TORONTO, March 1 /CNW/ - T S Telecom hereby reports its financial results
for the third quarter ended December 31, 1998, as follows. <<
Financial Highlights
For the 3 months ended December 31, 1998 1997
(in thousands of dollars, except $ $
earnings per share)
Gross revenues 5,120 5,880
Net income (loss) before tax (205) 613
Net income (loss) (178) 597
Earnings per share (0.01) 0.03
Cash flow from operations 428 1,179
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For the 9 months ended December 31, 1998 1997
(in thousands of dollars, except $ $
earnings per share)
Gross revenues 18,955 22,429
Net income before tax 2,163 3,085
Net income 2,018 3,028
Earnings per share 0.10 0.15
Cash flow from operations 1,906 3,479
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>> The decline in third quarter revenues and income over the same period
last fiscal year is largely contributed to the current reorganization of the
telecom regulators first announced by China's Premier, Zhu Rongji in 1998.
The reorganization, which will result in the merger of The Ministry of Posts
and Telecommunications with two rival ministries, has led to uncertainties
between the involved parties, with the result of delaying decision making
processes and slowing operations. The impact of the reorganization to
telecommunications development, however, is likely short term as the
reorganization is expected to be completed by June of this year.
Financial Review
Gross revenue from operations for the three months ended December 31,
1998 was $5.1 million, as compared to $5.9 million for the same period in
fiscal year 1998. The Company experienced a net loss for the third quarter of
$0.18 million, as compared to next income of $0.6 million in the third quarter
of fiscal 1998.
Operational cash flow for the third quarter was $0.43 million, as
compared to $1.2 million realized for the corresponding period last year.
Year to date gross revenue was $19 million, down from the $22.4 million
for the same period last year. Income before tax for the nine months was $2.2
million, a decline of $0.9 million from the $3.1 million earned in the nine
months ended December 31, 1997. On an after tax basis, net income for the
first nine months was $2.0 million or $0.10 per share, as compared to $3.1
million or $0.15 per share for the same period last year.
Cash flow from operations for the nine months was $1.9 million, as
compared to $3.5 million in the previous year. At the end of the third
quarter the Company's cash position was $2.5 million, with no short or long
term loans outstanding.
T S Telecom's share of the nine months earnings of its 30% equity joint
venture, Shanghai Hua Cheng Telecommunications Equipment & Co. Ltd. (''SHC'')
was $483,000, as compared to $575,000 for the same period last year. The
decreased share of profits is attributable to increased taxation of SHC.
During this quarter, Shanghai Hua Cheng declared a dividend payable to the
Company of $241,000. The Company continues to be pleased with this
investment, which has provided returns well in excess of our initialinvestment.
Back Orders
At December 31, 1998, T S Telecom had approximately $1 million of
undelivered contracts on its order book, as compared to the $1.7 million of
back orders at the end of the third quarter of the prior fiscal year.
Substantially all of the company's back orders at the end of the second
quarter was finalized in the third quarter. The Company records the revenues
and costs associated with undelivered contracts upon shipment to customers.
Progress Report
During this quarter the Company continued with field trials of its
Fibersmart system, which has now been extended to four cities, including
Shanghai and Beijing. We expect that this product line will begin generating
revenues in our next fiscal year. We are also developing a hybrid power
monitoring system specifically for China's growing mobile telecommunication
networks, and plan for a late 1999 introduction. These are expected to a
significant contributor to the company's future revenues and earnings.
T S Telecom together with its subsidiaries is a value added distributor,
manufacturer and systems integrator of specialized telecommunications
equipment in China, including Hong Kong. The Company's focus is to assist
telecommunication providers to ensure trouble free and continuous operations
of their networks. The Company offers a range of products including advanced
maintenance and monitoring systems, and digital access equipment for
telecommunication and related networks. It is the exclusive and/or preferred
agent and distributor in Hong Kong and China for a number of U.S., European
and Asian manufacturers of technology based products including Sparton
Technology, Inc. and Opnet Technologies. It is also engaged in the development
and production of its own fiber optics monitoring system and cable
pressurization systems. T S Telecom, through its wholly owned Hong Kong
subsidiary T S International Co., Ltd., has a 30% interest in a manufacturing
joint venture in Shanghai, with the remaining 70% owned by a subsidiary of The
Shanghai Telephone Bureau. |
