424B3 1 d424b3.htm PROSPECTUS SUPPLEMENT Prospectus Supplement

 

Filed Pursuant to 424(b)(3)

Registration No. 333-99293

 


 

TSI TELECOMMUNICATION HOLDINGS, LLC

TSI TELECOMMUNICATION SERVICES INC.

TSI TELECOMMUNICATION HOLDINGS, INC.

TSI TELECOMMUNICATION NETWORK SERVICES INC.

TSI FINANCE INC.

 

 

Supplement to Prospectus

Dated September 30, 2002

 

 

The date of this supplement is May 9, 2003

 

 

Our Press Release dated May 5, 2003 on Form 8-K is attached as Annex A. This prospectus supplement relates to the offering for resale from time to time by a selling noteholder of an aggregate principal amount of $30,000,000 of our 12¾% Senior Subordinated Notes due 2009.

 


 

The purchase of our 12¾% Senior Subordinated Notes due 2009 involves a high degree of risk. See “Risk Factors” of the prospectus for a discussion of factors that you should carefully consider before purchasing the notes offered by the prospectus and this prospectus supplement.

 


 

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if the prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.

 


 

 


 


 

Annex A

 



 

SECURITIES AND EXCHANGE COMMISSION

 

WASHINGTON, D.C. 20549

 


 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

 


 

Date of Report (Date of earliest event reported): May 5, 2003

 


 

TSI TELECOMMUNICATION SERVICES INC.

(Exact name of registrant as specified in its charter)

 

Delaware

 

333-88168

 

06-1262301

(State or other jurisdiction of

incorporation or organization)

 

(Commission File Number)

 

(I.R.S. Employer Identification No.)

 


 

201 N. Franklin Street, Suite 700

Tampa, Florida 33602

Telephone: (813) 273-3000

(Address, including zip code, and telephone number, including area code, of registrants’ principal executive offices)

 



 

ITEM 5.    Other Events

 

After the close of business on May 5, 2003, TSI Telecommunication Services Inc. issued the attached press release.

 

Exhibits

 

Exhibit 99    Press Release dated May 5, 2003.

 

 

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.

 

Dated: May 5, 2003

 

TSI TELECOMMUNICATION SERVICES INC. (Registrant)

/S/    RAYMOND L. LAWLESS


Raymond L. Lawless

Chief Financial Officer and Secretary

 

 

EXHIBIT INDEX

 

 

Exhibit No.


  

Description


99

  

Press release dated May 5, 2003

 


 

[TSI Logo]

 

news release

 

Contact:

  

Raymond L. Lawless

    

Chief Financial Officer

    

(813) 273-3000

 

TSI Announces First Quarter 2003 Financial Results

 

News Summary:    TSI reports EBITDA of $23.9 million on total gross revenues of $62.8 million for the quarter ending March 31, 2003.

 

Tampa, Fla. May 5, 2003—TSI Telecommunication Services Inc. (TSI), a global communications technology company, reported EBITDA of $23.9 million on total gross revenues of $62.8 million for the quarter ending March 31, 2003. Excluding off-network database queries, or pass-thru, revenue for the first quarter of 2003 was $54.8 million.

 

“I am extremely pleased that TSI achieved its stated expectations for the quarter. We have accelerated our plans in some areas of the business based on a rapidly growing sales pipeline and increased demand for our services. TSI is executing on its strategy, and we continue to invest in new products and services anticipated in response to customer requirements and emerging market demand,” said Chief Executive Officer Ed Evans. “Our focus for 2003 is rolling out products and services that will generate both near term and sustainable future revenue growth. With that objective in mind, we are making progress, particularly in wireless number portability and related services.”

 

Chief Financial Officer Ray Lawless said, “We continue to generate strong cash flows, giving us the ability to de-lever quickly. Our excess cash flow payment for 2002 of $37 million was made on March 31st, in addition to our $5 million scheduled debt re-payment. Our total debt re-payment since inception was $63 million or 21% of the senior debt, bringing our total leverage ratio down to 3.9 versus 4.2 at the time the business was acquired.”

 

First Quarter Results

 

Total Revenue

 

First quarter revenue was $62.8 million, a 16.3 % decrease over the fourth quarter 2002. Total revenues, excluding pass-thru, were $54.8 million, a decrease of 10% over fourth quarter 2002. Overall declines in TSI’s sequential comparisons are partially attributable to the impact of renegotiated major customer contracts in 2002.

