<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File No. 0-19363
---------------------------------------------------------
CELLULAR COMMUNICATIONS INTERNATIONAL, INC.
- ----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-3221852
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
110 E. 59th Street, New York, New York 10022
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(212) 906-8480
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
The number of shares outstanding of the issuer's common stock as of March 31,
1997 was 10,712,241.
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Index
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
- ------------------------------ ----
<S> <C> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets-
March 31, 1997 and December 31, 1996......................... 2
Condensed Consolidated Statements of Operations-
Three months ended March 31, 1997 and 1996................... 3
Condensed Consolidated Statement of Shareholders'
(Deficiency) - Three months ended March 31, 1997............. 4
Condensed Consolidated Statements of Cash Flows-
Three months ended March 31, 1997 and 1996................... 5
Notes to Condensed Consolidated Financial Statements......... 6
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition........................... 10
PART II. OTHER INFORMATION
- --------------------------
Item 6. Exhibits and Reports on Form 8-K............................. 14
SIGNATURES............................................................ 15
- ----------
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Cellular Communications International, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
(unaudited) (see note)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 28,365,000 $ 46,759,000
Marketable securities 52,678,000 34,404,000
Other 1,255,000 1,045,000
------------ ------------
Total current assets 82,298,000 82,208,000
Investment in Omnitel 51,054,000 58,363,000
Equipment, net of accumulated
depreciation of $55,000 (1997)
and $50,000 (1996) 14,000 19,000
Deferred financing costs, net of
accumulated amortization of
$1,834,000 (1997) and $1,525,000
(1996) 5,408,000 5,717,000
------------ ------------
Total assets $138,774,000 $146,307,000
============ ============
LIABILITIES AND SHAREHOLDERS'
(DEFICIENCY)
Current liabilities:
Accounts payable $ 116,000 $ 156,000
Accrued expenses 712,000 630,000
Taxes payable 1,449,000 1,444,000
Due to NTL Incorporated 728,000 586,000
------------ ------------
Total current liabilities 3,005,000 2,816,000
Long-term debt, less unamortized
discount of $4,617,000 (1997) and
$4,881,000 (1996) 178,034,000 172,052,000
Commitments and contingent liabilities
Shareholders' deficiency:
Series preferred stock--$.01 par
value; authorized 2,500,000 shares,
outstanding none -- --
Common stock--$.01 par value;
authorized 25,000,000 shares; issued
and outstanding 10,712,000 (1997)
and 10,708,000 (1996) shares 107,000 107,000
Additional paid-in capital 28,767,000 28,737,000
(Deficit) (71,139,000) (57,405,000)
------------ ------------
(42,265,000) (28,561,000)
------------ ------------
Total liabilities and shareholders'
(deficiency) $138,774,000 $146,307,000
============ ============
</TABLE>
Note: The balance sheet at December 31, 1996 has been derived from the audited
financial statements at that date.
See accompanying notes.
2
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------------------
1997 1996
------------- ------------
<S> <C> <C>
Equity in net loss of Omnitel $ 7,137,000 $ 8,929,000
General and administrative expenses 1,094,000 737,000
Depreciation expense 5,000 7,000
Amortization of investments in joint
ventures 172,000 172,000
------------- ------------
Operating (loss) (8,408,000) (9,845,000)
Other income (expense):
Interest and other income 1,010,000 1,411,000
Interest expense (6,336,000) (5,486,000)
------------- ------------
Net (loss) $(13,734,000) $(13,920,000)
============= ============
Net (loss) per common share $(1.28) $(1.35)
============= ============
Weighted average number of common
shares used in computation of net
(loss) per share 10,711,000 10,348,000
============= ============
</TABLE>
See accompanying notes
3
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Condensed Consolidated Statement of Shareholders' Deficiency
(Unaudited)
<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL
--------------------- PAID-IN
SHARES AMOUNT CAPITAL (DEFICIT)
---------- -------- ----------- ------------
<S> <C> <C> <C> <C>
Balance at December 31, 1996 10,708,000 $107,000 $28,737,000 $(57,405,000)
Exercise of stock options 4,000 -- 30,000
Net (loss) for the three months ended
March 31, 1997 (13,734,000)
---------- -------- ----------- ------------
Balance at March 31, 1997 10,712,000 $107,000 $28,767,000 $(71,139,000)
============ ======== =========== ============
</TABLE>
See accompanying notes.
