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ETC Announces 2000 Year End ResultsWaukesha, WIFebruary 16, 2001 For Further Information contact: Dean Danner, President
Jeff Nigl, Chief Financial Officer
(262) 542-5600 * http://www.etcia.com
WAUKESHA, WISCONSIN, February 16, 2001 The NASDAQ Stock Market ELECTRONIC TELE-COMMUNICATIONS, INC. Symbol - ETCIA Electronic Tele-Communications, Inc. (ETC) today reported final audited results for its 2000 fourth quarter and fiscal year. Sales in 2000 were $10,454,180, resulting in a loss of $512,696 or $0.20 per Class A share, compared to a 1999 loss of $94,157 or $0.02 per Class A share on sales of $10,823,705. Sales for the fourth quarter of 2000 were $2,412,770, compared to 1999 fourth quarter sales of $1,790,855. For the fourth quarter of 2000 ETC reported a loss of $91,636 or $0.04, compared to a loss of $392,110 or $0.16 for the fourth quarter of 1999. Commenting on the 2000 results, ETC President Dean Danner said, “Sales levels were in line with projections through the first half of the year, and generated positive earnings for ETC. Beginning in the third quarter of the year we began experiencing a slowdown in shipments to major customers as weakness in the telephone equipment market segment began to be recognized. 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. In the fourth quarter and into the start of 2001 this slowdown has been further felt in our OEM business to the major telephone equipment manufacturers. Acquisitions and consolidations within the industry have resulted in delayed purchasing decisions as companies re-evaluate their strategic plans. As we enter the first quarter of 2001, the slowdown in the general economy is having an impact on ETC as well. The problems reported by the major telecommunications equipment suppliers has a trickle down effect on ETC. When they ship fewer telephone switching offices they purchase fewer voice platforms used on those offices. At the same time that sales for traditional telephone offices are slowing, interest in the new IP based telephone switches to support the convergence of voice and data is growing. ETC is spending the majority of its development budget on applications for this next generation of telephone offices featuring our Digicept Emcee platform. In development for the last two years, the Emcee is designed to work in both the IP environment and the traditional telephone environment providing a clean platform that can support the telephone network migration to new switches and services,” 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 Norcross, 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:
Three Months Ended Twelve Months Ended
December 31 December 31
2000 1999 2000 1999
Net sales 2,412,770 1,790,855 10,454,180 10,823,705
Cost of product sold 1,234,988 984,966 5,420,193 5,467,581
Gross profit 1,177,782 805,889 5,033,987 5,356,124
Operating expenses:
General and administrative 279,134 299,771 1,273,556 1,275,454
Marketing and selling 540,594 630,713 2,430,033 2,515,635
Research and development 438,389 392,042 1,811,130 1,654,246
1,258,117 1,322,526 5,514,719 5,445,335
Earnings (loss) from operations (80,335) (516,637) (480,732) (89,211) Other income (expense) (10,301) (873) (27,964) 1,054 Earnings (loss) before income taxes (90,636) (517,510) (508,696) (88,157) Income taxes (benefit) 1,000 (125,400) 4,000 6,000 Net earnings (loss) (91,636) (392,110) (512,696) (94,157) Basic and diluted earnings (loss) per share: Class A common (0.04) (0.16) (0.20) (0.02) Class B common (0.04) (0.16) (0.20) (0.10) Weighted average shares outstanding for basic and diluted 2,509,147 2,508,947 2,509,137 2,508,947 Selected Balance Sheet Data:
Dec 31 Dec 31
2000 1999
Current assets 3,624,004 3,245,415
Total assets 6,834,502 6,679,675
Current liabilities 1,612,279 945,056
Total liabilities 1,612,279 945,056
Stockholders' equity 5,222,223 5,734,619
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