- Delivered quarterly revenue of $15.0 million, up from
$11.9 million sequentially -
- Posted backlog of approximately $18 million -
SAN DIEGO, Nov. 9, 2009 (GLOBE NEWSWIRE) -- Axesstel, Inc. (OTCBB: AXST), a leader in the design and development of fixed wireless voice and broadband data products, reported results for its third quarter ended September 27, 2009.
Clark Hickock, CEO of Axesstel, stated, "Revenues for the third quarter improved to $15.0 million, up 26 percent as compared to our second quarter. Our third quarter results were fueled by strong revenue in EMEA of $6.6 million and Latin America of $7.0 million. In addition, we delivered record quarterly revenue from North America of $1.2 million. Our cost reductions including salary decreases and research and development outsourcing, where appropriate, have improved our operating position. We narrowed our loss to $909,000, or $0.04 per share, as compared to $2.2 million, or $0.09 per share, in the second quarter of 2009."
"We are encouraged by recent activity that indicates orders may pick up in 2010. In November, we received a $9.3 million voice product order for Latin America, bringing our current backlog to approximately $18 million, all of which is expected to be delivered in the fourth quarter of 2009 and the first quarter of 2010. In addition, our relationship with Verizon Wireless continues to gain traction, and with our recently signed distribution agreement with Quality One Wireless for the United States and Canada, we expect demand for our MV440 Wi-Fi Gateway to increase in those markets now that the contractual and channel approvals are in place."
"We are continuing our cost saving activities in the fourth quarter, including expense reductions in our Korean operations and outsourcing research and development of some phone and data products. These activities are expected to result in $2.0 million of annual savings. As such, our cost saving activities this year are expected to result in annual savings of over $4.0 million beginning in the first quarter of 2010. We believe these cost reductions will position us to be profitable at our current revenue and expected gross margin levels as we enter into 2010, and we are well positioned if demand for our products rises."
Financial Results
Revenues for the third quarter of 2009 were $15.0 million, compared to revenues of $11.9 million in the second quarter. Data products contributed 70 percent of revenues and voice products 30 percent in the third quarter of 2009, compared to data products with 83 percent and voice products with 17 percent in the second quarter of 2009. Gross profit for the third quarter of 2009 was $3.0 million, or 20 percent of revenue, compared to $2.8 million, or 24 percent of revenue, in the second quarter. Net loss in the third quarter of 2009 was $909,000, or $0.04 per share, compared to a net loss of $2.2 million, or $0.09 per share, for the second quarter 2009.
For the nine months ended September 27, 2009, the company reported revenue of $40.7 million, compared to $86.3 million for the same period of 2008. Net loss for the first nine months was $5.3 million, or $0.23 per share, compared to net income of $1.9 million, or $0.08 per diluted share, in the prior year period.
As of September 27, 2009, the cash and cash equivalents balance was $2.2 million, compared to $1.7 million as of December 31, 2008. The company continues to fund its working capital needs through financing of accounts receivable backed by credit insurance or letters of credit. During the quarter it increased its line of credit from $4.0 million to $11.0 million in receivables based financing and reduced the interest rate for this facility. The company ended the quarter with $3.3 million in receivables based financing.
Recent Highlights
- Received a $9.3 million voice product order from a Latin American operator that is expected to be shipped in the fourth quarter of 2009 and the first quarter of 2010.
- Completed contractual and channel approvals with Verizon Wireless for the MV440 Wi-Fi Gateway, now commercially available and approved to operate on the Verizon Wireless network.
- Entered a distribution agreement with Quality One Wireless to distribute Axesstel's select portfolio of fixed wireless voice and broadband data products throughout the United States and Canada.
- Secured new customers in Saudi Arabia and Africa, who placed small initial orders.
- Showcased the MV440 3G Gateway at CTIA WIRELESS I.T. & Entertainment(R) 2009 in San Diego and the Rural Cellular Association's 2009 Business & Technical Conference in Dallas in October.
Conference Call
Axesstel will host a conference call at 8:00 a.m. PT (11:00 a.m. ET) on Monday, November 9, 2009 to discuss its third quarter 2009 results. Participating in the call will be Clark Hickock, chief executive officer and Patrick Gray, chief financial officer.
The call will be webcast and can be accessed from the "Investor Relations" section of the company's website at http://www.axesstel.com. 1-877-663-9622. International callers should dial 00-1-973-200-3973. The conference ID will be #36247528.
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 Monday, November 9th, at 2:00 p.m. ET through Friday, November 13th at 11:59 p.m. ET. To access the replay, please dial 1-800-642-1687. International callers should dial 00-1-706-645-9291. The pass code will be 36247528.
About Axesstel, Inc.
