 million in reorganization costs, was $30.2 million.
Total revenues at the telecom that markets its service under the brand called Cricket were $826 million, compared with $751.3 million in 2003.
Leap said it added 29,000 net customers to its service in the last quarter of 2004 to bring the total added for the year to 97,000. That was better than 2003, when it reported a net customer loss of 39,000. Leap has about 1.5 million customers around the nation in such markets as Buffalo, N.Y., and Chattanooga, Tenn. It isn’t offered in San Diego.
This month, Leap stated it made errors in its third-quarter financial report that would require restating those results, which are expected to boost its net income for that period by $5.5 million. With the addition, Leap said its third quarter would show a net profit of $957.4 million. Leap stated the adjustments “result from the correction of accounting errors and are not attributable to any misconduct by company employees.”
Traded on the over-the-counter bulletin board as LEAP, shares gained nearly 8 percent in May 12 trading, to just below $26. Its 52-week stock price ranged from $19 to $29.87.