x

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2003

OR

o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

For the transition period from _____ to _____

COMMISSION FILE NUMBER

 333-88168-01

 333-88168

TSI TELECOMMUNICATION HOLDINGS, LLC

TSI TELECOMMUNICATION SERVICES INC.

(Exact name of registrant as specified in its charter)

Delaware

30-0041664

Delaware

06-1262301

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

201 N. Franklin Street, Suite 700 Tampa, Fl 33602

(Address of principal executive office)

(Zip code)

(813) 273-3000

(Registrant’s telephone number, including area code)

Yes   x

No   o

Yes   o

No   x

Page

PART I:

FINANCIAL INFORMATION

ITEM 1:

Condensed Consolidated Financial Statements

Condensed Consolidated Balance Sheets as of December 31, 2002 and March 31, 2003 (unaudited)

3

Condensed Consolidated Statements of Operations for the period from January 1, 2002 to February 13, 2002 (unaudited), the period from February 14, 2002 to March 31, 2002 (unaudited) and the three months ended March 31, 2003 (unaudited)

4

Condensed Consolidated Statements of Cash Flows for the period from January 1, 2002 to February 13, 2002 (unaudited), the period from February 14, 2002 to March 31, 2002 (unaudited) and the three months ended March 31, 2003 (unaudited)

5

Notes to Condensed Consolidated Financial Statements-- March 31, 2003 (unaudited)

6

ITEM 2:

Management’s Discussion and Analysis of Financial Condition and Results of Operations

13

ITEM 3:

Quantitative and Qualitative Disclosures about Market Risk

21

ITEM 4:

Controls and Procedures

22

PART II:

OTHER INFORMATION

ITEM 1:

Legal Proceedings

22

ITEM 2:

Changes in Securities and Use of Proceeds

22

ITEM 3:

Defaults Upon Senior Securities

22

ITEM 4:

Submission of Matters to a Vote of Security Holders

22

ITEM 5:

Other Information

22

ITEM 6:

Exhibits and Reports on Form 8-K

22

SIGNATURES

24

CERTIFICATIONS

25

EXHIBIT INDEX

E-1

December 31,
2002

March 31,
2003
(unaudited)

ASSETS

Current assets:

Cash

$

39,582

$

8,098

Accounts receivable, net of allowances of $2,405 and $2,678, respectively

54,610

45,948

Deferred tax assets

2,110

1,833

Prepaid and other current assets

3,827

3,858

Total current assets

100,129

59,737

Property and equipment, net

33,353

30,961

Capitalized software, net

73,914

71,731

Deferred finance costs, net

16,015

14,095

Goodwill

330,559

330,559

Identifiable intangibles:

Customer contract, net

13,594

12,548

Trademark

51,700

51,700

Cutomer base, net

207,124

204,434

Total assets

$

826,388

$

775,765

LIABILITIES AND UNITHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

8,089

$

9,481

Accrued payroll and related benefits

6,672

3,954

Accrued interest

14,608

6,410

Other accrued liabilities

11,693

12,355

Revolving line of credit

—  

1,500

Current portion of Term Note B, net of discount

52,736

19,891

Total current liabilities

93,798

53,591

Long-term liabilities:

Deferred taxes

10,983

9,269

Subordinated Notes, net of discount

240,257

240,452

Term Note B, net of discount

211,607

205,043

Total long-term liabilities

462,847

454,764

Unitholders’ equity:

Class A Preferred Units-an unlimited number authorized, none issued or or outstanding

—  

—  

Class B Preferred Units-an unlimited number authorized, 252,367.50 units issued and outstanding at March 31, 2003; liquidation preference of $252,367

252,367

252,367

Common Units-an unlimited number authorized, 89,099,099 units issued and 88,963,964 outstanding at March 31, 2003

2,967

2,967

Retained earnings

14,418

12,081

Less cost of treasury units (135,135 common units at March 31, 2003)

(9

)

(5

)

Total unitholders’ equity

269,743

267,410

Total liabilities and unitholders’ equity

$

826,388

$

775,765

Predecessor
Period from
January 1 to
February 13, 2002

Successor
Period from
February 14 to
March 31, 2002

Successor
Three Months
Ended
March 31, 2003

Revenues (including $15,838, $0 and $0 from affiliates, respectively)

$

39,996

$

42,920

$

62,799

Costs and expenses:

Cost of operations (including $4,419, $0 and $0 from affiliates, respectively)

20,655

18,616

26,103

Sales and marketing

2,614

3,135

4,877

General and administrative (including $443, $0 and $0 from affiliates, respectively)

3,001

6,326

7,524

Provision for uncollectible accounts

1,340

—  

369

Depreciation and amortization

1,464

4,507

8,948

Restructuring

—  

—  

1,841

29,074

32,584

49,662

Operating income

10,922

10,336

13,137

Other income (expense), net:

Interest income (including $221, $0 and $0 from affiliates, respectively)

432

140

262

Interest expense

—  

(7,927

)

(17,194

)

Other, net

(19

)

4

(1

)

413

(7,783

)

(16,933

)

Income (loss) before provision for income taxes

11,335

2,553

(3,796

)

Provision (benefit) for income taxes

4,418

999

(1,459

)

Net income (loss)

6,917

1,554

(2,337

)

Preferred unit dividends

—  

(3,155

)

(6,882

)

Net income (loss) attributable to common stockholder/unitholders

$

6,917

$

(1,601

)

$

(9,219

)

Predecessor

Successsor

Period from
January 1 to
February 13,
2002

Period from
February 14 to
March 31,
2002

Three Months
Ended
March 31, 2003

Cash flows from operating activities

Net income (loss)

$

6,917