Axesstel (OTCBB:AXST) is a recognized industry leader in the design and development of fixed wireless voice and broadband data products. Axesstel's best in class product portfolio includes broadband modems, 3G gateways, machine to machine applications, voice/data terminals, fixed wireless desktop phones and public call office phones for high-speed data and voice calling services. The company delivers innovative fixed wireless solutions to leading telecommunications operators and distributors worldwide. Axesstel is headquartered in San Diego, California with a research and development center in Seoul, South Korea. For more information on Axesstel, visit www.axesstel.com. (c) 2009 Axesstel, Inc. All rights reserved. The Axesstel logo is a trademark of Axesstel, Inc.
The Axesstel, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6261
"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 market penetration and conditions, product capabilities and the timing of new product introductions which may affect future results and the future viability of Axesstel. 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 risk factors. Those factors include but are not limited to the risk factors noted in Axesstel's filings with the Securities and Exchange Commission, such as to the need for additional working capital; economic and political instability in developing markets served by Axesstel; unforeseen manufacturing difficulties, unanticipated component shortages, competitive pricing pressures and the rapidly changing nature of technology and frequent introductions of new products and enhancements by competitors; the competitive nature of the markets for Axesstel's products; product and customer mix, Axesstel's need to gain market acceptance for its products; dependence on a limited number of large customers; potential intellectual property-related litigation; Axesstel's need to attract and retain skilled personnel; and Axesstel's reliance on its primary contract manufacturer. 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.
Tables to follow
AXESSTEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the three months For the nine months
ended ended
--------------------------- ---------------------------
September 27, September 28, September 27, September 28,
2009 2008 2009 2008
------------- ------------- ------------- -------------
Revenues $ 15,046,420 $ 30,051,128 $ 40,693,744 $ 86,317,041
Cost of goods
sold 12,070,110 23,598,449 32,673,196 65,215,447
------------- ------------- ------------- -------------
Gross margin 2,976,310 6,452,679 8,020,548 21,101,594
Operating
expenses:
Research and
development 894,058 1,206,418 2,823,932 3,659,484
Selling,
general and
administrative 2,724,532 4,613,804 9,796,185 14,146,693
------------- ------------- ------------- -------------
Total
operating
expenses 3,618,590 5,820,222 12,620,117 17,806,177
------------- ------------- ------------- -------------
Operating
income
(loss) (642,280) 632,457 (4,599,569) 3,295,417
Other income
(expense):
Interest
expense, net (249,890) (195,678) (751,408) (1,212,062)
Other, net (16,672) 57,226 46,695 (134,662)
------------- ------------- ------------- -------------
Total
other
income
(expense) (266,562) (138,452) (704,713) (1,346,724)
------------- ------------- ------------- -------------
Income (loss)
before
provision for
income taxes (908,842) 494,005 (5,304,282) 1,948,693
Provision for
income taxes -- 60,928 -- 60,928
------------- ------------- ------------- -------------
Net income
(loss) $ (908,842) $ 433,077 $ (5,304,282) $ 1,887,765
============= ============= ============= =============
Earnings
(loss) per
share:
Basic ($0.04) $0.02 ($0.23) $0.08
============= ============= ============= =============
Diluted ($0.04) $0.02 ($0.23) $0.08
============= ============= ============= =============
Weighted
average
shares
outstanding:
Basic 23,456,232 23,228,982 23,317,357 23,228,982
============= ============= ============= =============
Diluted 23,456,232 23,750,026 23,317,357 23,571,439
============= ============= ============= =============
AXESSTEL, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
September 27, December 31,
2009 2008
------------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 2,169,058 $ 1,662,311
Accounts receivable, net 13,593,448 27,196,264
Inventory 3,457,428 1,317,576
Prepayments and other current assets 548,682 2,211,488
------------- -------------
Total current assets 19,768,616 32,387,639
Property and equipment, net 848,435 1,000,666
Other assets:
License, net 707,568 1,164,859
Other, net 235,249 378,321
------------- -------------
Total other assets 942,817 1,543,180
------------- -------------
Total assets $ 21,559,868 $ 34,931,485
============= =============
September 27, December 31,
2009 2008
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 14,726,045 $ 19,323,734
Bank financing 3,281,795 5,391,342
Accrued commissions 2,187,000 3,302,846
Accrued royalties 1,635,000 1,338,000
Accrued warranties 325,000 460,000
Accrued expenses and other current
liabilities 1,574,538 2,331,177
------------- -------------
Total current liabilities 23,729,378 32,147,099
Stockholders' equity (deficit) (2,169,510) 2,784,386
------------- -------------
Total liabilities and stockholders'
equity $ 21,559,868 $ 34,931,485
============= =============