4
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net (loss) $(13,734,000) $(13,920,000)
Adjustments to reconcile net (loss)
to net cash (used in) operating
activities:
Equity in net loss of Omnitel 7,137,000 8,929,000
Depreciation and amortization expense 177,000 179,000
Accretion of original issue discount 5,763,000 4,984,000
Accretion of interest on marketable
securities (577,000) (362,000)
Interest on cash held in escrow -- (485,000)
Amortization of deferred financing
costs charged to interest expense 309,000 272,000
Amortization of debt discount 264,000 230,000
Changes in operating assets and
liabilities:
Other current assets (210,000) (243,000)
Accounts payable (40,000) (227,000)
Accrued expenses 82,000 149,000
Taxes payable 5,000 (2,139,000)
Due to Cellular Communications,
Inc. -- (16,000)
Due to NTL Incorporated 142,000 23,000
------------ ------------
Net cash (used in) operating activities (682,000) (2,626,000)
------------ ------------
INVESTING ACTIVITIES
Purchase of marketable securities (63,038,000) (44,967,000)
Proceeds from sale of marketable
securities 45,341,000 5,090,000
------------ ------------
Net cash (used in) investing activities (17,697,000) (39,877,000)
------------ ------------
FINANCING ACTIVITIES
Redemption of Senior Discount Notes (45,000) --
Payment of financing costs -- (54,000)
Exercise of stock options 30,000 29,000
------------ ------------
Net cash (used in) financing activities (15,000) (25,000)
------------ ------------
(Decrease) in cash and cash equivalents (18,394,000) (42,528,000)
Cash and cash equivalents at beginning
of period 46,759,000 62,965,000
------------ ------------
Cash and cash equivalents at end of
period $ 28,365,000 $ 20,437,000
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION
Income taxes paid $ -- $ 2,100,000
SUPPLEMENTAL SCHEDULE OF NONCASH
INVESTING ACTIVITIES
Cash held in escrow used for capital
contributions to Omnitel $ -- $ 19,548,000
</TABLE>
See accompanying notes.
5
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements
NOTE A - BASIS OF PREPARATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1997 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1997. For further information, refer to the consolidated financial statements
and notes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1996.
Net (loss) per share is computed based on the weighted average number of common
shares outstanding during the periods presented. Common stock equivalents are
excluded because they are antidilutive.
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share". SFAS No.
128 establishes new standards for computing and presenting earnings per share
and is effective for financial statements issued for periods ending after
December 15, 1997. The Company will adopt SFAS No. 128 effective with its 1997
year end. The adoption of SFAS No. 128 would not have changed the net loss per
common share for the three months ended March 31, 1997 and 1996.
NOTE B - INVESTMENT IN OMNITEL
The investment in Omnitel consists of the following:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
<S> <C> <C>
Capital contributions $ 96,805,000 $ 96,805,000
Capitalized costs including interest 9,725,000 9,725,000
Equity in accumulated net loss (54,044,000) (46,907,000)
------------ ------------
52,486,000 59,623,000
Accumulated amortization (1,432,000) (1,260,000)
------------ ------------
$ 51,054,000 $ 58,363,000
============ ============
</TABLE>
In March 1994, the Omnitel-Pronto Italia ("OPI") consortium in which Omnitel
holds a 70% interest was selected as the second GSM cellular telephone licensee
in Italy. The Company, through its 14.667% ownership interest in Omnitel, holds
an indirect 10.267% interest in OPI.
6
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)
NOTE B - INVESTMENT IN OMNITEL (CONTINUED)
The following financial information of Omnitel and OPI is prepared in accordance
with U.S. generally accepted accounting principles and is reflected in U.S.
dollars; the balance sheet information has been translated at the exchange rate
on the balance sheet date and the statement of operations information has been
translated at the average exchange rate for the period.
