Headline: eLEC Communications Reports Second Quarter Results With
Year-Over-Year Sales Growth of 231% Driven by 508% Growth in Telecom
Revenues
================================================================
NORWALK, Conn.--(BUSINESS WIRE)--July 14, 2000--eLEC
Communications Corp. (NASDAQ:ELEC), a provider of integrated
communications services to business customers, today announced the
results of its operations for the second quarter ended May 31, 2000.
eLEC reported revenues for the three and six-month periods ended
May 31, 2000 of $3,156,395 and $5,382,628, respectively, an increase
of $2,204,015, or 231%, and $3,715,338, or 223%, as compared to the
revenues reported for the comparable periods in 1999. Revenues of the
telecommunications division increased by $2,217,969, or 508% and
$3,606,149, or 451%, for the respective three-month and six-month
periods to $2,654,511 and $4,405,354, as compared to fiscal 1999.
eLEC also reported net losses for the three and six-month periods
ended May 31, 2000 of ($1,361,983), or ($0.10) per share, and
($2,010,883), or ($0.16) per share, compared to net losses of
($1,696,094), or ($0.18) per share, and ($3,214,067), or ($0.40) per
share, for the comparable prior year periods, which included losses of
($824,442), or ($0.09) per share, and ($1,645,420), or ($0.20) per
share, respectively, from discontinued operations.
The gross profit increased for the three and six-month periods
ended May 31, 2000, as compared to the respective periods in fiscal
1999, by $533,263 and $1,086,453 to $880,158 and $1,621,935,
respectively, or approximately 28% and 30% of revenues.
Paul Riss, eLEC's CEO, stated, "We enjoyed strong year-over-year
revenue growth in our telecommunications business of over 500% for the
second quarter. We increased our sales and marketing expenditures by
over $400,000 in the second quarter, as compared to our first fiscal
quarter, and expanded our investment in the facilities and personnel
necessary to support our accelerating growth and ATM/DSL network
deployment. We expect to see these trends continue during the third
quarter as we continue to invest aggressively in our
telecommunications business."
"We also experienced a slight narrowing of our gross margins
during the quarter," continued Mr. Riss. "This was primarily due to
temporarily increased carrier costs related to growth in new UNE-P
states as we continue our nationwide UNE-P deployment. We believe this
trend will continue through the third quarter. However, we continue to
enjoy gross margins well in excess of 30% on our established UNE-P
customer base and expect our telecommunications margins to trend up to
those levels in the long term as our mature customer base grows."
eLEC Communications Corp. is a publicly-traded local
telecommunications company that is taking advantage of the convergence
of the current and future competitive technological and regulatory
developments in the Internet and telecommunications markets. eLEC
provides an integrated suite of communications services to small and
medium-sized business customers, including local, long distance,
dial-up access, dedicated access, xDSL, and Web site design and
hosting.
*T
eLEC Communications Corp. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
For the Six Months Ended For the Three Months Ended
May 31, 2000 May 31, 1999 May 31, 2000 May 31, 1999
------------ ------------ ------------ ------------
Revenues $5,382,628 $1,667,290 $3,156,395 $952,380
Cost of
revenues 3,760,693 1,131,808 2,276,237 605,485
------------ ------------ ------------ ------------
Gross profit 1,621,935 535,482 880,158 346,895
------------ ------------ ------------ ------------
Costs and
expenses:
Selling and
general and
administrative 3,235,968 910,190 1,971,610 538,383
Depreciation
and
amortization 300,268 149,999 194,903 61,572
Equity in loss
of investee 162,969 1,044,350 85,648 619,649
------------ ------------ ------------ ------------
Total costs
and
expenses 3,699,205 2,104,539 2,252,161 1,219,604
------------ ------------ ------------ ------------
Loss from
operations (2,077,270) (1,569,057) (1,372,003) (872,709)
------------ ------------ ------------ ------------
Other (income)
expense:
Interest expense 26,874 3,082 7,711 2,402
Interest income (25,982) (3,492) (17,731) (3,459)
Miscellaneous
income, net (67,279) -- -- --
------------ ------------ ------------ ------------
(66,387) (410) (10,020) (1,057)
------------ ------------ ------------ ------------
Loss from
continuing
operations (2,010,883) (1,568,647) (1,361,983) (871,652)
------------ ------------ ------------ ------------
Loss from
discontinued
operations -- (1,645,420) -- (824,442)
------------ ------------ ------------ ------------
Net loss ($2,010,883) ($3,214,067) ($1,361,983) ($1,696,094)
------------ ------------ ------------ ------------
Basic and
diluted loss
per share
Continuing
operations ($0.16) ($0.20) ($0.10) ($0.09)
Discontinued
operations -- (0.20) -- (0.09)
------------ ------------ ------------ ------------
Net loss ($0.16) ($0.40) ($0.10) ($0.18)
------------ ------------ ------------ ------------
Weighted
average
number of
common shares
outstanding 12,582,006 7,998,835 13,426,574 9,428,410
------------ ------------ ------------ ------------
*T
This release contains forward-looking statements that involve
risks and uncertainties. eLEC's actual results may differ materially
from the results discussed in the forward-looking statements. Factors
that might cause such a difference include, among others, availability
of management; availability, terms, and deployment of capital; eLEC's
ability to successfully market its services to current and new
customers, generate customer demand for its product and services in
the geographical areas in which eLEC can operate, access new markets,
negotiate and maintain suitable interconnection agreements with the
incumbent local exchange carriers, and negotiate and maintain suitable
vendor relationships, all in a timely manner, at reasonable cost and
on satisfactory terms and conditions, as well as regulatory,
legislative and judicial developments that could cause actual results
to vary in such forward-looking statements.
CONTACT: eLEC Communications Corp., Norwalk
Paul Riss, CEO
203/750-1000
phriss@elec-corp.com>>>>
This looks pretty good to me. rod |
