Richard, hope you don't mind me taking a stab at your question. It seems as if the street didn't take kindly to FTEC's latest numbers. I can understand especially if expectations were high in anticipation of better numbers.Hope this isn't too simplistic an appraisal,Mike
HICKSVILLE, N.Y., Feb 11, 2000 /PRNewswire via COMTEX/ -- Firetector
Inc. reported the following for its first quarter ended December 31,
1999 and 1998:
1999 1998
Revenues $3,818,000 $ 3,560,000
Income (Loss)
Before Taxes (215,000) 150,000
Net Income (115,000) 100,000
Diluted Earnings
(Loss) per Share $(.06) $.06
Weighted Average Common
and Potential Dilutive
Common Shares Outstanding 1,782,651 1,913,798
The increase in revenues was due to a 10% increase in product sales
related to subcontractor work with minimal gross margin and from
shipment of a large communication system to a rail car manufacturer.
Management commented that the decrease in operating income was
anticipated in part by the Company's operating plan. However, the
operating loss was greater than anticipated and was primarily
attributed to the change in product mix in 1999 brought about by an
abnormally high percent of subcontractor work at lower margins, a large
shipment of new product to a rail car manufacturer at a low gross
margin due to introduction of a new product and cost overruns due to
technical problems, and reduced end user alteration work that carries a
higher gross margin. Due to the timing of releases from customers,
certain projects have been delayed until our second quarter. Operating
income was also effected by a 7% increase in selling, general and
administrative expenses. Management noted, however, that during the
last two years the Company has intensified is marketing efforts and
expanded its product territory with the hiring of several sales,
marketing, customer service, engineering and field support personnel.
These initiatives are directly responsible for a record order position
of $10.7 million at December 31, 1999. Due to the fact that the
Company's products are sold and installed as part of larger
construction or mass transit projects, there is typically a delay
between the bookings of the contract and its revenue realization.
Management believes that the results of its marketing program and
strong order position will result in enhanced profitability and
stockholder value.
Management noted the Company's strong balance sheet position coupled
with its $3 million revolving credit facility (with significant
borrowing capacity) can support the expanded marketing program that is
in place. At December 31, 1999, the Company had more than $5.4 million
of working capital and approximately $3.8 million of stockholders'
equity (book value of $2.39 per outstanding share of common stock).
Firetector is engaged in the design, manufacture, marketing and service
of a variety of data communication products and systems with
applications in the fire alarm, life safety, security and communication
industries |
