BOSTON-Shares of Boston Communications Group Inc. continued to languish as the company reported a third-quarter net loss of more than $40 million.
BCGI cited its ongoing legal fight with Freedom Wireless for the loss, taking a non-cash charge of $40.3 million in connection with the lawsuit. Freedom was awarded a $128 million judgment earlier this year when an eight-person jury found BCGI’s prepaid wireless services platform infringed on Freedom’s patents.
The court later added $20.1 million in interest to the judgment and ordered BCGI to stop selling the services, which account for 70 percent of its revenue.
BCGI’s net third-quarter loss totaled $40.6 million, or $2.29 per share, compared with net income of $4.2 million, or 24 cents per share, during the year-ago period. Aside from the non-cash charge and other legal expenses, BCGI reported a net income of $1.6 million, or 9 cents per share.
The company has appealed the original judgment, and expects the appeal process to take a year or longer. BCGI likely will be forced to declare bankruptcy if the judgment is ultimately upheld.
“Despite the obvious challenges imposed by our ongoing litigation with Freedom Wireless, we continue to deliver high-quality services to a global marketplace in the midst of a strong industry growth cycle,” said E.Y. Snowden, BCGI’s chief executive officer. “Our prudent approach to managing our business, the diversification efforts we set in motion over three years ago, and the commitment of our employees continue to carry us forward in these adverse times.”
Shares of BCGI, which neared $10 earlier this year, floundered on the news, holding steady at $1.07 in mid-day trading on the Nasdaq Thursday.
