Collectible Only. Expired Card - No Value.

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LCI International, Inc. was a long-distance telephone and telecommunications company, originating and placing telephone calls throughout the continental United States and placing calls in more than 200 countries worldwide.

Based in Virginia, LCI offered a wide variety of domestic and international voice and data services to commercial and residential markets.

The company experienced rapid growth in the late 1980s and early 1990s, largely a corollary of deregulation of the U.S. telecommunications industry during the 1980s. Such deregulation made it possible for companies like LCI to compete for a piece of the mammoth U.S. long-distance services pie.

By the early 1990s, in fact, LiTel (LCI) would be known as one of the leaders in the second tier of the telecommunications industry, the top tier consisting of telecommunication giants AT&T, MCI, and Sprint.

Through a combination of acquisitions and new construction, LiTel managed to quickly exceed its original goals. By late 1987 the company was operating a fiber-optic network with about 1,500 miles of cable serving more than 10,000 customers. More than 20 percent of those customers were located in the company’s core Columbus, OH market.

By 1990, LiTel was considered among the ten largest of about 250 companies still competing in the long-distance services industry. Despite huge increases in both sales and customers, however, LiTel remained unprofitable into the early 1990s. The lack of a surplus was mostly the result of the massive capital investments required for growth.

Indeed, by the early 1990s LiTel was sitting on a mountain of debt that had been used to fund growth and to pay off some of the original investors in the company.

CEO H. Brian Thompson

To whip the organization into shape and give it a new direction, Warburg brought in H. Brian Thompson, a former MCI executive, to act as chief executive. Thompson eliminated several of LiTel’s executives and brought in a new team made up largely of former MCI associates.

Thompson immediately went to work, engineering a successful turnaround that had LiTel generating profits by 1994. In an effort he referred to as “triage,” Thompson quickly shut down and eliminated unnecessary business, fired sales managers who weren’t performing adequately, and layed off much of the company’s bloated marketing force. In total, he laid off nearly 25 percent of the entire 1,000 member work force. Importantly, he shifted the company’s focus from business customers, who were accounting for about 70 percent of LiTel’s business in 1990, to the residential market, which was much more price competitive but made up about 94 percent of all long-distance telephone customers. Thompson also initiated an aggressive drive into international business. To reflect the changes, the company changed its name in 1992 to LCI International.

The changes at LCI quickly showed up on its bottom line. Total debt was steadily slashed (from about $220 million in 1990 to about $120 by the mid-1990s), and profits began to rise. The debt drain was alleviated in 1993 when LCI went public with two stock offerings, spaced 90 days apart, which raised about $200 million. At the same time, Thompson and fellow executives managed to continue growing the company at a rapid pace. While revenues initially dropped as management jettisoned poorly performing operations, they soon climbed, growing from about $260 million in 1992 to $341 million in 1993 and then to about $463 million in 1994. The company showed its first positive net income, of about $7 million, in 1994.

After resigning from his LCI post in 1991, McLernon devoted his attention to McLernon Enterprises, a launching pad for various technological ventures. Meanwhile, Thompson staffed LCI’s management ranks with many outside telecommunications industry veterans.

In a period of three years LCI’s new management team increased the company’s net worth from less than zero to more than $800 million. That figure still made LCI a very minor player in the multi-billion-dollar telecommunications industry, in which three companies controlled a giant 85 percent of the market. LCI controlled less than one percent, but had big plans for growth. In fact, Thompson had made a point of only hiring executives “who think in terms of billions of dollars,” he said in the July 18, 1994 Washington Post. “I am trying,” he observed, “to build a world class enterprise here that is capable of taking on the best in the business.” Among other changes, Thompson moved LCI’s corporate headquarters to McLean, Virginia, reflecting its geographic diversity. The core of company operations, however, remained in Columbus.

Although the majority of LCI’s revenues still came from business customers going into 1995, the company was rapidly growing its residential and international businesses in its pursuit to become a fully integrated service provider.

In addition to its various long-distance pursuits, LCI started gearing up to compete in the market for local telephone services, which was opened through further deregulation in the mid-1990s. Going into 1996, LCI was employing about 1,200 workers and generating roughly $600 million in revenues annually, and management expected sales to top $1 billion in 1996.

LCI continued to pursue rapid growth through acquisitions—such as the October 1995 buyout of US Signal Corp.’s long-distance division—and by expanding existing operations.