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DTS Reports Profit for Fourth Fiscal Quarter
ATLANTA--(BUSINESS WIRE)--Sept. 9, 1999--
Company Reports Second Consecutive Quarterly Profit,
Revenues up 40%
Digital Transmission Systems, Inc. (DTS) (OTC BB:DTSX), a leading telecommunications equipment manufacturer, today announced net sales of $2.7 million for its fourth fiscal quarter which were up 40% from the third quarter of fiscal 1999.
The net income for the period of $453 thousand, or 10 cents per share, is the second consecutive quarterly profit reported by DTS. Operating income of $49 thousand was also reported before the extraordinary gain of $468 thousand realized from a novation associated with the divestiture of SouthTech, Inc., the Company's loss-plagued international subsidiary that was sold in February 1999, and other debt settlements. Net sales for the 1999 fiscal year totaled $7.54 million with a net loss of $423 thousand or 9 cents per share.
Andy Salazar, DTS Chief Executive Officer, commented, "The results of the fourth fiscal quarter confirm that continued demand for DTS products in domestic markets, coupled with the expense reductions achieved in the first two quarters of the fiscal year, have led to profitability in the second half of fiscal 1999. Credit for the results is also due to our suppliers who have been supportive through the difficult financial period the Company experienced in fiscal 1999. For the new fiscal year, the Company will continue to focus on the equipment market for wireless carriers. However, the Company has traditionally experienced a weak first fiscal quarter. It will be a challenge to realize a profit in this quarter with the lower revenue level anticipated. We will leverage the momentum we have and the initial sales of our new product to pull us through. We still believe that growth in wireless carrier networks will continue to expand at a significant rate for the foreseeable future."
The Company plans to roll out its new product - the Internet Processor - an addition to its popular FlexT1 network access product line with beta sites scheduled through October 1999. The Internet Processor allows wireless carriers to use the internet to manage cell site equipment remotely through router and terminal server functionality built into FlexT1 compatible modules. Like other FlexT1 modules, the compact form factor of the IP Processor integrates a variety of networking functions required at cell sites of wireless carrier networks.
"We are pleased with the fourth quarter's results," continued Mr. Salazar. "They reaffirm that DTS now has a business model that can yield profitability for its shareholders. I am especially happy that the Company experienced a very successful quarter under the operational leadership of Woody Cannon, DTS' newly appointed President and COO. Mr. Cannon, previously DTS' VP of Marketing and Sales, enters his fourth year at DTS with a solid management team supporting him. He has been a key contributor in the business turnaround reported by DTS in the last six months," concluded Mr. Salazar.
Founded in 1990 and headquartered near Atlanta, DTS designs, manufactures and markets components to build, access and monitor high-speed telecommunications networks worldwide. The Company's primary customers include domestic and international wireless service providers, telephone service providers and private wireless network users. The Company's products include the FlexT1/FlexE1 integrated network access product lines and microFlex cross connect systems. Recently, the Company introduced the Internet Protocol Processor card set for the FlexT1, a product which enables wireless carriers to access equipment performance at remote cell sites with an internet or intranet interface.
Digital Transmission Systems, Inc.
Operating Results (in thousands)
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
Fiscal 1999 Fiscal 1999 Fiscal 1999 Fiscal 1999
----------- ----------- ----------- -----------
Revenues $2,691 $1,922 $1,405 $1,519
Gross Margin 973 950 405 446
Operating income
(loss) 49 11 (762) (892)
Net income (loss) 453 1,112 (911) (1,077)
Earnings per share 0.10 0.26 (0.22) (0.26)
For more information about DTS and its products, call 1-800-FLEX-DTS (1-800-353-9387) or visit the corporate Web site at dtsx.com.
Note: This news release, other than historical financial information, may consist of forward looking statements that involve risks and uncertainties, including, but not limited to, the timely availability of new products, the impact of competitive products and pricing and delays in the receipt of orders or in the shipment of products, perhaps causing quarterly fluctuations in results, and the other risks detailed in the Company's Securities and Exchange Commission reports and filings, including the report 10-KSB for the year ended June 30, 1998 and the SB-2 registration statement of the Company that became effective March 4, 1996. Actual results may vary materially.
CONTACT: Digital Transmission Systems, Inc.
Clive Marsh, 770/798-1300 ext. 226
cmarsh@dtsx.com
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