iPCS, Inc. Reports First Quarter Financial Results

Company Reaffirms 2009 Outlook
SCHAUMBURG, Ill.--(Business Wire)--
iPCS, Inc. (NASDAQ: IPCS), a PCS Affiliate of Sprint Nextel Corporation, today
reported financial and operational results for its first quarter ended March 31,
2009.

First Quarter 2009 Highlights:

* Total revenue of $136.2 million, compared to $125.7 million for the prior year
quarter.
* Net income of $5.8 million, or $0.34 per share, compared to a net loss of $1.6
million, or $0.09 per share, for the prior year quarter. Net income for the
first quarter includes a $4.3 million gain on the Sprint settlement as
previously announced on March 2, 2009.
* Adjusted EBITDA of $27.7 million, compared to $22.7 million in the prior year
quarter. Included in Adjusted EBITDA for the first quarter is the $4.3 million
gain on the Sprint settlement and approximately $3.7 million in Sprint Nextel
litigation expenses compared to approximately $0.3 million in Sprint Nextel
litigation expenses in the prior year quarter.
* Capital expenditures of $5.4 million, compared to $14.4 million for the prior
year quarter.
* Free cash flow of $16.4 million, compared to negative free cash flow of $3.9
million for the prior year quarter.
* Subscriber activity for the quarter as follows:

* Gross additions of approximately 60,600, compared to 59,200 for the prior year
quarter.
* Net additions of approximately 9,000 in the quarter, compared to 10,700 for
the prior year quarter.
* Monthly churn, net of 30 day deactivations, of approximately 2.3%, compared to
2.3% for the prior year quarter.
* Ending subscribers of approximately 700,100, compared to 640,600 for the prior
year quarter.

"We are quite pleased with our financial results for the quarter. In a
challenging environment, we were able to deliver our first quarter of positive
EPS in company history," remarked Timothy M. Yager, President and CEO of iPCS.
"Our substantial investment in the network over the last several years,
particularly in our 3G, EVDO technology has enabled us to grow our subscriber
base and ARPU, helping drive increased revenue and EBITDA."

"Our strong cash flow, balance sheet and liquidity position are real advantages
for us, allowing us to repurchase nearly $3.0 million of our common stock over
the past two months. While economic conditions and the consumer environment
remain challenging, our first quarter results reinforce our confidence that we
will meet our 2009 objectives and we reaffirm our guidance for 2009," concluded
Yager.

iPCS reaffirms the following full year 2009 guidance:

* Gross additions of 250,000 to 275,000.

* Adjusted EBITDA of $100 million to $120 million, excluding expenses related to
the Sprint Nextel litigation and the $4.3 million gain on the Sprint settlement.

* Capital expenditures of $35 million to $45 million.
* Free cash flow of $15 million to $25 million.

Conference Call to be held today, May 11th, at 11:00am ET (10:00am CT)

The Company will conduct a conference call to discuss its financial and
subscriber results for the first quarter on Monday, May 11, 2009 at 11:00 a.m.
Eastern Time (10:00 a.m. Central Time). To listen to the call, dial
1-800-632-2975 at least five minutes before the conference call begins and
reference the "iPCS Earnings Conference Call." Those calling in from
international locations should dial 973-935-8755. A replay of the call will be
available beginning at 12:00 p.m. Eastern Time on May 11, 2009. To access the
replay, dial 1-800-642-1687 using a pass code of 95435269. To access the replay
from international locations, dial 706-645-9291 and use the same pass code. The
call will also be webcast and can be accessed at the Investor Relations page of
the iPCS website at www.ipcswirelessinc.com. Replay of the webcast and the call
will be available through midnight on May 18, 2009.

