MicroTel Reports Adjusted Unaudited Fourth-Quarter Loss Which is
82% Less Than the Average of the Three Previous Quarters
The Company Operated Profitability in the Month of November and, on an Adjusted Basis,
December
RANCHO CUCAMONGA, Calif.--(BUSINESS WIRE)--Feb. 14, 2000-- MicroTel International Inc. (OTC BB: MCTL)
("MicroTel") Monday reported a loss of $996,000, or $0.06 loss per share in the fourth quarter of 1999.
After adjusting for charges taken for further write-downs, associated with XCEL Arnold Circuits Inc., a loss operation
previously sold, moving expenses, earnings for equity investments sold and loss on the sale of certain of these investments and
other non-recurring charges, the loss for the fourth quarter of 1999 was $131,000.
This is 82% less than the similarly adjusted average losses of the three consecutive prior quarters. The quarterly losses for the
year adjusted for non-recurring items are as follows:
Q 1 Q 2 Q 3 Q 4
$(991,000) $(640,000) $(574,000) $(131,000)
The company incurred a loss of $3,919,000, or $0.24 loss per share for 1999, compared with a loss of $1,185,000, or $0.10
loss per share in 1998. The loss increased in 1999 partially due to costs associated with restructuring a manufacturing facility,
sale of loss operations, the relocating of corporate headquarters and a manufacturing facility and expenses related to the
company's attempt to retain its previous Nasdaq listing.
Adjusted for these and other non-recurring expenses, the loss would have been $2,336,000. A revenue decline of $8,960,000
in 1999 from $37,261,000 in 1998, to $28,361,000 resulted from an $8,250,000 decline from the sale of loss operations in
1998 and 1999, including XCEL Arnold Circuits Inc., Hycomp Inc., the Xcelite product line and the discontinuance of
U.S.-based Sub System Assembly production.
The sales decline also resulted from the discontinuance of obsolete telecommunications test sets, which resulted in a decline of
approximately $3,750,000 in revenue. In addition, the company's revenue was reduced by $1.5 million in 1999, as compared
with 1998, due to the decline in value of the French franc in relation to the dollar.
This total decline of $13.5 million in revenue was offset by growth in sales in France and the United States of new products for
major new contracts announced over the past year for AT&T, Bell Atlantic, SBC, France Telcom and the French Post Office,
among others totaling approximately $4.3 million.
Without the benefit of these new products and contracts, sales in 1999 would have been approximately $24 million instead of
the reported sales of $28,301,000. The company expects this positive trend in revenue growth to continue in the year 2000,
also further enhanced by a planned acquisition.
Commenting on the quarter and the year, the company's chairman, president and CEO, Carmine T. Oliva, said: "It took 10
months of unrelenting effort to reduce both cost and increase revenue, so as to offset the revenue loss from unprofitable
operations that were sold or discontinued and declining sales of two old products. Our efforts were rewarded with a profitable
November, and on an adjusted basis, a profitable December.
"This improvement trend is evident in each quarter of 1999. Old product sales are now being offset more rapidly by new
product sales and therefore, expect continued growth in revenue in the year 2000. The first quarter, traditionally our weakest
and historically a loss, is stronger than originally projected, even though we still anticipate a small loss.
"However, we expect to be profitable in the second quarter and we anticipate a profit for the full year. We believe MicroTel is
now in the right markets with the right products to finally realize our true potential, especially within our core global
telecommunications markets."
MicroTel International is an international telecommunication electronics company comprising three wholly owned subsidiaries --
CXR Telcom Corp. in Fremont, Calif., CXR, S.A. in Paris and Xcel Information Technologies Corp. (XIT) in Rancho
Cucamonga.
CXR Telcom Corp. and CXR, S.A. 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.
MicroTel International Inc. and Subsidiaries
Consolidated Condensed Statements of Operations
(Unaudited)
Three months ended 12 months ended
Dec. 31, Dec. 31,
1999 1998 1999 1998
(in thousands, except per-share amounts)
Net sales $ 7,038 $ 9,436 $ 28,301 $ 37,261
Cost of sales 5,061 5,256 19,104 23,871
Gross profit 1,977 4,180 9,197 13,390
Operating expenses:
Selling, general and
administrative 2,138 3,153 11,233 11,826
Engineering and product
development 379 669 1,873 2,454
Income (loss) from operations (540) 358 (3,909) (890)
Other income (expense)
Interest expense (109) (139) (411) (675)
Gain on sale of subsidiary -- -- 331 580
Equity in earnings of
unconsolidated affiliates (129) (7) 626 (7)
Other (208) (107) (521) (92)
Income (loss) before
income taxes (986) 105 (3,884) (1,084)
Income tax expense 10 59 35 101
Net income (loss) (996) 46 (3,919) (1,185)
Other comprehensive income
(loss):
Foreign currency
translation adjustment (50) 119 (131) 206
Total comprehensive
income (loss) $ (1,046) $ 165 $ (4,050) $ (979)
Basic and diluted earnings
(loss) per share $ (0.06) $ 0.01 $ (0.24) $ (0.10)
Selected Balance Sheet Items
(Unaudited)
(dollars in thousands)
Dec. 31, 1999 Dec. 31, 1998
Total current assets $ 11,454 $ 15,552
Total assets $ 16,667 $ 21,242
Total current liabilities $ 9,919 $ 11,765
Total non-current liabilities $ 1,723 $ 2,479
Preferred Stock $ 588 $ 1,516
Stockholders' Equity $ 4,437 $ 5,482
Total Liabilities & Equity $ 16,667 $ 21,242
Contact:
MicroTel International Inc.
Randolph Foote, 909/297-2653
Web site: microtelinternational.com |
