OVERLAND PARK, Kan., Feb. 26, 2009 (GLOBE NEWSWIRE) -- TMNG Global (Nasdaq:TMNG), a leading provider of management consulting and software solution services to the global communications, media and entertainment industries, reported financial results for its 2008 fourth quarter (a fourteen week quarter) and full year ended January 3, 2009.

Revenues in the fourth quarter of 2008 were $14.4 million compared to revenues of $20.8 million in the fourth quarter of 2007 and $17.5 million in the third quarter of 2008. Revenue comparisons were affected by reduced customer spending in light of global macroeconomic trends, as well as unfavorable foreign exchange impact. During the quarter, TMNG Global's gross margin was 39.8%, compared with 47.4% in the fourth quarter of 2007. The decrease in gross margin was primarily due to lower utilization of consulting personnel on billable projects in the fourth quarter of 2008, especially during the December holiday season, as well as the mix of consulting engagements.

TMNG Global reported a net loss of ($5.0) million or ($0.14) per diluted share for the fourth quarter of 2008, compared to net income of $480,000, or $0.01 per diluted share in last year's fourth quarter. The fourth quarter net loss included a goodwill impairment charge of $4.3 million and a charge related to the valuation of the Company's auction rate securities of $280,000. All previously disclosed auction rate security valuation adjustments were recorded within other comprehensive income. Excluding these items and adjusting for the after tax impact of non-cash charges, including depreciation, amortization and share-based compensation of $1.1 million, TMNG Global generated non-GAAP adjusted net income of $679,000, or $0.02 per diluted share, during the fourth quarter of 2008. The comparable non-GAAP adjusted net income for the fourth quarter of fiscal 2007, which also included an adjustment for expenses related to the review of the Company's option granting practices, was $2.7 million, or $0.07 per diluted share.

"While challenging, 2008 was a productive year for TMNG, demonstrated by our year-over-year revenue growth, significant customer wins, and the successful and seamless integration of our recent acquisitions. We also maintained profitability on a cash earnings basis despite the pronounced macroeconomic difficulties that emerged in the second half of the year," said Richard Nespola, TMNG Global Chairman and CEO. "As the economic crisis unfolded, we took quick and decisive action by managing our business to lower levels of customer spending while focusing on the Company's ability to deliver value. We expect the 2009 environment to remain challenging. Therefore, we have focused on securing longer term commitments from our larger customers while continuously aligning our overhead with the realities of the economic climate. Our consulting and software offerings play into important client needs in difficult times by assisting service providers in maximizing the efficiency of their platforms while ensuring the integrity of their revenue stream. These core competencies combined with our healthy balance sheet and flexible operating model should serve us well until visibility improves."

Financial Results for the Fifty-Three Weeks Ended January 3, 2009

For the fifty-three weeks ended January 3, 2009, revenues increased to $74.0 million, compared with $71.9 million in the fifty-two week period ended December 29, 2007. TMNG Global's gross margin was 44.6% for the year ended January 3, 2009, compared with 46.8% for the prior year.

Net loss for the fifty-three weeks ended January 3, 2009 was ($14.8) million or ($0.42) per diluted share, compared with a net loss of ($2.3) million or ($0.07) per diluted share for the fifty-two weeks ended December 29, 2007. GAAP results in 2008 include goodwill and intangible asset impairment charges of $14.5 million and the auction rate securities valuation adjustment of $280,000. Non-GAAP adjusted net income, adjusted for the after tax impact of non-cash expenses, including the impairment charges, ARS write-down, depreciation and amortization expense, and share-based compensation, was approximately $6.1 million, or $0.17 per diluted share, for the fifty-three weeks ended January 3, 2009. The comparable non-GAAP adjusted net income for the fifty-two weeks ended December 29, 2007 was $5.0 million, or $0.14 per diluted share, which also excluded expenses related to the review of the Company's option granting practices and a gain on settlement of a foreign tax withholding dispute.

For the fifty-three weeks ended January 3, 2009, cash flow from operations was $6.1 million, compared to $1.4 million in the fifty-two week year-ago period.