About iPCS, Inc.

iPCS, through its operating subsidiaries, is a Sprint PCS Affiliate of Sprint
Nextel Corporation with the exclusive right to sell wireless mobility
communications network products and services under the Sprint brand in 81
markets including markets in Illinois, Michigan, Pennsylvania, Indiana, Iowa,
Ohio and Tennessee. The territory includes key markets such as Grand Rapids
(MI), Fort Wayne (IN), the Tri-Cities region of Tennessee (Johnson City,
Kingsport and Bristol), Scranton (PA), Saginaw-Bay City (MI), Central Illinois
(Peoria, Springfield, Decatur, and Champaign) and the Quad Cities region of
Illinois and Iowa (Bettendorf and Davenport, IA, and Moline and Rock Island,
IL). As of March 31, 2009, iPCS's licensed territory had a total population of
approximately 15.1 million residents, of which its wireless network covered
approximately 12.5 million residents, and iPCS had approximately 700,100
subscribers. iPCS is headquartered in Schaumburg, Illinois. For more
information, please visit iPCS's website at www.ipcswirelessinc.com.

Definitions of Operating and Non-GAAP Financial Measures

iPCS provides readers financial measures calculated using generally accepted
accounting principles ("GAAP") and other measures which are derived from GAAP
("Non-GAAP Financial Measures"). These financial measures reflect conventions or
standard measures of liquidity, profitability or performance commonly used by
the investment community in the telecommunications industry for comparability
purposes. These financial measures are a supplement to GAAP financial measures
and should not be considered as an alternative to, or more meaningful than, GAAP
financial measures.

The Non-GAAP Financial Measures and non-financial terms used in this release
include the following:

* Gross subscriber additions for the period represent the number of new
activations during the period (excluding transfers into our territory).
* New subscriber additions for the period represented is calculated as the gross
subscriber additions in the period less the number of subscribers deactivated
plus the net subscribers transferred in or out of our markets during the period.

* Churn is a measure of the average monthly rate at which subscribers based in
our territory deactivate service on a voluntary or involuntary (credit-related)
basis. We calculate average monthly churn based on the number of subscribers
deactivated during the period (net of those who deactivate within 30 days of
activation and excluding transfers out of our territory) as a percentage of our
average monthly subscriber based during the period divided by the number of
months during the period.
* Adjusted EBITDA represents earnings before interest, taxes, depreciation and
amortization as adjusted for gain or loss on the disposal of property and
equipment, stock-based compensation expense and debt extinguishment costs.
Adjusted EBITDA is a measure used by the investment community in the
telecommunications industry for comparability and is not intended to represent
the results of our operations in accordance with GAAP.
* ARPU, or average revenue per user, is a measure of the average monthly service
revenue earned from subscribers based in our territory. This measure is
calculated by dividing subscriber revenue (ARPU) or subscriber revenue plus
roaming revenue (ARPU including roaming) in our consolidated statement of
operations by the number of our average monthly subscribers during the period
divided by the number of months in the period.
* CCPU, or cash cost per user, is a measure of the monthly costs to operate our
business on a per subscriber basis consisting of costs of service and
operations, and general and administrative expenses in our consolidated
statement of operations, plus handset subsidies on equipment sold to existing
subscribers, less stock-based compensation expense. These costs are divided by
the number of our average monthly subscribers during the period divided by the
number of months in the period.
* CPGA, or cost per gross addition, is a measure of the average cost we incur to
add a new subscriber in our territory. These costs include handset subsidies on
new subscriber activations, commissions, rebates and other selling and marketing
costs. We calculate CPGA by dividing (a) the sum of cost of products sold less
product sales revenue associated with transactions with new subscribers, and
selling and marketing expense, net of stock-based compensation expense, during
the measurement period, by (b) the total number of subscribers activated in our
territory during the period.
* Licensed Population represents the number of residents in the markets in our
territory for which we have an exclusive right to provide wireless mobility
communications services under the Sprint brand name. The number of residents
located in our territory does not represent the number of wireless subscribers
that we serve or expect to serve in our territory.
* Covered Population represents the number of residents covered by our portion
of the wireless network of Sprint. The number of residents covered by our
network does not represent the number of wireless subscribers that we serve or
expect to serve in our territory.
* Free Cash Flowis defined as the net increase (decrease) in cash and cash
equivalents less the change in debt (including payment in kind, or "PIK"
interest), proceeds from the exercise of common stock options or the issuance or
repurchase of common stock and other financing activities, net. This non-GAAP
measure should be used in addition to, but not as a substitute for, the analysis
provided in the statement of cash flows. We believe that Free Cash Flow provides
useful information to investors, analysts and our management about the cash
generated by our core operations after interest and dividends and our ability to
fund scheduled debt maturities and other financing activities, including
discretionary refinancing and retirement of debt, the repurchase of common stock
and purchase or sale of investments.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of
1995

