NEWS:
(Applies to: MCTLC HYCP DTSX SATC)
MicroTel's--MCTLC--HyComp Inc. Subsidiary Sells Assets; Gain On The
Sale Will Be Reflected In MicroTel's First Quarter
ONTARIO, CALIF. (April 20) BUSINESS WIRE -April 20, 1999--MicroTel
International Inc. (NASDAQ SmallCap: MCTLC) today announced that its
HyComp subsidiary, a manufacturer of hybrid microelectronic circuits,
has sold substantially all of its assets. HyComp received $836,000 in
cash at the closing and will receive quarterly cash payments over the
next year based upon sales by the buyer to certain of HyComp's
customers. The buyer acquired all assets except cash and accounts
receivable and assumed all liabilities other than commercial and
intercompany debt. The gain on the assets sale will be included in
MicroTel's first quarter operating results.
MicroTel's Chairman and CEO, Carmine T. Oliva, stated, "This
divestment was another step in our strategic plan to exit certain
non-core circuits and components businesses. Additionally, while
HyComp's sales in 1998 totaled $2.8 million with a pre-tax profit of
$63,000, it was unprofitable in the first quarter of 1999 and the
prospects for a turnaround within the current calendar year were poor.
As we move forward, we continue to focus our business development
efforts on our core telecommunications hardware business, an example of
which is our recent acquisition of a substantial ownership interest in
Digital Transmission Systems, Inc. (OTCBB:DTSX)."
Two potential purchasers had made offers for HyComp's circuits
business. HyComp's board of directors chose what it believed to be the
stronger purchaser, SatCon Technology Corporation (Nasdaq:SATC) of
Cambridge, MA, based upon that purchaser's ability to bring new
business to HyComp's operation as well as the fundamental structure of
the offer. Contrary to a previous announcement by Cetek, Inc., of
Poughkeepsie, N.Y., HyComp's board decided not to accept an offer from
Cetek since, in the board's opinion, Cetek lacked the ability to bring
to HyComp's business the immediate production volume necessary to
operate the business profitably and, additionally, the offer contained
a much more complex and less certain payment structure.
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. located 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 and power
supplies. The Company operates out of facilities in the U.S., France,
England and Japan.
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.
-0- ks/ny*
CONTACT: James P. Butler, CFO
MicroTel International, Inc.
(909) 456-4321
Web site: microtelinternational.com
or
Herbert Lanzet/DeeDee Lanzet
(212) 687-0061
KEYWORD: CALIFORNIA
INDUSTRY KEYWORD: COMED COMPUTERS/ELECTRONICS TELECOMMUNICATIONS
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