Axesstel Reports Third-Quarter Results; Nine-Month Revenues Exceed Total for Full Fiscal Year 2002.Business Editors/High-Tech Writers SAN DIEGO--(BUSINESS WIRE)--Nov. 21, 2003 Axesstel Inc. (OTCBB OTCBB See OTC Bulletin Board (OTCBB). :AXES axes [L., Gr.] plural of axis. The straight lines which intersect at right angles and on which graphs are drawn. Usually the horizontal axis is the x-axis and the vertical one the y-axis. Called also axes of reference. ), a leader in developing, manufacturing and marketing high-quality, CDMA-based fixed wireless local loop (WLL See wireless local loop and PHS-WLL. ), hybrid terminals and engineering services to operators worldwide, today announced financial results for the fiscal 2003 third quarter, which ended Sept. 30, 2003, and for the first nine months of the fiscal year. In accord with management expectations, the company's 2003 nine-month revenues exceed the total reported for the entire 2002 fiscal year. Key consolidated performance highlights for the third quarter included: -- 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 Axesstel for the three months ended Sept. 30, 2003 were $1.0 million, generated entirely from engineering development services. An anticipated product sale worth approximately $2 million was delayed pending a finalized See finalization. letter of credit, but is expected to close in the fourth quarter. -- Axesstel's operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. for the third quarter was $1.0 million, as compared to operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. of $1.1 million for the third quarter of the previous year, reflecting ongoing company investments in R&D intended to fuel future growth. -- Axesstel's net loss for the third quarter of 2003 was $634,279, as compared to net income of $569,905 reported for the third quarter of the previous year, reflecting growth-oriented R&D expenditures as noted above. For the first nine months of 2003, key consolidated performance highlights included: -- Total net sales for Axesstel for the nine months ended Sept. 30, 2003 were $9.1 million, as compared with net income of $6.0 million for the first nine months of the previous year, and exceeding the $8.1 million in revenues reported for all of fiscal 2002. -- Operating income for the nine months ended Sept. 30, 2003, was $297,524, as compared to operating income of $958,203 recorded for the first nine months of the previous year, again reflecting investments in future growth. -- Net income for the first nine months of 2003 was $234,216, as compared to $680,573 in net income for the first nine months of the previous year. "Our third-quarter results reflect foundation-building conducted in the interests of continued growth in 2004," said John Chough, chief financial officer for Axesstel. "While certain expected revenue items were unfortunately delayed, we are confident that they are on track to be realized in the fourth quarter. Meanwhile, even without that income, we are ahead of full fiscal year 2002 revenues as of the current fiscal year's third quarter, and overall, revenue and expense trends are conforming to plan." "Year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. investments in R&D of nearly $1.3 million, which is more than 100 times the equivalent figure from 2002, have positioned us for some strong upcoming quarters," said Satoru SATORU -- Japanese term (悟 / さとる). Simply translates as the verb, "to know" or "understand" -- however, Satoru is more closely related to "higher knowledge". In Zen, Satoru is the root to the Zen Buddhist word, Satori, "enlightment. Yukie, president and 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. "Our mission is to provide connectivity to developing countries that lack traditional copper-wire telephony Meaning "sound over distance," it refers to electronically transmitting the human voice. In the beginning, telephony dealt only with analog signals in the circuit-switched networks of the telephone companies. infrastructure, while also providing developed countries with exciting products offering convergence of voice and data. We believe we will see impressive growth in coming quarters as we work with our world-class world-class adj. 1. Ranking among the foremost in the world; of an international standard of excellence; of the highest order: a world-class figure skater. 2. partners and customers to fulfill ful·fill also ful·fil tr.v. ful·filled, ful·fill·ing, ful·fills also ful·fils 1. To bring into actuality; effect: fulfilled their promises. 2. this mission." For further information, contact Sean Collins, partner, CCG CCG Chicago CCG Collectible Card Game CCG Canadian Coast Guard CCG Country Commercial Guide CCG Children's Cancer Group CCG Commission Canadienne des Grains (Canadian Grain Commission) , at 818-789-0100, ext. 202. Media inquiries should be directed to Bock Noun 1. bock - a very strong lager traditionally brewed in the fall and aged through the winter for consumption in the spring bock beer lager beer, lager - a general term for beer made with bottom fermenting yeast (usually by decoction mashing); originally Communications Inc. at 714-540-1030, ext. 14 (Valerie Name Valerie is a common name for a girl in both English and French. Spelt as "Valery" or "Valeri", it is a common male name in parts of Europe (particularly in France and Russia). It means brave and courageous. Christopherson) or 19 (Jennifer Jennifer became a common first name for females in English-speaking countries during the 20th century. The name Jennifer is a Cornish variant of Guinevere, deriving ultimately from Proto-Celtic *windo-seibaro- "white ghost", via Brythonic *wino-hibirā (cf. Tolkachev). About Axesstel Inc. Axesstel Inc. (OTCBB:AXES) is powering the next generation of wireless, fixed and hybrid mobile devices based on 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. , CDMA2000, 802.11, and emerging 3G and 4G broadband broadband Term describing the radiation from a source that produces a broad, continuous spectrum of frequencies (contrasted with a laser, which produces a single frequency or very narrow range of frequencies). IP technologies. The company is pursuing technology and applications that will enable the development and delivery of carrier-class subscriber-based solutions, including fixed terminals, handsets and wireless payphones. To date, Axesstel's Qualcomm-licensed products can be found in more than 15 countries worldwide. The company has headquarters in 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. with a research and development center in Seoul Seoul (sā`  l, sā` l, sōl), city (1995 pop. 10,229,262), capital of South Korea, NW South Korea, on the Han River. , Korea Korea (kôrē`ə, kə–), Korean Hanguk or Choson, region and historic country (85,049 sq mi/220,277 sq km), E Asia. . For more information,
visit the company's Web site at www.axesstel.com.
