LCC International to Restate Financial Statements for First Quarter 2005 and Full Year 2004; Company Comments on Its Second Quarter Results

LCC International, Inc. (NASDAQ:LCCI), a global leaderin wireless voice and data turn-key technical consulting services,announced today that the financial statements in its Quarterly Reportson Form 10-Q for the quarters ended September 30, 2004 and March 31,2005 and its Annual Report on Form 10-K for the year ended December31, 2004 will be restated due primarily to certain miscalculations ofrevenue earned from certain of the Company's fixed price contractswith one U.S. customer. As a result, the above-referenced financialstatements, as well as management's assertion on internal controls insuch reports, should no longer be relied upon prior to theirrestatement.

Restatement

During its review of the Company's second quarter results, theCompany determined that revenue for certain contracts with a U.S.customer accounted for under the percentage of completion method hadbeen miscalculated. Based upon the Company's current analysis, therestatement of the revenues would reduce third quarter 2004 revenuesby approximately $2 million, or approximately 4 percent, and fourthquarter 2004 revenues by approximately $4 million, or approximately 10percent. Total year 2004 revenues will be reduced by approximately $6million, or approximately 3 percent. Cost of revenues in each of theperiods will also be reduced. The reported net after-tax loss for thefull year 2004 is expected to increase by approximately $1 million.The reported after-tax loss for the first quarter of 2005 willincrease by approximately $0.2 million. The Company noted that theseestimates are preliminary and have not been audited or reviewed byKPMG LLP and are subject to change as the restatement process iscompleted. The Company hopes to complete the restatement process infour to six weeks, but there can be no assurance that it will befinished by that date.

Peter Deliso, LCC interim chief executive officer said, "While weare disappointed about having to restate our first quarter and 2004financial results, our core business remains sound. The profitimprovement plan we implemented last June has not had its full impact.Our backlog at June 30 was approximately $125 million, and we addedtwo contract wins in July totaling $25 million. Our performance andclient relationships remain strong. We are in an opportunity richenvironment with a robust sales pipeline. Our teams have a renewedfocus on margin improvement and profitable growth. We are a company intransition and have yet to see the full potential."

Bob Waldron, LCC chief financial officer, stated: "Based on areview of the Company's significant U.S. revenue-producing contracts,the miscalculation during the affected periods appears to berestricted to contracts with one customer. The Company's internalauditors have also performed testing on certain of the Company's U.S.revenue-producing contracts and we have not identified additionaladjustments that are needed. In addition to focusing on restating ourfinancial reports, we are in the process of retesting all of our keyinternal controls. We will also be performing internal audits on majorprojects and will be looking at ways to enhance our financialreporting."

Second Quarter Results

The Company at this time is only providing limited financialinformation for the second quarter because results for the periodended June 30, 2005 are affected by the above-mentioned restatement.Due to this effect, the Company anticipates that it will be unable tofile its Form 10-Q for the second quarter on a timely basis.

Second quarter revenues are estimated at approximately $45million. The net after-tax loss for the second quarter of 2005 isestimated at approximately $5 million, or about $.20 per share. Thisis primarily due to lower than anticipated margins in North Americaand a previously announced restructure reserve now estimated at $1.1million. Gross margins for the Company for the second quarter wereapproximately 15%. The Company recorded a gain of $0.6 million relatedto its NextWave settlement, which was offset by a $0.6 million foreigncurrency loss resulting from the continued strengthening of the dollaragainst the Euro and the Pound. The Company recorded estimated foreigntaxes of $0.7 million, but recorded no U.S. tax benefit. Year-to-daterevenues are estimated at approximately $88 million, with theestimated after-tax net loss estimated at approximately $8 million, orabout $.33 per share. The Company noted that these estimates arepreliminary and have not been reviewed by KPMG LLP and are subject tochange as the restatement process is completed. The Company ended thesecond quarter with $14.1 million in cash.

The Company reported backlog at June 30 of approximately $125million as compared to the $120 million the Company reported as ofApril 30.