The following summarizes the assets, liabilities and stockholders' equity of
Omnitel:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets $ 7,757,000 $ 9,542,000
Investment in OPI 262,603,000 341,842,000
------------ ------------
$270,360,000 $351,384,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 392,000 $ 1,341,000
Other liabilities 53,000 59,000
Stockholders' equity 269,915,000 349,984,000
------------ ------------
$270,360,000 $351,384,000
============ ============
</TABLE>
The following summarizes the unaudited results of operations of Omnitel:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------------------
1997 1996
------------ ------------
<S> <C> <C>
Revenues $ -- $ --
Costs and expenses (220,000) (652,000)
Equity in net loss of OPI (48,584,000) (60,359,000)
------------ ------------
Operating loss (48,804,000) (61,011,000)
Interest income, net 143,000 109,000
------------ ------------
Net loss $(48,661,000) $(60,902,000)
============ ============
</TABLE>
7
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)
NOTE B - INVESTMENT IN OMNITEL (CONTINUED)
The following summarizes the assets, liabilities and stockholders' equity of
OPI:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
-------------- --------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets $ 292,611,000 $ 299,576,000
Property, plant and equipment, net 664,802,000 697,069,000
Intangible assets, net 506,576,000 566,804,000
Deferred tax asset 135,158,000 129,644,000
Other 13,897,000 14,925,000
-------------- --------------
$1,613,044,000 $1,708,018,000
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 637,949,000 $ 559,905,000
Long-term debt 587,788,000 647,806,000
Other liabilities 12,161,000 11,961,000
Stockholders' equity 375,146,000 488,346,000
-------------- --------------
$1,613,044,000 $1,708,018,000
============== ==============
</TABLE>
The following summarizes the unaudited results of operations of OPI:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
--------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Revenues $ 175,175,000 $ 56,782,000
Costs and expenses 203,701,000 102,368,000
Depreciation and amortization 40,376,000 26,549,000
-------------- --------------
244,077,000 128,917,000
-------------- --------------
Operating loss (68,902,000) (72,135,000)
Interest (expense), net (18,403,000) (12,184,000)
Income tax benefit 17,899,000 --
-------------- --------------
Net loss $ (69,406,000) $ (84,319,000)
============== ==============
</TABLE>
8
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
Notes to Condensed Consolidated Financial Statements (continued)
NOTE B - INVESTMENT IN OMNITEL (CONTINUED)
Based on an evaluation of the business plan of OPI, expectation of future market
conditions and operating performance, management of OPI determined that a
portion of the valuation allowance on net deferred income tax assets was not
required.
NOTE C - LONG-TERM DEBT
Pursuant to the Senior Discount Notes Indenture, any net proceeds from an asset
sale that are not applied within 12 months after such asset sale to an
investment in a related business will be deemed excess proceeds. When the
aggregate amount of excess proceeds exceeds $5,000,000, the Company is required
to make an offer to purchase the maximum principal amount of Notes that may be
purchased using the excess proceeds, at an offer price in cash equal to 100% of
the accreted value of the Notes. As a result of the Company's waiver and release
of its claim to participate in an entity that owns one of the two GSM cellular
licenses for Delhi, India in December 1995 in exchange for cash of approximately
$40,000,000, the Company had approximately $38,900,000 of excess proceeds in
December 1996. The Company made an offer to purchase Notes at the accreted
value of $635.65 per $1,000 Note. In January 1997, upon the expiration of the
offer, $70,000 principal amount at maturity of Notes were tendered and the
Company paid approximately $44,500.
9
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
- -------------------------------------------
Equity in net loss of Omnitel decreased to $7,137,000 from $8,929,000 because of
the decrease in the net loss of Omnitel. The decrease is due to a decrease in
Omnitel's share of OPI's net loss to $48,584,000 from $60,359,000. OPI's net
loss decreased to $69,406,000 from $84,319,000 as a result of a 209% increase in
operating revenues with only an 89% increase in operating expenses, plus OPI
recorded an income tax benefit of $17,899,000 in 1997. OPI reported that it had
approximately 913,000 and 130,000 subscribers as of March 31, 1997 and in April
1996, respectively.
General and administrative expenses increased to $1,094,000 from $737,000
primarily due to costs incurred in connection with possible joint ventures
that the Company decided not to participate in.
Interest and other income decreased to $1,010,000 from $1,411,000 primarily
because of a decrease in funds available for investment.
Interest expense increased to $6,336,000 from $5,486,000 due to an increase in
the accretion of original issue discount on the Senior Discount Notes.
LIQUIDITY AND CAPITAL RESOURCES
The Company's capital requirements are primarily based upon the agreements and
requirements of the joint ventures in which it is now or may become a
participant. The Company also requires capital to pay for corporate overhead
expenses, personnel costs and taxes, as well as capital to explore other
opportunities that may arise. The Company has no material commitments for
capital expenditures, except as described below. Italian lire have been
translated solely for the convenience of the reader at an exchange rate of
1,676.10 lire = $1.00, the Noon Buying Rate on May 9, 1997.
As a result of the award of Italy's second GSM cellular license to OPI, OPI
requires capital to construct its cellular system and to fund its operations.
