Axesstel Announces Third Quarter 2006 Results.Posts Revenue of $32.1 Million, 90% over Prior Year Period, and Profit of $225,000 SAN DIEGO San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. -- Axesstel, Inc. (AMEX AMEX See: American Stock Exchange :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 Latin America, the Spanish-speaking, Portuguese-speaking, and French-speaking countries (except Canada) of North America, South America, Central America, and the West Indies. 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 (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. 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 (EVolution-Data Only) A 3G high-speed digital data service provided by cellular carriers worldwide that use the CDMA technology, including Verizon and Sprint in the U.S. EV-DO works on EV-DO cellphones as well as laptops and portable devices that have EV-DO modems. 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 des·tine tr.v. des·tined, des·tin·ing, des·tines 1. To determine beforehand; preordain: a foolish scheme destined to fail; a film destined to become a classic. 2. for Africa. * Announced development of MV400 Series of 3G Wireless Broadband High-speed wireless transmission of data. What is "high" speed is always a changing number. Wireless systems are typically slower than land-based, wireline networks. In the past, wireless broadband started at 250 Kbps, whereas land-based broadband was generally considered to start at T1 Gateways which combines CDMA (Code Division Multiple Access) A method for transmitting simultaneous signals over a shared portion of the spectrum. The foremost application of CDMA is the digital cellular phone technology from QUALCOMM that operates in the 800 MHz band and 1.9 GHz PCS band. 2000 1xEV-DO Rev A broadband data, a Wi-Fi router and four port Ethernet switch A device that connects clients and servers to each other in an Ethernet network. See switched Ethernet. 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 data communications, application of telecommunications technology to the problem of transmitting data, especially to, from, or between computers. In popular usage, it is said that data communications make it possible for one computer to "talk" with another. as well as one-way receipt of broadcast audio-visual signals in one fixed wireless multi-media communications device Typically refers to a terminal used to send voice, video or text. Mobile phones, wireless PDAs and personal computers equipped with microphones, speakers and cameras are all considered communications devices. See modem. . * 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 Investor relations The process by which the corporation communicates with its investors. " section of the company's website at http://www.axesstel.com. If you do not have Internet access See how to access the Internet. , 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 “San Diego” redirects here. For other uses, see San Diego (disambiguation). San Diego is a coastal Southern California city located in the southwestern corner of the continental United States. As of 2006, the city has a population of 1,256,951. and has a research and development center in Seoul, South Korea. For more information on Axesstel, visit www.axesstel.com. [c] 2006 Axesstel, Inc. All rights reserved. The Axesstel logo is a trademark of Axesstel, Inc. 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. "Safe Harbor Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " Statement under the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995: With the exception of historical information, the statements set forth above include forward-looking statements relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc 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 An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called 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. [TABLE OMITTED] [TABLE OMITTED] |
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