Eltrax Systems, Inc. Announces Earnings
SOUTHFIELD, Mich.--(BUSINESS WIRE)--Nov. 13, 1998--Eltrax
Systems, Inc. (Nasdaq SmallCap: ELTX) today announced its financial
results for the quarter and nine months ended September 30, 1998.
Revenue in the third quarter decreased by 23% to $11.0 million
from the $14.3 million recorded in the third quarter of 1997. This
decrease was primarily attributable to a significant decline in
revenue from a former subsidiary and the closing of two distribution
operations, which sold products to smaller resellers. A net loss of
$288,000 or $.02 a share, was recorded in the quarter, a decrease from
the $398,225, or $.05 a share recorded in the third quarter of 1997.
Earnings before interest, taxes, depreciation, and amortization
(EBITDA) were $26,000 for the quarter. Included in the third quarter
loss were net expenses of approximately $139,000 related to the
Company's Network Operating Center which started operations in early
1998. The Company now expects the Network Operating Center to have
contracts signed, which should result in break even operations by the
conclusion of the fourth quarter of 1998.
1998 year to date revenue of $37.9 million was 5.6% above the
$35.9 million recorded in the first nine months of 1997. The net loss
of $937,000 for the first nine months of 1998 is considerably less
than the $6.4 million loss recorded for the same period in 1997. The
1997 loss reflected several charges related to the former Datatech
subsidiary.
William P. O'Reilly, Eltrax Chairman stated that "During the
third quarter, the Company completed the acquisition of the Encore
group. We are excited about this new vertical application and together
with the acquisition of Sulcus Hospitality Technology Corp., which we
recently announced, will contribute significant profitability and
enhance shareholder value.
"We expect to continue to report positive EBITDA in the fourth
quarter of 1998, however, intangible amortization charges related to
the Encore acquisition, may result in a minor net loss for the
quarter."
Some of the preceding statements in this press release constitute
"forward-looking statements" within the meaning of the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and the Company intends that such forward-looking statements
be subject to the safe harbors created thereby. An example of a word
indicating forward-looking statements is the word "expects." These
forward-looking statements reflect the Company's current views with
respect to future events and financial performance, but are subject to
many uncertainties and factors relating to the Company's operations
and business environment which may cause the actual results of the
Company to be materially different from any future results expressed
or implied by such forward-looking statements. Please see the section
entitled "Certain Important Factors" of the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1997, which is
incorporated by reference in this press release, for a list of such
uncertainties and factors. The Company undertakes no obligation to
publicly update or revise any forward-looking statement whether as a
result of new information, future events, or otherwise.
Eltrax Systems, Inc. is a nationwide managed network services and
information technology company. Eltrax markets managed network
solutions, using proprietary and generic communications products and
services for enterprise-wide networks, and is a leading provider of
proprietary software products and technology services to the
hospitality industry. The Company's shares are traded on the Nasdaq
SmallCap market under the symbol ELTX. The Company's website is
www.eltrax.com.
Eltrax Systems, Inc.
Selected Financial Data
Income Statement Data:
Three Months Ended Nine Months Ended September 30, Nine Months Ended September 30,
September 30, September 30,
1998 1997 1998 1997
Revenue $10,955,012 $14,256,985 $37,908,464 $35,862,243
Cost of revenue 7,701,286 11,105,052 28,555,565 29,595,049
------------ ------------ ----------- ------------
Gross profit 3,253,726 3,151,933 9,352,899 6,267,194
Operating
expenses 3,560,931 3,458,686 10,124,372 8,730,109
Adjustment of
Datatech goodwill - - - 2,458,000
----------- ------------ ----------- ----------
-
Operating loss (307,205) (306,753) (771,473) (4,920,915)
Interest income 33,469 17,593 33,469 63,347
Interest expense (14,407) (108,029) (199,105) (267,286)
---------- ---------- ----------- ----------
Loss before
income taxes (288,143) (397,189) (937,109) (5,124,854)
Income tax
expense - 1,036 - 1,317,006
---------- ---------- --------- ----------
Net loss $(288,143) $(398,225) $(937,109) $(6,441,860)
=========== ========== =========== ===========
Net loss per
common share-basic
and diluted $(0.02) $(0.05) $(0.08) $(0.81)
========== ========== ========== =========
Weighted average
shares
outstanding
-basic 12,725,851 8,303,394 11,603,810 7,975,881
========== ========== ========== =========
Balance Sheet Data:
September 30, 1998 December 31, 1997
------------------ -----------------
Cash and cash equivalents $ 536,574 $ 366,364
Line of credit 1,429,543 4,744,529
Total assets 30,929,199 21,491,002
Total liabilities 15,729,414 13,990,280
Shareholders' equity 15,199,785 7,500,722
CONTACT:
Eltrax Systems, Inc.
William P. O'Reilly
(248) 358-1414
BW1357 NOV 13,1998
13:48 PACIFIC
16:48 EASTERN
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