"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 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 involve risk and uncertainties. The Company wishes to caution readers that a number of important factors could cause actual results to differ materially from those in the forward-looking statements. Those factors include but are not limited to the risk factors noted in the Company's filings with the Securities & 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 ability to gain market acceptance for its products; the Company's ability to attract and retain skilled personnel; and the Company's reliance on third-party suppliers. (financial tables follow)
Axesstel Inc. and Subsidiaries
Consolidated Statements of Operations
and Comprehensive Income (Loss)(a)
For the quarter and nine months ended Sept. 30, 2003 and 2002
(Unaudited)
Three Nine Three Nine
months months months months
Sept. 30, Sept. 30, Sept. 30, Sept. 30,
2003 2003 2002 2002
Net sales
Product sales $-- $3,128,875 $1,092,774 $3,871,994
Engineering
development service 1,043,100 5,987,730 1,680,000 2,100,000
1,043,100 9,116,605 2,772,774 5,971,994
Cost of goods sold -- 2,238,934 826,341 3,136,568
Gross profit 1,043,100 6,877,671 1,946,433 2,835,426
Research and
development 351,967 1,260,556 -- 12,072
Selling, general and
administrative
expenses 1,783,950 5,319,591 858,935 1,865,151
Total expenses 2,135,917 6,580,147 858,935 1,877,223
Operating income
(loss) (1,092,817) 297,524 1,087,498 958,203
Other income (expense)
Interest income and
other income (75) 226,661 5,612 336,128
Total expenses
Loss from sale of
marketable securities -- -- (41,987) (41,987)
Loss from disposition
of tangible assets (43,963) (43,963) -- --
Interest expense and
other expense 42,898 (35,583) (8,263) (27,951)
Total other income
(expense) (1,140) 147,115 (44,638) 266,190
Income (loss) before
income taxes (1,093,957) 444,639 1,042,860 1,224,393
Provision (benefit)
for income taxes (455,975) 210,423 459,343 543,820
Net income (loss) (637,982) 234,216 583,517 680,573
Other comprehensive
income (loss)
Foreign currency
translation adjustment 3,703 (42,618) (13,612) (11,139)
Comprehensive income
(loss) $(634,279) $191,598 $569,905 $669,434
Basic earnings (loss)
per common share $(0.10) $0.03 $0.08 $0.09
Diluted earnings
(loss) per common
share $(0.06) $0.02 $0.06 $0.07
Weighted average
number of common
shares -- basic 6,580,316 6,343,311 6,763,993 7,113,955
Weighted average
number of common
shares -- diluted 10,804,501 10,567,495 9,267,953 9,617,915
(a) Selected quarterly financial information. The information
contained herein does not include the full unaudited quarterly
financial information. Please see the company's report on Form 10Q for
the quarter ended Sept. 30, 2003 for the unaudited financial
information and notes thereto.
Axesstel Inc. and Subsidiaries
Consolidated Balance Sheet (a)
Sept. 30, 2003 (Unaudited)
ASSETS
Sept. 30,
2003
Current assets
Cash and cash equivalents $8,442
Accounts receivable, net of allowance for doubtful
accounts of $0 1,171,822
Prepayments and other current assets 351,054
Total current assets 1,531,318
Property and equipment, net 2,058,756
Other assets 2,677,457
Total assets $6,267,531
LIABILITIES AND STOCKHOLDERS' EQUITY
Sept. 30,
2003
Current liabilities
Accounts payable $146,000
Overdraft with bank 65,498
Deferred tax liability 61,927
Current installments of obligations under capital leases 160,062
Accrued expenses and other liabilities 1,431,819
Total current liabilities 1,865,306
Long-term liabilities
Obligations under capital leases, excluding current
installments --
Total long-term liabilities --
Commitments and contingencies --
Stockholders' equity
Common stock, par value $0.001 per share.
Authorized 50,000,000 shares;
6,580,316 shares issued and outstanding 6,580
Additional paid-in capital 4,386,996
Accumulated other comprehensive loss (85,673)
Retained earnings 94,322
Total stockholders' equity 4,402,225
Total liabilities and stockholders' equity $6,267,531
(a) Selected quarterly financial information. The information
contained herein does not include the full unaudited quarterly
financial information. Please see the company's report on Form 10Q for
the quarter ended Sept. 30, 2003 for the unaudited financial
information and notes thereto.
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