OPI has a syndicated bank loan facility for 1,800 billion lire ($1.1 billion)
and has received capital contributions of 1,450 billion lire ($865 million) from
its partners (1,015 billion lire ($605 million) from Omnitel and 435 billion
lire ($260 million) from Pronto Italia). Omnitel funded its share of OPI capital
contributions plus its own capital needs through capital contributions from its
shareholders of 1,040 billion lire ($620 million). The Company's total
cumulative contribution to Omnitel was approximately 152.5 billion lire ($96.8
million at the exchange rates in effect at the time of each contribution).
10
<PAGE>
Cellular Communications International, Inc. and Subsidiaries (continued)
OPI has provided an approximate 219 billion lire ($130.7 million) performance
bond that requires payments to the Italian government if OPI fails to meet
certain operational targets. There can be no assurance that OPI will be able to
achieve all of its performance bond goals. The Company's maximum liability
under the performance bond is approximately 22.5 billion lire ($13.4 million),
reflecting its proportionate interest in OPI.
OPI is anticipating an approximately 200 billion lire ($119 million) increase in
OPI's paid-in capital in 1997. Omnitel's share of this increase is 70% of the
OPI increase or 140 billion lire ($84 million) and the Company would be required
to make capital contributions to Omnitel of approximately 20.53 billion lire
($12.2 million) in order to fund the Company's 14.667% share of the capital
requirements of Omnitel. These additional capital contributions would require
capital calls by Omnitel which are expected to occur during 1997. OPI will also
require additional debt financing in excess of the 1,123 billion lire ($670
million) amount available from the syndicated bank loan as of March 31, 1997 and
the anticipated 1997 capital calls. The Company currently expects that OPI
would obtain such additional financing from bank borrowings.
The Company has not been successful in obtaining any new cellular licenses since
there is more competition for licenses and the costs of obtaining them has
increased. This has occurred because more companies recognize the potential
value of cellular licenses and governments increasingly realize they can extract
some part of this value from license applicants. There can be no assurance that
the Company will be successful in obtaining new cellular licenses or in
developing other opportunities in the future.
The information in the preceding paragraphs include projections; in reviewing
such information it should be kept in mind that actual results may differ
materially from those in such projections. These projections were based on
various factors and were derived utilizing numerous assumptions. Important
assumptions and factors that could cause actual results to differ materially
from those in these projections include OPI's ability to continue to design
network routes, install facilities, obtain and maintain any required
governmental licenses or approvals and finance construction and development, all
in a timely manner, at reasonable costs and on satisfactory terms and
conditions, as well as assumptions about customer acceptance, churn rates,
overall market penetration and competition from providers of alternative
services. Other factors and assumptions not identified above were also involved
in the derivation of these projections, and the failure of such other
assumptions to be realized as well as other factors may also cause actual
results to differ materially from those projected. The Company assumes no
obligation to update these projections to reflect actual funding requirements,
capital expenditures and results, changes in assumptions or changes in other
factors affecting such projections.
In August 1995, the Company issued $281,571,000 aggregate principal amount of
13-1/4% Senior Discount Notes due 2000 (the "Notes") and 281,571 warrants to
purchase 317,049 shares of common stock. The Notes were issued at a price to the
public of 52.783% or $148,622,000. The original issue discount accretes at a
rate of 13-1/4%, compounded semiannually, to an aggregate
11
<PAGE>
Cellular Communications International, Inc. and Subsidiaries (continued)
principal amount of $281,571,000 by August 15, 2000. The Notes are senior
unsecured obligations of the Company and rank senior in right of payment to all
future subordinated indebtedness of the Company. The indenture governing the
Notes contains restrictions relating to, among other things: (i) the incurrence
of additional indebtedness, (ii) the issuance of preferred stock, (iii)
dividends and other payments and (iv) mergers, consolidations and sales of
assets.
The indenture required that $51,800,000 of the proceeds be placed in an escrow
account until it was needed to finance the Company's additional capital
contribution obligations to Omnitel, provided that Omnitel was not in default of
any obligation to fund capital contributions of OPI. The Company utilized the
entire escrow account balance plus interest to make its required capital
contributions to Omnitel in 1995 and 1996.
To the extent that the Company obtains financing in U.S. dollars and the
Company's future commitments to Omnitel are in Italian lire, it will encounter
currency exchange rate risks. Omnitel's revenues will be received in Italian
lire and currently there are no foreign exchange controls in Italy. There can
be no assurance that foreign exchange restrictions will not be introduced in the
future.
