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ETC Announces Third Quarter 2000 ResultsWaukesha, WI—November 2, 2000 For Further Information contact: Dean Danner, President
Jeff Nigl, Chief Financial Officer
(262) 542-5600 * http://www.etcia.com
WAUKESHA, WISCONSIN, November 2, 2000 The NASDAQ Stock Market ELECTRONIC TELE-COMMUNICATIONS, INC. Symbol - ETCIA Electronic Tele-Communications, Inc. (ETC) today reported a third quarter 2000 loss of $715,238 or $0.29 per Class A share on sales of $1,575,630 compared to third quarter 1999 earnings of $96,130 or $0.05 per Class A share on sales of $2,888,497. Sales for the first nine months of 2000 were $8,041,410, compared to 1999 nine-month sales of $9,032,850. For the first nine months of 2000 ETC reported a loss of $421,060 or $0.17, compared to earnings of $297,953 or $0.13 for the first nine months of 1999. Commenting on the 2000 results, ETC President Dean Danner said, “After improved results in the first half of 2000, it is extremely frustrating to have had such poor sales in the third quarter. Sales levels were in line with projections through the first half of the year, but failed to meet expectations in the third quarter. The shortfall in third quarter sales was due primarily to a slowdown in orders from competitive local exchange carriers (CLECs), which were significant customers of ETC during the first half of the year. The CLECs have been delaying their purchasing decisions due to the current turmoil caused by acquisitions and consolidation within their industry. Although sales in the fourth quarter already show improvement from the third quarter, it will be difficult to completely recover the year’s losses created by the third quarter.” “In addition to slow third quarter sales, ETC incurred additional expenses associated with the relocation of our Atlanta and Pleasanton facilities, and for certification testing of new products. Our Atlanta office moved to Norcross, Georgia after nearly 30 years in its previous location in Atlanta’s Doraville suburb and our Pleasanton office moved to a new facility near the previous location. The new locations provide both offices a facility that better fits our operations, will improve productivity, and will reduce future operating costs. The certification testing is vital to ensure ETC’s new products conform to the latest USA and International standards for telecommunications systems,” Danner said. Electronic Tele-Communications is a supplier of Voice Application Processing Platforms to domestic and foreign telephone utilities and of messaging systems to the commercial market. ETC's equipment provides a wide range of audio information and call handling services via telephone networks, computer networks, and the Internet. ETC, with corporate headquarters in Waukesha, Wisconsin also has operations in Atlanta, Georgia and Pleasanton, California. Certain statements in this press release which are not historical facts are "forward-looking” statements as defined in the Private Securities Litigation Reform Act of 1995. Any “forward-looking” statements are provided in compliance with the “Safe Harbor” provision of the Private Securities Litigation Reform Act of 1995. “Forward-looking” statements involve a number of risks and uncertainties including, but not limited to, technology changes, backlog, acquisitions, status of the economy, governmental regulations, sources of supply, expense structure, product mix, major customers, level of order flow, competition, litigation, and other risk factors detailed in the Company’s filings with the Securities and Exchange Commission. Investors are encouraged to consider the risks and uncertainties included in those filings. Electronic Tele-Communications, Inc. Consolidated Statements of Operations:
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
2000 1999 2000 1999
Net sales 1,575,630 2,888,497 8,041,410 9,032,850
Cost of product sold 923,227 1,447,817 4,185,205 4,482,615
Gross profit 652,403 1,440,680 3,856,205 4,550,235
Operating expenses:
General and administrative 349,906 323,130 994,422 975,683
Marketing and selling 559,607 567,807 1,889,439 1,884,922
Research and development 493,335 404,252 1,372,741 1,262,204
1,402,848 1,295,189 4,256,602 4,122,809
Earnings (loss) from operations (750,445) 145,491 (400,397) 427,426 Other income (expense) (5,693) 39 (17,663) 1,927 Earnings (loss) before income taxes (756,138) 145,530 (418,060) 429,353 Income taxes (benefit) (40,900) 49,400 3,000 131,400 Net earnings (loss) (715,238) 96,130 (421,060) 297,953 Basic and diluted earnings (loss) per share: Class A common (0.29) 0.05 (0.17) 0.13 Class B common (0.29) 0.01 (0.17) 0.05 Weighted average shares outstanding for basic and diluted 2,509,147 2,508,947 2,509,133 2,508,947 Selected Balance Sheet Data:
(unaudited)
Sep 30 Dec 31
2000 1999
Current assets 3,021,414 3,245,415
Total assets 6,327,473 6,679,675
Current liabilities 1,013,614 945,056
Total liabilities 1,013,614 945,056
Stockholders' equity 5,313,859 5,734,619
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