Monday August 10, 7:29 am Eastern Time
Company Press Release
MicroTel -MCTL- Reports Sharply
Reduced Second Quarter Losses
Accelerated Improvement Points To Third Quarter
Break-Even and Fourth Quarter Profitability
Gross Profit Margins Are Up in All Business Sectors
ONTARIO, Calif.--(BUSINESS WIRE)--August 10, 1998-- MicroTel International, Inc.
(NASDAQ Small Cap: MCTL - news) today reported a strong second quarter improvement as
losses for the period ended June 30, 1998 were sharply reduced to $218,000, or $0.02 per share,
from the net loss of $1,435,000, or $0.13 per share, recorded for the 1997 second quarter. The
company noted that the improvement, particularly in gross profit margins, strongly points to fourth
quarter profitability.
While sales were lower in the second quarter of 1998 as a result of the sale of one of the company's
Circuits sector operations at the end of the first quarter of 1998, overall gross profit margins
increased by $262,000 to 38% of net sales for the second quarter of 1998 versus 26% of net sales
for the same period in 1997. This significant percentage increase resulted from improved margins
across all three of the company's business sectors. The company's Telecommunication Test
Equipment and Instrumentation sector gross profit margin increased to 45% in the second quarter of
1998 from 43% in the same period of 1997. The company's Components and subsystems sector
experienced an increase in gross profit margin percentage from 28% of net sales in the second
quarter of 1997 to 37% of net sales in the second quarter of 1998. Additionally the company's
Circuits sector gross profit rose to 22% of net sales in the second quarter of 1998 from just 7% in
the same period of 1997. Despite a decrease in sales of almost $3 million, the Circuits sector
produced $16,000 in additional gross profit in the second quarter of 1998 versus that of 1997.
Commenting on second quarter operating results, CEO Carmine T. Oliva said, ''Our accelerated
improvement has been gratifying. The gross profit margin gains reflect the corporate focus on higher
margin products. Second quarter results confirm that we are on track for a third quarter break-even
and fourth quarter profitability.''
MicroTel International, Inc.
Consolidated Condensed Statements of Operations
(Unaudited)
(in thousands except per share amounts)
Three Months Ended Six Months Ended
June 30, June 30,
1998 1997 1998 1997
Net Sales $ 8,971 $12,029 $18,713 $19,736
Cost of sales 5,555 8,875 13,061 14,972
Gross Profit 3,416 3,154 5,652 4,764
Operating expenses:
Selling, general &
administrative 2,796 3,643 5,914 5,555
Engineering & product
development 574 694 1,145 792
Income (loss) from
operations 46 (1,183) (1,407) (1,583)
Other expense (income)
Interest expense 177 262 344 460
Gain on sale of
subsidiary 90 - (580) -
Other (25) (8) (43) (7)
Income (loss) before income
taxes (196) (1,437) (1,128) (2,036)
Income taxes (benefit) 22 (2) 37 2
Net income (loss) $ (218) $ (1,435) $(1,165) (2,038)
Net (loss) per common
share $ (0.02) $ (0.13) $ (0.10) $ (0.24)
Weighted average number of shares
used in calculating net income
(loss) per share 11,929 11,005 11,928 8,638
The statements in this press release relating to matters that are not historical are forward-looking
statements which involve risks and uncertainties including, without limitation, economic and
competitive conditions in the markets served by the company affecting the demand for the
company's products, product pricing, market acceptance, access to distribution channels and other
risks detailed from time to time in the company's Securities and Exchange Commission filings. These
risks could cause actual results to differ materially from those anticipated or described herein.
Contact:
MicroTel International, Inc.
James P. Butler, CFO
909/456-4321
or
Herbert Lanzet/DeeDee Lanzet
212/687-0061 |
