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 June 1, 1999

Wireless fraud detection growth area for Lightbridge

BROOMFIELD — On paper, the 1998 financial performance of Lightbridge Inc. (NASDAQ: LTBG), a Burlington, Mass.-based company with operations in Broomfield, tells a very incomplete story about how well the company was doing behind the scenes.

While profits were heading south, the software provider for telecommunications carriers was gearing up for the tremendous growth in the wireless communications industry. The losses during the year came from charges relating to the purchase of Coral Systems Inc., from Longmont, and its software development team.

Lightbridge made The Business Report’s list of net income losers, showing a loss of $6.8 million in 1998.

“When you look at net income loss of $7 million in 1998 and a loss of $163,000 in 1997, both include one-time charges that distort the performance of Lightbridge,´ said Joe Tibbets, chief financial officer for Lightbridge Inc. “Performance was not as good in 98 as 97. It was a build year and a growth year for Lightbridge where we really needed to make some investments in resources and further opportunities. But it was very much in our plan to invest in those resources.”

Lightbridge, founded in 1991, was known for its credit processing expertise, and had relationships with carriers to provide credit check services and consulting. But to stay in the telecom game, the company decided to offer a broader range of services, including fraud detection and customer retention programs. The software behind some of these services came from the purchase of the R&D side of Coral Systems in late 1997, which brought FraudBuster, a trademarked software that helps carriers identify fraudulent customers.

“We very much have integrated what used to be Coral into Lightbridge and are operating as a single business, including those developments that come through as Coral,” Tibbets said. “They have software that ties into our systems of detecting fraud in wireless carriers. We’re taking that into a next generation fraud prevention product.”

The company recently expanded its operations at its Colorado site by opening a call center at the Interlocken facility for helping carriers qualify and activate new customers. “One of the reasons we did that is there is a terrific labor pool out there, which is appealing to supplement our Massachusetts labor pool,” Tibbets said. “It also gives us two time zones to cover two more hours of operations.”

Since the acquisition of Coral, revenue and net income have risen considerably. First-quarter results from 1999 show revenue at $19.5 million, up 45 percent from $13.3 million in the first quarter of 1998. Income grew to $1.4 million, up from $722,000 for the same period in 1998. “The first quarter of 1999 evidences that we are doing a great job of getting on the other side of those investments,” Tibbets said.

“Another strong quarter and a great start to 1999,´ said President and Chief Executive Pamela Reeve in a release. “We continue to make good progress in establishing our software business and now have greater visibility on opportunities that lie ahead.”

Lightbridge has relationships with leading telecommunications carriers, such as ALLTELL Communications, AT&T Wireless, Omnipoint Communications and Sprint PCS to provide software and services that detect fraudulent users and customers with bad credit, and helps to identify the best customers and keep them around.

“Lightbridge is in a unique position of helping them with those situations,” Tibbets said. “From a credit standpoint, fraud standpoint, most of that is a service, then we license software to the carriers that monitor call activity that helps with the fraud issue and retention issue.”

With 70 employees in Interlocken and growing, Lightbridge is expanding operations into the Far East, South America and in Great Britain. The Massachusetts headquarters employs more than 330 people.

BROOMFIELD — On paper, the 1998 financial performance of Lightbridge Inc. (NASDAQ: LTBG), a Burlington, Mass.-based company with operations in Broomfield, tells a very incomplete story about how well the company was doing behind the scenes.

While profits were heading south, the software provider for telecommunications carriers was gearing up for the tremendous growth in the wireless communications industry. The losses during the year came from charges relating to the purchase of Coral Systems Inc., from Longmont, and its software development team.

Lightbridge made The Business Report’s list of net income losers,…

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