Statements in this press release regarding iPCS's business which are not
historical facts are "forward-looking statements." Forward-looking statements
generally can be identified by the use of forward-looking terminology such as
"may," "will," "expect," "intend," "estimate," "anticipate," "believe" or
"continue" or the negative thereof or variations thereon or similar terminology.
Such statements are based upon the current beliefs and expectations of
management and are subject to significant risks and uncertainties. A variety of
factors could cause actual results to differ materially from those anticipated
in iPCS's forward-looking statements, including, but not limited to, the
following factors: (1) iPCS's dependence on its affiliation with Sprint; (2) the
final outcome of iPCS's litigation with Sprint concerning the scope of iPCS's
exclusivity under its affiliation agreements; (3) changes in Sprint's
affiliation strategy; (4) changes in Sprint's ability to devote as much of its
personnel and resources to the remaining Sprint Affiliates of Sprint Nextel; (5)
iPCS's reliance on Sprint's internal support systems and its related execution
of back office activities, including customer care, billing and back office
support; (6) changes in iPCS's customer default rates and/or in the level of bad
debt expense; (7) changes or advances in technology; (8) changes in Sprint's
national service plans, products and services or its fee structure with iPCS;
(9) adverse changes in the amounts of, and the relationship between, roaming
revenue iPCS receives and roaming expense iPCS pays; (10) iPCS's reliance on the
timeliness, accuracy and sufficiency of financial and other data and information
received from Sprint; (11) difficulties in network construction, expansion and
upgrades; (12) increased competition in iPCS's markets; (13) iPCS's dependence
on independent third parties for a sizable percentage of its sales; and (14) the
depth and duration of the economic downturn in the United States and its effect
on our vendors, distribution partners and customers. For a detailed discussion
of these and other cautionary statements and factors that could cause actual
results to differ from iPCS's forward-looking statements, please refer to iPCS's
filings with the SEC, especially in the "risk factors" section of the Annual
Report on Form 10-K for the fiscal year ended December 31, 2008 and our Form Q
for the quarter ended March 31, 2009 to be filed following the earnings call
referenced in this press release.Investors and analysts should not place undue
reliance on forward-looking statements. The forward-looking statements in this
document speak only as of the date of the document and iPCS assumes no
obligation to update the forward-looking statements or to update the reasons why
actual results could differ from those contained in the forward-looking
statements

iPCS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(In thousands, except share and per share amounts)

March 31, December 31,
2009 2008

Assets
Current Assets:
Cash and cash equivalents $ 70,696 $ 55,940
Accounts receivable, net 38,356 37,859
Receivable from Sprint 27,509 25,623
Inventories, net 5,412 5,465
Assets held for sale 389 389
Prepaid expenses 6,769 7,223
Other current assets 83 63
Total current assets 149,214 132,562
Property and equipment, net 156,418 162,014
Financing costs, net 6,075 6,419
Deferred customer activation costs 3,554 3,816
Intangible assets, net 88,308 90,602
Goodwill 141,783 141,783
Other assets 418 416
Total assets $ 545,770 $ 537,612

