ACTC results look good. Plus mention of a Internet spin off
before second quater.
Applied Cellular Technology Reports Record
Revenue and Net Income for 1998, Increasing
Over 100% From the Prior Year
Corporate Reorganization And Name Change Announced
PALM BEACH, Fla., March 5 /PRNewswire/ -- Applied Cellular Technology, Inc. (Nasdaq: ACTC - news)
today reported revenue of $207.1 million for the year ended December 31, 1998, a 101% increase from the prior
year when revenue of $103.2 million was reported. Operating income increased 60% for the same period, from
$5.6 million reported in 1997 to $8.9 million for 1998. Net income for 1998 was $4.6 million, or $0.13 per share,
compared to net income of $2.3 million, or $0.15 per share in 1997. From 1997 to 1998 EBITDA, (earnings
before interest, taxes, depreciation and amortization) which is one measure of cash flow, grew from $7.5 million to
$13.4 million, an 80% increase.
The Company reported a 79% increase in revenue for the fourth quarter of 1998, growing from $31.1 million to
$55.6 million. The Company also reported after-tax nonrecurring charges in the fourth quarter of approximately $1
million, or $0.02 per share, related to the final elimination of the Company's cellular business. Net income for the
fourth quarter after these charges was $43,500 or $0.00 per share. This compares with net income for the fourth
quarter of 1997 of $296,200, or $0.01 per share. In addition, during this three-month period Applied Cellular
repurchased approximately 106,000 shares of its common stock under its share repurchase program announced
on September 14, 1998. The Company has stated that it will continue to repurchase shares in 1999, subject to
certain market conditions.
Applied Cellular's Chairman and CEO, Richard J. Sullivan, commented, ''We are pleased with the results for
1998 which demonstrate our significant progress in growing our business and accumulating the critical mass we
need to implement our plan to become a full-service integrated communications provider. Our balance sheet is
rock solid and stockholders' equity grew by over 86% from a year ago. We are a company that at the end of
1998 had close to $66 million in current assets, less than $3 million of long-term debt and working capital of $15.1
million.''
Applied Cellular also announced that it has reorganized the company into five primary divisions to more effectively
and efficiently provide integrated communications products and services to a broad base of businesses. In
conjunction with this restructuring the Company is asking its shareholders at the June 5th Annual Meeting to
approve a corporate name change to Applied Digital Solutions. Following approval of the Company's name
change, Applied Cellular will begin trading on the the NASDAQ National Market System under the symbol
''ASDX''. The Company expects to recognize one-time expenses of approximately $0.04 per share in the first
quarter of 1999 relating to this corporate reorganization.
''Over the last few months Applied Cellular has announced a number of strategic initiatives that should improve our
operating performance and, ultimately, maximize shareholder value. Our decision to spin-off Inteletek and
undertake an initial public offering of this company was an important step towards the refocusing of our company
on the communications industry and we believe we are still on track to complete this offering by the end of the
second quarter.
We are seeing a growing demand from companies in all industries for a single communications solutions provider.
These companies generally do not employ a dedicated communications staff and find it inefficient and burdensome
to purchase communications hardware and software from a multitude of vendors. Applied Cellular will meet this
market need by offering companies a full menu of communications products. By integrating our business units we
will have a more complete package of services to sell, thereby enhancing and broadening our potential customer
base.''
Applied Cellular's five divisions are organized as follows:
Division Division President
Network Infrastructure Anat Ebenstein
Telecommunications James Shaver
Communications Infrastructure David Gerber
Internet Keith Bolton
Application Technology To be Filled
Each division president reports directly to Andy Hidalgo who has been promoted to Senior Vice President. A fact
sheet with more information about each business division follows this announcement.
''Andy and his team will focus on integrating all of our divisions and beginning the process of cross-marketing and
selling our range of services and products. He is also instituting formal financial controls and procedures to insure a
more timely and accurate reporting process. It is through all of these efforts that our long-term goals for Applied
Cellular will be realized,'' added Mr. Sullivan.
Applied Cellular Technology is a full service communications company that provides integrated products and
services to a wide variety of businesses. The Company is comprised of five business divisions which work together
to meet the growing communication needs of its clients. For more information visit the Company's web site at
www.appliedcell.com.
Applied Cellular Technology, Inc. and Subsidiaries
Selected Operating Information
(In Thousands)
Three Months Ended Twelve Months Ended
December 31, December 31,
1998 1997 1998 1997
(Unaudited)
Net Operating Revenue $55,573 $31,094 $207,081 $103,159
Income before Income Taxes
and Minority Interest (335) 931 7,702 4,806
Net Income Available
to Common Stockholders 44 296 4,646 2,268
Net Income per Common Share:
Basic $0.00 $0.02 $0.14 $0.18
Diluted $0.00 $0.01 $0.13 $0.15
Weighted Average Number
of Common Shares Outstanding:
Basic 37,056 19,563 32,318 12,632
Diluted 41,858 23,427 34,800 15,245
Selected Balance Sheet Data: December 31,
1998 1997
Cash and Cash Equivalents $4,555 $7,657
Total Current Assets 65,899 39,575
Total Assets 124,119 61,282
Total Current Liabilities 50,776 20,112
Stockholders' Equity 67,560 36,285
Total Liabilities and Stockholders' Equity 124,119 61,282
Statements about the Company's future expectations, including future revenues and earnings, and all other
statements in this press release other than historical facts are 'forward-looking statements' within the meaning of
Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as that term
is defined in the Private Litigation Reform Act of 1995. The Company intends that such forward-looking
statements involve risks and uncertainties and are subject to change at any time, and the Company's actual results
could differ materially from expected results.
BUSINESS DIVISIONS
Applied Cellular Technology is a full service communications company that provides integrated products and
services to a wide variety of businesses. The Company is comprised of five business divisions which work together
to meet the growing communication needs of its clients.
COMMUNICATIONS INFRASTRUCTURE
Communications Towers
Fiber Optics
Cabling
Power Distribution
Communications Equipment
NETWORK INFRASTRUCTURE
Computer Systems
Local Area Networks
Application Servers
INTERNET
Electronic Commerce
Wide Area Networks
Intranet/Extranet
APPLICATION TECHNOLOGY
Global Positioning Systems
Field Automation
Asset Management
Corporate Enterprise Access
Decision Support
Voice/Data Technology
Satellite Systems
TELECOMMUNICATIONS
Telephone Service & Systems
Computer Telephony Integration
Interactive Voice Response
Call Centers
Voice Messaging
SOURCE: Applied Cellular Technology, Inc.
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