CHATSWORTH, Calif., November 15, 1999 (PRIMEZONE) --
Recent Highlights:
- Q3 Revenue Increases 224% from Q3 1998 and 77.9% from Q2 1999 - Net Loss Narrows to $(0.04) Per Share vs. $(0.19) - Company Completes Acquisition of CWI Bringing Revenue Run Rate to $130 Million - Acquisition Provides Infrastructure to Accelerate E-commerce Opportunities - Company Named Only Authorized Provider to Telecom Resellers Association - $20 Million Credit Line Secured with Banc of America
Focus Affiliates, Inc. (dba FocusWireless.com) (Nasdaq:FONE) announced improved third quarter results as its net loss narrowed to $(292,000) or $(0.04) per share compared to a net loss of $(840,000) or $(0.19) per share for the same period last year. Revenue for the quarter ended September 30, 1999 increased 224 percent to $13,437,000 compared to $4,142,000 year ago primarily as a result expanded relationships with wireless manufacturers and suppliers, which led to increased sales of the Company's products and services. On a sequential basis, the Company's revenue increased 77.9 percent and losses from operations decreased 86.7 percent, respectively, from the second quarter.
Chief Executive Officer and President Michael Hedge said, "This quarter we have shown great successes in our strategy to rapidly grow FocusWireless.com and return our Company to profitability. Our new management team has been able to strengthen relationships with leading wireless manufacturers, secure new sources of working capital and more than double our sales in the past year. Looking forward, we believe the tremendous opportunities from our proprietary web application and our well-established contacts within the wireless industry will be the foundation for our continued aggressive growth.
"We recognized early on that a solution was needed to manage the new, emerging distribution channels for the wireless industry. Our Internet-based e-commerce model at www.focuswireless.com satisfies the industry's needs and saves them time and money."
Most recently, FocusWireless.com was appointed by the Telecom Resellers Association (TRA), an 800 business member organization, as their only authorized provider of wireless handsets. "We will provide TRA members with end-to-end transaction--from the time members place an order on our website--through customization and shipment," Mr. Hedge said. "This TRA appointment opens up significant opportunities for FocusWireless.com to continue developing its prominence in the industry while benefiting from a new source of revenue.
"FocusWireless.com intends to extend its path of rapid growth. We plan to achieve our expansion goals," Mr. Hedge added, "through both internal growth and through strategic acquisitions. In November we completed our acquisition of CWI, a Chicago-based company. We are in the process of integrating our many synergies, including a broad, diversified customer base, solid operations, and an infrastructure capable of accelerating our Internet E-commerce initiative to support growth from a combined enterprise that now has an annual run rate in excess of $130 million in revenues."
Mr. Hedge concluded, "Reflecting on our accomplishments during the past few quarters, I am pleased that our management team was able to implement several key initiatives. These included expanding FocusWireless.com through acquisitions, repositioning our Company and reshaping our image as innovators. We exploited our industry expertise and are now one of the first to launch an Internet-based e-commerce strategy for the wireless industry. While we have much more to do to build the Company into our vision, we have created a strong basis for the future."
For the nine-month period, the Company reported a net loss of $2,466,000 or $(0.37) per share compared to a net loss of $2,577,000 or $(0.58) per share for the same quarter last year. Revenue for the period was $27,656,000 compared to $22,758,000 last year.
About FocusWireless.com FocusWireless.com will be offering the wireless telecom industry an e-commerce solution that provides end-to-end transaction management for its business-to-business customer base. Via a proprietary web application, the Company will facilitate the sale of wireless products and offer innovative value-added services for its "B-to-B" customers, which include carriers, resellers, retailers, dealers and manufacturers. The Company intends to continue its expansion by targeting existing and emerging wireless telecom distribution channels and will offer comprehensive web-based solutions that will allow more companies reduced barriers to entry of retailing wireless telecom products.
Statements included within this press release that are not historical in nature constitute forward-looking statements for the purposes of the safe harbor provided by the Private Securities Litigation Reform Act of 1995. Investors are cautioned that this press release contains certain such forward-looking statements that involve substantial risks and uncertainties. When used, the words "anticipate," "believe," "estimate," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward looking statements. The Company's actual results, performance or achievements could differ materially from the results expressed in, or implied by, these forward looking statements Risks include potential delays in the completion of developing the Internet e-commerce solution, unanticipated costs to develop and maintain the system and potential lack of customer acceptance of this order processing method. Risks also include the costs and delays of integration of the Company and CWI in a merger of information systems, operations and personnel.Further management discussion of risks and uncertainties can be found in the Company's quarterly filings with the Securities and Exchange Commission and other periodic filings.
FOCUS AFFILIATES, INC.
Consolidated Statements of Operations
(Unaudited)
For the 3 Months Ended
September 30,
1999 1998
Net sales $ 13,437,000 $ 4,142,000
Cost of sales 12,633,000 4,020,000
----------- ------------
Gross profit 804,000 122,000
Selling, general and
administrative expenses 1,025,000 930,000
----------- ------------
1,025,000 930,000
Loss from operations (221,000) (808,000)
Other income (expense):
Interest expense (83,000) (31,000)
Other Income (expense) 12,000 (1,000)
----------- ------------
Loss before income tax benefits (292,000) (840,000)
Income tax benefits - -
----------- ------------
Net loss $ (292,000) $ (840,000)
----------- ------------
----------- ------------
Basic loss per share $ (0.04) $ (0.19)
----------- ------------
----------- ------------
Diluted loss per share $ (0.04) $ (0.19)
----------- ------------
----------- ------------
Weighted average number of
common shares outstanding 7,014,893 4,415,902
----------- ------------
----------- ------------
FOCUS AFFILIATES, INC.
Consolidated Balance Sheets
Sept. 30, Dec. 31,
1999 1998
(Unaudited)
Assets
Current Assets:
Cash $ 1,250,000 $ 362,000
Accounts receivable, net of
allowance for doubtful accounts
of $170,000 and $251,000 5,209,000 2,155,000
Inventories, net of reserves
for obsolescence of $250,000
and $592,000 1,345,000 837,000
Notes receivable, net of allowance
for doubtful notes of $662,000 and
$1,521,000 - -
Deposits for purchase of inventory 49,000 254,000
Prepaid expenses and
other current assets 509,000 211,000
----------- ------------
Total current assets 8,362,000 3,819,000
Property and equipment, net of
accumulated depreciation of
$376,000 and $242,000 417,000 359,000
Other assets 585,000 -
Total assets $ 9,364,000 $ 4,178,000
----------- ------------
----------- ------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 3,927,000 1,150,000
Revolving credit facility 2,814,000 -
Accrued expenses 622,000 179,000
----------- ------------
Total current liabilities 7,363,000 1,329,000
----------- ------------
Commitments and contingencies - -
Stockholders' equity
Preferred stock -$.01 par value,
1,000,000 shares Authorized and
none issued - -
Common stock -$.01 par value,
25,000,000 shares Authorized
7,014,893 and 5,915,902 shares
Issued and outstanding 70,000 59,000
Additional paid-in capital 12,986,000 11,379,000
Accumulated deficit (11,055,000) (8,589,000)
Total stockholders' equity 2,001,000 2,849,000
Total liabilities and
stockholders' equity $ 9,364,000 $ 4,178,000
CONTACT: Linda Press/Sally Stewart
Sitrick And Company
(310) 788-2850
David Kane, CFO
FocusWireless.com
(818)709-2300