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(COMTEX) B: MicroTel CXR Telcom Subsidiary Completes Restructuring of
B: MicroTel CXR Telcom Subsidiary Completes Restructuring of Operations
ONTARIO, Calif., Jul 21, 1999 (BUSINESS WIRE via COMTEX) --
Annualized Cost Savings of $1,065,000 and are Expected to Enable
CXR to Operate Profitability Going Forward
MicroTel International Inc. (the "company") (OTC BB:MCTL) Wednesday
announced that its CXR Telcom subsidiary located in Fremont, Calif. has
completed a restructuring of its business operations that included a
substantial reduction in manpower and other expenses as well as the
consolidation of certain engineering and other support functions.
The annualized cost savings equals $1,065,000. While the CXR Telcom
unit contributed the vast majority of the consolidated operating loss
for MicroTel in the first and second quarters of 1999, following the
completion of this restructuring, CXR expects to achieve and maintain
profitability. All of the restructuring costs were recorded in the
second quarter and will contribute to a second quarter loss for
MicroTel.
"The restructuring included not only staff reductions but an extensive
change in executive management," stated Bryan Fuller, the newly
appointed president of CXR Telcom. "While we consider the restructuring
to be essentially complete, we have targeted the additional objective
of downsizing our facility requirements by 50% by the end of the third
quarter which would contribute an additional estimated annual savings
of $175,000."
Commenting on the restructuring, Carmine T. Oliva, chairman, president
and chief executive officer of MicroTel stated, "CXR's losses in the
first and second quarter of 1999 broke the profit improvement trend we
achieved in 1998 which ended with a profitable fourth quarter. However,
with the change in management and the expense reductions the new
management has achieved, we expect to return to the profitability trend
of 1998."
MicroTel International Inc. is a holding company for its three wholly
owned subsidiaries -- CXR Telcom Corporation in Fremont; CXR S.A. in
Paris, France and XIT Corp. in Ontario and its 41% owned affiliate
company Digital Transmission Systems Inc. located near Atlanta.
CXR Telcom Corp., CXR S.A. and Digital Transmission Systems Inc.
design, manufacture and market electronic telecommunication test
instruments, wireless and wireline voice, data and video transmission
and networking equipment. XIT Corp. designs, manufactures and markets
information technology products, including input and display
components, subsystem assemblies and power supplies. The company
operates out of facilities in the United States, France, England and
Japan.
The statements in this news 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.
Copyright (C) 1999 Business Wire. All rights reserved.
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CONTACT: MicroTel International Inc., Ontario
James P. Butler, 909/456-4321
Web site: microtelinternational.com
WEB PAGE: businesswire.com
GEOGRAPHY: CALIFORNIA
INDUSTRY CODE: COMPUTERS/ELECTRONICS
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