CORRECTION : Mitec Issues Fourth Quarter Update - New $6.2 Million Order Bolsters
Backlog
MONTREAL, QUEBEC--Mitec Telecom inc. today reported that revenue
and earnings for the fourth quarter ended April 30, 1999 will be
below market expectations. A combination of a lag in sales and a
decision for a write down will result in a loss for the quarter in
the range of $0.07 to $0.10. Revenue for the quarter is expected
to be in the vicinity of $7.5 million.
For the fourth quarter last year, Mitec earned $0.10 per share on
revenues of $11 million.
Mitec President and Chief Operating Officer, John Robinson stated
that the wireless industry has experienced a decline in sales due
to delayed orders from major OEM's. "It appears that there was a
general market softness which has affected all three of our
segments. We are seeing signs of improvement, particularly in the
wireless sector."
Evidence of this is the recent awarding by a major OEM of a
contract to supply RF subsystems worth approximately $6.2 million
Cdn. Delivery is expected during Mitec's second quarter of fiscal
2000.
Keith Findlay, Vice President Finance and CFO explained that the
company is writing off inventory and leasehold improvements. "Our
research and development costs also increased during the fourth
quarter."
With this most recent order, backlog at the end of the fourth
quarter is expected to be $16 million, compared to $12.6 million
at the same time last year.
Mitec Chairman and CEO, Myer Bentob stated the results are a
disappointment, notwithstanding the current state of the industry.
"Mitec needs to do better. Given the growth in backlog, there
will be a concerted effort to re-establish both our revenue and
profit levels. Going forward, we will be doubling our Research
and Development efforts. We are budgeting a sizeable increase for
fiscal 2000 to develop new products and to support current and
potential OEM requirements."
Mitec is expected to release its earnings during the third week of
June.
Mitec Telecom Inc. designs and manufacturers components,
subsystems and multifunction subsystems for the wireless
telecommunications industry. The Company sells its products
worldwide primarily to original equipment manufacturers for
incorporation into wireless infrastructure equipment, which is
used in voice, data and cable communications networks. Mitec
Telecom has 275 employees at its facilities in Pointe Claire
(Quebec), Tinton Falls (New Jersey), Copthorne (England), Wang-Noi
(Thailand), and Vaxjo, (Sweden).
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