Message #33 From:
NewsBot Date: November 8, 2006 01:05:00 PM
AFT News Axesstel Announces Third Quarter 2006 Results
SAN DIEGO--(BUSINESS WIRE)--Axesstel, Inc. (AMEX:AFT) today announced results for the third quarter
and nine months ended September 29, 2006.
Financial Results
Revenues for the third quarter of 2006 were $32.1 million, compared to
$16.9 million in the third quarter of 2005. Gross margin for the third
quarter was $6.1 million, or 19 percent of revenue, compared to $1.5
million, or 9 percent of revenue, from the year ago quarter. The company
reported net income of $225,000, or $0.01 per diluted share. This
compares with a net loss of $4.5 million, or $0.20 per share, in the
third quarter of 2005, which included a non-cash write-off of $2.0
million.
For the nine months ended September 30, 2006, the company reported
revenues of $65.4 million and net loss of $6.8 million, or $0.30 per
share. This compares to revenues of $82.9 million and net loss of $5.6
million, or $0.29 per share for the nine months ended September 30,
2005. The cash and cash equivalents balance was $6.2 million at
September 29, 2006.
“Continued growth in Latin America and strong
demand for our broadband modem products resulted in a 41 percent
increase over the prior quarter in revenue and substantially improved
margins,” said Marv Tseu, CEO of Axesstel.
“To support our growth objectives we have
significantly strengthened our management capabilities with the hiring
of two executives,” said Tseu. “Murray
Kawchuck, senior vice president of sales and corporate marketing, will
focus on enhancing our global sales presence. Stephen Sek, chief
technology officer, will be responsible for shaping the technology
direction of the company’s product line as it
moves more deeply into data products for commercial and residential use.
“Having strengthened our relationships in Asia
and India, we expect to see an up-tick in revenues from that region
going into the fourth quarter,” Tseu added. “In
Latin America, during the third quarter we experienced record modems
sales in preparation for the holidays; and in the fourth quarter we
expect modem sales to continue to be strong, but less than the third
quarter.
“Looking ahead, we expect fourth quarter
revenues of approximately $30 million to $32 million with margins in the
15 percent range based on product mix. Our 2006 revenue guidance is
approximately $95 million to $97 million. In 2007, we expect the typical
seasonality in the first half of the year and our goal is to sustain a
consistent quarterly revenue run rate in the $30 million range. In the
second half of the year, we expect significant growth in revenue run
rates, as EV-DO rollouts occur in Asia and we expand our GSM footprint,”
stated Tseu.
Recent Highlights
Significant developments recently and in the third quarter 2006 include:
Received $1.8 million purchase order from large China-based
infrastructure provider for EV-DO Modems destined for Africa.
Announced development of MV400 Series of 3G Wireless Broadband
Gateways which combines CDMA2000 1xEV-DO Rev A broadband data, a Wi-Fi
router and four port Ethernet switch in one plug-and-play networking
device.
Announced availability of PX Series Fixed Wireless Desktop Phones, a
cost reducing redesign of the successful P-Series product. The PX
Series phones are designed for consumers looking to access voice
calling and data services.
Awarded two patents: One covers hybrid or converged solutions that can
support multiple combinations of wireless and wire-line
telecommunications technologies in one device and another that covers
solutions that combine two-way voice and data communications as well
as one-way receipt of broadcast audio-visual signals in one fixed
wireless multi-media communications device.
Entered into an amendment of its receivables-based credit facility
with Silicon Valley Bank, which was extended for a two-year term and
expanded to $20 million in November.
Conference Call
Axesstel will host a conference call at 1:30 p.m. PT (4:30 p.m. ET)
today to discuss its third quarter results. Participating in the call
will be Marv Tseu, chief executive officer; and Patrick Gray, senior
vice president finance and corporate controller.
The call is being webcast and can be accessed from the “Investor
Relations” section of the company’s
website at http://www.axesstel.com.
If you do not have Internet access, please dial the following number
five to ten minutes prior to the scheduled conference call time:
1-877-707-9631. International callers should dial 00-1-785-2422. There
is no pass code required for this call.
If you are unable to participate in the call at this time, the webcast
will be archived on the Axesstel website. In addition, a telephonic
replay will be available on November 8 at 7:00 p.m. until November 10 at
11:59 p.m. To access the replay, please dial 1-800-723-0488.
International callers should dial 00-1-402-220-2651. There is no pass
code required for this call.
About Axesstel
Axesstel (AMEX:AFT) is a leader in the design and development of fixed
wireless voice and broadband data products. Axesstel’s
product portfolio includes fixed wireless desktop phones, public call
office phones, voice/data terminals, broadband modems and 3G gateways
for access to voice calling and high-speed data services. The company
delivers innovative fixed wireless solutions to leading
telecommunications operators and distributors worldwide. Axesstel is
headquartered in San Diego, California and has a research and
development center in Seoul, South Korea. For more information on
Axesstel, visit www.axesstel.com.
"Safe Harbor" Statement under the Private Securities Litigation Reform
Act of 1995: With the exception of historical information, the
statements set forth above include forward-looking statements relating
to revenues, margins and profitability as well as anticipated cost
reductions, manufacturing efficiencies, expected product introductions,
and potential customers and markets which may affect future results and
future viability. Axesstel wishes to caution readers that actual results
could differ materially from those suggested by the forward-looking
statements due to risks and uncertainties and a number of important
factors. Those factors include, but are not limited to, the risk of
delays in the adoption of new technologies in developing markets; the
lack of continued acceptance or growth of fixed wireless products in
target markets; the possibility that networks that can support our
broadband products will not be widely deployed; competition for
contracts with our large telecommunication carrier customers; the risks
of dependence on a limited number of those customers; the requirement
for end users to accept our products and technologies; our dependence on
limited or sole source suppliers; the possibility of unforeseen
manufacturing difficulties; and other risk factors and information
contained in Axesstel's filings with the Securities and Exchange
Commission, such as the rapidly changing nature of technology, evolving
industry standards, and frequent introductions of new products and
enhancements by competitors; the competitive nature of the markets for
Axesstel's products; Axesstel's need to gain market acceptance for its
products; Axesstel’s need to attract and
retain skilled personnel; potential intellectual property-related
litigation, and Axesstel's dependence on a few significant customers.
All forward-looking statements are qualified in their entirety by this
cautionary statement, and Axesstel undertakes no obligation to revise or
update this press release to reflect events or circumstances occurring
after this press release.
