For Further Information contact: Dean Danner, President
Jeff Nigl, Chief Financial Officer
(262) 542-5600
ETC ANNOUNCES 3RD QUARTER 1997 RESULTS
WAUKESHA, WISCONSIN, November 7, 1997 NASDAQ National Market
ELECTRONIC TELE-COMMUNICATIONS, INC. Symbol - ETCIA (Electel)
Electronic Tele-Communications, Inc. reported a loss of $397,592 or $.15 per
Class A share on sales of $2,544,378 for the third quarter of 1997, compared
to earnings of $107,590 or $.05 per Class A share on sales of $3,217,381 for
the third quarter of 1996. Sales for the first nine months of 1997 were
$9,096,811, compared to 1996 nine month sales of $8,861,420. Results for
the nine month period were a loss of $305,041 or $.11 per Class A share in
1997, compared to a loss of $181,669 or $.06 per share in 1996.
Commenting on the results, Dean Danner, President of ETC said, "The third
quarter loss is a combination of slow sales in the quarter coupled with an
additional reserve provided of approximately $240,000 for the anticipated
partial write-off of an international account receivable. The Company fully
expects to collect the balance of the international receivable less the
reserve provided. However, if any remaining amount, less the reserve, cannot
be collected, any such uncollected amount could have a material impact on
ETC's financial statements in future periods."
Continuing, Danner said, "The third quarter had unusually slow bookings,
but good progress in getting approvals from our OEM customers and operating
telephone companies for our newer Voice Application Processing Platforms.
These new approvals of our D2000 family of products coupled with new OEM
distribution agreements should lay the groundwork for improved results in
1998."
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, is sold or leased to provide a wide range of audio
information and call handling services via the telephone network. ETC,
with corporate headquarters in Waukesha, Wisconsin, has operations in
Atlanta, Georgia and Pleasanton, California.
Certain statements in this news release are forward-looking statements
which are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Forward-looking statements
involve a number of risks and uncertainties including, but not limited
to, variability of timing and amount of orders from OEM's and operating
telephone companies, technology changes and the ability of the Company to
maintain technological competitiveness, status of the economy, government
regulations, competition, dependence on major customers, litigation, product
mix, and other factors detailed in the Company's Form 10-K for the year
ended December 31, 1996.
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Electronic Tele-Communications, Inc. and Subsidiary
Consolidated Statements of Operations
Three-Month and Nine-Month Periods
Ended September 30, 1997 and 1996
(Unaudited)
Three Months Nine Months
1997 1996 1997 1996
---------- ---------- ---------- ----------
NET SALES 2,544,378 3,217,381 9,096,811 8,861,420
COST OF PRODUCTS SOLD 1,645,995 1,676,219 5,182,123 4,550,350
---------- ---------- ---------- ----------
GROSS PROFIT 898,383 1,541,162 3,914,688 4,311,070
OPERATING EXPENSES:
General and administrative 448,256 391,340 1,292,851 1,210,056
Marketing and selling 574,857 550,191 1,707,492 1,786,381
Research and development 488,996 489,767 1,374,126 1,572,607
---------- ---------- ---------- ----------
1,512,109 1,431,298 4,374,469 4,569,044
---------- ---------- ---------- ----------
EARNINGS (LOSS) FROM OPERATIONS (613,726) 109,864 (459,781) (257,974)
OTHER INCOME (EXPENSE):
Interest expense (1,221) 81 (9,036) (1,076)
Interest income 51 12,775 7,359 12,877
Miscellaneous (10,096) (10,330) (28,083) (15,596)
---------- ---------- ---------- ----------
(11,266) 2,526 (29,760) (3,795)
---------- ---------- ---------- ----------
EARNINGS (LOSS) BEFORE
INCOME TAXES (624,992) 112,390 (489,541) (261,769)
Income taxes (benefit) (227,400) 4,800 (184,500) (80,100)
---------- ---------- ---------- ----------
NET EARNINGS (LOSS) (397,592) 107,590 (305,041) (181,669)
========== ========== ========== ==========
EARNINGS (LOSS) PER SHARE:
Class A common (0.15) 0.05 (0.11) (0.06)
Class B common (0.17) 0.03 (0.19) (0.14)
Weighted average common
shares outstanding 2,503,949 2,503,949 2,503,949 2,503,949
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