Conference Call Details

As previously announced, a conference call to discuss theCompany's performance will be held on Tuesday, August 9 at 8:30 a.m.Eastern. Interested parties wishing to participate in the conferencecall should dial +1.617.847.8704. Participants should enter passcode80049330 in order to be connected to the call.

To listen to a live broadcast of the conference call via theInternet, please visit the Investor Relations section of the Company'sweb site located at www.lcc.com. In order to participate in the callvia the Internet, participants will need a computer with speakers andthe Windows(R) Media Player plug-in.

A replay of the call will begin at approximately 10:30 a.m.Eastern on Tuesday, August 9 and will continue until 12 midnightEastern on Wednesday, August 10. To access the replay, please dial+1.617.801.6888 and enter passcode 41524417 to be connected to arecording of the LCC International earnings call.

Beginning Wednesday, August 10, LCC's call to discuss itsfinancial results will be available for review on the Company's website. This function sorts the call by section that enables parties tosave time by only listening to the segments in which they are mostinterested (i.e. opening remarks, financial overview, questions andanswer). To access the August 9th call, go to the Audio Archives pagethat can be found in the Investor Relations section of the Company'sweb site.

About LCC

LCC International, Inc. is a global leader in voice and datadesign, deployment and management services to the wirelesstelecommunications industry. Since 1983, LCC has performed technicalservices for the largest wireless operators in North and SouthAmerica, Europe, The Middle East, Africa and Asia. The Company hasworked with all major access technologies and has participated in thesuccess of some of the largest and most sophisticated wireless systemsin the world. Through an integrated set of technical businessconsulting, training, design, deployment, operations and maintenanceservices, LCC is unique in its ability to provide comprehensiveturnkey services to wireless operators around the world. News andadditional information are available at www.lcc.com.

Statements included in this news release which are not historicalin nature are "forward-looking statements" within the meaning ofSection 21E of the U.S. Securities Exchange Act of 1934 and the U.S.Private Securities Litigation Reform Act of 1995. Forward lookingstatements relate to expectations, beliefs, projections, future plansand strategies, anticipated events or trends and similar expressionsconcerning matters that are not historical facts. These include,without limitation, statements regarding increased demand for theCompany's services; forecasts or opinions regarding anticipatedrevenues, earnings and profits; statements regarding contracts, workor revenue opportunities the Company may secure in the future; andrelated information, all of which are based on current factualinformation and certain assumptions about future events whichmanagement believes to be reasonable at this time. There are manyrisks, uncertainties and other factors that can prevent the Companyfrom achieving its goals or cause the Company's results to differmaterially from those expressed or implied by these forward-lookingstatements including, without limitation, changes in demand for theCompany's services from external factors including general economicconditions or changes in wireless demand or technology affectingnetwork expansion strategies and financing opportunities for theCompany's clients, delays in the award of new work or the progress ofexisting projects, the termination or reduction of existing projectsdue to changes in the financial condition or business strategies ofthe Company's clients, the Company's dependence on hiring andretaining professional staff and key personnel, fluctuations inquarterly results from a variety of internal and external factorsincluding changes in the Company's estimates with respect to thecompletion of fixed-price contracts, lengthy sales cycles especiallywith respect to larger projects that may account for a significantportion of the Company's anticipated revenues, intense competition inthe marketplace especially from competitors with greater financialresources and financing capabilities, and those risk factors describedin LCC International, Inc.'s filings with the Securities and ExchangeCommission, including its most recent Annual Report on Form 10-K andQuarterly Reports on Form 10-Q. The Company generally providesperformance and earnings projections at each quarterly earningsconference call and in specific regulatory filings. These forecastsare as of the date of the call or filing and will include estimatesbased on factual information and assumptions which management believesto be reasonable at that time. In providing projections and otherforward-looking statements, the Company does not make, andspecifically disclaims, any undertaking or obligation to update themat any time in the future or at all to reflect new information, futureevents or otherwise.