Astrocom Announces Fourth Quarter and Year End 1999 Results.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--March 31, 2000 Astrocom Corporation (OTC OTC See: Over-the-counter. OTC See over-the-counter market (OTC). : Bulletin Board: ATCC ATCC American Type Culture Collection, see there ) today announced the results for the fourth quarter and year ended December 31, 1999. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the fourth quarter 1999 decreased 59% to $255,593 from $629,812 for the same period last year. The net loss for the fourth quarter 1999 was or $(0.03) per share, versus a loss of $(197,955) or $(0.01) per share for the fourth quarter of 1998. Net sales for the year ended December 31, 1999 decreased 50% to $1,461,831 from $2,896,563 for 1998. The net loss for the year was $(1,119,305) or $(0.07) per share, reflecting an increase of 112% over the loss of $(529,094) or $(0.04) per share for 1998. The decrease in sales was due to a significant decrease in orders from the top three 1998 customers and a general slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. from all customers. The decrease in sales is attributed to the company's limited product line competing against much larger companies with broader product lines. New product development is targeted at a product strategy that repositions the company in niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. where manufacturing and sales channel size are less important factors. In addition, the company is expanding the sales force and signing up a network of Manufacturer's Representatives to increase product visibility. The gross profit margins Gross profit margin Gross profit divided by sales, which is equal to each sales dollar left over after paying for the cost of goods sold. gross profit margin A measure calculated by dividing gross profit by net sales. decreased to (18)% in the fourth quarter of 1999 from 26% for the same period in 1998. For the year, gross profit margins decreased to 25% from 32% in 1998. The decrease in gross margin percentage is due to an increase in inventory reserve. In the fourth quarter of 1999, the Company recorded a $107,397 net increase in inventory reserves against cost of sales for slow moving inventory. Without the increased inventory reserve the gross margin percentage remained constant even with the lower sales volume due to a decrease in labor and burden in manufacturing. The Company expects gross profit margins to remain at these levels, but also to be effected by sales volume, product mix and the distribution channel used. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. in the fourth quarter 1999 held flat relative to the same period in 1998; for the year, operating expenses increased by 9% over that of 1998. For the year 1999, the Company decreased administrative and technical support expenses by 16% but increased research and development expenses and sales and marketing expenses by 53% and 30%, respectively. The Company expects to continue increased investment in product development and sales and marketing. "While 1999 was a disappointing year financially, it was a strategically significant year for Astrocom," said Ron Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs , Astrocom's president and chief executive officer. "We refocused our product development from historic products to the new inverse (mathematics) inverse - Given a function, f : D -> C, a function g : C -> D is called a left inverse for f if for all d in D, g (f d) = d and a right inverse if, for all c in C, f (g c) = c and an inverse if both conditions hold. multiplexing multiplexing, in communication, technique whereby two or more independent messages, or information-bearing signals, are carried by a single common medium, or channel. family of products. In addition, we strengthened our management team and began redirecting our sales efforts. These activities will continue through the first half of 2000, and positive results are anticipated for the second half of the year." Astrocom Corporation develops, manufactures, markets and services electronic devices which address key areas of wide area data, voice and video communications networks The transmission channels interconnecting all client and server stations as well as all supporting hardware and software. . This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that project or estimate future events. Any statements that are not statements of historical fact may be deemed to be forward-looking statements. These statements involve various risks and uncertainties that may cause actual results to differ materially from historical results or those currently projected. Readers are cautioned not to place undue reliance on these forward-looking statements. This release should be read in conjunction with the Company's most recent SEC filings.
Astrocom Corporation
Selected Financial Information
Quarter Ended Year Ended
December 31, December 31,
1999 1998 1999 1998
-------------------- ---------------------
Net Sales $ 255,593 $ 629,812 $ 1,461,831 $2,896,563
Net Income (Loss) $(416,158) $(197,955) $(1,119,305) $ (529,094)
Net Income (Loss)
per Share $(.03) $(0.01) $(.07) $(0.04)
Weighted Average
Shares Outstanding 15,026,607 14,978,573 15,006,079 13,032,042
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