Channell Announces Preliminary Fourth Quarter Results and Outlook for 2001.

Business Editors

TEMECULA, Calif.--(BUSINESS WIRE)--Jan. 30, 2001

Channell Commercial Corp. (Nasdaq:CHNL) Tuesday announced preliminary, unaudited results for the fourth quarter ending Dec. 31, 2000.

The company expects fourth quarter revenues of approximately $27 million and fourth quarter net income per share of approximately $0.06 excluding special charges. For the year 2000, the company expects net income per share excluding special charges to be approximately $0.80.

Special charges of $0.41 per diluted share will be included in fourth quarter net results relating to restructuring expenses of $1.5 million to streamline operations and a non-cash asset write down of $4.6 million of production equipment.

As a result, the company expects a net loss per share after special charges in the fourth quarter of approximately $(0.35). For the year 2000, the company expects net income after special charges of approximately $0.39. The company anticipates announcing fourth quarter actual results the week of Feb. 27, 2001.

Restructuring and Asset Write Down Charges

Thomas Liguori, Chief Financial Officer, said, "We have decided to take several important steps to improve efficiency, align production costs with anticipated revenues and reduce SG&A expenses below 2000 levels. First, we are reducing our global headcount by 10% of the total work force. Second, we are consolidating several facilities including our Charlotte, North Carolina distribution facility into the Temecula operations, reducing leased manufacturing space in Europe and integrating the Hong Kong sales office into our Asian sales operations in Malaysia. Although these actions will be implemented throughout the year, once completed the company anticipates annual cash savings of $3.2 million as a result of lower labor and facility costs.

"In addition, the carrying value of certain production equipment used in the company's European operations has been written down by $4.6 million to reflect a reduction in the fair value of this equipment. Depreciation expense will be reduced an average of approximately $770,000 per year over the next six years."

William H. Channell, Jr., President and Chief Operating Officer, said, "We have taken these measures so that the company can fully exploit our competitive advantages in the global telecommunications equipment market. These reductions in our cost structure combined with the strength of our financial position should permit Channell to take maximum advantage of the many opportunities we see ahead in the telecommunications industry."

Outlook for 2001

Liguori said, "Our 2001 plan reflects anticipated reductions by our largest customers in their 2001 equipment spending. Accordingly, we are estimating revenues in 2001 to be approximately $126 million. While revenues are expected to decline this year, as a result of our cost structure reductions we anticipate earnings per share in 2001 to increase. We currently estimate first quarter revenues to be approximately $24 million and first quarter earnings per share to be approximately ($0.08). We anticipate 2001 earnings per share of approximately $0.85."

Channell, Jr. continued, "While we see the recent slowdown continuing through the first quarter, it is important to point out that our scaled back first quarter revenue forecast does not mean deterioration in our market position but rather a temporary slowdown in our customers' equipment spending. Secondly, the 2001 revenue estimate contains within it some significant positive trends. We anticipate aggregate revenues from our metal enclosures, copper connectivity and fiber optics product groups to grow about 58% to approximately $34 million in 2001. This expected growth is based on our customers' positive reactions to these new innovative products."

Tuesday's Conference Call

There will be a conference call hosted by Channell management at 12 noon Eastern time Tuesday to discuss the subjects covered in today's release. This call is being webcast by CCBN and can be accessed at www.companyboardroom.com. Listeners will need to have the RealPlayer to listen in to the conference call. Free downloads available at www.real.com.

About Channell

Channell Commercial Corp. is a global designer and manufacturer of telecommunications equipment primarily supplied to telephone and broadband network operators worldwide. Major product lines include a complete line of thermoplastic and metal fabricated enclosures, advanced copper termination and connectorization products, fiber optic cable management systems and coaxial-based passive RF electronics.

Channell has headquarters and United States manufacturing facilities in Temecula. International operations include facilities in Toronto, London, Sydney, Australia and Kuala Lumpur, Malaysia.

Channell's customers have included telco and broadband service providers such as AT&T, Bell Atlantic, BellSouth, GTE, British Telecom, Singapore Telecom, Telekom Malaysia, Telstra, Cable & Wireless, Rogers Canada, Shaw Communications, Optus, Cox Communications, Time Warner, Media One and TCI.

Corporate Profile

An eight-page Channell corporate profile can be viewed at www.channellcomm.com. The corporate profile includes illustrations of the Local Loop and typical Channell products in the Local Loop. It also includes a discussion of the company's markets, competitive position and growth strategy.

Forward-Looking Statements

Forward-looking statements contained within this news release are subject to many uncertainties in the company's operations and business environments. Examples of such uncertainties include customer demand, material costs, integration of acquired businesses and worldwide economic conditions among others. Such uncertainties are discussed further in the company's annual report/10K and S-1 filed with the Securities and Exchange Commission.