quite a turn around:
(COMTEX) B: MicroTel's Third-Quarter Profit Soars to More Than $1 Mil
B: MicroTel's Third-Quarter Profit Soars to More Than $1 Million; The Company's
Profitability is Being Driven by an Increase in New Telecommunications Test
Instrument Sales in the U.S.
RANCHO CUCAMONGA, Calif., Oct 25, 2000 (BUSINESS WIRE) -- MicroTel
International Inc. (OTCBB:MCTL) ("MicroTel") Wednesday announced that for the
three months ended Sept. 30, 2000, it recorded a net profit of $1,028,000, or
4.9 cents basic pre-tax earnings per share.
This compared with a net loss of $1,034,000, or 6.2 cents per share for the
third quarter of 1999. Earnings in the third quarter of 2000 included a gain on
the sale of Wi-LAN stock of $197,000 and a net income contribution of $239,000
for two months from the recent acquisition of T-Com.
Sales for the three months ended Sept. 30, 2000, were $7,524,000, which includes
lower seasonal sales for the summer months of July and August especially in
Europe. This compares with sales of $6,952,000 for the three months ended Sept.
30, 1999, an improvement of 8.3%.
The company realized net income of $1,048,000 for the nine months ended Sept.
30, 2000, compared with a net loss of $2,923,000 for the nine months ended Sept.
30, 1999. The gross margin increased to 41.9% for the nine months of 2000,
compared with 34.0% for the prior-year period.
EBITDA profit for the third quarter 2000 reached $1,361,000, compared with
$411,000 for the second quarter of 2000, an improvement of 231.1%.
Randolph D. Foote, MicroTel's CFO, commented: "In 1999 MicroTel publicly
announced $24 million in new business revenue expected over a multi-year period
and this new revenue base is now favorably impacting our 2000 revenue and
profitability. New higher margin test instrument product sales by our CXR
subsidiary in the U.S. jumped from $1,655,000 for the nine-month period ending
Sept. 30, 1999, to $3,239,000 for the year 2000 period, an increase of 95.7%.
"This coupled with strong profitability in our U.S. Electronic Components
Segment has fueled our exceptional profit performance in the third quarter."
Graham Jefferies, MicroTel's executive vice president and telcom group chief
operating officer commented: "While we are elated over our third-quarter profit
we would have performed even better if we were not continuing to experience
delayed shipments and losses from our recent Belix acquisition. However, the
European Electronic Components Group which includes Belix, returned to a small
profit in September and is expected to improve steadily from here onwards.
"CXR, S.A. our French-based telecom operation, has been impacted by a 17.5%
decline in the value of the French franc vs. the U.S. dollar as compared to
1999, causing a significant erosion of margin since the subsidiary not only
purchases raw material components from the U.S. but also resells U.S.
manufactured test instruments and networking products.
"Corrective actions are being taken and we expect improved performance in the
fourth quarter. The 17.5% decline in the French franc coupled with a 15.0%
decline in the British pound is also negatively impacting revenue growth as more
than 60% of our revenue is in these currencies and converted for consolidation
purposes into U.S. dollars."
Carmine T. Oliva, MicroTel's chairman, president and CEO stated: "Third-quarter
profitability clearly demonstrates what MicroTel is capable of achieving going
forward. Our basic business strategy of new telecom product sales to a broader
base of customers will be greatly enhanced by the T-Com acquisition which takes
MicroTel not only into a new customer base, but it allows us access to the
central office test equipment market which is T-Com's strength.
"U.S. sales of new field-test products to customers such as Bell Atlantic, SBC
Telecom and the FAA, among others, is driving the increase in sales and
profitability. Our last remaining challenge in implementing our 1999 strategy of
divesting loss operations and divesting all Circuit Segment businesses and other
low margin product lines, will be achieved with the sale or discontinuance of
our last remaining circuit operation Xcel Etch-Tek in the fourth quarter.
"Lastly, we are especially pleased that in the short space of the third quarter
we have added over $2 million to our net worth as a result of the T-Com
acquisition and third-quarter profitability and this achieves the first major
cornerstone of $4 million in tangible net worth which is one of the key criteria
for eventually achieving a Nasdaq National listing for MicroTel's common
shares."
MicroTel International is an international telecommunications electronics
company comprising three wholly owned subsidiaries -- CXR Telcom Corp. in
Fremont, Calif., CXR, S.A. in Paris and XIT Corp. (Xcel Information Technologies
Corp.) in Rancho Cucamonga, Calif.
CXR Telcom and CXR design, manufacture and market electronic telecommunications
test instruments, wireless and wireline voice, data and video transmission and
network access equipment. XIT designs, manufactures and markets electronic
components. 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 Nine Months Ended
Sept. 30, Sept. 30,
2000 1999 2000 1999
(In thousands, except per-share amounts)
Net sales $ 7,524 $ 6,952 $ 21,522 $ 21,263
Cost of sales 3,695 4,729 12,506 14,043
Gross profit 3,829 2,223 9,016 7,220
Operating expenses:
Selling, general and
administrative 2,571 2,488 7,242 9,095
Engineering and product
development 276 459 772 1,494
Income (loss) from operations 982 (724) 1,002 (3,369)
Other income (expense)
Interest expense (126) (100) (321) (302)
Gain on sale of subsidiary -- -- -- 331
Equity in earnings of
unconsolidated affiliates -- 28 -- 755
Other 175 (226) 380 (313)
Income (loss) before
income taxes 1,031 (1,022) 1,061 (2,898)
Income tax expense 3 12 13 25
Net income (loss) 1,028 (1,034) 1,048 (2,923)
Basic earnings (loss)
per share $ .049 $ (.062) $ .051 $ (.185)
Diluted earnings (loss)
per share $ .044 $ (.062) $ .048 $ (.185)
Selected Balance Sheet Items
(Unaudited)
(Dollars in thousands)
Sept. 30, 2000 Dec. 31, 1999
Total current assets $ 14,464 $ 11,759
Total assets $ 19,700 $ 16,621
Total current liabilities $ 11,671 $ 11,285
Total non-current liabilities $ 1,809 $ 947
Preferred Stock -- Series A $ 276 $ 588
Stockholders' Equity $ 5,944 $ 3,801
Total Liabilities & Equity $ 19,700 $ 16,621
CONTACT: MicroTel International Inc., Rancho Cucamonga
Randolph Foote, 909/297-2653
Web site: microtelinternational.com
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KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: TELECOMMUNICATIONS
COMPUTERS/ELECTRONICS
EARNINGS
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