Liabilities and Stockholders' Deficiency
Current Liabilities:
Accounts payable $ 4,833 $ 5,051
Accrued expenses 17,504 18,337
Payable to Sprint 45,536 41,067
Deferred revenue 14,129 13,410
Accrued interest 4,856 5,519
Current maturities of long-term debt and capital lease obligations 39 37
Total current liabilities 86,897 83,421
Deferred customer activation fee revenue 3,554 3,816
Interest rate swap 15,459 16,621
Other long-term liabilities 6,239 6,551
Long-term debt and capital lease obligations, excluding current maturities 475,392 475,401
Total liabilities 587,541 585,810

Stockholders' Deficiency:
Preferred stock, par value $.01 per share; 25,000,000 shares authorized; none issued - -
Common stock, par value $.01 per share; 75,000,000 shares authorized, 17,264,052 and 173 172
17,163,221 shares issued, respectively
Additional paid-in-capital 168,645 167,531
Accumulated deficiency (193,508 ) (199,280 )
Accumulated other comprehensive loss (15,459 ) (16,621 )
Treasury stock, at cost; 167,163 and 0 shares, respectively (1,622 ) -
Total stockholders' deficiency (41,771 ) (48,198 )
Total liabilities and stockholders' deficiency $ 545,770 $ 537,612

iPCS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(Dollars in thousands, except share data)

For the Three Months Ended

March 31, 2009 March 31, 2008

Revenue:
Service revenue $ 103,981 $ 92,099
Roaming revenue 27,620 30,144
Equipment and other 4,563 3,415
Total revenue 136,164 125,658
Operating Expense:
Cost of service and roaming 72,150 68,184
Cost of equipment 16,212 11,663
Selling and marketing 16,650 17,859
General and administrative 8,881 7,088
Gain on Sprint Settlement (4,273 ) -
Depreciation 10,286 11,661
Amortization of intangible assets 2,294 2,294
Loss on disposal of property and equipment, net 99 10
Total operating expense 122,299 118,759
Operating income 13,865 6,899
Interest income 86 720
Interest expense (8,034 ) (8,915 )
Other income, net 5 15
Income (loss) before provision for income tax 5,922 (1,281 )
Provision for income tax 150 325
Net income (loss) $ 5,772 $ (1,606 )

Basic and diluted income (loss) per share of common stock:
Income (loss) available to common stockholders $ 0.34 $ (0.09 )

Weighted average basic and diluted common shares 17,155,931 17,136,043
outstanding

iPCS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)

For the Three Months Ended

March 31, 2009 March 31, 2008

Cash Flows from Operating Activities:
Net income (loss) $ 5,772 $ (1,606 )
Adjustments to reconcile net income (loss) to net cash flows from operating activities:
Loss on disposal of property and equipment 99 10
Depreciation and amortization 12,580 13,955
Non-cash interest expense 344 344
Stock-based compensation expense 1,120 1,841
Provision for doubtful accounts 3,217 5,384
Changes in assets and liabilities:
Accounts receivable (3,713 ) (4,176 )
Receivable from Sprint (1,887 ) 2,952
Inventories, net 54 (2,467 )
Prepaid expenses, other current and long-term assets 693 451
Accounts payable, accrued expenses and other long-term liabilities (1,552 ) (4,218 )
Payable to Sprint 4,469 (2,331 )
Deferred revenue 457 341
Net cash flows provided by operating activities 21,653 10,480
Cash Flows from Investing Activities:
Purchases of property and equipment (5,356 ) (14,406 )
Proceeds from disposition of property and equipment 123 19
Net cash flows used in investing activities (5,233 ) (14,387 )
Cash Flows from Financing Activities:
Payments on capital lease obligations (9 ) (7 )
Proceeds from the exercise of stock options - 137
Payment of special cash dividend (29 ) (36 )
Repurchase of common stock (1,626 ) -
Net cash flows (used in) provided by financing activities (1,664 ) 94
Net increase (decrease) in cash and cash equivalents 14,756 (3,813 )
Cash and cash equivalents at beginning of period 55,940 77,599
Cash and cash equivalents at end of period $ 70,696 $ 73,786

