Financials:
(Applies to: MCTLC DTSX)
MicroTel -MCTLC- Reports 88% Reduction in Losses as Company Looks for
Growing Profitability in 1999; 1998 Gross Margin As a Percent of Net
Sales Rose to 36% from 24% in 1997
ONTARIO, CALIF. (March 31) BUSINESS WIRE -March 31, 1999--MicroTel
International, Inc. (Nasdaq Small Cap:MCTLC) today announced that
results for the year ended December 31, 1998 reflect a net loss of $1,
185,000, down 88% from the loss of $9,693,000 for 1997.
For the fourth quarter of 1998, the Company posted a net profit of $180,
000 exclusive of a one-time charge related to the March 1999 settlement
of previously pending litigation. Adjusted for the divestment of $11
million in unprofitable sales, the Company's 1998 net sales increased
better than 7% over those of 1997. Gross margin as a percent of net
sales rose from 24% in 1997 to 36% in 1998 due to three factors:
increased higher margin sales, the disposal and discontinuance of lower
margin product lines and the reduction throughout 1998 of manufacturing
overhead costs.
Concurrent with its strategy of disposing of non-core, lower margin
product lines, the Company seeks to acquire new telecommunications
end-user products. The most recent example of this is the Company's
acquisition in January 1999 of a 41% ownership interest in Digital
Transmission Systems, Inc., a provider of wireless voice and data
transmission products which complements the Company's existing base
wireline transmission product line.
Carmine T. Oliva, MicroTel's Chairman and CEO commented, "We are
pleased to close the year with our first profitable quarter. While the
profit was modest, our $33 million in recent contracts and purchase
orders indicate continuing improved profitability in 1999."
MicroTel International, Inc. is a holding company for its three wholly
owned subsidiaries -- CXR Telcom Corporation in Fremont, CA; CXR, S.A.
in Paris, France and XIT Corporation in Ontario, CA. and its 41% owned
affiliate company Digital Transmission Systems, Inc. near Atlanta,
Georgia. CXR Telcom Corporation, CXR, S.A. and Digital Transmission
Systems, Inc. design, manufacture and market electronic
telecommunication test instruments, wireless and wireline voice, data
and video transmission and networking equipment. XIT Corporation
designs, manufactures and markets information technology products,
including input and display components, subsystem assemblies, power
supplies, hybrid microelectronic and other circuits. The Company
operates out of facilities in the U.S., France, England and Japan.
For further information please consult the Company's investor Website
at microtelinternational.com.
The statements in this press 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.
Consolidated Condensed Statements of Operations
(in thousands except per share amounts)
Year ended
December 31,
1998 1997
-------- --------
Net Sales $ 37,261 $ 43,098
Cost of sales 23,871 32,670
-------- --------
Gross profit 13,390 10,428
Operating expenses:
Selling, general & administrative 11,826 11,361
Engineering & product development 2,454 2,046
Write-down of goodwill -- 5,693
-------- --------
Loss from operations (890) (8,672)
Other expense (income)
Interest expense 675 895
Gain on sale of subsidiary (580) --
Other 99 29
-------- --------
Loss before income taxes (1,084) (9,596)
Income taxes 101 97
-------- --------
Net loss $ (1,185) $ (9,693)
======== ========
Basic and diluted loss per share $ (0.10) $ (0.96)
-------- --------
Weighted average shares outstanding 11,952 10,137
-------- --------
Consolidated Balance Sheet
(in thousands)
12/31/98 12/31/97
Total current assets $15,552 $17,127
Total current liabilities 11,765 15,304
Long-term debt, less current portion 1,689 2,530
Stockholders' equity 5,482 6,015
Total assets & liabilities $21,242 $25,440
-0- CER/se*
CONTACT: MicroTel International Inc.
James P. Butler, 909/456-4321
Web site: microtelinternational.com
or
H.L. Lanzet, Inc.
Herbert Lanzet/DeeDee Lanzet, 212/687-0061
KEYWORD: NEW YORK CALIFORNIA
INDUSTRY KEYWORD: COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS
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