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To: steve phil who wrote (10020)	10/31/1998 9:05:00 AM
From: Bruce Galpeer	Read Replies (8) of 19331

DCI Telecommunications began business on Jan.1 1995. The President and CEO was and is Joe Murphy. He has a long history in wall street of taking companies from red to black in a short period of time. His mgt. team is a group that he has been with at other companies for up to 25 or more years in some cases. A very good, solid core group to build a company with. The idea was for DCI to become a player in the value-added pre-paid telephone card industry. That idea has changed and grown since that time into a player in the pre-paid and long distance industry especially in Europe. The first big advancement for CI was when it purchased Muller Media in Nov. 96. This gave Joe Murphy the working capital he needed to stabilize DCI from a recurring large quarterly loss situation to near breakeven. This also allowed him to go out on the M&A trail. In the first quarter of 1997 an agreement was signed to acquire CardCall. prnewswire.com E= A two division company that was doing pre-paid telecards in Europe and Canada. The most important part of this deal was the WH Smith distribution contract in the UK. This contract was the launching pad for where DCI is today. The WH Smith contract was sold in Nov. 97 to Smartalk(SMTK) for $9 million in cash and stock. DCI took this money to use for expansion in Europe and pay of some of the old debt. fast.quote.com In April 1997 DCI acquired CYBERFAX, at that point in time the first and only company to carry realtime fax internet traffic worldwide with no long distance charges. After a slow start up Cyberfax has begun carrying billable minutes last quarter. The potential remains unlimited for this division as the rest of the industry has been slow to catch up. prnewswire.com E= DCI was now on the move. Also in the summer of 97 DCI purchased Crossmain LTD. a startup long distance carrier based in London. prnewswire.com E= After the sale of the WH Smith contract, Crossmain and the remaining pieces of CardCall UK were combined into a new single division called DCI UK/Europe. The efficiency of cost cutting, one of Joe Murphy's fortes, was immediately evident. The next move was to start installing switches in Europe and set up a leased line long distance network between major European areas. fast.quote.com In early 98 the Canadian pre-paid division went into a joint venture with another Canadian pre-paid company called Datawave(DWVSF). fast.quote.com Together they locked up more than 40% of the Canadian pre-paid market. DCI was still on the acquisition trail at this point and looking at several companies. The next company that was purchased was a small US pre-paid company located in Gaithersburg, Md, EDGE Communications. fast.quote.com EDGE was a small profitable company that had developed a niche market for it's product. The company was purchased doing $8 million in TTM revenues and a FTM of $12 million. EDGE has not stood still from when the deal was completed in May 98. A number of new contracts have been signed by EDGE bringing it's current run rate to over $40 million in FTM revenues. That does not include the recently released news of an additional contract with Latin Debit Technologies of Florida valued at $48 million. With the acquisition of EDGE Joe Murphy was introduced to Serg Aldo of TimeWorldComm also in Gaithersburg, Md. TWC does long distance carrying traffic in Europe. TWC recently won 2 contracts in Europe totaling more than $350 million. The problem they had was they had no way to carry the traffic cost effectively. In steps Joe Murphy and DCI with it's already established switches and a leased line network. A JV was struck between the 2 with DCI receiving 51% of the revenues and TWC 49%. This happened Aug. 31, 98. biz.yahoo.com The new division, DCI TIME Europe, is currently ramping up facilities to meet the demands of these new contracts. Because of all this new traffic for DCI, the company has been able to increase gross margins from 14.6% to 16.5%. These numbers will show up on the bottom line as revenues start increasing. They have also announced new contracts and had record breaking revenues again. biz.yahoo.com To see where DCI has come from and to look to the future to see where it is going one only has to look at the exploding revenues that DCI is producing quarter to quarter. Last fiscal year DCI did a total of $8.3 million. In the first quarter alone DCI expanded to $6.3 million and then the second quarter numbers posted recently were for $10.4 million. Also in the release with last quarters numbers was the statement that DCI expects to turn the corner and achieve profitability in the 3rd quarter. Adding these two together gives DCI a double over last year in just the first two quarters. These numbers do not included any revenues from the TWC JV or the new contract from EDGE as these are just ramping up now. The numbers for the 3rd quarter and the 4th quarter look staggering when these two entities come up to speed. All this from a company that only 2 years ago did $2.8 million in revenue. Current 10-K sec.yahoo.com Previous 10-K sec.yahoo.com Current 10-Q www4.edgar-online.com Previous 10-Q www4.edgar-online.com

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