Supplemental disclosure of cash flow information - cash paid for interest $ 8,334 $ 9,136

(net of amount capitalized)
Supplemental disclosure for non-cash investing activities:
Accounts payable and accrued expenses incurred for the acquisition of property, 1,579 8,542
equipment and construction in progress

iPCS, INC. AND SUBSIDIARIES
(UNAUDITED)
(In thousands)
Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA For the Three Months Ended
March 31, 2009 March 31, 2008

Net income (loss) $ 5,772 $ (1,606 )
Net interest expense 7,948 8,195
Provision for income tax 150 325
Depreciation and amortization 12,580 13,955
Stock-based compensation expense 1,120 1,841
Loss on disposal of property and equipment, net 99 10
Adjusted EBITDA $ 27,699 $ 22,720

Free Cash Flow For the Three Months Ended
March 31, 2009 March 31, 2008
Net increase (decrease) in cash and cash equivalents $ 14,756 $ (3,813 )
Add back: Cash Flows from Financing Activities
Payments on capital lease obligations 9 7
Proceeds from the exercise of stock options - (137 )
Payment of special cash dividend 29 36
Repurchases of common stock 1,626 -
Free cash flow $ 16,420 $ (3,907 )

iPCS, INC. AND SUBSIDIARIES
(UNAUDITED)
Summary of Operating Statistics

For the Three Months Ended
March 31, 2009 March 31, 2008

Subscribers
Gross Additions 60,600 59,200
Net Additions 9,000 10,700
Total Subscribers 700,100 640,600
Churn, net 2.3 % 2.3 %

Average Revenue Per User, Monthly
Including Roaming $ 63 $ 64
Without Roaming $ 50 $ 48

Cash Cost Per User, Monthly
Including Roaming $ 40 $ 40
Without Roaming $ 31 $ 31

Cost Per Gross Addition $ 402 $ 399

Licensed Population (Millions) 15.1 15.1
Covered Population (Millions) 12.5 12.0
Cell Sites 1,912 1,696

iPCS, INC. AND SUBSIDIARIES
(UNAUDITED)
(Dollars in thousands except per user and per add amounts)
Reconciliation of Non-GAAP Financial Measures

For the Three Months Ended
March 31, 2009 March 31, 2008
ARPU
Service revenue $ 103,981 $ 92,099
Roaming revenue 27,620 30,144
Total service revenue $ 131,601 $ 122,243
Average subscribers 695,400 633,800

Average revenue per user including roaming, monthly $ 63 $ 64
Average revenue per user without roaming, monthly $ 50 $ 48

CCPU
Cost of service and roaming $ 72,150 $ 68,184
plus: General and administrative 8,881 7,088
less: Stock-based compensation expense (984 ) (1,628 )
less: Retail equipment upgrade revenue (1,273 ) (503 )
plus: Retail equipment cost of upgrades 5,091 2,770
Total cash costs including roaming $ 83,865 $ 75,911
less: Roaming expense (19,261 ) (16,526 )
Total cash costs without roaming $ 64,604 $ 59,385
Average subscribers 695,400 633,800

Cash cost per user, monthly $ 40 $ 40
Cash cost per user without roaming, monthly $ 31 $ 31

CPGA
Selling and marketing $ 16,650 $ 17,859
less: Stock-based compensation expense (136 ) (213 )
less: Equipment revenue, net of upgrade revenue (3,275 ) (2,900 )
plus: Equipment costs, net of cost of upgrades 11,121 8,893
CPGA Costs $ 24,360 $ 23,639
Gross additions 60,600 59,200

Cost per gross addition $ 402 $ 399

Investors:
Financial Dynamics
Nathan Elwell, 312-553-6706

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