Subject: News Release
Release Date: For Immediate Release
For Further Information contact: Dean Danner, President
Jeff Nigl, Chief Financial Officer
(262) 542-5600
ETC ANNOUNCES 3RD QUARTER 1998 RESULTS
WAUKESHA, WISCONSIN, October 23, 1998 The NASDAQ Stock Market
ELECTRONIC TELE-COMMUNICATIONS, INC. Symbol - ETCIA (Electel)
Electronic Tele-Communications, Inc. (ETC) reported sales of $3,025,266 for the
third quarter of 1998, compared to $2,544,378 for the third quarter of 1997.
Earnings were $20,682 or $.01 per Class A share for the 1998 quarter, compared
to a loss of $397,592 or $.15 per share in the 1997 quarter. Sales for the
first nine months of 1998 were $8,881,448, compared to 1997 nine month sales
of $9,096,811. Results for the nine month periods were a loss of $171,367 or
$.06 per Class A share in 1998, compared to a loss of $305,041 or $.11 per
share in 1997.
Cost of products sold as a percentage of sales was lower in the 1998 third
quarter due to a one-time write off of an international account receivable in
the 1997 third quarter. General and administration expenses were also lower in
1998 due to lower legal expenses and management changes.
Commenting on the financial results, Dean Danner, President of ETC said, "Sales
remained steady in the third quarter of 1998, and significantly ahead of the
1997 quarter, resulting in positive earnings for the quarter. We are still
recovering from a very weak first quarter of 1998, but are making progress."
"The predominant activity continues to center around ETC's Digicept DNA family
of enhanced information systems. The Digicept DNA partitions provide our
customers with an expandable product that is both cost effective and reliable.
The Digicept DNA incorporates both traditional telephone company announcements
with enhanced service messages, and information of local interest such as
public service announcements, time & temperature, and local weather
observations. The Digicept DNA family of products is also fully compliant with
newly emerging requirements for compatibility with hearing impaired terminals,"
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, 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, 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.
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Electronic Tele-Communications, Inc. and Subsidiary
Consolidated Statements of Operations:
(Unaudited) (Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1998 1997 1998 1997
Net sales 3,025,266 2,544,378 8,881,448 9,096,811
Cost of product sold 1,548,653 1,645,995 4,692,247 5,182,123
Gross profit 1,476,613 898,383 4,189,201 3,914,688
Operating expenses:
General and administrative 374,125 448,256 1,116,594 1,292,851
Marketing and selling 584,219 574,857 1,824,943 1,707,492
Research and development 422,171 488,996 1,316,927 1,374,126
1,380,515 1,512,109 4,258,464 4,374,469
Earnings (loss) from operations 96,098 (613,726) (69,263) (459,781)
Other income (expense) (36,116) (11,266) (80,104) (29,760)
Earnings (loss) before
income taxes 59,982 (624,992) (149,367) (489,541)
Income taxes (benefit) 39,300 (227,400) 22,000 (184,500)
Net earnings (loss) 20,682 (397,592) (171,367) (305,041)
Basic and diluted earnings
(loss) per share:
Class A common 0.01 (0.15) (0.06) (0.11)
Class B common 0.01 (0.17) (0.10) (0.19)
Weighted average shares outstanding
for basic and diluted 2,508,947 2,503,949 2,508,947 2,503,949
Selected Balance Sheet Data:
(Unaudited)
Sep 30 Dec 31
1998 1997
Current assets 4,298,895 3,934,664
Total assets 7,672,272 7,097,509
Current liabilities 1,962,920 1,080,219
Total liabilities 2,033,471 1,206,979
Stockholders' equity 5,638,801 5,890,530
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