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ETC Announces Third Quarter 2001 ResultsWaukesha, WI — October 16, 2001 For Further Information contact: Dean Danner, President
Jeff Nigl, Chief Financial Officer
(262) 542-5600 * http://www.etcia.com
WAUKESHA, WISCONSIN, October 16, 2001 OTC Bulletin Board ELECTRONIC TELE-COMMUNICATIONS, INC. Symbol - ETCIA Electronic Tele-Communications, Inc. (ETC) today reported a third quarter 2001 loss of $535,708 or $0.21 per Class A share on sales of $918,605 compared to third quarter 2000 losses of $715,238 or $0.29 per Class A share on sales of $1,575,630. Sales for the first nine months of 2001 were $3,805,355, compared to 2000 nine month sales of $8,041,410. Losses for the first nine months of 2001 were $1,966,748 or $0.78 per Class A Share, compared to losses of $421,060 or $0.17 for the first nine months of 2000. Commenting on the 2001 results, ETC President Dean Danner said, "We are continuing to struggle with the nation wide downturn that has caused losses and layoffs throughout the telecommunications industry. We had hoped that the downturn would abate during the third quarter, but instead our major OEM customers continued to reduce their manufacturing operations due to slow sales of their systems to telephone companies which means slower sales for ETC. The weakness in the economy was further impacted by the tragic events of September 11. Although ETC was not directly affected by the terrorist attacks, we are indirectly affected by any major event that adversely affects the economy and the telecommunications industry." "Due to the weak economy and ongoing slow sales, we continued our cost reduction efforts with additional layoffs and other cost savings during the quarter. ETC's employment is now roughly half of what it was at the first of the year. The impact of the cost reductions and layoffs implemented since the first of the year is an annualized savings of nearly $3,000,000. Although these savings will not be fully reflected in our financial results until 2002, a portion of the savings can be seen with third quarter operating expenses down over 40% from last year." 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, compatible with most telephone systems, 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. 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. - - M O R E - - Electronic Tele-Communications, Inc. Statements of Operations:
(unaudited) (unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
2001 2000 2001 2000
Net sales 918,605 1,575,630 3,805,355 8,041,410
Cost of products sold 652,614 923,227 2,412,008 4,185,205
Gross profit 265,991 652,403 1,393,347 3,856,205
Operating expenses:
General and administrative 215,258 349,906 820,628 994,422
Marketing and selling 308,529 559,607 1,323,657 1,889,439
Research and development 273,032 493,335 1,174,427 1,372,741
796,819 1,402,848 3,318,712 4,256,602
Loss from operations (530,828) (750,445)(1,925,365) (400,397) Other income (expense) (3,880) (5,693) (38,383) (17,663) Loss before income taxes (534,708) (756,138)(1,963,748) (418,060) Income taxes (benefit) 1,000 (40,900) 3,000 3,000 Net loss (535,708) (715,238)(1,966,748) (421,060) Basic and diluted loss per share: Class A common (0.21) (0.29) (0.78) (0.17) Class B common (0.21) (0.29) (0.78) (0.17) Weighted average shares outstanding for basic and diluted 2,509,147 2,509,147 2,509,147 2,509,133 Selected Balance Sheet Data:
(unaudited)
Sep 30 Dec 31
2001 2000
Current assets 2,426,610 3,624,004
Total assets 4,412,658 6,834,502
Current liabilities 765,742 1,612,279
Total liabilities 1,157,183 1,612,279
Stockholders' equity 3,255,475 5,222,223
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