The Company expects that cash and marketable securities on hand is sufficient to
meet all obligations of the Company at least through the next twelve months.
The Company is primarily a holding company with limited business operations of
its own. The Company's assets consist primarily of cash, marketable securities
and its ownership interest in Omnitel. The Company does not hold, nor is it
likely that the Company will hold, a majority interest in any operating systems.
The Company's minority voting position in Omnitel currently precludes it from
controlling Omnitel or OPI, even though the Company is involved in the
management of Omnitel and intends to participate in the future only in operating
companies in which it can be involved in management. Thus, the Company may be
unable to cause the implementation of strategies that it favors and, in the
event of a disagreement between the Company and one or more of its partners, the
strategies adopted and actions taken by an affiliate company may in some cases
be contrary to the Company's preferred strategies and actions. In addition, the
Company may be unable to access the cash flow of affiliated companies since (i)
it does not have the requisite control to cause such entities to pay dividends,
(ii) substantially all of such entities are expected to be parties to credit or
other borrowing agreements that severely restrict or prohibit the payment of
dividends, and such entities are likely to continue to be subject to such
restrictions and prohibitions for the foreseeable future and (iii) some
countries tax payment and repatriation of dividends. As a result, the Company
does not expect to receive significant cash through dividends or other
distributions from an affiliate in the foreseeable future.
Because the Company does not currently have any cash flow and does not expect
any cash flow for the foreseeable future, its ability to repay the Notes at
maturity will be dependent on developing one or more sources of cash at or prior
to maturity. The Company may (i) seek to refinance all or a portion of the Notes
at maturity through sales of additional debt or equity securities of the
Company, (ii) if possible and subject to the appropriate consents and approvals
and certain other
12
<PAGE>
Cellular Communications International, Inc. and Subsidiaries (continued)
limitations set forth in the OPI Agreement and the Omnitel Agreement, seek to
sell all or a portion of its interest in Omnitel, (iii) negotiate with its
partners to permit any cash produced by OPI to be distributed to equity holders
rather than invested in the business and/or (iv) seek to invest in companies
that will make substantial cash distributions on or before the maturity of the
Notes. There can be no assurance that (i) there will be a market for the debt or
equity securities of the Company in the future, (ii) the Company will be
permitted to sell particular assets or be able to sell assets in a timely manner
or on commercially acceptable terms or in an amount that (giving effect to the
substantial corporate income taxes which could be due in the event of such a
sale) will be sufficient to repay the Notes when due, (iii) the Company will be
able to persuade its partners that cash generated by the operations of its
affiliated entities should be distributed to equity holders (in fact, the
Company expects that Omnitel and OPI will utilize all of their respective cash
flow for debt repayment or internal development opportunities for the
foreseeable future) or (iv) the Company will be able to locate and invest in
companies that will be mature enough to make substantial cash distributions to
investors prior to the maturity of the Notes.
Cash used in operating activities was $682,000 and $2,626,000 in 1997 and 1996,
respectively. The decrease in cash used in operating activities is primarily due
to a decrease in income taxes paid to none in 1997 from $2,100,000 in 1996. Cash
used in investing activities was $17,697,000 in 1997 as a result of purchases of
marketable securities, net of proceeds from sales. Redemption of Senior Discount
Notes of $45,000 in 1997 is the result of the Company's offer to repurchase up
to $38,900,000 accreted value of Notes using the excess proceeds from the waiver
and release of the Company's claim to participate in an entity that owns one of
the two GSM cellular licenses for Delhi, India in December 1995 in exchange for
cash of approximately $40,000,000.
13
<PAGE>
Cellular Communications International, Inc. and Subsidiaries
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits.
27. Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K were filed by the Company during the quarter
ended March 31, 1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CELLULAR COMMUNICATIONS
INTERNATIONAL, INC.
Date: May 12, 1997 By: /s/ J. Barclay Knapp
-------------------------
J. Barclay Knapp
Executive Vice President
Date: May 12, 1997 By: /s/ Gregg Gorelick
--------------------------
Gregg Gorelick
Vice President-Controller
(Principal Accounting Officer)
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 28,365,000
<SECURITIES> 52,678,000
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 1,255,000
<PP&E> 69,000
<DEPRECIATION> (55,000)
<TOTAL-ASSETS> 138,774,000
<CURRENT-LIABILITIES> 3,005,000
<BONDS> 178,034,000
0
0
<COMMON> 107,000
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</TABLE>