In addition to reporting net income (loss) and net income (loss) per share on a GAAP basis, this press release contains certain non-GAAP adjustments which are described in the schedule entitled "Reconciliation of GAAP Net (Loss) Income to Non-GAAP Adjusted Net Income" that accompanies this press release. In making these non-GAAP adjustments, the Company took into account certain non-cash expenses and benefits, including tax effects as applicable, and the impact of certain items that are generally not expected to be on-going in nature. Management believes the exclusion of these items provides a useful basis for evaluating underlying business performance, but should not be considered in isolation and is not in accordance with, or a substitute for, evaluating Company performance utilizing GAAP financial information. The Company believes that providing such adjusted results allows investors and other users of the Company's financial statements to better understand TMNG Global's comparative operating performance for the periods presented.

TMNG Global's management uses the non-GAAP financial measure in its own evaluation of the Company's performance, particularly when comparing performance to the prior year's period. TMNG Global's non-GAAP measure may differ from similar measures by other companies, even if similar terms are used to identify such measures. Although TMNG Global's management believes the non-GAAP financial measure is useful in evaluating the performance of its business, TMNG Global acknowledges that items excluded from such measure have a material impact on the Company's net income (loss) and net income (loss) per share calculated in accordance with GAAP. Therefore, management uses non-GAAP measures in conjunction with GAAP results. Investors and other users of our financial information should also consider the above factors when evaluating TMNG Global's results.

Conference Call

The Company will host a conference call at 5:00 p.m. ET today to discuss 2008 fourth quarter and full year results. Investors can access the conference call via a live webcast on the Company's website, www.tmng.com, or by dialing 800-860-2442 in the United States or 412-858-4600 from international locations and referencing the TMNG Global call. A replay of the conference call will be archived on the Company's website for one week. Additionally, a replay of the call will be available beginning February 27, 2009 at 9:00 a.m. ET by dialing 877-344-7529, pass code 427815, through March 5, 2009.

About TMNG Global

TMNG Global (Nasdaq:TMNG) is a leading provider of professional services to the converging communications industry. Its companies, TMNG, CSMG, and Cartesian, and its base of over 500 consultants, have provided strategy, management, and technical consulting, as well as products and services, to more than 1200 communications service providers, entertainment, media, and technology companies and financial services firms worldwide. The company is headquartered in Overland Park, Kansas, with offices in Boston, Chicago, London, New Jersey, New York, Shanghai and Washington, D.C.

Cautionary Statement Regarding Forward Looking Information

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. In particular, any statements that do not relate to historical or current facts constitute forward-looking statements, including any statements contained herein regarding expectations with respect to the Company's future business, financial condition and results of operations. Forward-looking statements are subject to known and unknown risks, uncertainties, and contingencies, many of which are beyond the Company's control, which may cause actual results, performance, or achievements to differ materially from those projected or implied in such forward-looking statements. Factors that might affect actual results, performance, or achievements include, among other things, the ability of the Company to successfully integrate recent acquisitions, conditions in the telecommunications industry, overall economic and business conditions (including the recent worsening of conditions in the credit markets and in general economic conditions), the demand for the Company's services (including the recent slowing of client decisions on proposals and project opportunities along with scope reduction of existing projects), the level of cash and non-cash expenditures incurred by the Company, technological advances and competitive factors in the markets in which the Company competes, and the factors described in this press release and in TMNG Global's filings with the Securities and Exchange Commission, including the risks described in TMNG Global's periodic reports filed with the SEC, including, but not limited to, "Cautionary Statement Regarding Forward Looking Information" under Part I of its Annual Report on Form 10-K for the fiscal year ended December 29, 2007 and subsequent periodic reports containing updated disclosures of such risks. These filings are available at the SEC's web site at www.sec.gov. TMNG Global does not intend to update these forward-looking statements and undertakes no duty to any person to provide any such update under any circumstances.

