Telegroup, Inc. Announces That Clifford Rees Will Assume Responsibilities of Steven J.
Baumgartner Upon His Departure On January 15, 1999
Fairfield, IA (
Dec. 14, 1998-)
-- Telegroup, Inc. (Nasdaq: TGRP
- news) today announced that, as part of its restructuring and consolidation of the
responsibilities of senior management, Clifford Rees, Chief Executive Officer of the
Company, will assume the responsibilities of Steven J. Baumgartner, President and Chief
Operating Officer of the Company. Steven J. Baumgartner will leave the Company on January
15, 1999. Until that time, Mr. Baumgartner will continue to assist the Company in
discussions with potential strategic partners and other matters. Mr. Rees served as both
Chief Executive Officer and President prior to Mr. Baumgartner joining the Company in
February 1998.
In addition, Douglas A. Neish, Chief Financial Officer of the Company, will
separate from the Company on January 1, 1999. Stan Bierbrier, Treasurer of the Company,
and Jerry Oliver, Controller of the Company, will assume Mr. Neish's responsibilities.
Clifford Rees commented, "I want to thank Steve and Doug for their
contributions to Telegroup.
However, with the simplification of our business plan and need to reduce costs,
Telegroup is down-sizing its senior management. We are convinced that consolidation of
upper management responsibilities will allow us to greatly reduce costs yet effectively
handle Company operations as we continue to implement our restructuring plan. The
Company's recent reductions in force, which have resulted in a decrease in the number of
its employees from 1,050 on October 1, 1998 to 835 employees as of today, have in my view
actually improved operating efficiencies while significantly reducing our costs."
Clifford Rees continued, "We are pursuing a number of opportunities which could
improve the Company's profitability and meet funding needs, including active discussions
with potential strategic partners. Our retail revenue growth continues even with our
restructuring efforts."
Telegroup provides national and international long distance telecommunications
services, serving residential and small and medium-sized business customers in more than
200 countries worldwide. The company also provides value-added wholesale services to over
40 domestic and international telecommunications carriers. Telegroup operates a global,
digital, facilities-based network, the Telegroup Intelligent Global Network (R), which
consists of 25 Nortel GSP and Excel LNX voice switches in 12 countries, 23 Nortel Passport
ATM switches, 6 enhanced services platforms, 26,000 miles of owned and leased capacity on
digital fiber-optic cable links, and leased parallel data transmission capacity.
Telegroup had revenues of $337 million in 1997. This press release contains certain
forward-looking statements, within the meaning of Section 27A of the Securities Act of
1933 and Section 21E of the Securities Exchange Act of 1934, including statements
regarding Telegroup's future operating performance as well as opportunities that will
improve profitability and meet funding needs. Telegroup's actual results might differ
materially from those projected in forward-looking statements as a result of numerous
factors including without limitation, the Company's success in developing its business
plan and acquiring additional financing needed to meet this plan, market competition,
unforeseen operating and technical problems, regulatory uncertainties, possible delays in
the full implementation of liberalization initiatives by foreign governments, foreign
currency fluctuations, and changes in the U.S. and foreign tax laws. Those and other risks
are described in the Company's filings with the Securities and Exchange Commission.