 

Network Services

 

Total Network Services revenue decreased 14.8% quarter-over-quarter to $34.2 million. The sequential decrease is due to an expected drop in pass-thru revenue. Network Services Revenue, excluding pass-thru revenue, was $26.1 million, flat from the prior quarter. Sequential growth in our SS7 transport services, network monitoring tool and wholesale local access transport area (LATA) circuits was offset by declines in other SS7 revenue.

 

(more)


 

page two/TSI Announces 1Q Results

 

 

Technology Interoperability Services

 

Technology Interoperability Services revenue totaled $14.5 million in the first quarter, a 16.5% decrease from fourth quarter 2002. The decrease reflects the impact of renegotiated major customer contracts in 2002 and the termination of an agreement with Adelphia Business Systems for Access Revenue Management Services.

 

Call Processing Services

 

Call Processing Services revenues were $10.2 million in the first quarter, a 17.9% decrease from the prior period, primarily due to a shift in revenue to Network Services as carriers implement SS7 connections between their own networks and those of their roaming partners.

 

Other Outsourcing Services

 

TSI’s Other Outsourcing Services segment revenue was $3.9 million for the quarter, a decrease of 22.6% from the previous quarter. The decline is primarily attributable to the expected lost of prepaid wireless services revenues.

 

Business Highlights

 

    TSI secured the following key contracts:

 

  -   Dobson Communications—WNP and local number portability services

 

  -   IDN, LLC—Commercial Carrier Network Services (CCNS) facilities infrastructure for data or voice transmissions between switches or other network elements across state or LATA boundaries

 

  -   Telefonica Movil de Chile—multiple services to enable roaming and SS7 transport

 

    TSI began processing for NII Holdings, Inc., formerly known as Nextel International, to provide ACCESS® S&E clearinghouse services for NII’s properties located in Argentina, Brazil, Mexico and Peru

 

    TSI launched a broad scope of new services:

 

  -   An end-to-end WNP suite of services, including new fallout management/port center and work flow services developed to address porting errors

 

  -   A suite of WLAN roaming services that will address the rating, conversion, clearing and settlement needs for wireless operators and hotspot providers

 

  -   Business Network Solutions, a suite of services targeted to enterprise customers that require network management and consultation or facilities co-location

 

  -   CIBER record correction and re-submits, a service that prevents roaming revenue leakage, for which seventeen carriers have contracted

 

  -   An enhanced version of STREAMLINER® Enterprise Wireless Billing Management Services for European operators

 

  -   Financial net settlement services for CDMA-based wireless carriers and, through a partnership with United Kingdom-based United Clearing, for GSM operators throughout the world

 

(more)


 

page three/TSI Announces 1Q Results

 

 

  ·   Other highlights:

 

  -   The opening of TSI’s new office in Amsterdam marked the establishment of a permanent base in Europe and execution of TSI’s business strategy to expand into markets with high growth opportunities

 

  -   The formation of a strategic partnership with InterOP Technologies that will combine the two companies’ expertise and services to bring an end-to-end business and technical SMS solution to wireless carriers

 

First Quarter 2003 Results Earnings Call

 

TSI will host a conference call on Tuesday, May 6, 2003 at 10:00 a.m. (ET) to review its first quarter results. To participate on this call, please dial 1 (800) 289-0517 (for U.S. callers) or +1 (913) 981-5529 (international direct dial). The pass code for this call is 110421.

 

A replay of this call will be available beginning Tuesday, May 6, 2003 at 1:00 p.m. (ET) through May 13, 2003, 5:00 p.m. (ET). To access the replay, please dial 1 (888) 203-1112 (for U.S. callers), or +1 (719) 457-0820 (international direct dial). The replay pass code is 110421.

 

About TSI

 

TSI is a global communications technology company specializing in innovative business and network engineering solutions that manage and interconnect voice and data systems in 26 countries throughout North America, Central and Latin America, Asia Pacific and Europe. TSI provides technology interoperability, network services and call processing to more than 250 mobile operators, wireline carriers, emerging telecom market entrants and business customers. Products include SS7 intelligent network solutions, clearing and settlement services, voice and data roaming facilitation, fraud management, revenue enhancement solutions and more than 25 other integrated services. TSI is a privately owned corporation headquartered in Tampa, Fla., U.S.A., with offices in major cities throughout the United States and offices in Amsterdam, London, Luxembourg, Beijing and Hong Kong. For more information, visit www.tsiconnections.com.

 

CUSIP: 87287VAB8 Bloomberg Tickers: TSITEL (Bond) 32497Z (Equity)

 

 

Cautions about Forward Looking Statements

 

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These include, but are not limited to, statements regarding TSI’s plans, intentions and expectations. Such statements are inherently subject to a variety of risks and uncertainties that could cause actual results to differ materially from those projected. Given these concerns, investors and analysts should not place undue reliance on forward-looking statements.