               THE MANAGEMENT NETWORK GROUP, INC.
         CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
              (In thousands, except per share data)
                           (unaudited)

                                                    Fifty-    Fifty-
                               Fourteen  Thirteen   Three     Two
                                Weeks     Weeks     Weeks     Weeks
                                Ended     Ended     Ended     Ended
                               --------  --------  --------  --------
                                Jan. 3,  Dec. 29,   Jan. 3,  Dec. 29,
                                 2009      2007      2009      2007
                               --------  --------  --------  --------

 Revenues                      $ 14,397  $ 20,828  $ 74,042  $ 71,875

 Cost of services (includes
  net non-cash share-based
  compensation expense of $98
  and $178 for the fourteen weeks
  ended January 3, 2009 and
  the thirteen weeks ended
  December 29, 2007, respectively,
  and $545 and $302 for the
  fifty-three weeks ended
  January 3, 2009 and the
  fifty-two weeks ended
  December 29, 2007,
  respectively)                   8,670    10,955    41,055   238,263
                               --------  --------  --------  --------

 Gross Profit                     5,727     9,873    32,987    33,612

 Operating Expenses:

  Selling, general and
   administrative (includes
   net non-cash share-based
   compensation expense of $295
   and $556 for the fourteen
   weeks ended January 3, 2009
   and the thirteen weeks ended
   December 29, 2007, respectively,
   and $1,272 and $1,145 for the
   fifty-three weeks ended
   January 3, 2009 and the
   fifty-two weeks ended
   December 29, 2007,
   respectively)                  6,251     8,945    30,124    31,723
  Special Committee investigation             109               2,560
  Intangible asset amortization     537     1,463     3,916     3,612
  Goodwill, intangible and
   long-lived asset impairment    4,286              14,451
                               --------  --------  --------  --------
 Total operating expenses        11,074    10,517    48,491    37,895
                               --------  --------  --------  --------
 Loss from operations            (5,347)     (644)  (15,504)   (4,283)
 Other (expense) income:
   Interest income, net             166       361       916     1,546
   Other, net                      (267)               (243)      452
                               --------  --------  --------  --------
     Total other (expense)
      income                       (101)      361       673     1,998
                               --------  --------  --------  --------
 Loss before income tax
  provision                      (5,448)     (283)  (14,831)   (2,285)
 Income tax benefit
  (provision)                       450       763         6       (52)
                               --------  --------  --------  --------
 Net (loss) income             $ (4,998) $    480  $(14,825) $ (2,337)
                               ========  ========  ========  ========

 (Loss) income per common share:

 Basic and diluted             $  (0.14) $   0.01  $  (0.42) $  (0.07)
                               ========  ========  ========  ========

 Weighted average shares
  used in calculation of
  net (loss) income per
  common share:
 Basic                           34,736    36,124    35,445    35,868
                               ========  ========  ========  ========
 Diluted                         34,736    36,402    35,445    35,868
                               ========  ========  ========  ========


                   THE MANAGEMENT NETWORK GROUP, INC.
                  CONDENSED CONSOLIDATED BALANCE SHEETS
                             (In thousands)
                               (unaudited)

                                                    Jan. 3,  Dec. 29,
                                                     2009      2007
                                                   --------  --------
     ASSETS
 CURRENT ASSETS:
  Cash and cash equivalents                        $  5,956  $ 10,022
  Short-term investments                                       17,125
  Receivables:
   Accounts receivable                                8,247    13,044
   Accounts receivable -- unbilled                    4,540     7,804
                                                   --------  --------
                                                     12,787    20,848
   Less: Allowance for doubtful accounts               (379)     (562)
                                                   --------  --------
  Net receivables                                    12,408    20,286
  Prepaid and other current assets                    1,653     1,763
                                                   --------  --------
     Total current assets                            20,017    49,196

  Property and equipment, net                         1,801     1,784
  Goodwill                                            6,240    13,365
  Licenses and identifiable intangible assets, net    4,842    11,605
  Noncurrent investments                             13,404
  Other assets                                          410       616
                                                   --------  --------
 Total Assets                                      $ 46,714  $ 76,566
                                                   ========  ========

