eLEC Reports Third Quarter Operating Results
Monday October 18, 8:30 am ET
WHITE PLAINS, N.Y.--(BUSINESS WIRE)--Oct. 18, 2004--eLEC Communications Corp. (OTCBB:ELEC - News)
Summary of Accomplishments:
3rd Quarter Revenues of $2.4 million, up 91% over Q3 2003
5th consecutive quarter of revenue growth
Revenues for the month of August exceeded $1 million
Quarterly gross profit of 52%
Successful test of our own VoIP platform
Addition of VoIP executive to management team
eLEC today announced results for the third quarter ended August 31, 2004. Quarterly revenues increased for the fifth consecutive quarter, amounting to $2,438,064 for the third quarter of fiscal 2004, an increase of $1,162,175, or 91%, over revenues of $1,275,889 in the third quarter of fiscal 2003. In comparison to the second quarter of fiscal 2004, third quarter revenues increased by $542,132, or 29%. In August 2004, the last month of the third quarter, revenues exceeded $1 million. Revenues for the nine months ended August 31, 2004 amounted to $6,207,998, an increase of $2,431,654, or 64%, over revenues of $3,776,334 for the nine months ended August 31, 2003.
eLEC reported a net loss for the third fiscal quarter of 2004 of ($418,584), or ($0.03) per share, as compared to net income of $694,441, or $0.04 per share, for the third fiscal quarter of 2003, which included a one-time gain on the sale of assets of $1,254,442. eLEC's loss from operations decreased to ($396,086) for the third fiscal quarter in 2004, as compared to an operating loss of ($444,562) in the third quarter of fiscal 2003.
eLEC's CEO Paul Riss stated, "As part of an aggressive growth strategy, spending for customer acquisition costs in the third fiscal quarter exceeded cash flow generated from operations. Although limiting our customer acquisition costs may have enabled us to show an operating profit for the third fiscal quarter, we believe that the value of our company is significantly enhanced by adding and retaining new customers as soon as possible. Therefore, our business model is driven by adding as many new customers as our financial resources permit. We project that we will be able to spend approximately $150,000 in customer acquisition costs in October, which would yield approximately 3,000 additional gross lines. We continue to look for an acceptable financing package so that we can further accelerate our growth."
"We are very pleased with the progress we have made in the development of our VoIP platform, which is successfully making calls over the Internet to other Internet phones and PSTN phones," continued Riss. "We believe it is important to have our own VoIP technology and that it is very significant that a seasoned VoIP executive, Mark Richards, is now a part of our VoIP management team. If we can attract talented people like Mark, who recently served as the COO of a premiere VoIP carrier, we believe we can accelerate our VoIP strategy and increase the number of business partners and customers."
eLEC Communications Corp. is a publicly-traded local telecommunications company that is taking advantage of the convergence of the technological and regulatory developments in the Internet and telecommunications markets. eLEC provides an integrated suite of communications services to business and residential customers, including local, long distance, dedicated access, and VoIP. For more information on our products and offerings, visit our web site at www.myelec.com.
eLEC Communications Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
For the Nine For the Three
Months Ended Months Ended
Aug. 31, Aug. 31, Aug. 31, Aug. 31,
2004 2003 2004 2003
---- ---- ---- ----
Revenues $6,207,988 $3,776,334 $2,438,064 $1,275,889
---------- ---------- ---------- ----------
Costs and expenses:
Costs of services 2,955,924 1,986,726 1,159,223 649,597
Selling, general and
administrative 3,610,693 3,792,201 1,670,626 1,053,647
Depreciation and
amortization 12,112 80,850 4,301 17,207
--------- --------- --------- ----------
Total costs and
expenses 6,578,729 5,859,777 2,834,150 1,720,451
--------- --------- --------- ----------
Loss from operations (370,741) (2,083,443) (396,086) (444,562)
Other income (expense):
Interest expense (3,126) (105,509) - (36,065)
Other income (loss) 28,153 88,063 (22,498) (34,300)
Gain on sale of assets - 3,511,297 - 1,254,442
Gain on sale of
investment securities
and other investments 770 121,687 - 37,926
-------- --------- --------- ----------
Total other income
(expense) 25,797 3,615,538 (22,498) 1,222,003
--------- --------- --------- ----------
Income (loss) before
bankruptcy reorganization
items and income tax
benefit (expense) (344,944) 1,532,095 (418,584) 777,441
--------- --------- --------- ----------
Reorganization items:
Gain on settlement
with creditors 904,027 - - -
Professional fees (161,000) (49,000) - (49,000)
--------- --------- --------- ----------
743,027 (49,000) - (49,000)
--------- --------- --------- ----------
Income (loss) before
income tax benefit
(expense) 398,083 1,483,095 (418,584) 728,441
Income tax benefit
(expense) 47,937 (34,000) - (34,000)
--------- --------- --------- ----------
Net income (loss) $446,020 $1,449,095 ($418,584) $694,441
========= ========== ========= ==========
Basic and diluted
earnings (loss) per
share $0.03 $0.09 ($0.03) $0.04
========= ========== ========= ==========
Weighted average number
of common shares
outstanding
Basic 16,254,282 15,633,829 16,254,282 15,684,369
Diluted 16,652,398 15,664,231 16,254,282 15,733,552
========== ========== ========== ===========
This release contains forward-looking statements that involve risks and uncertainties. eLEC's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include, among others, certain risks and uncertainties over which the company may have no control. For further discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see the discussions contained in eLEC's Annual Report on Form 10-KSB for the year ended November 30, 2003, eLEC's Quarterly Report on Form 10-QSB for the quarters ended February 29, 2004, May 31, 2004, August 31, 2004 and any subsequent SEC filings.
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Contact:
For eLEC Communications Corp.:
John Logan, 206-984-9202
logan@beaconrockresearch.com
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Source: eLEC Communications Corp. |