 

(more)


 

TSI Telecommunication Services Inc.

Condensed Consolidated Statements of Operations (unaudited)

(Dollars in thousands)

 

    

Predecessor


    

Successor


    

Combined


    

Successor


 
    

Period from Jan 1 to Feb 13, 2002


    

Period from Feb 14 to Mar 31, 2002


    

Three Months Ended Mar 31, 2002


    

Three Months Ended Mar 31, 2003


 

Revenues Excluding Off Network Database Queries

  

$

31,409

 

  

$

33,288

 

  

$

64,697

 

  

$

54,761

 

Off Network Database Queries

  

 

8,587

 

  

 

9,632

 

  

 

18,219

 

  

 

8,038

 

    


  


  


  


Total Revenues

  

 

39,996

 

  

 

42,920

 

  

 

82,916

 

  

 

62,799

 

Cost of operations

  

 

20,655

 

  

 

18,616

 

  

 

39,271

 

  

 

26,103

 

    


  


  


  


Gross Margin

  

 

19,341

 

  

 

24,304

 

  

 

43,645

 

  

 

36,696

 

Gross Margin %

  

 

48.4

%

  

 

56.6

%

  

 

52.6

%

  

 

58.4

%

Gross Margin % before Off Network Database Queries

  

 

61.6

%

  

 

73.0

%

  

 

67.5

%

  

 

67.0

%

Sales and marketing

  

 

2,614

 

  

 

3,135

 

  

 

5,749

 

  

 

4,877

 

General and administrative

  

 

4,341

 

  

 

6,326

 

  

 

10,667

 

  

 

7,893

 

Depreciation and amortization

  

 

1,464

 

  

 

4,507

 

  

 

5,971

 

  

 

8,948

 

Restructuring

  

 

—  

 

  

 

—  

 

  

 

—  

 

  

 

1,841

 

    


  


  


  


Operating income

  

 

10,922

 

  

 

10,336

 

  

 

21,258

 

  

 

13,137

 

Other income (expense), net

                                   

Interest income (expense), net

  

 

432

 

  

 

(7,787

)

  

 

(7,355

)

  

 

(16,932

)

Other, net

  

 

(19

)

  

 

4

 

  

 

(15

)

  

 

(1

)

    


  


  


  


    

 

413

 

  

 

(7,783

)

  

 

(7,370

)

  

 

(16,933

)

    


  


  


  


Income before provision for income taxes

  

 

11,335

 

  

 

2,553

 

  

 

13,888

 

  

 

(3,796

)

Provision for income taxes

  

 

4,418

 

  

 

999

 

  

 

5,417

 

  

 

(1,459

)

Net income (loss)

  

 

6,917

 

  

 

1,554

 

  

 

8,471

 

  

 

(2,337

)

Preferred unit dividends

  

 

—  

 

  

 

(3,155

)

  

 

(3,155

)

  

 

(6,882

)

    


  


  


  


Net income (loss) attributable to common stockholder/unitholders

  

$

6,917

 

  

$

(1,601

)

  

$

5,316

 

  

$

(9,219

)

    


  


  


  


Reconciliation to EBITDA

                                   

Net income (loss)

  

$

6,917

 

  

$

1,554

 

  

$

8,471

 

  

$

(2,337

)

Interest (income) expense, net

  

 

(432

)

  

 

7,787

 

  

 

7,355

 

  

 

16,932

 

Provision for income taxes

  

 

4,418

 

  

 

999

 

  

 

5,417

 

  

 

(1,459

)

Depreciation and amortization

  

 

1,464

 

  

 

4,507

 

  

 

5,971

 

  

 

8,948

 

Restructuring

  

 

—  

 

  

 

—  

 

  

 

—  

 

  

 

1,841

 

    


  


  


  


EBITDA

  

$

12,367

 

  

$

14,847

 

  

$

27,214

 

  

$

23,925

 

    


  


  


  


EBITDA Margin

  

 

30.9

%

  

 

34.6

%

  

 

32.8

%

  

 

38.1

%

Selected Balance Sheet Information

                                   

Cash

           

$

14,419

 

           

$

8,098

 

Senior debt (net of discount)

           

$

281,103

 

           

$

226,434

 

Total debt (net of discount)

           

$

520,771

 

           

$

466,886

 

Senior debt (outstanding face value)

           

$

298,763

 

           

$

237,558

 

Total debt (outstanding face value)

           

$

543,763

 

           

$

482,558