     LIABILITIES AND STOCKHOLDERS' EQUITY
 CURRENT LIABILITIES:
  Trade accounts payable                           $  1,138  $  1,927
  Accrued payroll, bonuses and related expenses       4,053     5,038
  Other accrued liabilities                           2,907     2,466
  Income tax liabilities                                103       861
  Deferred revenue                                      476     3,554
  Accrued contingent consideration                      161     1,616
  Unfavorable and other contractual obligations         697     1,668
                                                   --------  --------
     Total current liabilities                        9,535    17,130

 NONCURRENT LIABILITIES:
  Deferred income tax liabilities                       115     1,368
  Unfavorable and other contractual obligations       1,062     1,716
  Noncurrent borrowings                               1,485
  Other liabilities                                     891       524
                                                   --------  --------
     Total noncurrent liabilities                     3,553     3,608

 Total stockholders' equity                          33,626    55,828
                                                   --------  --------
 Total Liabilities and Stockholders' Equity        $ 46,714  $ 76,566
                                                   ========  ========


               THE MANAGEMENT NETWORK GROUP, INC.
            RECONCILIATION OF GAAP NET (LOSS) INCOME
                TO NON-GAAP ADJUSTED NET INCOME
                          (unaudited)
             (in thousands, except per share data)


                                                   Fifty-    Fifty-
                               Fourteen  Thirteen   Three     Two
                                Weeks     Weeks     Weeks     Weeks
                                Ended     Ended     Ended     Ended
                               ------------------  ------------------
                                Jan. 3,  Dec. 29,   Jan. 3,  Dec. 29,
                                 2009      2007      2009      2007
                               --------  --------  --------  --------

 Reconciliation of GAAP net
  (loss) income to non-GAAP
  adjusted net income:
  GAAP net (loss) income       $ (4,998) $    480  $(14,825) $ (2,337)
                               --------  --------  --------  --------

  Special Committee
   investigation                              109               2,560
  Goodwill, intangible and
   long-lived asset impairment    4,286              14,451
  Auction rate securities
   impairment                       280                 280
  Depreciation and amortization     966     1,814     5,385     4,872
  Gain on settlement of foreign
   withholding tax dispute                                        (452)
  Non-cash share based
   compensation expense             393       734     1,817     1,447
  Tax effect of applicable
   non-GAAP adjustments            (248)     (462)     (965)   (1,078)
                               --------  --------  --------  --------
   Adjustments to GAAP net
    (loss) income                 5,677     2,195    20,968     7,349

                               --------  --------  --------  --------
 Non-GAAP adjusted net income  $    679  $  2,675  $  6,143  $  5,012
                               ========  ========  ========  ========


 Reconciliation of GAAP net
  (loss) income per diluted
  common share to non-GAAP
  adjusted net income per
  diluted common share:
  GAAP net (loss) income per
   diluted common share        $  (0.14) $   0.01  $  (0.42) $  (0.07)
                               --------  --------  --------  --------

  Special Committee investigation            0.00                0.07
  Goodwill, intangible and
   long-lived asset impairment     0.12                0.41
  Auction rate securities
   impairment                      0.01                0.01
  Depreciation and amortization    0.03      0.05      0.15      0.14
  Gain on settlement of foreign
   withholding tax dispute                                      (0.01)
  Non-cash share based
   compensation expense            0.01      0.02      0.05      0.04
  Tax effect of applicable
   non-GAAP adjustments           (0.01)    (0.01)    (0.03)    (0.03)
                               --------  --------  --------  --------
   Adjustments to GAAP net
    (loss) income per diluted
    common share                   0.16      0.06      0.59      0.21

                               --------  --------  --------  --------
 Non-GAAP adjusted net income
  per diluted common share     $   0.02  $   0.07  $   0.17  $   0.14
                               ========  ========  ========  ========

 Weighted average shares used
  in calculation of diluted
  net (loss) income per
  common share                   34,736    36,402    35,445    35,868
                               ========  ========  ========  ========

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