ETC Announces Third Quarter 1999 ResultsWaukesha, WI—November 2, 1999 For Further Information contact: Dean Danner, President
Jeff Nigl, Chief Financial Officer
(262) 542-5600 * http://www.etcia.com
WAUKESHA, WISCONSIN, November 2, 1999 The NASDAQ Stock Market
ELECTRONIC TELE-COMMUNICATIONS, INC. Symbol - ETCIA
Electronic Tele-Communications, Inc. (ETC) today reported third quarter 1999 earnings of $96,130 or $0.05 per Class A share on sales of $2,888,497, compared to third quarter 1998 earnings of $20,682 or $0.01 per Class A share on sales of $3,025,266. Sales for the first nine months of 1999 were $9,032,850 compared to 1998 nine month sales of $8,881,448. Earnings for the first nine months of 1999 were $297,953 or $0.13 per Class A share compared to a 1998 nine month loss of $171,367 or $0.06 per Class A share. Commenting on the 1999 results, ETC President Dean Danner said, "While sales have increased slightly during the first nine months of 1999, profits have made a nice turn around this year due to a better sales mix of higher margin products and keeping an eye on operating costs." Danner continued, "Last month, we successfully introduced a new product, the Digicept Emcee, at TELECOM 99 + INTERACTIVE 99, the world-wide telecommunications convention held in Geneva, Switzerland. The Digicept Emcee is The Voice of the Network™ and will offer our customers standard and revenue-generating applications, enhanced services, and opportunities for branding and custom messaging. Emcee interfaces with and supports applications for T1, E1, ISDN, and SS7 network protocols which will make it a platform ideal for the global telecommunications market. In addition, Emcee's open-standard architecture and Windows® NT operating system provide the path to future capabilities and applications. We are excited about the potential of our new network peripheral." ETC designs, manufactures, and markets quality telecommunication products that provide network solutions for domestic and international access providers. Its products are sold primarily to domestic and foreign telephone companies and original equipment manufacturers. ETC also provides a wide range of services including professional recording services, turn-key installations, on-site training, and technical support, to meet the varied needs of its customers. Headquartered in Waukesha, Wisconsin, ETC 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 are not guarantees of future performance and 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, 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. and Subsidiary
Consolidated Statements of Operations:
Three Months Ended Nine Months Ended
September 30 September 30
1999 1998 1999 1998
Net sales 2,888,497 3,025,266 9,032,850 8,881,448
Cost of product sold 1,447,817 1,548,653 4,482,615 4,692,247
Gross profit 1,440,680 1,476,613 4,550,235 4,189,201
Operating expenses:
General and administrative 314,561 374,125 951,971 1,116,594
Marketing and selling 567,807 584,219 1,884,922 1,824,943
Research and development 404,252 422,171 1,262,204 1,316,927
1,286,620 1,380,515 4,099,097 4,258,464
Earnings (loss) from operations 154,060 96,098 451,138 (69,263)
Other income (expense) (8,530) (36,116) (21,785) (80,104)
Earnings (loss) before
income taxes 145,530 59,982 429,353 (149,367)
Income taxes (benefit) 49,400 39,300 131,400 22,000
Net earnings (loss) 96,130 20,682 297,953 (171,367)
Basic and diluted earnings
(loss) per share:
Class A common 0.05 0.01 0.13 (0.06)
Class B common 0.01 0.01 0.05 (0.10)
Weighted average shares outstanding
for basic and diluted 2,508,947 2,508,947 2,508,947 2,508,947
Selected Balance Sheet Data:
Sept 30 Dec 31
1999 1998
Current assets 3,583,980 5,156,211
Total assets 7,057,427 8,438,766
Current liabilities 926,915 2,396,881
Total liabilities 930,698 2,449,274
Stockholders' equity 6,126,729 5,989,492
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