ETC Announces 1999 Year-End ResultsWaukesha, WI—February 18, 2000 For Further Information contact: Dean Danner, President
Jeff Nigl, Chief Financial Officer
(262) 542-5600 * http://www.etcia.com
WAUKESHA, WISCONSIN, February 18, 2000 The NASDAQ Stock Market
ELECTRONIC TELE-COMMUNICATIONS, INC. Symbol - ETCIA
Electronic Tele-Communications, Inc. (ETC) today reported final audited results for its 1999 fourth quarter and fiscal year. Sales in 1999 were $10,823,705, resulting in a loss of $94,157 or $0.02 per Class A share, compared to 1998 sales of $13,149,994 and earnings of $179,324 or $0.08 per Class A share. For the 1999 fourth quarter, ETC reported a loss of $392,110 or $0.16 per Class A share on sales of $1,790,855, compared to fourth quarter 1998 earnings of $350,691 or $0.14 per Class A share on sales of $4,268,546. Commenting on the 1999 results, ETC President Dean Danner said, "After 6 consecutive profitable quarters, results of the fourth quarter were quite disappointing, and erased the earnings achieved during the first nine months. Sales in the fourth quarter are often very strong for ETC as evidenced by the 1998 quarter. However, as we progressed through the fourth quarter of 1999 and approached the Y2K event boundary, it became apparent that many of our customers were deferring network changes until 2000. Although Y2K did not result in any major failures in our equipment or in the telecommunications network, it did impact our sales and bookings, which are just now returning to normal levels." "In addition, fourth quarter earnings were impacted by sales and marketing expense increases as ETC began the introduction of its new Emcee Voice Information Server at the International telecommunications show in Geneva Switzerland. The Emcee product is designed to further ETC's participation in the converging marketplace of land and cellular based telephony, and ATM/IP data based telephony networks. ETC is committed to being a prominent player in providing our customer's scalable products to compete in this rapidly changing environment," 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 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. Electronic Tele-Communications, Inc. and Subsidiary
Consolidated Statements of Operations:
Three Months Ended Twelve Months Ended
December 31 December 31
1999 1998 1999 1998
Net sales 1,790,855 4,268,546 10,823,705 13,149,994
Cost of product sold 984,966 2,430,080 5,467,581 7,122,327
Gross profit 805,889 1,838,466 5,356,124 6,027,667
Operating expenses:
General and administrative 299,771 317,415 1,275,454 1,464,602
Marketing and selling 630,713 525,522 2,515,635 2,350,465
Research and development 392,042 434,676 1,654,246 1,751,603
1,322,526 1,277,613 5,445,335 5,566,670
Earnings (loss) from operations (516,637) 560,853 (89,211) 460,997
Other income (expense) (873) (17,662) 1,054 (67,173)
Earnings (loss) before
income taxes (517,510) 543,191 (88,157) 393,824
Income taxes (125,400) 192,500 6,000 214,500
Net earnings (loss) (392,110) 350,691 (94,157) 179,324
Basic and diluted earnings
(loss) per share:
Class A common (0.16) 0.14 (0.02) 0.08
Class B common (0.16) 0.14 (0.10) 0.04
Weighted average shares outstanding
for basic and diluted 2,508,947 2,508,947 2,508,947 2,508,947
Selected Balance Sheet Data:
Dec 31 Dec 31
1999 1998
Current assets 3,245,415 5,180,054
Total assets 6,679,675 8,438,766
Current liabilities 945,056 2,396,881
Total liabilities 945,056 2,449,274
Stockholders' equity 5,734,619 5,989,492
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